Third-Quarter Highlights:
Comparison to prior-year period
-- 8.3% increase in third-quarter FFO per share
-- 21% increase in Funds from Operations
-- 42% increase in EBITDA
-- 64% growth in total assets
-- 46% increase in total market capitalization
-- Portfolio occupancy at 93%
Financial Highlights
(Unaudited) (dollars in 000's, except per-share data)
Three Months Ended Nine Months Ended
September 30, September 30,
% %
1998 1997 Change 1998 1997 Change
Revenues $33,939 $24,484 39% $94,335 $71,015 33%
EBITDA $21,904 $15,444 42% $59,628 $43,090 38%
Funds from
Operations $13,186 $10,898 21% $38,300 $30,927 24%
FFO Per Share
-Basic and Diluted $0.52 $0.48 8.3% $1.53 $1.38 11%
Total Market
Capitalization $1,061,228 $728,305 46% $1,061,228 $728,305 46%
Portfolio Occupancy 93% 93% 0% 93% 93% 0%
Total Square Feet
(in millions) 15.3 8.6 78% 15.3 8.6 78%
No. of Properties 95 44 116% 95 44 116%
NORTHBROOK, Ill., Nov. 4 /PRNewswire/ -- Bradley Real Estate, Inc.
(NYSE: BTR) today reported an 8.3 percent increase in third-quarter funds from
operations per share to $0.52 per share compared with $0.48 per share in the
year earlier period. Funds from operations increased 21 percent to
$13.2 million compared with $10.9 million in the 1997 third quarter. For the
nine months ended September 30, 1998, funds from operations increased to
$38.3 million, or $1.53 per share, compared with $30.9 million, or $1.38 per
share, a year earlier. Diluted and basic FFO per share amounts for each
quarter and nine-month period were the same.
Net income for the latest quarter totaled $36.1 million, or $1.52 per
share ($1.44 per diluted share), compared with $6.6 million, or $0.30 per
basic and diluted share, for the prior-year quarter. The increase in net
income for 1998 was primarily attributable to a net gain of $30.6 million on
the sale of real estate investments. Excluding this gain and its effect on
minority interest, net income totaled $7.2 million, or $0.32 per share. Net
income for the nine months ended September 30, 1998, was $49.4 million, or
$2.09 per share ($2.07 per diluted share), compared with $20.5 million, or
$0.95 per share ($0.94 per diluted share), a year earlier. Net income for the
nine months reflects a $29.7 million net gain on the sale of real estate
investments.
Commenting on the results for the quarter, Thomas P. D'Arcy, chairman and
chief executive officer, stated, "We are pleased with our operating results
for the quarter. Our FFO per share grew 8.3 percent, after giving effect to
changes in the accounting treatment for percentage rent and after writing-off
feasibility costs for certain acquisitions we chose not to pursue, given
current market conditions."
Property Fundamentals Remain Strong
D'Arcy continued, "Third quarter leasing activity was strong, as evidenced
by the signing of two significant leases. At our Heritage Square property we
entered into a new 62,000-square-foot lease with Carson Pirie Scott,
representing over half of the former Montgomery Ward space. At our Crystal
Lake property, the newly relocated Jewel store experienced a very successful
grand opening, and we have leased 30,000 square feet, representing half of
their former space, to Toys 'R Us. We are optimistic that the balance of the
former Jewel space will be leased by year-end. In total, we signed 46 new
leases aggregating 233,000 square feet at an average base rent of $8.86 per
square foot. In addition, during the quarter the company renewed 43 leases
totaling 159,000 square feet at an average base rent of $10.33 per square
foot, a 4 percent increase over the prior average base rent."
Acquisition of Mid-America Realty Investments, Inc. and Sale of One North
State Completed
As previously announced, during the quarter the company completed the
acquisition of Mid-America Realty Investments, Inc. The acquisition was
funded with $87 million of a new Bradley 8.4 percent Series A Convertible
Preferred Stock and the assumption of approximately $67 million of MDI debt,
of which the company has prepaid approximately $29 million. In addition, on
July 31, 1998, the company closed on the sale of its One North State Street
building located in downtown Chicago at a price of $84.5 million, representing
a gain for financial reporting purposes of approximately $30.6 million.
$179 Million in Other Year-to-Date Acquisitions
During the quarter, the company acquired five additional shopping centers
totaling 851,000 square feet for approximately $67 million. Year-to-date, not
including the assets purchased in the Mid-America transaction, the company has
acquired 19 shopping centers totaling 2.6 million square feet at a cost of
$179 million and having an average yield of approximately 9.7 percent.
Richard Heuer, executive vice president of acquisitions, commented, "We are
pleased with the quality and value of our acquisitions year-to-date. In
addition to strong entry yields, a number of the properties acquired offer
significant opportunities for yield enhancements through redevelopment and/or
expansions."
Balance Sheet Review
At September 30, 1998, total assets increased to $948 million, from
$578 million a year earlier. Total debt outstanding was $451 million at a
weighted average interest rate of 7.21 percent and a weighted average maturity
of 5.74 years. Total debt outstanding included fixed rate debt of
$297 million at a weighted average interest rate of 7.44 percent and a
weighted average maturity of 7.54 years. At September 30, 1998, the floating
rate portion of Bradley's total debt consisted of $153 million outstanding
under the company's $200 million unsecured line of credit facility maturing
December 2000.
Positive Outlook
Commenting on the outlook for the company, Thomas P. D'Arcy, continued,
"With very solid property fundamentals, no debt maturing during the next two
years, ample capacity on our bank lines, expected proceeds from asset sales, a
low dividend payout ratio and an active franchise in our markets from which we
can create value from our existing infrastructure, we believe the company
continues to be well-positioned for earnings growth despite the current
unsettled capital environment."
The preceding information contains forward-looking statements of the
company's plans, objectives and expectations, which are dependent upon a
number of factors including a stable retailing climate in the Midwestern
United States, the financial viability of the company's tenants and the
continuing availability of retail center acquisitions and development
opportunities in the Midwest on favorable terms. Reference is made to the
discussions under the captions "Risk Factors" in the company's 1997 Form 10-K
report which includes a discussion of certain other factors which could cause
actual results to differ materially from those in forward-looking statements.
Bradley Real Estate, Inc. is the nation's oldest real estate investment
trust (REIT) and a leading owner and operator of neighborhood and community
shopping centers located in the Midwest region of the United States. The
company owns and operates 95 properties, aggregating 15.3 million square feet,
located in 16 states. The company has paid 149 consecutive quarterly
distributions to its share owners, one of the longest records of distributions
among publicly traded REITs.
In addition to the regular quarterly earnings releases and quarterly
reports, the company also makes available on a quarterly basis supplemental
information which includes property and corporate-level detail. This
information is available upon request from the company.
BRADLEY REAL ESTATE, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(UNAUDITED)
September 30, September 30, %
1998 1997 Change
ASSETS
Real estate investments-at cost $904,704 $575,599 57.2%
Accumulated depreciation
and amortization (53,741) (38,533) 39.5%
Net real estate investments 850,963 537,066 58.4%
Real estate investments held for sale 49,476 10,005 394.5%
Other assets:
Cash and cash equivalents 3,283 4,404 -25.5%
Rents and other receivables, net of
allowance for doubtful accounts
of $3,486 for 1998 and $2,437
for 1997 13,349 12,249 9.0%
Investment in partnership 13,260 -- 100.0%
Deferred charges, net and
other assets 17,982 14,146 27.1%
Total assets $948,313 $577,870 64.1%
LIABILITIES AND
SHARE OWNERS' EQUITY
Mortgage loans 97,640 128,711 -24.1%
Unsecured notes payable 199,527 -- 100.0%
Line of credit 153,400 121,800 25.9%
Accounts payable, accrued expenses
and other liabilities 32,399 19,898 62.8%
Total liabilities 482,966 270,409 78.6%
Minority interest 20,693 14,472 43.0%
Share Owners' equity:
Shares of preferred stock and
paid-in capital, par value
$.01 per share; liquidation
preference $25.00 per share:
Authorized 20,000,000 shares;
3,480,210 shares issued and
outstanding 86,882 -- 100.0%
Shares of common stock and
paid-in capital, par value $.01
per share:
Authorized 80,000,000 shares;
issued and outstanding,
23,846,760 at September 30,
1998 and 21,681,156 at
September 30, 1997 346,887 303,297 14.4%
Shares of excess stock, par value
$.01 per share:
Authorized 50,000,000 shares;
0 shares issued and outstanding -- -- --
Retained earnings (distributions
in excess of accumulated earnings) 10,885 (10,308) 205.6%
Total share owners' equity 444,654 292,989 51.8%
Total liabilities and
share owners' equity $948,313 $577,870 64.1%
BRADLEY REAL ESTATE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(UNAUDITED)
Three months ended Nine months ended
September 30, September 30,
1998 1997 %Change 1998 1997 %Change
Income:
Rental income $33,305 $24,033 38.6% $92,642 $69,922 32.5%
Other income 634 451 40.6% 1,693 1,093 54.9%
33,939 24,484 38.6% 94,335 71,015 32.8%
Expenses:
Operations,
maintenance
and management 4,510 3,479 29.6% 13,286 10,478 26.8%
Real estate taxes 5,665 4,025 40.7% 16,441 13,652 20.4%
Mortgage and
other interest 7,424 4,362 70.2% 19,567 11,593 68.8%
General and
administrative 2,107 1,536 37.2% 5,227 3,795 37.7%
Depreciation and
amortization 5,752 4,244 35.5% 16,346 12,099 35.1%
25,458 17,646 44.3% 70,867 51,617 37.3%
Income before
equity in earnings
of partnership and
net gain on sale
of properties 8,481 6,838 24.0% 23,468 19,398 21.0%
Equity in earnings
of partnership 247 -- 100.0% 247 -- 100.0%
Net gain on sale
of properties 30,555 -- 100.0% 29,680 1,773 1574.0%
Income before
allocation to
minority interest 39,283 6,838 474.5% 53,395 21,171 152.2%
Income allocated
to minority
interest (2,095) (277) 656.3% (2,892) (658) 339.5%
Net income 37,188 6,561 466.8% 50,503 20,513 146.2%
Preferred share
distributions (1,096) -- -100.0% (1,096) - -100.0%
Net income
attributable
to common share
owners $36,092 $6,561 450.1% $49,407 $20,513 140.9%
Basic net income
per share $1.52 $0.30 401.4% $2.09 $0.95 121.2%
Diluted net
income per share $1.44 $0.30 374.8% $2.07 $0.94 119.2%
CALCULATION OF FUNDS FROM OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
% %
1998 1997 Change 1998 1997 Change
Income before
allocation to
minority interest $39,283 $6,838 474.5% $53,395 $21,171 152.2%
- Preferred share
distributions (1,096) -- -100.0% (1,096) -- -100.0%
+ Depreciation of
real estate
assets &
amortization of
tenant
improvements 4,939 3,400 45.3% 13,185 9,634 36.9%
+ Amortization of
deferred leasing
commissions 290 362 -19.9% 1,574 1,000 57.4%
+ Other amortization
including deferred
finance & non real
estate related
costs 523 482 8.5% 1,587 1,465 8.3%
- Amortization of
deferred finance &
non real estate
related costs (225) (184) 22.3% (692) (570) 21.4%
+ Depreciation and
amortization
included in equity
in earnings of
partnership 27 -- 100.0% 27 -- 100.0%
- Net gain on sale
of real estate
investments (30,555) -- -100.0% (29,680) (1,773)1574.0%
FUNDS FROM
OPERATIONS $13,186 $10,898 21.0% $38,300 $30,927 23.8%
Funds from Operations
per share - basic $0.52 $0.48 8.6% $1.53 $1.38 10.8%
Funds from Operations
per share - diluted $0.52 $0.48 8.3% $1.53 $1.38 10.7%
RECONCILIATION OF BASIC EARNINGS AND FUNDS FROM OPERATIONS PER SHARE
TO DILUTED EARNINGS AND FUNDS FROM OPERATIONS PER SHARE
Three Months Ended September 30,
1998 1997
Net Income Income Shares Per-Share Income Shares Per-Share
Basic:
Net income $36,092,000 23,782,221 $1.52 $6,561,000 21,676,427 $0.30
Effect of dilutive
securities:
Dilutive options
exercised -- 46,466 -- 33,149
Preferred stock 1,096,000 2,162,504 -- --
Conversion of
OP Units 2,095,000 1,380,609 277,000 914,849
Diluted:
Net Income $39,283,000 27,371,800 $1.44 $6,838,000 22,624,425 $0.30
Funds From
Operations
Basic:
Funds From
Operations $13,186,000 25,162,830 $0.52 10,898,000 22,591,276 $0.48
Effect of dilutive
securities:
Dilutive options
exercised -- 46,466 -- 33,149
Preferred Stock 1,096,000 2,162,504 -- --
Diluted:
Funds From
Operations $14,282,000 27,371,800 $0.52 10,898,000 22,624,425 $0.48
Nine Months Ended September 30,
1998 1997
Net Income Income Shares Per-Share Income Shares Per-Share
Basic:
Net income $49,407,000 23,597,218 $2.09 $20,513,000 21,671,144 $0.95
Effect of
dilutive securities:
Dilutive options
exercised -- 48,338 -- 31,527
Preferred stock 1,096,000 728,756 -- --
Conversion of
OP Units 2,892,000 1,398,890 658,000 700,998
Diluted:
Net Income $53,395,000 25,773,202 $2.07 $21,171,000 22,403,669 $0.94
Funds From
Operations
Basic:
Funds From
Operations $38,300,000 24,996,108 $1.53 30,927,000 22,372,142 $1.38
Effect of
dilutive securities:
Dilutive options
exercised -- 48,338 -- 31,527
Preferred
Stock 1,096,000 728,756 -- --
Diluted:
Funds From
Operations $39,396,000 25,773,202 $1.53 $30,927,000 22,403,669 $1.38
SOURCE Bradley Real Estate, Inc.
 back to top
CONTACT:
Thomas P. D'Arcy, Chairman and CEO of Bradley
Real Estate, Inc., 847-272-9800; or Dennis Waite of The Financial
Relations Board, 312-640-6674
NOTE TO EDITORS: To receive additional information on Bradley
Real Estate free of charge via fax, dial 800-PRO-INFO and enter
"BTR."
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