NEWPORT BEACH, Calif., Feb. 11 /PRNewswire/ -- Glenn L. Carpenter,
Chairman of the Board and Chief Executive Officer of Pacific Gulf Properties
Inc. (NYSE: PAG), reported today that revenues and income available to common
shareholders for the year ended December 31, 1997 were $69,506,000 and
$20,603,000. This compares with $49,887,000 and a loss of $118,000 for the
year ended December 31, 1996. Income available to common shareholders per
share for the year ended December 31, 1997 was $1.51 (basic earnings per
share), compared with a loss of $.02 (basic earnings per share) for the
similar period in 1996. Income before gain on sale of real estate for 1997
was $15,864,000. Funds from operations for the year ended December 31, 1997
were $29,113,000, or $1.95 per share assuming the conversion of all preferred
shares and all remaining subordinated debentures ("proforma basis"), as
compared with $16,930,000, or $1.80 per share, for the year ended December
31, 1996 on the same basis.
For the three months ended December 31, 1997, revenues and income
available to common shareholders were $20,317,000 and $10,246,000, compared
with $13,745,000 and a loss of $2,426,000 for the quarter ended December 31,
1996. Income available to common shareholders per share for the three months
ended December 31, 1997 was $.62 (basic earnings per share), compared with a
loss of $.32 (basic earnings per share) for the same period in 1996. Income
before gain on sale of real estate for the fourth quarter of 1997 was
$5,006,000.
Glenn L. Carpenter, Chairman of the Board and Chief Executive Officer,
stated that the 1997 results were improved due to "same store" sales growth,
the reduction in interest cost associated with the debenture exchange
completed by the Company in December 1996 and the Company's active
acquisition program, which acquired $340,000,000 in new real estate
properties during 1997. In contrast, 1996 results were impacted by the
deduction of the non-cash, non-recurring $3,596,000 charge related to the
debenture exchange offer in the fourth quarter of that year.
Funds from operations for the fourth quarter ended December 31, 1997, on
a proforma basis assuming the conversion of all preferred shares and all the
remaining subordinated debentures, were $9,231,000, or $.51 per share,
compared with $4,794,000, or $.45 per share, for the fourth quarter 1996.
The 13% increase, on a per share basis, was due to $340,000,000 in new
property acquisitions made during 1997, and the continued growth in "same
store" net operating income for both the industrial and multifamily
portfolios.
Net operating income for Pacific Gulf's industrial portfolio on a "same
store" basis increased from $10,815,000 in 1996 to $12,032,000 in 1997, an
increase of 11%. This increase was due primarily to an increase in rental
income and lower operating costs due to improved management. Overall
occupancy for the industrial portfolio was 95% as of December 31, 1997,
compared with 98% as of December 31, 1996.
For the multifamily operations, "same store" net operating income
increased from $16,250,000 in 1996, to $17,133,000 in 1997, representing an
increase of 5%. This increase was due primarily to an increase in rental
income. Overall occupancy for the multifamily portfolio was 94% as of
December 31, 1997, compared with 93% as of December 31, 1996.
The Company has adopted and reported earnings per share giving effect to
the Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 128 which requires the calculation and disclosure of basic and
diluted earnings per share including a reconciliation of the weighted average
shares utilized in the calculations. As restated for the change and as
reflected on the attached consolidated statements of operations and on the
Funds from Operations supplemental table, the Company's calculations of
weighted average outstanding shares for 1996 have been revised and,
accordingly, are not comparative to previous releases.
Pacific Gulf Properties Inc., a self-administered and self-managed equity
real estate investment trust, owns, operates, leases, acquires, rehabilitates
and develops industrial and multifamily properties located in selected
markets within the western United States.
(Financial tables follow)
(Other supplemental data available upon request)
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(UNAUDITED)
Three Months Ended December 31
1997 1996
REVENUES
Rental income
Industrial properties $11,560 $6,314
Multifamily properties 8,757 7,431
20,317 13,745
EXPENSES
Rental property expenses
Industrial properties 2,348 1,517
Multifamily properties 3,333 3,027
5,681 4,544
Depreciation 3,935 2,315
Interest (including amortization
of debenture discount and
financing costs of $ 208
and $287 respectively) 4,716 4,798
General and administrative expenses 921 918
Minority partners' interest in
earnings of consolidated partnerships 58 --
Nonrecurring loss on exchange
of debentures for common stock -- 3,596
15,311 16,171
INCOME (LOSS) BEFORE GAIN
ON SALE OF REAL ESTATE 5,006 (2,426)
Gain on sale of real estate 5,705 --
NET INCOME (LOSS) $10,711 $(2,426)
Less preferred dividend requirements 465 --
INCOME AVAILABLE (LOSS ATTRIBUTABLE)
TO COMMON SHAREHOLDERS $10,246 $(2,426)
INCOME AVAILABLE (LOSS ATTRIBUTABLE)
PER COMMON SHARE
Basic EPS $0.62 $(0.32)
Diluted EPS $0.60 $(0.31)
DIVIDENDS DECLARED PER COMMON SHARE $0.42 $0.41
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
Years Ended December 31
1997 1996
REVENUES
Rental income
Industrial properties $36,410 $20,783
Multifamily properties 33,096 29,104
69,506 49,887
EXPENSES
Rental property expenses
Industrial properties 8,212 5,308
Multifamily properties 12,754 11,554
20,966 16,862
Depreciation 12,008 8,236
Interest (including amortization of
debenture discount and financing
costs of $827 and $1,211 respectively) 17,337 18,411
General and administrative expenses 3,159 2,974
Minority partners' interest in
earnings of consolidated partnerships 172 --
Nonrecurring loss on exchange of
debentures for common stock -- 3,596
53,642 50,079
INCOME (LOSS) BEFORE GAIN
ON SALE OF REAL ESTATE 15,864 (192)
Gain on sale of real estate 5,594 74
NET INCOME (LOSS) $21,458 $(118)
Less preferred dividend requirements 855 --
INCOME AVAILABLE (LOSS ATTRIBUTABLE)
TO COMMON SHAREHOLDERS $20,603 $(118)
INCOME AVAILABLE (LOSS ATTRIBUTABLE)
PER COMMON SHARE
Basic EPS $1.51 $(0.02)
Diluted EPS $1.47 $(0.02)
DIVIDENDS DECLARED PER COMMON SHARE $1.65 $1.61
FUNDS FROM OPERATIONS (a)
SUPPLEMENTAL TABLE
(In thousands except share data)
For the Three Months Ended For the Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1996 1997 1996
Income Available (Loss Attributable)
to Common Shareholders $10,246 $(2,426) $20,603 $(118)
Gain on Sale of Real Estate (5,705) -- (5,594) (74)
Nonrecurring Loss on Exchange
of Debentures for Common Stock -- 3,596 -- 3,596
Depreciation 3,935 2,315 12,008 8,236
Funds from Operations 8,476 3,485 27,017 11,640
Weighted Average Common
Shares Outstanding (b) 16,420 7,517 13,686 6,312
Funds from Operations
per Common Share $ .52 $ .46 $ 1.97 $ 1.84
(a) Industry analysts generally consider funds from operation ("FFO") an
appropriate measure of performance of a real estate investment trust
("REIT"). Funds from operations represent amounts available to common
shareholders and is defined as net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from
debt restructuring and sales of property, plus depreciation and amortization
(excluding amortization of deferred financing costs and depreciation of non
real estate assets), and after adjustments for unconsolidated partnerships
and joint ventures and preferred dividend requirements.
(b) 1996 calculations have been revised to conform to the current year
presentation.
PROFORMA FUNDS FROM OPERATIONS (c)
Funds from Operations $8,476 $3,485 $27,017 $11,640
Preferred Dividend Requirements 465 -- 855 --
Interest Expense on Debentures 255 1,168 1,100 4,720
Amortization of Debenture
Discount and Costs 35 141 141 570
Pro Forma Funds
from Operations $9,231 $4,794 $29,113 $16,930
Weighted Average Common
Shares Outstanding 16,420 7,517 13,686 6,312
Additional Shares
Assuming Conversion
Other (d) 82 70 80 36
Preferred Stock 1,095 -- 507 --
Debentures 682 3,034 682 3,034
Proforma Weighted Average
Outstanding Shares 18,279 10,621 14,955 9,382
Proforma Funds from Operations
per common share $.51 $.45 $1.95 $1.80
(c) Proforma Funds from Operations Calculations -- Assume the conversion
of Convertible Subordinated Debentures and Preferred Stock and excludes the
conversion of limited partnership units (consistent with the Company's
previous calculation methodology).
(d) Represents non-vested restricted stock and options as converted.
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
Dec. 31, 1997 Dec. 31, 1996
ASSETS
Real estate assets
Land $202,418 $111,253
Buildings 530,638 270,458
733,056 381,711
Accumulated depreciation (39,148) (28,844)
693,908 352,867
Cash and cash equivalents 1,466 1,523
Receivables 3,399 2,125
Other assets 13,698 8,125
$712,471 $364,640
LIABILITIES AND SHAREHOLDERS' EQUITY
Loans payable $283,852 $197,401
Accounts payable and accrued liabilities 9,009 5,671
Dividends payable 8,852 4,001
Convertible subordinated debentures 12,592 14,227
314,305 221,300
Minority interest in
consolidated partnerships 9,326 3,518
Commitments and contingencies -- --
Shareholders' equity
Preferred shares, $.01 par value;
5,000,000 shares authorized;
1,351,351 Senior Cumulative
Convertible shares Class A and
1,411,765 shares Class B issued
and outstanding at December 31, 1997
and no shares outstanding at
December 31, 1996 28 --
Common shares, $.01 par value;
25,000,000 shares authorized;
19,968,189 at December 31, 1997
and 9,757,917 at December 31, 1996,
respectively 200 98
Excess shares, $.01 par value;
30,000,000 shares authorized;
no shares outstanding -- --
Outstanding restricted stock (818) (877)
Additional paid-in capital 411,187 157,895
Distributions in excess of earnings (21,757) (17,294)
388,840 139,822
$712,471 $364,640
SOURCE Pacific Gulf Properties, Inc.
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CONTACT:
Donald G. Herrman, Chief Financial Officer,
or Cindy L. Smith, Investor Relations, both of Pacific Gulf
Properties, Inc., 714-223-5000, or 800-PGP-1909
CNOC: http://www.prnewswire.com or fax, 800-758-5804, ext.
671475
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