Fourth-quarter/Full-year Highlights:
- 1997 total return 24.6%
- 9.9% increase in full-year funds from operations (FFO) per share
over 1996
- 8.5% increase in fourth-quarter funds from operations per share
over 1996
- 34% annual increase in EBITDA
- Total market capitalization increased 40% to $818 million
- Annual dividend rate increased 6% to $1.40 per share, quarterly
rate of $0.35
- Portfolio occupancy 94% at year-end
Financial Highlights (Unaudited)
(in 000's, except per share data)
Twelve Months Ended Three Months Ended
12/31/97 12/31/96 12/31/97 12/31/96
Revenues $97,552 $78,839 $26,537 $23,200
Funds from
Operations $41,174 $30,345 $11,218 $9,616
FFO Per Share $1.89 $1.72 $0.51 $0.47
EBITDA $60,019 $44,818 $16,929 $13,659
Total Market
Capitalization $817,662 $584,350 $817,662 $584,350
Portfolio Occupancy 94% 90% 94% 90%
Total Square Feet 10.1 7.7 10.1 7.7
million million million million
NORTHBROOK, Ill., Feb. 11 /PRNewswire/ -- Bradley Real Estate, Inc.
(NYSE: BTR) today reported a 9.9 percent increase in funds from operations
(FFO) per share to $1.89 per share, or $41.2 million, for the year ended
December 31, 1997, compared with $1.72 per share, or $30.3 million, in the
prior year. Net income for 1997 totaled $25.1 million, or $1.15 per share,
compared with $27.2 million, or $1.54 per share, for the prior year. Net
income for 1996 included a gain of $9.4 million on the sale of the company's
ground lease in Minneapolis. Net income for 1997 included a net gain of
$7.4 million on the sale of four non-core properties over the course of the
year, a non-recurring charge of $3.4 million for certain stock-based
compensation, and an extraordinary charge of $4.6 million for costs incurred
in connection with the prepayment of a REMIC obligation in late November and
the write-off of costs associated with the company's former line of credit.
The non-recurring stock-based charge results from the substitution of stock
awards to key executives upon the Board of Directors' decision in the fourth
quarter to terminate the company's previous superior performance plan.
Weighted average common shares outstanding were 21,776,146 for 1997 compared
with 17,619,546 for the prior year.
Fourth-quarter Results
Fourth-quarter funds from operations per share increased 8.5 percent over
the prior-year quarter to $0.51 cents per share, or $11.2 million, from
$0.47 cents per share, or $9.6 million in the fourth quarter of 1996. Net
income for the period totaled $0.21 cents per share, or $4.6 million, compared
with $0.30 cents per share, or $6.1 million, for the comparable period last
year. Weighted average shares outstanding for the quarter increased to
22,087,730 from 20,567,723 in the year-ago period.
Year-end Occupancy at 94%
Property occupancy at December 31, 1997, was 94 percent, compared with
90 percent at year-end 1996. During the quarter the company signed 17 new
leases totaling 187,000 square-feet at an average rate for comparable space of
$9.12 per square-foot, representing an increase of 10.6 percent over the prior
average rental rate. For the year the company signed new leases totaling
559,000 square feet at an average rent for comparable space of $9.89 per
square-foot, representing an increase of 12.8 percent over the prior average
rental rate. In addition, during the quarter the company renewed 41 leases
totaling 158,000 square feet at an average rate of $11.08 per square foot, a
14.2 percent increase over the prior average rental rate. For the year, the
company renewed 88 leases totaling 334,000 square feet at an average rate of
$10.85 per square foot, representing an increase per square foot of
10.2 percent over the prior average rental rate.
$94 Million of Acquisitions in Fourth Quarter; Full-year Total $190
Million
During the quarter, the company closed on the acquisition of 11 new
properties totaling 1.7 million square feet at a cost of $94 million,
bringing aggregate acquisitions for the year to 25 properties at a cost of
$190 million. Also during the quarter, the company sold its remaining New
England asset, 585 Boylston Street in Boston, at a price of $5.8 million,
resulting in a gain of approximately $4.8 million. At year-end, the company
listed for sale its One North State Street property, located on State Street
in the "Loop" district of downtown Chicago. The 680,000-square-foot, mixed-
use building does not fit with the company's grocery-anchored community
shopping center focus and the company believes, given the current strong
investment sales market in downtown Chicago, that it is an opportune time to
sell this asset.
Balance Sheet Positioned for Continued Growth
At December 31, 1997, total assets were $669 million. The company's debt
to total market capitalization was 37 percent and its debt service coverage
ratio for the year was 3.5. Total debt outstanding was $303 million at a
weighted average rate of 7.34 percent and a weighted average maturity of 5.23
years. Total debt of $303 million included fixed rate debt of $151 million at
an average rate of 7.53 percent and an average maturity of 7.47 years. Fixed
rate debt consisted of $100 million of 7 percent unsecured Notes, maturing in
2004, and $51 million of secured mortgage indebtedness. At year-end the
floating rate portion of Bradley's total debt consisted of $152 million
outstanding under the company's unsecured line of credit facility at a
weighted average rate of 7.16 percent. The company entered into a new line of
credit during the quarter, lowering the rate to LIBOR plus one percent,
extending the maturity to three years, and increasing the line to $200 million
from $150 million. In January 1998, the company has paid down its line of
credit with proceeds from the issuance of $100 million of 7.2 percent
unsecured Notes, maturing in 2008, increasing the available borrowing
capacity on the line of credit to approximately $160 million.
Commenting on the results for the quarter and the year, Thomas D'Arcy,
president and chief executive officer stated, "We are pleased with our fourth-
quarter and full-year results, which reflect the company's focused growth
strategy. During the year we made significant progress in establishing
Bradley as a leading owner of grocery-anchored properties in our Midwest
markets and we have laid the foundation for future growth. We acquired 25 new
properties totaling 3.1 million square feet at an aggregate investment of
$190 million. The 33 percent increase in our asset base coupled with the
24 percent increase in revenues and 34 percent increase in EBITDA reflect the
aggressive steps we are taking to further our Midwest franchise.
Commenting on operations, D'Arcy continued, "In addition to an active year
with regard to new investments, the company's core portfolio continued to
perform very well. During the year we increased our same-store occupancy and
were very successful in increasing base rents across the portfolio. As we
enter 1998, we continue to actively address leasing challenges, and
notwithstanding some recent tenant filings for bankruptcy relief, we remain
optimistic about the continued strong performance of the portfolio.
"Additionally, we have greatly increased our overall financial flexibility
through the achievement of an investment-grade credit rating. The credit
rating, coupled with our low dividend payout ratio of 71 percent, strong debt
service coverage ratio of 3.5, an asset base which is 90 percent unencumbered
by secured debt and our forward equity commitment, position the company well
for continued growth in 1998."
Dividend Rate Increased 6% in Fourth Quarter
During the quarter, the company increased its annual dividend rate by
6 percent to $1.40 per share from $1.32 per share. The quarterly dividend
of $0.35 per share was paid on December 31, 1997, to share owners of record on
December 9, 1997, representing the company's 146th consecutive quarterly
dividend payment. The company's funds from operations payout ratio for 1997
was 71 percent and its funds available for distribution payout ratio was
77 percent.
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 in the Midwest on
favorable terms. Reference is made to the discussions under the captions "Risk
Factors" in the company's 1996 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 has paid 146 consecutive quarterly distributions to its share owners,
one of the longest records of distributions among publicly traded REITs. The
company owns 53 properties located in 11 states aggregating 10.1 million
square feet of rentable space.
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)
ASSETS December 31, December 31, %
1997 1996 Change
Real estate investments-at cost $626,247 $490,133 28%
Accumulated depreciation and
amortization (40,574) (30,670) 32%
Net real estate investments 585,673 459,463 27%
Real estate investments held for sale 52,692 10,285 412%
Other Assets:
Cash and cash equivalents 4,747 7,462 (36%)
Rents and other receivables,
net of allowance for doubtful
accounts of $2,438 for 1997
and $1,636 for 1996 13,038 9,543 37%
Deferred charges, net and
other assets 12,641 15,531 (19%)
Total assets $668,791 $502,284 33%
LIABILITIES AND SHARE OWNERS' EQUITY
Mortgage loans 51,227 125,394 (59%)
Unsecured notes payable 99,783 -- 100%
Line of credit 151,700 63,500 139%
Accounts payable, accrued expenses
and other liabilities 25,086 19,505 29%
Total liabilities 327,796 208,399 57%
Minority interest 21,170 4,160 40%
Share Owners' equity:
Shares of preferred stock, par
value $.01 per share: Authorized
20,000,000 shares; 0 shares
issued and outstanding -- -- 0%
Shares of common stock, par
value $.01 per share: Authorized
80,000,000 shares; issued and
outstanding, 22,999,120 and
21,658,790 shares at December 31,
1997 and 1996, respectively 230 217 6%
Shares of excess stock, par
value $.01 per share: Authorized
50,000,000 shares; 0 shares issued
and outstanding -- -- 0%
Additional paid-in capital 333,222 298,875 11%
Distributions in excess of
accumulated earnings (13,627) (9,367) 45%
Total share owners' equity 319,825 289,725 10%
Total liabilities and share owners'
equity $668,791 $502,284 33%
BRADLEY REAL ESTATE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data) (UNAUDITED)
Three months ended
December 31, %
1997 1996 Change
Income:
Rental income $26,193 $22,869 15%
Other income 344 331 4%
26,537 23,200 14%
Expenses:
Operations, maintenance and
management 3,534 3,672 (4%)
Real estate taxes 4,746 4,724 0%
Mortgage and other interest 4,969 3,744 33%
General and administrative 1,328 1,145 16%
Non-recurring stock-
based compensation 3,415 -- 100%
Corporate office relocation -- -- 0%
Write-off of deferred financing and
acquisition costs -- -- 0%
Depreciation and amortization 4,507 3,713 21%
Income before net gain on sale of
properties and extraordinary items 4,038 6,202 (35%)
Net gain on sale of properties 5,665 -- 100%
Income before extraordinary items
and allocation to minority interest 9,703 6,202 56%
Income allocated to minority interest (458) (92) 398%
Income before extraordinary items 9,245 6,110 51%
Extraordinary loss on prepayment of debt,
net of minority interest (4,631) -- 100%
Net income $4,614 $6,110 (24%)
Basic earnings per common share:
Income before extraordinary items $0.42 $0.30 40%
Extraordinary loss on prepayment of
debt, net of minority interest (0.21) -- 100%
Net income $0.21 $0.30 (30%)
Weighted average shares
outstanding 22,087,730 20,567,723
Diluted earnings per common share:
Income before extraordinary items $0.42 $0.30 40%
Extraordinary loss on prepayment
of debt, net of minority interest (0.21) -- 100%
Net income $0.21 $0.30 (30%)
Twelve Months Ended
December 31, %
1997 1996 Change
Income:
Rental income $96,115 $77,512 24%
Other income 1,437 1,327 8%
97,552 78,839 24%
Expenses:
Operations, maintenance and
management 14,012 12,949 8%
Real estate taxes 18,398 16,787 10%
Mortgage and other interest 16,562 13,404 24%
General and administrative 5,123 3,532 45%
Non-recurring stock-based compensation 3,415 -- 100%
Corporate office relocation -- 409 (100%)
Write-off of deferred financing and
acquisition costs -- 344 (100%)
Depreciation and amortization 16,606 13,286 25%
Income before net gain on sale of
properties and extraordinary items 23,436 18,128 29%
Net gain on sale of properties 7,438 9,379 (21%)
Income before extraordinary items
and allocation to minority interest 30,874 27,507 12%
Income allocated to minority interest (1,116) (285) 292%
Income before extraordinary items 29,758 27,222 9%
Extraordinary loss on prepayment of debt,
net of minority interest (4,631) -- 100%
Net income $25,127 $27,222 (8%)
Basic earnings per common share:
Income before extraordinary items $1.36 $1.54 (12%)
Extraordinary loss on prepayment of
debt, net of minority interest (0.21) -- 100%
Net income $1.15 $1.54 (25%)
Weighted average shares outstanding 21,776,146 17,619,546
Diluted earnings per common share:
Income before extraordinary items $1.36 $1.54 (12%)
Extraordinary loss on prepayment
of debt, net of minority interest (0.21) -- 100%
Net income $1.15 $1.54 (25%)
BRADLEY REAL ESTATE, INC.
CALCULATION OF FUNDS FROM OPERATIONS
(Dollars in thousands, except per share data) (UNAUDITED)
Three months ended Twelve months ended
Net income $4,614 $6,110 (24%) $25,127 $27,222 (8%)
Company's portion of:
Depreciation of real
estate assets &
amortization of
tenant
improvements 3,599 2,893 24% 12,932 10,289 26%
Amortization of
deferred leasing
commissions 245 302 (19%) 1,214 966 26%
Other amortization
including deferred
finance & nonreal
estate related
costs 452 518 (13%) 1,871 2,282 (18%)
Amortization of deferred
finance & nonreal
estate related
costs (169) (207) (18%) (721) (1,035)(30%)
Extraordinary loss
on prepayment of
debt 4,631 -- 100% 4,631 -- 100%
Non-recurring
stock-based
compensation 3,294 -- 100% 3,294 -- 100%
Net gain on sale of
properties (5,448) -- 100% (7,174) (9,379)(24%)
Funds From Operations $11,218 $9,616 17% $41,174 $30,345 36%
Per share data:
Funds From Operations $0.51 $0.47 9% $1.89 $1.72 10%
SOURCE Bradley Real Estate, Inc.
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CONTACT:
Thomas P. D'Arcy, President and CEO of
Bradley Real Estate, 847-272-9800; or Jenifer Estabrook of The
Financial Relations Board, 312-640-6787
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