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| Boddie-Noell Properties, Inc. Announces Fourth Quarter and 1999 Operating Results |
CHARLOTTE, N.C., Feb. 1 /PRNewswire/ -- Boddie-Noell Properties, Inc. (Amex: BNP) today announced operating results for the quarter ended December 31, 1999, and fiscal year 1999. Overview Boddie-Noell Properties, Inc., is a self administered, self-managed real estate investment trust that owns and operates 15 apartment communities containing 3,440 apartment units. We also own 44 restaurant properties, which are leased to a third-party operator on a triple-net lease basis. Through our management subsidiary, we manage an additional four apartment communities containing 891 apartment units. All of our operations are in the states of North Carolina and Virginia. Results of Operations for 1999 Important Notice: Boddie-Noell Properties operates under the umbrella partnership format commonly referred to as an UpREIT. Under this format, all of the operations of Boddie-Noell are conducted at the operating partnership level. To better reflect the size and scope of our operations, all of the figures included in this report, except for "per share" items, represent the operations of the operating partnership. Items which are reported on a per share basis reflect the results applicable to a single share of the Company's common stock. See Tabular Information Following Funds from Operations. Funds from operations for the year increased 5.1% to $10,816,415 in 1999 from $10,291,886 in 1998. This increase was primarily attributable to the inclusion, for the full period, of five apartment communities acquired during 1998 and the acquisition of one apartment community in January 1999. On a per share basis, funds from operations decreased to $1.43 in 1999 from $1.45 in 1998. The decrease in the per share amount reflects a 6.4% increase in the total weighted average shares and minority operating partnership units outstanding in 1999 as compared to 1998. Revenues. For 1999, total revenue increased 23.3% over 1998. This increase in total revenue was primarily due to an increase in apartment revenues. Apartment Operations. Revenues from our apartments increased 30.5% for the year. Average economic occupancy for all apartments was 95.1% for 1999 and 94.7% in 1998. Average monthly revenue per occupied unit for all apartments was $729 for 1999 and $737 in 1998. On a "same-unit" basis, revenue for apartments owned in both years increased 0.3%. Average economic occupancy for these units increased 0.7% to 95.3% for 1999 from 94.6% in 1998. Average monthly revenue per occupied unit for these units decreased to $732 in 1999 from $735 in 1998. Restaurant Operations. For the year, restaurant rental revenue declined 3.6% from that received in 1998. This decline was the result of the closure of three restaurants during 1999. Under the lease, restaurant rental payments are the greater of a specified minimum rent or 9.875% of food sales. Prior to the closing of the three restaurants in 1999, the minimum rent was $4,500,000 per year. With the closing of the three restaurants, the new minimum rent is $4,212,766. For 1999, the $4,338,830 in restaurant rental revenue recorded was the result of our receiving the old minimum rent prior to the closing of the three restaurants and the new reduced minimum rent for the balance of the year. Excluding the three restaurants that were closed during 1999, restaurant sales declined 3.1% for the year. For us to begin to receive rent in excess of minimum rent, restaurant sales would need to increase 4.7%. Interest and Other Income. For the year, interest and other income declined 28.7% in 1999 as compared to 1998. This decline was primarily attributable to a reduction in interest income due to repayment in February 1999 of $2,000,000 in principal on a note due to the Company from a joint venture partnership. Expenses. Apartment operations expense increased 39.6%. This was primarily attributable to the increase in the number of apartments and a significant increase in personnel costs. An increase in administrative expenses, which includes all costs other than on site operations, was consistent with the increased size and scope of the Company's operations. Earnings. For the year, net income was $0.46 per share as compared to $0.62 per share in 1998. The decline in earnings was primarily attributable to an increase in depreciation expense associated with the 1998 and 1999 apartment community acquisitions. Dividends. During 1999, we paid dividends of $1.24 per share. Of this amount, 50.31% was considered to be ordinary income and 49.69% was classified as non-taxable return of capital. The ratio of dividends paid to funds from operations was 86.6% in 1999 as compared to 85.5% in 1998. Results of Operations for the Fourth Quarter of 1999 Revenues for the fourth quarter increased 3.3% over 1998. The increase in total revenue for the quarter was attributable to an increase in apartment revenue offset by a decline in other revenue items. For the quarter, apartment rental income increased 7.8% over the same period in 1998. This was primarily attributable to inclusion of one apartment community acquired in January 1999. For the fourth quarter, average economic occupancy for all apartments was 95.3% in 1999 as compared to 94.2% in 1998. Average monthly revenue per occupied unit for all apartments in the fourth quarter was $727 in 1999 as compared to $736 in 1998. On a "same-unit" basis, apartment revenue for the fourth quarter of 1999 increased 1.3% from 1998. "Same-unit" average economic occupancy for the quarter increased 0.9% to 95.2% in 1999 from 94.3% in 1998, while average monthly revenue per occupied unit increased to $731 from $729 in 1998. Restaurant rental revenues for the quarter declined 6.4% from the fourth quarter of 1998. During the fourth quarter of 1999, we received the minimum rent. The decline in rental revenue for the quarter reflects the impact of the reduction in the minimum rent following the closure of three restaurants earlier in 1999. Excluding the three closed restaurants, restaurant sales for the quarter decreased 4.7%. The difference between sales and restaurant rental revenues was due to the impact of the restaurant lease's minimum rent provision. Interest and other income for the quarter declined 73.9% in 1999 as compared to 1998. This decline was primarily attributable to a reduction in interest income due to repayment in February 1999 of $2,000,000 in principal on a note due to the Company from a joint venture partnership. Increases in expenses for apartment operations, depreciation, amortization, and interest for the fourth quarter were primarily attributable to the increase in the number of apartments. Also contributing to the increase in apartment operations expense was an increase in personnel costs. Funds from operations for the fourth quarter decreased 7.7% as compared to 1998. On a per share basis, funds from operations for the fourth quarter decreased to $0.35 in 1999 from $0.38 in 1998. For the fourth quarter, net income was $0.10 per share as compared with $0.15 in 1998. During the fourth quarter of 1999, we paid a regular quarterly dividend of $0.31 per share. Additional Information More information may be obtained by calling the company's Corporate Offices at (704) 944-0100 or on the Internet through the company website at http://www.bnproperties.com. Information requests may be e-mailed to the investor relations department at investor.relations@bnproperties.com . BODDIE-NOELL PROPERTIES, INC. Consolidated Statements of Operations and Funds from Operations Dollars in thousands, except per share data Three months ended Year ended December 31 December 31 1999 1998 1999 1998 Revenues Apartment rental income $7,152 $6,638 $28,608 $21,925 Restaurant rental income 1,053 1,125 4,339 4,500 Interest and other income 64 243 510 715 8,269 8,006 33,457 27,140 Expenses Apartment operations 2,591 2,265 10,023 7,181 Depreciation and amortization 1,914 1,796 7,525 5,937 Administrative 326 314 1,752 1,333 Interest 2,688 2,545 10,703 8,209 7,519 6,920 30,003 22,660 Income before minority interest and extraordinary item 749 1,086 3,454 4,480 Minority interest in operating partnership 162 218 728 742 Income before extraordinary item 587 867 2,726 3,738 Extraordinary item - loss on early extinguishment of debt -- -- -- 51 Net income $587 $867 $2,726 $3,686 Income before minority interest and extraordinary item $749 $1,086 $3,454 $4,480 Depreciation 1,774 1,657 6,956 5,406 Amortization of management intangible 102 102 406 406 Funds from operations - Operating Partnership 2,625 2,844 10,816 10,292 Minority interest in funds from operations (567) (557) (2,280) (1,708) Funds from operations available to shareholders - basic $2,058 $2,287 $8,537 $8,584 Per share amounts - basic: Income before extraordinary item $0.10 $0.15 $0.46 $0.63 Net income $0.10 $0.15 $0.46 $0.62 Funds from operations $0.35 $0.38 $1.43 $1.45 Per share amounts - diluted: Income before extraordinary item $0.10 $0.15 $0.46 $0.63 Net income $0.10 $0.15 $0.46 $0.62 Funds from operations $0.35 $0.38 $1.43 $1.44 Weighted average shares outstanding 5,900 5,972 5,973 5,924 Weighted average Operating Partnership minority units outstanding 1,649 1,513 1,601 1,192 Weighted average total shares and minority units outstanding 7,550 7,484 7,573 7,116 The company provides the following information for use by analysts and other members of the financial community for use in their detailed analyses: Three months ended Year ended December 31 December 31 1999 1998 1999 1998 Numerators: For basic per share amounts - Income before extraordinary item $587 $867 $2,726 $3,738 Extraordinary item -- -- -- 51 Net income - basic $587 $867 $2,726 $3,686 Income before extraordinary item and minority interest $749 $1,086 $3,454 $4,480 Depreciation 1,774 1,657 6,956 5,406 Amortization of management intangible 102 102 406 406 Minority interest in FFO (567) (557) (2,280) (1,708) Funds from operations available to shareholders - basic $2,058 $2,287 $8,537 $8,584 For diluted per share amounts - Income before extraordinary item $749 $1,086 $3,454 $4,480 Extraordinary item -- -- -- 60 Net income - diluted $749 $1,086 $3,454 $4,420 Income before extraordinary item $749 $1,086 $3,454 $4,480 Depreciation 1,774 1,657 6,956 5,406 Amortization of management intangible 102 102 406 406 Funds from operations available to shareholders - diluted $2,625 $2,844 $10,816 $10,292 Denominators: For basic per share amounts - Weighted average shares outstanding 5,900 5,972 5,973 5,924 Effect of dilutive securities: Contingent stock, acquisition -- -- -- 2 Convertible Operating Partnership units 1,649 1,513 1,601 1,192 Stock options (A) -- -- -- 15 For diluted per share amounts - Adjusted weighted average shares and assumed conversions 7,550 7,484 7,573 7,133 (A) Includes only dilutive stock options.SOURCE Boddie-Noell Properties, Inc.
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CONTACT:
Philip S. Payne, Executive Vice President &
CFO of Boddie-Noell Properties, Inc., 704-944-0100, or fax,
704-944-2039
