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| BNP Residential Properties, Inc., Announces Fourth Quarter and 2000 Operating Results |
CHARLOTTE, N.C., Feb. 9 /PRNewswire/ --
BNP Residential Properties, Inc., (Amex: BNP) today announced operating
results for the quarter ended December 31, 2000, and fiscal year 2000.
Overview
BNP Residential Properties, Inc., is a self-administered and self-managed
real estate investment trust that owns and operates 15 apartment communities
containing 3,680 units. We also own 43 restaurant properties, which are
leased to a third party operator on a triple-net basis. Through our
management subsidiary, we manage an additional four apartment communities
containing 891 units. At present, all of our operations are in the states of
North Carolina and Virginia.
Results of Operations
Important Notice: BNP Residential Properties operates under the umbrella
partnership format commonly referred to as an UpREIT. Under this format, all
of the operations of BNP are conducted at the operating partnership level. To
better reflect the size and scope of our operations, all figures included in
this report, except for "per share" items, represent the operations of the
operating partnership. Items that are reported on a per share basis reflect
the results applicable to a single share of our common stock.
2000 as Compared to 1999
Revenues
Total revenue in 2000 was $33.9 million, an increase of 1.2% compared to
1999. Apartment rental income accounted for 86.4% of our total revenue in
2000 compared to 85.5% in 1999. Restaurant rental income was 12.3% of total
revenue in 2000 as compared to 13.0% in 1999.
Apartment rental income in 2000 was $29.3 million, an increase of 2.3%
compared to 1999. This increase reflects improvements in both occupancy and
average rental rates in 2000. Average economic occupancy for all apartments
was 95.9% in 2000 compared to 95.1% in 1999. Average monthly revenue per
occupied unit for all apartments was $737 in 2000 compared to $729 in 1999.
These comparisons reflect the results for all 3,440 apartments in operation
through the entire 12 months of 2000 and 1999.
Restaurant rental income in 2000 was $4.2 million, a decrease of 4.1%
compared to 1999. The decrease in restaurant rental income is due to the sale
of three restaurant properties in June 1999 and one restaurant property in
June 2000. The four restaurants were sold to the lessee under the "non-
economic" clause of an agreement that allows the lessee to close and buy back
up to seven restaurants for no less than net carrying value. We received
approximately $644,000 as a result of the June 2000 restaurant closing. In
January 2001, the lessee notified us of its intention to close and buy back
one additional restaurant in April 2001.
Under the lease, restaurant rental payments are the greater of a specified
minimum rent or 9.875% of food sales. Prior to the sale of the four
restaurants, the minimum rent was $4,500,000 per year. The minimum rent is
reduced by approximately $96,000 per year for each restaurant that is sold.
Restaurant rental income in both 2000 and 1999 was the specified minimum rent.
"Same store" sales (for our 43 restaurants that were open through the
entire 12 months of both 2000 and 1999) declined by 3.6% in 2000 compared to
1999. Restaurant sales would have to increase by approximately 8% before we
would receive rent exceeding the minimum rent.
Interest and other income decreased by 16.3% to $427,000 in 2000 as
compared to 1999. This decrease is primarily attributable to a $47,000
reduction in interest income due to repayment in February 2000 of $525,000 in
principal on a note receivable from a participating mortgage note held by the
Company. Our interest in the net income of the Management Company was
$131,000 in 2000 compared to $123,000 in 1999.
Expenses
Total expenses, including non-cash charges for depreciation and
amortization, were $31.3 million in 2000, an increase of 4.3% compared to
1999.
Apartment operations expense was $9.8 million in 2000, an increase of 3.6%
compared to 1999. Apartment operations expense represented 33.4% of related
apartment rental income, compared to 32.9% in 1999. This increase is
primarily attributable to higher costs for compensation of on-site staff,
taxes and property insurance.
We reclassified approximately $600,000 of 1999 expenses from apartment
operations expense to administrative expense to conform to our current
classification. Under the current classification only direct costs of on-site
operations are included in apartment operations expense.
Operating expenses for restaurant properties are insignificant because the
restaurant properties' triple-net lease arrangement requires the lessee to pay
virtually all of the expenses associated with the restaurant properties.
Administrative expense was $2.4 million in 2000, an increase of 1.7%
compared to 1999. We include our apartment property management costs as well
as corporate expenses in this line item. Administrative costs were in line
with management's expectations.
During 2000, we entered into negotiations for a private equity
transaction. These negotiations were terminated by the Company during the
fourth quarter of 2000, and we recorded a charge of $237,000 for the costs
incurred in pursuing the transaction. Because this is a significant and non-
recurring charge, we have reported this charge as a separate line item in our
statement of operations.
Depreciation and amortization totaled $7.7 million in 2000, an increase of
2.8% compared to 1999. These increases reflect the impact of additions and
replacements at apartment communities.
Interest expense was $11.2 million in 2000, an increase of 4.2% compared
to 1999. This increase was primarily attributable to substantial increases in
variable interest rates during the first half of 2000.
Funds From Operations
Funds from operations in 2000 totaled $10.1 million, a decrease of 6.3%
compared to $10.8 million in 1999. Funds from operations per share was $1.37
for 2000 as compared to $1.43 for 1999. The modest increase in contribution
from apartment operations was not adequate to offset increases in interest
expense, loss in restaurant rental income, or the significant non-recurring
charge for the terminated equity transaction. Approximately $0.03 per share
of the decline in funds from operations per share for the year was
attributable to the non-recurring charge incurred in the fourth quarter.
Net Income
Net income per share for the year 2000 was $0.35 as compared to $0.46 for
1999. The decline in net income per share was due to increases in interest
expense, loss in restaurant rental income, increases in non-cash charges of
depreciation and amortization and the significant non-recurring charge for the
terminated equity transaction.
Dividend
We paid dividend distributions totaling $1.24 per share during 2000 and
1999. Our dividend payout ratio (the ratio of dividends plus distributions
paid to Operating Partnership funds from operations) for the year was 90.5% in
2000 and 86.6% in 1999. For the year 2000, 50.1% of the distribution was
classified as non-taxable return of capital and 49.9% was ordinary taxable
dividend income.
Significant Events
On December 28, 2000, we acquired Page Mill Apartments, a 240 unit
apartment community in Cary, North Carolina, at a total cost of approximately
$12.4 million, paid in cash. We financed this acquisition with a $9.7 draw on
a variable-rate loan secured by a deed of trust on the community and $2.7
draws on our lines of credit. Page Mill is adjacent to one of our properties,
Oak Hollow - 220 units. These two properties will be combined and operated as
one 460 unit community. Because the acquisition was so late in the year, the
purchase of Page Mill had no effect on 2000 operating results. With the
purchase of Page Mill, we now own and operate 3,680 apartment units.
Fourth Quarter of 2000 as Compared to Fourth Quarter of 1999
Revenues
Total revenue for the fourth quarter of 2000 was $8.47 million, an
increase of 2.4% compared to the same period in 1999.
Apartment rental income during the fourth quarter was $7.3 million, an
increase of 2.2% compared to 1999. Average economic occupancy for all
apartments was 94.7% during the fourth quarter of 2000 as compared to 95.3% in
1999. Average monthly revenue per occupied unit for all apartments was $748
in the fourth quarter of 2000 compared to $727 in 1999. These comparisons
reflect the results for all 3,440 apartments in operation through the entire
quarter in 2000 and 1999.
Restaurant rental income for the fourth quarter of 2000 was $1.03 million
as compared to $1.05 million in 1999. The decrease in restaurant rental
income was due to the sale of one restaurant property in June 2000.
"Same store" sales (for the 43 restaurants that were open through the
entire fourth quarters of 2000 and 1999) declined by 5.1% in 2000 compared to
1999.
Expenses
Total expenses, including non-cash charges for depreciation and
amortization, were $8.0 million for the fourth quarter of 2000, an increase of
6.6% as compared to 1999.
Apartment operations expense was $2.5 million for the fourth quarter of
2000, an increase of 2.1% compared to 1999. Apartment operations expense
represented 34.4% of related apartment rental income for the fourth quarters
of both 2000 and 1999. This increase is primarily attributable to higher
costs for compensation of on-site staff, taxes and property insurance.
Administrative expense increased by 7.1% for the fourth quarter of 2000 as
compared to 1999. We now include non-site apartment property management costs
as well as corporate expenses in this line item. Administrative costs were in
line with management's expectations.
During 2000, we entered into negotiations for a private equity
transaction. These negotiations were terminated by the Company during the
fourth quarter of 2000, and we recorded a charge of $237,000 for the costs
incurred in pursuing the transaction. Because this is a significant and non-
recurring charge, we have reported this charge as a separate line item in our
statement of operations.
Interest expense for the quarter was $2.8 million in 2000, an increase of
5.1% compared to 1999. This increase is primarily attributable to a
substantial increase in variable interest rates.
Funds from Operations
Funds from operations for the fourth quarter of 2000 totaled $2.36
million, a decrease of 10.1% compared to $2.63 million in 1999. Funds from
operations per share was $0.32 for the fourth quarter of 2000 as compared to
$0.35 in 1999. The decline in funds from operations per share for the quarter
was primarily attributable to the significant non-recurring charge for the
terminated equity transaction. This non-recurring charge accounted for
approximately $0.03 per share of the decline in funds from operations per
share for the quarter and year.
Net income
Net income per share for the fourth quarter of 2000 was $0.06 as compared
to $0.10 for 1999. The decline in net income per share was due to increases
in interest expense, loss in restaurant rental income, increases in non-cash
charges of depreciation and amortization and the significant non-recurring
charge for the terminated equity transaction.
Dividend
We paid dividend distributions totaling $0.31 per share during the fourth
quarters of both 2000 and 1999.
Additional Information
More information may be obtained by calling the our corporate offices at
(704) 944-0100 or on our web site at http://www.bnproperties.com. Information
requests may be e-mailed to the investor relations department at
investor.relations@bnproperties.com.
Forward Looking Statement Disclosure
This press release includes forward-looking statements concerning the
company's operations, economic performance and financial condition, including,
in particular, forward-looking statements regarding future operations and
performance. Such statements are subject to various risks and uncertainties.
Actual results could differ materially from those currently anticipated due to
a number of factors identified in our annual report on Form 10-K for the year
ending December 31, 1999.
BNP RESIDENTIAL PROPERTIES, INC.
Consolidated Balance Sheets
December 31
2000 1999
Assets
Real estate investments at cost:
Apartment properties $217,818,208 $203,365,405
Restaurant properties 39,702,060 40,544,741
257,520,268 243,910,146
Less accumulated depreciation (32,815,205) (25,926,208)
224,705,063 217,983,938
Cash and cash equivalents 1,056,052 431,531
Prepaid expenses and other assets 1,510,541 1,638,199
Investment in and advances to
Management Company 714,892 452,489
Notes receivable 100,000 625,000
Other assets, net of accumulated amortization:
Intangible related to acquisition
of management operations 1,521,288 1,927,488
Deferred financing costs 1,083,560 1,210,990
Total assets $230,691,396 $224,269,635
Liabilities and Shareholders' Equity
Mortgage and other notes payable $163,611,737 $150,883,348
Accounts payable and accrued expenses 149,412 110,581
Accrued interest on mortgage and
other notes payable 794,836 742,413
Escrowed security deposits and
deferred revenue 383,626 486,748
Deferred cable equipment rental revenue 800,000 --
Deferred credit for interest defeasance 666,688 833,344
166,406,299 153,056,434
Minority interest in Operating Partnership 19,737,035 21,316,760
Shareholders' equity:
Common stock, $.01 par value, 100,000,000
shares authorized, 5,706,950 shares issued
and outstanding at December 31, 2000
5,734,906 shares issued and outstanding
at December 31, 1999 57,069 57,349
Additional paid-in capital 69,707,155 69,961,625
Dividend distributions in excess of
net income (25,216,162) (20,122,533)
Total shareholders' equity 44,548,062 49,896,441
Total liabilities and shareholders' equity $230,691,396 $224,269,635
BNP Residential Properties, Inc.
Consolidated Statements of Operations and Funds from Operations
Dollars in thousands, except per share data
Three months ended Twelve months ended
December 31 December 31
2000 1999 2000 1999
Revenues
Apartment rental income $7,308 $7,152 $ 29,269 $ 28,608
Restaurant rental income 1,029 1,053 4,162 4,339
Interest and other income 129 64 427 510
8,466 8,269 33,858 33,457
Expenses
Apartment operations 2,512 2,460 9,766 9,423
Depreciation and
amortization 1,953 1,914 7,735 7,525
Administrative 489 457 2,391 2,352
Costs of terminated
equity transaction 237 -- 237 --
Interest 2,826 2,688 11,151 10,703
8,017 7,519 31,280 30,003
Income before minority
interest 449 749 2,578 3,454
Minority interest in
operating partnership (104) (162) (595) (728)
Net income $346 $587 $1,983 $2,726
Income before minority
interest $449 $749 $2,578 $3,454
Depreciation 1,808 1,774 7,156 6,956
Amortization of
management intangible 102 102 406 406
Funds from operations -
Operating Partnership 2,359 2,625 10,139 10,816
Minority interest in
funds from operations (544) (567) (2,339) (2,280)
Funds from operations
available to
shareholders - basic $1,815 $2,058 $7,801 $8,537
Per share amounts -
basic:
Net income $ 0.06 $0.10 $0.35 $0.46
Funds from operations $ 0.32 $0.35 $1.37 $1.43
Per share amounts -
diluted:
Net income $ 0.06 $0.10 $0.35 $0.46
Funds from operations $ 0.32 $0.35 $1.37 $1.43
Weighted average shares
outstanding 5,707 5,900 5,708 5,973
Weighted average
Operating Partnership
minority units
outstanding 1,710 1,649 1,711 1,601
Weighted average total
shares and minority units
outstanding 7,416 7,550 7,418 7,573
We provide the following information for use by analysts and other members
of the financial community for use in their detailed analyses:
Three months ended Twelve months ended
December 31 December 31
2000 1999 2000 1999
Numerators:
For basic per share
amounts -
Net income - basic $346 $587 $1,983 $2,726
Income before minority
interest $449 $749 $2,578 $3,454
Depreciation 1,808 1,774 7,156 6,956
Amortization of
management intangible 102 102 406 406
Minority interest in FFO (544) (567) (2,339) (2,280)
Funds from operations
available to
shareholders - basic $1,815 $2,058 $7,801 $8,537
For diluted per share
amounts - Income before
minority interest $449 $749 $2,578 $3,454
Income before minority
interest $449 $749 $2,578 $3,454
Depreciation 1,808 1,774 7,156 6,956
Amortization of
management intangible 102 102 406 406
Funds from operations
available to
shareholders - diluted $2,359 $2,625 $ 10,139 $10,816
Denominators:
For basic per share
amounts - Weighted average
hares outstanding 5,707 5,900 5,708 5,973
Effect of dilutive
securities: Convertible
Operating Partnership
units 1,710 1,649 1,711 1,601
Stock options (A) -- -- -- --
For diluted per share
amounts -
Adjusted weighted
average shares and
assumed conversions 7,416 7,550 7,418 7,573
(A) Includes only dilutive stock options.
SOURCE BNP Residential Properties, Inc.
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CONTACT:
Philip S. Payne, Executive Vice President &
CFO of BNP Residential Properties, Inc., 704-944-0100, or fax,
704-944-2039
