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| Boddie-Noell Properties, Inc. Announces Operating Results for The Second Quarter of 1999 |
CHARLOTTE, N.C., July 28 /PRNewswire/ -- Boddie-Noell Properties, Inc. (Amex: BNP) today announced operating results for the quarter ended June 30, 1999 (second quarter of 1999). Overview: Boddie-Noell Properties, Inc. is a real estate investment trust focused on owning and operating apartment communities. We own and operate fifteen apartment communities containing a total of 3,440 apartments. BNP Management, Inc., an unconsolidated subsidiary, provides third-party management services for four apartment communities, containing a total of 891 apartments, and one shopping center. In addition to our apartment properties, we own 44 restaurant properties, which are leased on a triple net basis to a restaurant operator. We, along with our management subsidiary, operate in the states of North Carolina and Virginia. Operating Results: See Tabular Information Below Revenue: For the second quarter of 1999, total revenue increased by 40.4 percent over the same period in 1998. For the first six months of 1999 total revenue increased by 40.8 percent over the same period in 1998. We have two principal sources of revenue: apartment operations and restaurant rental revenue. For both the quarter and first six month periods the increase in total revenue was attributable to a significant increase in apartment rental income. Apartments: Revenue from our apartments increased by 50.9 percent for the second quarter and 52.8 percent for the first six months of 1999 as compared to the same periods in 1998. The increases for both the quarter and year-to- date periods were principally due to the acquisition of six apartment communities during 1998 and the first quarter of 1999. For the second quarter, average economic occupancy for all apartments was 95.7 percent and the average revenue received per occupied unit was $733 per month. For the first six months of 1999, the average economic occupancy for all apartments was 95.1 percent and the average revenue per occupied unit was $731. On a "same store" basis, revenue from apartments increased by 1.0 percent for the second quarter. Average economic occupancy for these units increased to 95.6 percent from 94.7 percent for the second quarter, while average revenue per occupied unit remained unchanged at $736. For the first six months of 1999, "same store" apartment revenue increased by 0.6 percent with average economic occupancy increasing to 95.4 percent from 94.5 percent. Average revenue per occupied unit for the first six months decreased to $734 from $736 per month. Restaurants: In June 1999, we sold three restaurants to Boddie-Noell Enterprises, the lessee, under the non-economic clause of the restaurant master lease. Following the sale of these properties, we expect the annual minimum rent will be approximately $4.3 million in 1999, and $4.2 million per year thereafter, compared to $4.5 million minimum rent in 1998. We applied the $2.1 million proceeds from the sale to reduce our line of credit. We expect the sale of these restaurants to reduce funds from operations for the balance of 1999 by approximately $80,000. Restaurant rental revenue for the second quarter and for the first six months of 1999 was the minimum rent, however, as a result of the sale of the three restaurant properties in the second quarter of 1999 restaurant rental revenue decreased by 1.6 percent for the second quarter and decreased by 0.8 percent for the first six months. "Same store" sales at our restaurant properties decreased by 1.2 percent for the second quarter, and decreased by 2.0 percent for the first six months, compared to 1998 amounts. Expenses: Expenses increased by 60.6 percent for the second quarter and by 59.3 percent for the first six months of 1998. Apartment operating expenses increased by 66.5 percent for the second quarter and 63.1 percent for the first six months of 1998. These increases are primarily attributable to the acquisition of six apartment properties in 1998 and the first quarter of 1999. Funds from Operations: Funds from operations of the Operating Partnership for the second quarter increased by 10.7 percent to $2,660,000 from $2,402,000 in the second quarter of 1998. Funds from operations per share for the second quarter were unchanged from the second quarter of 1998 at $0.35 per share. For the first six months of 1999, funds from operations for the Operating Partnership increased by 15.4 percent to $5,518,000 from $4,780,000. On a per share basis, funds from operations for the first six months of 1999 increased by 4.5% to $0.73 per share from $0.70 per share in 1998. Net Income: For the second quarter, net income available to common shareholders decreased by 40.2 percent. For the first six months of 1999, net income decreased by 31.5 percent. The decline in net income for both periods is primarily attributable to the increase in the non-cash charge for depreciation associated with the acquisition of the six apartment properties in 1998 and early 1999. President's Statement: Despite strong competition and a large supply of new construction in our markets, we have been able to maintain good occupancy at our apartment communities during the second quarter. This has not, however, been without considerable effort and cost. Record home purchases have resulted in a substantial amount of turnover at a number of our properties. We have countered this by implementing an aggressive marketing campaign and by insuring that our properties are in excellent physical condition. While we have been able to maintain occupancy, and, in fact, increase it slightly, we have not been able to increase rents at the rate we would like. As a result, apartment revenue for the second quarter was slightly lower than expected. This, combined with a number of other factors, including the loss of revenue from the three restaurants which were sold during the quarter, the costs associated with the marketing campaign and resident turnover, higher personnel costs attributable to an extremely tight labor market and some issues of timing of expenses, resulted in slightly lower than expected funds from operations. We believe we are well positioned for balance of the year. We have excellent properties in good locations. Demand for apartments remains high and we believe we can compete effectively in our markets. Dividend Declaration: On July 20, 1999, the Board of Directors declared a regular quarterly dividend in the amount of $0.31 per share to be paid on August 17, 1999, to shareholders of record on August 2, 1999. 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, 1998. Information Requests: More information may be obtained by calling our Corporate Offices at (704) 944-0100 or on the Internet through our website at http://www.bnproperties.com . You may also e-mail information requests to our 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 Six months ended June 30 June 30 1999 1998 1999 1998 Revenues Apartment rental income $ 7,243 $ 4,800 $ 14,359 $ 9,399 Restaurant rental income 1,107 1,125 2,232 2,250 Interest and other income 190 159 309 352 8,541 6,084 16,901 12,000 Expenses Apartment operations 2,649 1,591 4,958 3,040 Depreciation and amortization 1,875 1,148 3,750 2,280 Administrative 514 309 983 629 Interest 2,676 1,755 5,359 3,496 7,714 4,802 15,050 9,445 Income before minority interest and extraordinary item 827 1,282 1,851 2,556 Minority interest in operating partnership 172 187 386 365 Income before extraordinary item 655 1,095 1,465 2,191 Extraordinary item - loss on early extinguishment of debt -- -- -- 51 Net income $ 655 $ 1,095 $ 1,465 $ 2,139 Income before minority interest and extraordinary item $ 827 $ 1,282 $ 1,851 $ 2,556 Depreciation 1,732 1,018 3,464 2,021 Amortization of management intangible 102 102 203 203 Funds from operations - Operating Partnership 2,660 2,402 5,518 4,780 Minority interest in funds from operations (554) (350) (1,151) (683) Funds from operations available to shareholders - basic $ 2,106 $ 2,051 $ 4,367 $ 4,097 Per share amounts - basic: Income before extraordinary item $ 0.10 $ 0.19 $ 0.24 $ 0.37 Net income $ 0.10 $ 0.19 $ 0.24 $ 0.36 Funds from operations $ 0.35 $ 0.35 $ 0.73 $ 0.70 Per share amounts - diluted: Income before extraordinary item $ 0.10 $ 0.18 $ 0.24 $ 0.37 Net income $ 0.10 $ 0.18 $ 0.24 $ 0.36 Funds from operations $ 0.35 $ 0.35 $ 0.73 $ 0.69 Weighted average shares outstanding 5,999 5,917 5,992 5,881 Weighted average Operating Partnership minority units outstanding 1,579 1,013 1,579 982 Weighted average total shares and minority units outstanding 7,578 6,930 7,571 6,862 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 Six months ended June 30 June 30 1999 1998 1999 1998 Numerators: For basic per share amounts - Income before extraordinary item $ 655 $ 1,095 $ 1,465 $ 2,191 Extraordinary item -- -- -- 51 Net income - basic $ 655 $ 1,095 $ 1,465 $ 2,139 Income before extraordinary item and minority interest $ 827 $ 1,282 $ 1,851 $ 2,556 Depreciation 1,732 1,018 3,464 2,021 Amortization of management intangible 102 102 203 203 Minority interest in FFO (554) (350) (1,151) (683) Funds from operations available to shareholders - basic $ 2,106 $ 2,051 $ 4,367 $ 4,097 For diluted per share amounts - Income before extraordinary item $ 827 $ 1,282 $ 1,851 $ 2,556 Extraordinary item -- -- -- 51 Net income - diluted $ 827 $ 1,282 $ 1,851 $ 2,504 Income before extraordinary item $ 827 $ 1,282 $ 1,851 $ 2,556 Depreciation 1,732 1,018 3,464 2,021 Amortization of management intangible 102 102 203 203 Funds from operations available to shareholders - diluted $ 2,660 $ 2,402 $ 5,518 $ 4,780 Denominators: For basic per share amounts - Weighted average shares outstanding 5,999 5,917 5,992 5,881 Effect of dilutive securities: Contingent stock, acquisition -- -- -- 4 Convertible Operating Partnership units 1,579 1,013 1,579 982 Stock options (1) -- 30 0 34 For diluted per share amounts - Adjusted weighted average shares and assumed conversions 7,578 6,960 7,571 6,900 (1) 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
