SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: (DATE OF EARLIEST EVENT REPORTED) MARCH 27, 1998
ALEXANDER HAAGEN PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND COMMISSION FILE: 1-12588 95-4444963
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3500 SEPULVEDA BOULEVARD
MANHATTAN BEACH, CALIFORNIA, 90266
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 546-4520
The Company hereby amends Item 7 of its current report on Form 8-K filed with
the Securities and Exchange Commission on April 10, 1998 (the "Initial Form 8-
K") to file the (i) audited combined historical summary of certain revenues and
certain expenses of the Six Acquired Properties, for the year ended December 31,
1997, (ii) unaudited pro forma condensed financial information and (iii) the
consent of its independent auditors. Capitalized terms used but not defined
herein have the meaning given to each such term in the Initial Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of properties acquired.
2
SIGNATURES
Pursuant to the requirements of the Securities exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALEXANDER HAAGEN PROPERTIES, INC.
Date: June 8, 1998
By: /s/ Stuart J.S. Gulland
----------------------------
Stuart J.S. Gulland
Senior Vice-President and Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Alexander Haagen Properties, Inc.:
We have audited the accompanying combined historical summary of certain revenues
and certain expenses (the "Historical Summary") of the Six Acquired Properties
(as described in Note 1) for the year ended December 31, 1997. This Historical
Summary is the responsibility of the Six Acquired Properties' management. Our
responsibility is to express an opinion on this combined historical summary of
certain revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform our audit to obtain reasonable
assurance about whether the combined Historical Summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Historical Summary. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the Historical
Summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the Form 8-K of Alexander Haagen Properties, Inc. Material
amounts, described in Note 1 to the Historical Summary, that would not be
comparable to those resulting from the proposed future operation of the Six
Acquired Properties are excluded, and the Historical Summary is not intended to
be a complete presentation of the revenues and expenses of these properties.
In our opinion, such Historical Summary presents fairly, in all material
respects, the combined certain revenues and certain expenses, as defined above,
of the Six Acquired Properties for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Los Angeles, California
May 15, 1998
F-1
ALEXANDER HAAGEN PROPERTIES, INC.
SIX ACQUIRED PROPERTIES
COMBINED HISTORICAL SUMMARY OF CERTAIN REVENUES AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
(IN THOUSANDS)
CERTAIN REVENUES:
Rental revenues (Note 2) $6,897
Percentage revenues 200
Tenant reimbursements 1,256
------
Total certain revenues 8,353
------
CERTAIN EXPENSES:
Property operating expenses 771
Real estate taxes 524
General and administrative 362
------
Total certain expenses 1,657
------
CERTAIN REVENUES IN EXCESS OF CERTAIN EXPENSES $6,696
======
See notes to combined historical summary of certain revenues and certain
expenses.
F-2
ALEXANDER HAAGEN PROPERTIES, INC.
SIX ACQUIRED PROPERTIES
NOTES TO COMBINED HISTORICAL SUMMARY OF CERTAIN REVENUES
AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The combined historical summary of certain revenues and certain expenses
relates to the operations of the following properties (the "Six Acquired
Properties") which have been acquired by Alexander Haagen Properties, Inc.
(the "Company") from an unaffiliated party.
DATE OF
PROPERTY LOCATION ACQUISITION
Bakersfield Shopping Center Bakersfield, CA March 27, 1998
Center of El Centro El Centro, CA March 27, 1998
Loma Square San Diego, CA March 27, 1998
North County Plaza Carlsbad, CA March 27, 1998
Vineyards Marketplace Rancho Cucamonga, CA March 27, 1998
Mineral King Plaza Visalia, CA May 1, 1998
Rental revenues are recorded on a straight-line basis, other revenues and
direct operating expenses are presented on the accrual basis of accounting.
The accompanying historical summary of certain revenues and certain expenses
are not representative of the actual operations for the periods presented as
certain revenues and expenses which may not be comparable to the revenues and
expenses expected to be incurred by the Company in the proposed future
operations of the properties have been excluded. Revenues and expenses
excluded consist of certain other income, interest expense, depreciation and
amortization and professional fees not directly related to the future
operations of the properties.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
F-3
2. OPERATING LEASES
The properties are leased to tenants under operating leases with expiration
dates extending to the year 2022. Future minimum rentals under operating
leases, excluding percentage rent and tenant reimbursements of operating
expenses, as of December 31, 1997 are as follows:
PERIOD ENDING
DECEMBER 31 (IN THOUSANDS)
1998 $ 6,521
1999 6,018
2000 5,539
2001 5,007
2002 4,180
Thereafter 23,199
-------
Total $50,464
=======
******
F-4
ALEXANDER HAAGEN PROPERTIES, INC.
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
The accompanying unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1997 and for the three months ended
March 31, 1998 were prepared as if the purchase of the Six Acquired Properties
and the related assumption of mortgage notes had occurred on January 1, 1997.
These statements should be read in conjunction with the respective consolidated
financial statements and notes thereto included in the Company's Quarterly
Report on form 10-Q for the quarter ended March 31, 1998, and its Annual Report
on form 10-K for the year ended December 31, 1997. In the opinion of
management, the unaudited, pro forma condensed consolidated statement of
operations provides for all adjustments necessary to reflect the effects of the
transaction previously noted.
These pro forma statements may not necessarily be indicative of the results that
would have actually occurred if the acquisitions had been consummated on the
date indicated, nor does it purport to present the results of operations for
future periods.
F-5
ALEXANDER HAAGEN PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE
DATA)
- --------------------------------------------------------------------------------
AHPI
AHPI SIX TOTAL PRO FORMA
DECEMBER 31, ACQUIRED OTHER PRO FORMA DECEMBER 31,
1997 PROPERTIES ADJUSTMENTS ADJUSTMENTS 1997
(A)
REVENUES:
Rental $ 64,682 $6,897 $6,897 $ 71,579
Tenant reimbursements 19,204 1,256 1,256 20,460
Percentage rents 982 200 200 1,182
Other income 4,093 4,093
----------- ------ ------ -----------
Total revenues 88,961 8,353 8,353 97,314
----------- ------ ------ -----------
EXPENSES:
Interest 36,083 $ 3,919 (B) 3,919 40,002
Property operating costs 17,832 771 771 18,603
Property taxes 7,663 524 458 (E) 982 8,645
Depreciation and amortization 18,333 862 (C) 862 19,195
Non-recurring charges 9,355 9,355
General and administrative 5,166 362 (168) (F) 194 5,360
----------- ------ ------- ------ -----------
Total expenses 94,432 1,657 (5,071) 6,728 101,160
----------- ------ ------- ------ -----------
(LOSS) INCOME FROM
OPERATIONS BEFORE
MINORITY INTERESTS AND
EXTRAORDINARY LOSS (5,471) 6,696 (5,071) 1,625 (3,846)
EQUITY IN INCOME OF
MANAGEMENT COMPANY 19 19
MINORITY INTERESTS -
OPERATING PARTNERSHIP 1,508 (394) (D) (394) 1,114
MINORITY INTERESTS - OTHER (279) (279)
----------- ------ ------- ------ -----------
(LOSS) INCOME BEFORE
EXTRAORDINARY ITEM $ (4,223) $6,696 $(5,465) $1,231 $ (2,992)
=========== ====== ======= ====== ===========
NET LOSS PER SHARE BEFORE
EXTRAORDINARY ITEM:
Basic net loss per share $ (0.32) $ (0.22)
=========== ===========
Adjusted basic weighted average
number of shares 13,312,311 13,312,311
============ ===========
F-6
ALEXANDER HAAGEN PROPERTIES, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
(A) Reflects Alexander Haagen Properties, Inc., condensed historical
consolidated statement of operations for the year ended December 31, 1997.
(B) Represents incremental interest expense associated with the assumption of
$36,825,000 in mortgage debt at an effective interest rate of 7.5% and an
increase of $17,271,000 in the line of credit at an effective interest rate
of 6.70% as if all acquisitions had been purchased as of January 1, 1997.
(C) Represents incremental depreciation expense calculated based on the cost of
the six properties acquired depreciated on the straight-line method over a
40 year life.
(D) Represents the income allocated to the 27.07% minority interest in the
Operating Partnership owned by the holders of units in the Operating
Partnership.
(E) Represents incremental property tax expense as a result of the change in
ownership.
(F) Represents reduction in general and administrative costs necessary to
reflect the level of management costs expected to be incurred on an ongoing
basis.
F-7
ALEXANDER HAAGEN PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED, DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
AHP
SIX TOTAL PRO FORMA
AHP ACQUIRED OTHER PRO FORMA MARCH
MARCH 31, 1998 PROPERTIES ADJUSTMENTS ADJUSTMENTS 1997
(A)
REVENUES:
Rental revenues $ 19,532 $1,659 $ $1,659 $ 21,191
Tenant reimbursements 6,173 295 295 6,468
Percentage rental 239 239
Other income 1,225 1 1 1,226
----------- ------ ------- ------ -----------
Total revenues 27,169 1,955 1,955 29,124
----------- ------ ------- ------ -----------
EXPENSES:
Interest 10,254 $ 916 (B) 916 11,170
Property operating costs 4,993 176 176 5,169
Property taxes 2,772 122 83 (E) 205 2,977
Depreciation and amortization 5,389 202 (C) 202 5,591
General and administrative 1,469 90 (45) (F) 45 1,514
----------- ------ ------- ------ -----------
Total expenses 24,877 388 1,156 1,544 26,421
----------- ------ ------- ------ -----------
INCOME FROM OPERATIONS
BEFORE MINORITY INTERESTS 2,292 1,567 (1,156) 411 2,703
MINORITY INTERESTS -
OPERATING PARTNERSHIP (443) (80) (D) (80) (523)
MINORITY INTERESTS - OTHER (69) (69)
----------- ------ ------- ------ -----------
NET INCOME $ 1,780 $1,567 $(1,236) $ 331 $ 2,111
=========== ====== ======= ====== ===========
NET INCOME PER SHARE:
Basic income per share $ 0.10 $ 0.12
=========== ===========
Diluted income per share $ 0.08 $ 0.09
=========== ===========
Weighted average shares
outstanding - basic 17,646,000 17,646,000
=========== ===========
Weighted average shares - diluted 22,142,000 22,666,000
=========== ===========
F-8
ALEXANDER HAAGEN PROPERTIES, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
(A) Reflects Alexander Haagen Properties, Inc., condensed historical
consolidated statement of operations for the three months ended March 31,
1998.
(B) Represents incremental interest expense associated with the assumption of
$36,825,000 in mortgage debt at an effective interest rate of 7.5% and an
increase of $17,271,000 in the line of credit at an effective interest rate
of 6.7% as if all acquisitions had been purchased as of January 1, 1997.
(C) Represents incremental depreciation expense calculated based on the cost of
the six properties acquired depreciated on the straight-line method over a
40 year life.
(D) Represents the income allocated to the 21.8% minority interest in the
Operating Partnership owned by the holders of units in the Operating
Partnership.
(E) Represents incremental property tax expense as a result of the change in
ownership.
(F) Represents reduction in general and administrative costs necessary to
reflect the level of management costs expected to be incurred on an ongoing
basis.
F-9