Exhibit 99.1
NEWS RELEASE
FOR RELEASE: IMMEDIATE RELEASE
CONTACT: Frank C. Marchisello, Jr.
(336) 834-6834
TANGER REPORTS FIRST QUARTER 2005 RESULTS
4.6% Increase in Total FFO, 2.4% Increase in FFO Per Share
Greensboro, NC, April 26, 2005, Tanger Factory Outlet Centers, Inc. (NYSE:SKT)
today reported funds from operations ("FFO"), a widely accepted measure of REIT
performance, for the three months ended March 31, 2005 was $14.5 million, or
$0.43 per share, as compared to FFO of $13.9 million, or $0.42 per share, for
the three months ended March 31, 2004, representing a 4.6% increase in total FFO
and a 2.4% per share increase. During the first quarter of 2005, Tanger
recognized a previously announced loss on the sale of real estate associated
with the sale of the company's outlet center located in Seymour, Indiana. As a
result, the company reported a net loss for the first quarter of 2005 of $2.9
million, or $0.11 per share, as compared to net income of $1.0 million, or $0.04
per share for the first quarter of 2004. All FFO and net income per share
amounts described above are on a diluted basis. A reconciliation of net income
to FFO is presented on the supplemental information page of this press release.
First Quarter Highlights
------------------------
o Increased the common share dividend 3.2% from $0.3125 to $0.3225 per share,
$1.29 per share annualized, representing the 12th consecutive year of
increased dividends
o 211 leases signed, totaling 944,324 square feet with respect to
re-tenanting and renewal activity, including 40.6% of the square footage
scheduled to expire during 2005
o 8.6% increase in average base rental rates on leases renewed during the
quarter
o 95% period-end portfolio occupancy rate up 1% from March 31, 2004
o $315 per square foot in reported same-space tenant sales for the rolling
twelve months ended March 31, 2005 up 3% compared to $306 per square foot
for the twelve months ended March 31, 2004
o 46,400 square feet of expansion space underway in Locust Grove, Georgia and
scheduled to open in the summer of 2005
o 39.5% debt-to-total market capitalization ratio, 3.49 times interest
coverage ratio
Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented,
"Lease renewals and higher rental rates continued to be the trend during the
first quarter of 2005. Our leasing spreads during the quarter continued to grow
for both new leases and renewals. Our team continues to work on making our new
developments happen on time and on budget. We should be in a good position by
the end of the second quarter to provide some additional information on when we
expect to begin construction on these properties."
Portfolio Operating Results
---------------------------
During the first quarter of 2005, Tanger executed 211 leases, totaling 944,324
square feet. Lease renewals during the first quarter accounted for 739,494
square feet generated an 8.6% increase in average base rental rates on a cash
basis and represented 40.6% of the 1,821,000 square feet originally scheduled to
expire during 2005. Base rental increases on re-tenanted space during the first
quarter averaged 3.9% on a cash basis and accounted for the remaining 204,830
square feet. Same center net operating income increased 1.1% for the first
quarter of 2005 compared to the same period in 2004.
For the first quarter of 2005, same-space sales increased by 6%, as compared to
the same period in 2004. Reported same-space sales per square foot for the
rolling twelve months ended March 31, 2005 were $315 per square foot. This
represents a 3% increase compared to $306 per square foot for the rolling twelve
months ended March 31, 2004. Same-space sales is defined as the weighted average
sales per square foot reported in space open for the full duration of the
comparative periods. Reported same-store sales for the three months ended March
31, 2005 increased 3% compared to the same period in 2004. Same-store sales are
defined as sales for tenants whose stores have been open from January 1, 2004
through the duration of the comparison period.
Investment Activities
---------------------
Tanger is currently underway with constructing a 46,400 square foot expansion at
its center located in Locust Grove, Georgia. The estimated cost of the expansion
is $6.6 million with an estimated return on cost of approximately 11%. The
company currently expects to complete the expansion with stores commencing
operations during the summer of 2005. Leases have been executed with Polo/Ralph
Lauren, Sketchers, Children's Place and others. Upon completion of the
expansion, the company's Locust Grove center will total approximately 294,000
square feet.
Tanger continues the pre-development and leasing of four previously announced
sites located in Pittsburgh, Pennsylvania; Deer Park, New York; Charleston,
South Carolina; and Wisconsin Dells, Wisconsin, with expected deliveries during
2006 and 2007.
Financing Activities and Balance Sheet Summary
----------------------------------------------
On March 1, 2005, Tanger announced that its Board of Directors approved a 3.2%
increase in the annual dividend on its common shares from $1.25 per share to
$1.29 per share. Simultaneously, the Board of Directors declared a quarterly
dividend of $.3225 per share for the first quarter ended March 31, 2005. A cash
dividend of $.3225 per share will be payable on May 16, 2005 to holders of
record on April 29, 2005. Tanger has increased its dividend each year since
becoming a public company in May of 1993. As of March 31, 2005, Tanger had a
total market capitalization of approximately $1.2 billion, with $484.4 million
of debt outstanding (excluding a debt premium of $8.6 million), equating to a
39.5% debt-to-total market capitalization ratio. As of March 31, 2005, $397.4
million, or 82.0% of Tanger's total debt, was at fixed interest rates and the
company had $33.5 million outstanding with $91.5 million available on its
unsecured lines of credit. During the first quarter Tanger continued to improve
its interest coverage ratio, which was 3.49 times for the first quarter of 2005,
as compared to 3.20 times interest coverage in the same period last year.
On April 10, 2005 the company repaid at maturity a $13.7 million, 9.77% mortgage
with New York Life with amounts available under its unsecured lines of credit,
increasing the amounts currently outstanding under its lines of credit to $34.5
million. On September 10, 2005 a $7.2 million, 9.125% mortgage with New York
Life matures and the company currently expects to repay this loan with amounts
available on its unsecured lines of credit. The repayment of these two loans
will unencumber the company's Lancaster, PA and Commerce I, GA properties.
2005 FFO Per Share Guidance
---------------------------
Based on current market conditions, the strength and stability of its core
portfolio, Tanger currently believes its net income for 2005 will be between
$0.56 and $0.60 per share and its FFO for 2005 will be between $1.93 and $1.97
per share. The company's earnings estimates do not include the impact of any
potential gains on the sale of land parcels or the impact of any potential sales
or acquisitions of properties. The following table provides the reconciliation
of estimated diluted FFO per share to estimated diluted net income available to
common shareholders per share:
For the twelve months ended December 31, 2005
Low Range High Range
Estimated diluted net income per share, excluding
gain/loss on the sale of real estate $ 0.56 $ 0.60
Minority interest, depreciation and amortization uniquely
significant to real estate including minority interest
share and our share of joint ventures (1.37) (1.37)
Estimated diluted FFO per share $ 1.93 $ 1.97
First Quarter Conference Call
-----------------------------
Tanger will host a conference call to discuss its first quarter results for
analysts, investors and other interested parties on Wednesday, April 27, 2005,
at 10:00 A.M. eastern time. To access the conference call, listeners should dial
1-877-277-5113 and request to be connected to the Tanger Factory Outlet Centers
First Quarter Financial Results call. Alternatively, the call will be web cast
by CCBN and can be accessed at the "Tanger News" section of Tanger Factory
Outlet Centers, Inc.'s web site at www.tangeroutlet.com.
A telephone replay of the call will be available from April 27, 2005 starting at
12:00 P.M. Eastern Time through May 6, 2005, by dialing 1-800-642-1687
(conference ID # 5447201). Additionally, an online archive of the broadcast will
also be available through May 6, 2005.
About Tanger Factory Outlet Centers
-----------------------------------
Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a fully integrated,
self-administered and self-managed publicly traded REIT, presently has ownership
interests in or management responsibilities for 33 centers in 22 states coast to
coast, totaling approximately 8.7 million square feet of gross leasable area.
Tanger is filing a Form 8-K with the Securities and Exchange Commission that
includes a supplemental information package for the quarter ended March 31,
2005. For more information on Tanger Outlet Centers, visit our web site at
www.tangeroutlet.com.
Estimates of future net income per share and FFO per share are by definition,
and certain other matters discussed in this press release regarding our
re-merchandising strategy, the renewal and re-tenanting of space, tenant sales
and sales trends, interest rates, fund from operations, the development of new
centers, the opening of ongoing expansions, coverage of the current dividend and
the impact of sales of land parcels may be, forward-looking statements within
the meaning of the federal securities laws. These forward-looking statements are
subject to risks and uncertainties. Actual results could differ materially from
those projected due to various factors including, but not limited to, the risks
associated with general economic and local real estate conditions, the
availability and cost of capital, our ability to lease our properties, our
inability to collect rent due to the bankruptcy or insolvency of tenants or
otherwise, and competition. For a more detailed discussion of the factors that
affect our operating results, interested parties should review the Tanger
Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year
ended December 31, 2004.
TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
March 31,
2005 2004
- -----------------------------------------------------------------------------------------------------------------
(unaudited)
REVENUES
Base rentals (a) $ 31,861 $ 31,460
Percentage rentals 886 711
Expense reimbursements 14,297 11,886
Other income 947 850
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Total revenues 47,991 44,907
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EXPENSES
Property operating 16,240 13,423
General and administrative 3,044 3,157
Depreciation and amortization 12,930 12,157
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Total expenses 32,214 28,737
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Operating income 15,777 16,170
Interest expense 8,228 8,864
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Income before equity in earnings of unconsolidated joint ventures,
minority interests, discontinued operations and loss on sale of real estate 7,549 7,306
Equity in earnings of unconsolidated joint ventures (b) 191 166
Minority interests
Consolidated joint venture (6,624) (6,593)
Operating partnership (202) (160)
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Income from continuing operations 914 719
Discontinued operations, net of minority interest (a) --- 293
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Income before loss on sale of real estate 914 1,012
Loss on sale of real estate, net of minority interest (3,843) ---
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Net income (loss) $ (2,929) $ 1,012
- -----------------------------------------------------------------------------------------------------------------
Basic earnings per common share
Income from continuing operations $ 0.03 $ 0.03
Net income (loss) $ (0.11) $ 0.04
- -----------------------------------------------------------------------------------------------------------------
Diluted earnings per common share
Income from continuing operations $ 0.03 $ 0.03
Net income (loss) $ (0.11) $ 0.04
- -----------------------------------------------------------------------------------------------------------------
Funds from operations (FFO) $ 14,530 $ 13,893
FFO per common share - diluted $ 0.43 $ 0.42
- -----------------------------------------------------------------------------------------------------------------
Summary of discontinued operations
Income from discontinued operations $ - $ 364
Minority interest in discontinued operations - (71)
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Discontinued operations, net of minority interest $ - $ 293
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(a) Includes straight-line rent and market rent adjustments of $158 and $144 for the three months ended March 31, 2005 and 2004.
(b) Includes Myrtle Beach, South Carolina Hwy 17 property which is currently held through an unconsolidated joint venture in
which we own a 50% interest.
TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, December 31,
2005 2004
- ---------------------------------------------------------------------------------------------------------------
(unaudited)
ASSETS
Rental Property
Land $113,355 $113,830
Buildings, improvements and fixtures 955,931 963,563
- ---------------------------------------------------------------------------------------------------------------
1,069,286 1,077,393
Accumulated depreciation (228,252) (224,622)
- ---------------------------------------------------------------------------------------------------------------
Rental property, net 841,034 852,771
Cash and cash equivalents 6,531 4,103
Deferred charges, net 55,611 58,851
Other assets 21,536 20,653
- ---------------------------------------------------------------------------------------------------------------
Total assets $924,712 $936,378
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LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
Liabilities
Long-term debt
Senior, unsecured notes $100,000 $100,000
Mortgages payable (including a premium of $8,558 and $9,346, respectively) 305,983 308,342
Unsecured note 53,500 53,500
Lines of credit 33,455 26,165
- ---------------------------------------------------------------------------------------------------------------
492,938 488,007
Construction trade payables 9,781 11,918
Accounts payable and accrued expenses 25,753 17,026
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Total liabilities 528,472 516,951
- ---------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Minority interests
Consolidated joint venture 223,895 222,673
Operating partnership 31,045 35,621
- ---------------------------------------------------------------------------------------------------------------
Total minority interests 254,940 258,294
- ---------------------------------------------------------------------------------------------------------------
Shareholders' equity
Common shares, $.01 par value, 50,000,000 shares authorized,
27,611,416 and 27,443,016 shares issued and outstanding
at March 31, 2005 and December 31, 2004 276 274
Paid in capital 277,857 274,340
Distributions in excess of net income (129,917) (109,506)
Deferred compensation (6,844) (3,975)
Accumulated other comprehensive loss (72) ---
- ---------------------------------------------------------------------------------------------------------------
Total shareholders' equity 141,300 161,133
- ---------------------------------------------------------------------------------------------------------------
Total liabilities, minority interests and shareholders' equity $924,712 $936,378
- ---------------------------------------------------------------------------------------------------------------
TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(In thousands, except per share, state and center information)
Three Months Ended
March 31,
2005 2004
- --------------------------------------------------------------------------------------------------------------------
Funds from Operations:
Net income (loss) $ (2,929) $1,012
Adjusted for:
Minority interest in operating partnership 202 160
Minority interest adjustment - consolidated joint venture 169 33
Minority interest, depreciation and amortization
attributable to discontinued operations --- 289
Depreciation and amortization uniquely significant to real estate
- consolidated 12,876 12,099
Depreciation and amortization uniquely significant to real estate
- unconsolidated joint ventures 369 300
Loss on sale of real estate, net of minority interest 3,843 ---
- --------------------------------------------------------------------------------------------------------------------
Funds from operations $ 14,530 $ 13,893
- --------------------------------------------------------------------------------------------------------------------
Funds from operations per share - diluted $.43 $.42
- --------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES
Basic weighted average common shares 27,304 26,674
Effect of outstanding share and unit options 180 301
Effect of unvested restricted share awards 32 ---
- --------------------------------------------------------------------------------------------------------------------
Diluted weighted average common shares (for
earnings per share computations) 27,516 26,975
Convertible operating partnership units (a) 6,067 6,067
- --------------------------------------------------------------------------------------------------------------------
Diluted weighted average common shares (for
funds from operations per share computations) 33,583 33,042
- --------------------------------------------------------------------------------------------------------------------
OTHER INFORMATION
Gross leasable area open at end of period -
Wholly owned 4,925 5,302
Partially-owned consolidated 3,271 3,273
Partially-owned unconsolidated 402 324
Managed 65 434
- --------------------------------------------------------------------------------------------------------------------
Total gross leasable area open at end of period 8,663 9,333
Outlet centers in operation -
Wholly owned 22 26
Partially owned - consolidated (b) 9 9
Partially owned - unconsolidated (c) 1 1
Managed 1 4
- --------------------------------------------------------------------------------------------------------------------
Total outlet centers in operation 33 40
States operated in at end of period (b) (c) 22 23
Occupancy percentage at end of period (b) (c) 95% 94%
- --------------------------------------------------------------------------------------------------------------------
(a) The convertible operating partnership units (minority interest in operating partnership) are not
dilutive on earnings per share computed in accordance with generally accepted accounting principles.
(b) Includes the Charter Oak portfolio which is currently held through a consolidated joint venture
in which we own a one-third interest.
(c) Includes Myrtle Beach, South Carolina Hwy 17 property which is currently held through an
unconsolidated joint venture in which we own a 50% interest.
We believe that for a clear understanding of our operating results, FFO
should be considered along with net income as presented elsewhere in this
report. FFO is presented because it is a widely accepted financial
indicator used by certain investors and analysts to analyze and compare one
equity REIT with another on the basis of operating performance. FFO is
generally defined as net income (loss), computed in accordance with
generally accepted accounting principles, before extraordinary items and
gains (losses) on sale or disposal of depreciable operating properties,
plus depreciation and amortization uniquely significant to real estate and
after adjustments for unconsolidated partnerships and joint ventures. We
caution that the calculation of FFO may vary from entity to entity and as
such the presentation of FFO by us may not be comparable to other similarly
titled measures of other reporting companies. FFO does not represent net
income or cash flow from operations as defined by accounting principles
generally accepted in the United States of America and should not be
considered an alternative to net income as an indication of operating
performance or to cash flows from operations as a measure of liquidity. FFO
is not necessarily indicative of cash flows available to fund dividends to
shareholders and other cash needs.