RAMCO-GERSHENSON PROPERTIES TRUST FINAL COPY-07/23/03
27600 Northwestern Highway, Suite 200
Southfield, MI 48034
(248) 350-9900
FAX: (248) 350-9925
Contact: Dennis Gershenson, President & CEO FOR IMMEDIATE RELEASE
or Richard Smith, CFO WEDNESDAY, JULY 23, 2003
Phone: (248) 350-9900
FAX: (248) 350-9925
RAMCO-GERSHENSON PROPERTIES TRUST REPORTS RESULTS FOR SECOND QUARTER 2003
Successfully completes 2.15 million common share public offering, Recognizes
previously announced one-time, non-cash charge for write-off of Kmart straight
line rent receivable
FINANCIAL RESULTS:
o Diluted FFO per share of $0.36
o Diluted FFO of $5.7 million
o Diluted EPS from continuing operations of $(0.09)
o Total revenues of $25.3 million
o Paid $0.42 per share regular quarterly dividend on July 15, 2003
OPERATION HIGHLIGHTS:
o Completed 2.15 million common share public offering
o Acquired Publix at River Crossing shopping center in New Port Richey, FL
o Announced Target anchored redevelopment at Shoppes of Lakeland in Lakeland,
FL
o Finalized 195,000 square foot Meijer Superstore to replace Kmart at
Tel-Twelve in Southfield, MI
o Signed Wal-Mart Superstore expansion agreement for Taylors Square in
Greenville, SC
o Commenced Home Depot anchored development in Grand Haven, MI
SOUTHFIELD, MICH. -- RAMCO-GERSHENSON PROPERTIES TRUST (NYSE:RPT) announced
today results for the second quarter and six months ended June 30, 2003.
The Company's diluted Funds From Operations (FFO) per share for the quarter
ended June 30, 2003 was $0.36, which was $0.01 above consensus analyst
estimates. As previously announced, FFO and earnings from continuing operations
were reduced by a $0.19 per share charge related to the write-off of the Kmart
straight line rent receivable as part of the assignment of the Kmart lease to
Meijer, Inc. at the Company's Tel-Twelve shopping center in Southfield,
Michigan.
Including the $3.0 million straight line rent receivable charge, for the three
months ended June 30, 2003, diluted FFO decreased 21.9 percent, or $1,607,000 to
$5,736,000 compared with $7,343,000 for the three months ended June 30, 2002. On
a per share basis the decrease was 28.0 percent, or $0.14, to $0.36 compared
with $0.50 in 2002. Total revenues increased 18.2 percent or $3,909,000, to a
total of $25,339,000, compared with $21,430,000 in 2002. Taking into
consideration the charge, income (loss) from continuing operations for the three
months ended June 30, 2003, was $(518,000) compared with $2,162,000 in 2002. On
a diluted earnings per share basis, earnings (loss) from continuing operations
decreased from $0.39 in 2002 to $(0.09) in 2003.
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Including the aforementioned charge, for the six months ended June 30, 2003,
diluted FFO decreased 4.2 percent, or approximately $615,000, to $14,183,000
compared with $14,798,000 for the six months ended June 30, 2002. On a per share
basis, the decrease was 17.3 percent, or $0.19, to $0.91 compared with $1.10 in
2002. Total revenues increased 20.1 percent or $8,665,000, to a total of
$51,834,000, compared with $43,169,000 in 2002. Income from continuing
operations for the six months ended June 30, 2003, was $2,633,000 compared with
$4,448,000 in 2002. On a diluted earnings per share basis, earnings (loss) from
continuing operations decreased from $0.66 in 2002 to $0.11 in 2003.
"The second quarter of 2003 has been a particularly busy one for the Company"
said Dennis Gershenson, President and Chief Executive Officer of
Ramco-Gershenson Properties Trust. "We accomplished a significant number of
objectives including the completion of a second common share equity offering in
a little over a year, the acquisition of a grocery-anchored shopping center, the
commencement of a new development project in Grand Haven, Michigan and the
announcement of several major redevelopment projects. Our FFO was in line with
analysts estimates, which were adjusted for the non-cash charge taken in the
quarter. It should be noted that the write-off taken accompanies a positive
event, which is the replacement of a closed Kmart at our Tel-Twelve shopping
center with a 195,000 square foot Meijer Superstore."
Acquisitions
During the quarter, the Company purchased a Publix Supermarket anchored shopping
center in New Port Richey, Florida. The 62,000 square foot center was purchased
for $7.2 million.
Subsequent to quarter end, the Company acquired the 247,000 square foot Clinton
Pointe shopping center in Clinton Township, Michigan, a suburb of Detroit. The
shopping center is anchored by Target, which was not part of the purchase,
OfficeMax and Sports Authority. The center was purchased for $11.5 million.
Development
In June, the Company commenced the development of a Home Depot anchored shopping
center in Grand Haven, Michigan. Grand Haven is located within the metro
tri-plex area that encompasses the cities of Grand Rapids, Muskegon and Holland,
Michigan. In addition to the Home Depot, which is anchor owned, the center will
contain 50,000 square feet of retail space including two outlots. Home Depot is
expected to open in the first quarter of 2004.
Asset Management
During the quarter, the Company entered into an agreement with Target to anchor
the 300,000 square foot redevelopment of its Shoppes of Lakeland in Lakeland,
Florida. As part of the agreement, the Company sold a portion of the center to
Target. In addition to Target, the redevelopment includes an existing 23,000
square foot Michael's store. The Company is also finalizing a lease with an
additional anchor to occupy the former 72,000 square foot Builder's Square space
and is adding 52,800 square feet of ancillary retail space and a number of
outlots to the shopping center.
In June, the Company announced that Meijer, a discount department and grocery
store, will replace the closed 128,000 square foot Kmart with a new 195,000
square foot superstore at its Tel-Twelve shopping center in Southfield,
Michigan. The transaction will occur through an assignment of the Kmart lease.
The Company has determined to treat the assignment for accounting purposes as a
termination of the Kmart lease and recognition of a new agreement with Meijer.
Meijer, a seventy year old Company, opened its first "superstore" in Grand
Rapids, Michigan in 1962. Since that time Meijer has
RAMCO-GERSHENSON PROPERTIES TRUST
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expanded its operation to include 156 superstores throughout Illinois, Indiana,
Kentucky, Michigan and Ohio. The addition of Meijer to Tel-Twelve marks the
second phase of the redevelopment of the shopping center. The Company is
currently in negotiations with two retailers to occupy the vacant Montgomery
Ward space, which would complete the redevelopment of this asset.
Also during the quarter, the Company entered into an agreement with Wal-Mart to
expand its current 134,000 square foot store to a 207,000 square foot superstore
at its Taylors Square shopping center in Greenville, South Carolina. An
additional 29,000 square feet of new in-line retail space will also be
constructed as part of the redevelopment. Wal-Mart's expansion at Taylors Square
marks the Company's second announcement this year of an existing Wal-Mart
converting their operation to a superstore format.
Wal-Mart is currently in the process of expanding its operation at the Troy
Towne Center in Troy, Ohio, from an 116,000 square foot store to an 197,000
square foot superstore. This redevelopment, announced last quarter, also
includes the addition of an 85,584 square foot Kohl's department store, which is
open and operating. Wal-Mart is expected to open its expansion in the spring of
2004.
Leasing
Through the first six months of 2003 the Company opened 35 new non-anchor stores
at an average rental rate of $13.71, which is 10.9% above portfolio average. The
Company also renewed 57 non-anchor leases paying 6.3% above prior rents. In
addition, the Company signed four new anchor leases.
Common Share Offering
In June, the Company completed a 2,150,000 common share public offering at a net
price of $23.65 per share. The offering was underwritten by Deutsche Bank
Securities. The net proceeds of $50.7 million were utilized to pay down
outstanding balances under the Company's secured and unsecured credit facilities
as well as to fund the Clinton Pointe acquisition.
Finance
Total capitalization as of June 30, 2003, was approximately $835.7 million.
Total debt was $402.8 million with an average interest rate of 6.8% and an
average maturity of 3.9 years. RPT's debt to market capitalization at the end of
the quarter was 48.2%.
Dividend
The Company paid a cash dividend on its common stock of $0.42 per share on July
15, 2003 to shareholders of record on June 30, 2003.
Earnings Guidance/Conference Call
The Company is tightening its previously announced 2003 annual FFO diluted per
share estimates of between $2.03 and $2.13 to be between $2.03 and $2.08, per
share. This corresponds to net income per diluted common share estimates for
2003 of between $0.49 and $0.53.
RPT expects 2004 annual diluted FFO per share to be between $2.35 and $2.45 and
net income per diluted common share to be between $1.25 and $1.30.
RPT will host a live broadcast of its 2nd Quarter conference call on July 24,
2003 at 9:00 a.m. eastern time, to discuss its financial and operating results
and 2003 and 2004 guidance. The live broadcast will
RAMCO-GERSHENSON PROPERTIES TRUST
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be available online at www.ramcogershenson.com, www.streetevents.com and
www.vcall.com or by telephone at (800) 539-5010 (no passcode needed). A replay
will be available shortly after the call on the aforementioned websites (for
ninety days) or by telephone at (800) 642-1687, passcode 1458331 (for one week).
Supplemental financial information is available via e-mail by sending requests
to dhendershot@rgpt.com and is also available at the investor relations section
of our web page.
Ramco-Gershenson Properties Trust has a portfolio of 62 shopping centers
totaling approximately 12.2 million square feet of gross leasable area,
consisting of 61 community centers, of which nine are power centers and two are
single tenant properties, as well as one enclosed regional mall. The Company's
centers are located in Michigan, Ohio, Wisconsin, New Jersey, Maryland,
Virginia, North Carolina, South Carolina, Tennessee, Georgia, Alabama and
Florida. Headquartered in Southfield, Michigan, the Company is a fully
integrated, self-administered, publicly-traded real estate investment trust
(REIT) which owns, develops, acquires, manages and leases community shopping
centers, regional malls and single tenant retail properties, nationally.
This press release contains forward-looking statements with respect to the
operation of certain of the Trust's properties. Management of Ramco-Gershenson
believes the expectations reflected in the forward-looking statements made in
this document are based on reasonable assumptions. Certain factors could occur
that might cause actual results to vary. These include general economic
conditions, the strength of key industries in the cities in which the Trust's
properties are located, the performance of the Trust's tenants at the Trust's
properties and elsewhere, and other factors discussed in the Trust's reports
filed with the Securities and Exchange Commission.
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RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/03 6/30/02 6/30/03 6/30/02
----------- ----------- ----------- -----------
REVENUES
Minimum rents $ 17,838 $ 15,022 $ 35,284 $ 28,890
Percentage rents 115 194 774 716
Recoveries from tenants 6,681 5,762 14,384 11,710
Fees and management income 466 229 674 880
Interest and other income 239 223 718 973
----------- ----------- ----------- -----------
Total Revenues 25,339 21,430 51,834 43,169
----------- ----------- ----------- -----------
EXPENSES
Real estate taxes 3,404 2,728 6,704 5,300
Recoverable operating expenses 3,943 3,242 8,225 6,626
Depreciation and amortization 5,596 4,339 10,698 8,349
Other operating 3,273 382 3,662 694
General and administrative 2,155 2,108 4,376 4,159
Interest expense 7,118 6,056 14,458 12,366
----------- ----------- ----------- -----------
Total Expenses 25,489 18,855 48,123 37,494
----------- ----------- ----------- -----------
Operating income (loss) (150) 2,575 3,711 5,675
Earnings from unconsolidated entities 58 177 140 346
----------- ----------- ----------- -----------
Income (Loss) before gain on sale of real estate and minority
interest (92) 2,752 3,851 6,021
Loss on sale of real estate (527) - (527) -
Minority interest 101 (590) (691) (1,573)
----------- ----------- ----------- -----------
Income (Loss) from continuing operations (518) 2,162 2,633 4,448
Discontinued operations, net of minority interest:
Gain on sale of property - 2,164 - 2,164
Income (Loss) from operations - (4) - 147
----------- ----------- ----------- -----------
Net income (loss) (518) 4,322 2,633 6,759
Preferred dividends (594) - (1,188) (828)
Gain on redemption of preferred shares - 2,425 - 2,425
----------- ----------- ----------- -----------
Net income (loss) available to common shareholders $ (1,112) $ 6,747 $ 1,445 $ 8,356
=========== =========== =========== ===========
Basic earnings (loss) per share:
Income (Loss) from continuing operations $ (0.09) $ 0.44 $ 0.12 $ 0.69
Income from discontinued operations - 0.21 - 0.26
=========== =========== =========== ===========
Net income (loss) $ (0.09) $ 0.65 $ 0.12 $ 0.95
=========== =========== =========== ===========
Diluted earnings (loss) per share:
Income (Loss) from continuing operations $ (0.09) $ 0.39 $ 0.11 $ 0.66
Income from discontinued operations - 0.17 - 0.21
=========== =========== =========== ===========
Net income (loss) $ (0.09) $ 0.56 $ 0.11 $ 0.87
=========== =========== =========== ===========
Weighted average shares outstanding:
Basic 12,709 10,435 12,949 8,771
=========== =========== =========== ===========
Diluted 12,889 14,674 12,655 13,392
=========== =========== =========== ===========
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CALCULATION OF FUNDS FROM OPERATIONS(1)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Three Six Six
Months Months Moths Months
Ended Ended Ended Ended
6/30/03 6/30/02 6/30/03 6/30/02
----------- ----------- ----------- -----------
Net income (loss) available to common shareholders $ (1,112) $ 6,747 $ 1,445 $ 8,356
Add:
Depreciation and amortization expense 5,582 4,597 10,680 8,569
Loss on sale of real estate 1,367 - 1,367 -
Minority interest in partnership:
Continuing operations (101) 590 691 1,573
Discontinued operations - (2) - 61
Less:
Gain on redemption of preferred shares - (2,425) - (2,425)
Discontinued operations, gain on sale of property - (2,164) - (2,164)
----------- ----------- ----------- -----------
Funds from Operations-basic 5,736 7,343 14,183 13,970
Add:
Convertible preferred share dividends(2) - - - 828
----------- ----------- ----------- -----------
Funds from Operations-diluted $ 5,736 $ 7,343 $ 14,183 $ 14,798
=========== =========== =========== ===========
Funds from Operations per share:
Basic $ 0.37 $ 0.55 $ 0.92 $ 1.19
=========== =========== =========== ===========
Diluted $ 0.36 $ 0.50 $ 0.91 $ 1.10
=========== =========== =========== ===========
Basic weighted average shares outstanding(3) 15,640 13,373 15,425 11,713
Convertible Preferred shares and options(2) 180 1,301 161 1,679
----------- ----------- ----------- -----------
Diluted weighted average shares outstanding(3) 15,820 14,674 15,586 13,392
=========== =========== =========== ===========
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RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, December 31,
2003 2002
----------- ------------
ASSETS (Unaudited)
Investment in real estate, net $ 645,446 $ 628,953
Cash and cash equivalents 13,577 9,974
Accounts receivable, net 21,605 21,425
Equity investments in and advances to unconsolidated entities 9,604 9,578
Other assets, net 25,933 27,912
----------- -----------
Total Assets $ 716,165 $ 697,842
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $ 402,835 $ 423,248
Distributions payable 7,902 6,384
Accounts payable and accrued expenses 18,797 20,621
----------- -----------
Total Liabilities 429,534 450,253
Minority Interest 43,852 46,586
Commitments and Contingencies - -
Shareholders' Equity 242,779 201,003
----------- -----------
Total Liabilities and Shareholders' Equity $ 716,165 $ 697,842
=========== ===========
RAMCO-GERSHENSON PROPERTIES TRUST
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(1) Management generally considers funds from operations ("FFO") an appropriate
supplemental measure of the financial performance of an equity REIT. Under
the NAREIT definition, FFO represents income before minority interest,
excluding extraordinary items, as defined under accounting principles
generally accepted in the United States of America ("GAAP"), gains on sales
of depreciable property, plus real estate related depreciation and
amortization (excluding amortization of financing costs), and after
adjustments for unconsolidated partnerships and joint ventures. FFO should
not be considered an alternative to GAAP net income as an indication of our
performance. We consider FFO as a useful measure for reviewing our
comparative operating and financial performance between periods or to
compare our performance to different REITs. However, our computation of FFO
may differ from the methodology for calculating FFO utilized by other real
estate companies, and therefore, may not be comparable to these other real
estate companies.
(2) Series B preferred shares are not convertible into common shares. Therefore
they are excluded from the calculation.
(3) For basic FFO, represents the weighted average total shares outstanding,
assuming the redemption of all Operating Partnership Units for Common
Shares. For diluted FFO, represents the weighted average total shares
outstanding, assuming the redemption of all Operating Partnership Units for
Common Shares, the Series A Preferred Shares converted to Common Shares in
2002 and the Common Shares issuable under the treasury stock method upon
exercise of stock options.
******
For more information on Ramco-Gershenson Properties Trust visit the Company's
Website at: www.ramcogershenson.com