EXHIBIT 99.1
PRESS RELEASE - FOR IMMEDIATE RELEASE
CONTACT: Kenneth R. Howe, Chief Financial Officer
(248) 737-4190
AGREE REALTY CORPORATION REPORTS THIRD QUARTER 2003
OPERATING RESULTS
THIRD QUARTER 2003 HIGHLIGHTS:
FINANCIAL INFORMATION
o Diluted FFO per share of $0.49
o Diluted FFO per share before charge for early
extinguishment of debt $0.64
o $0.485 per share quarterly dividend paid October 16,
2003
o Completed $43.2 million offering of Common Stock
FARMINGTON HILLS, MI (October 29, 2003) - Agree Realty Corporation (NYSE:
ADC) today announced results for the quarter ended September 30, 2003. For the
third quarter, funds from operations were $3,127,000 ($4,088,000 before a charge
for early extinguishment of debt) compared with funds from operations in the
third quarter of 2002 of $3,432,000. Diluted funds from operations per share
were $0.49 per share ($0.64 per share before a charge for early extinguishment
of debt) compared with $0.67 per share for the third quarter of 2002. Net income
decreased to $1,857,000 as a result of a charge for early extinguishment of debt
as explained below, or $0.33 per share on a diluted basis, compared with net
income for the third quarter of 2002 of $2,137,000, or $0.48 per share. Total
revenues increased 11.5% to $6,843,000, compared with total revenues of
$6,140,000 in the third quarter of 2002. A reconciliation of net income to FFO
is included in the financial table accompanying this press release.
For the nine months ended September 30, 2003, funds from operations were
$10,548,000 ($11,509,000 before a charge for early extinguishment of debt)
compared with funds from operations for the nine months ended September 30, 2002
of $10,056,000. Diluted funds from operations per share were $1.90 per share
($2.07 per share before a charge for early extinguishment of debt) compared with
$1.96 per share for the third quarter of 2002. Net income was $6,475,000, or
$1.33 per share on a diluted basis, compared with net income for the comparable
period last
year of $6,200,000, or $1.39 per share. Total revenues increased 12.8% to
$20,549,000, compared with total revenues of $18,211,000 for the comparable
period last year.
FUNDS FROM OPERATIONS
Management considers Funds from Operations ("FFO") to be a useful
supplemental measure to evaluate operating performance. The Company considers
FFO to be an appropriate supplemental measure of operating performance because,
by excluding gains or losses on dispositions and excluding depreciation, FFO can
help one compare the operating performance of a company's real estate between
periods or as compared to different companies. FFO is defined by the National
Association of Real Estate Investment Trusts, Inc. ("NAREIT") to mean net income
computed in accordance with generally accepted accounting principles ("GAAP"),
excluding gains (or losses) from sales of property, plus real estate related
depreciation and amortization. FFO should not be considered as an alternative to
net income as the primary indicator of the Company's operating performance or as
an alternative to cash flow as a measure of liquidity. In addition, our method
of calculating FFO may not be comparable to the methods used by other REITs and,
accordingly may be different from similarly titled measures reported by other
companies.
DIVIDEND
The Company paid a cash dividend of $0.485 per share on October 16,
2003 to shareholders of record on September 30, 2003. The dividend is equivalent
to an annualized dividend of $1.94 per share and represents a payout ratio of
75.3% of funds from operations before a charge for early extinguishment of debt
for the quarter.
FINANCING
On August 4, 2003 the Company completed an offering of 1,700,000 shares
of common stock at a price of $23.50 per share; on August 12, 2003 the
underwriters exercised their over allotment option for an additional 255,000
shares at the same per share price. The net proceeds form the offerings of
approximately $43.2 million were used to repay amounts outstanding under the
Company's credit facility.
During the third quarter 2003 the Company negotiated an early payment of
three mortgage notes totaling approximately $37 million and bearing an interest
rate of 7.00%. Two of the mortgages totaling approximately $30.3 million, were
scheduled to mature in November 2005 and required a final payment in the amount
of approximately $28.2 million on the maturity date. The
third mortgage in the amount of approximately $6.7 million had a scheduled
maturity date of April 2013 and required a final payment in the amount of
approximately $2.9 million on the maturity date. This mortgage contained a
provision that would reset the interest rate to the then current rate in
December 2005.
The Company incurred a pre-payment penalty of 1.50% of the outstanding
mortgage balance and wrote off unamortized mortgage costs on the three mortgages
of $406,000.
PORTFOLIO RESULTS
At September 30, 2003, Agree Realty Corporation's total assets were
$188,146,000. At quarter end the Company's portfolio consisted of 50 properties
totaling 3.7 million square feet located in 13 states. The portfolio is 97%
leased.
Agree Realty Corporation owns, manages and develops properties which
are primarily single tenant properties and neighborhood community shopping
centers, located in thirteen (13) states and leased to major retail tenants.
Agree Realty Corporation considers portions of the information
contained in this release to be forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 27E of the Securities
Exchange Act of 1934, both as amended, with respect to the Company's expectation
for future periods. Such statements are, by their nature, subject to certain
risks and uncertainties. The Company cautions that, as a result of a number of
factors, actual results could differ materially from those set forth in this
presentation. Other risks, uncertainties and factors that could cause actual
results to differ materially than those projected are detailed from time to time
in reports filed by the Company with the Securities and Exchange Commission,
including Forms 8-K, 10-Q and 10-K.
For additional information, visit the Company's home page on the
Internet at http://www.agreerealty.com
AGREE REALTY CORPORATION
OPERATING RESULTS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three months ended Nine months ended
September 30, September 30,
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2003 2002 2003 2002
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REVENUE
Minimum rents $ 6,088 $ 5,401 $18,072 $15,884
Percentage rent 48 35 99 78
Operating cost reimbursements 597 530 2,034 1,723
Unconsolidated entities 110 174 342 521
Management fees and other - - 2 5
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TOTAL REVENUE 6,843 6,140 20,549 18,211
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EXPENSES
Real estate taxes 457 420 1,370 1,259
Property operating expenses 467 333 1,500 1,097
Land lease payments 185 185 554 554
General and administrative 553 503 1,676 1,466
Depreciation and amortization 1,026 926 3,040 2,778
Interest expense 1,302 1,557 4,561 4,580
Early extinguishment of debt 961 - 961 -
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TOTAL EXPENSES 4,951 3,924 13,662 11,734
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INCOME BEFORE MINORITY INTEREST
AND DISCONTINUED OPERATIONS 1,892 2,216 6,887 6,477
Minority interest expense 182 291 835 852
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INCOME BEFORE DISCONTINUED OPERATIONS 1,710 1,925 6,052 5,625
Income from discontinued operations 147 212 423 575
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NET INCOME $ 1,857 $ 2,137 $ 6,475 $ 6,200
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NET INCOME - PER SHARE $ 0.33 $ 0.48 $ 1.33 $ 1.39
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RECONCILIATION OF FUNDS FROM OPERATIONS
TO NET INCOME
Net income $ 1,857 $ 2,137 $ 6,475 $ 6,200
Depreciation of real estate assets 1,056 955 3,136 2,866
Amortization of leasing costs 15 17 43 51
Minority interest 199 323 894 939
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FUNDS FROM OPERATIONS $ 3,127 $ 3,432 $10,548 $10,056
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FUNDS FROM OPERATIONS - PER SHARE $ 0.49 $ 0.67 $ 1.90 $ 1.96
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Weighted average number of shares
and "OP" units outstanding 6,349 5,120 5,557 5,120
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Agree Realty Corporation
Consolidated Balance Sheets (in thousands)
(Unaudited)
Sep 30, Dec 31,
2003 2002
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ASSETS
Real estate investments, at cost $ 216,047 $ 200,752
Accumulated depreciation (37,667) (34,706)
Operating property held for sale 7,322 7,483
Cash and cash equivalents 234 1,096
Rents receivable 156 785
Investments in and advances to
unconsolidated entities 333 315
Deferred costs, net of amortization 1,043 1,425
Other assets 678 1,012
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TOTAL ASSETS $ 188,146 $ 178,162
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LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgages payable $ 41,435 $ 71,589
Construction loans 1,569 5,612
Notes payable 39,500 38,083
Other liabilities 4,702 4,468
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TOTAL LIABILITIES 87,206 119,752
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TOTAL MINORITY INTEREST 5,704 5,787
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Common stock 1 1
Additional paid-in capital 108,268 64,506
Accumulated deficit (12,104) (11,135)
Unearned compensation (929) (749)
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TOTAL STOCKHOLDERS' EQUITY 95,236 52,623
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$ 188,146 $ 178,162
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