EXHIBIT 99.1
PRESS RELEASE - FOR IMMEDIATE RELEASE
CONTACT: Kenneth R. Howe, Chief Financial Officer
(248) 737-4190
AGREE REALTY CORPORATION REPORTS SECOND QUARTER
2005 OPERATING RESULTS
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SECOND QUARTER 2005 HIGHLIGHTS:
FINANCIAL INFORMATION
o Diluted FFO per share of $0.60
o $0.49 per share quarterly dividend
paid July 14, 2005
FARMINGTON HILLS, MI (July 28, 2005) - Agree Realty Corporation (NYSE: ADC)
today announced results for the quarter ended June 30, 2005. For the second
quarter, funds from operations increased 12.7% to $5,015,000 compared with funds
from operations in the second quarter of 2005 of $4,451,000. Diluted funds from
operations per share were $0.60 per share compared with $0.62 per share for the
second quarter of 2004. Net income increased to $3,519,000, or $0.46 per share
on a diluted basis, compared with net income for the second quarter of 2004 of
$3,057,000, or $0.47 per share. Total revenues increased 9.6% to $7,994,000,
compared with total rental revenues of $7,295,000 in the second quarter of 2004.
A reconciliation of net income to FFO is included in the financial table
accompanying this press release.
For the six months ended June 30, 2005, funds from operations increased
14.6% to $9,793,000 compared with funds from operations for the six months ended
June 30, 2004 of $8,721,000. Diluted funds from operations per share were $1.20
per share compared with $1.22 per share for the six months ended June 30, 2004.
Net income was $6,820,000, or $.91 per share on a diluted basis, compared with
net income for the comparable period last year of $5,953,000, or $.92 per share.
Total revenues increased 10.3% to $16,089,000, compared with total rental
revenues of $14,581,000 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
We paid a cash dividend of $0.49 per share on July 14, 2005 to shareholders
of record on June 30, 2005. The dividend is equivalent to an annualized dividend
of $1.96 per share and represents a payout ratio of 81.7% of funds from
operations for the quarter.
PORTFOLIO RESULTS
At June 30, 2005, Agree Realty Corporation's total assets were
$217,199,000. At quarter end our portfolio consisted of 55 properties totaling
3,477,671 million square feet located in 14 states. The portfolio was 99% leased
at the end of the quarter.
On June 30, 2005 we completed the development of a retail property in
Midland, Michigan. The property is leased to Walgreen Co.
At June 30, 2005 our construction in progress balance totaled approximately
$8.6 million and we capitalized $150,000 of construction period interest during
the second quarter 2005.
LEASE EXPIRATIONS
The following table shows lease expirations for the next 10 years for our
freestanding properties and community shopping centers, assuming that none of
the tenants exercise renewal options.
JUNE 30, 2005
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GROSS LEASABLE AREA ANNUALIZED BASE RENT
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NUMBER
EXPIRATION OF LEASES SQUARE PERCENT PERCENT
YEAR EXPIRING FOOTAGE OF TOTAL AMOUNT OF TOTAL
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2005 2 $ 1,400 0.04% $ 27,498 0.09%
2006 39 179,247 5.15 1,434,424 4.94
2007 15 80,630 2.32 597,176 2.05
2008 27 316,195 9.09 1,359,624 4.68
2009 11 164,990 4.74 164,990 0.57
2010 16 299,885 8.62 1,778,885 6.12
2011 9 192,322 5.53 1,231,871 4.24
2012 -- -- -- -- --
2013 1 51,868 1.49 492,746 1.70
2014 3 172,958 4.97 824,206 2.84
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Total 123 $1,459,495 41.95% $7,911,420 27.23%
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ANNUALIZED BASE RENT OF OUR PROPERTIES
The following is a breakdown of base rents in place at June 30, 2005 for each
type of retail tenant:
National $25,823,698 88.86%
Regional 2,008,113 6.91
Local 1,228,163 4.23
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Total $29,059,974 100.00%
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MAJOR TENANTS
The following is a breakdown of base rents in place at June 30, 2005 for each of
our Major Tenants:
Borders $ 9,543,489 32.84%
Walgreen 5,569,606 19.17
Kmart 4,213,717 14.50
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Total $19,326,812 66.51%
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OPERATING PARTNERSHIP UNITS
As of June 30, 2005 there were 673,547 operating partnership units
outstanding.
Agree Realty Corporation owns, manages and develops properties which are
primarily single tenant properties and neighborhood community shopping centers,
located in fourteen (14) 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 Six months ended
June 30, June 30,
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2005 2004 2005 2004
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REVENUE
Minimum rents $ 7,202 $ 6,498 $14,469 $12,814
Percentage rent 6 16 30 41
Operating cost reimbursements 769 684 1,573 1,530
Unconsolidated entities -- 97 -- 194
Other income 17 -- 17 2
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TOTAL REVENUE 7,994 7,295 16,089 14,581
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EXPENSES
Real estate taxes 462 475 931 928
Property operating expenses 499 406 1,165 1,091
Land lease payments 195 180 390 360
General and administration 834 663 1,754 1,296
Depreciation and amortization 1,202 1,072 2,388 2,141
Interest expense 974 1,159 2,028 2,263
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TOTAL EXPENSES 4,166 3,955 8,656 8,079
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INCOME BEFORE MINORITY INTEREST AND
DISCONTINUED OPERATIONS 3,828 3,340 7,433 6,502
Minority interest expense 309 315 613 613
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INCOME BEFORE DISCONTINUED OPERATIONS 3,519 3,025 6,820 5,889
Income from discontinued operations -- 32 -- 64
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NET INCOME $ 3,519 $ 3,057 $ 6,820 $ 5,953
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NET INCOME - PER SHARE $ .46 $ .47 $ .91 $ .92
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RECONCILIATION OF FUNDS FROM OPERATIONS TO NET INCOME
Net income $ 3,519 $ 3,057 $ 6,820 $ 5,953
Depreciation of real estate assets 1,175 1,065 2,336 2,127
Amortization of leasing costs 12 11 24 22
Gain on sale of assets -- -- -- --
Minority interest 309 318 613 619
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FUNDS FROM OPERATIONS $ 5,015 $ 4,451 $ 9,793 $ 8,721
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FUNDS FROM OPERATIONS - PER SHARE $ .60 $ .62 $ 1.20 $ 1.22
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WEIGHTED AVERAGE NUMBER OF SHARES AND "OP" UNITS OUTSTANDING 8,349 7,146 8,178 7,147
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AGREE REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
(UNAUDITED)
JUNE 30, DEC 31
2005 2004
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ASSETS
Real estate investments, at cost $ 257,880 $ 253,293
Accumulated depreciation (44,060) (41,728)
Cash and cash equivalents 231 587
Cash - restricted -- --
Rents receivable 281 627
Investments in and advances to unconsolidated entities -- --
Deferred costs, net of amortization 1,341 1,261
Other Assets 1,526 1,662
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TOTAL ASSETS $ 217,199 $ 215,702
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LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgages payable $ 52,675 $ 53,809
Construction loans -- --
Notes payable 10,800 39,200
Deferred revenue 13,138 13,483
Other liabilities 6,017 5,703
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TOTAL LIABILITIES 82,630 112,195
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TOTAL MINORITY INTEREST 5,827 5,875
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Common stock 1 1
Additional paid-in capital 142,209 109,600
Accumulated deficit (11,427) (10,727)
Unearned compensation (2,041) (1,242)
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TOTAL STOCKHOLDERS' EQUITY 128,742 97,632
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$ 217,199 $ 215,702
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