Exhibit 99.1
PRESS RELEASE - FOR IMMEDIATE RELEASE
CONTACT: Kenneth R. Howe, Chief Financial Officer
(248) 737-4190
AGREE REALTY CORPORATION REPORTS SECOND QUARTER
2006 OPERATING RESULTS
SECOND QUARTER 2006 HIGHLIGHTS:
FINANCIAL INFORMATION
- Diluted FFO per share of $0.59
- $0.49 per share quarterly dividend paid July 13, 2006
FARMINGTON HILLS, MI (August 1, 2006) - Agree Realty Corporation (NYSE:
ADC) today announced results for the quarter ended June 30, 2006. For the second
quarter, funds from operations were $4,953,000 compared with funds from
operations in the second quarter of 2005 of $5,015,000. Diluted funds from
operations per share were $0.59 per share compared with $0.60 per share for the
second quarter of 2005. Net income was $3,462,000, or $0.45 per share on a
diluted basis, compared with net income for the second quarter of 2005 of
$3,519,000, or $0.46 per share. Total revenues increased 5.6% to $8,167,000,
compared with total revenues of $7,737,000 in the second quarter of 2005. A
reconciliation of net income to funds from operations is included in the
financial table accompanying this press release.
For the six months ended June 30, 2006, funds from operations were
$9,923,000 compared with funds from operations for the six months ended June 30,
2005 of $9,793,000. Diluted funds from operations per share were $1.18 per share
compared with $1.20 per share for the six months ended June 30, 2005. Net income
was $6,949,000, or $0.89 per share on a diluted basis, compared with net income
for the comparable period last year of $6,820,000, or $0.91 per share. Total
revenues increased 5.7% to $16,440,000, compared with total revenues of
$15,561,000 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 13, 2006 to
shareholders of record on June 30, 2006. The dividend is equivalent to an
annualized dividend of $1.96 per share and represents a payout ratio of 83.1% of
funds from operations for the quarter.
PORTFOLIO RESULTS
At June 30, 2006, Agree Realty Corporation's total assets were
$216,260,000 and our portfolio consisted of 59 properties totaling 3,362,971
million square feet located in 15 states. The portfolio was 98.3% leased at the
end of the quarter. For the six month and three month periods ended June 30,
2006 our fully diluted weighted average shares outstanding were 7,660,300 shares
and 7,661,478 shares, respectively.
At June 30, 2006 our construction in progress balance totaled
approximately $2,735,000 and we capitalized $35,000 of construction period
interest during the second quarter 2006.
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, 2006
--------------
Gross Leasable Area Annualized Base Rent
------------------- --------------------
Number
Expiration of Leases Square Percent Percent
Year Expiring Footage of Total Amount of Total
- -------------------------------------------------------------------
2006 3 7,600 .2% $ 63,800 .2%
2007 11 52,200 1.6% 470,670 1.6%
2008 27 313,005 9.5% 1,396,908 4.7%
2009 16 181,590 5.5% 899,114 3.0%
2010 20 331,635 10.0% 2,057,916 6.9%
2011 24 232,521 7.0% 1,608,836 5.4%
2012 4 20,760 .6% 162,793 .5%
2013 1 51,868 1.6% 492,746 1.7%
2014 3 172,958 5.2% 824,206 2.8%
2015 11 730,525 22.1% 5,075,265 17.1%
Thereafter 45 1,212,536 36.7% 16,665,898 56.1%
-------------------------------------------------
Total 165 3,307,198 100.0% $29,718,152 100.0%
----------------------------------------------------
ANNUALIZED BASE RENT OF OUR PROPERTIES
The following is a breakdown of base rents in place at June 30, 2006 for each
type of retail tenant:
National $26,465,043 89%
Regional 2,182,579 7%
Local 1,070,530 4%
--------- ----
Total $29,718,152 100%
----------- ----
MAJOR TENANTS
The following is a breakdown of base rents in place at June 30, 2006 for each of
our Major Tenants:
Borders (18) $ 9,752,295 33%
Walgreen (17) 6,320,599 21%
Kmart (12) 3,847,911 13%
--------- ----
Total $19,920,805 67%
----------- ----
OPERATING PARTNERSHIP UNITS
As of June 30, 2006 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 fifteen (15) 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)
<Table>
<Caption>
Three months ended Six months ended
June 30, June 30,
----------------------------------------------
2006 2005 2006 2005
------- ------- ------- -------
REVENUE
Minimum rents $ 7,430 $ 6,983 $14,963 $14,035
Percentage rent 13 6 27 25
Operating cost reimbursements 710 731 1,422 1,484
Other income 14 17 28 17
------- ------- ------- -------
TOTAL REVENUE 8,167 7,737 16,440 15,561
------- ------- ------- -------
EXPENSES
Real estate taxes 462 431 902 872
Property operating expenses 381 472 928 1,093
Land lease payments 195 195 391 391
General and administration 1,022 834 2,073 1,754
Depreciation and amortization 1,203 1,155 2,406 2,294
Interest expense 1,139 974 2,292 2,028
------- ------- ------- -------
TOTAL EXPENSES 4,402 4,061 8,892 8,432
------- ------- ------- -------
INCOME BEFORE MINORITY INTEREST AND
DISCONTINUED OPERATIONS 3,765 3,676 7,548 7,130
Minority interest expense 303 297 599 588
------- ------- ------- -------
INCOME BEFORE DISCONTINUED OPERATIONS 3,462 3,379 6,949 6,543
------- ------- ------- -------
Income from discontinued operations -- 140 -- 278
------- -------
NET INCOME $ 3,462 $ 3,519 $ 6,949 $ 6,820
------- ------- ------- -------
NET INCOME - PER SHARE $ .45 $ .46 $ .89 $ .91
------- ------- ------- -------
RECONCILIATION OF FUNDS FROM OPERATIONS TO
NET INCOME
Net income $ 3,462 $ 3,519 $ 6,949 $ 6,820
Depreciation of real estate assets 1,178 1,175 2,355 2,336
Amortization of leasing costs 10 12 20 24
Gain on sale of assets -- -- -- --
Minority interest 303 309 599 613
------- ------- ------- -------
FUNDS FROM OPERATIONS $ 4,953 $ 5,015 $ 9,923 $ 9,793
------- ------- ------- -------
FUNDS FROM OPERATIONS - PER SHARE $ .59 $ .60 $ 1.18 $ 1.20
------- ------- ------- -------
WEIGHTED AVERAGE NUMBER OF SHARES AND OP
UNITS OUTSTANDING - DILUTIVE 8,335 8,349 8,334 8,178
------- ------- ------- -------
</Table>
AGREE REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
(UNAUDITED)
<Table>
<Caption>
JUNE 30, DEC. 31
2006 2005
--------- ---------
ASSETS
Land $ 73,035 $ 73,035
Buildings 184,802 185,032
Accumulated depreciation (45,966) (43,772)
Property under development 1,535 265
Cash and cash equivalents 216 5,715
Rents receivable 275 731
Deferred costs, net of amortization 1,191 1,241
Other Assets 1,172 1,213
--------- ---------
TOTAL ASSETS $ 216,260 $ 223,460
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgages payable $ 49,527 $ 50,722
Notes payable 12,300 17,500
Deferred revenue 12,449 12,794
Dividends and distributions payable 4,097 4,089
Other liabilities 1,643 1,749
--------- ---------
TOTAL LIABILITIES 80,016 86,854
--------- ---------
TOTAL MINORITY INTEREST 5,917 5,979
--------- ---------
Common stock 1 1
Additional paid-in capital 143,138 143,138
Accumulated deficit (10,421) (9,717)
Unearned compensation (2,391) (2,795)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 130,327 130,627
--------- ---------
$ 216,260 $ 223,460
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</Table>