Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT: Kenneth R. Howe, Chief Financial Officer
(248) 737-4190
AGREE REALTY CORPORATION REPORTS THIRD QUARTER 2006
OPERATING RESULTS
THIRD QUARTER 2006 HIGHLIGHTS:
FINANCIAL INFORMATION
- Diluted FFO per share of $0.59
- $0.49 per share quarterly dividend paid October 12, 2006
FARMINGTON HILLS, MI (October 31, 2006) - Agree Realty Corporation (NYSE:
ADC) today announced results for the quarter ended September 30, 2006. For the
third quarter, funds from operations were $4,901,000 compared with funds from
operations in the third quarter of 2005 of $4,948,000. Diluted funds from
operations per share were $0.59 per share compared with $0.59 per share for the
third quarter of 2005. Net income was $3,406,000, or $0.44 per share on a
diluted basis, compared with net income for the third quarter of 2005 of
$3,454,000, or $0.45 per share. Total revenues increased 5.4% to $8,114,000,
compared with total revenues of $7,697,000 in the third quarter of 2005. A
reconciliation of net income to funds from operations is included in the
financial table accompanying this press release.
For the nine months ended September 30, 2006, funds from operations were
$14,724,000 compared with funds from operations for the nine months ended
September 30, 2005 of $14,741,000. Diluted funds from operations per share were
$1.76 per share compared with $1.79 per share for the nine months ended
September 30, 2005. Net income was $10,255,000, or $1.34 per share on a diluted
basis, compared with net income for the comparable period last year of
$10,274,000, or $1.36 per share. Total revenues increased 5.6% to $24,554,000,
compared with total revenues of $23,257,000 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 October 12, 2006 to
shareholders of record on September 29, 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 September 30, 2006, Agree Realty Corporation's total assets were
$218,612,000 and our portfolio consisted of 60 properties totaling 3,355,234
million square feet located in 15 states. The portfolio was 99.5% leased at the
end of the quarter. For the nine month and three month periods ended September
30, 2006 our fully diluted weighted average shares outstanding were 7,666,366
shares and 7,672,549 shares, respectively.
At September 30, 2006 our construction in progress balance totaled
approximately $3,967,000 and we capitalized $53,000 of construction period
interest during the third 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.
September 30, 2006
---------------------------------------------
Gross Leasable Area Annualized Base Rent
Number -------------------- ----------------------
Expiration of Leases Square Percent Percent
Year Expiring Footage of Total Amount of Total
- ---------- --------- --------- -------- ----------- --------
2007 7 34,800 1.0% $ 303,205 1.0%
2008 28 316,925 9.5% 1,416,358 4.7%
2009 20 193,326 5.8% 964,753 3.2%
2010 20 328,035 9.8% 2,030,828 6.7%
2011 24 228,524 6.8% 1,619,555 5.4%
2012 7 41,760 1.3% 325,568 1.1%
2013 1 51,868 1.6% 492,746 1.6%
2014 3 172,958 5.2% 824,206 2.7%
2015 11 730,525 21.9% 5,075,265 16.8%
2016 5 80,945 2.4% 1,584,222 5.2%
Thereafter 41 1,158,948 34.7% 15,573,051 51.6%
--- --------- ----- ----------- -----
Total 167 3,338,614 100.0% $30,209,757 100.0%
=== ========= ===== =========== =====
ANNUALIZED BASE RENT OF OUR PROPERTIES
The following is a breakdown of base rents in place at September 30, 2006 for
each type of retail tenant:
National $26,976,447 89%
Regional 2,182,579 7%
Local 1,086,731 4%
----------- ---
Total $30,245,757 100%
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MAJOR TENANTS
The following is a breakdown of base rents in place at September 30, 2006 for
each of our Major Tenants:
Borders (18) $ 9,781,436 32%
Walgreen (18) 6,593,929 22%
Kmart (12) 3,847,911 13%
----------- ---
Total $20,223,276 67%
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OPERATING PARTNERSHIP UNITS
As of September 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)
Three months Nine months
ended ended
September 30, September 30,
--------------- -----------------
2006 2005 2006 2005
------ ------ ------- -------
REVENUE
Minimum rents $7,453 $7,062 $22,416 $21,097
Percentage rent 14 14 41 39
Operating cost reimbursements 639 613 2,060 2,097
Other income 8 8 37 24
------ ------ ------- -------
TOTAL REVENUE 8,114 7,697 24,554 23,257
------ ------ ------- -------
EXPENSES
Real estate taxes 450 444 1,352 1,316
Property operating expenses 389 342 1,318 1,435
Land lease payments 195 195 586 586
General and administration 1,006 912 3,079 2,665
Depreciation and amortization 1,213 1,168 3,618 3,461
Interest expense 1,157 1,029 3,449 3,057
------ ------ ------- -------
TOTAL EXPENSES 4,410 4,090 13,402 12,520
------ ------ ------- -------
INCOME BEFORE MINORITY INTEREST AND
DISCONTINUED OPERATIONS 3,704 3,607 11,152 10,737
Minority interest expense 298 291 897 879
------ ------ ------- -------
INCOME BEFORE DISCONTINUED OPERATIONS 3,406 3,316 10,255 9,858
Income from discontinued operations -- 138 -- 416
------ ------ ------- -------
NET INCOME $3,406 $3,454 $10,255 $10,274
------ ------ ------- -------
NET INCOME - PER SHARE - DILUTIVE $ .44 $ .45 $ 1.34 $ 1.36
------ ------ ------- -------
RECONCILIATION OF FUNDS FROM OPERATIONS TO NET INCOME
Net income $3,406 $3,454 $10,255 $10,274
Depreciation of real estate assets 1,185 1,185 3,540 3,521
Amortization of leasing costs 12 12 32 36
Gain on sale of assets -- (6) -- (6)
Minority interest 298 303 897 916
------ ------ ------- -------
FUNDS FROM OPERATIONS $4,901 $4,948 $14,724 $14,741
------ ------ ------- -------
FUNDS FROM OPERATIONS - PER SHARE - DILUTIVE $ .59 $ .59 $ 1.76 $ 1.79
------ ------ ------- -------
WEIGHTED AVERAGE NUMBER OF SHARES AND OP UNITS
OUTSTANDING - DILUTIVE 8,346 8,346 8,340 8,234
------ ------ ------- -------
AGREE REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
(UNAUDITED)
SEPT 30, DEC. 31
2006 2005
-------- --------
ASSETS
Land $ 74,034 $ 73,035
Buildings 186,408 185,032
Accumulated depreciation (47,150) (43,772)
Property under development 2,767 265
Cash and cash equivalents 164 5,715
Rents receivable 406 731
Deferred costs, net of amortization 1,180 1,241
Other Assets 803 1,213
-------- --------
TOTAL ASSETS $218,612 $223,460
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgages payable $ 48,914 $ 50,722
Notes payable 15,650 17,500
Deferred revenue 12,276 12,794
Dividends and distributions payable 4,111 4,089
Other liabilities 1,505 1,749
-------- --------
TOTAL LIABILITIES 82,456 86,854
-------- --------
TOTAL MINORITY INTEREST 5,885 5,979
-------- --------
Common stock 1 1
Additional paid-in capital 141,066 140,343
Accumulated deficit (10,796) (9,717)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 130,271 130,627
-------- --------
$218,612 $223,460
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