Bedford Property Investors Announces Second Quarter 2004 Results.LAFAYETTE Lafayette (lä'fēĕt`, lăf'ēĕt`). 1 City (1990 pop. 23,501), Contra Costa co., NW Calif., a residential suburb in the San Francisco–Oakland area; settled 1848, inc. 1968. , Calif. -- Bedford Bedford, town, England Bedford, town (1991 pop. 75,632), county seat of Bedfordshire, central England, on the Ouse River. It is an important industrial center; diesel engines, pumps, turbines, agricultural machinery, electrical equipment, and transistors Property Investors, Inc. (NYSE NYSE See: New York Stock Exchange :BED) today announced its financial results for the second quarter ended June June: see month. 30, 2004. Funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) per share was $0.76, reflecting an increase of 1% when compared with FFO per share of $0.75 achieved for the second quarter of 2003. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) was $0.30, compared with EPS of $0.44 achieved for the second quarter of 2003. Financial Results FFO for the second quarter of 2004 was $12,226,000 compared to $12,297,000 for the same period in 2003. FFO for the first six months of 2004 was $23,870,000, or $1.48 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $24,878,000, or $1.52 per diluted share, for the same period in 2003, representing a decrease of 3% in diluted FFO per share. FFO is a non-GAAP financial measurement used by real estate investment trusts to measure and compare operating performance and is generally defined as net income in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , excluding extraordinary items and gains or losses from sales of property, plus depreciation and amortization of assets related to real estate, and after adjustments for unconsolidated partnerships and joint ventures. A reconciliation of our FFO to our net income available to common stockholders (the most directly comparable GAAP measure) is included in the financial data accompanying this press release. Net income available to common stockholders for the second quarter of 2004 decreased by $2,427,000 (33%) when compared with the second quarter of 2003. Net income available to common stockholders for the first six months of 2004 decreased by $5,363,000 (36%) when compared with the same period of 2003. This decrease is due to the decline in income from property operations, increase in interest expense, and declaration and payment of our Series A preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) . The decrease was partially offset by the increase in income due to property acquisitions in 2003 and 2004. The decline in income from property operations is the result of "blend and extend" lease transactions (in which we lowered rental rates with tenants whose rent was substantially above market in exchange for extended lease terms), declines in the operating portfolio occupancy, and increases in depreciation expense primarily due to improvements of real estate and properties acquired and developed in 2003 and 2004. The increase in interest expense is mainly due to the additional borrowing to fund 2003 and 2004 property acquisitions. Property Operations As of June 30, 2004, our operating portfolio occupancy was 93%, an increase of one percentage point from the previous quarter. The average occupancy at our same-store operating properties, which consist of approximately 6.8 million rentable square feet or 88% of the total square footage of our operating portfolio, was 92% during the quarter. During the quarter, we renewed and released 25 of 31 expiring ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. leases, a total of 252,104 square feet, and 75% of the expiring footage. The average change in rental rates in these new leases was a decrease of 7%. Property Acquisitions and Dispositions As previously announced, in April 2004, we purchased two fully-leased properties: a 111,200 square-foot office building in Scottsdale, Arizona Scottsdale (O'odham Vaṣai S-vaṣonĭ) is a city in Maricopa County, Arizona, United States, adjacent to Phoenix. Scottsdale has become internationally recognized as a premier and posh tourist destination, while maintaining its own identity and culture as " for $17,310,000 and a two-building 126,809 square-foot office/R&D complex in Hillsboro, Oregon Hillsboro is a city in and county seat of Washington County, Oregon, United States.GR6 The community began in 1842 and was named Hillsborough in 1850, before incorporation in 1876 as Hillsboro. for $19,390,000. In addition, in late April, we acquired a 130,639 square-foot redevelopment project for $9,145,000 in Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. . In April and May, we purchased three parcels of land totaling 4.69 acres for $1,820,000 in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). . These parcels of land are held for future development and are located adjacent to our operating properties in Las Vegas. No sales were completed during the second quarter of 2004. Financing As previously announced, on April 6, 2004, we sold 2.4 million shares of our 7.625% Series B Cumulative Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. at $25 per share in an underwritten public offering. The initial preferred dividend was declared on July July: see month. 1, 2004, paid on July 15, 2004 and will be recorded in the third quarter of 2004. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. From April 1, 2004 through June 30, 2004, we repurchased 363,244 shares of our common stock at an average cost of $27.51 per share pursuant to our share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. Since the inception of our repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program in November November: see month. 1998, we have repurchased a total of 8,434,381 shares of our common stock at an average cost of $19.17 per share, which represents 37% of the shares outstanding at November 1998. Company Information We are a self-administered equity real estate investment trust that acquires, develops, owns and operates suburban office and industrial properties. As of June 30, 2004, we wholly own and manage approximately 8.2 million square feet of commercial space located in Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Colorado, Nevada, Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. and Washington. On June 30, 2004, we had 513 tenants. Our common stock is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. and the Pacific Exchange under the symbol "BED" and our website is www.bedfordproperty.com. Investors, analysts and other interested parties are invited to join our quarterly conference call on Tuesday, July 20, 2004 at 8:00 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . To participate, callers may dial 866-244-4576 five minutes beforehand. Investors also have the opportunity to listen to the conference call live on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , at our website, under Investor Relations Investor relations The process by which the corporation communicates with its investors. -- Investor Overview, by clicking on the webcast icon. A replay of the call is available for one week at 888-266-2081 (Passcode 709094). The second quarter 2004 Supplemental Operating and Financial Data will also be available on our website beginning on July 19, 2004.
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2004 AND DECEMBER 31, 2003
(Unaudited; in thousands, except share and per share amounts)
2004 2003
--------- ---------
Assets
Real estate investments:
Industrial buildings $428,738 $414,392
Office buildings 366,946 375,844
Properties under development 43,984 -
Land held for development 14,172 14,071
--------- ---------
853,840 804,307
Less accumulated depreciation 89,489 81,638
--------- ---------
Total real estate investments 764,351 722,669
Cash and cash equivalents 4,912 7,598
Other assets 46,552 43,352
--------- ---------
Total assets $815,815 $773,619
========= =========
Liabilities and Stockholders' Equity
Bank loan payable $ 68,832 $ 68,978
Mortgage loans payable 368,112 368,542
Accounts payable and accrued expenses 6,682 8,874
Dividends payable 8,260 8,319
Other liabilities 16,234 15,007
--------- ---------
Total liabilities 468,120 469,720
--------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value; authorized
6,795,000 shares; issued none - -
Series A 8.75% cumulative redeemable preferred
stock, $0.01 par value; authorized and issued
805,000 shares at June 30, 2004 and December 31,
2003; stated liquidation preference of $40,250 38,947 38,947
Series B 7.625% cumulative redeemable preferred
stock, $0.01 par value; authorized and issued
2,400,000 shares at June 30, 2004; stated
liquidation preference of $60,000 57,832 -
Common stock, $0.02 par value; authorized
50,000,000 shares; issued and outstanding
16,196,009 shares at June 30, 2004 and
16,311,955 shares at December 31, 2003 324 326
Additional paid-in capital 285,897 289,734
Deferred stock compensation (8,733) (5,476)
Accumulated dividends in excess of net income (26,787) (19,721)
Accumulated other comprehensive income 215 89
--------- ---------
Total stockholders' equity 347,695 303,899
--------- ---------
Total liabilities and stockholders' equity $815,815 $773,619
========= =========
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited; in thousands, except share and per share amounts)
Three Months Six Months
2004 2003 2004 2003
----------- ----------- ----------- -----------
Property operations:
Rental income $28,715 $26,508 $56,762 $53,461
Rental expenses:
Operating expenses 5,325 4,867 10,267 9,443
Real estate taxes 2,971 2,690 5,945 5,369
Depreciation and
amortization 7,351 4,995 14,259 9,904
----------- ----------- ----------- -----------
Income from property
operations 13,068 13,956 26,291 28,745
General and
administrative
expenses (1,583) (1,251) (3,088) (2,935)
Interest income 11 33 29 72
Interest expense (5,740) (5,436) (11,860) (10,908)
----------- ----------- ----------- -----------
Net income 5,756 7,302 11,372 14,974
Preferred dividends -
Series A (881) - (1,761) -
----------- ----------- ----------- -----------
Net income available to
common stockholders $ 4,875 $ 7,302 $ 9,611 $14,974
=========== =========== =========== ===========
Income per common share
- basic $ 0.31 $ 0.45 $ 0.60 $ 0.93
=========== =========== =========== ===========
Weighted average number
of shares - basic 15,838,442 16,126,098 15,898,655 16,102,628
=========== =========== =========== ===========
Income per common share
- diluted $ 0.30 $ 0.44 $ 0.59 $ 0.91
=========== =========== =========== ===========
Weighted average number
of shares - diluted 16,059,299 16,423,089 16,181,870 16,412,916
=========== =========== =========== ===========
BEDFORD PROPERTY INVESTORS, INC.
RECONCILIATION OF NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
TO FUNDS FROM OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Unaudited; in thousands, except share and per share amounts)
Three Months Six Months
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net income available to
common stockholders $ 4,875 $ 7,302 $ 9,611 $14,974
Adjustments:
Depreciation and
amortization 7,351 4,995 14,259 9,904
----------- ----------- ----------- -----------
Funds from Operations
(FFO)(1) $12,226 $12,297 $23,870 $24,878
=========== =========== =========== ===========
FFO per share - diluted $ 0.76 $ 0.75 $ 1.48 $ 1.52
=========== =========== =========== ===========
Weighted average number
of shares - diluted 16,059,299 16,423,089 16,181,870 16,412,916
=========== =========== =========== ===========
(1) Although FFO is not a financial measure calculated in accordance
with accounting principles generally accepted in the United States
of America (GAAP), we believe that FFO may be an appropriate
alternative measure of the performance of an equity real estate
investment trust (REIT). Presentation of this information provides
the reader with an additional measure to compare the performance
of equity REITs. FFO is generally defined by the National
Association of Real Estate Investment Trusts as net income (loss)
(computed in accordance with GAAP), excluding extraordinary items
and gains (losses) from sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated
partnerships and joint ventures. FFO as set forth in the table
above has been computed in accordance with this definition. FFO
does not represent cash generated by operating activities in
accordance with GAAP; it is not necessarily indicative of cash
available to fund cash needs and should not be considered as an
alternative to net income (loss) as an indicator of our operating
performance or as an alternative to cash flow as a measure of
liquidity. Furthermore, FFO as disclosed by other REITs may not be
comparable to our presentation. The most directly comparable
financial measure calculated in accordance with GAAP to FFO is net
income available to common stockholders.
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