Bedford Property Investors Announces Third Quarter and Nine Months 2005 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 third quarter and nine months ended September September: see month. 30, 2005. 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 of common stock (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. ) for the third quarter of 2005 was $0.11 compared with 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. EPS of $0.21 achieved for the third quarter of 2004. EPS for the nine months ended September 30, 2005 was $1.10 compared with $0.81 for the nine months of 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 of common stock for the third quarter of 2005 was $0.41 compared with FFO per share of $0.69 achieved for the third quarter of 2004. FFO per share of common stock for the first nine months of 2005 was $1.30 compared with FFO per share of common stock of $2.17 achieved in the first nine months of 2004. Financial Results Net income available to common stockholders for the third quarter of 2005 decreased by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1,615,000 when compared with the third quarter of 2004. The decrease is primarily due to the decreases in income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $2,302,000 and income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $2,171,000, partially offset by gain on sale of $2,744,000. Net income available to common stockholders for the first nine months of 2005 increased by approximately $4,319,000 when compared with the same period in 2004. The increase in net income available to common stockholders for the first nine months of 2005 is mainly due to gains of approximately $18,983,000 realized from the sales of operating properties, partially offset by decreases in income from continuing operations of $6,691,000 and income of discontinued operations of $5,800,000, and an increase in preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) of $2,173,000. Income from continuing operations (which excludes the operating results from properties sold and gains on sales) for the third quarter and the first nine months of 2005 decreased $2,302,000 and $6,691,000, respectively, when compared to the same periods in 2004. These decreases are the result of the loss of net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. from the properties we sold in 2004 and 2005, continued rental rate reductions on our lease renewals and re-leasing activities, declines in the operating portfolio occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy , and increases in depreciation expense, primarily due to improvements of real estate and properties acquired and developed in 2004 and 2005. These decreases were partially offset by additional net operating income resulting from the properties acquired in 2004 and development activities in 2004 and 2005. FFO for the third quarter of 2005 was approximately $6,427,000, compared to approximately $11,064,000 for the same period in 2004. FFO for the nine months ended September 30, 2005 was approximately $20,484,000, compared to approximately $34,934,000 for the same period in 2004. 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 computed 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 ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. this press release. Property Operations As of September 30, 2005, we owned and managed approximately 7.5 million square feet of suburban office and industrial properties which consisted of 82 operating properties totaling approximately 7 million square feet and five development and rehabilitation rehabilitation: see physical therapy. projects totaling approximately 471,000 square feet. At the end of the third quarter of 2005, our 7.5 million square foot portfolio was 84% occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. , while our operating portfolio was 89% occupied. During the third quarter of 2005, we renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. and re-leased 180,347 square feet, or 68%, of the 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. square footage of 265,285. The average change in rental rates (on a cash basis) in these new leases was a decrease of 17.4%. For the nine months ended September 30, 2005, we renewed and re-leased 787,274 square feet, or 69%, of the expiring square footage. The average change in rental rates (on a cash basis) in these new leases was a decrease of 15.3%. Property Dispositions In the third quarter of 2005, we sold one operating property for $9,500,000. This sale consisted of a vacant R&D building of 87,953 square feet and generated a gain on sale of real estate investments of approximately $2,744,000. During the nine months ended September 30, 2005, we sold seven operating properties in three transactions for a total of $53,050,000. These sales consisted of two office and five R & D buildings totaling 379,919 square feet and generated aggregate gains on sale of real estate investments of $18,733,000. In addition, we recorded a gain of $250,000 from funds released from escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. in the first quarter of 2005 in connection with a property sold in the fourth quarter of 2004. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. During the third quarter of 2005, we repurchased 234,316 shares of our common stock at an average cost of $22.10 per share. Of the 234,316 shares repurchased, 6,482 shares were repurchased from our employees in connection with the exercise of stock options. The remaining 227,834 shares were repurchased on the open market pursuant to our common stock 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 this 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 8,928,660 shares of our common stock at an average cost of $19.38 per share, which represents 39.4% of the shares of common stock outstanding at November 30, 1998. Company Information We are a self-administered equity real estate investment trust that acquires, develops, owns and operates multi-tenant In the Software as a Service (SaaS) software architecture, multi-tenant refers to the ability of the hosting site to support multiple organizations ("tenants") at the same time. Multi-tenancy is a key feature of a true SaaS architecture. suburban office and industrial properties 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 Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. 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). , 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 Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. . As of September 30, 2005, we had 487 tenants. We are 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 Tuesday: see week. , October October: see month. 18, 2005 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) 641-2830 and state ID#: 9459097 and conference call leader Hanh Kihara, 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 at www.bedfordproperty.com, under Investor Relations-Investor Overview, by clicking on the webcast icon. A telephonic replay of the call will be available through November 18, 2005 at (800) 642-1687, ID#: 9459097.
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
(Unaudited; in thousands, except share and per share amounts)
September 30, December 31,
2005 2004(1)
---------------- --------------
Assets
Real estate investments:
Industrial buildings $ 397,166 $ 417,613
Office buildings 343,585 332,695
Properties under development 4,201 29,716
Land held for development 12,683 13,529
------------ -----------
757,635 793,553
Less accumulated depreciation 93,716 85,436
------------ -----------
663,919 708,117
Operating properties held for sale,
net 26,597 8,293
------------ -----------
Total real estate investments 690,516 716,410
Cash and cash equivalents 979 24,218
Accounts receivable, net 662 679
Notes receivable, net - 6,820
Other assets 42,847 45,356
------------ -----------
Total assets $ 735,004 $ 793,483
============ ===========
Liabilities and Stockholders' Equity
Bank loan payable $ 59,351 $ -
Mortgage loans payable 306,264 351,335
Accounts payable and accrued expenses 11,218 13,135
Dividends payable 10,200 63,898
Other liabilities 11,900 14,657
------------ -----------
Total liabilities 398,933 443,025
------------ -----------
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 September 30, 2005 and December
31, 2004; 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 September 30, 2005 and
December 31, 2004; stated liquidation
preference of $60,000 57,769 57,769
Common stock, $0.02 par value;
authorized 50,000,000 shares;
issued and outstanding 16,031,240
shares at September 30, 2005 and
16,325,584 shares at December 31,
2004 320 326
Additional paid-in capital 282,724 289,132
Deferred stock compensation (10,449) (10,114)
Accumulated dividends in
excess of net income (33,240) (25,700)
Accumulated other
comprehensive income - 98
------------ -----------
Total stockholders' equity 336,071 350,458
------------ -----------
Total liabilities and
stockholders' equity $ 735,004 $ 793,483
============ ===========
(1) The information in this column was derived from the Company's
audited consolidated balance sheet for the year ended December 31,
2004.
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited; in thousands, except share and per share amounts)
Three Months Nine Months
2005 2004 2005 2004
----------- ----------- ----------- -----------
Rental income $ 22,126 $ 22,308 $ 67,181 $ 65,732
Rental expenses:
Operating expenses 4,929 4,008 13,937 11,414
Real estate taxes 2,352 2,288 7,897 7,079
Depreciation and
amortization 7,217 6,651 21,451 18,842
General and
administrative
expenses 1,677 1,655 5,790 4,743
----------- ----------- ----------- -----------
Income from operations 5,951 7,706 18,106 23,654
Other income (expense)
Interest income 7 9 173 38
Interest expense (5,123) (4,578) (15,200) (13,922)
----------- ----------- ----------- -----------
Income from continuing
operations 835 3,137 3,079 9,770
----------- ----------- ----------- -----------
Discontinued operations:
Income from
discontinued
operations 207 2,378 1,317 7,117
Gain on sale of
operating
properties 2,744 - 18,983 -
----------- ----------- ----------- -----------
Income from
discontinued
operations 2,951 2,378 20,300 7,117
----------- ----------- ----------- -----------
Net income 3,786 5,515 23,379 16,887
Preferred dividends -
Series A (880) (880) (2,641) (2,641)
Preferred dividends -
Series B (1,144) (1,258) (3,431) (1,258)
----------- ----------- ----------- -----------
Net income available
to common
stockholders $ 1,762 $ 3,377 $ 17,307 $ 12,988
=========== =========== =========== ===========
Income per common
share - basic:
(Loss) income from
continuing
operations $ (0.08)$ 0.06 $ (0.19)$ 0.37
Income from
discontinued
operations 0.19 0.15 1.29 0.45
----------- ----------- ----------- -----------
Net income available
to common
stockholders $ 0.11 $ 0.21 $ 1.10 $ 0.82
=========== =========== =========== ===========
Weighted average
number of shares -
basic 15,580,684 15,743,554 15,726,617 15,846,577
=========== =========== =========== ===========
Income per common
share - diluted:
(Loss) income from
continuing
operations $ (0.08)$ 0.06 $ (0.19)$ 0.37
Income from
discontinued
operations 0.19 0.15 1.29 0.44
----------- ----------- ----------- -----------
Net income available
to common
stockholders $ 0.11 $ 0.21 $ 1.10 $ 0.81
=========== =========== =========== ===========
Weighted average
number of shares -
diluted 15,624,212 15,977,814 15,788,251 16,124,418
=========== =========== =========== ===========
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED FUNDS FROM OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(in thousands, except share and per share amounts)
Three Months Nine Months
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net income
available to
common
stockholders $ 1,762 $ 3,377 $ 17,307 $ 12,988
Adjustments:
Depreciation and
amortization:
Continuing
operations 7,217 6,651 21,451 18,842
Discontinued
operations 192 1,036 709 3,104
Gain on sale of
operating
properties (2,744) - (18,983) -
----------- ----------- ----------- -----------
Funds from
Operations
(FFO)(1) $ 6,427 $ 11,064 $ 20,484 $ 34,934
=========== =========== =========== ===========
FFO per share -
diluted $ 0.41 $ 0.69 $ 1.30 $ 2.17
=========== =========== =========== ===========
Weighted average
number of shares -
diluted 15,624,212 15,977,814 15,788,251 16,124,418
=========== =========== =========== ===========
(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 is 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 such as 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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