Ramco-Gershenson Properties Trust Reports Results for the First Quarter 2006.FARMINGTON HILLS Far·ming·ton Hills A city of southeast Michigan, an industrial suburb of Detroit. Population: 81,400. , Mich. -- Ramco-Gershenson Properties Trust (NYSE NYSE See: New York Stock Exchange :RPT RPT - Unify. Report Writer Language. ) announced today results for the first quarter ended March 31, 2006. Financial Information: --Diluted FFO FFO See: Funds from operations per share of $0.62, a 3.3% increase over last year --Diluted FFO of $13.5 million, a 13.4% increase over last year --Net income of $5.6 million, a 14.3% increase over last year --Diluted earnings per share of $0.23, a 21.1% increase over last year Company Highlights: --Increased quarterly common share dividend 2.3% to $0.4475 per share --Sold seven non-core assets for $47.0 million --Announced 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 --Signed six mid-box leases totaling 167,000 square feet --Sold 17 acre land parcel to Lowe's at River City Marketplace in Jacksonville, FL --Opened 20 new non-anchor stores, 14.0% over portfolio average rents --Renewed 67 non-anchor leases, 9.5% over prior rental rates --Portfolio occupancy of 93.9%, compared to 92.6% in 2005 For the three months ended March 31, 2006, 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. 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) increased 13.4% to $13.5 million, compared with $11.9 million for the three months ended March 31, 2005. On a per share basis, FFO increased 3.3% to $0.62, compared with $0.60 in 2005. Net income for the three months ended March 31, 2006, was $5.6 million, compared with $4.9 million in 2005. On a per share basis, net income increased 21.1% to $0.23, compared to $0.19 in 2005. "We are pleased with our first quarter financial results, which were in line with expectations," said Dennis Gershenson, President and Chief Executive Officer. "We posted very solid leasing results, completed the sale of seven non-core shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into and made substantial progress on our River City Marketplace development. Through the remainder of the year, we will continue to aggressively pursue opportunities within our markets and core portfolio to advance our business plan." Acquisitions/Dispositions During the quarter, the Company sold seven non-core shopping centers for the aggregate sale price of $47.0 million. The seven centers were sold as a portfolio and comprised approximately 935,000 square feet. All of the shopping centers were located in tertiary tertiary (tûr`shēârē), in the Roman Catholic Church, member of a third order. The third orders are chiefly supplements of the friars—Franciscans (the most numerous), Dominicans, and Carmelites. markets. The proceeds from the sale were used to pay down the Company's unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and will be reinvested to fund the Company's business plan. Development River City Marketplace, Jacksonville, Florida “Jacksonville” redirects here. For other uses, see Jacksonville (disambiguation). Jacksonville is the largest city in the state of Florida and the county seat of Duval County. During the quarter, the Company sold a 17 acre parcel to Lowe's Home Improvement for $4.3 million as well as reimbursements for certain site work, for the construction of a 177,000 square foot superstore su·per·store n. A very large retail store that stocks highly diversified merchandise, such as groceries, toys, and camera equipment, or a wide variety of mechandise in a specific product line, such as computers or sporting goods. at its River City Marketplace development in Jacksonville, Florida. The Company also signed a lease agreement for a 25,000 square foot Bed, Bath & Beyond. The addition of Lowe's and Bed, Bath & Beyond rounds out an anchor line-up that accounts for more than 565,000 square feet and includes a 204,000 square foot Wal-Mart, scheduled to open in May of 2006, as well as Wallace Wal·lace , Alfred Russel 1823-1913. British naturalist who developed a concept of evolution that paralleled the work of Charles Darwin. (Hollywood) Theaters, Ross Ross , Sir Ronald 1857-1932. British physician. He won a 1902 Nobel Prize for proving that malaria is transmitted to humans by the bite of the mosquito. Dress for Less, PetSmart, Michaels, Old Navy and OfficeMax, which are scheduled to open throughout the summer. Development Pipeline At quarter-end, the Company had a total of four shopping centers under development including the River City Marketplace in Jacksonville, Florida and Beacon Beacon, city (1990 pop. 13,243), Dutchess co., SE N.Y., on the E bank of the Hudson River; settled 1663, inc. in 1913 when Fishkill Landing and Matteawan villages were united. Square in Grand Haven, Michigan Grand Haven is a city in the U.S. State of Michigan and is the county seat of Ottawa County6. The city is located on Lake Michigan at the mouth of the Grand River, for which it is named. , which are part of unconsolidated joint ventures, as well as Rossford Pointe pointe n. In ballet, dancing that is performed on the tips of the toes. [From French pointe (des pieds), point (of the feet), tiptoe; see point.] in Rossford, Ohio Rossford is a city in Wood County, Ohio, United States, along the Maumee River. The population was 6,406 at the 2000 census. The town lies at the Crossroads of America, the intersection of Interstate 75 and the Ohio Turnpike. and The Shoppes of Fairlane Meadows in Dearborn, Michigan Dearborn is a city in the U.S. state of Michigan. It is located in the Detroit metropolitan area and Wayne County, and is the tenth largest city in the U.S. state of Michigan. As of the 2000 census, it had a population of 97,775. . To date the Company has spent $62.8 million on these projects, which have an expected aggregate cost of $104.6 million. When complete, the centers will account for approximately 1.2 million square feet of retail space. Asset Management/Leasing At March 31, 2006, the Company had seven value-added redevelopment projects in process with a total project cost of $28.6 million. Each of the projects involves the expansion or addition of at least one major, national anchor tenant. The most significant new redevelopment is the addition of Best Buy and PetSmart, to replace Media Play and Circuit City, at the Tel-Twelve shopping center in Southfield, Michigan Southfield is a city in Oakland County of the U.S. state of Michigan. It is a suburb of Detroit and is part of the metro Detroit area. As of the 2000 census, the city had a total population of 78,296. Southfield Township is adjacent to the city on the north side. . Best Buy and PetSmart are expected to open during the second quarter of 2006. The balance of the redevelopments are expected to be completed by year-end. During the quarter, the Company opened 20 new non-anchor stores, at an average base rent of $17.05 per square foot, an increase of 14.0% over portfolio average rents and 2 anchor stores anchor store n. A large store, such as a department store or supermarket, that is prominently located in a shopping mall to attract customers who are then expected to patronize the other shops in the mall. , at an average base rent of $12.63, an increase of 68.8% over average rents. The Company also renewed 67 non-anchor leases, at an average base rent of $13.13, an increase of 9.5% over prior rental rates and 5 anchor leases, at an average base rent of $6.88, an increase of 12.0% over prior rents paid. At March 31, 2006, the portfolio was 93.9% leased, compared to 92.6% at March 31, 2005. Market Capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. and Debt Total debt at quarter-end was approximately $683.0 million with an average interest rate of 6.2% and an average maturity of 55 months. As of March 31, 2006, debt to market capitalization was 49.9% and total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. approximated $1.4 billion. Dividend/Share 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. On March 1, 2006, the Company's Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. approved an increase in its common share dividend of approximately 2.3%. The increase raised the first quarter common share dividend from $0.4375 per share to $0.4475 for the period of January 1, 2006 through March 31, 2006. The dividend is based on an expected annual dividend of $1.79 per share. The common share dividend was paid on April 3, 2006, to shareholders of record on March 20, 2006. A first quarter dividend of $0.5938 per Series B cumulative redeemable Redeemable Eligible for redemption under the terms of an indenture. preferred share and a first quarter dividend of $0.5664375 per Series C cumulative convertible preferred share, for the period of January 1, 2006 through March 31, 2006 were also paid on April 3, 2006, to shareholders of record on March 20, 2006. During the quarter, the Company announced a $15 million common share repurchase program. Under the program, shares may be repurchased on the open market and in privately negotiated transactions depending on market conditions, share price and other factors. As of March 31, 2006, the Company repurchased 2,800 shares at an average price of $29.44 per common share. Subsequent to quarter-end, the Company repurchased 74,400 shares at an average price of $27.53 per common share. Earnings Guidance/Conference Call As stated previously, the Company estimates that 2006 annual diluted FFO will be between $2.53 and $2.58. It also expects earnings per diluted common share to be between $0.79 and $0.84. Ramco-Gershenson will host a live broadcast of its first quarter conference call on Thursday, April 27, 2006 at 10:00 a.m. eastern time. The live broadcast will be available online at www.rgpt.com and www.streetevents.com and also by telephone at (800) 539-5010 (conference #7716187). A replay will be available shortly after the call on the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. websites (for ninety days) or by telephone at (800) 642-1687, passcode 7716187 (for one week). Supplemental financial information is available via e-mail by sending requests to dhendershot@rgpt.com and is also available at the investor section of our web page. Ramco-Gershenson Properties Trust has a portfolio of 78 shopping centers totaling approximately 17.7 million square feet of gross leasable area Gross leasable area (GLA) in the retail development industry is a term applied to shopping malls, lifestyle centers, outlet malls and other retail centers to indicate the amount of floor space available to be rented. , consisting of 77 community centers and one enclosed en·close also in·close tr.v. en·closed, en·clos·ing, en·clos·es 1. To surround on all sides; close in. 2. To fence in so as to prevent common use: enclosed the pasture. regional mall. The Company's centers are located in Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). , Florida, Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , Ohio, Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee , Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , New Jersey, Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). , South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , and Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). . Headquartered in Farmington Hills, Michigan Farmington Hills is the most populous city in Oakland County of the U.S. state of Michigan. It is a suburb of Detroit and is known for it's affluence, excellent schools, great housing stock, luxury homes and a center of business in Oakland County and Metro Detroit. , the Company is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) which owns, develops, acquires, manages and leases community shopping centers, regional malls and single tenant retail properties, nationally. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and should be reviewed in conjunction with the Company's filings with the U.S. Securities and Exchange Commission and other publicly available information regarding the Company. Management of Ramco-Gershenson believes that expectations reflected in forward-looking statements are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary. These include general economic conditions, the strength of key industries in the cities in which the Company's properties are located, the performance of tenants at the Company's properties as well as other factors.
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)
For the Three
Months Ended
March 31,
-----------------
2006 2005
-------- --------
REVENUES:
Minimum rents $24,634 $24,001
Percentage rents 385 274
Recoveries from tenants 9,874 10,641
Fees and management income 1,242 1,217
Other income 440 746
-------- --------
Total revenues 36,575 36,879
-------- --------
EXPENSES:
Real estate taxes 4,877 4,548
Recoverable operating expenses 5,602 5,820
Depreciation and amortization 8,077 7,323
Other operating 702 457
General and administrative 4,101 3,719
Interest expense 10,570 10,331
-------- --------
Total expenses 33,929 32,198
-------- --------
Income from continuing operations before gain on sale
of real estate assets, minority interest and
earnings from unconsolidated entities 2,646 4,681
Gain (Loss) on sale of real estate assets 1,708 (3)
Minority interest (786) (731)
Earnings from unconsolidated entities 737 284
-------- --------
Income from continuing operations 4,305 4,231
-------- --------
Discontinued operations, net of minority interest
Gain on sale of real estate assets 957 -
Income from operations 323 680
-------- --------
Income from discontinued operations 1,280 680
-------- --------
Net income 5,585 4,911
Preferred stock dividends (1,664) (1,664)
-------- --------
Net income available to common shareholders $3,921 $3,247
======== ========
Basic earnings per share:
Income from continuing operations $0.16 $0.15
Income from discontinued operations 0.07 0.04
-------- --------
Net income $0.23 $0.19
======== ========
Diluted earnings per share:
Income from continuing operations $0.16 $0.15
Income from discontinued operations 0.07 0.04
-------- --------
Net income $0.23 $0.19
======== ========
Basic weighted average shares outstanding 16,847 16,831
======== ========
Diluted weighted average shares outstanding 16,889 16,877
======== ========
COMPREHENSIVE INCOME
Net income $5,585 $4,911
Other comprehensive income:
Unrealized gains on interest rate swaps 554 244
-------- --------
Comprehensive income $6,139 $5,155
======== ========
RAMCO-GERSHENSON PROPERTIES TRUST
CALCULATION OF FUNDS FROM OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
-------------------
2006 2005
--------- ---------
Net Income $5,585 $4,911
Add:
Depreciation and amortization expense:
Continuing operations real estate 8,665 7,459
Discontinued operations real estate - 372
Gain on sale of real estate (1) - (25)
Minority interest in partnership:
Continuing operations 786 731
Discontinued operations 57 118
Less:
Discontinued operations, gain on sale of
property, net of minority interest (957) -
--------- ---------
Funds from operations 14,136 13,566
Less:
Preferred stock dividends (594) (1,664)
--------- ---------
Funds from operations available to common
shareholders $13,542 $11,902
========= =========
Weighted average equivalent shares outstanding,
diluted 21,707 19,806
========= =========
Funds from operations available for common
shareholders, per diluted share $0.62 $0.60
========= =========
------------------
(1) Excludes gain on sale of undepreciated land of $1,708 in 2006 and
$27 in 2005.
Management considers funds from operations, also known as "FFO," an
appropriate supplemental measure of the financial performance of an
equity REIT. Under the NAREIT definition, FFO represents income before
minority interest, excluding extraordinary items, as defined under
accounting principles generally accepted in the United States of
America ("GAAP"), gains on sales of depreciable property, plus real
estate related depreciation and amortization (excluding amortization
of financing costs), and after adjustments for unconsolidated
partnerships and joint ventures. FFO should not be considered an
alternative to GAAP net income as an indication of our performance. We
consider FFO as a useful measure for reviewing our comparative
operating and financial performance between periods or to compare our
performance to different REITs. However, our computation of FFO may
differ from the methodology for calculating FFO utilized by other real
estate companies, and therefore, may not be comparable to these other
real estate companies.
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
March 31, December 31,
2006 2005
------------- -------------
(Unaudited)
ASSETS
Investment in real estate, net $935,467 $922,103
Real estate assets held for sale - 61,995
Cash and cash equivalents 17,053 14,929
Accounts receivable, net 35,182 32,341
Equity investments in unconsolidated
entities 53,645 53,398
Other assets, net 39,210 40,509
------------- -------------
Total Assets $1,080,557 $1,125,275
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $683,024 $724,831
Accounts payable and accrued expenses 31,666 31,353
Distributions payable 10,514 10,316
Capital lease obligation 7,851 7,942
------------- -------------
Total Liabilities 733,055 774,442
Minority Interest 38,087 38,423
SHAREHOLDERS' EQUITY
Preferred Shares of Beneficial Interest,
par value $.01, 10,000 shares
authorized:
9.5% Series B Cumulative Redeemable
Preferred Shares; 1,000 shares
issued and outstanding, liquidation
value of $25,000 23,804 23,804
7.95% Series C Cumulative Convertible
Preferred Shares; 1,889 shares
issued and outstanding, liquidation
value of $53,837 51,741 51,741
Common Shares of Beneficial Interest,
par value $.01, 45,000 shares
authorized; 16,847 issued and
outstanding as of March 31, 2006 and
December 31, 2005 168 168
Additional paid-in capital 343,080 343,011
Accumulated other comprehensive income 510 (44)
Cumulative distributions in excess of
net income (109,888) (106,270)
------------- -------------
Total Shareholders' Equity 309,415 312,410
------------- -------------
Total Liabilities and Shareholders'
Equity $1,080,557 $1,125,275
============= =============
For further information on Ramco-Gershenson Properties Trust visit the
Company's Website at www.rgpt.com
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