FARMINGTON HILLS, Mich., Oct. 22, 2013 (GLOBE NEWSWIRE) -- Ramco-Gershenson Properties Trust (NYSE: RPT ) today announced its financial and operating results for the three and nine months ended September 30, 2013.
Third Quarter Highlights:
Ramco-Gershenson's third quarter 2013 highlights reflect a continued focus on maximizing operating performance while capitalizing on value-added investment opportunities and promoting a strong balance sheet.
Financial Results and Operating Performance
- Reported Funds from Operations ("FFO") of $0.29 per diluted share, a 12% increase over the same period last year.
- Raised its 2013 FFO per share guidance to $1.15 to $1.17 from $1.10 to $1.16.
- Increased same-center net operating income ("NOI") by 3.1%, compared to the same period in 2012.
- Signed 95 leases encompassing 524,880 square feet, achieving same-space rental growth of 6.3%.
- Increased core portfolio leased occupancy to 95.6%, compared to 95.1% at June 30, 2013, and 94.4% at September 30, 2012.
Investment Activity
Acquisitions and Dispositions:
- Acquired Deer Grove Centre in metropolitan Chicago.
- Sold Edgewood Towne Center in Lansing, Michigan.
Development and Redevelopment:
- Commenced construction of its Lakeland Park Center development in Lakeland, Florida.
- Began redevelopment of Merchants' Square in Carmel, Indiana to include a 37,000 square foot Flix Brewhouse.
Balance Sheet
- Improved net debt to EBITDA to 6.2x, compared to 6.7x for the same period in 2012.
- Increased interest coverage to 3.6x and fixed charge coverage to 2.6x, compared to 3.1x and 2.2x, respectively, in the comparable period.
"The strong financial results we are reporting for the first nine months of 2013 underscore our healthy same-center NOI growth and the positive impact from our accretive acquisitions completed this year," said Dennis Gershenson, President and Chief Executive Officer. "These results reflect a continued focus on owning a high-quality, multi-anchored shopping center portfolio and contributed to the recent increases in both our common share dividend and our 2013 FFO guidance."
Financial Results
FFO for the three months ended September 30, 2013, was $20.8 million or $0.29 per diluted share, compared to FFO of $14.9 million, or $0.26 per diluted share for the same period in 2012. FFO for the nine months ended September 30, 2013, was $59.2 million or $0.89 per diluted share, compared to FFO of $35.5 million, or $0.78 per diluted share for the same period in 2012.
Net income available to common shareholders for the three months ended September 30, 2013, was $3.7 million or $0.06 per diluted share, compared to net income of $1.4 million, or $0.03 per diluted share for the same period in 2012. Net income available to common shareholders for the nine months ended September 30, 2013, was $10.7 million or $0.18 per diluted share, compared to net income of $0.2 million, or $0.00 per diluted share for the same period in 2012.
Operating Portfolio
As of September 30, 2013, the Company's portfolio consisted of 79 retail shopping centers and one office building totaling 15.3 million square feet, of which 66 were wholly-owned properties and 14 were joint venture assets.
During the quarter, the Company continued to sign leases with national retailers, promoting a diversified tenant mix, and growing its credit-quality rental stream. All of these activities contributed to strong operating fundamentals.
| Operating Metric | September 30, 2013 | June 30, 2013 | September 30, 2012 |
| Occupancy: | |||
| Core Portfolio Leased Occupancy | 95.6% | 95.1% | 94.4% |
| Core Portfolio Economic Occupancy | 94.7% | 94.5% | 93.7% |
| Small Shop Leased Occupancy | 88.1% | 87.3% | 87.1% |
| Leasing Activity: | |||
| Total Lease Transactions | 95 | 103 | 67 |
| Total Square Feet | 524,880 | 475,836 | 311,711 |
| Comparable Rent Growth | 6.3% | 9.1% | 5.4% |
At quarter end, net operating income for the Company's wholly-owned, same-center portfolio increased by 3.1%, compared to the same period in 2012. Occupancy for the wholly-owned, same center portfolio increased to 95.8%, compared to 93.9% for the same period in 2012.
Investment Activity
Acquisitions/Dispositions:
During the third quarter, the Company acquired Deer Grove Centre in Palatine, Illinois, a densely-populated, affluent submarket of Chicago, for $20 million in cash. The 236,000 square foot multi-anchored shopping center is tenanted by TJ Maxx/Home Goods, Petco, Dress Barn, Staples, a Dominick's supermarket, and is shadow anchored by a 120,000 square foot Target. The shopping center is part of a strong trade area with an average five-mile household income of $102,000 and a population of 250,000.
In September, the Company sold Edgewood Towne Center, an 86,000 square foot shopping center anchored by OfficeMax in Lansing, Michigan, for $5.5 million. The Company also sold a residual one acre undeveloped land parcel in Jacksonville, Florida for $0.5 million.
Development/Expansion/Redevelopment:
During the third quarter, the Company commenced development of the first phase of Lakeland Park Center adjacent to its Shoppes of Lakeland shopping center in Lakeland, Florida. Phase I of the project, which is 96% pre-leased, consists of approximately 210,000 square feet of retail space and includes an impressive line-up of retailers including Dick's Sporting Goods, Ross Dress for Less, PetSmart, Old Navy, ULTA Beauty, Shoe Carnival, Floor and Décor, Dress Barn, Lane Bryant, and America's Best. Construction costs for Phase I of the project are estimated to be approximately $33.6 million and are expected to produce a stabilized return of between 9-10%.
Also during the quarter, the Company commenced the redevelopment of its 278,000 square foot Merchants' Square shopping center in Carmel (Indianapolis), Indiana with the signing of a lease for a 37,000 square foot Flix Brewhouse. The project is expected to cost $6.4 million.
As previously announced, the Company is actively redeveloping three additional shopping centers with an estimated cost of $26.7 million. Further, the Company has a shadow pipeline of 6-8 future redevelopment, retenanting, and/or expansion projects that it plans to commence over the next 12-18 months. These projects are estimated to cost between $70-$90 million and produce a stabilized return on cost of between 10%-12%.
Financing Activities and Balance Sheet
Financing Activities:
During the third quarter, the Company sold 1.1 million common shares through its at-the-market equity program, generating $17.1 million in proceeds.
In August, the Company completed the refinancing of The Plaza at Delray, a joint venture property in Delray Beach, Florida. The new 10-year mortgage loan has a fixed interest rate of 4.43%.
Balance Sheet:
For the quarter, the Company continued to post solid debt metrics highlighted by net debt to total market capitalization of 39.2%, compared to 42.6% for the same period in 2012. Its net debt to annualized EBITDA, improved to 6.2x, compared to 6.7x for the same period in 2012.
At September 30, 2013, the Company's total market capitalization equaled $1.8 billion, comprised of 64.3 million shares of common stock (or equivalents) valued at $990.6 million, 2.0 million shares of convertible perpetual preferred stock valued at $117.7 million and $713.8 million of consolidated debt and capital lease obligations, net of cash.
At September 30, 2013, the Company had $221.8 million available under its line of credit and $4.8 million of cash (and equivalents) on hand. The Company's weighted average term of debt (including its pro-rata share of joint venture debt) was approximately 5.7 years.
Dividend
In August, the Company raised its quarterly cash dividend to $0.1875 per common share, resulting in an indicated annual rate of $0.75 per share, an increase of approximately $0.08 per share over the prior annual rate. The Board also approved a third quarter Series D convertible perpetual preferred share dividend of $0.90625 per share for the same period. The dividends, for the period July 1, 2013 through September 30, 2013, were paid on October 1, 2013 to shareholders of record on September 20, 2013. The Company's FFO payout ratio for the quarter was 64.7%.
2013 Guidance
The Company has raised its 2013 FFO guidance to $1.15 to $1.17 per diluted share from its previous guidance of $1.10 to $1.16 per diluted share. The Company is also estimating that its same-center NOI growth will be approximately 3% for the year, compared to its previous estimate of between 2% and 3%. Ramco-Gershenson's revised 2013 FFO and same-center NOI guidance reflects the Company's continued positive outlook with respect to its business plan.
Conference Call/Webcast
Ramco-Gershenson Properties Trust will host a live broadcast of its third quarter 2013 conference call on Wednesday, October 23, 2013, at 9:00 a.m. eastern time, to discuss its financial and operating results. The live broadcast will be available online at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-9205, no pass code needed. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 660-6853, (Conference ID #100346), for one week.
Supplemental Materials
The Company's supplemental financial package is available on the corporate web site at www.rgpt.com . If you wish to receive a copy via email, please send requests to dhendershot@rgpt.com .
About Ramco-Gershenson Properties Trust
Ramco-Gershenson Properties Trust (NYSE: RPT ) is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT) based in Farmington Hills, Michigan. The Company's business is the ownership and management of multi-anchor shopping centers in strategic metropolitan markets throughout the Eastern, Midwestern and Central United States. At September 30, 2013, the Company owned and managed a portfolio of 79 shopping centers and one office building with approximately 15.3 million square feet of gross leasable area owned by the Company or its joint ventures. The properties are located in Michigan, Florida, Ohio, Georgia, Missouri, Colorado, Wisconsin, Illinois, Indiana, New Jersey, Virginia, Maryland, and Tennessee. At September 30, 2013, the Company's core operating portfolio was 95.6% leased. For additional information regarding Ramco-Gershenson Properties Trust visit the Company's website at www.rgpt.com .
This press release may contain forward-looking statements that represent the Company's expectations and projections for the future. Management of Ramco-Gershenson believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing ability to qualify as a REIT and other factors discussed in the Company's reports filed with the Securities and Exchange Commission.
Ramco-Gershenson Properties Trust: Dawn Hendershot, 248-592-6202 Director of Investor Relations and Corporate Communications.
| RAMCO-GERSHENSON PROPERTIES TRUST | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands, except per share amounts) | ||
| September 30, 2013 | December 31, 2012 | |
| (unaudited) | ||
| ASSETS | ||
| Income producing properties, at cost: | ||
| Land | $ 273,579 | $ 166,500 |
| Buildings and improvements | 1,256,019 | 952,671 |
| Less accumulated depreciation and amortization | (244,906) | (237,462) |
| Income producing properties, net | 1,284,692 | 881,709 |
| Construction in progress and land held for development or sale | 97,024 | 98,541 |
| Net real estate | 1,381,716 | 980,250 |
| Equity investments in unconsolidated joint ventures | 31,819 | 95,987 |
| Cash and cash equivalents | 4,782 | 4,233 |
| Restricted cash | 8,420 | 3,892 |
| Accounts receivable (net of allowance for doubtful accounts of $2,289 and $2,589 as of September 30, 2013 and December 31, 2012, respectively) | 9,188 | 7,976 |
| Other assets, net | 111,075 | 72,953 |
| TOTAL ASSETS | $ 1,547,000 | $ 1,165,291 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Notes payable: | ||
| Senior unsecured notes payable | $ 340,000 | $ 180,000 |
| Mortgages payable | 338,038 | 293,156 |
| Unsecured revolving credit facility | 10,000 | 40,000 |
| Junior subordinated notes | 28,125 | 28,125 |
| Total notes payable | 716,163 | 541,281 |
| Capital lease obligation | 5,772 | 6,023 |
| Accounts payable and accrued expenses | 32,730 | 21,589 |
| Other liabilities | 41,771 | 26,187 |
| Distributions payable | 13,795 | 10,379 |
| TOTAL LIABILITIES | 810,231 | 605,459 |
| Commitments and Contingencies | ||
| Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity: | ||
| Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 2,000 shares issued and outstanding as of September 30, 2013 and December 31, 2012 | $ 100,000 | $ 100,000 |
| Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 61,560 and 48,489 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively | 616 | 485 |
| Additional paid-in capital | 879,377 | 683,609 |
| Accumulated distributions in excess of net income | (270,302) | (249,070) |
| Accumulated other comprehensive loss | (1,334) | (5,241) |
| TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT | 708,357 | 529,783 |
| Noncontrolling interest | 28,412 | 30,049 |
| TOTAL SHAREHOLDERS' EQUITY | 736,769 | 559,832 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,547,000 | $ 1,165,291 |
| RAMCO-GERSHENSON PROPERTIES TRUST | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
| (In thousands, except per share amounts) | ||||
| (Unaudited) | ||||
| Three months ended September 30, | Nine months ended September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| REVENUE | ||||
| Minimum rent | $ 33,238 | $ 22,766 | $ 89,868 | $ 65,106 |
| Percentage rent | 85 | 170 | 200 | 369 |
| Recovery income from tenants | 10,203 | 7,644 | 28,333 | 22,707 |
| Other property income | 1,567 | 493 | 2,596 | 1,659 |
| Management and other fee income | 566 | 1,021 | 1,842 | 2,935 |
| TOTAL REVENUE | 45,659 | 32,094 | 122,839 | 92,776 |
| EXPENSES | ||||
| Real estate taxes | 6,374 | 4,006 | 16,754 | 12,583 |
| Recoverable operating expense | 4,846 | 3,885 | 13,752 | 11,055 |
| Other non-recoverable operating expense | 660 | 671 | 2,150 | 1,940 |
| Depreciation and amortization | 15,165 | 10,481 | 40,649 | 28,599 |
| General and administrative expense | 5,363 | 4,990 | 16,497 | 14,746 |
| TOTAL EXPENSES | 32,408 | 24,033 | 89,802 | 68,923 |
| OPERATING INCOME | 13,251 | 8,061 | 33,037 | 23,853 |
| OTHER INCOME AND EXPENSES | ||||
| Other (expense) income, net | (400) | 54 | (716) | 172 |
| (Loss) gain on sale of real estate | (13) | — | 3,901 | 69 |
| Earnings (loss) from unconsolidated joint ventures | 387 | 1,008 | (5,027) | 2,084 |
| Interest expense | (7,915) | (6,430) | (21,284) | (19,509) |
| Amortization of deferred financing fees | (382) | (354) | (1,069) | (1,107) |
| Provision for impairment on equity investments in unconsolidated joint ventures | — | (294) | — | (294) |
| Deferred gain recognized upon acquisition of real estate | — | 845 | 5,282 | 845 |
| INCOME FROM CONTINUING OPERATIONS BEFORE TAX | 4,928 | 2,890 | 14,124 | 6,113 |
| Income tax benefit (provision) | 29 | 19 | (1) | 17 |
| INCOME FROM CONTINUING OPERATIONS | 4,957 | 2,909 | 14,123 | 6,130 |
| DISCONTINUED OPERATIONS | ||||
| Gain on sale of real estate | 657 | — | 2,194 | 336 |
| Gain on extinguishment of debt | — | — | — | 307 |
| Provision for impairment | — | — | — | (2,536) |
| Income from discontinued operations | 101 | 412 | 454 | 1,196 |
| INCOME (LOSS) FROM DISCONTINUED OPERATIONS | 758 | 412 | 2,648 | (697) |
| NET INCOME | 5,715 | 3,321 | 16,771 | 5,433 |
| Net (income) loss attributable to noncontrolling partner interest | (201) | (158) | (634) | 191 |
| NET INCOME ATTRIBUTABLE TO RPT | 5,514 | 3,163 | 16,137 | 5,624 |
| Preferred share dividends | (1,813) | (1,813) | (5,438) | (5,438) |
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ 3,701 | $ 1,350 | $ 10,699 | $ 186 |
| EARNINGS (LOSS) PER COMMON SHARE, BASIC | ||||
| Continuing operations | $ 0.05 | $ 0.02 | $ 0.14 | $ 0.02 |
| Discontinued operations | 0.01 | 0.01 | 0.04 | (0.02) |
| $ 0.06 | $ 0.03 | $ 0.18 | $ — | |
| EARNINGS (LOSS) PER COMMON SHARE, DILUTED | ||||
| Continuing operations | $ 0.05 | $ 0.02 | $ 0.14 | $ 0.02 |
| Discontinued operations | 0.01 | 0.01 | 0.04 | (0.02) |
| $ 0.06 | $ 0.03 | $ 0.18 | $ — | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||
| Basic | 61,102 | 46,911 | 57,626 | 42,834 |
| Diluted | 61,572 | 47,197 | 58,097 | 43,115 |
| RAMCO-GERSHENSON PROPERTIES TRUST | ||||||||
| FUNDS FROM OPERATIONS | ||||||||
| (In thousands, except per share data) | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| (In thousands, except per share data) | ||||||||
| Net income available to common shareholders | $ 3,701 | $ 1,350 | $ 10,699 | $ 186 | ||||
| Adjustments: | ||||||||
| Rental property depreciation and amortization expense | 15,088 | 10,479 | 40,514 | 28,881 | ||||
| Pro-rata share of real estate depreciation from unconsolidated joint ventures | 690 | 1,614 | 2,967 | 4,984 | ||||
| Gain on sale of depreciable real estate | (657) | — | (2,194) | (336) | ||||
| Loss on sale of joint venture depreciable real estate (1) | — | 57 | 6,454 | 75 | ||||
| Provision for impairment on income-producing properties | — | — | — | 1,976 | ||||
| Provision for impairment on joint venture income-producing properties (1) | — | — | — | 50 | ||||
| Provision for impairment on equity investments in unconsolidated joint ventures | — | 294 | — | 294 | ||||
| Deferred gain recognized upon acquisition of real estate | — | (845) | (5,282) | (845) | ||||
| Noncontrolling interest in Operating Partnership (2) | 201 | 157 | 634 | 274 | ||||
| Subtotal | $ 19,023 | $ 13,106 | $ 53,792 | $ 35,539 | ||||
| Add preferred share dividends (assumes if converted) (3) | 1,813 | 1,813 | 5,438 | — | ||||
| FUNDS FROM OPERATIONS | $ 20,836 | $ 14,919 | $ 59,230 | $ 35,539 | ||||
| Weighted average common shares | 61,102 | 46,911 | 57,626 | 42,834 | ||||
| Shares issuable upon conversion of Operating Partnership Units (2) | 2,253 | 2,437 | 2,259 | 2,556 | ||||
| Dilutive effect of securities | 470 | 286 | 471 | 281 | ||||
| Shares issuable upon conversion of preferred shares (3) | 6,940 | 6,940 | 6,940 | — | ||||
| WEIGHTED AVERAGE EQUIVALENT SHARES OUTSTANDING, DILUTED | 70,765 | 56,574 | 67,296 | 45,671 | ||||
| FUNDS FROM OPERATIONS, PER DILUTED SHARE (4) | $ 0.29 | $ 0.26 | $ 0.89 | $ 0.78 | ||||
| Dividend per common share | $0.18750 | $0.16325 | $0.52400 | $0.48975 | ||||
| Payout ratio - FFO | 64.7% | 62.8% | 58.9% | 62.8% | ||||
| (1) Amount included in earnings (loss) from unconsolidated joint ventures. | ||||||||
| (2) The total non-controlling interest reflects OP units convertible 1:1 into common shares or the cash value thereof. | ||||||||
| (3) Series D convertible preferred shares were dilutive for the three months ended September 30, 2013 and 2012. For the nine months ended September 30, 2013 and 2012 preferred shares were dilutive and anti-dilutive, respectively. | ||||||||
| (4) Per share amounts are based on weighted average diluted shares outstanding during the quarter and, therefore, may not agree with the per share calculated for the nine months ended September 30, 2013. | ||||||||
We consider 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 net income available to common shareholders, excluding extraordinary items, as defined under accounting principles generally accepted in the United States of America ( " GAAP " ), gains (losses) on sales of depreciable property and impairment provisions on depreciable property or equity investments in depreciable property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and adjustments for unconsolidated partnerships and joint ventures. FFO should not be considered an alternative to GAAP net income available to common shareholders or as an alternative to cash flow as a measure of liquidity. We consider FFO 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: Dawn Hendershot Director of Investor Relations and Corporate Communications 248-592-6202
