NEW ORLEANS, May 8 /PRNewswire-FirstCall/ -- Sizeler Property Investors, Inc. today announced its operating results for the three-months ended March 31, 2006:
Key Items:
* For the quarter ended March 31, 2006, FFO totaled $5,661,000 or
$0.27 per share compared to $2,879,000 or $0.21 per share a year ago,
an increase of approximately 29% on a per share basis.
* Diluted FFO for the quarter ended March 31, 2006 totaled $5,661,000 or
$0.26 per share compared to $2,879,000 or $0.21 per share in the same
period for 2005, an increase of approximately 24% on a per share
basis.
* Equity Market Capitalization reached approximately $317 million at
March 31, 2006, up from approximately $272 million at December 31,
2005.
* In December 2005, a major restructuring of the Company's operations
and staffing was completed which had a substantial impact on
administrative costs in the first quarter as reflected by a reduction
in these costs to $824,000 in 2006 compared to $1,839,000 a year ago.
* Interest coverage in the first quarter of 2006 was 4.33x as compared
to 3.06x in first quarter 2005.
* Retail net operating income -- on a same property basis -- totaled
$5.4 million in 2006 as compared to $5.1 million in 2005, an increase
of approximately 6%.
* Apartment net operating income -- on a same property basis -- totaled
$3.6 million in 2006 as compared to $3.2 million in 2005, an increase
of approximately 13%.
* The Company has Hammond Square Mall under contract for sale subject to
completion of due diligence and usual terms and conditions.
* In January 2006, the Company announced the appointment of Wachovia
Capital Markets, LLC as its exclusive financial advisor to assist the
Company in analyzing potential strategic alternatives. This process
is currently underway.
* A quarterly distribution of $0.10 per share was declared to Common
shareholders of record on May 19, 2006, payable on May 30, 2006.
* A quarterly distribution of $0.609375 per share was declared to the
9.75% Series B Cumulative Redeemable Preferred Stock shareholders of
record on July 31, 2006, payable on August 15, 2006.
FOR THE THREE-MONTHS ended March 31, 2006, the Company recorded net income of $2,709,000 compared to net income of $48,000 for the same period in 2005. In 2006, $2,514,000 of net income or $0.12 per share was allocated to common shareholders, compared to a net loss of $157,000 or ($0.01) per share in the first quarter of 2005.
Operating revenue from continuing operations totaled approximately $14.1 million for the three-months ended March 31, 2006, compared to approximately $12.6 million in the first quarter of 2005, an increase of 11.9%. The increase is attributable to an increase in retail revenue and an overall improvement in the level of apartment units leased, as well as the addition of the Villages of Williamsburg apartment property to the portfolio.
Operating costs from continuing operations increased approximately $650,000 due to higher utility costs and costs of property operations and maintenance and due to the addition of the above mentioned property as compared to 2005.
Administrative expenses were significantly reduced to approximately $824,000 as compared to $1,839,000 for the same period in 2005. This decrease of approximately $1 million for the quarter is attributable to lower costs for payroll, equipment maintenance, travel and entertainment, legal and accounting as well as other services.
Interest expense declined approximately $1,158,000 due primarily to the repayment of mortgage and bank debt and the redemption of outstanding debentures in May 2005, which were partially offset by higher interest rates on the Company's bank lines, as compared to the 2005 period.
Non-ordinary expenses incurred during the first quarter ended March 31, 2006 totaled approximately $579,000. These non-ordinary items included:
* $188,000 of hurricane expenses.
* $391,000 of restructuring costs primarily composed of tax and
financial consulting fees and compensation expense incurred due to the
expensing of stock options granted in January 2006 in accordance with
FASB 123(R).
This total of $579,000 compares to non-ordinary items included in the 2005 first quarter of $444,000 which consisted of proxy contest costs.
For the three month period ended March 31, 2006, there were no discontinued operations. For the three month period ended March 31, 2005, the results of operations of Bryn Mawr Apartments, sold in May 2005, and Lakeview Club Apartments, sold in December 2004, were classified as discontinued operations. Discontinued operations from the properties contributed approximately $71,000 to earnings in the first quarter of 2005.
RECONCILIATION OF NET INCOME TO REPORTED FFO
(in thousands)
Quarter ended March 31
2006 2005
Dollars Shares (a) Dollars Shares (a)
Net Income $2,709 21,328 $48 13,793
Additions:
Depreciation &
Amortization 3,186 3,088
Partnership Depreciation 10 9
Deductions:
Preferred Dividends (195) (205)
Amortization costs (49) (61)
Funds from Operations-
Available to common
Shareholders $5,661 21,328 $2,879 13,793
(a) Weighted average shares outstanding.
Segment Results -- On a Same Property Basis
The Company has two operating segments -- retail and apartments. The table below shows the operating results on a same property basis for the three-months ended March 31, 2006 compared to the same period in 2005:
(in thousands)
March 31, 2006 March 31, 2005
Retail Apartments Other Total Retail Apartments Other Total
Oper.
Rev. $7,963 $5,739 $60 $13,762 $7,319 $5,211 $113 $12,643
Oper.
Exp. (2,567) (2,182) (2) (4,751) (2,264) (1,963) (9) (4,236)
Operating
Income $5,396 $3,557 $58 $9,011 $5,055 $3,248 $104 $8,407
As of March 31, 2006, the apartment and retail portfolios were 98% and 91% leased, respectively, compared to 95% and 89% for the same period a year ago.
Sizeler Property Investors, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31 December 31
2006 2005
(Unaudited) (Audited)
ASSETS
Real estate investments
Land $46,419,000 $46,411,000
Buildings and improvements, net
of accumulated depreciation of
$122,720,000 in 2006 and
$120,301,000 in 2005 222,547,000 222,064,000
Construction in progress 3,684,000 3,192,000
Land held for development or sale 9,901,000 9,658,000
Investment in real estate
partnership 928,000 917,000
283,479,000 282,242,000
Cash and cash equivalents 2,181,000 5,787,000
Accounts receivable and accrued
revenue, net of allowance for
doubtful accounts of $277,000 in
2006 and $443,000 in 2005 7,101,000 6,904,000
Notes receivable 1,160,000 1,180,000
Prepaid expenses and other assets 6,052,000 6,094,000
Total Assets $299,973,000 $302,207,000
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Mortgage notes payable $83,356,000 $83,897,000
Bank notes payable 23,000,000 25,995,000
Accounts payable and accrued expenses 5,074,000 5,131,000
Tenant deposits and advance rents 891,000 851,000
Total Liabilities 112,321,000 115,874,000
SHAREHOLDERS' EQUITY
Series A preferred stock, 40,000 shares
authorized, none issued --- ---
Series B preferred stock, par value
$0.0001 per share, liquidation
preference $25 per share,
2,476,000 shares authorized, shares
issued and outstanding -- 248,000 in 2006
and 326,000 in 2005 1,000 1,000
Common stock, par value $0.0001 per
share, 51,484,000 shares authorized,
shares issued and outstanding --
21,443,000 in 2006 and
21,154,000 in 2005 1,000 1,000
Excess stock, par value $0.0001 per
share, 16,000,000 authorized, none
issued --- ---
Additional paid-in capital 256,714,000 255,788,000
Accumulated other comprehensive gain 48,000 55,000
Unearned compensation (294,000) (313,000)
Cumulative net income 76,115,000 73,405,000
Cumulative distributions paid (144,933,000) (142,604,000)
Total Shareholders' Equity 187,652,000 186,333,000
Total Liabilities and
Shareholders' Equity $299,973,000 $302,207,000
Sizeler Property Investors, Inc. and Subsidiaries
Consolidated Statements of Income
Quarter Ended March 31
2006 2005
OPERATING REVENUE
Contractual rental income and
charges $13,573,000 $12,261,000
Other income 517,000 382,000
Total Operating Revenue 14,090,000 12,643,000
OPERATING EXPENSES
Real estate taxes 906,000 992,000
Utilities 611,000 562,000
Operations and maintenance 2,267,000 1,745,000
Other operating expenses 1,102,000 937,000
Administrative expenses 824,000 1,839,000
Proxy contest expenses --- 444,000
Hurricane expenses 188,000 ---
Restructuring Costs 391,000 ---
Depreciation and amortization 3,186,000 3,088,000
Total Operating Expenses 9,475,000 9,607,000
OPERATING INCOME 4,615,000 3,036,000
Interest expense 1,931,000 3,089,000
Income (loss) from continuing
operations before equity in income
of partnership and net earnings
from discontinued operations 2,684,000 (53,000)
Equity in income of partnership 25,000 30,000
Income (loss) from continuing
operations before net earnings from
discontinued operations 2,709,000 (23,000)
Net earnings from discontinued
real estate operations --- 71,000
NET INCOME $2,709,000 $48,000
NET INCOME (LOSS) ALLOCATION:
Allocable to preferred shareholders 195,000 205,000
Allocable to common shareholders 2,514,000 (157,000)
NET INCOME $2,709,000 $48,000
Net income (loss) per common share -
basic and diluted $0.12 $(0.01)
Weighted average common shares
outstanding - basic 21,328,000 13,793,000
Weighted average common shares
outstanding - diluted 21,426,000 13,793,000
Net income $2,709,000 $48,000
Add (deduct) non cash items:
Depreciation and amort on real
estate assets 3,196,000 3,097,000
Deferred financing cost amort (49,000) (61,000)
Preferred distributions (195,000) (205,000)
FUNDS FROM OPERATIONS $5,661,000 $2,879,000
FUNDS FROM OPERATIONS PER SHARE $0.27 $0.21
Weighted average shares outstanding 21,328,000 13,793,000
Diluted funds from operations 5,661,000 2,879,000
Diluted funds from operations
per share 0.26 0.21
Diluted weighted average shares 21,426,000 13,793,000
FUNDS FROM OPERATIONS
Funds from operations (FFO) is a non-GAAP financial measure. A description of how the Company calculates FFO is contained in the Company's most recent Annual Report on Form 10-K filed with the SEC, which is available on the Investor Relations page of the Company's website (http://www.sizeler.net/ ).
In addition, FFO prior to non-ordinary expenses is a non-GAAP financial measure. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and should not be viewed in isolation. The Company's management refers to these non-GAAP financial measures in making operational decisions because they provide meaningful supplemental information regarding the Company's operational performance and facilitate management's internal comparisons to the Company's historical operating results. In addition, the Company has historically reported similar non-GAAP financial measures to investors and believes that the inclusion of comparative numbers provides consistency in its financial reporting. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used in this press release to their most directly comparable GAAP financial measure.
FORWARD LOOKING STATEMENT
This release made by the Company may contain certain forward-looking statements that are subject to risk and uncertainty. Investors and potential investors in the Company's securities are cautioned that a number of factors could adversely affect the Company and cause actual results to differ materially from those in the forward-looking statements, including, but not limited to (a) the inability to lease current or future vacant space in the Company's properties; (b) decisions by tenants and anchor tenants who own their space to close stores at properties; (c) the inability of tenants to pay rent and other expenses; (d) tenant financial difficulties; (e) general economic and world conditions, including threats to the United States homeland from unfriendly factions; (f) decreases in rental rates available from tenants; (g) increases in operating costs at properties; (h) increases in corporate operating costs associated with new regulatory requirements; (i) lack of availability of financing for acquisition, development and rehabilitation of properties; (j) force majeure as it relates to construction and renovation projects; (k) possible dispositions of mature properties since the Company is continuously engaged in the examination of the various lines of business; (l) increases in interest rates; (m) a general economic downturn resulting in lower retail sales and causing downward pressure on occupancies and rents at retail properties; (n) forces of nature; (o) the adverse tax consequences if the Company were to fail to qualify as a REIT in any taxable year; and (p) inability of the Company to implement its strategic initiatives for foregoing or other reasons.
Except as required under federal securities laws and the rules and regulations of the SEC, the Company does not have any intention or obligation to update or revise any forward-looking statements in this release or other Company filings with the SEC, whether as a result of new information, future events, changes in assumptions or otherwise, including specifically any statements previously provided with respect to expected operating results or performance.
