CUPERTINO, Calif., Oct. 14 /PRNewswire-FirstCall/ -- Mission West Properties, Inc. reported today that Funds From Operations ("FFO") for the quarter ended September 30, 2009 was approximately $17,604,000, or $0.17 per diluted common share, (considering the potential effect of all O.P. units being exchanged for shares of the Company's common stock) as compared to approximately $14,199,000, or $0.13 per diluted common share, for the same period in 2008. Unrealized gain from investment in marketable securities accounted for approximately $4,464,000, or $0.04 per diluted common share, for the quarter ended September 30, 2009. On a sequential quarter basis, FFO for the quarter ended June 30, 2009 was approximately $0.13 per diluted common share. For the nine months ended September 30, 2009, FFO increased to $43,863,000, or $0.42 per diluted common share, from FFO of $42,471,000, or $0.40 per diluted common share, for the same period in 2008. Net termination fees accounted for approximately $1,921,000, or $0.02 per diluted common share, for the nine months ended September 30, 2008.
Net income for the quarter ended September 30, 2009 was approximately $11,242,000 as compared to approximately $7,939,000 for the quarter ended September 30, 2008. Net income per diluted share to common stockholders was approximately $0.13 for the quarter ended September 30, 2009 compared to $0.08 for the quarter ended September 30, 2008, a per share increase of approximately 63%. Net income for the nine months ended September 30, 2009 was approximately $24,065,000 as compared to approximately $23,897,000 for the nine months ended September 30, 2008. For the nine months ended September 30, 2009, net income per diluted share to common stockholders was approximately $0.27, up from $0.25 a year ago, a per share increase of approximately 8%.
Company Profile
Mission West Properties, Inc. operates as a selfmanaged, selfadministered and fully integrated REIT engaged in the management, leasing, marketing, development and acquisition of commercial R&D properties, primarily located in the Silicon Valley portion of the San Francisco Bay Area. Currently, the Company manages 111 properties totaling approximately 8.0 million rentable square feet, which includes approximately 854,000 rentable square feet (or 16 buildings) that are in the process of being rezoned for residential development. For additional information, please contact Investor Relations at 408-725-0700.
The matters described herein contain forward-looking statements. Such statements can be identified by the use of forward-looking terminology such as "will," "anticipate," "estimate," "expect," "intends," or similar words. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to, the ability to complete acquisitions under the Berg Land Holdings Option Agreement with the Berg Group and other factors detailed in the Company's registration statements, and periodic filings with the Securities & Exchange Commission.
MISSION WEST PROPERTIES, INC. SELECTED FINANCIAL DATA (In thousands, except share, per share and property data amounts) Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, 2009 2008 2009 2008 ---- ---- ---- ---- OPERATING REVENUES: Rental revenue from real estate $20,442 $20,256 $61,521 $58,612 Tenant reimbursements 4,566 4,607 13,681 11,900 Lease termination and settlement income - - - 1,921 Other income 284 292 906 769 --- --- --- --- Total operating revenues 25,292 25,155 76,108 73,202 ------ ------ ------ ------ OPERATING EXPENSES: Operating and maintenance 3,539 2,951 10,014 7,993 Real estate taxes 3,248 2,888 9,996 8,245 General and administrative 589 605 1,743 1,951 Depreciation and amortization of real estate 5,921(1) 5,759(1) 18,200(1) 17,064(1) -------- -------- --------- --------- Total operating expenses 13,297 12,203 39,953 35,253 ------ ------ ------ ------ Operating income 11,995 12,952 36,155 37,949 OTHER INCOME (EXPENSES): Equity in earnings of unconsolidated joint venture 72 126 237 915 Interest and dividend income 93 193 1,158 965 Unrealized gain from investment 4,464 - 4,140 - Interest expense (5,180) (5,023) (17,071) (14,907) Interest expense - related parties (202) (309) (554) (1,025) ---- ---- ---- ------ Net income 11,242 7,939 24,065 23,897 Net income attributable to noncontrolling interests (8,476) (6,304) (18,083) (19,021) ------ ------ ------- ------- Net income attributable to common stockholders $2,766 $1,635 $5,982 $4,876 ====== ====== ====== ====== Net income per share to common stockholders: Basic $0.13 $0.08 $0.28 $0.25 ===== ===== ===== ===== Diluted $0.13 $0.08 $0.27 $0.25 ===== ===== ===== ===== Weighted average shares of common stock (basic) 21,770,211 19,745,141 21,717,713 19,703,066 ========== ========== ========== ========== Weighted average shares of common stock (diluted) 21,902,387 19,783,507 21,858,067 19,769,148 ========== ========== ========== ========== Weighted average O.P. units outstanding 83,504,965 85,527,739 83,557,463 85,528,787 ========== ========== ========== ========== FUNDS FROM OPERATIONS Funds from operations $17,604 $14,199 $43,863 $42,471 ======= ======= ======= ======= Funds from operations per share (2) $0.17 $0.13 $0.42 $0.40 ===== ===== ===== ===== Outstanding common stock 21,770,211 19,748,211 21,770,211 19,748,211 ========== ========== ========== ========== Outstanding O.P. units 83,504,965 85,526,965 83,504,965 85,526,965 ========== ========== ========== ========== Weighted average O.P. units and common stock outstanding (diluted) 105,407,352 105,311,246 105,415,530 105,297,934 =========== =========== =========== =========== Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended FUNDS FROM Sept 30, Sept 30, Sept 30, Sept 30, OPERATIONS 2009 2008 2009 2008 CALCULATION ---- ---- ---- ---- Net income $11,242 $7,939 $24,065 $23,897 Add: Depreciation and amortization of real estate 6,385 6,204 19,796 18,313 Depreciation and amortization of real estate held in unconsolidated joint venture 60 189 179 568 Less: Noncontrolling interests in joint ventures (83) (133) (177) (307) --- ---- ---- ---- Funds from operations $17,604 $14,199 $43,863 $42,471 ======= ======= ======= ======= Funds From Operations ("FFO") is a non-GAAP financial measurement used by real estate investment trusts ("REITs") to measure and compare operating performance. As defined by NAREIT, FFO represents net income (loss) (computed in accordance with GAAP, accounting principles generally accepted in the United States of America), excluding gains (or losses) from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non real estate assets) and after adjustments for unconsolidated partnerships and joint ventures. Management considers FFO to be an appropriate supplemental measure of the Company's operating and financial performance because when compared year over year, it reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, providing a perspective not immediately apparent from net income. In addition, management believes that FFO provides useful information about the Company's financial performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs. FFO should neither be considered as an alternative for net income as a measure of profitability nor is it comparable to cash flows provided by operating activities determined in accordance with GAAP. FFO is not comparable to similarly entitled items reported by other REITs that do not define them exactly as we define FFO. Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, PROPERTY AND OTHER 2009 2008 2009 2008 DATA: ---- ---- ---- ---- Total properties, end of period 111 111 111 111 Total square feet, end of period 8,047,569 8,047,569 8,047,569 8,047,569 Average monthly rental revenue per square foot (3) $1.30 $1.25 $1.29 $1.24 Occupancy for leased properties 65.7% 66.7% 65.7% 66.7% Straight-line rent $115 $857 $675 $2,444 Leasing commissions $973 $606 $1,294 $1,241 Capital expenditures $156 $3,827 $156 $6,164 LEASE ROLLOVER SCHEDULE: # of Year Leases Rentable Square Feet 2009 Base Rent(5) ---- ------ -------------------- ----------------- 2009 8 90,082(4) $1,811,171 2010 8 342,099 5,838,534 2011 16 838,692 12,333,272 2012 14 1,010,825 13,538,262 2013 6 397,215 5,081,754 2014 17 1,492,430 24,794,530 2015 6 485,036 8,784,081 2016 3 165,976 3,105,544 2017 5 349,949 3,510,351 Thereafter 1 119,756 2,608,286 - ------- --------- Total 84 5,292,060 $81,405,785 == ========= =========== BALANCE SHEETS September 30, 2009 December 31, 2008 ------------------ ----------------- Assets Investments in real estate: Land $320,911 $320,911 Buildings and improvements 799,627 799,471 Real estate related intangible assets 3,240 3,240 ----- ----- Total investments in properties 1,123,778 1,123,622 Accumulated depreciation and amortization (198,243) (180,043) -------- -------- Net investments in properties 925,535 943,579 Investment in unconsolidated joint venture 3,830 3,768 ----- ----- Net investments in real estate 929,365 947,347 Cash and cash equivalents 576 - Restricted cash 7,597 39,478 Restricted investment in marketable securities 11,124 - Investment in marketable securities - 3,368 Deferred rent receivables 18,516 17,841 Other assets, net 31,408 26,251 ------ ------ Total assets $998,586 $1,034,285 ======== ========== Liabilities and Equity Liabilities: Mortgage notes payable $321,907 $330,908 Mortgage note payable - related parties 8,389 8,761 Note payable - related parties 5,057 - Revolving line of credit 3,573 13,079 Interest payable 1,530 1,596 Security deposits 5,026 5,272 Deferred rental income 5,525 3,964 Dividends and distributions payable 15,791 21,055 Accounts payable and accrued expenses 29,283 17,747 ------ ------ Total liabilities 396,081 402,382 ------- ------- Commitments and contingencies. Equity: (6) Stockholders' equity: Common stock, $.001 par value 22 20 Additional paid-in capital 169,790 154,412 Distributions in excess of accumulated earnings (24,912) (20,014) ------- ------- Total stockholders' equity 144,900 134,418 Noncontrolling interests 457,605 497,485 ------- ------- Total equity 602,505 631,903 ------- ------- Total liabilities and equity $998,586 $1,034,285 ======== ========== (1) Includes approximately $159 in amortization expense for the three months ended September 30, 2009 and 2008, and $478 and $441 in amortization expense for the nine months ended September 30, 2009 and 2008, respectively, for the amortization of in-place lease value intangible asset pursuant to the Business Combinations Topic of the Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC"). (2) Calculated on a fully diluted basis. Assumes conversion of O.P. units outstanding into the Company's common stock. (3) Average monthly rental revenue per square foot has been determined by taking the cash base rent for the period divided by the number of months in the period, and then divided by the average occupied square feet in the period. (4) Seven leases for approximately 90,000 rentable square feet are month to month leases. (5) Base rent reflects cash rent. (6) Reflects adoption of the Consolidation Topic of the FASB ASC.
Mission West Properties, Inc.
CONTACT: Carl Berg of Mission West Properties, Inc., +1-408-725-0700
Web Site: http://www.missionwest.com/
