GTR (Fav) REIT/$19 "1st Quarter FFO Increases 9.4% to $20.7M
Debt Reduced by $14.7 M"
COLUMBUS, Ohio, April 23 /PRNewswire-FirstCall/ -- Glimcher Realty Trust, (NYSE: GRT - news), one of the country's premier retail REITs, today reported results for its first quarter ended March 31, 2002. For the first three months of 2002 Funds From Operations (``FFO'') increased 9.4% to $20.7 million. Due to the dilution from the Company's follow-on equity offering in May 2001, FFO per fully diluted share was $0.62 compared to $0.70 the first quarter of 2001. FFO is an industry standard for evaluating operating performance defined as net income plus real estate depreciation less gains or losses from sales of depreciable property, discontinued operations, extraordinary items and the cumulative effect of accounting changes.
Fully diluted earnings per share were $0.18 per share in 2002 compared to $0.13 in 2001. Gains from the sale of properties contributed approximately $0.09 per diluted share in 2002 compared to $0.02 in 2001. In the first quarter revenues increased 10.9% primarily due to the Company including Jersey Gardens, which was accounted for as a joint venture in the first quarter of 2001, in the consolidated operating results for the current quarter. For the latest three months, the Company's regional mall portfolio performed well as comparable mall store occupancy increased 0.2% and comparable mall store average rents were 1.2% above the first quarter of 2001. The Company's successful asset community center disposition program helped to reduce total debt by $14.7 million in the first quarter of 2002.
``We continue to make significant strides with our strategic plan,'' said Michael P. Glimcher, President. ``Proceeds from the sale of assets were utilized to pay down debt during the quarter and our debt to market capitalization ratio continues to improve. Upon closing, the recently announced contract for the sale of approximately $300 million of community center assets will result in regional malls representing more than 80% of the GLA in our portfolio.''
Summary of First Quarter Financial Highlights
(dollars in thousands except per share amounts)
Three Months Ended March 31,
2002 2001 Change
Revenue $70,184 $63,302 10.9 %
FFO $20,738 $18,963 9.4 %
FFO per diluted share $0.62 $0.70 -11.4 %
First Quarter 2002 Results
For the first quarter of 2002, FFO increased 9.4% to $20.7 million, or $0.62 per diluted share, compared with $19.0 million, or $0.70 per diluted share, for the first quarter 2001. Revenues increased 10.9% to $70.2 million from $63.3 million in 2001. Net income available to common shareholders was $5.6 million compared with $3.2 million for the same period of 2001 with 102 properties contributing to first quarter 2002 results compared with 108 properties a year earlier.
The Company's regional mall portfolio continues to perform well with comparable mall store occupancy increasing to 86.4% from 86.2% at March 31, 2001, and comparable mall store average rents increasing 1.2% to $21.92 per square foot. Regional mall anchor occupancy declined 1.2% to 94.7% but average anchor rents increased $0.13 to $5.35 per square foot from the first quarter of 2001. Mall anchor statistics reflect vacancies of approximately 242,000 square feet related to three former Ames locations and 109,000 square feet related to two former Phar-Mor stores for leases rejected in the first quarter of 2002 and the fourth quarter of 2001.
The Company realized same store revenue and NOI declines of 2.7% and 1.7%, respectively, in the regional mall portfolio due primarily to anchor vacancies. In the community center portfolio, same store revenue and NOI declined 2.7% and 3.1%, respectively, reflecting seven Ames vacancies of approximately 524,000 square feet and one Phar-Mor vacancy of 42,000 square feet. At March 31, 2002, the Company has three operating Ames stores aggregating 224,000 square feet and annualized minimum rents of $560,000 in the community center portfolio and no remaining Phar-Mor locations.
Debt to Market Cap
At March 31, 2002, debt-to-market capitalization stood at 61.3% compared with 62.8% at March 31, 2001 and 61.5% at December 31, 2001. The benefit of a $14.7 million reduction in debt during the quarter was partially offset by a lower share price.
Asset Sales
During the first quarter of 2002, the Company sold two community centers for $22.4 million generating a net gain to Glimcher of approximately $2.9 million. The 2002 first quarter net income includes net gains on sales of property of $0.09 per diluted share compared with $0.02 per diluted share in the similar 2001 period.
In early April, the Company announced that it has entered into a contract with a group of private investors for the sale of 44 single-tenant and community center assets for an approximate purchase price of $300 million. The properties total approximately 6.4 million square feet of gross leasable area. Specific details of the consideration are subject to confidentiality provisions contained in the agreement to purchase. The transaction is scheduled to close by August 31, 2002. The proceeds are expected to be used to pay down debt and fund additional investments in the regional mall portfolio.
Permanent Financing Activities
During the first quarter, Glimcher completed one permanent mortgage financing for $4.5 million at a fixed rate of 6.78%. On February 4, 2002, the Company also completed the defeasance of the final $40 million REMIC tranche which was scheduled to mature February 1, 2003. The Company currently has applications pending for certain other financing commitments that are expected to close during the second quarter, including the refinancing of the Jersey Gardens Mall construction loan. |
