CHARLOTTE, N.C., July 30 NC-CogdellSpencer-ern
CHARLOTTE, N.C., July 30 /PRNewswire-FirstCall/ -- Cogdell Spencer Inc.
(NYSE: CSA), a real estate investment trust (REIT) that invests in specialty
office buildings, including medical offices and ambulatory surgery and
diagnostic centers, and provides advanced planning and design-build services
for the medical profession, today announced financial results for the quarter
ended June 30, 2008.
Second Quarter 2008 Results
Cogdell Spencer Inc. reports Funds from Operations Modified (FFOM) per
share and operating partnership unit of $0.30, Funds from Operations (FFO) per
share and operating partnership unit of $0.20, and net income (loss) per share
of ($0.12) for the three months ended June 30, 2008.
FFOM for the three months ended June 30, 2008 was $7.3 million, or $0.30
per share and operating partnership unit, basic and diluted. FFOM adds back
to traditionally defined FFO non-cash amortization of non-real estate related
intangible assets associated with purchase accounting. FFO for the three
months ended June 30, 2008 was $4.8 million, or $0.20 per share and operating
partnership unit, basic and diluted. The weighted average number of basic and
diluted shares and operating partnership units outstanding totaled 24,347,634
and 24,486,032, respectively, for the three months ended June, 2008.
Net income (loss) was ($1.8 million) for the three months ended June 30,
2008, or ($0.12) per share basic and diluted. The weighted average number of
basic and diluted shares outstanding totaled 15,392,983 for the three months
ended June 30, 2008.
As of June 30, 2008, the Company's portfolio consisted of 62 consolidated
wholly-owned and joint venture properties and three unconsolidated joint
venture properties, comprising a total of approximately 3.3 million square
feet. The overall percentage of leased space at the Company's in-service,
consolidated properties as of June 30, 2008, was 92.5%. In addition, the
Company manages 51 properties for third party clients totaling approximately
2.2 million square feet.
Results for the Six Months Ended June 30, 2008
FFOM for the six months ended June 30, 2008 was $13.1 million, or $0.59
per share and operating partnership unit, basic and diluted. FFO for the six
months ended June 30, 2008 was $9.9 million, or $0.45 per share and operating
partnership unit, basic and diluted. The weighted average number of basic and
diluted shares and operating partnership units outstanding totaled 22,159,621
and 22,234,469, respectively, for the six months ended June 30, 2008.
Net income (loss) was ($3.6 million) for the six months ended June 30,
2008, or ($0.24) per share basic and diluted. The weighted average number of
basic and diluted shares outstanding totaled 14,878,718 for the six months
ended June 30, 2008.
Dividend
On June 13, 2008, Cogdell Spencer Inc. announced that its Board of
Directors had declared a quarterly dividend of $0.35 per share of common stock
payable on July 21, 2008 to stockholders of record on June 25, 2008. The
dividend covers the second quarter of 2008.
Outlook
Cogdell Spencer Inc.'s management expects that FFOM per share and
operating partnership unit for the year ending December 31, 2008 will be
between $1.20 and $1.24 and expects that FFO per share and operating
partnership unit will be between $0.86 and $0.90. A reconciliation of the
range of projected net income (loss) to projected FFO and FFOM for the year
ending December 31, 2008 is below:
Guidance Range for the
Year Ending December 31, 2008
Low High
(In thousands, except per share and
operating partnership unit data)
Net loss before minority interests
in Operating Partnership $(6,900) - - $(5,900)
Plus real estate related
depreciation and amortization 27,500 - - 27,500
Funds from Operations (FFO)20,600 - - 21,600
Plus amortization of intangibles
related to purchase accounting,
net of income tax benefit 8,150 - -8,150
Funds from Operations Modified (FFOM) $28,750 - - $29,750
FFO per share and unit - diluted$0.86 - -$0.90
FFOM per share and unit - diluted $1.20 - -$1.24
Weighted average shares and units
outstanding - diluted 24,000 - - 24,000
Supplemental operating and financial data are available in the Investor
Relations section of the Company's Web site at www.cogdellspencer.com .
The reported results are unaudited and there can be no assurance that the
results will not vary from the final information for the three and six months
ended June 30, 2008. In the opinion of management, all adjustments considered
necessary for a fair presentation of these reported results have been made.
FFO is a supplemental non-GAAP financial measure used by the real estate
industry to measure the operating performance of real estate companies. FFOM
adds back to traditionally defined FFO non-cash amortization of non-real
estate related intangible assets associated with purchase accounting. The
Company presents FFO and FFOM because it considers them important supplemental
measures of operational performance. The Company believes FFO is frequently
used by securities analysts, investors and other interested parties in the
evaluation of REITs, many of which present FFO when reporting their results.
FFO is intended to exclude GAAP historical cost depreciation and amortization
of real estate and related assets, which assumes that the value of real estate
assets diminishes ratably over time. Historically, however, real estate
values have risen or fallen with market conditions. Because FFO excludes
depreciation and amortization unique to real estate, gains and losses from
property dispositions and extraordinary items, it provides a performance
measure that, when compared year over year, reflects the impact to operations
from trends in occupancy rates, rental rates, operating costs, development
activities and interest costs, providing a perspective not immediately
apparent from net income. The Company computes FFO in accordance with
standards established by the Board of Governors of NAREIT in its March 1995
White Paper (as amended in November 1999 and April 2002), which may differ
from the methodology for calculating FFO utilized by other equity REITs and,
accordingly, may not be comparable to such other REITs. Further, FFO does not
represent amounts available for management's discretionary use because of
needed capital replacement or expansion, debt service obligations, or other
commitments and uncertainties. FFO should not be considered as an alternative
to net income (loss) (computed in accordance with GAAP) as an indicator of the
Company's performance, nor is it indicative of funds available to fund its
cash needs, including its ability to pay dividends or make distributions. A
reconciliation from GAAP net loss to FFO and FFOM is included as an attachment
to this press release.
Conference Call
Cogdell Spencer Inc. invites you to attend the Second Quarter 2008
Conference Call on Thursday, July 31, 2008 at 10:00 a.m. (Eastern Daylight
Time). The number to call for this teleconference is (800) 860-2442
(domestic) or (412) 858-4600 (international), and no passcode is required. In
addition, the conference call can be accessed via the Internet at
www.cogdellspencer.com through the "Q2 2008 Cogdell Spencer Earnings
Conference Call" link on the Investor Relations page.
A playback will be available until August 7, 2008. To access the
playback, please dial (877) 344-7529 (domestic) or (412) 317-0088
(international) and enter the passcode: 421319. The replay can also be
accessed via the Internet at www.cogdellspencer.com through the "Q2 2008
Cogdell Spencer Earnings Conference Call" link on the Investor Relations page.
About Cogdell Spencer Inc.
Charlotte-based Cogdell Spencer Inc. (NYSE: CSA) is a fully-integrated,
self-administered, and self-managed real estate investment trust ("REIT") that
invests in specialty office buildings for the medical profession, including
medical offices, ambulatory surgery and diagnostic centers. On March 10,
2008, the Company merged with Marshall Erdman & Associates, Inc. Erdman is a
market-leading provider of design-build healthcare facilities throughout the
United States of America. Erdman's service offerings include advanced
planning, architecture, engineering, and construction. Combined, the Company
is a fully integrated healthcare facilities company providing services from
conceptual planning to long-term property ownership and management.
At present, the Cogdell Spencer Inc. portfolio consists of 62 consolidated
wholly-owned properties and joint venture properties, three unconsolidated
joint venture properties, and 51 managed medical office buildings. For more
information on Cogdell Spencer Inc., please visit the company's Web site at
www.cogdellspencer.com .
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. The forward-looking
statements reflect the Company's views about future events and are subject to
risks, uncertainties, assumptions and changes in circumstances that may cause
actual results to differ materially. Factors that may contribute to these
differences include, but are not limited to the following: market trends; our
ability to obtain future financing arrangements; our ability to renew ground
leases; our ability to integrate the operations of Marshall Erdman &
Associates, Inc. with our operations; defaults by tenants; and changes in the
reimbursement available to our tenants by government or private payors. For a
further list and description of such risks and uncertainties, see the reports
filed by the Company with the Securities and Exchange Commission, including
the Company's Form 10-K for the year ended December 31, 2007. Although the
Company believes the expectations reflected in such forward-looking statements
are based on reasonable assumptions, it can give no assurance that its
expectations will be realized. The Company disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Cogdell Spencer Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
June 30, 2008 December 31, 2007
Assets
Real estate properties:
Operating real estate properties $526,937$486,279
Less: Accumulated depreciation (56,974)(44,596)
Total operating real estate
properties, net 469,963 441,683
Construction in progress 2,889 13,380
Total real estate properties, net 472,852 455,063
Cash and cash equivalents 5,088 3,555
Restricted cash 18,078 1,803
Tenant and accounts receivable, net 49,827 2,249
Goodwill and intangible assets, net 313,151 31,589
Other assets 30,558 11,978
Total assets $889,554$506,237
Liabilities and stockholders' equity
Mortgage notes payable $242,033$237,504
Revolving credit facility114,000 79,200
Term loan100,000 -
Accounts payable 29,028 5,817
Billings in excess of costs and estimated
earnings on uncompleted contracts32,796 -
Deferred income taxes 40,107 217
Payable to MEA shareholders 24,003 -
Other liabilities 40,359 21,243
Total liabilities 622,326 343,981
Minority interests96,074 47,221
Stockholders' equity 171,154 115,035
Total liabilities and stockholders'
equity $889,554$506,237
Cogdell Spencer Inc.
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
(unaudited)
For the Three For the Six Months
Months Ended Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 (1) 2007 (1)
Revenues:
Rental revenue $19,300 $14,624 $37,991 $28,945
Design-Build contract revenue and
other sales 78,021- 101,956-
Property management and other fees 835 8261,6721,770
Development management and other
income 110 21 129 251
Total revenues 98,266 15,471 141,748 30,966
Expenses:
Property operating and management 7,8416,065 15,040 11,969
Costs related to design-build revenue
and other sales 66,286- 87,330-
Selling, general, and administrative 8,4881,657 12,7893,764
Depreciation and amortization12,3806,749 21,404 13,391
Total expenses 94,995 14,471 136,563 29,124
Income from operations before other
income (expense) 3,2711,0005,1851,842
Other income (expense):
Interest and other income, net 218 179 473 580
Interest expense (6,857) (3,188) (11,952) (7,223)
Equity in earnings (loss) of
unconsolidated partnerships 547 (5)
Total other income (expense) (6,634) (3,005) (11,472) (6,648)
Loss from operations before income tax
expense (benefit) (3,363) (2,005) (6,287) (4,806)
Income tax expense (benefit) (383) 26 (740) 170
Loss from operations (2,980) (2,031) (5,547) (4,976)
Minority interests in real estate
partnerships 48 (22) 62 (39)
Minority interests in operating
partnership1,089 5621,8411,611
Net loss $(1,843) $(1,491) $(3,644) $(3,404)
Net loss per share - basic and diluted $(0.12) $(0.12) $(0.24) $(0.34)
Weighted average common shares - basic
and diluted (2) 15,393 11,931 14,879 10,153
(1) The six months ended June 30, 2008, include four months of activity
related to the Marshall Erdman & Associates subsidiary.
(2) 10 and 18 shares of unvested restricted common stock are anti-
dilutive due to the net loss for the three months ended June 30, 2008 and
2007, respectively. 11 and 19 shares of unvested restricted common stock are
anti-dilutive due to the net loss for the six months ended June, 2008 and
2007, respectively.
Cogdell Spencer Inc.
Business Segment Reporting
(In thousands)
(unaudited)
Design-Build Unallocated
Three months ended June 30, Property and and
2008: Operations DevelopmentOther Total
Revenues:
Rental revenue $19,300$- $- $19,300
Design-Build contract
revenue and other sales -78,021 -78,021
Property management and
other fees 835 - - 835
Development management
and other income - 110 - 110
Total revenues 20,13578,131 -98,266
Operating expenses:
Property operating and
management 7,841 - - 7,841
Costs related to design-
build revenue and other
sales-66,286 -66,286
Selling, general, and
administrative - 5,800 - 5,800
Total operating expenses7,84172,086 -79,927
12,294 6,045 -18,339
Other income (expense)15146 21 218
Corporate general and
administrative expenses- - (2,688) (2,688)
Interest expense- - (6,857) (6,857)
Provision for income taxes
applicable to funds from
operations modified- - (1,248) (1,248)
Depreciation and amortization - (306)(66) (372)
Earnings from unconsolidated
real estate partnerships,
before real estate related
depreciation and amortization 8 - - 8
Minority interests in real
estate partnerships, before
real estate related
depreciation and amortization(74)- - (74)
Funds from operations
modified ("FFOM") 12,379 5,785 (10,838)7,326
Amortization of intangibles
related to purchase accounting,
net of income tax benefit(42) (4,140) 1,631(2,551)
Funds from operations
("FFO") 12,337 1,645 (9,207)4,775
Real estate related
depreciation and
amortization (7,707)- -(7,707)
Minority interests in operating
partnership- - 1,089 1,089
Net income (loss)$4,630$1,645 $(8,118) $(1,843)
Cogdell Spencer Inc.
Business Segment Reporting
(In thousands)
(unaudited)
Design-Build Unallocated
Six months ended June 30, Property and and
2008: Operations DevelopmentOther Total
Revenues:
Rental revenue $37,991$- $- $37,991
Design-Build contract
revenue and other sales - 101,956 - 101,956
Property management and
other fees 1,672 - - 1,672
Development management
and other income - 129 - 129
Total revenues 39,663 102,085 - 141,748
Operating expenses:
Property operating and
management 15,040 - -15,040
Costs related to design-
build revenue and other
sales-87,330 -87,330
Selling, general, and
administrative - 7,681 - 7,681
Total operating expenses 15,04095,011 - 110,051
24,623 7,074 -31,697
Other income (expense)31985 69 473
Corporate general and
administrative expenses- - (5,108) (5,108)
Interest expense- - (11,952) (11,952)
Provision for income taxes
applicable to funds from
operations modified- - (1,312) (1,312)
Depreciation and amortization - (421) (112) (533)
Earnings from unconsolidated
real estate partnerships,
before real estate related
depreciation and amortization 13 - -13
Minority interests in real
estate partnerships, before
real estate related
depreciation and amortization (152)- - (152)
Funds from operations
modified ("FFOM") 24,803 6,738 (18,415) 13,126
Amortization of intangibles
related to purchase accounting,
net of income tax benefit(84) (5,172) 2,052(3,204)
Funds from operations
("FFO") 24,719 1,566 (16,363)9,922
Real estate related
depreciation and
amortization (15,407)- - (15,407)
Minority interests in
operating partnership - - 1,841 1,841
Net income (loss)$9,312$1,566$(14,522) $(3,644)
Cogdell Spencer Inc.
Reconciliation of Net Loss to Funds from Operations Modified (FFOM) (1)
(In thousands, except per share and unit amounts)
(unaudited)
Three Months EndedSix Months Ended
June 30, June 30,June 30, June 30,
2008 20072008 2007
Net loss$(1,843) $(1,491)$(3,644) $(3,404)
Plus minority interests in
operating partnership (1,089)(562) (1,841) (1,611)
Plus real estate related
depreciation and
amortization (2) 7,7076,658 15,407 13,212
Funds from Operations (FFO) (1) 4,7754,605 9,9228,197
Plus amortization of intangibles
related to purchase accounting,
net of income tax benefit 2,551 26 3,204 52
Funds from Operations Modified
(FFOM) (1) $7,326 $4,631 $13,126 $8,249
FFO per share and unit - basic
and diluted $0.20$0.28 $0.45$0.56
FFOM per share and unit - basic
and diluted $0.30$0.28 $0.59$0.56
Weighted average shares and units
outstanding - basic 24,348 16,437 22,160 14,697
Weighted average shares and units
outstanding - diluted 24,486 16,455 22,234 14,717
(1) FFO is a supplemental non-GAAP financial measure used by the real
estate industry to measure the operating performance of real estate companies.
FFOM adds back to traditionally defined FFO non-cash amortization of non-real
estate related intangible assets associated with purchase accounting. The
Company presents FFO and FFOM because it considers them important supplemental
measures of operational performance. The Company believes FFO is frequently
used by securities analysts, investors and other interested parties in the
evaluation of REITs, many of which present FFO when reporting their results.
FFO is intended to exclude GAAP historical cost depreciation and amortization
of real estate and related assets, which assumes that the value of real estate
assets diminishes ratably over time. Historically, however, real estate
values have risen or fallen with market conditions. Because FFO excludes
depreciation and amortization unique to real estate, gains and losses from
property dispositions and extraordinary items, it provides a performance
measure that, when compared year over year, reflects the impact to operations
from trends in occupancy rates, rental rates, operating costs, development
activities and interest costs, providing a perspective not immediately
apparent from net income. The Company computes FFO in accordance with
standards established by the Board of Governors of NAREIT in its March 1995
White Paper (as amended in November 1999 and April 2002), which may differ
from the methodology for calculating FFO utilized by other equity REITs and,
accordingly, may not be comparable to such other REITs. Further, FFO does not
represent amounts available for management's discretionary use because of
needed capital replacement or expansion, debt service obligations, or other
commitments and uncertainties. FFO should not be considered as an alternative
to net income (loss) (computed in accordance with GAAP) as an indicator of the
Company's performance, nor is it indicative of funds available to fund its
cash needs, including its ability to pay dividends or make distributions.
(2) Real estate depreciation and amortization consists of depreciation
and amortization from wholly-owned real estate properties of $7,388 and $6,640
and the Company's share of joint venture real estate depreciation and
amortization of $319 and $18 for the three months ended June 30, 2008 and
2007, respectively. Real estate depreciation and amortization consists of
depreciation and amortization from wholly-owned real estate properties of
$14,827 and $13,174 and the Company's share of joint venture real estate
depreciation and amortization of $580 and $38 for the six months ended June
30, 2008 and 2007, respectively.
SOURCE Cogdell Spencer Inc.
