- Core mall store occupancy at June 30, 2008 over 92% - 40 basis points higher than at June 30, 2007
COLUMBUS, Ohio, July 23 /PRNewswire-FirstCall/ -- Glimcher Realty Trust,
(NYSE: GRT), today announced financial results for the second quarter ended
June 30, 2008. A description and reconciliation of non-GAAP financial metrics
is contained in a later section of this press release and references to per
share amounts are based on diluted common shares.
Net income available to common shareholders in the second quarter of 2008
was $1.3 million, or $0.03 per share, as compared to a net loss of $(5.3)
million, or $(0.14) per share, in the second quarter of 2007. Funds From
Operations ("FFO") in the second quarter of 2008 was $20.5 million compared to
$16.0 million in the second quarter of 2007. On a per share basis, FFO for
the second quarter of 2008 was $0.50 per share compared to $0.40 per share in
the second quarter of 2007. Included in the second quarter 2007 FFO was a
$2.5 million non-cash impairment charge related to Northwest Mall in Houston,
Texas.
"We are pleased with our second quarter financial results," stated Michael
P. Glimcher, Chairman of the Board and CEO. "Once again, our properties posted
solid operating metrics for the quarter demonstrating resilience amid this
challenging market environment."
For the first six months of 2008, net income available to common
shareholders was $1.1 million, or $0.03 per share, compared to a net loss of
$(4.2) million, or $(0.11) per share, in the first six months of 2007. FFO
was $40.4 million, or $0.99 per share, in the first six months of 2008
compared to $36.0 million, or $0.89 per share, in the first six months of
2007.
Summary of Financial Results
(unaudited, dollars in thousands except per share amounts)
For Three Months For Six Months
Ended June 30,Ended June 30,
20082007 20082007
Revenues $77,642 $71,430 $155,761$144,129
Net income (loss) available $1,314 $(5,277) $1,053 $(4,169)
to common shareholders
Earnings (loss) per diluted
common share$0.03 $(0.14)$0.03 $(0.11)
FFO$20,537 $16,048 $40,433 $36,044
FFO per diluted common share $.50 $0.40 $0.99 $0.89
Highlights
-- Total revenues of $77.6 million in the second quarter of 2008 were 8.7%
greater than total revenues for the second quarter of 2007. Revenues from
Merritt Square Mall, which was acquired in October 2007, drove approximately
$3.0 million of the increase. Other significant increases in revenue resulted
from higher tenant reimbursement income of approximately $1.4 million,
primarily due to improved recovery rates, and $0.6 million increase in lease
termination fees compared to the second quarter 2007.
-- Net income to common shareholders for the second quarter of 2008
improved by $6.6 million compared to the second quarter of 2007. Lower
interest expense of $2.7 million, higher net tenant reimbursement income of
$0.8 million from improved recovery rates, higher contribution of $2.3 million
from discontinued operations resulting from the gain on the sale of Knox
Village Square in 2008 compared to a loss on a property sale and a property
impairment in the second quarter of 2007, as well as higher fee income from
unconsolidated real estate entities contributed to improvements in our income
performance in 2008. These improvements were partially offset by a higher
provision for credit losses in the second quarter of 2008, as well as lower
income contribution from our investment in unconsolidated real estate
entities.
-- Net operating income for comparable held-for-investment mall
properties, including joint venture malls ("Core Malls"), increased 1.3% in
the second quarter of 2008 over the second quarter of 2007. When including
mall properties classified as held-for-sale, net operating income increased
approximately 1% for the quarter. The impact of prior year tenant
reimbursements was not considered in making these comparisons.
-- Core Malls store average rents were $27.23 per square foot at June 30,
2008, an increase of 2% from the $26.78 per square foot at June 30, 2007. Re-
leasing spreads for the leases signed during the second quarter of 2008 were
favorable by 15% with base rents averaging over $30 per square foot. Re-
leasing spreads represent the percentage change in base rent for leases
signed, both new leases and renewals, to the base rent for comparative tenants
for those leases where the space was occupied in the previous twenty-four
months.
-- Mall store occupancy for our Core Malls at June 30, 2008 was 92.2%
compared to 91.8% at June 30, 2007, an improvement of 40 basis points. When
including mall properties classified as held-for-sale and our non-comparable
mall (Merritt Square Mall) acquired since June 2007, mall store occupancy was
90.2% at June 30, 2008.
-- Aggregate sales for the Core Malls stores decreased 2% to $362 per
square foot for the twelve months ending June 30, 2008 compared to $370 per
square foot for the twelve months ending June 30, 2007. The sales per square
foot for the twelve months ending June 30, 2008 were comparable to the sales
per square foot for the twelve months ending March 31, 2008. Aggregate sales
represent retail sales for all mall stores of 10,000 square feet or less that
reported sales in each respective twelve month period. When including mall
properties classified as held-for-sale and our non-comparable mall (Merritt
Square Mall) acquired since June 2007, store sales were $353 per square foot
at June 30, 2008.
-- Debt-to-total-market capitalization at June 30, 2008 (including the
Company's pro-rata share of unconsolidated real estate entities' debt) was
71.3% based on the common share closing price of $11.18, compared to 67.1% at
December 31, 2007 based on the common share closing price of $14.29. Fixed
rate debt represented approximately 90% of the Company's total outstanding
borrowings at June 30, 2008.
Status of Property Dispositions
The Company had four properties held-for-sale at the end of the first
quarter of 2008. The status of each property is discussed below:
-- Knox Village Square - We sold this community center asset in May 2008
for $9.5 million and used the proceeds to pay down the credit facility.
-- Ohio River Valley - We are in discussions with an interested buyer and
expect to sell this community center property in 2008.
-- Great Mall of the Great Plains - We are in contract to sell this asset
and the buyer has funds at risk and expects to close in 2008. The contract
price is above the net book value of the property. We expect to use the
proceeds from this property sale as well as funds from our line of credit to
repay the $30 million loan on the property.
-- Eastland Charlotte Mall - We have notified the loan servicer on our
Eastland Charlotte Mall that Glimcher Properties Limited Partnership will not
fund any further cash deficits at the property. In addition, Glimcher
Properties Limited Partnership has filed a legal action seeking the
appointment of a receiver for Eastland Charlotte Mall and the liquidation of
this property.
Outlook
The Company now estimates diluted net income per share to be in the range
of $0.06 to $0.14 for 2008 and reaffirmed FFO per share to be in the range of
$2.02 to $2.10 for the year. The guidance assumes lower short-term borrowing
rates and continued fees from unconsolidated real estate entities will offset
any potential lost rent associated with the Steve & Barry's bankruptcy filing
earlier this month. Under a scenario in which the Steve & Barry's bankruptcy
results in a total liquidation and rejection of all leases, we expect our
exposure to include up to $1.5 million of base rent and $1.0 million of write-
offs associated with unamortized lease inducements. For the remainder of the
year, the Company is now forecasting a LIBOR rate of slightly under 3% and net
fees from unconsolidated real estate entities of $3 million.
A reconciliation of estimated diluted net income per share to the range of
estimated FFO per share for 2008 follows:
Low End High End
Estimated diluted net income per share $ 0.06$ 0.14
Add: Real estate depreciation and
amortization* 2.002.00
Less: Gain on sales of properties (0.04) (0.04)
Estimated FFO per share $ 2.02$ 2.10
For the third quarter of 2008, the Company estimates diluted net income
per share to be in the range of $(0.07) to $(0.02) and FFO per share to be in
the range of $0.41 to $0.46. The guidance provides for the potential write-
off of unamortized lease inducements of $1.0 million associated with the Steve
& Barry's bankruptcy. A reconciliation of the range of estimated diluted net
income per share to estimated FFO per share for the third quarter of 2008
follows:
Low End High End
Estimated diluted net income per share $ (0.07) $ (0.02)
Add: Real estate depreciation and
amortization* 0.480.48
Estimated FFO per share $ 0.41$ 0.46
Funds From Operations and Net Operating Income
This press release contains certain non-Generally Accepted Accounting
Principles (GAAP) financial measures and other terms. The Company's
definition and calculation of these non-GAAP financial measures and other
terms may differ from the definitions and methodologies used by other REITs
and, accordingly, may not be comparable. The non-GAAP financial measures
referred to above should not be considered as alternatives to net income or
other GAAP measures as indicators of our performance.
Funds From Operations is used by industry analysts and investors as a
supplemental operating performance measure of an equity real estate investment
trust ("REIT"). The Company uses FFO in addition to net income to report
operating results. FFO is an industry standard for evaluating operating
performance defined as net income (computed in accordance with GAAP) excluding
gains or losses from sales of depreciable property, plus real estate
depreciation and amortization after adjustments for unconsolidated
partnerships and joint ventures. FFO does include impairment losses for
properties held for use and held for sale. Reconciliations of non-GAAP
financial measures to earnings used in this press release are included in the
above Outlook section and attached financial tables of the press release.
Net Operating Income (NOI) is used by industry analysts, investors and
Company management to measure operating performance of the Company's
properties. NOI represents total property revenues less property operating
and maintenance expenses. Accordingly, NOI excludes certain expenses included
in the determination of net income such as property management and other
indirect operating expenses, interest expense and depreciation and
amortization expense. These items are excluded from NOI in order to provide
results that are more closely related to a property's results of operations.
In addition the Company's computation of same mall NOI excludes property bad
debt expense, straight-line adjustments of minimum rents, termination income,
amortization of market-rent adjustments and income from outparcel sales. We
also adjust for other miscellaneous items in order to enhance the
comparability of results from one period to another. Certain items, such as
interest expense, while included in FFO and net income, do not affect the
operating performance of a real estate asset and are often incurred at the
corporate level as opposed to the property level. As a result, management
uses only those income and expense items that are incurred at the property
level to evaluate a property's performance. Real estate asset related
depreciation and amortization is excluded from NOI for the same reasons that
it is excluded from FFO pursuant to the National Association of Real Estate
Investment Trust's definition.
Second Quarter Conference Call
Glimcher's second quarter investor conference call is scheduled for 11
a.m. ET on Thursday, July 24, 2008. Those wishing to join this call may do so
by calling (866) 825-3308, passcode 29006417. This call also will be
simulcast and available over the Internet via the web site www.glimcher.com on
July 24, 2008 and continue through August 7, 2008. Supplemental information
about the second quarter operating results is available on the Company's web
site or at www.sec.gov or by calling (614) 887-5844.
About the Company
Glimcher Realty Trust, a real estate investment trust, is a recognized
leader in the ownership, management, acquisition and development of regional
and super-regional malls. At June 30, 2008, the Company's mall portfolio,
including assets held through one of the Company's strategic joint ventures,
consisted of 23 properties located in 14 states with gross leasable area
totaling approximately 20.6 million square feet. The community center
portfolio is comprised of three properties representing approximately 761,000
square feet. Glimcher Realty Trust's common shares are listed on the New York
Stock Exchange under the symbol "GRT." Glimcher Realty Trust's Series F and
Series G preferred shares are listed on the New York Stock Exchange under the
symbols "GRTPRF" and "GRTPRG," respectively. Glimcher Realty Trust is a
component of both the Russell 2000(R) Index, representing small cap stocks,
and the Russell 3000(R) Index, representing the broader market.
Forward Looking Statements
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Such statements are based on assumptions and expectations which may not be
realized and are inherently subject to risks and uncertainties, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and otherwise, may
differ from the results discussed in the forward-looking statements. Risks
and other factors that might cause differences, some of which could be
material, include, but are not limited to, economic and market conditions,
competition, tenant or joint venture partner(s) bankruptcies, failure to
increase mall store occupancy and same-mall operating income, rejection of
leases by tenants in bankruptcy, financing and development risks, construction
and lease-up delays, cost overruns, the level and volatility of interest
rates, the rate of revenue increases as compared to expense increases, the
financial stability of tenants within the retail industry, the failure of the
Company (defined herein) to make additional investments in regional mall
properties and to redevelop properties, failure to complete proposed or
anticipated acquisitions, the failure to sell properties as anticipated and to
obtain estimated sale prices, the inability to upgrade our tenant mix,
restrictions in current financing arrangements, failure to fully recover
tenant obligations for common area maintenance, insurance, taxes and other
property expenses, the failure of GRT to qualify as a real estate investment
trust ("REIT"), the failure to refinance debt at favorable terms and
conditions, an increase in impairment charges with respect to Properties for
which there has been a prior impairment charge as well as impairment charges
with respect to other Properties, loss of key personnel, material changes in
the Company's dividend rates on its securities or the ability to pay its
dividend on its securities, possible restrictions on our ability to operate or
dispose of any partially-owned Properties (defined herein), failure to achieve
earnings/funds from operations targets or estimates, conflicts of interest
with existing joint venture partners, significant costs related to
environmental issues as well as other risks listed from time to time in this
news release and in GRT's other reports and statements filed with the
Securities and Exchange Commission ("SEC").
Visit Glimcher at: www.glimcher.com
GLIMCHER REALTY TRUST
Operating Results
(in thousands, except per share amounts)
(unaudited)
Three Months ended June 30,
Statement of Operations 2008 2007
Total revenues $77,642$71,430
Total expenses (52,815) (49,937)
Operating income 24,827 21,493
Interest expense, net(20,064) (22,808)
Equity in (loss) income of
unconsolidated entities, net(48) 1,276
Income (loss) before minority
interest in operating partnership
and discontinued operations 4,715(39)
Minority interest in operating
partnership - 431
Income from continuing operations 4,715392
Discontinued operations:
Impairment loss - (2,452)
Gain (loss) on sale of
properties 1,252 (1,073)
(Loss) income from operations (294) 2,215
Net income (loss) 5,673 (918)
Less: Preferred stock dividends (4,359)(4,359)
Net income (loss) available to
common shareholders $1,314$(5,277)
Reconciliation of Net Income (Loss)
Available to CommonPer Per
Shareholders to Funds From Diluted Diluted
OperationsCommon Common
Share Share
Net income (loss) available to
common shareholders$1,314$(5,277)
Minority interest in operating
partnership - (431)
1,314 $0.03 (5,708) $(0.14)
Real estate depreciation and
amortization 19,364 0.47 19,571 0.48
Equity in loss (income) of
unconsolidated entities48 0.00 (1,276)(0.03)
Pro-rata share of joint venture
funds from operations 1,063 0.032,388 0.06
(Gain) loss on sale of properties (1,252)(0.03) 1,073 0.03
Funds From Operations $20,537 $0.50 $16,048 $0.40
Weighted average common shares
outstanding - basic37,598 36,998
Weighted average common shares
outstanding - diluted 40,790 40,548
Earnings per Share
Net income (loss) available to
common shareholders before
discontinued operations per
common share $0.01 $(0.11)
Discontinued operations per common
share $0.03 $(0.03)
Income (loss) per common share $0.03 $(0.14)
Net income (loss) available to
common shareholders before
discontinued operations per
diluted common share $0.01 $(0.11)
Discontinued operations per diluted
common share $0.02 $(0.03)
Income (loss) per diluted common
share $0.03 $(0.14)
Funds from operations per diluted
common share $0.50 $0.40
GLIMCHER REALTY TRUST
Operating Results
(in thousands, except per share amounts)
(unaudited)
Six Months ended June 30,
Statement of Operations 2008 2007
Total revenues $155,761 $144,129
Total expenses (105,673) (97,628)
Operating income 50,08846,501
Interest expense, net (40,725) (45,012)
Equity in income of unconsolidated
entities, net 155 1,393
Income before minority interest in
operating partnership
and discontinued operations 9,518 2,882
Minority interest in operating
partnership- 348
Income from continuing operations 9,518 3,230
Discontinued operations:
Impairment loss- (2,452)
Gain (loss) on sale of properties1,252(1,435)
(Loss) income from operations (999)5,206
Net income9,771 4,549
Less: Preferred stock dividends (8,718) (8,718)
Net income (loss) available to common
shareholders$1,053 $(4,169)
Reconciliation of Net Income (Loss) PerPer
Available to CommonDilutedDiluted
Shareholders to Funds From Operations Common Common
Share Share
Net income (loss) available to
common shareholders $1,053 $(4,169)
Minority interest in operating
partnership -(348)
1,053 $0.03(4,517) $(0.11)
Real estate depreciation and
amortization 38,452 $0.9436,830 $0.91
Equity in income of unconsolidated
entities(155) $(0.00) (1,393) $(0.03)
Pro-rata share of joint venture
funds from operations 2,335 $0.06 3,689 $0.09
(Gain) loss on sale of properties (1,252) $(0.04)1,435 $0.03
Funds From Operations $40,433 $0.99 $36,044 $0.89
Weighted average common shares
outstanding - basic 37,58936,901
Weighted average common shares
outstanding - diluted 40,74640,436
Earnings per Share
Net income (loss) available to common
shareholders before discontinued
operations per common share $0.02$(0.15)
Discontinued operations per common
share$0.01 $0.03
Income (loss) per common share$0.03$(0.11)
Net income (loss) available to common
shareholders before discontinued
operations per diluted common share $0.02$(0.14)
Discontinued operations per diluted
common share $0.01 $0.03
Income (loss) per diluted common share$0.03$(0.11)
Funds from operations per diluted
common share $0.99 $0.89
GLIMCHER REALTY TRUST
Selected Balance Sheet Information
(in thousands, except percentages and base rents)
June 30,December 31,
2008 2007
Investment in real estate, net $1,710,955$1,710,003
Total assets $1,814,416$1,830,947
Mortgage notes and other notes
payable $1,574,116$1,552,210
Debt / Market capitalization70.3% 66.2%
Debt / Market capitalization
including pro-rata share of joint
ventures 71.3% 67.1%
June 30, June 30,
2008 2007
Occupancy:
Wholly-owned Malls:
Mall Anchors 97.0% 95.1%
Mall Stores 90.5% 90.5%
Total Consolidated Mall Portfolio94.5% 93.5%
Mall Portfolio including
Joint Ventures:
Mall Anchors 97.1% 95.4%
Mall Stores 90.2% 90.3%
Total Mall Portfolio 94.5% 93.6%
Core Malls (1);
Mall Anchors 97.3% 96.8%
Mall Stores 92.2% 91.8%
Total Mall Portfolio 95.4% 95.0%
Average Base Rents:
Wholly-owned Malls:
Mall Anchors $6.25 $6.34
Mall Stores $26.19$26.08
Mall Portfolio including
Joint Ventures:
Mall Anchors $6.63 $6.74
Mall Stores $26.02$25.86
Core Malls (1);
Mall Anchors $6.70 $6.66
Mall Stores $27.23$26.78
(1) Excludes properties sold after June 30, 2007 and properties purchased
after June 30, 2007.
Includes both wholly-owned and joint venture assets and excludes
held-for-sale malls.
SOURCE Glimcher Realty Trust
