FARMINGTON HILLS, Mich., May 3 /PRNewswire-FirstCall/ -- Agree Realty Corporation today announced results for the quarter ended March 31, 2007. For the first quarter, funds from operations were $5,139,000 compared with funds from operations in the first quarter of 2006 of $4,870,000. Diluted funds from operations per share were $0.61 per share compared with $0.58 per share for the first quarter of 2006. Net income was $3,605,000, or $0.47 per share on a diluted basis, compared with net income for the first quarter of 2006 of $3,387,000, or $0.45 per share. Total revenues increased 2.3% to $8,463,000, compared with total revenues of $8,272,000 in the first quarter of 2006. A reconciliation of net income to funds from operations is included in the financial table accompanying this press release.
"We are pleased with the operating results for the quarter ended March 31, 2007 and expect continued growth of our funds from operations as our development projects in Livonia, Michigan, Barnesville, Georgia and Macomb, Michigan are completed," said Richard Agree, President and Chairman of Agree Realty Corporation.
Funds from Operations
Management considers Funds from Operations (FFO) to be a useful supplemental measure to evaluate operating performance. The Company considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (NAREIT) to mean net income computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization. FFO should not be considered as an alternative to net income as the primary indicator of the Company's operating performance or as an alternative to cash flow as a measure of liquidity. In addition, our method of calculating FFO may not be comparable to the methods used by other REITs and, accordingly may be different from similarly titled measures reported by other companies.
Dividend
We paid a cash dividend of $0.49 per share on April 12, 2007 to shareholders of record on March 30, 2007. The dividend is equivalent to an annualized dividend of $1.96 per share and represents a payout ratio of 80.3% of funds from operations for the quarter.
Portfolio Results
At March 31, 2007, Agree Realty Corporation's total assets were $224,595,000 and our portfolio consisted of 60 properties totaling 3,355,234 million square feet located in 15 states. The portfolio was 99.7% leased at the end of the quarter. For the quarter ended March 31, 2007 our basic and fully diluted weighted average shares outstanding were 7,643,026 and 7,685,616 shares, respectively.
At March 31, 2007 our construction in progress balance totaled approximately $7,800,000 and we capitalized $105,000 of construction period interest during the first quarter 2007.
Lease Expirations
The following table shows lease expirations for the next 10 years for our freestanding properties and community shopping centers, assuming that none of the tenants exercise renewal options.
March 31, 2007 Gross Leasable Area Annualized Base Rent Number Expiration of Leases Square Percent Percent Year Expiring Footage of Total Amount of Total 2007 3 14,300 .4% $ 127,700 .4% 2008 26 311,925 9.3% 1,375,758 4.5% 2009 20 193,326 5.8% 974,511 3.2% 2010 20 328,035 9.8% 2,031,495 6.7% 2011 26 233,524 7.0% 1,665,429 5.5% 2012 12 68,260 2.0% 526,177 1.7% 2013 1 51,868 1.5% 497,068 1.6% 2014 3 172,958 5.2% 824,206 2.7% 2015 10 646,442 19.3% 4,612,462 15.2% 2016 5 80,945 2.4% 1,664,513 5.5% Thereafter 42 1,253,651 37.3% 16,091,624 53.0% Total 168 3,355,234 100.0% $30,390,943 100.0% Annualized Base Rent of our Properties
The following is a breakdown of base rents in place at March 31, 2007 for each type of retail tenant:
National $27,136,470 89% Regional 2,146,579 7% Local 1,107,894 4% Total $30,390,943 100% Major Tenants
The following is a breakdown of base rents in place at March 31, 2007 for each of our Major Tenants:
Borders (18) $ 9,861,727 32% Walgreen (18) 6,648,599 22% Kmart (12) 3,847,911 13% Total $20,358,237 67% Operating Partnership Units
As of March 31, 2007 there were 673,547 operating partnership units outstanding.
Agree Realty Corporation owns, manages and develops properties which are primarily single tenant properties and neighborhood community shopping centers, located in fifteen (15) states and leased to major retail tenants.
Agree Realty Corporation considers portions of the information contained in this release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 27E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Such statements are, by their nature, subject to certain risks and uncertainties. The Company cautions that, as a result of a number of factors, actual results could differ materially from those set forth in this presentation. Other risks, uncertainties and factors that could cause actual results to differ materially than those projected are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission, including Forms 8-K, 10-Q and 10-K.
Agree Realty Corporation Operating Results (in thousands, except per share amounts) (Unaudited) Three Months Ended March 31, 2007 2006 Revenue Minimum rents $7,687 $7,532 Percentage rent 14 14 Operating cost reimbursements 756 712 Other income 6 14 Total Revenue 8,463 8,272 Expenses Real estate taxes 457 440 Property operating expenses 510 547 Land lease payments 170 195 General and administration 996 1,051 Depreciation and amortization 1,234 1,202 Interest expense 1,177 1,154 Total Expenses 4,544 4,589 Income before minority interest 3,919 3,683 Minority interest expense 314 296 Net income $3,605 $3,387 Net Income - per share $ .47 $ .45 Reconciliation of Funds from Operations to Net Income Net income $3,605 $3,387 Depreciation of real estate assets 1,208 1,177 Amortization of leasing costs 12 10 Minority interest 314 296 Funds from Operations $5,139 $4,870 Funds from Operations - per share $ .61 $ .58 Weighted average number of shares and "OP" units outstanding 8,359 8,326 Agree Realty Corporation Consolidated Balance Sheets (in thousands) (Unaudited) March 31, Dec 31 2007 2006 ASSETS Land $ 78,611 $ 77,536 Buildings 189,193 189,117 Accumulated depreciation (49,559) (48,353) Property under development 3,160 1,594 Cash and cash equivalents 168 464 Rents receivable 378 732 Deferred costs, net of amortization 1,392 1,441 Other Assets 1,252 984 Total Assets $ 224,595 $ 223,515 LIABILITIES AND STOCKHOLDERS' EQUITY Mortgages payable $ 47,720 $ 48,291 Notes payable 23,073 20,500 Deferred revenue 11,932 12,104 Dividends and distributions payable 4,108 4,112 Other liabilities 1,429 2,210 Total Liabilities 88,262 87,217 Total Minority Interest 5,862 5,879 Common stock 1 1 Additional paid-in capital 141,521 141,277 Accumulated deficit (11,051) (10,859) Total Stockholders' Equity 130,471 130,419 224,595 $ 223,515
Agree Realty Corporation
