EX-99.1 2 a5456351ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Ramco-Gershenson Properties Trust Reports Results for Second Quarter 2007 Posts Solid Operating Statistics and Reaffirms 2007 Annual FFO Guidance FARMINGTON HILLS, Mich.--(BUSINESS WIRE)--July 25, 2007--Ramco-Gershenson Properties Trust (NYSE:RPT) announced today results for the second quarter ended June 30, 2007. Financial Information for the Second Quarter 2007: -- Diluted FFO per share of $0.60 -- Diluted FFO of $12.9 million -- Total revenues of $37.2 million -- Diluted EPS from continuing operations of $0.56 Company Highlights for the Second Quarter 2007: -- Announces $270 million development pipeline -- Formed new acquisition joint venture -- Completed the redemption of Series C Preferred Shares -- Increased same center operating income by 3.4% -- Opened 21 new non-anchor stores, 37.6% over portfolio rental averages -- Renewed 24 non-anchor leases, 12.9% over prior rental rates Financial Results For the three months ended June 30, 2007, diluted Funds from Operations (FFO) decreased 4.4% to $12.9 million compared with $13.5 million for the three months ended June 30, 2006. On a per share basis, diluted FFO decreased 4.8% to $0.60, compared with $0.63 in 2006. The primary reasons for the decrease in FFO related to the sale of assets to newly formed joint ventures as well as a significant lease termination fee received last year. Total revenues decreased 3.1% to $37.2 million, compared to $38.4 million in 2006, also primarily due to the sale of properties mentioned above. Income from continuing operations was $11.0 million, which included a gain on the sale of real estate assets, net of minority interest of $7.7 million or $0.36 per share compared to income from continuing operations of $4.7 million in 2006. On a diluted per share basis, income from continuing operations was $0.56 per share compared to $0.18 per share in 2006. For the six months ended June 30, 2007, diluted Funds from Operations (FFO) increased 0.4% to $27.2 million compared with $27.1 million for the six months ended June 30, 2006. On a per share basis, diluted FFO increased 0.8% to $1.26, compared with $1.25 in 2006. Total revenues increased 3.2% to $77.4 million, compared to $75.0 million in 2006. Income from continuing operations was $34.9 million, which included a gain on the sale of real estate assets, net of minority interest of $26.8 million or $1.44 per share compared to income from continuing operations of $9.0 million in 2006. On a diluted per share basis, income from continuing operations was $1.82 per share compared to $0.34 per share in 2006. "I am pleased to report that we posted solid operating statistics for the second quarter including strong same center income growth and leasing results for both new leases and renewals," said Dennis Gershenson, President and Chief Executive Officer. "We acknowledge that our funds from operations did not meet analyst expectations for the quarter, however, our 2007 business plan, which includes the ramping up of three new development projects, the initiation of a number of value-added redevelopments plus an aggressive acquisition schedule, is on track. We are confident of achieving our stated financial objectives for the year and reaffirm our FFO guidance." Operating Highlights Joint Venture Acquisitions During the quarter, the Company sold two of its shopping centers to a newly formed joint venture with a discretionary fund that invests in core assets managed by Heitman LLC. The shopping centers, which include Kissimmee West in Kissimmee, Florida and Shoppes of Lakeland in Lakeland, Florida, have an aggregate value of $52.9 million. Ramco-Gershenson will hold a 7% interest in the joint venture and will continue to manage the properties earning market fees for the services it performs. Expansion of the joint venture will be on an asset-by-asset basis. Development The Company is currently pursuing three new shopping center developments driven by strong retailer demand and solid market demographics. The Company is currently working with the respective community governmental agencies to complete the entitlement processes for these projects, which represent a variety of retail concepts including mixed-use and town center formats. The developments are: -- The Town Center at Aquia in Stafford, Virginia includes the complete value-added redevelopment of an existing 200,000 square foot shopping center owned by the Company. When complete the mixed-use asset will encompass over 650,000 square feet of upscale office, retail/entertainment components and approximately 300 residential units. During the second quarter, the Company signed a lease with Northrop Grumman to occupy 49,000 square feet or approximately one-half of the first Class A Office Building currently under construction at the site. The office building is expected to open in January of 2008. The total project cost is estimated at $150 million. -- Hartland Towne Square in Hartland, Michigan is being developed through a joint venture as a 550,000 square foot traditional community center featuring two major anchors to include a department/grocery superstore and a home improvement store. The center will also include at least three mid-box national retailers as well as a number of outlots. Hartland Towne Square is located on the northeast corner of the US-23 and M-59 interchange at a midpoint between Detroit to the east, Ann Arbor to the south and Lansing to the west. The total project cost is estimated at $50 million. -- Northpointe Town Center in Jackson, Michigan is being developed as a 575,000 square foot combination power center and town center, which will include retail, entertainment and office components. Located at the interchange of I-94 and US-127, the new development will complement two other Ramco-Gershenson properties in the market, which currently account for over 850,000 square feet. The 70 acre project results from strong retailer demand and the inability to accommodate retailer requests at the Company's two existing shopping centers. The total project cost is estimated at $70 million. Including the aforementioned projects, the Company is currently developing six centers totaling approximately 3.0 million square feet with an estimated total project cost of $385 million. Redevelopment At June 30, 2007, the Company had six value-added redevelopment projects in process for both wholly-owned and joint venture properties impacting approximately 390,000 square feet with a total project cost of $25.1 million. The Company is currently in the process of finalizing negotiations for five additional redevelopments, which are expected to come on-line prior to the end of the year. These projects include the addition of at least one anchor tenant to shopping centers in Michigan, Florida and Georgia. Leasing During the second quarter, for both core and joint venture properties, 21 new non-anchor stores opened in 62,705 square feet, at an average base rent of $21.55 per square foot, an increase of 37.6% over portfolio average rents. In addition, 24 non-anchor leases were renewed impacting 85,955 square feet, at an average base rent of $13.40 per square foot, an increase of 12.9% over prior rental rates. Same center property operating income for the quarter increased 3.4%. At June 30, 2007, the portfolio was 92.7% occupied. Debt and Market Capitalization Total debt at quarter-end was approximately $663.6 million with an average interest rate of 6.1% and an average maturity of 56 months. Of that total, $558.5 million was fixed rate debt and $105.1 million was variable rate debt. As of June 30, 2007, debt to market capitalization was 45.5% and total capitalization approximated $1.5 billion. Preferred Share Redemption/Dividend During the quarter, the Company completed the redemption of its 7.95% Series C Cumulative Convertible Preferred Shares of Beneficial Interest. As of June 1, 2007, 1,857,846 Series C Preferred Shares, or approximately 98% of the 1,889,000 shares had been converted into common shares. The remaining 31,154 Series C Preferred Shares were redeemed on June 1, 2007, at the redemption price of $28.50 plus accrued and unpaid dividends totaling $11,765. On July 2, 2007, the Company paid a second quarter common share dividend of $0.4625 per share and a second quarter dividend of $0.5938 per Series B cumulative redeemable preferred share for the period of April 1, 2007 through June 30, 2007, to shareholders of record on June 20, 2007. Earnings Guidance/Conference Call The Company expects 2007 annual diluted FFO per share to be between $2.61 and $2.69. In addition, the Company expects earnings per diluted common share to be between $2.10 and $2.20. Management considers funds from operations, also known as "FFO" to be an appropriate supplemental measure of financial performance for a REIT. Please see the reconciliation of funds from operations to net income later in this press release. Ramco-Gershenson will host a live broadcast of its first quarter conference call on Thursday, July 26, 2007, at 9:00 a.m. eastern time, to discuss its financial results. The live broadcast will be available online at www.rgpt.com and www.streetevents.com and also by telephone at (800) 265-0241, passcode 65700079. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (888) 286-8010, passcode 94351117 (for one week). Supplemental financial information is available via e-mail by sending requests to dhendershot@rgpt.com and is also available at the investor section of our web page. Ramco-Gershenson Properties Trust, headquartered in Farmington Hills, Michigan, is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT), which owns, develops, acquires, manages and leases community shopping centers, regional malls and single tenant retail properties, nationally. As of June 30, 2007, Ramco-Gershenson owned interests in 84 shopping centers totaling approximately 18.8 million square feet of gross leasable area in Michigan, Florida, Georgia, Ohio, Wisconsin, Tennessee, Indiana, New Jersey, Virginia, South Carolina, North Carolina, and Maryland. For further information on Ramco-Gershenson Properties Trust visit the Company's website at www.rgpt.com. This press release contains forward-looking statements with respect to the operation of certain of the Trust's properties. Management of Ramco-Gershenson believes the expectations reflected in the forward-looking statements made in this document are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary. These include general economic conditions, the strength of key industries in the cities in which the Trust's properties are located, the performance of the Trust's tenants at the Trust's properties and elsewhere and other factors discussed in the Trust's reports filed with the Securities and Exchange Commission. RAMCO-GERSHENSON PROPERTIES TRUST CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In Thousands, except per share amounts) (Unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, -------------------- ------------------ 2007 2006 2007 2006 ----------- -------- --------- -------- REVENUES: Minimum rents $24,495 $25,151 $48,768 $49,785 Percentage rents 96 - 408 385 Recoveries from tenants 10,733 10,307 22,469 20,182 Fees and management income 1,426 1,519 4,030 2,761 Other income 498 1,440 1,676 1,880 ----------- -------- --------- -------- Total revenues 37,248 38,417 77,351 74,993 ----------- -------- --------- -------- EXPENSES: Real estate taxes 5,061 4,891 10,232 9,768 Recoverable operating expenses 5,574 5,634 12,257 11,236 Depreciation and amortization 8,331 7,876 16,468 15,953 Other operating 765 917 1,274 1,619 General and administrative 3,874 3,295 6,907 7,396 Interest expense 10,744 10,989 21,762 21,559 ----------- -------- --------- -------- Total expenses 34,349 33,602 68,900 67,531 ----------- -------- --------- -------- Income from continuing operations before gain on sale of real estate assets, minority interest and earnings from unconsolidated entities 2,899 4,815 8,451 7,462 Gain on sale of real estate assets 8,941 25 31,376 1,733 Minority interest (1,507) (885) (6,035) (1,672) Earnings from unconsolidated entities 712 755 1,118 1,492 -------------------- ------------------ Income from continuing operations 11,045 4,710 34,910 9,015 ----------- -------- --------- -------- Discontinued operations, net of minority interest: Gain (Loss) on sale of real estate assets - (3) - 954 Income from operations - 70 - 393 ----------- -------- --------- -------- Income from discontinued operations - 67 - 1,347 ----------- -------- --------- -------- Net income 11,045 4,777 34,910 10,362 Preferred stock dividends (606) (1,664) (2,269) (3,328) Loss on redemption of preferred shares (35) - (35) - ----------- -------- --------- -------- Net income available to common shareholders $10,404 $ 3,113 $32,606 $ 7,034 =========== ======== ========= ======== Basic earnings per common share: Income from continuing operations $ 0.58 $ 0.18 $ 1.89 $ 0.34 Income from discontinued operations - - - 0.08 ----------- -------- --------- -------- Net income $ 0.58 $ 0.18 $ 1.89 $ 0.42 =========== ======== ========= ======== Diluted earnings per common share: Income from continuing operations $ 0.56 $ 0.18 $ 1.82 $ 0.34 Income from discontinued operations - - - 0.08 ----------- -------- --------- -------- Net income $ 0.56 $ 0.18 $ 1.82 $ 0.42 =========== ======== ========= ======== Basic weighted average common shares outstanding 17,847 16,679 17,221 16,763 =========== ======== ========= ======== Diluted weighted average common shares outstanding 21,483 16,714 18,557 16,800 =========== ======== ========= ======== COMPREHENSIVE INCOME Net income $11,045 $ 4,777 $34,910 $10,362 Other comprehensive income: Unrealized gain on interest rate swaps 420 641 197 1,195 ----------- -------- --------- -------- Comprehensive income $11,465 $ 5,418 $35,107 $11,557 =========== ======== ========= ======== RAMCO-GERSHENSON PROPERTIES TRUST CALCULATION OF FUNDS FROM OPERATIONS (1) (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------ ------------------ 2007 2006 2007 2006 --------- -------- --------- -------- Net Income $11,045 $ 4,777 $ 34,910 $10,362 Add: Depreciation and amortization expense 9,291 8,460 18,253 17,125 Minority interest in partnership: Continuing operations 1,487 885 5,990 1,672 Discontinued operations - 12 - 69 Less: Gain on sale of real estate (2) (8,316) - (30,814) - Discontinued operations, gain (loss) on sale of real estate, net of minority interest - 3 - (954) --------- -------- --------- -------- Funds from operations 13,507 14,137 28,339 28,274 Less: Series B Preferred Stock dividends (594) (594) (1,188) (1,188) --------- -------- --------- -------- Funds from operations available to common shareholders $12,913 $13,543 $ 27,151 $27,086 ========= ======== ========= ======== Weighted average equivalent shares outstanding, diluted 21,483 21,532 21,478 21,619 ========= ======== ========= ======== Funds from operations available to common shareholders per diluted share $ 0.60 $ 0.63 $ 1.26 $ 1.25 ========= ======== ========= ======== (1) Management considers funds from operations, also known as "FFO," an appropriate supplemental measure of the financial performance of an equity REIT. Under the NAREIT definition, FFO represents income before minority interest, excluding extraordinary items, as defined under accounting principles generally accepted in the United States of America ("GAAP"), gains on sales of depreciable property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. FFO should not be considered an alternative to GAAP net income as an indication of our performance. We consider FFO as a useful measure for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs. However, our computation of FFO may differ from the methodology for calculating FFO utilized by other real estate companies, and therefore, may not be comparable to these other real estate companies. (2) Excludes gain on sale of undepreciated land of $562 in 2007 and $1,733 in 2006. RAMCO-GERSHENSON PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) June 30, December 31, 2007 2006 ----------- ------------ (Unaudited) ASSETS Investment in real estate, net $ 913,536 $ 897,975 Cash and cash equivalents 8,603 11,550 Restricted cash 9,780 7,772 Accounts receivable, net 35,828 33,692 Equity investments in and advances to unconsolidated entities 73,469 75,824 Other assets, net 39,332 38,057 ----------- ------------ Total Assets $1,080,548 $1,064,870 =========== ============ LIABILITIES Mortgages and notes payable $ 663,551 $ 676,225 Accounts payable and accrued expenses 35,565 26,424 Distributions payable 10,478 10,391 Capital lease obligation 7,564 7,682 ----------- ------------ Total Liabilities 717,158 720,722 Minority Interest 42,837 39,565 SHAREHOLDERS' EQUITY Preferred Shares of Beneficial Interest, par value $0.01, 10,000 shares authorized: 9.5% Series B Cumulative Redeemable Preferred Shares; 1,000 shares issued and outstanding, liquidation value of $25,000 23,804 23,804 7.95% Series C Cumulative Convertible Preferred Shares; 1,889 shares issued, 1,888 shares outstanding as of December 31, 2006, liquidation value of $53,808 - 51,714 Common Shares of Beneficial Interest, par value $0.01, 45,000 shares authorized; 18,469 and 16,580 issued and outstanding as of June 30, 2007 and December 31, 2006, respectively 185 166 Additional paid-in capital 386,804 335,738 Accumulated other comprehensive income 444 247 Cumulative distributions in excess of net income (90,684) (107,086) ----------- ------------ Total Shareholders' Equity 320,553 304,583 ----------- ------------ Total Liabilities and Shareholders' Equity $1,080,548 $1,064,870 =========== ============ CONTACT: Ramco-Gershenson Properties Trust Dennis Gershenson, President & CEO or Richard Smith, CFO Phone: 248-350-9900 Fax: 248-350-9925