EX-99.1 2 k14882exv99w1.htm PRESS RELEASE DATED MAY 3, 2007 exv99w1
 

PRESS RELEASE — FOR IMMEDIATE RELEASE
CONTACT: Kenneth R. Howe, Chief Financial Officer (248) 737-4190
AGREE REALTY CORPORATION REPORTS FIRST QUARTER 2007 OPERATING RESULTS
 
First Quarter 2007 Highlights:
Financial Information
  •   Diluted FFO per share of $0.61
 
  •   $0.49 per share quarterly dividend paid April 12, 2007
     FARMINGTON HILLS, MI (May 3, 2007) — Agree Realty Corporation (NYSE: ADC) 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
    Number   Gross Leasable Area   Annualized Base Rent
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.
     For additional information, visit the Company’s home page on the Internet at http://www.agreerealty.com.

 

 

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