Bedford erty (NYSE:BED)
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Bedford Property Investors, Inc. (NYSE:BED) today
announced its financial results for the second quarter and six months
ended June 30, 2005. Diluted earnings per share of common stock (EPS)
for the second quarter of 2005 were $0.55, compared with diluted EPS
of $0.30 achieved for the second quarter of 2004. EPS for the six
months ended June 30, 2005 were $0.98 compared with $0.59 for the six
months of 2004. Funds from operations (FFO) per share of common stock
for the second quarter of 2005 were $0.43, compared with FFO per share
of $0.76 achieved for the second quarter of 2004. FFO per share of
common stock for the first six months of 2005 were $0.89, compared
with FFO per share of common stock of $1.48 achieved in the first six
months of 2004.
Financial Results
Net income available to common stockholders for the second quarter
of 2005 increased by approximately $3,784,000 (78%) when compared with
the second quarter of 2004. Net income available to common
stockholders for the first six months of 2005 increased by
approximately $5,934,000 (62%) when compared with the same period in
2004. These increases are mainly due to gains of approximately
$9,095,000 and $16,239,000 realized from the sales of operating
properties for the second quarter and first six months of 2005,
respectively. Income from continuing operations (which excludes the
operating results from properties sold and gains on sales) for the
second quarter and the first six months of 2005 decreased $2,579,000
and $4,995,000, respectively, when compared to the same periods in
2004. These decreases are the result of the loss of net operating
income from the property sales that occurred in 2004 and 2005,
continued rental rate reductions on our lease renewals and re-leasing,
declines in the operating portfolio occupancy, and increases in
depreciation expense, primarily due to improvements of real estate and
properties acquired and developed in 2004 and 2005. These decreases
were partially offset by additional net operating income resulting
from the property acquisitions and development undertaken in 2004.
FFO for the second quarter of 2005 were approximately $6,810,000,
compared to approximately $12,226,000 for the same period in 2004. FFO
for the six months ended June 30, 2005 were approximately $14,057,000,
compared to approximately $23,870,000 for the same period in 2004. FFO
is a non-GAAP financial measurement used by real estate investment
trusts to measure and compare operating performance and is generally
defined as net income computed in accordance with GAAP, excluding
extraordinary items and gains or losses from sales of property, plus
depreciation and amortization of assets related to real estate, and
after adjustments for unconsolidated partnerships and joint ventures.
A reconciliation of our FFO to our net income available to common
stockholders (the most directly comparable GAAP measure) is included
in the financial data accompanying this press release.
Property Operations
As of June 30, 2005, we owned and managed approximately 7.5
million square feet of suburban office and industrial properties which
consisted of 81 operating properties totaling approximately 6.9
million square feet and six development and rehabilitation projects
totaling approximately 600,000 square feet.
At quarter end our 7.5 million square foot portfolio was 80%
occupied while our operating portfolio was 88% occupied.
During the second quarter of 2005, we renewed and re-leased
451,294 square feet, or 82% of the expiring square footage of 550,053.
The average change in rental rates (on a cash basis) in these new
leases was a decrease of 16.0%. For the six months ended June 30,
2005, we renewed and re-leased 606,927 square feet, or 69% of the
expiring square footage. The average change in rental rates (on a cash
basis) in these new leases was a decrease of 14.7%.
Property Acquisitions
In the second quarter of 2005, we purchased a 1.31 acre parking
lot for approximately $587,000 in Phoenix, Arizona. We purchased this
lot, which is adjacent to one of our existing operating properties, to
accommodate the parking needs of our tenants.
Property Dispositions
In the second quarter of 2005, we sold five operating properties
in one transaction for $27,750,000. This sale consisted of two office
and three R & D buildings totaling 182,186 square feet and generated a
gain on sale of real estate investments of $9,095,000.
During the six months ended June 30, 2005, we sold six operating
properties in two transactions for a total of $43,550,000. These sales
consisted of two office and four R & D buildings totaling 291,966
square feet and generated gains on sale of real estate investments of
$15,989,000. In addition, we recorded a gain of $250,000 from funds
released from escrow in the first quarter of 2005 in connection with a
property sold in the fourth quarter of 2004.
Stock Repurchase
During the second quarter of 2005, we repurchased 178,363 shares
of our common stock at an average cost of $21.81 per share. Of the
178,363 shares repurchased, 635 shares were repurchased from our
employees who sold shares in settlement of their payroll taxes upon
the vesting of their restricted stock. The remaining 177,728 shares
were repurchased on the open market pursuant to our common stock share
repurchase program. Since the inception of this repurchase program in
November 1998, we have repurchased a total of 8,694,344 shares of our
common stock at an average cost of $19.31 per share, which represents
38% of the shares of common stock outstanding at November 30, 1998.
Company Information
We are a self-administered equity real estate investment trust
that acquires, develops, owns and operates multi-tenant suburban
office and industrial properties in Arizona, California, Colorado,
Nevada, Oregon and Washington. As of June 30, 2005, we had 478
tenants.
We are traded on the New York Stock Exchange and the Pacific
Exchange under the symbol "BED", and our website is
www.bedfordproperty.com.
Investors, analysts and other interested parties are invited to
join our quarterly conference call on Tuesday, July 19, 2005 at 8:00
a.m. PDT. To participate, callers may dial 866-641-2830 and state ID#:
143428 and conference call leader Hanh Kihara, five minutes
beforehand. Investors also have the opportunity to listen to the
conference call live on the Internet at our website at
www.bedfordproperty.com, under Investor Relations-Investor Overview,
by clicking on the webcast icon. A telephonic replay of the call is
available through August 19, 2005 at 800-642-1687, ID#: 143428.
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BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS AS OF
JUNE 30, 2005 AND DECEMBER 31, 2004
(Unaudited; in thousands, except share and per share amounts)
June 30, December 31,
2005 2004(1)
------------ --------------
Assets
Real estate investments:
Industrial buildings $ 408,199 $ 417,613
Office buildings 345,541 332,695
Properties under development 19,701 29,716
Land held for development 12,666 13,529
----------- -----------
786,107 793,553
Less accumulated depreciation 94,117 85,436
----------- -----------
691,990 708,117
Operating properties held for sale, net - 8,293
----------- -----------
Total real estate investments 691,990 716,410
Cash and cash equivalents 2,508 24,218
Accounts receivable, net 464 679
Notes receivable, net - 6,820
Other assets 42,848 45,356
----------- -----------
Total assets $ 737,810 $ 793,483
=========== ===========
Liabilities and Stockholders' Equity
Bank loan payable $ 44,163 $ -
Mortgage loans payable 316,588 351,335
Accounts payable and accrued expenses 7,773 13,135
Dividends payable 10,311 63,898
Other liabilities 12,406 14,657
----------- -----------
Total liabilities 391,241 443,025
----------- -----------
Stockholders' equity:
Preferred stock, $0.01 par value;
authorized 6,795,000 shares; issued none - -
Series A 8.75% cumulative redeemable
preferred stock, $0.01 par value;
authorized and issued 805,000 shares
at June 30, 2005 and December 31, 2004;
stated liquidation preference of $40,250 38,947 38,947
Series B 7.625% cumulative redeemable
preferred stock, $0.01 par value;
authorized and issued 2,400,000 shares
at June 30, 2005 and December 31, 2004;
stated liquidation preference of $60,000 57,769 57,769
Common stock, $0.02 par value; authorized
50,000,000 shares; issued and
outstanding 16,248,057 shares at June
30, 2005 and 16,325,584 shares at
December 31, 2004 324 326
Additional paid-in capital 287,683 289,132
Deferred stock compensation (11,361) (10,114)
Accumulated dividends in excess
of net income (26,826) (25,700)
Accumulated other comprehensive income 33 98
----------- -----------
Total stockholders' equity 346,569 350,458
----------- -----------
Total liabilities and stockholders' equity $ 737,810 $ 793,483
============ ===========
(1) The information in this column was derived from the Company's
audited consolidated balance sheet for the year ended December
31, 2004.
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE, 2005 AND 2004
(Unaudited; in thousands, except share and per share amounts)
Three Months Six Months
2005 2004 2005 2004
----------- ----------- ----------- -----------
Rental income $ 23,543 $ 23,276 $ 47,176 $ 46,023
Rental expenses:
Operating
expenses 4,872 4,082 9,404 7,731
Real estate taxes 2,931 2,598 5,939 5,176
Depreciation and
amortization 7,246 6,550 14,658 12,670
General and
administrative
expenses 2,052 1,583 4,113 3,088
----------- ----------- ----------- -----------
Income from
operations 6,442 8,463 13,062 17,358
Other income
(expense)
Interest income 26 11 166 29
Interest expense (5,274) (4,701) (10,621) (9,785)
----------- ----------- ----------- -----------
Income from
continuing
operations 1,194 3,773 2,607 7,602
----------- ----------- ----------- -----------
Discontinued
operations:
Income from
discontinued
operations 394 1,983 747 3,770
Gain on sale of
operating
properties 9,095 - 16,239 -
----------- ----------- ----------- -----------
Income from
discontinued
operations 9,489 1,983 16,986 3,770
----------- ------------ ----------- -----------
Net income 10,683 5,756 19,593 11,372
Preferred
dividends -
Series A (881) (881) (1,761) (1,761)
Preferred
dividends -
Series B (1,143) - (2,287) -
----------- ----------- ----------- -----------
Net income
available to
common
stockholders $ 8,659 $ 4,875 $ 15,545 $ 9,611
=========== =========== =========== ===========
Income per common
share - basic:
(Loss) income
from continuing
operations $ (0.05) $ 0.18 $ (0.09) $ 0.37
Income from
discontinued
operations 0.60 0.13 1.07 0.23
----------- ----------- ----------- -----------
Net income
available to
common
stockholders $ 0.55 $ 0.31 $ 0.98 $ 0.60
=========== =========== =========== ===========
Weighted average
number of shares
- basic 15,764,606 15,838,442 15,800,793 15,898,655
=========== =========== =========== ===========
Income per common
share - diluted:
(Loss) income
from continuing
operations $ (0.05) $ 0.18 $ (0.09) $ 0.36
Income from
discontinued
operations 0.60 0.12 1.07 0.23
----------- ----------- ----------- -----------
Net income
available to
common
stockholders $ 0.55 $ 0.30 $ 0.98 $ 0.59
=========== =========== =========== ===========
Weighted average
number of shares
- diluted 15,795,296 16,059,299 15,858,864 16,181,870
=========== =========== =========== ===========
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED FUNDS FROM OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(in thousands, except share and per share amounts)
Three Months Six Months
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net income
available to
common
stockholders $ 8,659 $ 4,875 $ 15,545 $ 9,611
Adjustments:
Depreciation and
amortization:
Continuing
operations 7,246 6,550 14,658 12,670
Discontinued
operations - 801 93 1,589
Gain on sale of
operating
properties (9,095) - (16,239) -
----------- ----------- ----------- -----------
Funds from
Operations
(FFO)(1) $ 6,810 $ 12,226 $ 14,057 $ 23,870
=========== =========== =========== ===========
FFO per share -
diluted $ 0.43 $ 0.76 $ 0.89 $ 1.48
=========== =========== =========== ===========
Weighted average
number of shares -
diluted 15,795,296 16,059,299 15,858,864 16,181,870
=========== =========== =========== ===========
(1) Although FFO is not a financial measure calculated in accordance
with accounting principles generally accepted in the United States of
America (GAAP), we believe that FFO is an appropriate alternative
measure of the performance of an equity real estate investment trust
(REIT). Presentation of this information provides the reader with an
additional measure to compare the performance of equity REITs. FFO is
generally defined by the National Association of Real Estate
Investment Trusts as net income (loss) (computed in accordance with
GAAP), excluding extraordinary items such as gains (losses) from sales
of property, plus depreciation and amortization, and after adjustments
for unconsolidated partnerships and joint ventures. FFO as set forth
in the table above has been computed in accordance with this
definition. FFO does not represent cash generated by operating
activities in accordance with GAAP; it is not necessarily indicative
of cash available to fund cash needs and should not be considered as
an alternative to net income (loss) as an indicator of our operating
performance or as an alternative to cash flow as a measure of
liquidity. Furthermore, FFO as disclosed by other REITs may not be
comparable to our presentation. The most directly comparable financial
measure calculated in accordance with GAAP to FFO is net income
available to common stockholders.
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