Bedford erty (NYSE:BED)
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Bedford Property Investors, Inc. (NYSE:BED) today
announced its financial results for the third quarter and nine months
ended September 30, 2005. Diluted earnings per share of common stock
(EPS) for the third quarter of 2005 was $0.11 compared with diluted
EPS of $0.21 achieved for the third quarter of 2004. EPS for the nine
months ended September 30, 2005 was $1.10 compared with $0.81 for the
nine months of 2004. Funds from operations (FFO) per share of common
stock for the third quarter of 2005 was $0.41 compared with FFO per
share of $0.69 achieved for the third quarter of 2004. FFO per share
of common stock for the first nine months of 2005 was $1.30 compared
with FFO per share of common stock of $2.17 achieved in the first nine
months of 2004.
Financial Results
Net income available to common stockholders for the third quarter
of 2005 decreased by approximately $1,615,000 when compared with the
third quarter of 2004. The decrease is primarily due to the decreases
in income from continuing operations of $2,302,000 and income from
discontinued operations of $2,171,000, partially offset by gain on
sale of $2,744,000. Net income available to common stockholders for
the first nine months of 2005 increased by approximately $4,319,000
when compared with the same period in 2004. The increase in net income
available to common stockholders for the first nine months of 2005 is
mainly due to gains of approximately $18,983,000 realized from the
sales of operating properties, partially offset by decreases in income
from continuing operations of $6,691,000 and income of discontinued
operations of $5,800,000, and an increase in preferred dividends of
$2,173,000.
Income from continuing operations (which excludes the operating
results from properties sold and gains on sales) for the third quarter
and the first nine months of 2005 decreased $2,302,000 and $6,691,000,
respectively, when compared to the same periods in 2004. These
decreases are the result of the loss of net operating income from the
properties we sold in 2004 and 2005, continued rental rate reductions
on our lease renewals and re-leasing activities, 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 properties
acquired in 2004 and development activities in 2004 and 2005.
FFO for the third quarter of 2005 was approximately $6,427,000,
compared to approximately $11,064,000 for the same period in 2004. FFO
for the nine months ended September 30, 2005 was approximately
$20,484,000, compared to approximately $34,934,000 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 September 30, 2005, we owned and managed approximately 7.5
million square feet of suburban office and industrial properties which
consisted of 82 operating properties totaling approximately 7 million
square feet and five development and rehabilitation projects totaling
approximately 471,000 square feet.
At the end of the third quarter of 2005, our 7.5 million square
foot portfolio was 84% occupied, while our operating portfolio was 89%
occupied.
During the third quarter of 2005, we renewed and re-leased 180,347
square feet, or 68%, of the expiring square footage of 265,285. The
average change in rental rates (on a cash basis) in these new leases
was a decrease of 17.4%. For the nine months ended September 30, 2005,
we renewed and re-leased 787,274 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 15.3%.
Property Dispositions
In the third quarter of 2005, we sold one operating property for
$9,500,000. This sale consisted of a vacant R&D building of 87,953
square feet and generated a gain on sale of real estate investments of
approximately $2,744,000.
During the nine months ended September 30, 2005, we sold seven
operating properties in three transactions for a total of $53,050,000.
These sales consisted of two office and five R & D buildings totaling
379,919 square feet and generated aggregate gains on sale of real
estate investments of $18,733,000. 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 third quarter of 2005, we repurchased 234,316 shares of
our common stock at an average cost of $22.10 per share. Of the
234,316 shares repurchased, 6,482 shares were repurchased from our
employees in connection with the exercise of stock options. The
remaining 227,834 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 8,928,660 shares of our common stock at an average cost of $19.38
per share, which represents 39.4% 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 September 30, 2005, we had 487
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, October 18, 2005 at
8:00 a.m. PDT. To participate, callers may dial (866) 641-2830 and
state ID#: 9459097 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 will
be available through November 18, 2005 at (800) 642-1687, ID#:
9459097.
-0-
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BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
(Unaudited; in thousands, except share and per share amounts)
September 30, December 31,
2005 2004(1)
---------------- --------------
Assets
Real estate investments:
Industrial buildings $ 397,166 $ 417,613
Office buildings 343,585 332,695
Properties under development 4,201 29,716
Land held for development 12,683 13,529
------------ -----------
757,635 793,553
Less accumulated depreciation 93,716 85,436
------------ -----------
663,919 708,117
Operating properties held for sale,
net 26,597 8,293
------------ -----------
Total real estate investments 690,516 716,410
Cash and cash equivalents 979 24,218
Accounts receivable, net 662 679
Notes receivable, net - 6,820
Other assets 42,847 45,356
------------ -----------
Total assets $ 735,004 $ 793,483
============ ===========
Liabilities and Stockholders' Equity
Bank loan payable $ 59,351 $ -
Mortgage loans payable 306,264 351,335
Accounts payable and accrued expenses 11,218 13,135
Dividends payable 10,200 63,898
Other liabilities 11,900 14,657
------------ -----------
Total liabilities 398,933 443,025
------------ -----------
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 September 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 September 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 16,031,240
shares at September 30, 2005 and
16,325,584 shares at December 31,
2004 320 326
Additional paid-in capital 282,724 289,132
Deferred stock compensation (10,449) (10,114)
Accumulated dividends in
excess of net income (33,240) (25,700)
Accumulated other
comprehensive income - 98
------------ -----------
Total stockholders' equity 336,071 350,458
------------ -----------
Total liabilities and
stockholders' equity $ 735,004 $ 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 NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(Unaudited; in thousands, except share and per share amounts)
Three Months Nine Months
2005 2004 2005 2004
----------- ----------- ----------- -----------
Rental income $ 22,126 $ 22,308 $ 67,181 $ 65,732
Rental expenses:
Operating expenses 4,929 4,008 13,937 11,414
Real estate taxes 2,352 2,288 7,897 7,079
Depreciation and
amortization 7,217 6,651 21,451 18,842
General and
administrative
expenses 1,677 1,655 5,790 4,743
----------- ----------- ----------- -----------
Income from operations 5,951 7,706 18,106 23,654
Other income (expense)
Interest income 7 9 173 38
Interest expense (5,123) (4,578) (15,200) (13,922)
----------- ----------- ----------- -----------
Income from continuing
operations 835 3,137 3,079 9,770
----------- ----------- ----------- -----------
Discontinued operations:
Income from
discontinued
operations 207 2,378 1,317 7,117
Gain on sale of
operating
properties 2,744 - 18,983 -
----------- ----------- ----------- -----------
Income from
discontinued
operations 2,951 2,378 20,300 7,117
----------- ----------- ----------- -----------
Net income 3,786 5,515 23,379 16,887
Preferred dividends -
Series A (880) (880) (2,641) (2,641)
Preferred dividends -
Series B (1,144) (1,258) (3,431) (1,258)
----------- ----------- ----------- -----------
Net income available
to common
stockholders $ 1,762 $ 3,377 $ 17,307 $ 12,988
=========== =========== =========== ===========
Income per common
share - basic:
(Loss) income from
continuing
operations $ (0.08)$ 0.06 $ (0.19)$ 0.37
Income from
discontinued
operations 0.19 0.15 1.29 0.45
----------- ----------- ----------- -----------
Net income available
to common
stockholders $ 0.11 $ 0.21 $ 1.10 $ 0.82
=========== =========== =========== ===========
Weighted average
number of shares -
basic 15,580,684 15,743,554 15,726,617 15,846,577
=========== =========== =========== ===========
Income per common
share - diluted:
(Loss) income from
continuing
operations $ (0.08)$ 0.06 $ (0.19)$ 0.37
Income from
discontinued
operations 0.19 0.15 1.29 0.44
----------- ----------- ----------- -----------
Net income available
to common
stockholders $ 0.11 $ 0.21 $ 1.10 $ 0.81
=========== =========== =========== ===========
Weighted average
number of shares -
diluted 15,624,212 15,977,814 15,788,251 16,124,418
=========== =========== =========== ===========
BEDFORD PROPERTY INVESTORS, INC.
CONSOLIDATED FUNDS FROM OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(in thousands, except share and per share amounts)
Three Months Nine Months
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net income
available to
common
stockholders $ 1,762 $ 3,377 $ 17,307 $ 12,988
Adjustments:
Depreciation and
amortization:
Continuing
operations 7,217 6,651 21,451 18,842
Discontinued
operations 192 1,036 709 3,104
Gain on sale of
operating
properties (2,744) - (18,983) -
----------- ----------- ----------- -----------
Funds from
Operations
(FFO)(1) $ 6,427 $ 11,064 $ 20,484 $ 34,934
=========== =========== =========== ===========
FFO per share -
diluted $ 0.41 $ 0.69 $ 1.30 $ 2.17
=========== =========== =========== ===========
Weighted average
number of shares -
diluted 15,624,212 15,977,814 15,788,251 16,124,418
=========== =========== =========== ===========
(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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