Exhibit 99.1
Contact:
Cedar Shopping Centers
Leo Ullman,
Chairman, President & CEO
(516) 944-4525
lsu@cedarshoppingcenters.com
CEDAR SHOPPING CENTERS, INC. ANNOUNCES FIRST QUARTER 2007 RESULTS
Port Washington, New York — May 7, 2007 — Cedar Shopping Centers, Inc., (NYSE: “CDR”) today
reported its financial results for the quarter ended March 31, 2007.
Highlights
First Quarter of 2007
| |
• |
|
Funds from operations (“FFO”) increased 44% to $13.6 million or
$0.30 per share/OP Unit compared to $9.5 million or $0.30 per
share/OP Unit for the first quarter of 2006 |
| |
| |
• |
|
Net income applicable to common shareholders increased 266% to
$3.7 million or $0.08 per share compared to $1.0 million or $0.03
per share for the first quarter of 2006 |
| |
| |
• |
|
Total revenues rose 21% to $36.2 million |
| |
| |
• |
|
Net cash flows provided by operating activities increased to $10.1
million compared to $5.5 million for the corresponding period of
2006. |
Leo Ullman, CEO, commented, “Our 2007 results will continue to benefit from the acquisitions and
the development projects that have been completed during the prior four years, as we work hard to
effectively and profitably balance our redevelopment growth and our operating results. Our
portfolio, now constituting more than 100 properties, represents solid income producing shopping
centers in their respective markets. We expect that in the coming years these properties and the
development projects that we are starting in 2007 will produce even greater cash-flow as many of
the projects reach completion.”
Financial and Operating Results
Cedar’s total revenues for the first quarter ended March 31, 2007 increased 21% to $36.2 million
from $30.0 million for the quarter ended March 31, 2006. Net income applicable to common
1
shareholders grew 266% to $3.7 million, or $0.08 per share, compared to $1.0 million, or $0.03 per
share for the first quarter ended March 31, 2006. FFO for the first quarter was $13.6 million,
or $0.30 per share/OP Unit as compared to $9.5 million, or $0.30 per share/OP Unit for the quarter
ended March 31, 2006.
Net cash flows provided by operating activities increased to $10.1 million for the quarter ended
March 31, 2007, compared to $5.5 million for 2006.
The basic weighted average number of shares/OP Units of common stock outstanding was 46,097,000
compared to 31,434,000 during the corresponding quarter of 2006.
Guidance
The Company continues to expect FFO for 2007 to be in the range of $1.25 to $1.30 per share/OP
Unit, as previously announced.
Interested parties are urged to review the Form 10-Q filed with the Securities and Exchange
Commission for the quarter ended March 31, 2007 for further details.
The Company has issued “Supplemental Financial Information” for the period ended March 31, 2007,
and has filed such information today as an exhibit to its Form 8-K, which will also be available on
the Company’s website at www.cedarshoppingcenters.com.
Investor Conference Call
The Company, with Leo S. Ullman, CEO, and Thomas J. O’Keeffe, CFO, will host a conference call on
Tuesday, May 8th at 10:00 AM (EST), to discuss first quarter results. The U.S. dial-in
number for this teleconference is (888) 802-2275; the international dial-in number is (913) 312-1267. A replay of the conference call will be available from May 8th at 1:00 PM
until close of business on May 23rd using U.S. dial-in number (888) 203-1112 or (719) 457-0820 for international and entering passcode 4983205. A live webcast will be available for a
limited time on the Company’s corporate website at www.cedarshoppingcenters.com.
About Cedar Shopping Centers, Inc.
The Company is a fully-integrated real estate company which focuses primarily on ownership,
operation, development and redevelopment of supermarket-anchored community shopping centers and
drug store-anchored convenience centers, which has realized significant growth in assets and
shareholder value since its public offering in October 2003. The Company presently owns and
operates 104 of such primarily supermarket- and drug store-anchored centers with an aggregate of
approximately 10.6 million square feet of gross leasable area, located in nine states,
predominantly in the Northeast and mid-Atlantic regions. The Company also owns 11 development
parcels aggregating approximately 196 acres.
2
Forward-Looking Statements
Statements made or incorporated by reference in this press release include certain “forward-looking
statements”. Such forward-looking statements include, without limitation, statements containing the
words “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import which
express the Company’s beliefs, expectations or intentions regarding future performance or future
events or trends. While forward-looking statements reflect good faith beliefs, expectations or
intentions, they are not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors, which may cause actual results, performance or achievements to
differ materially from anticipated future results, performance or achievements expressed or implied
by such forward-looking statements as a result of factors outside of the Company’s control. Certain
factors that might cause such differences include, but are not limited to, the following: real
estate investment considerations, such as the effect of economic and other conditions in general
and in the Company’s market areas in particular; the financial viability of the Company’s tenants;
the continuing availability of suitable acquisitions, and development and redevelopment
opportunities, on favorable terms; the availability of equity and debt capital in the public and
private markets; the availability of suitable joint venture partners; changes in interest rates;
returns from development, redevelopment and acquisition activities may not be at expected levels or
at expected times; risks inherent in ongoing development and redevelopment projects including, but
not limited to, cost overruns resulting from weather delays, changes in the nature and scope of
development and redevelopment efforts, changes in governmental regulations related thereto, and
market factors involved in the pricing of material and labor; the need to renew leases or re-let
space upon the expiration of current leases; and the financial flexibility to repay or refinance
debt obligations when due.
Non-GAAP Financial Measures — FFO
Funds From Operations (“FFO”) is a widely-recognized non-GAAP financial measure for REITs that the
Company believes, when considered with financial statements determined in accordance with GAAP, is
useful to investors in understanding financial performance and providing a relevant basis for
comparison among REITs. In addition, FFO is useful to investors as it captures features particular
to real estate performance by recognizing that real estate generally appreciates over time or
maintains residual value to a much greater extent than do other depreciable assets. Investors
should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating
performance. The Company presents FFO because the Company considers it an important supplemental
measure of its operating performance and believes that it is frequently used by securities
analysts, investors and other interested parties in the evaluation of REITs. Among other things,
the Company uses FFO or an FFO-based measure (1) as one of several criteria to determine
performance-based bonuses for members of senior management, (2) in performance comparisons with
other shopping center REITs, and (3) to measure compliance with certain financial covenants under
the terms of the Loan Agreement relating to the Company’s secured revolving credit facility.
The Company computes FFO in accordance with the “White Paper” on FFO published by the National
Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income applicable
to common shareholders (determined in accordance with GAAP), excluding
3
gains or losses from debt restructurings and sales of properties, plus real estate-related
depreciation and amortization, and after adjustments for partnerships and joint ventures (which are
computed to reflect FFO on the same basis).
FFO does not represent cash generated from operating activities and should not be considered as an
alternative to net income applicable to common shareholders or to cash flow from operating
activities. FFO is not indicative of cash available to fund ongoing cash needs, including the
ability to make cash distributions. Although FFO is a measure used for comparability in assessing
the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the
computation of FFO may vary from one company to another. The following table sets forth the
Company’s calculations of FFO for the three months ended March 31, 2007 and 2006:
4
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended March 31, |
| |
|
2007 |
|
2006 |
| |
|
|
Net income applicable to common
shareholders |
|
$ |
3,655,000 |
|
|
$ |
1,000,000 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
Real estate depreciation and amortization |
|
|
9,830,000 |
|
|
|
8,571,000 |
|
Limited partners’ interest |
|
|
163,000 |
|
|
|
53,000 |
|
Minority interests in consolidated joint ventures |
|
|
395,000 |
|
|
|
310,000 |
|
Minority interests’ share of FFO applicable to
consolidated joint ventures |
|
|
(491,000 |
) |
|
|
(466,000 |
) |
Equity in (income) loss of unconsolidated
joint ventures |
|
|
(156,000 |
) |
|
|
25,000 |
|
FFO from unconsolidated joint ventures |
|
|
234,000 |
|
|
|
(3,000 |
) |
| |
|
|
Funds from operations |
|
$ |
13,630,000 |
|
|
$ |
9,490,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
FFO per
common share (assuming conversion
of OP Units): |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
| |
|
|
Diluted |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
Shares used in determination of basic earnings
per share |
|
|
44,112,000 |
|
|
|
29,878,000 |
|
Additional shares assuming conversion
of OP Units (basic) |
|
|
1,985,000 |
|
|
|
1,556,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of basic FFO per share |
|
|
46,097,000 |
|
|
|
31,434,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted earnings
per share |
|
|
44,119,000 |
|
|
|
30,139,000 |
|
Additional shares assuming conversion
of OP Units (diluted) |
|
|
1,999,000 |
|
|
|
1,564,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted FFO per share |
|
|
46,118,000 |
|
|
|
31,703,000 |
|
| |
|
|
5
CEDAR SHOPPING CENTERS, INC.
Consolidated Balance Sheets
| |
|
|
|
|
|
|
|
|
| |
|
March 31, |
|
|
|
|
| |
|
2007 |
|
|
December 31, |
|
| |
|
(unaudited) |
|
|
2006 |
|
Assets |
|
|
|
|
|
|
|
|
Real estate: |
|
|
|
|
|
|
|
|
Land |
|
$ |
254,642,000 |
|
|
$ |
250,460,000 |
|
Buildings and improvements |
|
|
1,020,930,000 |
|
|
|
991,517,000 |
|
|
|
|
|
|
|
|
|
|
|
1,275,572,000 |
|
|
|
1,241,977,000 |
|
Less accumulated depreciation |
|
|
(73,861,000 |
) |
|
|
(64,838,000 |
) |
|
|
|
|
|
|
|
Real estate, net |
|
|
1,201,711,000 |
|
|
|
1,177,139,000 |
|
|
|
|
|
|
|
|
|
|
Investment in unconsolidated joint venture |
|
|
3,676,000 |
|
|
|
3,644,000 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
14,774,000 |
|
|
|
17,885,000 |
|
Restricted cash |
|
|
11,460,000 |
|
|
|
11,507,000 |
|
Rents and other receivables, net |
|
|
14,671,000 |
|
|
|
12,182,000 |
|
Other assets |
|
|
7,604,000 |
|
|
|
6,921,000 |
|
Deferred charges, net |
|
|
23,871,000 |
|
|
|
22,441,000 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,277,767,000 |
|
|
$ |
1,251,719,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
Mortgage loans payable |
|
$ |
497,581,000 |
|
|
$ |
499,603,000 |
|
Secured revolving credit facility |
|
|
92,570,000 |
|
|
|
68,470,000 |
|
Accounts payable, accrued expenses, and other |
|
|
19,980,000 |
|
|
|
17,435,000 |
|
Unamortized intangible lease liabilities |
|
|
56,507,000 |
|
|
|
53,160,000 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
666,638,000 |
|
|
|
638,668,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests in consolidated joint ventures |
|
|
9,228,000 |
|
|
|
9,132,000 |
|
Limited partners’ interest in Operating Partnership |
|
|
25,880,000 |
|
|
|
25,969,000 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock ($.01 par value, $25.00 per share
liquidation value, 5,000,000 shares authorized, 3,550,000
shares issued and outstanding) |
|
|
88,750,000 |
|
|
|
88,750,000 |
|
Common stock ($.06 par value, 50,000,000 shares
authorized, 44,188,000 and 43,773,000 shares, respectively,
issued and outstanding) |
|
|
2,651,000 |
|
|
|
2,626,000 |
|
Treasury stock (591,000 and 443,000 shares, respectively, at cost) |
|
|
(7,824,000 |
) |
|
|
(6,378,000 |
) |
Additional paid-in capital |
|
|
570,417,000 |
|
|
|
564,637,000 |
|
Cumulative distributions in excess of net income |
|
|
(78,105,000 |
) |
|
|
(71,831,000 |
) |
Accumulated other comprehensive income |
|
|
132,000 |
|
|
|
146,000 |
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
576,021,000 |
|
|
|
577,950,000 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
1,277,767,000 |
|
|
$ |
1,251,719,000 |
|
|
|
|
|
|
|
|
6
CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Income
(unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended March 31, |
|
| |
|
2007 |
|
|
2006 |
|
Revenues: |
|
|
|
|
|
|
|
|
Rents |
|
$ |
28,564,000 |
|
|
$ |
24,172,000 |
|
Expense recoveries |
|
|
7,275,000 |
|
|
|
5,614,000 |
|
Other |
|
|
352,000 |
|
|
|
206,000 |
|
|
|
|
|
|
|
|
Total revenues |
|
|
36,191,000 |
|
|
|
29,992,000 |
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Operating, maintenance and management |
|
|
7,077,000 |
|
|
|
6,168,000 |
|
Real estate and other property-related taxes |
|
|
3,577,000 |
|
|
|
2,936,000 |
|
General and administrative |
|
|
1,998,000 |
|
|
|
1,379,000 |
|
Depreciation and amortization |
|
|
9,883,000 |
|
|
|
8,597,000 |
|
|
|
|
|
|
|
|
Total expenses |
|
|
22,535,000 |
|
|
|
19,080,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
13,656,000 |
|
|
|
10,912,000 |
|
|
|
|
|
|
|
|
|
|
Non-operating income and expense: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(7,568,000 |
) |
|
|
(7,357,000 |
) |
Amortization of deferred financing costs |
|
|
(352,000 |
) |
|
|
(329,000 |
) |
Interest income |
|
|
275,000 |
|
|
|
116,000 |
|
Equity in income (loss) of unconsolidated joint ventures |
|
|
156,000 |
|
|
|
(25,000 |
) |
|
|
|
|
|
|
|
Total non-operating income and expense |
|
|
(7,489,000 |
) |
|
|
(7,595,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority and limited partners’ interests |
|
|
6,167,000 |
|
|
|
3,317,000 |
|
Minority interests in consolidated joint ventures |
|
|
(395,000 |
) |
|
|
(310,000 |
) |
Limited partners’ interest in Operating Partnership |
|
|
(163,000 |
) |
|
|
(53,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
5,609,000 |
|
|
|
2,954,000 |
|
|
|
|
|
|
|
|
|
|
Preferred distribution requirements |
|
|
(1,954,000 |
) |
|
|
(1,954,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income applicable to common shareholders |
|
$ |
3,655,000 |
|
|
$ |
1,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends to common shareholders |
|
$ |
9,929,000 |
|
|
$ |
6,701,000 |
|
|
|
|
|
|
|
|
Per common share |
|
$ |
0.225 |
|
|
$ |
0.225 |
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
44,112,000 |
|
|
|
29,878,000 |
|
|
|
|
|
|
|
|
Diluted |
|
|
44,119,000 |
|
|
|
30,139,000 |
|
|
|
|
|
|
|
|
7
CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Cash Flows
(unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
Three months ended March 31, |
|
| |
|
2007 |
|
|
2006 |
|
Cash flow from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,609,000 |
|
|
$ |
2,954,000 |
|
Adjustments to reconcile net income to net cash
provided by operating activities: |
|
|
|
|
|
|
|
|
Non-cash provisions: |
|
|
|
|
|
|
|
|
Earnings in excess of distributions of consolidated joint venture
minority interests |
|
|
129,000 |
|
|
|
40,000 |
|
Equity in (income) loss of unconsolidated joint ventures, net |
|
|
(156,000 |
) |
|
|
25,000 |
|
Distributions from unconsolidated joint venture |
|
|
132,000 |
|
|
|
— |
|
Limited partners’ interest |
|
|
163,000 |
|
|
|
53,000 |
|
Straight-line rents |
|
|
(967,000 |
) |
|
|
(900,000 |
) |
Depreciation and amortization |
|
|
9,883,000 |
|
|
|
8,597,000 |
|
Amortization of intangible lease liabilities |
|
|
(2,589,000 |
) |
|
|
(2,628,000 |
) |
Other non-cash provisions |
|
|
792,000 |
|
|
|
442,000 |
|
Increases/decreases in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Cash at consolidated joint ventures |
|
|
25,000 |
|
|
|
504,000 |
|
Rents and other receivables |
|
|
(1,522,000 |
) |
|
|
(2,023,000 |
) |
Other assets |
|
|
(709,000 |
) |
|
|
(1,241,000 |
) |
Accounts payable and accrued expenses |
|
|
(685,000 |
) |
|
|
(345,000 |
) |
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
10,105,000 |
|
|
|
5,478,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities: |
|
|
|
|
|
|
|
|
Expenditures for real estate and improvements |
|
|
(26,942,000 |
) |
|
|
(23,596,000 |
) |
Investment in unconsolidated joint ventures |
|
|
(8,000 |
) |
|
|
(6,000 |
) |
Construction escrows and other |
|
|
63,000 |
|
|
|
(1,933,000 |
) |
|
|
|
|
|
|
|
Net cash (used in) investing activities |
|
|
(26,887,000 |
) |
|
|
(25,535,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities: |
|
|
|
|
|
|
|
|
Net advances (repayments) from line of credit |
|
|
24,100,000 |
|
|
|
12,000,000 |
|
Proceeds from sales of common stock |
|
|
4,132,000 |
|
|
|
8,988,000 |
|
Proceeds from mortgage financings |
|
|
— |
|
|
|
13,637,000 |
|
Mortgage repayments |
|
|
(2,022,000 |
) |
|
|
(1,937,000 |
) |
Distributions in excess of earnings from consolidated joint venture
minority interests |
|
|
— |
|
|
|
(122,000 |
) |
Distributions to limited partners |
|
|
(443,000 |
) |
|
|
(348,000 |
) |
Preferred distribution requirements |
|
|
(1,969,000 |
) |
|
|
(1,969,000 |
) |
Distributions to common shareholders |
|
|
(9,929,000 |
) |
|
|
(6,701,000 |
) |
Payment of deferred financing costs |
|
|
(198,000 |
) |
|
|
(197,000 |
) |
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
13,671,000 |
|
|
|
23,351,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(3,111,000 |
) |
|
|
3,294,000 |
|
Cash and cash equivalents at beginning of period |
|
|
17,885,000 |
|
|
|
8,601,000 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
14,774,000 |
|
|
$ |
11,895,000 |
|
|
|
|
|
|
|
|
8
