Overview
by Management
Leo
Ullman, CEO, in a statement said: “We are extremely proud, yet again, of the
achievements of our Company. We have continued to demonstrate remarkable growth
while also evidencing the ability to manage that growth and being able to couple
it with excellent financial and operating results. Thus, while our outstanding
shares increased by some 60%, we have nevertheless been able to generate per
share FFO growth of 20% compared to the same quarter of last year. On an overall
basis, our FFO nearly doubled.
We
believe our portfolio, now measuring some 85 properties, is also a remarkable
collection of excellent properties in their markets. Most of our properties
are quite new, have long anchor leases, and are in excellent geographic locations.
We have purposely focused on mature markets with excellent existing roads and
traffic patterns. Yet within such mature markets, we have been able to build
and redevelop the properties in certain high growth areas. Our recent site visit
with investors and analysts, I believe, fairly demonstrated to those investors
and analysts, that we are producing truly first-class properties in outstanding
locations in the areas where we operate.
Our
development operations are also growing remarkably and we have identified
a substantial number of excellent opportunities where we have been able
to tie-up
development parcels while seeking leasing commitments from a number of
supermarket and drug store tenants in our core areas. We are highly
confident
that, as these development properties come on stream during the next couple
of
years, they will add greatly to shareholder value.”
Tom
O’Keeffe, CFO, noted: “We have reconfirmed our FFO guidance at
$1.20-$1.30 for the current year and the first quarter results are supportive
of our guidance.
We have included, as part of our press release, a schedule of new signed
leases which will be reflected in our financial statements during the coming
quarters
as these new leases come on line.”
Investor
Conference Call
The
Company, with Leo S. Ullman, CEO, and Thomas J. O’Keeffe, CFO, will host a
conference call on Tuesday, May 9th
at 2:30
PM (EDT), to discuss first quarter results. The U.S. dial-in number for this
teleconference is (800) 901-5218; the international dial-in number is (617)
786-4511. All callers should use participant passcode 69239138 when dialing
in.
A replay of the conference call will be available from May 9th
until
close of business on May 23rd
using
U.S. dial-in number (888) 286-8010 and entering passcode 73931701 (international
callers may use dial-in number (617) 801-6888 and use the same passcode
indicated for U.S. callers). A live webcast will be available until June
9th
online
on the Company’s corporate website at www.cedarshoppingcenters.com.
About
Cedar Shopping Centers, Inc.
Cedar
Shopping Centers, Inc., with headquarters in Port Washington, New York, is
a
fully-integrated, self-administered and self-managed real estate investment
trust (“REIT”) listed on the New York Stock Exchange. Its properties, which
total approximately 9 million sq. ft. of GLA, are focused primarily in
multi-tenant supermarket-anchored community shopping centers and drug
store-anchored convenience centers largely in the Northeast and mid-Atlantic
regions , specifically Pennsylvania (36), Ohio (20), Virginia (10), Maryland
(4), Connecticut (4), Massachusetts (3), New Jersey (3), New York (3), and
Michigan (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, 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 a
difference 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; changes in interest rates; the fact that returns from development,
redevelopment and acquisition activities may not be at expected levels; inherent
risks 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, 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
refinance debt obligations when due.
Non-GAAP
Financial Measures –
FFO
Funds
From Operations (“FFO”) is a widely-recognized measure of REIT performance. 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 gains or losses from debt restructurings and
sales of properties, plus depreciation and amortization, and after adjustments
for unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are computed to reflect FFO
on
the same basis. In computing FFO, the Company does not add back to net income
applicable to common shareholders the amortization of costs incurred in
connection with its financing or hedging activities, or depreciation of non-real
estate assets, but does add back to net income applicable to common shareholders
those items that are defined as “extraordinary” under GAAP. FFO does not
represent cash generated from operating activities in accordance with GAAP
and
should not be considered as an alternative to net income applicable to common
shareholders (determined in accordance with GAAP) as an indication of the
Company’s financial performance or to cash flow from operating activities
(determined in accordance with GAAP) as a measure of liquidity. As the NAREIT
White Paper only provides guidelines for computing FFO, the computation of
FFO
may vary from one company to another. FFO is not necessarily indicative of
cash
available to fund ongoing cash needs. The following table sets forth the
Company’s calculations of FFO for the three months ended March 31, 2006 and
2005:
| |
|
Three
months ended March 31,
|
|
| |
|
|
|
| |
|
2006
|
|
2005
|
|
| |
|
|
|
|
|
Net
income applicable to common shareholders
|
|
$
|
1,000,000
|
|
$
|
1,354,000
|
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
8,571,000
|
|
|
3,730,000
|
|
|
Limited
partners’ interest
|
|
|
53,000
|
|
|
32,000
|
|
Minority
interests in consolidated joint ventures
|
|
|
310,000
|
|
|
290,000
|
|
|
Equity
in loss of unconsolidated joint venture
|
|
|
25,000
|
|
|
—
|
|
Minority
interests’ share of FFO applicable to consolidated joint
ventures
|
|
|
(466,000
|
)
|
|
(536,000
|
)
|
|
FFO
from unconsolidated joint venture
|
|
|
(3,000
|
)
|
|
—
|
|
| |
|
|
|
|
|
|
Funds
from operations
|
|
$
|
9,490,000
|
|
$
|
4,870,000
|
|
| |
|
|
|
|
|
FFO
per common share (assuming conversion
of OP Units)
|
|
$
|
0.30
|
|
$
|
0.25
|
|
| |
|
|
|
|
|
|
Average
number of common shares:
|
|
|
|
|
|
|
|
Shares
used in determination of earnings per share
|
|
|
29,878,000
|
|
|
19,351,000
|
|
Additional
shares assuming conversion of OP Units
|
|
|
1,556,000
|
|
|
454,000
|
|
| |
|
|
|
|
|
Shares
used in determination of FFO per share
|
|
|
31,434,000
|
|
|
19,805,000
|
|
| |
|
|
|
|
|
CEDAR
SHOPPING CENTERS, INC.
Consolidated
Balance Sheets
| |
|
March
31,
2006
(unaudited)
|
|
December
31,
2005
|
|
| |
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Real
estate:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
191,096,000
|
|
$
|
180,951,000
|
|
|
Buildings
and improvements
|
|
|
844,110,000
|
|
|
800,005,000
|
|
| |
|
|
|
|
|
| |
|
|
1,035,206,000
|
|
|
980,956,000
|
|
|
Less
accumulated depreciation
|
|
|
(40,759,000
|
)
|
|
(34,499,000
|
)
|
| |
|
|
|
|
|
|
Real
estate, net
|
|
|
994,447,000
|
|
|
946,457,000
|
|
Investment
in and advances to unconsolidated joint venture
|
|
|
1,346,000
|
|
|
—
|
|
|
Cash
and cash equivalents
|
|
|
11,895,000
|
|
|
8,601,000
|
|
|
Cash
at joint ventures and restricted cash
|
|
|
11,022,000
|
|
|
10,415,000
|
|
|
Rents
and other receivables, net
|
|
|
11,817,000
|
|
|
9,093,000
|
|
|
Other
assets
|
|
|
9,060,000
|
|
|
4,051,000
|
|
|
Deferred
charges, net
|
|
|
19,373,000
|
|
|
17,639,000
|
|
| |
|
|
|
|
|
|
Total
assets
|
|
$
|
1,058,960,000
|
|
$
|
996,256,000
|
|
| |
|
|
|
|
|
|
Liabilities
and shareholders’ equity
|
|
|
|
|
|
|
|
|
Mortgage
loans payable
|
|
$
|
410,319,000
|
|
$
|
380,311,000
|
|
|
Secured
revolving credit facility
|
|
|
159,480,000
|
|
|
147,480,000
|
|
|
Accounts
payable, accrued expenses, and other
|
|
|
15,727,000
|
|
|
16,462,000
|
|
|
Unamortized
intangible lease liabilities
|
|
|
48,355,000
|
|
|
27,943,000
|
|
| |
|
|
|
|
|
|
Total
liabilities
|
|
|
633,881,000
|
|
|
572,196,000
|
|
| |
|
|
|
|
|
|
Minority
interests in consolidated joint ventures
|
|
|
9,930,000
|
|
|
12,339,000
|
|
|
Limited
partners’ interest in Operating Partnership
|
|
|
20,342,000
|
|
|
20,586,000
|
|
|
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, 30,239,000
and 29,618,000 shares issued and outstanding)
|
|
|
1,814,000
|
|
|
1,777,000
|
|
|
Treasury
stock (443,000 shares, at cost)
|
|
|
(5,416,000
|
)
|
|
(5,416,000
|
)
|
|
Additional
paid-in capital
|
|
|
365,144,000
|
|
|
357,000,000
|
|
|
Cumulative
distributions in excess of net income
|
|
|
(55,657,000
|
)
|
|
(49,956,000
|
)
|
|
Accumulated
other comprehensive income
|
|
|
172,000
|
|
|
138,000
|
|
|
Unamortized
deferred compensation plans
|
|
|
—
|
|
|
(1,158,000
|
)
|
| |
|
|
|
|
|
|
Total
shareholders’ equity
|
|
|
394,807,000
|
|
|
391,135,000
|
|
| |
|
|
|
|
|
|
Total
liabilities and shareholders’ equity
|
|
$
|
1,058,960,000
|
|
$
|
996,256,000
|
|
| |
|
|
|
|
|
CEDAR
SHOPPING CENTERS, INC.
Consolidated
Statements of Income
(unaudited)
| |
|
Three
months ended March 31,
|
|
| |
|
|
|
| |
|
2006
|
|
2005
|
|
| |
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Rents
|
|
$
|
24,172,000
|
|
$
|
12,849,000
|
|
|
Expense
recoveries
|
|
|
5,614,000
|
|
|
3,673,000
|
|
|
Other
|
|
|
206,000
|
|
|
—
|
|
| |
|
|
|
|
|
|
Total
revenues
|
|
|
29,992,000
|
|
|
16,522,000
|
|
| |
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Operating,
maintenance and management
|
|
|
6,168,000
|
|
|
4,027,000
|
|
|
Real
estate and other property-related taxes
|
|
|
2,936,000
|
|
|
1,475,000
|
|
|
General
and administrative
|
|
|
1,379,000
|
|
|
969,000
|
|
|
Depreciation
and amortization
|
|
|
8,597,000
|
|
|
3,743,000
|
|
| |
|
|
|
|
|
|
Total
expenses
|
|
|
19,080,000
|
|
|
10,214,000
|
|
| |
|
|
|
|
|
|
Operating
income
|
|
|
10,912,000
|
|
|
6,308,000
|
|
| |
|
|
|
|
|
|
|
|
Non-operating
income and expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(7,357,000
|
)
|
|
(3,137,000
|
)
|
|
Amortization
of deferred financing costs
|
|
|
(329,000
|
)
|
|
(206,000
|
)
|
|
Interest
income
|
|
|
116,000
|
|
|
5,000
|
|
Equity
in income (loss) of unconsolidated joint
venture
|
|
|
(25,000
|
)
|
|
—
|
|
| |
|
|
|
|
|
|
Total
non-operating income and expense
|
|
|
(7,595,000
|
)
|
|
(3,338,000
|
)
|
| |
|
|
|
|
|
Income
before minority and limited partners’ interests
|
|
|
3,317,000
|
|
|
2,970,000
|
|
Minority
interests in consolidated joint ventures
|
|
|
(310,000
|
)
|
|
(290,000
|
)
|
Limited
partners’ interest in Operating Partnership
|
|
|
(53,000
|
)
|
|
(32,000
|
)
|
| |
|
|
|
|
|
|
Net
income
|
|
|
2,954,000
|
|
|
2,648,000
|
|
|
Preferred
distribution requirements
|
|
|
(1,954,000
|
)
|
|
(1,294,000
|
)
|
| |
|
|
|
|
|
|
Net
income applicable to common shareholders
|
|
$
|
1,000,000
|
|
$
|
1,354,000
|
|
| |
|
|
|
|
|
|
Per
common share (basic and diluted)
|
|
$
|
0.03
|
|
$
|
0.07
|
|
| |
|
|
|
|
|
|
Dividends
to common shareholders
|
|
$
|
6,701,000
|
|
$
|
4,354,000
|
|
| |
|
|
|
|
|
|
Per
common share
|
|
$
|
0.225
|
|
$
|
0.225
|
|
| |
|
|
|
|
|
|
Average
number of common shares outstanding
|
|
|
29,878,000
|
|
|
19,351,000
|
|
| |
|
|
|
|
|
CEDAR
SHOPPING CENTERS, INC.
Consolidated
Statements of Cash Flows
(unaudited)
| |
|
Three
months ended March 31, |
|
| |
|
|
|
| |
|
2006 |
|
2005 |
|
| |
|
|
|
|
|
|
Cash
flow from operating activities: |
|
|
|
|
|
|
|
|
Net
income |
|
$ |
2,954,000
|
|
$ |
2,648,000
|
|
Adjustments
to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Non-cash
provisions: |
|
|
|
|
|
|
|
Minority
interests’ earnings in excess of distributions from consolidated
joint ventures
|
|
|
40,000
|
|
|
113,000
|
|
|
Equity
in loss of unconsolidated joint venture |
|
|
25,000
|
|
|
— |
|
|
Limited
partners’ interest |
|
|
53,000
|
|
|
32,000
|
|
|
Straight-line
rents |
|
|
(900,000 |
) |
|
(492,000 |
) |
|
Depreciation
and amortization |
|
|
8,597,000
|
|
|
3,743,000
|
|
|
Amortization
of intangible lease liabilities |
|
|
(2,628,000 |
) |
|
(907,000 |
) |
|
Other |
|
|
442,000
|
|
|
231,000
|
|
|
Increases/decreases
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Joint
venture cash |
|
|
504,000
|
|
|
(107,000 |
) |
|
Rents
and other receivables |
|
|
(2,023,000 |
) |
|
(655,000 |
) |
|
Other
assets |
|
|
(1,241,000 |
) |
|
(1,492,000 |
) |
Investment
in and advances to unconsolidated joint venture
|
|
|
(6,000 |
) |
|
— |
|
|
Accounts
payable and accrued expenses |
|
|
(345,000 |
) |
|
(1,306,000 |
) |
| |
|
|
|
|
|
|
Net
cash provided by operating activities |
|
|
5,472,000
|
|
|
1,808,000
|
|
| |
|
|
|
|
|
|
Cash
flow from investing activities: |
|
|
|
|
|
|
|
|
Expenditures
for real estate and improvements |
|
|
(23,596,000 |
) |
|
(16,709,000 |
) |
|
Other |
|
|
(1,933,000 |
) |
|
25,000
|
|
| |
|
|
|
|
|
|
Net
cash (used in) investing activities |
|
|
(25,529,000 |
) |
|
(16,684,000 |
) |
| |
|
|
|
|
|
|
Cash
flow from financing activities: |
|
|
|
|
|
|
|
|
Line
of credit, net |
|
|
12,000,000
|
|
|
19,300,000
|
|
|
Proceeds
from sales of common stock |
|
|
8,988,000
|
|
|
— |
|
|
Proceeds
from mortgage financings |
|
|
13,637,000
|
|
|
— |
|
|
Mortgage
repayments |
|
|
(1,937,000 |
) |
|
(557,000 |
) |
|
Distributions
to minority interest partners in excess of earnings |
|
|
(122,000 |
) |
|
(129,000 |
) |
|
Distributions
to limited partners |
|
|
(348,000 |
) |
|
(102,000 |
) |
|
Preferred
distribution requirements |
|
|
(1,969,000 |
) |
|
(1,294,000 |
) |
|
Distributions
to common shareholders |
|
|
(6,701,000 |
) |
|
(4,354,000 |
) |
|
Deferred
financing costs |
|
|
(197,000 |
) |
|
(470,000 |
) |
| |
|
|
|
|
|
|
Net
cash provided by financing activities |
|
|
23,351,000
|
|
|
12,394,000
|
|
| |
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
|
3,294,000
|
|
|
(2,482,000 |
) |
|
Cash
and cash equivalents at beginning of period |
|
|
8,601,000
|
|
|
8,457,000
|
|
| |
|
|
|
|
|
|
Cash
and cash equivalents at end of period |
|
$ |
11,895,000
|
|
$ |
5,975,000
|
|
| |
|
|
|
|
|
