American Land Lease Announces Second Quarter 2004 Financial Results; 8.7% Increase in Funds From Operations per Share Over 2003
August 05 2004 - 8:00AM
PR Newswire (US)
American Land Lease Announces Second Quarter 2004 Financial
Results; 8.7% Increase in Funds From Operations per Share Over 2003
CLEARWATER, Fla., Aug. 5 /PRNewswire-FirstCall/ -- American Land
Lease, Inc. (NYSE:ANL) today released results for second quarter
2004. Please refer to the Supplemental Information which the
Company also released today for definitions of measures of
performance not determined in accordance with generally accepted
accounting principles ("non-GAAP") and reconciliation of non-GAAP
measures to measures determined in accordance with generally
accepted accounting principles ("GAAP"). Summary Financial Results
Second Quarter * Diluted Earnings Per Share ("Diluted EPS") were
$0.29 for the three- month period ended June 30, 2004 as compared
to $0.26 from the same period one year ago, an increase of 9.2% on
a per share basis. * Funds from Operations ("FFO"; a non-GAAP
financial measure defined in the Supplemental Information) were
$3.1 million, or $0.38 per diluted common share, for the quarter
compared to $2.8 million, or $0.35 per diluted common share from
the same period one year ago, an increase of 8.7% on a per share
basis. * Unit volume in home sales was 103 new home closings,
including 94 new homes sold on expansion home sites. This compares
with 88 new home closings in second quarter 2003, including 87 new
homes sold on expansion sites. * "Same Store" results provided a
revenue increase of 9.0%, an expense increase of 3.4% and an
increase of 11.8% in Net Operating Income ("NOI"). * "Same Site"
results provided a revenue increase of 3.1%, an expense increase of
2.1% and an increase of 3.7% in NOI. Supplemental Information The
full text of this press release and Supplemental Information are
available upon request or through the Company's web site at
http://www.americanlandlease.com/. Management Comments Bob Blatz,
President of American Land Lease, commented, "We are pleased to
report results for the second quarter 2004. The impact of newly
leased sites continues to drive the outperformance of our same
store growth rate while our focus on senior communities continues
to provide stable growth in our core business." "Our home sales
unit volume increased as compared to second quarter 2003 and
revenue growth in home sales was 25% primarily driven by an
increase from $85,000 to $92,000 in average selling price. Our
backlog is up 15% over the prior year to 189 homes, so we continue
to see growth in the volume and quality of our home sales as a
driver for improved results. Our partnership with home
manufacturers continues to yield product improvements, including
longer lead times, and a better quality home product that commands
a higher sales price The better quality homes are a welcome
addition to our communities as they increase the overall community
value." Dividend Declaration On July 28, 2004, the Board of
Directors declared a regular second quarter dividend of $0.25 per
share, payable on August 26, 2004, to stockholders of record on
August 9, 2004. The Company continues to suspend its dividend
reinvestment plan until further notice. The Board of Directors
reviews the dividend policy quarterly. The Company's dividend is
set quarterly and is subject to change or elimination at any time.
The Company's primary financial objective is to maximize long term,
risk adjusted returns on investment for stockholders. While the
dividend policy is considered within the context of this objective,
maintenance of past dividend levels is not a primary investment
objective of the Company and the dividend policy is subject to
numerous factors including, the Company's profitability, capital
expenditure plans, obligations related to principal payments and
capitalized interest, and the availability of debt and equity
capital at terms deemed attractive by the Company to finance these
expenditures. The Company's net operating loss carryforward may be
used to offset all or a portion of its real estate investment trust
("REIT") taxable income, which may allow the Company to reduce or
eliminate its dividends and still maintain its REIT status.
Operational Results Second Quarter Property Operations Second
quarter revenue from property operations was $7,247,000 as compared
to $6,540,000 in the same period one year ago, a 10.8% increase.
Second quarter property operating expenses totaled $2,764,000 as
compared to $2,616,000 in the same period one year ago, a 5.7%
increase. The Company realized significant increases in rental
income driven by annual rental rate increases, the absorption of
new home sites as a result of its home sales efforts and the
acquisition of one community during fourth quarter 2003. Property
operating expenses increased in the second quarter 2004 as compared
to the same period in the prior year driven primarily by increases
in labor and benefit costs, the acquisition of one community during
the fourth quarter 2003, and utility costs, offset by decreases in
offsite management and tenant related legal costs. The combination
of increased revenue and expenses resulted in an overall
improvement in property operating margins before depreciation
expense from 60.0% in the prior year's second quarter to 61.9% in
the second quarter 2004. Second Quarter "Same Store" Results Second
quarter "same store" results reflect the results of operations for
properties and golf courses owned for both the second quarter of
2004 and the same period in the prior year. The same store
properties account for 98% of the property operating revenues for
the second quarter of 2004. We believe that same store information
provides insight as to the changes in profitability for properties
owned during both reporting periods that could not be obtained from
a review of the consolidated income statement in periods where
properties are acquired. A reconciliation of "same store" operating
results reported below to total property revenues and property
expenses, as determined under GAAP, can be found in the
Supplemental Information, page 27. The same store increases are as
follows: 2Q04 Revenue 9.0 % Expense 3.4 % Net Operating Income 11.8
% We derive our increase in property revenue (i) from increases in
rental rates and other charges at our properties and (ii) through
the origination of leases on expansion home sites ("absorption").
"Same site" results reflect the results of operations excluding
those sites leased subsequent to the beginning of the prior year
period. We believe that "same site" information provides the
ability to understand the changes in profitability without the
growth related to the newly leased sites. Our presentation of same
site results is a non-GAAP measure and should not be considered in
isolation from, and is not intended to represent an alternative
measure to, operating income or cash flow or any other measure of
performance as determined in accordance with GAAP. We calculate
absorption revenues as the rental revenue recognized on sites
leased subsequent to the beginning of the prior year period. We
estimate that 50% of the increase in expenses over the prior year
period is attributable to newly leased sites in our calculation of
same site results. We believe that the allocation of expenses
between same site and absorption is an appropriate allocation
between fixed and variable costs of operating our properties. Our
same site, absorption, same site golf operations and total same
store results for second quarter 2004 are as follows: Same Site
Rental Absorption Same Site Golf Same Store Revenue 3.1 % 5.8 % 0.1
% 9.0 % Expense 2.1 % 2.0 % (0.7%) 3.4 % NOI 3.7 % 7.7 % 0.4 % 11.8
% A reconciliation of same site and same store operating results
used in the above calculations to total property revenues and
property expenses, as determined under GAAP, for the three months
ended June 30, 2004 and 2003 can be found in the Supplemental
Information, page 27. Second Quarter Home Sales Operations Second
quarter 2004 new home sales unit volume was 103 closings, a 17%
increase from the 88 closings in the same period in the prior year.
Average selling price per home was $92,000 as compared to $85,000
in the same period in the prior year, an 8.2% increase. The
increase in closings compared to the same period in the prior year
was balanced across the Company's expansion communities, with
increases in nine communities and decreases in seven communities.
Brokerage profits were up 85% as compared with the same period in
the prior year driven by an 89% increase in the number of
transactions. Selling gross margins, excluding brokerage
activities, improved to 33% in the quarter as compared to 29% in
the same period in the prior year. This increase was driven by
increased selling prices, increased manufacturer rebates associated
with higher purchasing volumes, and sales of upgrades to base home
models. The increases in revenue and cost savings were offset by
increases in the cost of homes purchased. Selling costs as a
percentage of sales revenue increased from 20.6% in the prior
year's period to 25.3% in the second quarter of 2004, reflecting
additional investments in personnel and advertising/marketing in
support of a higher operating level for the business. The backlog
of contracts for closing stood at 189 home sales, an increase of 24
contracts from the same period in the prior year. The Company
remains committed to its program of generating revenue growth
through new lease originations in its existing portfolio. The home
sales business continues to provide the Company with additional
earning home sites that have a greater return on investment than is
currently available through the purchase of occupied communities.
Summary of home sales activity: Quarter ended Quarter ended June
30, 2004 June 30, 2003 New home closings 103 88 New home contracts
144 105 Home resales 5 11 Brokered home sales 83 44 New home
contract backlog 189 165 Outlook for 2004 The table below
summarizes the Company's projected financial outlook for 2004 as of
the date of this release and is based on the estimates and
assumptions disclosed in this and previous press releases: Full
Year 2004 Projected FFO $1.40 to $1.60 AFFO $1.28 to $1.44 Diluted
EPS $1.03 to $1.24 Same Store Sales Revenue Growth 5.0% to 9.0%
Expense Growth 4.5% to 7.5% NOI Growth 6.0% to 9.5% Home Sales
Operating Income $2,000,000 to $3,250,000 General and
Administrative Expenses $3,200,000 to $3,700,000 Other Income
$210,000 to $280,000 Capital Replacements (per site) $115 to $135
Depreciation $2,900,000 to $3,200,000 A portion of the Company's
earnings is from the sale of new homes on expansion home sites in
its developing communities. The earnings from the new home sales
are subject to greater volatility than the earnings from rental
property activities. The Company's earnings estimates would be
impacted positively by increases in the unit volume of new home
sales or increases in the gross margins from new home sales.
Conversely, decreases in the unit volume of new home sales or
decreases in the gross margins from new home sales would negatively
impact the Company's earnings estimates. Home sales volume is
dependent upon a number of factors, including consumer confidence
and consumer access to financing sources for home purchases and the
sale of their current home. The Company's projected results for
2004 include increased corporate governance costs based upon
current estimates of the cost of compliance. Non- employee director
compensation continues to be paid in stock and all stock based
compensation is expensed within the 2004 projections. The Company's
earnings estimates would be adversely impacted by the increased
cost of compliance with regulations and laws applicable to public
companies and financial reporting. The financial and operating
projections provided in this release are the result of management's
consideration of past operating performance, current and
anticipated market conditions and other factors that management
considers relevant from its past experience. Development Activity
The Company continued its development activity at Savanna Club and
will be selling into its "Eagles Retreat" subdivision throughout
the third quarter. This subdivision represents Phase VII of VIII.
At Riverside Club, "The Bluffs" is in its closeout phase -- with
less than 10 homesites not under contract. While the next Phase --
"The Fairways" -- is not scheduled for completion until the end of
third quarter, the Company has begun pre-selling into that phase as
of August 1st. In its current pre-sale phase, only 48 of the 148
home sites are available to be placed under contract for a home and
future lease. As that phase sells out the company will open another
section of the subdivision, which is expected in Q105first quarter
2005. Construction neared completion for the subdivisions at the
Royal Palm and Brentwood communities that will provide an
additional 162 home sites for immediate occupancy in third quarter
2004. Planning and permitting a subdivision at an additional
community continued during the quarter. Financing Activity During
the quarter, the Company negotiated a 1% reduction in floor
interest rate on three variable rate loans with an outstanding
balance of $10.6 million as of June 30, 2004. This reduction in
floor rate became effective July 1, 2004. With respect to these
three loans, the Company achieved occupancy targets at three
properties that provided additional advances under committed
non-recourse credit facilities totaling $2.13 million. During the
quarter, the Company increased the size of its floor plan credit
facility used to finance its inventory of homes to $20 million.
American Land Lease, Inc. is a REIT that holds interests in 29
manufactured home communities with 6,754 operational home sites,
976 developed expansion sites, 1,268 undeveloped expansion sites
and 129 recreational vehicle sites. Some of the statements in this
press release, as well as oral statements made by the Company's
officials to analysts and stockholders in the course of
presentations about the Company and conference calls following
quarterly earnings releases, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements may include projections of the
Company's cash flow, dividends and anticipated returns on real
estate investments. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include: general economic and business
conditions; interest rate changes, financing and refinancing risks;
risks inherent in owning real estate; future development rate of
home sites; competition; the availability of real estate assets at
prices which meet the Company's investment criteria; the Company's
ability to reduce expense levels, implement rent increases, use
leverage and other risks set forth in the Company's Securities and
Exchange Commission filings. Management will hold a teleconference
call, Thursday, August 5, 2004 at 4:00 p.m. Eastern Daylight Time
to discuss second quarter 2004 results. You can participate in the
conference call by dialing, toll-free, (800) 374-5458 approximately
five minutes before the conference call is scheduled to begin and
indicating that you wish to join the American Land Lease first
quarter 2004 results conference call. If you are unable to
participate at the scheduled time, this information will be
available for recorded playback from 5:30 p.m. EDT, August 5, 2004
until midnight on August 12, 2004. To access the replay, dial toll
free, (800) 642-1687 and request information from conference ID
9106803. DATASOURCE: American Land Lease CONTACT: Robert G. Blatz,
President, or Shannon E. Smith, Chief Financial Officer, both of
American Land Lease, +1-727-726-8868 Web site:
http://www.americanlandlease.com/
Copyright
American Land Lease (NYSE:ANL)
Historical Stock Chart
From Jun 2024 to Jul 2024
American Land Lease (NYSE:ANL)
Historical Stock Chart
From Jul 2023 to Jul 2024