INDIANAPOLIS, Aug. 2 /PRNewswire-FirstCall/ -- Windrose Medical Properties Trust , a self-managed specialty medical properties REIT, announced today financial results for the second quarter ended June 30, 2004.
Windrose reported second quarter 2004 rental revenues of $7,069,000 on a GAAP basis, compared to $3,095,000 in the second quarter 2003. Second quarter 2004 general and administrative expenses were $765,000, compared to $674,000 in the same quarter 2003. The second quarter non-cash gain on the interest rate swap was $267,000.
For the three months ended June 30, 2004, net income available for common shareholders for the period on a GAAP basis was $1,083,000, or $0.11 per diluted share, compared to $98,000, or $0.02 per diluted share, for the same period 2003. Funds from operations (FFO), comprised of net income plus depreciation and amortization from real estate, were $2,572,000, or $0.26 per diluted share, compared to $784,000, or $0.14 per diluted share. Funds available for distribution (FAD), comprised of FFO adjusted primarily for straight-line rent and minority interest items, were $1,988,000.
As previously announced, Windrose declared a second quarter 2004 dividend of $0.22 per share. The dividend is payable on August 20, 2004 to shareholders of record on August 11, 2004.
Fred Farrar, President and Chief Operating Officer, remarked, “During the second quarter, we strengthened our property management capability with the addition of Steve Horn as Vice President of Asset Management. Steve brings a high level of professional asset management experience to Windrose and will help us to improve our occupancy rates and to continue to increase our return on investment within the existing portfolio.”
Mr. Farrar continued, “Our second quarter net operating income increased more 100% to $5.0 million over the prior year and was impacted by one-time charges and higher uncovered property management expenses associated with strengthening the property management team. Our net income was affected by the gain on the interest rate swap and higher amortization of loan fees as outlined last quarter.”
Fred Klipsch, Chairman and Chief Executive Officer, stated, “We have closed $64.2 million in acquisitions in 2004 and are confident that we will reach our $100 million target for the full year. Our acquisition and development pipelines are robust, as we continue to evaluate multiple opportunities.”
Windrose will host a conference call to discuss second quarter results on Tuesday, August 3, 2004 at 2:00 p.m. Eastern Time (1:00 p.m. Central Time). The conference call will be accessible by telephone and through the Internet. Telephone access is available by dialing (888) 841-5035 for domestic callers and (973) 582-2830 for international callers. The reservation number for both is 4969148. Those interested in listening to the conference call should dial into the call approximately 10 minutes before the start time. A live webcast of the conference call will be available online at http://www.windrosempt.com/. A telephonic replay of the call will be available until August 17, 2004. The replay dial-in numbers are (877) 519-4471 for domestic callers and (973) 341-3080 for international callers. Please use reservation code 4969148. After the live webcast, the call will remain available on Windrose Medical Properties Trust’s Web site, http://www.windrosempt.com/, through September 1, 2004.
About Windrose Medical Properties Trust
Windrose is a self-managed Real Estate Investment Trust (REIT) based in Indianapolis, Indiana with offices in Nashville, Tennessee. Windrose was formed to acquire, selectively develop and manage specialty medical properties, such as medical office buildings, outpatient treatment diagnostic facilities, physician group practice clinics, ambulatory surgery centers, specialty hospitals, outpatient treatment centers and other healthcare related specialty properties.
Safe Harbor
Some of the statements in this news release constitute forward-looking statements. Such statements include, in particular, statements about our beliefs, expectations, plans and strategies that are not historical facts. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties, assumptions and changes in circumstances, many of which are beyond our control, which may cause our actual results to differ significantly from those expressed in any forward-looking statement. The factors that could cause actual results to differ materially from current expectations include financial performance and condition of our lessees, adverse changes in healthcare laws, changes in economic and general business conditions, competition for specialty medical properties, our ability to finance our operations, the availability of additional acquisitions, regulatory conditions and other factors described from time to time in filings we make with the Securities and Exchange Commission. The forward-looking statements contained herein represent our judgment as of the date hereof and we caution readers not to place undue reliance on such statements. We do not undertake to publicly update or revise any forward-looking statement whether as a result of new information, future events or otherwise.
Windsor Medical Properties Trust, Inc. Condensed Consolidated Financial Information For the Three Months Ending June 30, 2004, and June 30, 2003 (Dollars in Thousands, except per share amounts) (Unaudited) Three months Three months ended ended 6/30/2004 6/30/2003 RENTAL OPERATIONS Revenues Rent $7,069 $3,095 Operating expenses Property taxes 603 99 Property operating 1,425 481 Depreciation and amortization 1,548 732 Total operating expenses 3,576 1,312 Operating income from rental operations 3,493 1,783 SERVICE OPERATIONS (HADC) Revenues Development and project management fees 465 761 Expenses Cost of sales and project costs 369 591 General and administrative expenses 122 404 Loss from service operations (26) (234) GENERAL AND ADMINISTRATIVE EXPENSES Corporate operations 765 674 Operating income 2,702 875 OTHER INCOME (EXPENSE) Interest Income (expense) (1,821) (673) Gain (loss) on interest rate swap 267 (75) Other Income (Expense) (29) (21) Total other income (expense) (1,583) (769) Income tax benefit 9 - Net income before Minority Interest 1,128 106 Minority interest in income of common unit holders and other subsidiaries (45) (8) Net income available for common shareholders 1,083 98 Weighted average shares of common stock outstanding - Basic 9,948 5,692 - Diluted 10,307 6,052 Net income per common share - Basic and diluted $0.11 $0.02 Condensed Consolidated Financial Information For the Three months Ending June 30, 2004, and June 30, 2003 (Dollars in Thousands, except per share amounts) (Unaudited) Three months Three months ended ended 6/30/2004 6/30/2003 Funds from operations(1) (FFO): Net income $1,083 $98 Add back (deduct): Lease commission amortization and depreciation expense 1,548 732 Minority interest share of depreciation and amortization (59) (46) Funds from operations (FFO) $2,572 $784 FFO per common share - Basic and Diluted $0.26 $0.14 Windrose Medical Properties Trust, Inc. Condensed Consolidated Financial Information For the Three months Ending June 30, 2004 (Dollars in Thousands) (Unaudited) Three months ended 6/30/2004 Funds available for distribution(2) (FAD) Funds from operations (FFO) $2,572 Add back (deduct): Straight-line rent adjustment (353) Minority interest share of straight-line rent adjustment 19 Rental income associated with above/below market leases 17 Gain on interest rate swap (267) Funds available for distribution (FAD) $1,988 Cash Spent on Tenant Improvements, Capital Expenditures and Leasing Commissions Maintenance Capital Expenditures 133 Tenant Improvements and Leasing Commissions - New Tenants 225 Total $358 Reconciliation of Net Income to Cash Flows Used in Operating Activities (Unaudited) Three months ended 6/30/2004 Net income $1,083 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 1,548 Rental Income associated with above/below market lease 17 Deferred Income Taxes (9) Gain on interest rate swap (267) Amortization of deferred financing fees 171 Amortization of fair value of debt (197) Minority interest in earnings 45 Increase (decrease) in cash due to changes in: Construction payables, net (72) Straight line rent receivable (353) Billings in excess of revenues earned (25) Receivables from tenants (211) Accounts payable and other accrued expenses (525) Cash flows provided by operating activities $1,205 Reconciliation of Cash Flows Used in Operating Activities to Funds Available for Distribution (FAD) (Unaudited) Three months ended 6/30/2004 Cash flows provided by operating activities $1,205 Add: Non-income Operating Cash Flows: Billings in excess of revenues earned 25 Deferred Income Taxes 9 Other accrued revenues and expenses 525 Receivables from tenants 211 Amortization of fair value of debt 197 Construction payables, net 72 Deduct: Non-income Operating Cash Flows: Amortization of deferred financing fees (171) Minority interest in earnings (45) Minority interest share of depreciation and amortization and straight line rental income (40) Funds available for distribution (FAD) $1,988 Windrose Medical Properties Trust, Inc. Condensed Consolidated Balance Sheets (Dollars in Thousands) (Unaudited) 6/30/2004 12/31/2003 Cash and cash equivalents 2,374 17,387 Net real estate assets 220,431 162,105 Other assets 10,611 8,401 Total assets 233,416 187,893 Secured Debt 119,427 76,893 Payables and other liabilities 8,524 3,753 Dividend Payable - 1,252 Minority interest 3,822 3,837 Shareholders’ equity 101,643 102,158 Total liabilities and shareholders’ equity 233,416 187,893
(1) The Company believes that FFO is helpful in understanding the Company’s operating performance in that FFO excludes depreciation and amortization expense on real estate assets. The Company believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. FFO should not be considered as an alternative to cash flows from operating, investing and financing activities as a measure of liquidity. The White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in April 2002 defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization and after comparable adjustments for the Company’s portion of these items related to unconsolidated entities and joint ventures
(2) The Company’s management considers funds available for distribution (“FAD”) to be a useful liquidity measure because FAD provides investors with an additional basis to evaluate the ability of the Company to incur and service debt and to fund capital expenditures and distributions to shareholders and unit holders. The Company derives FAD by adjusting FFO for certain non-cash items such as the straight line rent adjustment and the interest rate swap gain/loss.
The Company’s calculations of FFO and FAD may not be comparable to FFO and FAD reported by other real estate investment trusts (“REITs”) due to the fact that not all REITs use the same definitions. FFO and FAD should not be considered as alternatives to net income as indicators of the Company’s operating performance or alternatives to cash flows as measures of liquidity. FFO and FAD do not measure whether cash flow is sufficient to fund all of the Company’s cash needs, including principal amortization, capital expenditures, and distributions to shareholders and unit holders. Additionally, FFO and FAD do not represent cash flows from operating, investing or financing activities as defined by GAAP.
Reclassifications: Certain prior quarter balances have been reclassified to conform to the current presentation.
Contact: Investors/Media: Windrose Medical Properties The Ruth Group TrustFred Farrar Stephanie Carrington/Jason Rando President and COO 646 536-7017/7025 317 860-8213 scarrington@theruthgroup.comjrando@theruthgroup.com
Windrose Medical Properties Trust
CONTACT: Fred Farrar, President and COO, Windrose Medical PropertiesTrust, +1-317-860-8213; or Stephanie Carrington, +1-646-536-7017,scarrington@theruthgroup.com, or Jason Rando, +1-646-536-7025,jrando@theruthgroup.com, both of The Ruth Group, for Windrose MedicalProperties Trust
Web site: http://www.windrosempt.com/
