LOS ANGELES--(BUSINESS WIRE)--Thomas Properties Group, Inc. (Nasdaq: TPGI) reported today the results of operations for the quarter ended December 31, 2010.
The results of operations presented in this release include TPGI’s results of operations for the three and twelve months ended December 31, 2010 and 2009. The consolidated net loss for the three months ended December 31, 2010 was $(6.2) million or $(0.18) per share compared to consolidated net loss of $(7.7) million or $(0.30) per share for the three months ended December 31, 2009. The consolidated net loss for the year ended December 31, 2010 was $(11.5) million or $(0.34) per share compared to consolidated net loss of $(21.6) million or $(0.86) per share for the year ended December 31, 2009. The decrease in the consolidated net loss for the year ended December 31, 2010 compared to the consolidated net loss for the year ended December 31, 2009 is primarily due to decreases in interest expense resulting from reduced debt balances, general and administrative expenses and impairment loss.
After tax cash flow (“ATCF”) for the three months ended December 31, 2010 was $(0.3) million or $(0.01) per share compared to after tax cash flow of $2.5 million or $0.10 per share for the three months ended December 31, 2009. After tax cash flow for the year ended December 31, 2010 was $9.1 million or $0.27 per share compared to after tax cash flow of $8.2 million or $0.33 per share for the year ended December 31, 2009. The decrease in ATCF per share for the year ended December 31, 2010 compared to the year ended December 31, 2009 was primarily the result of a larger number of shares outstanding in 2010 compared with 2009. The Company defines ATCF (a non-GAAP financial measure) as net income (loss) excluding the following items: noncontrolling interests, deferred income taxes, non-cash charges for depreciation and amortization and asset impairment, amortization of loan costs, non-cash compensation expense, straight-line rent adjustments, adjustments to reflect the fair market value of rent, and gain from extinguishment of debt. ATCF is further described in note (c) to the financial statements below.
"For the past two years, our company has been focused on stabilizing our balance sheet and maintaining occupancy in our portfolio. Since the beginning of 2009, we have reduced our pro-rata share of property debt by 34.8%, from $397.8 million to $259.5 million. In addition, we have extended the weighted average remaining life of our debt from 3.7 years to 5.9 years," said Jim Thomas, Chairman & CEO. "We have increased the occupancy of our portfolio, which at December 31, 2010 was 84.3% leased, compared with 83.6% leased at the beginning of 2009. We are now poised for growth. Going forward we will focus on internal growth through increasing occupancy and rental rates, as well as generating cash for reinvestment through sales of assets."
Supplemental Materials
The company will publish a Supplemental Financial Information package which will be available at www.tpgre.com in the Investor Relations tab, Supplemental Financial Information section.
Teleconference and Webcast
TPGI will hold a quarterly earnings conference call on Friday, February 18, 2011 at 11:00 a.m. Pacific Time. To participate in the call, dial (800) 798-2801 and (617) 614-6205 internationally, and provide confirmation code 25133739.
A live webcast (listen only mode) of the conference call will also be available at this time. A hyperlink to the live webcast will be available from the Investor Relations section of our website at www.tpgre.com. A replay of the call will be available through March 11, 2011, by calling (888) 286-8010 and (617) 801-6888 internationally, and providing confirmation code 60732686. The replay will also be available on Thomas Properties Group, Inc.’s web site at www.tpgre.com.
The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
About Thomas Properties Group, Inc.
Thomas Properties Group, Inc., with headquarters in Los Angeles, is a full-service real estate company that owns, acquires, develops and manages primarily office, as well as mixed-use and residential properties on a nationwide basis. The company’s primary areas of focus are the acquisition and ownership of premier properties, property development and redevelopment, and property and investment management activities. For more information on Thomas Properties Group, Inc., visit www.tpgre.com.
Forward Looking Statements
Statements made in this press release or during the quarterly earnings conference call that are not historical may contain forward-looking statements. Although TPGI believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. Factors that could cause actual results to differ materially from TPGI’s expectations include actual and perceived trends in various national and economic conditions that affect global and regional markets for commercial real estate services (including interest rates), the availability of credit and equity investors to finance commercial real estate transactions, our ability to enter into or renew leases at favorable rates, which can be impacted by the financial condition of our tenants, risks associated with the success of our development and property redevelopment projects, general volatility in the securities and credit markets, and the impact of tax laws affecting real estate. For a discussion of some of the factors that may cause our results to differ from management’s expectations, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the year ended December 31, 2009 and our subsequent Form 10-Q quarterly reports, each of which is filed with the SEC. TPGI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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THOMAS PROPERTIES GROUP, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except share and per share data) |
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(unaudited) |
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| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues: | ||||||||||||||||
| Rental | $ | 7,412 | $ | 7,254 | $ | 29,230 | $ | 29,753 | ||||||||
| Tenant reimbursements | 4,711 | 5,012 | 20,187 | 21,163 | ||||||||||||
| Parking and other | 679 | 832 | 3,330 | 2,988 | ||||||||||||
| Investment advisory, management, leasing and development services | 2,109 | 2,187 | 7,703 | 9,345 | ||||||||||||
| Investment advisory, management, leasing and development services - unconsolidated real estate entities | 5,344 | 3,794 | 16,470 | 15,023 | ||||||||||||
| Reimbursement of property personnel costs | 1,584 | 1,371 | 5,797 | 5,584 | ||||||||||||
| Condominium sales | 425 | 7,299 | 14,984 | 30,226 | ||||||||||||
| Total revenues | 22,264 | 27,749 | 97,701 | 114,082 | ||||||||||||
| Expenses: | ||||||||||||||||
| Property operating and maintenance | 6,390 | 6,900 | 25,049 | 25,339 | ||||||||||||
| Real estate and other taxes | 1,693 | 1,798 | 6,914 | 7,225 | ||||||||||||
| Investment advisory, management, leasing and development services | 4,234 | 3,272 | 12,221 | 11,910 | ||||||||||||
| Reimbursable property personnel costs | 1,584 | 1,371 | 5,797 | 5,584 | ||||||||||||
| Cost of condominium sales | 300 | 5,600 | 10,955 | 26,492 | ||||||||||||
| Interest | 4,871 | 6,453 | 19,239 | 26,868 | ||||||||||||
| Depreciation and amortization | 3,723 | 3,269 | 14,128 | 12,642 | ||||||||||||
| General and administrative | 4,363 | 4,802 | 14,224 | 17,082 | ||||||||||||
| Impairment loss | 4,500 | 4,400 | 4,500 | 13,000 | ||||||||||||
| Total expenses | 31,658 | 37,865 | 113,027 | 146,142 | ||||||||||||
| Gain on sale of real estate | — | 1,214 | — | 1,214 | ||||||||||||
| Gain on extinguishment of debt | — | 11,412 | — | 11,921 | ||||||||||||
| Interest income | 17 | 51 | 72 | 338 | ||||||||||||
| Equity in net loss of unconsolidated real estate entities | (246 | ) | (15,641 | ) | (1,184 | ) | (16,236 | ) | ||||||||
| Loss before income taxes and noncontrolling interests | (9,623 | ) | (13,080 | ) | (16,438 | ) | (34,823 | ) | ||||||||
| Benefit (provision) for income taxes | 774 | (203 | ) | 357 | (683 | ) | ||||||||||
| Net loss | (8,849 | ) | (13,283 | ) | (16,081 | ) | (35,506 | ) | ||||||||
| Noncontrolling interests' share of net loss: | ||||||||||||||||
| Unitholders in the Operating Partnership | 2,804 | 4,079 | 4,843 | 11,535 | ||||||||||||
| Partners in consolidated real estate entities | (106 | ) | 1,474 | (234 | ) | 2,408 | ||||||||||
| 2,698 | 5,553 | 4,609 | 13,943 | |||||||||||||
| TPGI share of net loss | $ | (6,151 | ) | $ | (7,730 | ) | $ | (11,472 | ) | $ | (21,563 | ) | ||||
| Loss per share - basic and diluted | $ | (0.18 | ) | $ | (0.30 | ) | $ | (0.34 | ) | $ | (0.86 | ) | ||||
| Weighted average common shares - basic and diluted | 35,041,770 | 25,753,994 | 33,684,101 | 25,173,163 | ||||||||||||
| Reconciliation of net loss to EBDT(a): | ||||||||||||||||
| Net loss | $ | (6,151 | ) | $ | (7,730 | ) | $ | (11,472 | ) | $ | (21,563 | ) | ||||
| Adjustments: | ||||||||||||||||
| Income tax (benefit) provision | (774 | ) | 203 | (357 | ) | 683 | ||||||||||
| Noncontrolling interests - unitholders in the Operating Partnership | (2,804 | ) | (4,079 | ) | (4,843 | ) | (11,535 | ) | ||||||||
| Depreciation and amortization | 3,723 | 3,269 | 14,128 | 12,642 | ||||||||||||
| Amortization of loan costs | 203 | 318 | 897 | 690 | ||||||||||||
| Unconsolidated real estate entities: | ||||||||||||||||
| Depreciation and amortization | 2,714 | 4,811 | 15,599 | 19,412 | ||||||||||||
| Amortization of loan costs | 281 | 214 | 718 | 897 | ||||||||||||
| Earnings before depreciation, amortization and taxes | $ | (2,808 | ) | $ | (2,994 | ) | $ | 14,670 | $ | 1,226 | ||||||
| TPGI share of EBDT (b) | $ | (2,017 | ) | $ | (1,950 | ) | $ | 10,408 | $ | 790 | ||||||
| EBDT per share - basic and diluted | $ | (0.06 | ) | $ | (0.08 | ) | $ | 0.31 | $ | 0.03 | ||||||
| Weighted average common shares - basic | 35,041,770 | 25,753,994 | 33,684,101 | 25,173,163 | ||||||||||||
| Weighted average common shares - diluted | 35,041,770 | 25,753,994 | 33,949,968 | 25,173,163 | ||||||||||||
| Reconciliation of net loss to ATCF(c): | ||||||||||||||||
| Net loss | $ | (6,151 | ) | $ | (7,730 | ) | $ | (11,472 | ) | $ | (21,563 | ) | ||||
| Adjustments: | ||||||||||||||||
| Income tax (benefit) provision | (774 | ) | 203 | (357 | ) | 683 | ||||||||||
| Noncontrolling interests - unitholders in the Operating Partnership | (2,804 | ) | (4,079 | ) | (4,843 | ) | (11,535 | ) | ||||||||
| Depreciation and amortization | 3,723 | 3,269 | 14,128 | 12,642 | ||||||||||||
| Amortization of loan costs | 203 | 318 | 897 | 690 | ||||||||||||
| Non-cash compensation expense | 205 | 581 | 672 | 2,838 | ||||||||||||
| Straight-line rent adjustments | (775 | ) | (162 | ) | (1,842 | ) | (924 | ) | ||||||||
| Adjustments to reflect the fair market value of rent | 1 | — | 2 | 23 | ||||||||||||
| Impairment loss | 4,500 | 4,400 | 4,500 | 13,000 | ||||||||||||
| Gain on extinguishment of debt | — | (11,412 | ) | — | (11,921 | ) | ||||||||||
| Unconsolidated real estate entities: | ||||||||||||||||
| Depreciation and amortization | 2,714 | 4,811 | 15,599 | 19,412 | ||||||||||||
| Amortization of loan costs | 281 | 214 | 718 | 897 | ||||||||||||
| Straight-line rent adjustments | (294 | ) | (91 | ) | (1,191 | ) | (1,565 | ) | ||||||||
| Adjustments to reflect the fair market value of rent | (235 | ) | (368 | ) | (1,102 | ) | (1,394 | ) | ||||||||
| Impairment loss | — | 14,000 | — | 16,012 | ||||||||||||
| Gain on extinguishment of debt | (331 | ) | — | (1,953 | ) | (4,189 | ) | |||||||||
| ATCF before income taxes | $ | 263 | $ | 3,954 | $ | 13,756 | $ | 13,106 | ||||||||
| TPGI share of ATCF before income taxes (b) | $ | 188 | $ | 2,575 | $ | 9,759 | $ | 8,443 | ||||||||
| TPGI income tax expense - current | (494 | ) | (100 | ) | (639 | ) | (232 | ) | ||||||||
| TPGI share of ATCF | $ | (306 | ) | $ | 2,475 | $ | 9,120 | $ | 8,211 | |||||||
| ATCF per share - basic & diluted | $ | (0.01 | ) | $ | 0.10 | $ | 0.27 | $ | 0.33 | |||||||
| Weighted average common shares - basic | 35,041,770 | 25,753,994 | 33,684,101 | 25,173,163 | ||||||||||||
| Weighted average common shares - diluted | 35,041,770 | 25,753,994 | 33,949,968 | 25,173,163 | ||||||||||||
a. EBDT is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies. We define EBDT as net income (loss) excluding the following items: i) income tax expense (benefit); ii) noncontrolling interests; iii) depreciation and amortization; and iv) amortization of loan costs. EBDT provides a performance measure that, when compared year over year, reflects the impact to operations from changes to occupancy rates, rental rates, operating costs, development and redevelopment activities, general and administrative expenses, and interest costs, and provides perspective on operating performance not immediately apparent from net income. EBDT should be considered only as a supplement to net income as a measure of our performance. EBDT also assists management in identifying trends for purposes of financial planning and forecasting results. However, the usefulness of EBDT as a performance measure is limited and EBDT should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. EBDT also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with GAAP).
b. Based on an interest in our operating partnership of 71.83% and 70.95% for the three and twelve months ended December 31, 2010, respectively, and 65.13% and 64.42% for the three and twelve months ended December 31, 2009, respectively.
c. ATCF is a non-GAAP financial measure and may not be directly comparable to similarly-titled measures reported by other companies. We define ATCF as net income (loss) excluding the following items: i) deferred income tax expense (benefit); ii) noncontrolling interests; iii) non-cash charges for depreciation and amortization and asset impairment; iv) amortization of loan costs; v) non-cash compensation expense; vi) the adjustment to recognize rental revenues using the straight-line method; vii) the adjustment to rental revenue to reflect the fair market value of rents; and viii) gain on extinguishment of debt. Management utilizes ATCF data in assessing performance of our business operations in period-to-period comparisons and for financial planning purposes. ATCF should be considered only as a supplement to net income as a measure of our performance. ATCF should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. ATCF also should not be used as a supplement to or substitute for cash flow from operating activities (computed in accordance with GAAP).
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CONSOLIDATED BALANCE SHEETS |
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(In thousands) |
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| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (unaudited) | (audited) | |||||||
| ASSETS | ||||||||
| Investments in real estate: | ||||||||
| Operating properties, net | $ | 266,859 | $ | 276,603 | ||||
| Land improvements—development properties | 96,585 | 95,558 | ||||||
| 363,444 | 372,161 | |||||||
| Condominium units held for sale | 49,827 | 64,101 | ||||||
| Improved land held for sale | 2,819 | 4,508 | ||||||
| Investments in unconsolidated real estate entities | 17,975 | 14,458 | ||||||
| Cash and cash equivalents, unrestricted | 42,363 | 35,935 | ||||||
| Restricted cash | 13,069 | 12,071 | ||||||
| Rents and other receivables, net | 1,754 | 2,073 | ||||||
| Receivables from unconsolidated real estate entities | 2,979 | 2,010 | ||||||
| Deferred rents | 14,592 | 12,954 | ||||||
| Deferred leasing and loan costs, net | 13,538 | 15,375 | ||||||
| Other assets, net | 17,875 | 23,757 | ||||||
| Total assets | $ | 540,235 | $ | 559,403 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Liabilities: | ||||||||
| Mortgage loans | $ | 254,612 | $ | 255,104 | ||||
| Other secured loans | 45,924 | 63,132 | ||||||
| Accounts payable and other liabilities, net | 29,020 | 35,573 | ||||||
| Prepaid rent and deferred revenue | 2,888 | 3,249 | ||||||
| Total liabilities | 332,444 | 357,058 | ||||||
| Equity: | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued or outstanding as of December 31, 2010 and 2009 | — | — | ||||||
| Common stock, $.01 par value, 225,000,000 shares authorized, 36,943,394 and 30,878,621 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively | 369 | 308 | ||||||
| Limited voting stock, $.01 par value, 20,000,000 shares authorized, 12,313,331 and 13,813,331 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively | 123 | 138 | ||||||
| Additional paid-in capital | 207,953 | 185,344 | ||||||
| Retained deficit and dividends | (60,790 | ) | (49,394 | ) | ||||
| Total stockholders’ equity | 147,655 | 136,396 | ||||||
| Noncontrolling interests: | ||||||||
| Unitholders in the Operating Partnership | 51,478 | 63,042 | ||||||
| Partners in consolidated real estate entities | 8,658 | 2,907 | ||||||
| Total noncontrolling interests | 60,136 | 65,949 | ||||||
| Total equity | 207,791 | 202,345 | ||||||
| Total liabilities and equity | $ | 540,235 | $ | 559,403 | ||||