SCHEDULE 14A INFORMATION
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SECURITIES EXCHANGE ACT OF 1934
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IRT PROPERTY COMPANY
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IRT PROPERTY COMPANY ANNOUNCES FOURTH QUARTER
AND YEAR-END RESULTS
FFO per Share Increases 12.9%
ATLANTA (January 30, 2003) -- IRT Property Company (NYSE:IRT) announced today
its operating results for the fourth quarter and year ended December 31, 2002.
Financial Highlights
Fully diluted funds from operations increased 20.4% to $12,390,000 in the
fourth quarter of 2002 compared with $10,293,000 in the fourth quarter of 2001.
Fully diluted funds from operations increased 6.6% to $44,292,000 in 2002
compared with $41,559,000 in the prior year. Revenues increased 12.4% in the
fourth quarter to $23,748,000 compared with $21,129,000 in the prior-year
period. For 2002, revenues increased 7.0% to $90,538,000 compared with
$84,605,000 in the prior year.
Funds from operations per fully diluted share increased 12.9% to $0.35 in
the fourth quarter compared with $0.31 in the prior-year period. FFO for the
fourth quarter of 2002 included lease termination fees and an outparcel sale
totaling $1.7 million, or $0.05 per fully diluted share. Funds from operations
per fully diluted share increased 4.8% to $1.31 in 2002 from $1.25 in the
prior-year.
Net earnings for the fourth quarter of 2002 increased 92.7% to $10,838,000
compared with $5,623,000 for the same period a year ago. Net earnings per
diluted share increased 77.8% to $0.32 in the fourth quarter compared with $0.18
in the same period a year ago. Earnings for the fourth quarter included gains on
the sale of three shopping centers of $3.1 million, or $0.09 per fully diluted
share.
Net earnings for 2002 increased 24.3% to $31,338,000 compared with
$25,220,000 in the same period a year ago. For 2002, net earnings per diluted
share were $0.95 compared with $0.83 in 2001.
Commenting on the announcement, Thomas H. McAuley, Chairman and Chief
Executive Officer, stated, "We were very active during the quarter on many
fronts, not only with our pending merger with Equity One but also opening a new
development, leasing and property sales. In addition to the success of our
development and leasing activity in the quarter, we were able to complete the
sale of three properties and one pre-development property, bringing total
proceeds raised during the year to over $21 million. The combined efforts of our
entire team led to funds from operations exceeding our previous expectations for
the quarter and the year. We are encouraged with such a strong finish to the
year and the overall positioning of the Company as we enter the next stage in
the evolution of our company - merging with Equity One to become one of the
largest shopping center owners in the Southeast."
Development Program Highlights
The Company's development program continued to produce solid results in the
quarter. In November, the redevelopment of Carrollwood Center in Tampa was
completed with a new Publix opening and a renovation of the center. Subsequent
to the end of the quarter, the Company opened The Shops at Huntcrest in Atlanta.
Anchored by Publix, the 97,040-square-foot neighborhood center is currently 90%
leased and committed. In the fourth quarter of 2003, the Company also expects to
complete the 15,000-square-foot expansion to Unigold Center in Orlando.
Mr. McAuley added, "These two properties are good examples of the added
value we can generate through development. We acquired Carrollwood Center in
late 2001 with the intent of increasing the expected return through a renovation
and expansion of the center. Likewise, The Shops at Huntcrest becomes the fifth
new Publix-anchored development we have completed in the past two years and our
first in the Atlanta area. These properties will be strong additions to our
portfolio. With several new projects in pre-development stages, including one
new location in which we are in final lease negotiations with a grocery anchor,
and three outparcel sales under contract, we expect the development capabilities
of the IRT management team to be an additional asset to the combined entity."
Leasing Activity
During 2002, IRT maintained a high level of leasing activity throughout its
portfolio. For the year, the Company signed a total of 943,000 square feet of
new and renewal leases and was able to open each of the three new development
properties completed during the year in excess of 90% leased. Despite the loss
of two Kmart locations and the termination of a Winn-Dixie lease, the Company's
portfolio ended the year at 92% leased. "We are pleased with the success our
leasing team has had during the year. We have faced several challenges with the
loss of several anchors due to bankruptcy and a weak retail environment, but
our leasing results indicate that the increasing concentration of our portfolio
in larger, higher growth markets has enabled us to work with new tenants that
continue to have an interest in well-leased, grocery-anchored shopping centers."
ABOUT IRT PROPERTY COMPANY
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A self-administered equity real estate investment trust, IRT specializes in
Southeastern United States shopping centers. Anchor tenants include Publix,
Kroger, Harris Teeter, Wal-Mart and other popular national and regional chain
stores. The portfolio of 90 shopping center investments includes approximately
9.8 million square feet of retail space. For additional information, please
visit the company's Web site at www.irtproperty.com.
SUPPLEMENTAL INFORMATION
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A copy of the Company's supplemental information package for the quarter
ended December 31, 2002, is available to all interested parties at our web site,
or upon written or e-mail request to Karen Sheppard, IRT Property Company, 200
Galleria Parkway N.W., Suite 1400, Atlanta, Georgia 30339. E-mail address:
INVESTORRELATIONS@IRTPROPERTY.COM.
Equity One has filed a registration statement on Form S-4, containing a
joint proxy statement/prospectus and other relevant documents, with the SEC
concerning the proposed merger between Equity One and IRT. You are urged to read
the registration statement containing the joint proxy statement/prospectus and
any other relevant documents filed or that will be filed with the SEC when they
become available because they will contain important information about Equity
One, IRT and the merger. You may obtain the registration statement containing
the joint proxy statement/prospectus and other documents free of charge at the
SEC's web site, www.sec.gov. The joint proxy statement/prospectus and these
other documents may also be obtained for free from Equity One by directing a
request to Equity One, 1696 N.E. Miami Gardens Drive, North Miami Beach, Florida
33179, Attention: Investor Relations, telephone: (305) 947-1664 and from IRT by
directing a request to IRT Property Company, 200 Galleria Parkway, Suite 1400,
Atlanta, Georgia 30339, Attention: Investor Relations, telephone: (770)
955-4406.
Equity One and IRT, and their respective directors and executive officers
and other members of their management and employees, may be deemed to be
participants in the solicitation of proxies from the stockholders of Equity One
and IRT in connection with the merger. Information about the directors and
executive officers of Equity One and their ownership of Equity One shares is set
forth in the proxy statement for Equity One's 2002 annual meeting of
stockholders. Information about the directors and executive officers of IRT and
their ownership of IRT stock is set forth in the proxy statement for IRT's 2002
annual meeting of shareholders. Investors may obtain additional information
regarding the interests of such participants by reading the joint proxy
statement/prospectus when it becomes available.
In addition to historical information, this press release may include
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements are based on information presently available to
management and are subject to various risks and uncertainties, including,
without limitation, those described in the Company's annual report on Form 10-K
for the year ended December 31, 2001, under "Special Cautionary Notice Regarding
Forward Looking Statements" and "Risk Factors," and otherwise in the Company's
SEC reports and filings.
IRT PROPERTY COMPANY
FINANCIAL HIGHLIGHTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATE)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
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2002 2001 2002 2001
-------- -------- -------- --------
Gross revenues $23,748 $21,129 $90,538 $84,605
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Income from continuing operations
before income taxes, minority interest,
gain on sale of properties and outparcels
and discontinued operations $ 7,285 $ 5,148 $24,984 $20,952
Income tax provision 9 - - (53)
Minority Interest - OP unitholders (179) (119) (559) (509)
Gain on sales of properties and outparcels 603 347 1,101 3,848
-------- -------- -------- --------
Income from continuing operations 7,718 5,376 25,526 24,238
Income from discontinued operations 3,120 247 5,968 982
Extraordianry loss on debt extinguishment - - (156) -
-------- -------- -------- --------
Net earnings $10,838 $ 5,623 $31,338 $25,220
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Diluted earnings per share:(1)
Income from continuing operations $ 0.23 $ 0.17 $ 0.77 $ 0.80
Income from discontinued operations 0.09 0.01 0.19 0.03
Extraordinary item - - (0.01) -
-------- -------- -------- --------
Net earnings $ 0.32 $ 0.18 $ 0.95 $ 0.83
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Weighted average shares:
Basic 33,993 30,404 32,772 30,322
Diluted(1) 34,169 31,378 33,095 33,301
Fully diluted funds from operations (2)(3) $12,390 $10,293 $44,292 $41,559
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Fully diluted funds from operations per share (2)(3) $ 0.35 $ 0.31 $ 1.31 $ 1.25
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Fully diluted weighted average shares (2)(3) 34,985 33,447 33,911 33,301
(1) Diluted earnings per share includes the effects of the conversion of the
OP Units and the 7.3% debentures when such conversion is dilutive. For the three
months and the year ended December 31, 2002 such conversion of the OP units are
anti-dilutive and are not included. For the three months and the year ended
December 31, 2001, the conversion of the OP Units is assumed, as it is dilutive.
For the three months ended December 31, 2002 and 2001, the effects of the
debenture conversion are anti-dilutive and are not included. For the year ended
December 31, 2002 and 2001, the effects of the debenture conversion is assumed,
as it is dilutive.
(2) The Company defines funds from operations, consistent with the NAREIT
definition, as net earnings (computed in accordance with generally accepted
accounting principles) before gains (losses) on sales of properties and
extraordinary items, plus depreciation and amortization of capitalized leasing
costs. Interest on debentures, amortization of debenture costs and amounts
attributable to minority interests of convertible partnership units ("OP Units")
are added to funds from operations when the assumed conversion is dilutive.
Conversion of the OP Units is dilutive and therefore assumed for the three
months and year ended December 31, 2002 and 2001. Conversion of the debentures
is dilutive and therefore assumed for the year ended December 31, 2002 and 2001
and for the three months ended December 31, 2001. For the three months ended
December 31, 2002, such debenture conversion is anti-dilutive and, as such, is
not included due to the debenture redemption in January 2002.
(3) Fully diluted funds from operations, assuming conversion of the
Company's 7.3% subordinated debentures and OP Units, is calculated as follows:
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
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2002 2001 2002 2001
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Funds from operations $12,143 $ 9,648 $43,328 $38,941
Interest on convertible debentures - 425 109 1,699
Amortization of convertible debentures costs - 25 7 100
Amounts attributable to minority interest 247 195 848 819
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Fully diluted funds from operations $12,390 $10,293 $44,292 $41,559
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