SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 15, 2002
KONOVER PROPERTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-11998 56-1819372
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
3434 Kildaire Farm Road
Suite 200
Raleigh, North Carolina (919) 372-3000 27606
(Address of principal executive offices) (Registrant's telephone (Zip Code)
number, including area code)
No Change
(Former name or former address, if changed since last report)
Konover Property Trust, Inc.
ITEM 2: Acquisition or Disposition of Assets
On May 15, 2002, Konover Property Trust, Inc. (the "Company"), through its
wholly owned subsidiary Mount Pleasant KPT LLC, closed on the sale of Mount
Pleasant Towne Centre, a 426,000 square foot shopping center located in Mount
Pleasant, South Carolina, to DRA Advisors, Inc. for approximately $55.3 million,
including the assumption of mortgage indebtedness of approximately $45.9
million. The net proceeds from the sale after transaction costs were
approximately $9.1 million.
Reference is made to the Press Release dated May 16, 2002 attached hereto
as Exhibit 99.2 and incorporated by reference hereto.
ITEM 7: Financial Statements and Exhibits
(a) Not applicable
(b) Pro forma financial information
. Pro forma Consolidated Balance Sheet as of March 31, 2001 ........ 3
. Notes to Pro forma Consolidated Balance Sheet .................... 4
. Pro forma Consolidated Statement of Operations for the Three
Months Ended March 31, 2002 ...................................... 5
. Pro forma Consolidated Statement of Operations for the Year
Ended December 31, 2001 .......................................... 6
. Notes to Pro forma Consolidated Statements of Operations ......... 7
(c) Exhibits
Exhibit Number Description of Exhibit
-------------- ----------------------
Exhibit 99.1 The Agreement for Sale, dated March 15,
2002, by and between Mount Pleasant KPT
LLC as seller and DRA Advisors, Inc. as
buyer.
Exhibit 99.2 Press Release issued by the Company on
May 16, 2002.
2
Pro forma Consolidated Balance Sheet
Konover Property Trust, Inc.
As of March 31, 2002
(Amounts in thousands)
(Unaudited)
Mount Pro Forma
Konover Pleasant Konover
Property Towne Property
Trust, Inc./(a)/ Centre /(b)/ Trust, Inc.
---------------------------------------------------
Assets
Investment in rental property, excluding
properties held for sale, net $ 270,281 $ - $ 270,281
Properties held for sale 63,107 (53,079) 10,028
Cash and cash equivalents 18,316 9,130 27,446
Restricted cash 6,475 (1,484) 4,991
Accounts receivable, net 4,401 - 4,401
Deferred charges and other assets 6,360 (826) 5,534
Notes receivable 2,628 - 2,628
Investment in and advances to
unconsolidated entities 13,071 - 13,071
---------------------------------------------------
Total assets $ 384,639 $ (46,259) $ 338,380
===================================================
Liabilities and Shareholders Equity
Debt on income properties $ 229,212 $ (45,946) $ 183,266
Capital lease obligation 74 - 74
Accounts payable and other liabilities 10,764 (473) 10,291
---------------------------------------------------
Total liabilities 240,050 (46,419) 193,631
Minority interests 4,952 - 4,952
---------------------------------------------------
Shareholders' equity:
Convertible preferred stock 18,679 - 18,679
Stock purchase warrants 9 - 9
Common stock 319 - 319
Additional paid-in capital 291,045 - 291,045
Accumulated deficit (170,359) 160 (170,199)
Deferred compensation (56) - (56)
---------------------------------------------------
Total shareholders' equity 139,637 160 139,797
---------------------------------------------------
Total liabilities and
shareholders' equity $ 384,639 $ (46,259) $ 338,380
===================================================
3
Notes to Pro forma Consolidated Balance Sheet
Konover Property Trust, Inc.
(Unaudited)
Basis of Presentation:
On May 15, 2002, Konover Property Trust, Inc. (the "Company"), through
its wholly owned subsidiary Mount Pleasant KPT LLC, closed on the sale of Mount
Pleasant Towne Centre, a 426,000 square foot shopping center located in Mount
Pleasant, South Carolina, to DRA Advisors, Inc. for approximately $55.3 million,
including the assumption of mortgage indebtedness of approximately $45.9
million. The net proceeds from the sale after transaction costs were
approximately $9.1 million.
The unaudited pro forma consolidated balance sheet as of March 31, 2002
is based on the unaudited historical financial statements of the Company after
giving effect to the disposition of Mount Pleasant Towne Centre and certain
adjustments as described below.
Balance Sheet Adjustments:
(a) Represents the historical unaudited consolidated balance sheet of the
Company as of March 31, 2002.
(b) Represents the elimination of the historical unaudited balance
sheet accounts as of March 31, 2002 of Mount Pleasant Towne
Centre and the impact of the sale as described above.
4
Pro forma Consolidated Statement of Operations
Konover Property Trust, Inc.
For the Three Months Ended March 31, 2002
(Amounts in thousands, except per share information)
(Unaudited)
Pro Forma
Konover
Konover Property Mount Pleasant Towne Property Trust,
Trust, Inc./(a)/ Centre Sale/(b)/ Inc.
------------------ ---------------------- ----------------
Revenues
Base rents $ 7,914 $ (1,297) $ 6,617
Percentage rents 422 (15) 407
Property operating cost recoveries 2,183 (385) 1,798
Other income 129 48 177
----------------------------------------------------------
Total revenues 10,648 (1,649) 8,999
Expenses
Property operating 2,140 (285) 1,855
Real estate taxes 1,060 (173) 887
Depreciation and amortization 2,698 - 2,698
General and administrative 1,909 - 1,909
Stock compensation amortization 44 - 44
Operating loss of sold management
business 84 - 84
Interest, net 4,523 (926) 3,597
Equity in earnings of
unconsolidated earnings (150) - (150)
----------------------------------------------------------
Total expenses 12,308 (1,384) 10,924
----------------------------------------------------------
Loss before minority interests (1,660) (265) (1,925)
Minority interest 57 - 57
----------------------------------------------------------
Net loss (1,603) (265) (1,868)
Preferred dividends - - -
----------------------------------------------------------
Loss applicable to common
stockholders $ (1,603) $ (265) $ (1,868)
==========================================================
Earnings per common share:
Basic $ (0.05) $ (0.06)
==========================================================
Diluted $ (0.05) $ (0.06)
==========================================================
Weighted average common shares outstanding:
Basic 31,767 31,767
==========================================================
Diluted 31,767 31,767
==========================================================
5
Pro forma Consolidated Statement of Operations
Konover Property Trust, Inc.
For the Year Ended December 31, 2001
(Amounts in thousands, except per share information)
(Unaudited)
Pro Forma
Mount Pleasant
Konover Property Towne Centre 2001 Property Konover Property
Trust, Inc./(a)/ Sale/(b)/ Disposals/(c)/ Trust, Inc.
--------------------------------------------------------------------------
Revenues
Base rents $ 58,265 $ (5,328) $ (26,243) $ 26,694
Percentage rents 834 (53) (378) 403
Property operating cost recoveries 13,575 (1,110) (5,857) 6,608
Other income 2,439 179 (1,620) 998
--------------------------------------------------------------------------
Total revenues 75,113 (6,312) (34,098) 34,703
Expenses
Property operating 17,243 (1,078) (9,240) 6,925
Real estate taxes 7,782 (690) (3,627) 3,465
Depreciation and amortization 18,505 (1,449) (5,851) 11,205
General and administrative 7,950 - - 7,950
Stock compensation amortization 845 - - 845
Severance and other related costs 6,099 - - 6,099
Interest, net 28,131 (3,623) (9,882) 14,626
Gain on sale of real estate (367) - 367 -
Adjustment to carrying value of
property and investments 114,755 (6,123) (100,575) 8,057
Abandoned transaction costs 83 - (22) 61
Equity in losses of unconsolidated
ventures 6,782 - - 6,782
Minority interest (3,645) - - (3,645)
--------------------------------------------------------------------------
Total expenses 204,163 (12,963) (128,830) 62,370
--------------------------------------------------------------------------
Loss before extraordinary item (129,050) 6,651 94,732 (27,667)
Extraordinary gain on early
retirement of debt 775 - (775) -
--------------------------------------------------------------------------
Net loss (128,275) 6,651 93,957 (27,667)
Preferred dividends (271) - - (271)
--------------------------------------------------------------------------
Loss applicable to common
stockholders $ (128,546) $ 6,651 $ 93,957 $ (27,938)
==========================================================================
Earnings per common share:
Basic $ (4.11) $ (0.89)
==========================================================================
Diluted $ (4.11) $ (0.89)
==========================================================================
Weighted average common shares outstanding:
Basic 31,292 31,292
==========================================================================
Diluted 31,292 31,292
==========================================================================
6
Notes to Pro forma Consolidated Statements of Operations
Konover Property Trust, Inc.
(Amounts in thousands)
(Unaudited)
Basis of Presentation:
On May 15, 2002, Konover Property Trust, Inc. (the "Company"), through
its wholly owned subsidiary Mount Pleasant KPT LLC, closed on the sale of Mount
Pleasant Towne Centre, a 426,000 square foot shopping center located in Mount
Pleasant, South Carolina, to DRA Advisors, Inc. for approximately $55.3 million,
including the assumption of mortgage indebtedness of approximately $45.9
million. The net proceeds from the sale after transaction costs were
approximately $9.1 million.
The unaudited pro forma consolidated statements of operations for the
three months ended March 31, 2002 and the year ended December 31, 2001 are based
on the unaudited financial statements of the Company after giving effect to the
dispositions of the Mount Pleasant Towne Centre and certain adjustments as
described below.
Statements of Operations Adjustments:
(a) Represents, the unaudited consolidated statement of operations of the
Company for the three months ended March 31, 2002 and audited
consolidated statement of operations for the year ended December 31,
2001.
(b) Represents the elimination of the historical unaudited statements of
operations for the three months ended March 31, 2002 and the year ended
December 31, 2001 of Mount Pleasant Towne Centre. Other income includes
management fees earned in connection with the Company's on-going
management of the property.
(c) Represent the elimination of the historical unaudited statements of
operations for the year ended December 31, 2001 of the 33 properties
sold during 2001. The properties include the 31 property outlet
portfolio sale in September 2001, the sale of the Shoreside shopping
center in September 2001, and the sale of the Nashville outlet shopping
center in December 2001.
General and Administrative Expenses:
The pro forma consolidated statements of operations presented herein do
not reflect planned reductions in certain indirect general and administrative
costs arising from the Company's reorganization plans resulting from the sale of
33 properties in 2001.
7
EXHIBIT INDEX
Number Description
---------------------
99.1 The Agreement for Purchase and Sale, dated March 15, 2002, by and
between Mount Pleasant KPT LLC as seller and DRA Advisors, Inc. as
buyer.
99.2 Press Release issued by the Company on May 16, 2002 regarding the
completion of the sale of Mount Pleasant Towne Centre.
8
KONOVER PROPERTY TRUST, INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Konover Property Trust, Inc.
(Registrant)
Dated: May 29, 2002
By: /s/ Daniel J. Kelly
-----------------------------
Name: Daniel J. Kelly
Title: Executive Vice President,
Chief Financial Officer
9