UNITED STATES
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): December 30, 2004
SIZELER PROPERTY INVESTORS, INC.
(Exact Name of Registrant as Specified in its Charter)
| Maryland | 1-09349 | 72-1082589 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2542 Williams Boulevard, Kenner, LA 70062
(Address of Principal Executive Offices, including zip code)
(504) 471-6200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.01. Completion of Acquisition or Disposition of Assets
On December 30, 2004, Sizeler Property Investors, Inc. (the “Company”), through its wholly-owned subsidiary, SPILAKE, Inc., sold an apartment community known as Lakeview Club Apartments, located in Oakland Park, Florida to RAK Group Acquisition Corporation. Lakeview Club Apartments contains 443 apartment units located at 2819 North Oakland Forest Drive, Oakland Park, Florida.
The aggregate contract sale price for Lakeview Club Apartments was $43,800,000. The sale price, which resulted from arms-length negotiations, was determined based on the fair market value of the property. The purchaser is not affiliated with the Company or any of its affiliates, directors or officers, or any associate of any director or officer.
The proceeds of the sale net of closing costs and fees of the transaction (approximately $2.7 million) were used to reduce the Company’s bank credit line borrowings and long-term mortgage debt by approximately $40.5 million, and the remaining net proceeds were available for general corporate purposes.
As described in the Company’s press release, attached hereto as Exhibit 99.6, the sale of Lakeview Club Apartments is part of the Company’s strategic initiative.
ITEM 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
None.
(b) Pro Forma Financial Information.
THE FOLLOWING UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION IS PRESENTED FOR ILLUSTRATIVE PURPOSES ONLY AND IS NOT NECESSARILY AN INDICATION OF THE FUTURE FINANCIAL POSITION OR RESULTS OF OPERATIONS OF THE COMPANY.
Management has prepared the following pro forma financial statements, which are based on the historical consolidated financial statements of the Company and adjusted to give effect to the disposition of Lakeview Club Apartments, which occurred on December 30, 2004, as well as the use of proceeds from the sale as described in this Current Report on Form 8-K.
The Unaudited Consolidated Pro Forma Balance Sheet at September 30, 2004 has been prepared to reflect the subsequent December 2004 disposition as if the transaction had occurred on September 30, 2004. The Consolidated Pro Forma Statement of Income for each of the years ended December 31, 2003, 2002, 2001 and the nine-month period ended September 30, 2004 have been prepared to present the results of operations of the Company as if the disposition of Lakeview Club Apartments had occurred at the beginning of the first period presented.
The following consolidated pro forma financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto that are incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 and the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2004. In the Company’s opinion, all significant adjustments necessary to reflect the disposition have been made.
Page 2 of 14 Pages
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 2004
(UNAUDITED)
| Historical |
Disposition Pro Forma |
Total Pro Forma |
||||||||||
| (A) | (B) | |||||||||||
| ASSETS | ||||||||||||
| Real estate investments |
||||||||||||
| Land |
$ | 55,978,000 | $ | (4,721,000 | ) | $ | 51,257,000 | |||||
| Buildings and improvements, net of accumulated depreciation |
240,194,000 | (18,527,000 | ) | 221,667,000 | ||||||||
| Construction in progress |
5,745,000 | 5,745,000 | ||||||||||
| Investment in real estate partnership |
932,000 | 932,000 | ||||||||||
| 302,849,000 | (23,248,000 | ) | 279,601,000 | |||||||||
| Cash and cash equivalents |
6,012,000 | 500,000 | 6,512,000 | |||||||||
| Accounts receivable and accrued revenue, net of allowance for doubtful accounts of $244,000 |
2,105,000 | 2,105,000 | ||||||||||
| Prepaid expenses and other assets |
12,656,000 | (185,000 | ) | 12,471,000 | ||||||||
| Total Assets |
$ | 323,622,000 | $ | (22,933,000 | ) | $ | 300,689,000 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| LIABILITIES |
||||||||||||
| Mortgage notes payable |
$ | 124,332,000 | $ | (16,019,000 | ) | $ | 108,313,000 | |||||
| Notes payable |
47,463,000 | (24,500,000 | ) | 22,963,000 | ||||||||
| Accounts payable and accrued expenses |
11,929,000 | (25,000 | ) | 11,904,000 | ||||||||
| Estimated income taxes payable |
2,978,000 | 2,978,000 | ||||||||||
| Tenant deposits and advance rents |
1,064,000 | (199,000 | ) | 865,000 | ||||||||
| 184,788,000 | (37,765,000 | ) | 147,023,000 | |||||||||
| Convertible subordinated debentures |
56,599,000 | 56,599,000 | ||||||||||
| Total Liabilities |
241,387,000 | (37,765,000 | ) | 203,622,000 | ||||||||
| SHAREHOLDERS’ EQUITY |
||||||||||||
| Series A preferred stock, 40,000 shares authorized, none issued |
0 | 0 | ||||||||||
| Series B preferred stock, par value $0.0001 per share, liquidation preference $25 per share, 2,476,000 shares authorized, 336,000 issued and outstanding |
1,000 | 1,000 | ||||||||||
| Common stock, par value $0.0001 per share, 51,484,000 shares authorized, shares issued and outstanding — 13,192,000 |
1,000 | 1,000 | ||||||||||
| Excess stock, par value $0.0001 per share, 16,000,000 shares authorized, none issued |
0 | 0 | ||||||||||
| Additional paid-in capital |
170,433,000 | 170,433,000 | ||||||||||
| Accumulated other comprehensive gain |
79,000 | 79,000 | ||||||||||
| Cumulative net income |
44,319,000 | 14,832,000 | 59,151,000 | |||||||||
| Cumulative distributions paid |
(132,598,000 | ) | (132,598,000 | ) | ||||||||
| Total Shareholders’ Equity |
82,235,000 | 14,832,000 | 97,067,000 | |||||||||
| Total Liabilities and Shareholders’ Equity |
$ | 323,622,000 | $ | (22,933,000 | ) | $ | 300,689,000 | |||||
Page 3 of 14 Pages
Explanation of Pro Forma Adjustments:
| A. | Reflects the Company’s historical Consolidated Balance Sheet as reported in its Form 10-Q for the quarter ended September 30, 2004. |
| B. | Reflects proceeds of $43.8 million less closing costs and fees of approximately $2.7 million from the December 2004 disposition, less payoff of outstanding mortgage debt, partial paydown of bank credit line borrowings and removal of disposition assets and other miscellaneous accounts including the provision for estimated income taxes calculated on the basis of statutory rates. The resulting gain on sale is reflected in cumulative net income. |
Page 4 of 14 Pages
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED PRO FORMA STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
(UNAUDITED)
| Historical |
Disposition Pro Forma |
Total Pro Forma |
||||||||||
| (A) | (B)(C) | |||||||||||
| OPERATING REVENUES |
||||||||||||
| Contractual rental income and charges |
$ | 39,584,000 | $ | (3,133,000 | ) | $ | 36,451,000 | |||||
| Other income |
1,630,000 | (111,000 | ) | 1,519,000 | ||||||||
| Total Operating Revenues |
41,214,000 | (3,244,000 | ) | 37,970,000 | ||||||||
| OPERATING EXPENSES |
||||||||||||
| Utilities |
2,167,000 | (255,000 | ) | 1,912,000 | ||||||||
| Real estate taxes |
3,455,000 | (579,000 | ) | 2,876,000 | ||||||||
| Administrative expenses |
5,155,000 | 5,155,000 | ||||||||||
| Operations and maintenance |
6,739,000 | (503,000 | ) | 6,236,000 | ||||||||
| Other operating expenses |
4,627,000 | (283,000 | ) | 4,344,000 | ||||||||
| Depreciation and amortization |
10,077,000 | (641,000 | ) | 9,436,000 | ||||||||
| Total Operating Expenses |
32,220,000 | (2,261,000 | ) | 29,959,000 | ||||||||
| INCOME FROM OPERATIONS |
8,994,000 | (983,000 | ) | 8,011,000 | ||||||||
| Interest expense |
10,872,000 | (1,404,000 | ) | 9,468,000 | ||||||||
| NET INCOME BEFORE EQUITY IN INCOME OF PARTNERSHIP |
(1,878,000 | ) | 421,000 | (1,457,000 | ) | |||||||
| Equity in income of partnership |
199,000 | 199,000 | ||||||||||
| NET INCOME |
$ | (1,679,000 | ) | $ | 421,000 | $ | (1,258,000 | ) | ||||
| NET INCOME ALLOCATION: |
||||||||||||
| Allocable to preferred shareholders |
615,000 | 615,000 | ||||||||||
| Allocable to common shareholders |
(2,294,000 | ) | 421,000 | (1,873,000 | ) | |||||||
| NET INCOME |
$ | (1,679,000 | ) | $ | 421,000 | $ | (1,258,000 | ) | ||||
| Net income per common share - basic and diluted |
$ | (0.17 | ) | $ | 0.03 | $ | (0.14 | ) | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
13,157,000 | 13,157,000 | 13,157,000 | |||||||||
Page 5 of 14 Pages
Explanation of Pro Forma Adjustments:
| A. | Represents the Company’s results of continuing operations included in its unaudited historical Consolidated Statement of Income for the nine months ended September 30, 2004 as reported on its Form 10-Q for the quarter ended September 30, 2004. |
| B. | Reflects the elimination of the results of operations of Lakeview Club Apartments sold in December 2004. |
| C. | The reduction in interest expense represents the actual interest expense on the mortgage debt relating to Lakeview Club Apartments plus the decrease in outstanding credit line debt at the average interest rate for the period presented. |
Page 6 of 14 Pages
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED PRO FORMA STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2003
(UNAUDITED)
| Historical |
Disposition Pro Forma |
Total Pro Forma | ||||||||
| (A) | (B)(C) | |||||||||
| OPERATING REVENUES |
||||||||||
| Contractual rental income and charges |
$ | 50,786,000 | $ | (4,155,000 | ) | $ | 46,631,000 | |||
| Other income |
2,094,000 | (153,000 | ) | 1,941,000 | ||||||
| Total Operating Revenues |
52,880,000 | (4,308,000 | ) | 48,572,000 | ||||||
| OPERATING EXPENSES |
||||||||||
| Utilities |
2,546,000 | (302,000 | ) | 2,244,000 | ||||||
| Real estate taxes |
4,440,000 | (772,000 | ) | 3,668,000 | ||||||
| Administrative expenses |
6,376,000 | 6,376,000 | ||||||||
| Operations and maintenance |
8,511,000 | (697,000 | ) | 7,814,000 | ||||||
| Other operating expenses |
5,436,000 | (400,000 | ) | 5,036,000 | ||||||
| Depreciation and amortization |
11,978,000 | (839,000 | ) | 11,139,000 | ||||||
| Total Operating Expenses |
39,287,000 | (3,010,000 | ) | 36,277,000 | ||||||
| INCOME FROM OPERATIONS |
13,593,000 | (1,298,000 | ) | 12,295,000 | ||||||
| Interest expense |
12,459,000 | (1,845,000 | ) | 10,614,000 | ||||||
| NET INCOME BEFORE EQUITY IN INCOME OF PARTNERSHIP |
1,134,000 | 547,000 | 1,681,000 | |||||||
| Equity in income of partnership |
89,000 | 89,000 | ||||||||
| NET INCOME |
$ | 1,223,000 | $ | 547,000 | $ | 1,770,000 | ||||
| NET INCOME ALLOCATION: |
||||||||||
| Allocable to preferred shareholders |
819,000 | 819,000 | ||||||||
| Allocable to common shareholders |
404,000 | 547,000 | 951,000 | |||||||
| NET INCOME |
$ | 1,223,000 | $ | 547,000 | $ | 1,770,000 | ||||
| Net income per common share - basic and diluted |
$ | 0.03 | $ | 0.04 | $ | 0.07 | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
13,086,000 | 13,086,000 | 13,086,000 | |||||||
Page 7 of 14 Pages
Explanation of Pro Forma Adjustments:
| A. | Represents the Company’s results of continuing operations included in its historical Consolidated Statement of Income for the year ended December 31, 2003. |
| B. | Reflects the elimination of the results of operations of Lakeview Club Apartments sold in December 2004. |
| C. | The reduction in interest expense represents the actual interest expense on the mortgage debt relating to Lakeview Club Apartments plus the decrease in outstanding credit line debt at the average interest rate for the period presented. |
Page 8 of 14 Pages
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED PRO FORMA STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2002
(UNAUDITED)
| Historical |
Disposition Pro Forma |
Total Pro Forma | ||||||||
| (A) | (B)(C) | |||||||||
| OPERATING REVENUES |
||||||||||
| Contractual rental income and charges |
$ | 50,472,000 | $ | (4,273,000 | ) | $ | 46,199,000 | |||
| Other income |
2,210,000 | (176,000 | ) | 2,034,000 | ||||||
| Total Operating Revenues |
52,682,000 | (4,449,000 | ) | 48,233,000 | ||||||
| OPERATING EXPENSES |
||||||||||
| Utilities |
2,225,000 | (267,000 | ) | 1,958,000 | ||||||
| Real estate taxes |
4,316,000 | (705,000 | ) | 3,611,000 | ||||||
| Administrative expenses |
5,505,000 | 5,505,000 | ||||||||
| Operations and maintenance |
7,966,000 | (637,000 | ) | 7,329,000 | ||||||
| Other operating expenses |
5,032,000 | (401,000 | ) | 4,631,000 | ||||||
| Depreciation and amortization |
11,524,000 | (816,000 | ) | 10,708,000 | ||||||
| Total Operating Expenses |
36,568,000 | (2,826,000 | ) | 33,742,000 | ||||||
| INCOME FROM OPERATIONS |
16,114,000 | (1,623,000 | ) | 14,491,000 | ||||||
| Interest expense |
13,377,000 | (2,182,000 | ) | 11,195,000 | ||||||
| NET INCOME BEFORE EQUITY IN INCOME OF PARTNERSHIP |
2,737,000 | 559,000 | 3,296,000 | |||||||
| Equity in income of partnership |
105,000 | 105,000 | ||||||||
| NET INCOME |
$ | 2,842,000 | $ | 559,000 | $ | 3,401,000 | ||||
| NET INCOME ALLOCATION: |
||||||||||
| Allocable to preferred shareholders |
547,000 | 547,000 | ||||||||
| Allocable to common shareholders |
2,295,000 | 559,000 | 2,854,000 | |||||||
| NET INCOME |
$ | 2,842,000 | $ | 559,000 | $ | 3,401,000 | ||||
| Net income per common share - basic and diluted |
$ | 0.18 | $ | 0.04 | $ | 0.22 | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
12,855,000 | 12,855,000 | 12,855,000 | |||||||
Page 9 of 14 Pages
Explanation of Pro Forma Adjustments:
| A. | Represents the Company’s results of continuing operations included in its historical Consolidated Statement of Income for the year ended December 31, 2002. |
| B. | Reflects the elimination of the results of operations of Lakeview Club Apartments sold in December 2004. |
| C. | The reduction in interest expense represents the actual interest expense on the mortgage debt relating to Lakeview Club Apartments plus the decrease in outstanding credit line debt at the average interest rate for the period presented. |
Page 10 of 14 Pages
SIZELER PROPERTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED PRO FORMA STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
(UNAUDITED)
| Historical |
Disposition Pro Forma |
Total Pro Forma | ||||||||
| (A) | (B)(C) | |||||||||
| OPERATING REVENUES |
||||||||||
| Contractual rental income and charges |
$ | 50,200,000 | $ | (4,354,000 | ) | $ | 45,846,000 | |||
| Other income |
2,258,000 | (161,000 | ) | 2,097,000 | ||||||
| Total Operating Revenues |
52,458,000 | (4,515,000 | ) | 47,943,000 | ||||||
| OPERATING EXPENSES |
||||||||||
| Utilities |
2,230,000 | (230,000 | ) | 2,000,000 | ||||||
| Real estate taxes |
4,076,000 | (599,000 | ) | 3,477,000 | ||||||
| Administrative expenses |
4,446,000 | 4,446,000 | ||||||||
| Operations and maintenance |
7,946,000 | (636,000 | ) | 7,310,000 | ||||||
| Other operating expenses |
5,512,000 | (421,000 | ) | 5,091,000 | ||||||
| Depreciation and amortization |
11,409,000 | (802,000 | ) | 10,607,000 | ||||||
| Total Operating Expenses |
35,619,000 | (2,688,000 | ) | 32,931,000 | ||||||
| INCOME FROM OPERATIONS |
16,839,000 | (1,827,000 | ) | 15,012,000 | ||||||
| Interest expense |
15,240,000 | (2,722,000 | ) | 12,518,000 | ||||||
| NET INCOME BEFORE EQUITY IN INCOME OF PARTNERSHIP AND GAIN ON SALE OF REAL ESTATE |
1,599,000 | 895,000 | 2,494,000 | |||||||
| Equity in income of partnership |
98,000 | 98,000 | ||||||||
| NET INCOME BEFORE GAIN ON SALE OF REAL ESTATE |
1,697,000 | 895,000 | 2,592,000 | |||||||
| GAIN ON SALE OF REAL ESTATE |
506,000 | 506,000 | ||||||||
| NET INCOME |
$ | 2,203,000 | $ | 895,000 | $ | 3,098,000 | ||||
| NET INCOME ALLOCATION: |
||||||||||
| Allocable to preferred shareholders |
||||||||||
| Allocable to common shareholders |
2,203,000 | 895,000 | 3,098,000 | |||||||
| NET INCOME |
$ | 2,203,000 | $ | 895,000 | $ | 3,098,000 | ||||
| Net income per common share - basic and diluted |
$ | 0.27 | $ | 0.11 | $ | 0.38 | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
8,313,000 | 8,313,000 | 8,313,000 | |||||||
Page 11 of 14 Pages
Explanation of Pro Forma Adjustments:
| A. | Represents the Company’s results of continuing operations included in its historical Consolidated Statement of Income for the year ended December 31, 2001. |
| B. | Reflects the elimination of the results of operations of Lakeview Club Apartments sold in December 2004. |
| C. | The reduction in interest expense represents the actual interest expense on the mortgage debt relating to Lakeview Club Apartments plus the decrease in outstanding credit line debt at the average interest rate for the period presented. |
Page 12 of 14 Pages
| (c) | Exhibits. |
| 99.1 | Agreement for Sale and Purchase between SPILAKE, Inc., a Delaware corporation, as Seller, and RAK Group Acquisition Corporation, a New York corporation, as Buyer, effective November 18, 2004. (All Exhibits have been omitted, and the Company will furnish to the Commission, upon request, a copy of any omitted Exhibit.) | |
| 99.2 | First Amendment to Agreement for Sale and Purchase effective December 3, 2004. | |
| 99.3 | Second Amendment to Agreement for Sale and Purchase effective December 10, 2004. | |
| 99.4 | Third Amendment to Agreement for Sale and Purchase effective December 16, 2004. | |
| 99.5 | Reinstatement and Fourth Amendment to Agreement for Sale and Purchase effective December 21, 2004. | |
| 99.6 | Press Release, dated January 5, 2005 with respect to the sale of the Lakeview Club Apartments. | |
Page 13 of 14 Pages
SIGNATURES
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 hereunto duly authorized.
Date: January 5, 2005
| SIZELER PROPERTY INVESTORS, INC. | ||||
| By: | /s/ Thomas A. Masilla, Jr. | |||
| Thomas A. Masilla, Jr. | ||||
| President and Chief Operating Officer | ||||
Page 14 of 14 Pages