MINOT, ND -- (MARKET WIRE) -- 06/30/05 --
Investors Real Estate Trust (NASDAQ: IRETS)
(NASDAQ: IRETP) reported the following results today:
(unaudited; in thousands, except per share amounts)
For the three months For the twelve months
ended April 30, ended April 30,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues $ 39,326 $ 34,903 $ 156,447 $ 133,596
Net Income $ 2,417 $ 1,416 $ 15,076 $ 9,440
Net Income available to
common shareholders $ 1,824 $ 1,383 $ 12,704 $ 9,407
Net Income Per Share -
Basic and Diluted $ .04 $ .03 $ .30 $ .24
Funds from Operations
("FFO") $ 10,943 $ 9,090 $ 42,314 $ 36,638
FFO Per Share - Diluted $ .19 $ .17 $ .76 $ .73
Total revenues for the three months ended April 30, 2005, were $39.3
million, compared to $34.9 million for the same period in 2004, a 12.6%
increase. Total revenues were $156.4 million and $133.6 million for the
twelve months ended April 30, 2005 and 2004, respectively, a 17.1%
increase. The increase in revenue for the twelve months ended April 30,
2005, was due primarily to rent from properties acquired during fiscal year
2005, and to increases in rent from properties acquired in fiscal year 2004
in excess of that received in fiscal year 2004 from the same properties.
This increase in revenue was partially offset by a decrease in rental
income on existing properties, net of declining occupancy levels.
Net income available to common shareholders for the three months ended
April 30, 2005, was $1.8 million, compared to $1.4 million for the same
period in 2004, a 28.6% increase. Net income available to common
shareholders was $12.7 million and $9.4 million for the twelve months ended
April 30, 2005 and 2004, respectively, a 35.1% increase. The increase in
net income available to common shareholders for the twelve months ended
April 30, 2005, was due primarily to gains from the sale of real estate,
and to increases in rental income, net of expenses, from property
acquisitions in fiscal years 2005 and 2004.
Net income per fully diluted share for the three months ended April 30,
2005, was $.04, compared to $.03 for the same period in 2004, a 33.4%
increase. Net Income per fully diluted share was $.30 and $.24 for the
twelve months ended April 30, 2005 and 2004, respectively, a 25.0%
increase. The year-to-date increase in net income per share was due to the
factors discussed above affecting net income available to common
shareholders.
Funds from Operations ("FFO"), a non-GAAP financial measure, was $10.9
million for the three months ended April 30, 2005, compared to $9.1 million
for the same period in 2004, a 19.8% increase. FFO was $42.3 million and
$36.6 for the twelve months ended April 30, 2005 and 2004, respectively, a
15.6% increase. FFO per fully diluted share, a non-GAAP financial measure,
for the three months ended April 30, 2005, was $.19, representing a 11.8%
increase from FFO per fully diluted share of $.17 for the three months
ended April 30, 2004. FFO per fully diluted share for the twelve months
ended April 30, 2005, was $.76, representing a 4.1% increase over FFO per
fully diluted share of $.73 for the twelve months ended April 30, 2004.
FFO and FFO per share for both the three and twelve months ended April 30,
2005, was impacted by the factors mentioned above affecting net income
available to common shareholders, excluding the gain on sale of real estate
and the increase in depreciation expense.
A reconciliation of net income to FFO is provided in the condensed
consolidated statement of operations information below.
Thomas A. Wentz, Sr., President and Chief Executive Officer, stated,
"economic conditions in our core markets appear to be improving, which
should translate into decreasing vacancy rates and increased rental
revenues in our current fiscal year. For example, we recently leased a
75,815 square foot office building in Rapid City, South Dakota, which had
been vacant for more than two years, to General Electric Capital
Corporation, under a six-year lease commencing June 1, 2005. We plan to
continue to focus on reducing vacancy levels and improving operations at
our properties, and we will continue to pursue the acquisition of quality
multi-family residential, office, medical, industrial and retail
properties."
Company Information: IRET is a self-advised equity real estate investment
trust engaged in owning and operating income-producing properties located
primarily in the upper Midwest. IRET owns a diversified portfolio of 211
properties, consisting of 65 multi-family residential properties, 50 office
properties, 11 industrial properties (including miscellaneous commercial
properties), 60 retail properties and 25 medical properties (including
assisted living facilities).
IRET's cash distributions to common shareholders/unitholders during fiscal
year 2005 increased to 64.5 cents per share/unit, compared to 63.7 cents
paid in the prior fiscal year, an increase of 1.26%. In each of the last 34
calendar years, the annual distribution has increased over the amount paid
in the preceding year.
Annual Meeting of Shareholders: IRET's 35th Annual Meeting of Shareholders
will be held on Tuesday, September 20, 2005, at 7:00 p.m. CST at the
International Inn, 1505 North Broadway, Minot, North Dakota.
A full description and discussion of IRET's results of operations for
fiscal year 2005 will be contained in IRET's Annual Report on Form 10-K,
which will be filed with the Securities and Exchange Commission no later
than July 14, 2005, and mailed to shareholders in August. IRET's press
releases are available on the company website at www.iret.com or by
contacting Investor Relations at 701-837-4738.
Certain statements in this press release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements involve known and unknown risks, uncertainties and other
factors that may cause actual results to differ materially. Such risk,
uncertainties and other factors include, but are not limited to: potential
fluctuations in our operating results; the need for additional capital; the
direction of interest rates and their subsequent effect on our business;
competition; our ability to attract and retain skilled personnel; and those
risks and uncertainties discussed in filings made by us with the Securities
and Exchange Commission.
Fiscal 2005 Acquisition and Disposition Summary
Property Acquisitions
IRET Properties added $146.4 million of real estate investments to its
portfolio during fiscal year 2005, compared to $170.3 million added in
fiscal 2004. The fiscal year 2005 additions are detailed below.
INVESTORS REAL ESTATE TRUST
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)
(Unaudited)
Condensed Balance Sheet
(unaudited, in thousands)
04-30-0504-30-04
---------- ----------
Assets
Cash $ 23,538 $ 31,704
Marketable Securities 2,459 2,336
Receivables & Other Assets 57,816 50,354
Real Estate Owned 1,185,238 1,085,953
Less Accumulated Depreciation (118,512) (98,923)
Mortgage Receivables 619 4,893
---------- ----------
Total Assets $1,151,158 $1,076,317
========== ==========
Liabilities
Mortgages Payable $ 708,558 $ 633,124
Investment Certificates Payable 4,636 7,074
Other 23,761 48,482
---------- ----------
Total Liabilities $ 736,955 $ 688,680
========== ==========
Minority Interest in Operating Partnership $ 15,860 $ 16,386
---------- ----------
Minority Interest in Partnerships $ 103,171 $ 92,622
---------- ----------
Shareholders' Equity
Preferred Shares of Beneficial Interest $ 27,317 $ 27,343
1,150,000 Shares 04-30-05
1,150,000 Shares 04-30-04
Common Shares of Beneficial Interest 324,180 292,400
45,187,676 Shares 04-30-05
41,693,256 Shares 04-30-04
Accumulated Distribution and Other Losses (56,303) (41,083)
Accumulated Other Comprehensive
Income/Loss (22) (31)
---------- ----------
Total Shareholders' Equity $ 295,172 $ 278,629
---------- ----------
Total Liabilities & Shareholders' Equity $1,151,158 $1,076,317
========== ==========
INVESTORS REAL ESTATE TRUST
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER AND YEAR ENDED
APRIL 30, 2005 and 2004
(in thousands, except per share data)
(Unaudited)
Results from Operations
For the Three-Month and Twelve-Month Periods ended April 30, 2005 and
2004 (unaudited)
(in thousands, except per share amounts)
3 Months Ended 12 Months Ended
04-30-0504-30-0404-30-0504-30-04
-------- -------- -------- --------
Revenues $ 39,326 $ 34,903 $156,447 $133,596
======== ======== ======== ========
Net Income 2,417 1,416 15,076 9,440
Preferred stock dividends (593) (33) (2,372) (33)
-------- -------- -------- --------
Net income applicable to
common shares $ 1,824 $ 1,383 $ 12,704 $ 9,407
Minority interest in
earnings of unitholders 19 399 3,873 2,752
-------- -------- -------- --------
Fully Diluted Net Income $ 1,843 $ 1,782 $ 16,577 $ 12,159
======== ======== ======== ========
Net income per common share:
Basic $ .04 $ .03 $ .30 $ .24
======== ======== ======== ========
Diluted $ .04 $ .03 $ .30 $ .24
======== ======== ======== ========
Average number of common
shares and share
equivalents outstanding:
Basic 44,662 41,226 43,214 39,257
======== ======== ======== ========
Diluted 57,523 52,650 55,835 50,433
======== ======== ======== ========
FFO applicable to
common shares $ 10,943 $ 9,090 $ 42,314 $ 36,638
======== ======== ======== ========
FFO per diluted share $ .19 $ .17 $ .76 $ .73
======== ======== ======== ========
Average number of common
shares and share
equivalents outstanding
used for determining
funds from operations per
diluted share 57,523 52,650 55,835 50,433
======== ======== ======== ========
Reconciliation of Net Income to Funds From Operations
For the Three-Month and Twelve-Month Periods ended April 30, 2005 and
2004 (unaudited)
(in thousands, except per share amounts)
3 Months Ended
04-30-0504-30-04
Weighted Weighted
Average Per Average Per
Amount Shares Share Amount Shares Share
------- ------ ---- ------- ------ ----
Net Income $ 2,417 $ 1,416
Less distributions to
preferred shareholders (593) (33)
------- ------ ---- ------- ------ ----
Net Income Available
For Common Shares $ 1,824 44,662 $.04 $ 1,383 41,226 $.03
Add back:
Minority interest
in earnings
of unitholders 19 12,861 399 11,424
------- ------ ---- ------- ------ ----
Fully Diluted Net
Income $ 1,843 57,523 $.04 $ 1,782 52,650 $.03
------- ------ ---- ------- ------ ----
Adjustments:
Depreciation and
Amortization $ 9,531 $ 7,392
(Earnings)loss from
depreciable property
sales/impairment (431) (84)
------- ------ ---- ------- ------ ----
Fully Diluted Funds
From Operations $10,943 57,523 $.19 $ 9,090 52,650 $.17
======= ====== ==== ======= ====== ====
(in thousands, except per share amounts)
12 Months Ended
04-30-0504-30-04
Weighted Weighted
Average Per Average Per
Amount Shares Share Amount Shares Share
------- ------ ---- ------- ------ ----
Net Income $15,076 $ 9,440
Less distributions to
preferred shareholders (2,372) (33)
------- ------ ---- ------- ------ ----
Net Income Available
For Common Shares $12,704 43,214 $.30 $ 9,407 39,257 $.24
Add back:
Minority interest
in earnings
of unitholders 3,873 12,621 2,752 11,176
------- ------ ---- ------- ------ ----
Fully Diluted Net
Income $16,577 55,835 $.30 $12,159 50,433 $.24
------- ------ ---- ------- ------ ----
Adjustments:
Depreciation and
Amortization $34,342 $25,079
(Earnings)loss from
depreciable property
sales/impairment (8,605) (600)
------- ------ ---- ------- ------ ----
Fully Diluted Funds
From Operations $42,314 55,835 $.76 $36,638 50,433 $.73
======= ====== ==== ======= ====== ====
1. The National Association of Real Estate Investment Trusts ("NAREIT")
defines FFO as net income (computed in accordance with generally accepted
accounting principles) excluding gains (or losses) from sales of property
plus real estate depreciation and amortization. IRET management considers
that FFO is a useful supplemental measure for equity real estate
investment trusts. Historical cost accounting for real estate assets in
accordance with GAAP assumes, through depreciation, that the value of real
estate assets decreases predictably over time. However, real estate asset
values have historically risen or fallen with market conditions. FFO, by
excluding depreciation costs, reflects the fact that real estate, as an
asset class, generally appreciates over time and that depreciation charges
required by GAAP may not reflect underlying economic realities. FFO is
used by investors to compare the performance of real estate investment
trusts. However, while FFO is widely used by real estate investment trusts
as a performance metric, not all real estate companies use the same
definition of FFO or calculate FFO in the same way. Accordingly, FFO
presented here is not necessarily comparable to FFO presented by other
real estate companies.
Fiscal 2005 Acquisition and Disposition Summary
Property Acquisitions
IRET Properties added $146.4 million of real estate investments to its
portfolio during fiscal year 2005, compared to $170.3 million added in
fiscal 2004. The fiscal year 2005 additions are detailed below.
Fiscal 2005 (May 1, 2004 to April 30, 2005)
(in thousands)
--------------
2005 Acquisitions Purchase Price
----------------- --------------
Multi-Family Residential
54-unit Southbrook Court and Mariposa Lane
Townhomes - Topeka, KS $ 5,500
36-unit Legacy 5 - Grand Forks, ND 2,738
36-unit Legacy 6 - Grand Forks, ND 2,607
140-unit Olympik Village - Rochester, MN 7,100
----------
$ 17,945
----------
Commercial Property - Office
26,186 sq. ft. Plymouth I Office Building - Plymouth, MN $ 1,864
26,186 sq. ft. Plymouth II Office Building - Plymouth, MN 1,748
26,186 sq. ft. Plymouth III Office Building - Plymouth, MN 2,214
79,377 sq. ft. Northgate I Office Building - Maple Grove, MN 8,175
185,000 sq. ft. Crosstown Circle Office Building -
Eden Prairie, MN 22,000
81,173 sq. ft. Highlands Ranch II Office Building -
Highlands Ranch, CO 12,800
86,428 sq. ft. Wells Fargo Center - St. Cloud, MN 9,201
153,947 sq. ft. US Bank - Bloomington, MN 20,300
----------
$ 78,302
----------
Commercial Property - Medical
52,300 sq. ft. Nebraska Orthopaedic Hospital Expansion
Project - Omaha, NE $ 20,597
45,081 sq. ft. Pavilion I Clinic - Duluth, MN 10,900
60,294 sq. ft. High Pointe Health Campus Phase I
(East Metro Medical Building) - Lake Elmo, MN 13,050
----------
$ 44,547
----------
Commercial Property - Retail
46,720 sq. ft. Sleep Inn Hotel - Brooklyn Park, MN $ 2,750
4,000 sq. ft. single tenant retail building
(former Payless building) - Fargo, ND 375
----------
$ 3,125
----------
Undeveloped Property
* Legacy VII - Grand Forks, ND $ 2,443
----------
$ 2,443
----------
Total Fiscal 2005 Property Acquisitions $ 146,362
==========
* = Property not placed in service at April 30, 2005. Additional costs
were still to be incurred
Property Dispositions
During fiscal year 2005, IRET Properties disposed of 17 properties and one
undeveloped property for an aggregate sale price of $48.9 million, compared
to six properties and two parcels of undeveloped land sold for $4.4 million
in total during fiscal year 2004. Real estate assets sold by IRET
properties during fiscal year 2005 were as follows:
(in thousands)
Book Value
Sales and
Price Sales Cost Gain/Loss
-------- -------- --------
2005 Dispositions
Multi-Family Residential
204-unit Ivy Club
Apartments - Vancouver, WA $ 12,250 $ 12,070 $ 180
26-unit Beulah Condominiums -
Beulah, ND 96 96 0
36-unit Parkway Apartments -
Beulah, ND 159 159 0
18-unit Dakota Arms
Apartments - Minot, ND 825 566 259
100-unit Van Mall Woods
Apartments - Vancouver, WA 6,900 5,625 1,275
192-unit Century Apartments -
Williston, ND 4,599 2,658 1,941
18-unit Bison Apartments -
Carrington, ND 215 161 54
17-unit Bison Apartments -
Cooperstown, ND 185 135 50
Commercial - Office
62,585 sq. ft. Flying Cloud
Building - Eden Prairie, MN 5,750 5,750 0
Commercial - Medical (assisted
living facility)
97,821 sq. ft. Edgewood Vista -
Minot, ND 7,210 5,676 1,534
5,100 sq. ft. Edgewood Vista -
Belgrade, MT 509 433 76
5,100 sq. ft. Edgewood Vista -
Columbus, NE 509 435 74
5,100 sq. ft. Edgewood Vista -
Grand Island, NE 509 434 75
16,392 sq. ft. Edgewood Vista -
East Grand Forks, MN 1,639 1,312 327
Commercial - Retail
30,000 sq. ft. Barnes & Noble
Store - Fargo, ND 4,590 2,916 1,674
18,040 sq. ft. Petco Store -
Fargo, ND 2,160 1,209 951
4,800 sq. ft. single tenant retail
building (former Tom Thumb
store) - Ham Lake, MN 650 518 132
Undeveloped Property
205,347 sq. ft. parcel of vacant
land - Libby, MT 151 151 0
-------- -------- --------
Total Fiscal 2005 Property
Dispositions $ 48,906 $ 40,304 $ 8,602
======== ======== ========
PO Box 1988
12 South Main Street
Minot, North Dakota 58701
701.837.4738 phone
701.838.8875 fax
info@iret.com email
Contact:
Michelle R. Saari
701.837.4738
www.iret.com