- Maintains 95% Occupancy Level; Increases in Revenues; Substantial
Leasing Achievements - PORT WASHINGTON, N.Y., July 29
/PRNewswire-FirstCall/ -- Cedar Shopping Centers, Inc. (NYSE:CDR)
today reported its financial results for the second quarter, ended
June 30, 2009. Highlights For The Quarter -- Revenues increased
4.5% to $44.8 million from $42.8 million for the comparable quarter
of 2008. -- Net income attributable to common shareholders (and net
of limited partners' interest) was $2.5 million ($0.05 per share)
before non-cash charges of $2.3 million ($0.05 per share) relating
to a terminated development opportunity and $0.5 million ($0.01 per
share) relating to mark-to-market of stock-based compensation. Such
non-cash charges resulted in net loss attributable to common
shareholders of ($0.3) million ($0.01 per share) for the quarter as
compared to net income of $1.2 million ($0.03 per share) for the
comparable quarter of 2008. -- Funds from Operations ("FFO") for
the quarter, before the above-mentioned non-cash charges, was $13.7
million ($0.29 per share/OP unit). FFO for the quarter, after such
non-cash charges, was $10.8 million ($0.23 per share/OP unit). FFO
for the second quarter of 2008 was $14.4 million ($0.31 per
share/OP unit). -- Occupancy for the Company's stabilized portfolio
remained at 95% and total portfolio occupancy, including
development and redevelopment properties, remained at 92%. -- The
Company signed renewal leases aggregating 329,000 square feet at an
average increase in base rents of more than 10%. Leo Ullman,
Cedar's CEO, stated, "Our financial results for the quarter ended
June 30, 2009 again reflect the strength of our Company's "bread
and butter", primarily-super-market-anchored shopping centers. We
are executing well on our business plan, maintaining solid
occupancy and cash flows, while starting to deliver on our
significant development pipeline. Furthermore our multi-pronged
strategy for maintaining our financial flexibility is moving ahead.
It includes, among other things, recycling of capital while
continuing to explore and evaluate the best capital structure for
the long-term benefit of the Company." Financial and Operating
Results Net income attributable to common shareholders and FFO for
the second quarter of 2009 reflect stable core operations and cash
flows. Base rents and occupancy levels, as compared to prior year
and last quarter, were substantially equivalent for same-store
properties. Net income attributable to common shareholders and FFO
reflect continued controlled bad debt expense, and billable expense
recoveries that, in the aggregate, were consistent with the levels
of the first quarter of 2009 but represented higher net expense as
compared to the second quarter of 2008 by approximately $0.02 per
share. Net income attributable to common shareholders (and net of
limited partners' interest) in the second quarter of 2009 was $2.5
million ($0.05 per share) before non-cash charges of approximately
$2.3 million ($0.05 per share) related to the cancellation of a
development project, for which the costs were incurred in prior
years, and $0.5 million ($0.01 per share) for mark-to-market
expense related to stock-based compensation. FFO for the quarter,
before the above-mentioned non-cash charges, was $13.7 million
($0.29 per share/OP unit). FFO for the quarter, after such non-cash
charges, was $10.8 million ($0.23 per share/OP unit). FFO for the
second quarter of 2008 was $14.4 million ($0.31 per share/OP unit).
Revenues for the six-month period increased 6.0% to $91.6 million
from $86.4 million for the comparable period of 2008. Net income
attributable to common shareholders for the six-month period in
2009, after approximately $0.05 per share of costs attributable to
termination of potential acquisitions and development projects,
completed acquisitions, and mark-to-market of stock-based
compensation, was $3.7 million ($0.08 per share) as compared to
$4.3 million ($0.10 per share) for the comparable period of 2008.
FFO for the six-month period in 2009 after the above-mentioned
non-cash deductions in the second quarter was $26.2 million ($0.56
per share/OP unit) as compared to $28.1 million ($0.61 per share/OP
unit) for the comparable period of 2008. Net cash flows provided by
operating activities were $16.2 million for the second quarter of
2009 as compared to $16.3 million for the comparable quarter of the
prior year. A reconciliation of net income applicable to common
shareholders to FFO is contained in the table accompanying this
release. Same Property Results The Company owned 116 properties
throughout both the second quarters of 2009 and 2008. Same property
net operating income was $30.0 million in the second quarter of
2009 as compared to $31.5 million in the comparable quarter of
2008. Base rent and percentage rent on a cash basis were slightly
higher in the 2009 second quarter than in the comparable period of
2008, reflecting substantially stable operations and tenants, while
non-cash revenues from straight-line and other rents were lower by
$0.8 million in the comparable periods. Bad debt expense was higher
by approximately $0.4 million. Expense recoveries were lower by
about $0.3 million, attributable principally to properties
undergoing redevelopment. Leasing Activity In the second quarter of
2009, the Company signed 42 renewal leases totaling approximately
329,000 square feet of gross leasable area (GLA) with an average
increase in base rents of 10.2%. The Company signed 14 new leases
totaling approximately 76,000 square feet with an average base rent
of $14.66 per sq. ft., and had 18 terminated leases totaling
approximately 49,000 square feet with average base rent of $14.59
per sq. ft. Balance Sheet Total assets were $1.83 billion at June
30, 2009 and $1.73 billion at December 31, 2008. The Company had
total debt outstanding of $1,113.5 million at June 30, 2009 as
compared to $1,013.5 million at December 31, 2008. At June 30,
2009, the Company's fixed-rate debt was approximately 65% of total
indebtedness with a weighted average remaining term of 5.9 years
and a weighted average interest rate of 5.8%. In June 2009, the
Company arranged property-specific financings on the Columbus
Crossing supermarket-anchored shopping center in Philadelphia, PA
and on CVS drugstore ground-up development properties in Kinderhook
and Kingston, NY. The financings involved an aggregate amount of
$23.3 million, terms of five years and interest rates of 6.75% on
the Philadelphia property and 5.25% on the New York properties. The
Company expects that it will be able to arrange an extension during
the third quarter of its existing Secured Revolving Stabilized
Property Credit Facility due January 2010. The Company has an
announced development and redevelopment pipeline of approximately
$302 million that it expects to put into service largely during the
second half of 2009 and continuing into 2010. As of June 30, 2009,
the Company had spent approximately $234 million of the estimated
total project costs of the announced pipeline. It expects to fund
the remaining estimated balance of development costs principally
with borrowings under its existing secured revolving and
property-specific credit facilities. Recent Property Sales The
Company completed sales of a property in Medina, OH in April and
another in Westfield, NY in July that generated aggregate sales
prices of $2.9 million. Financial Guidance The Company reiterates
its guidance with respect to FFO per share/OP unit for 2009 in a
range of $0.85 to $1.00 per share/OP unit. In providing this
guidance, it should be noted that there remain several important
variables which provide considerable uncertainty and lack of clear
predictability of financial results for the balance of the year
when compared to the results for 2008. They include the following,
as previously set forth in our guidance: -- potentially lower
revenues and increased bad debt expense from tenant lease
terminations and renegotiated lease arrangements, -- increased
interest costs and uncertainties as to the timing of completing the
renewal of our existing secured revolving credit facility for our
stabilized properties, -- potential additional write-offs of
development and acquisition costs on projects which may be canceled
or impaired, and -- lower scheduled amortization of intangible
lease liabilities. The foregoing guidance does not include the
potential impact of mark-to-market costs of the Company's
stock-based compensation. Supplemental Information Package The
Company has issued "Supplemental Financial Information" for the
period ended June 30, 2009 and has filed such information today as
an exhibit to Form 8-K, which will also be available on the
Company's website at http:///www.cedarshoppingcenters.com.
Reference to Form 10-Q Interested parties are urged to review the
Form 10-Q to be filed with the Securities and Exchange Commission
for the quarter ended June 30, 2009, when available, for further
details. The Form 10-Q can also be linked through the "Investor
Relations" section of the Company's website. Investor Conference
Call The Company will host a conference call on Thursday, July 30,
2009, at 11:00 AM Eastern time to discuss the second quarter
results. The conference call can be accessed by dialing (888)
819-8015 or (913) 312-1474 for international participants. A live
webcast of the conference call will be available online on the
Company's website at http://www.cedarshoppingcenters.com/. A replay
of the call will be available from 2:00 PM Eastern time on July 30,
2009, until midnight Eastern time on August 13, 2009. The replay
dial-in numbers are (888) 203-1112 or (719) 457-0820 for
international callers. Please use passcode 4841299 for the
telephonic replay. A replay of the Company's webcast will be
available on the Company's website for a limited time. About Cedar
Shopping Centers Cedar Shopping Centers, Inc. is a fully-integrated
real estate investment trust which focuses primarily on ownership,
operation, development and redevelopment of "bread and butter"
supermarket-anchored shopping centers in coastal mid-Atlantic and
New England states. The Company presently owns and operates
approximately 12.7 million square feet of GLA at 121 shopping
center properties, of which approximately 75% are anchored by
supermarkets and/or drugstores with average remaining lease terms
of approximately 11 years. The Company's stabilized properties have
an occupancy rate of approximately 95%. The Company has also
announced a pipeline of approximately 11 substantially pre-leased
primarily supermarket- and drugstore-anchored development
properties. Forward-Looking Statements Statements made or
incorporated by reference in this press release include certain
"forward-looking statements". Forward-looking statements include,
without limitation, statements containing the words "anticipates",
"believes", "expects", "intends", "future", and words of similar
import which express the Company's beliefs, expectations or
intentions regarding future performance or future events or trends.
While forward-looking statements reflect good faith beliefs,
expectations, or intentions, they are not guarantees of future
performance and involve known and unknown risks, uncertainties and
other factors, which may cause actual results, performance or
achievements to differ materially from anticipated future results,
performance or achievements expressed or implied by such
forward-looking statements as a result of factors outside of the
Company's control. Certain factors that might cause such
differences include, but are not limited to, the following: real
estate investment considerations, such as the effect of economic
and other conditions in general and in the Company's market areas
in particular; the financial viability of the Company's tenants
(including an inability to pay rent, filing for bankruptcy
protection, closing stores and vacating the premises); the
continuing availability of acquisition, development and
redevelopment opportunities, on favorable terms; the availability
of equity and debt capital (including the availability of
construction financing) in the public and private markets; the
availability of suitable joint venture partners and potential
purchasers of the Company's properties if offered for sale; changes
in interest rates; the fact that returns from acquisition,
development and redevelopment activities may not be at expected
levels or at expected times; risks inherent in ongoing development
and redevelopment projects including, but not limited to, cost
overruns resulting from weather delays, changes in the nature and
scope of development and redevelopment efforts, changes in
governmental regulations relating thereto, and market factors
involved in the pricing of material and labor; the need to renew
leases or re-let space upon the expiration or termination of
current leases and incur applicable required replacement costs; and
the financial flexibility to repay or refinance debt obligations
when due and to fund tenant improvements and capital expenditures.
Non-GAAP Financial Measures - FFO Funds From Operations ("FFO") is
a widely-recognized non-GAAP financial measure for REITs that the
Company believes, when considered with financial statements
determined in accordance with GAAP, is useful to investors in
understanding financial performance and providing a relevant basis
for comparison among REITs. In addition, FFO is useful to investors
as it captures features particular to real estate performance by
recognizing that real estate generally appreciates over time or
maintains residual value to a much greater extent than do other
depreciable assets. Investors should review FFO, along with GAAP
net income, when trying to understand an equity REIT's operating
performance. The Company presents FFO because the Company considers
it an important supplemental measure of its operating performance
and believes that it is frequently used by securities analysts,
investors and other interested parties in the evaluation of REITs.
Among other things, the Company uses FFO or an adjusted FFO-based
measure (1) as one of several criteria to determine
performance-based bonuses for members of senior management, (2) in
performance comparisons with other shopping center REITs, and (3)
to measure compliance with certain financial covenants under the
terms of the Company's secured revolving credit facilities. The
Company computes FFO in accordance with the "White Paper" on FFO
published by the National Association of Real Estate Investment
Trusts ("NAREIT"), which defines FFO as net income applicable to
common shareholders (determined in accordance with GAAP), excluding
gains or losses from debt restructurings and sales of properties,
plus real estate-related depreciation and amortization, and after
adjustments for partnerships and joint ventures (which are computed
to reflect FFO on the same basis). FFO does not represent cash
generated from operating activities and should not be considered as
an alternative to net income applicable to common shareholders or
to cash flow from operating activities. FFO is not indicative of
cash available to fund ongoing cash needs, including the ability to
make cash distributions. Although FFO is a measure used for
comparability in assessing the performance of REITs, as the NAREIT
White Paper only provides guidelines for computing FFO, the
computation of FFO may vary from one company to another. The
following table sets forth the Company's calculations of FFO for
the three and six months ended June 30, 2009 and 2008: Three months
ended June 30, Six months ended June 30, --------------------------
------------------------ 2009 2008 2009 2008 -----------
----------- ----------- ----------- Net (loss) income attributable
to common shareholders $(316,000) $1,224,000 $3,683,000 $4,336,000
Add (deduct): Real estate depreciation and amortization 12,593,000
13,939,000 24,984,000 25,400,000 Noncontrolling interests: Limited
partners' interest (13,000) 56,000 167,000 199,000 Minority
interests in consolidated joint ventures 309,000 482,000 (45,000)
1,188,000 Minority interests' share of FFO applicable to
consolidated joint ventures (1,638,000) (1,417,000) (2,470,000)
(3,198,000) Equity in income of unconsolidated joint venture
(283,000) (222,000) (542,000) (372,000) FFO from unconsolidated
joint venture 377,000 355,000 736,000 581,000 Gain on sale of
discontinued operations (277,000) - (277,000) - -----------
----------- ----------- ----------- Funds From Operations
$10,752,000 $14,417,000 $26,236,000 $28,134,000 ===========
=========== =========== =========== FFO per common share (assuming
conversion of OP Units): Basic $0.23 $0.31 $0.56 $0.61 ===== =====
===== ===== Diluted $0.23 $0.31 $0.56 $0.61 ===== ===== ===== =====
Weighted average number of common shares: Shares used in
determination of basic earnings per share 45,062,000 44,464,000
44,971,000 44,461,000 Additional shares assuming conversion of OP
Units (basic) 2,018,000 2,029,000 2,018,000 2,030,000 ---------
--------- --------- --------- Shares used in determination of basic
FFO per share 47,080,000 46,493,000 46,989,000 46,491,000
========== ========== ========== ========== Shares used in
determination of diluted earnings per share 45,062,000 44,466,000
44,971,000 44,462,000 Additional shares assuming conversion of OP
Units (diluted) 2,018,000 2,029,000 2,018,000 2,030,000 ---------
--------- --------- --------- Shares used in determination of
diluted FFO per share 47,080,000 46,495,000 46,989,000 46,492,000
========== ========== ========== ========== CEDAR SHOPPING CENTERS,
INC. Consolidated Balance Sheets June 30, December 31, 2009 2008
------------ ------------- (unaudited) Assets Real estate: Land
$394,229,000 $378,704,000 Buildings and improvements 1,500,972,000
1,400,508,000 ------------- ------------- 1,895,201,000
1,779,212,000 Less accumulated depreciation (169,837,000)
(146,804,000) ------------ ------------ Real estate, net
1,725,364,000 1,632,408,000 Real estate held for sale 3,847,000
4,920,000 Investment in unconsolidated joint venture 5,352,000
4,976,000 Cash and cash equivalents 15,711,000 8,231,000 Restricted
cash 15,643,000 14,004,000 Rents and other receivables, net
7,176,000 5,818,000 Straight-line rents receivable 15,456,000
14,297,000 Other assets 5,892,000 9,403,000 Deferred charges, net
33,241,000 33,071,000 ---------- ---------- Total assets
$1,827,682,000 $1,727,128,000 ============== ==============
Liabilities and equity Mortgage loans payable $792,611,000
$708,983,000 Secured revolving credit facilities 320,925,000
304,490,000 Accounts payable and accrued expenses 36,588,000
46,548,000 Unamortized intangible lease liabilities 57,979,000
61,384,000 ---------- ---------- Total liabilities 1,208,103,000
1,121,405,000 ------------- ------------- Limited partners'
interest in Operating Partnership 14,368,000 14,271,000 Commitments
and contingencies - - Equity: Cedar Shopping Centers, Inc.
shareholders' equity: Preferred stock ($.01 par value, $25.00 per
share liquidation value, 12,500,000 shares authorized, 3,550,000
shares issued and outstanding) 88,750,000 88,750,000 Common stock
($.06 par value, 150,000,000 shares authorized 45,062,000 and
44,468,000 shares, respectively, issued and outstanding) 2,704,000
2,668,000 Treasury stock (983,000 and 713,000 shares, respectively,
at cost) (9,784,000) (9,175,000) Additional paid-in capital
577,778,000 576,083,000 Cumulative distributions in excess of net
income (128,406,000) (127,043,000) Accumulated other comprehensive
loss (3,426,000) (7,256,000) ---------- ---------- Total Cedar
Shopping Centers, Inc. shareholders' equity 527,616,000 524,027,000
----------- ----------- Noncontrolling interests: Minority
interests in consolidated joint ventures 68,256,000 58,150,000
Limited partners' interest in Operating Partnership 9,339,000
9,275,000 --------- --------- Total noncontrolling interests
77,595,000 67,425,000 ---------- ---------- Total equity
605,211,000 591,452,000 ----------- ----------- Total liabilities
and equity $1,827,682,000 $1,727,128,000 ==============
============== CEDAR SHOPPING CENTERS, INC. Consolidated Statements
of Income (unaudited) Three months ended June 30, Six months ended
June 30, -------------------------- ------------------------ 2009
2008 2009 2008 -------------------------- ------------------------
Revenues: Rents $36,482,000 $34,593,000 $72,481,000 $68,913,000
Expense recoveries 8,253,000 8,066,000 18,785,000 17,072,000 Other
41,000 175,000 303,000 382,000 ------ ------- ------- ------- Total
revenues 44,776,000 42,834,000 91,569,000 86,367,000 ----------
---------- ---------- ---------- Expenses: Operating, maintenance
and management 7,772,000 7,111,000 17,063,000 15,313,000 Real
estate and other property-related taxes 5,419,000 4,737,000
10,767,000 9,405,000 General and administrative 2,853,000 2,323,000
4,292,000 4,514,000 Terminated projects and acquisition transaction
costs 2,423,000 - 3,948,000 - Depreciation and amortization
12,650,000 13,994,000 25,035,000 25,507,000 ---------- ----------
---------- ---------- Total expenses 31,117,000 28,165,000
61,105,000 54,739,000 ---------- ---------- ---------- ----------
Operating income 13,659,000 14,669,000 30,464,000 31,628,000
Non-operating income and expense: Interest expense, including
amortization of deferred financing costs (12,117,000) (11,279,000)
(23,709,000) (22,663,000) Interest income 4,000 77,000 18,000
235,000 Equity in income of unconsolidated joint venture 283,000
222,000 542,000 372,000 Gain on sale of land parcel (3,000) -
236,000 - ----------- ----------- ----------- ----------- Total
non-operating income and expense (11,833,000) (10,980,000)
(22,913,000) (22,056,000) ----------- ----------- -----------
----------- Income before discontinued operations 1,826,000
3,689,000 7,551,000 9,572,000 (Loss) income from discontinued
operations (139,000) 44,000 (85,000) 89,000 Gain on sale of
discontinued operations 277,000 - 277,000 - ------- -- ------- --
Total discontinued operations 138,000 44,000 192,000 89,000 -------
------ ------- ------ Net income 1,964,000 3,733,000 7,743,000
9,661,000 Less, net loss (income) attributable to noncontrolling
interests: Minority interests in consolidated joint ventures
(309,000) (482,000) 45,000 (1,188,000) Limited partners' interest
in Operating Partnership 13,000 (56,000) (167,000) (199,000) ------
------- -------- -------- Total net loss (income) attributable to
noncontrolling interests (296,000) (538,000) (122,000) (1,387,000)
-------- -------- -------- ---------- Net income attributable to
Cedar Shopping Centers, Inc. 1,668,000 3,195,000 7,621,000
8,274,000 Preferred distribution requirements (1,984,000)
(1,971,000) (3,938,000) (3,938,000) --------- ---------- ----------
---------- Net (loss) income attributable to common shareholders
$(316,000) $1,224,000 $3,683,000 $4,336,000 ========= ==========
========== ========== Per common share (basic and diluted)
attributable to common shareholders: Continuing operations $(0.01)
$0.03 $0.08 $0.10 Discontinued operations - - - - -- -- -- --
$(0.01) $0.03 $0.08 $0.10 ====== ===== ===== ===== Amounts
attributable to Cedar Shopping Centers, Inc. common shareholders,
net of limited partners interest: Income from continuing operations
$(447,000) $1,182,000 $3,499,000 $4,251,000 Income from
discontinued operations (134,000) 42,000 (81,000) 85,000 Gain on
sale of discontinued operations 265,000 - 265,000 - ------- --
------- -- Net (loss) income $(316,000) $1,224,000 $3,683,000
$4,336,000 ========= ========== ========== ========== Dividends to
common shareholders $- $10,003,000 $5,046,000 $20,007,000 ==
=========== ========== =========== Per common share $- $0.2250
$0.1125 $0.4500 == ======= ======= ======= Weighted average number
of common shares outstanding 45,062,000 44,464,000 44,971,000
44,461,000 ========== ========== ========== ========== CEDAR
SHOPPING CENTERS, INC. Consolidated Statements of Cash Flows
(unaudited) Six months ended June 30, -------------------------
2009 2008 ------------------------- Cash flow from operating
activities: Net income $7,743,000 $9,661,000 Adjustments to
reconcile net income to net cash provided by operating activities:
Non-cash provisions: Equity in income of unconsolidated joint
venture (542,000) (372,000) Distributions from unconsolidated joint
venture 516,000 434,000 Terminated projects and acquisition
transaction costs 2,588,000 - Gain on sales of real estate
(513,000) - Straight-line rents receivable (1,176,000) (1,481,000)
Depreciation and amortization 25,051,000 25,536,000 Amortization of
intangible lease liabilities (6,670,000) (6,904,000)
Amortization/market price adjustments relating to stock-based
compensation 346,000 1,341,000 Amortization of deferred financing
costs 1,464,000 799,000 Increases/decreases in operating assets and
liabilities: Rents and other receivables, net (1,358,000) 720,000
Other 1,509,000 267,000 Accounts payable and accrued expenses
(3,946,000) (1,142,000) ---------- ---------- Net cash provided by
operating activities 25,012,000 28,859,000 ---------- ----------
Cash flow from investing activities: Expenditures for real estate
and improvements (63,336,000) (50,439,000) Net proceeds on sales of
real estate 1,480,000 - Purchase of consolidated joint venture
minority interests - (17,454,000) Investment in unconsolidated
joint venture (350,000) (1,094,000) Construction escrows and other
(984,000) (1,299,000) -------- ---------- Net cash (used in)
investing activities (63,190,000) (70,286,000) -----------
----------- Cash flow from financing activities: Net advances from
revolving lines of credit 16,435,000 63,950,000 Proceeds from
mortgage financings 44,231,000 27,562,000 Mortgage repayments
(13,519,000) (40,058,000) Net payments of deferred financing costs
(2,429,000) (1,888,000) Noncontrolling interests: Contributions
from consolidated joint venture minority interests, net 12,212,000
4,269,000 Distributions to consolidated joint venture minority
interests (2,061,000) (266,000) Redemption of Operating Partnership
Units - (122,000) Distributions to limited partners (227,000)
(913,000) Preferred stock distributions (3,938,000) (3,938,000)
Distributions to common shareholders (5,046,000) (20,007,000)
---------- ---------- Net cash provided by financing activities
45,658,000 28,589,000 ---------- ---------- Net increase (decrease)
in cash and cash equivalents 7,480,000 (12,838,000) Cash and cash
equivalents at beginning of period 8,231,000 23,289,000 ---------
---------- Cash and cash equivalents at end of period $15,711,000
$10,451,000 =========== =========== DATASOURCE: Cedar Shopping
Centers, Inc. CONTACT: Leo S. Ullman, Chairman, CEO and President
of Cedar Shopping Centers, Inc., +1-516-944-4525, Web Site:
http://www.cedarshoppingcenters.com/
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