Capital Automotive REIT Reports Fourth Quarter and Year End Results
3 February 1999
Capital Automotive REIT Reports Fourth Quarter and Year End Results - Announces Completion of $54 Million in Acquisitions in January 1999 -
MCLEAN, Va., Feb. 3 -- Capital Automotive REIT
today announced financial results for the fourth quarter and year ended
December 31, 1998.
For the fourth quarter, the Company reported funds from operations (FFO)
of $9.2 million, or $0.33 per basic and diluted share, on total revenues of
$12.7 million. Net income in the fourth quarter was $4.8 million, or $0.22 per
basic and diluted share. FFO results are based on basic and diluted weighted
average number of common shares and units of 28.3 million.
For the year ended December 31, 1998, funds from operations were
$27.0 million, or $1.04 per basic share or $1.03 per diluted share, on total
revenues of $34.9 million. Net income for the period was $16.5 million, or
$0.79 per basic and diluted share. FFO results for the full year period are
based on basic weighted average number of shares and units of 26.0 million and
diluted weighted average number of shares and units of 26.2 million.
As of December 31, 1998, the Company owned $511 million of franchised
automotive properties which included 120 dealership properties used by
29 dealer groups located in 18 states operated by 196 automotive franchises,
totaling 4.3 million square feet of building on 709 acres of land. The
Company's weighted average initial cap rate was 10.6%.
For the fourth quarter, the Company closed on $96 million in acquisitions,
which included 25 dealership properties in five states, representing
58 franchises. The properties included a total of 919,000 square feet of
dealership buildings on 188 acres of property. These acquisitions included:
-- Six properties from Group 1 Automotive, Inc. located in Houston and
Austin, TX and Denver, CO. The acquisitions include 10 automotive
franchises: Honda, Acura, Chevrolet, Jeep/Eagle, Chrysler, Plymouth,
Dodge, Dodge Truck, and Isuzu. Group 1 is a leading operator and
consolidator in the automotive retailing industry with 57 dealership
franchises in six states.
-- Three properties from Motorcars Group located in Cleveland, Ohio.
Motorcars operates six franchises on the properties representing six
brands including Mercedes-Benz, Honda, Volvo, Infiniti, Pontiac and
Oldsmobile. According to Automotive News, the Motorcars Group was the
country's 71st largest dealer group in the United States with 1997
revenues in excess of $275 million. The group currently operates a
total of 15 franchises in 11 locations.
-- Two additional properties from Momentum Motorcars based in Houston, TX
one of which is a BMW franchise. Momentum Motorcars was the largest
retail BMW dealer in the United States during 1997.
-- Four properties from Gurley-Leep Automotive Group located in South
Bend, Indiana. The Gurley-Leep Automotive Group operates 14 franchises
on the properties representing six automotive brands, including
Mercedes-Benz, Audi, Honda, Chrysler, Buick and GMC Truck. The
Gurley-Leep Automotive Group currently operates 15 franchised
dealerships in Indiana. The dealerships are recipients of Chrysler's
"Five Star Award", Buick's "Best in Class Award" and GMC's "Award for
Dealership Operations".
-- Five properties from Jackson Automotive Group located in Greenville and
Sulphur Springs, Texas. Jackson Automotive Group operates 15 franchises
representing 11 automotive brands including Ford, Jeep/Eagle and
Chrysler.
-- Three properties from Fenton Motor Group located in McAlester and Ada,
Oklahoma. The Fenton Motor Group operates nine franchises on the
properties, representing six brands including Ford, Lincoln-Mercury,
Pontiac, Buick, GMC and Nissan.
-- Two properties from Moritz Interests, Ltd. located in Oklahoma City and
Tulsa, Oklahoma. The Oklahoma City property is leased to Dealer's Auto
Auction, which was founded at the location in 1987. Dealer's Auto
Auction is one of the five largest independent wholesale automotive
auctions in the United States. The Tulsa property is leased to Crown
Auto World, which was founded at the location in the late 1970's and
currently holds three franchises, including BMW, Jeep/Eagle and Buick.
Crown Auto World is a recipient of Chrysler's "Five Star Award".
The Company has closed approximately $54 million of acquisitions in
January 1999. Consideration for the acquisitions was substantially all cash
funded from the proceeds of the Deutsche Bank $150 million permanent loan.
The acquisitions include 11 dealership properties in three states,
representing seven franchises. These acquisitions included:
-- Six additional properties from Group 1 Automotive, Inc. and its
affiliates located in Houston and Round Rock, Texas. Group 1 operates
three franchises on the properties, including Toyota, Lexus and Nissan.
-- One additional property from Park Place Motor Cars located in Dallas,
Texas. Park Place Motor Cars operates three franchises on the property,
including Mercedes-Benz, Porsche and Audi. Park Place's Mercedes-Benz
franchise is among the top 10 Mercedes-Benz franchises in the country.
Park Place is one of the largest Lexus dealers in the state of Texas
and is a four-time winner of the "Elite of Lexus Award". Mr. Kenneth
L. Schnitzer, Park Place's current President and CEO, was also named a
premier Porsche dealer for two consecutive years. Mr. Schnitzer, is a
past chairman of the Mercedes- Benz Dealer Council and is a 1998
recipient of the American International Automobile Dealers
Association's "All Star Dealer Award."
-- One additional property from FirstAmerica Automotive, Inc. located in
San Rafael, California. The property is currently being developed by
FirstAmerica and, when completed, FirstAmerica will operate a Dodge
franchise on the property. FirstAmerica operates 15 franchises
throughout California.
-- Three properties from McCluskey Chevrolet, a Cincinnati, Ohio based
group. McCluskey Chevrolet, founded by CEO Dan McCluskey in 1973, has
received several prestigious awards and honors including being named as
a national finalist in the Small Business category for the "1997
National Quality Cup Competition", GMC's "Five Star Performer Award"
and "Showcase Dealer for Service Supremacy."
Thomas D. Eckert, president and chief executive officer, stated, "The
company has completed $565 million in acquisitions since its initial public
offering in February 1998. This exceptional acquisition activity validates the
Capital Automotive strategy and timeliness in the rapidly consolidating
automotive industry. Our tenants include 12 of the Top 100 dealer groups in
the nation -- underscoring our strategy of partnering with the top
consolidators. As we enter 1999, we will continue to be mindful of capital
market and industry trends and manage our business as such to provide enhanced
returns with minimal risk."
Capital Automotive REIT, headquartered in McLean, Virginia, is the only
real estate investment trust formed to acquire the real property and
improvements used by operators of multi-site, multi-franchised motor vehicle
dealerships and motor vehicle related business. Additional information on
Capital Automotive REIT is available on the Company's website at
http://www.capitalautomotive.com.
The matters discussed in this press release include forward-looking
statements. In addition, when used in this press release, the words "intends
to," "believes," "anticipates," "expects," "pro forma" and similar expressions
are intended to identify forward-looking statements. Such statements are
subject to a number of risks and uncertainties. Actual results in the future
could differ materially and adversely from those described in the forward-
looking statements as a result of various important factors, including the
general economic climate, the supply of and demand for automotive properties,
interest rate levels, the availability of financing, and other risks
associated with the acquisition and leasing of properties, including risks
that the tenants will not pay rent or that operating costs may be greater than
anticipated, acquisitions that are pursued by the Company may not be
consummated for a variety of reasons, including the failure to reach agreement
with the seller and the other risk factors set forth in the Company's filings
with the Securities and Exchange Commission. The Company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements that may be made to reflect any future events or
circumstances.
CAPITAL AUTOMOTIVE REIT
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Statements of Operations:Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1998
Revenue:
Rental $11,773 $27,027
Interest & other 929 7,904
Total revenue 12,702 34,931
Expenses:
Depreciation and amortization 2,993 6,304
General and administrative 1,495 5,487
Interest 1,926 2,254
Total expenses 6,414 14,045
Net income before
minority interest 6,288 20,886
Minority interest (1,467) (4,395)
Net income $4,821 $16,491
Basic earnings per share $0.22 $ 0.79
Diluted earnings per share $0.22 $ 0.79
Weighted average number
of common shares - basic 21,907 20,927
Weighted average number
of common shares - diluted 21,907 20,978
Funds from Operations:
Net income before
minority interest $6,288 $20,886
Adjustments:
Add: Real estate
depreciation and amortization 2,920 6,161
Funds from operations $9,208 $27,047
Basic funds from
operations per share $0.33 $1.04
Diluted funds from
operations per share $0.33 $1.03
Weighted average number
of common shares and units
-- basic 28,287 26,048
Weighted average number
of common shares and units
-- diluted 28,287 26,228
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December 31, 1998
Selected Balance Sheet Data (in thousands)
Real estate before accumulated depreciation $511,132
Cash and cash equivalents 72,106
Total assets 583,211
Mortgage loans 161,997
Total other liabilities 18,659
Minority interest 93,898
Total shareholders' equity 308,657
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December 31, 1998
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Selected Portfolio Data:
Properties 120
States 18
Land acres 709
Square feet of building (in millions) 4.3
Average lease term (in years) 12.9
Dealership groups 29
"Total 100" dealership groups* 12
Franchises 196
Automotive brands 36
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*as published in "Automotive News"
Note: Although the Company was operating from October 20, 1997, formation
date, through December 31, 1997, the operations were minimal as the
Company did not own any property until the completion of its
Initial Public Offering in February 1998. As a result, 1997
figures have not been included for comparative purposes.