Capital Automotive Reports Record Results
1 February 2000
Capital Automotive Reports Record Results
Eighth Consecutive Quarter of Revenue, FFO and Dividend Growth
Highlights
* Fourth quarter year-to-year revenues increased 92% to $24.4 million
* Year-to-year revenues increased 117% to $75.9 million
* Fourth quarter funds from operations (FFO) increased 24% to $0.41 per
share compared to the same quarter last year
* Year-end FFO increased 46% to $1.50 per share compared to the same
period last year
* 1999 acquisitions of 112 properties, totaling $430.3 million, bringing
the total portfolio to 230 properties valued at $935.5 million at
year-end
McLEAN, Va., Feb. 1 -- Capital Automotive , the
nation's leading specialty finance company for automotive retail real estate,
today announced financial results for the fourth quarter and year ended
December 31, 1999.
For the fourth quarter, the Company reported FFO of $12.2 million, or
$0.41 per basic and diluted share, up from $9.2 million or $0.33 per basic and
diluted share in the same quarter last year. Revenues were $24.4 million for
the quarter, or a 92% increase compared to revenues of $12.7 million in the
fourth quarter of 1998. Net income was $6.2 million, or $0.29 per basic and
diluted share, compared to $4.8 million or $0.22 per basic and diluted share
in the same quarter last year.
For the year ended December 31, 1999, FFO was $43.2 million, or $1.50 per
basic and diluted share, up from $27.0 million, or $1.04 per basic share and
$1.03 per diluted share in 1998. Revenues were $75.9 million for 1999, a
117% increase compared to revenues of $34.9 million for 1998. Net income for
1999 was $21.7 million, or $1.01 per basic and diluted share compared to
$16.5 million or $0.79 per basic and diluted share in 1998.
As previously announced, the Company's fourth quarter dividend was $0.36
per share bringing the dividends paid for 1999 to $1.38. This dividend
equates to a payout ratio of 92% of FFO per share for 1999. The Company
expects to reduce this payout ratio to approximately 70% over the next two to
four years by growing FFO faster than the growth of dividends.
Thomas D. Eckert, president and chief executive officer, stated, "Our
strong fourth quarter operating results conclude a terrific year for Capital
Automotive. Our stringent underwriting standards continue to serve us well,
as the Company has not experienced any missed rental payments since inception.
The high quality of our real estate and credit-worthiness of our tenants is
illustrated by our lending relationships and declining credit spreads on our
debt. We are very proud of the strength of our tenant base and the solid
relationships we have created in the automotive retail industry."
Capital Automotive closed on approximately $72 million in property
acquisitions in the fourth quarter, of which approximately $56 million were
additional properties acquired from existing tenants. Consideration for all
the properties purchased in the fourth quarter consisted of approximately
$14 million in operating partnership units and the remainder of cash on hand.
The operating partnership units were priced at $13.12 per unit. For the year
ended December 31, 1999, the Company issued $23 million of partnership units
at an average price of $13.05 per unit as consideration for property
transactions. Acquisitions in the fourth quarter consisted of 14 dealership
properties in six states, representing 17 automotive franchises including BMW,
Mercedes Benz, Honda, and Toyota. The average initial lease term for the
fourth quarter acquisitions was 14.2 years. Cap rates on these transactions
were consistent with the Company's business plan.
As of December 31, 1999, the Company's portfolio included 230 properties
with an asset value of $935.5 million consisting of 349 automotive franchises
in 27 states. These properties total 8.0 million square feet of buildings and
improvements on 1,292 acres of land. Approximately 72% of the Company's
properties are located in the top 50 automobile markets in the country. The
properties are leased under long-term, triple net leases with an average
initial lease term of 13.3 years. The Company has entered into transactions
with 16 of the top 100 dealer groups in the country, 15 of which are tenants.
Approximately 66% of the Company's annualized rental revenues are derived from
this group of tenants. As of December 31, 1999, the Company's weighted
average initial cap rate is 10.5%.
During 1999, the Company raised approximately $335 million of long-term,
fixed rate, non-recourse debt. The Company's debt to total assets was 53% as
of December 31, 1999, with approximately 98% of the debt being long-term,
fixed rate, non-recourse debt. The Company's policy is generally to match the
duration of its leases with long-term debt to minimize interest rate risk.
Virtually all of the Company's debt is secured financing with an average term
of 13.2 years.
The Company will host a conference call at 11:00 a.m. Eastern Standard
Time today to discuss these quarterly and year-end results. The conference
call will be broadcast live over the Internet and can be accessed by all
interested parties from the company's web site at http://www.capitalautomotive.com .
Capital Automotive, headquartered in McLean, Va., is a self-administered,
self-managed real estate investment trust formed to acquire the real property
and improvements used by operators of multi-site, multi-franchised automotive
dealerships and related businesses. Additional information on Capital
Automotive is available on the Company's web site at
http://www.capitalautomotive.com .
To receive Capital Automotive's latest news and corporate developments via
fax at no cost, please call 1-800-PRO-INFO; use Company code CARS. Or visit
The Financial Relations Board's web site at http://www.frbinc.com .
Certain matters discussed within this press release are forward-looking
statements within the meaning of the federal securities laws. Although the
Company believes that the expectations reflected in the forward-looking
statements are based upon reasonable assumptions, the Company's future
operations will depend on a number of factors that may differ, some
materially, from the Company's assumptions. These factors, which could cause
the Company's actual results to differ materially from those set forth in the
forward-looking statements, include risks that the Company's tenants will not
pay rent or that the Company's operating costs may be higher than expected,
risks of interest rate fluctuations impacting future acquisitions, risks that
additional acquisitions may not be consummated, environmental and other risks
associated with the acquisition and leasing of automotive properties and those
risks detailed from time to time in the Company's SEC reports, including its
annual report on Form 10-K, its quarterly reports on Form 10-Q, and its
reports on Form 8-K.
CAPITAL AUTOMOTIVE
SUPPLEMENTAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Twelve Months Ended
December 31, December 31,
Statements of Operations: 1999 1998 1999 1998
Revenue:
Rental $23,959 $11,773 $74,339 $27,027
Interest and other 471 929 1,534 7,904
Total revenue 24,430 12,702 75,873 34,931
Expenses:
Depreciation and amortization 4,170 2,993 15,347 6,304
General and administrative 1,551 1,495 6,781 5,487
Interest 10,141 1,926 24,541 2,254
Total expenses 15,862 6,414 46,669 14,045
Net income before minority
interest 8,568 6,288 29,204 20,886
Minority interest (2,373) (1,467) (7,473) (4,395)
Net income $6,195 $4,821 $21,731 $16,491
Basic earnings per share $0.29 $0.22 $1.01 $0.79
Diluted earnings per share $0.29 $0.22 $1.01 $0.79
Weighted average number of
common shares - basic 21,607 21,907 21,607 20,927
Weighted average number of
common shares - diluted 21,640 21,907 21,629 20,978
Funds From Operations:
Net income before minority
interest $8,568 $6,288 $29,204 $20,886
Adjustments:
Add: Real estate depreciation
and amortization 4,141 2,920 15,246 6,161
Less: Straight-line rental
income (558) - (962) -
Less: Gain on sale of assets - - (245) -
Funds from operations $12,151 $9,208 $43,243 $27,047
Basic funds from operations
per share $0.41 $0.33 $1.50 $1.04
Diluted funds from operations
per share $0.41 $0.33 $1.50 $1.03
Weighted average number
of common shares
and units - basic 29,536 28,287 28,774 26,048
Weighted average number
of common shares
and units - diluted 29,568 28,287 28,796 26,228
Dec. 31, Dec. 31,
1999 1998
Selected Balance Sheet Data (in thousands)
Real estate before accumulated depreciation $935,525 $511,132
Cash and cash equivalents 11,886 72,106
Total assets 942,559 583,211
Mortgage loans 501,510 161,997
Total other liabilities 26,066 18,659
Minority interest 115,384 93,898
Total shareholders' equity 299,599 308,657
Dec. 31, Dec. 31,
Selected Portfolio Data 1999 1998
Properties 230 120
States 27 18
Land acres 1,292 709
Square footage of buildings (in millions) 8.0 4.3
Average lease term (in years) 13.3 12.9
Franchises 349 196