CUPERTINO, Calif., July 11, 2012 /PRNewswire/ -- Mission West
Properties, Inc. (NASDAQ: MSW) reported today that Funds From
Operations ("FFO") for the quarter ended June 30, 2012, was approximately $12,153,000, or $0.11 per diluted common share, (considering the
potential effect of all O.P. units being exchanged for shares of
the Company's common stock) as compared to approximately
$13,708,000, or $0.13 per diluted common share, for the same
period in 2011. The decrease was primarily due to lower tenant
reimbursement income and higher operating and general and
administrative expenses. On a sequential quarter basis, FFO for the
quarter ended March 31, 2012, was
approximately $0.13 per diluted
common share. For the six months ended June
30, 2012, FFO decreased to $26,303,000, or $0.25 per diluted common share, from FFO of
$29,950,000, or $0.28 per diluted common share, for the six
months ended June 30, 2011.
Net income for the quarter ended June 30,
2012, was approximately $13,709,000 as compared to approximately
$7,370,000 for the quarter ended
June 30, 2011. Net income per diluted
share available to common stockholders was approximately
$0.12 for the quarter ended
June 30, 2012, compared to
$0.08 for the quarter ended
June 30, 2011, a per share increase
of approximately 50%. The increase was primarily due to gains from
sale of real estate, which accounted for approximately $0.06 per diluted share. Net income for the six
months ended June 30, 2012, was
approximately $26,962,000 as compared
to approximately $17,305,000 for the
six months ended June 30, 2011. For
the six months ended June 30, 2012,
net income per diluted share available to common stockholders was
$0.24, up from $0.19 a year ago, a per share increase of
approximately 26%.
Disposition Activity
On April 30, 2012, the
Company disposed of four vacant R&D properties located at
1490-1520 McCandless Drive, 1525-1555 McCandless Drive, 1575-1595
McCandless Drive and 1600 McCandless Drive in Milpitas, California, consisting of
approximately 145,000 rentable square feet. A total net gain of
approximately $7,989,000 was
recognized and classified as discontinued operations on the total
cash sales price of $19,350,000.
On July 10, 2012, the Company
disposed of three vacant R&D properties located at 300 Montague
Expressway, 324-368 Montague Expressway and 337 Trade Zone
Boulevard in Milpitas, California,
consisting of approximately 149,000 rentable square feet. An
estimated total net gain of approximately $4,389,000 will be recognized and classified as
discontinued operations in the third quarter on the total cash
sales price of $18,500,000.
Company Profile
Mission West Properties, Inc. operates as a
self‑managed, self‑administered and fully integrated REIT engaged
in the management, leasing, marketing, development and acquisition
of commercial R&D properties, primarily located in the Silicon
Valley portion of the San Francisco Bay
Area. Currently, the Company manages 104 properties totaling
approximately 7.8 million rentable square feet. For additional
information, please contact Investor Relations at 408-725-0700.
The matters described herein contain forward-looking
statements. Such statements can be identified by the use of
forward-looking terminology such as "will," "anticipate,"
"estimate," "expect," "intend," or similar words. Forward-looking
statements involve a number of risks, uncertainties or other
factors beyond the Company's control, which may cause material
differences in actual results, performance or other expectations.
These factors include, but are not limited to, the ability to
complete acquisitions from the Berg Group and other factors
detailed in the Company's registration statements, and periodic
filings with the Securities & Exchange Commission.
|
MISSION
WEST PROPERTIES, INC.
|
|
SELECTED FINANCIAL DATA
|
|
(In
thousands, except share, per share and property data
amounts)
|
|
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Three
Months
Ended
Jun 30,
2012
|
|
Three
Months
Ended
Jun 30,
2011
|
|
Six
Months
Ended
Jun 30,
2012
|
|
Six
Months
Ended
Jun 30,
2011
|
|
OPERATING REVENUES:
|
|
|
|
|
|
|
|
|
Rental income
|
$20,075
|
|
$20,354
|
|
$40,087
|
|
$42,077
(7)
|
|
Tenant reimbursements
|
2,967
|
|
4,119
|
|
6,914
|
|
8,728
|
|
Other income
|
401
|
|
409
|
|
674
|
|
1,410
|
|
Total operating
revenues
|
23,443
|
|
24,882
|
|
47,675
|
|
52,215
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
2,863
|
|
2,489
|
|
5,272
|
|
4,999
|
|
Real estate taxes
|
3,014
|
|
2,994
|
|
5,442
|
|
6,044
|
|
General and administrative
|
911
|
|
522
|
|
1,562
|
|
1,043
|
|
Depreciation and amortization
|
5,993
(1)
|
|
5,509
(1)
|
|
11,986
|
|
11,000
|
|
Total operating
expenses
|
12,781
|
|
11,514
|
|
24,262
|
|
23,086
|
|
|
|
|
|
|
|
|
|
Operating income
|
10,662
|
|
13,368
|
|
23,413
|
|
29,129
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSES):
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated joint venture
|
60
|
|
27
|
|
174
|
|
18
|
|
Interest income
|
58
|
|
57
|
|
151
|
|
126
|
|
Interest expense
|
(4,833)
|
|
(5,246)
|
|
(9,755)
|
|
(10,525)
|
|
Interest expense – related parties
|
(146)
|
|
(144)
|
|
(292)
|
|
(291)
|
|
Income from continuing
operations
|
5,801
|
|
8,062
|
|
13,691
|
|
18,457
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
Net gain from disposal of
properties classified as
discontinued
operations
|
7,989
|
|
-
|
|
13,508
|
|
-
|
|
Net loss from properties
classified as
discontinued
operations
|
(81)
|
|
(692)
|
|
(237)
|
|
(1,152)
|
|
Income
(loss) from discontinued operations
|
7,908
|
|
(692)
|
|
13,271
|
|
(1,152)
|
|
|
|
|
|
|
|
|
|
Net
income
|
13,709
|
|
7,370
|
|
26,962
|
|
17,305
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
(10,929)
|
|
(5,491)
|
|
(21,338)
|
|
(13,027)
|
|
Net income
available to common stockholders
|
$2,780
|
|
$1,879
|
|
$5,624
|
|
$4,278
|
|
|
|
|
|
|
|
|
|
Income per
share from continuing operations:
|
|
|
|
|
|
|
|
|
Basic
|
$0.06
|
|
$0.09
|
|
$0.15
|
|
$0.20
|
|
Diluted
|
$0.06
|
|
$0.09
|
|
$0.15
|
|
$0.20
|
|
Income
(loss) per share from discontinued operations:
|
|
|
|
|
|
|
|
|
Basic
|
$0.06
|
|
($0.01)
|
|
$0.10
|
|
($0.01)
|
|
Diluted
|
$0.06
|
|
($0.01)
|
|
$0.09
|
|
($0.01)
|
|
Net income
per share to common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
$0.12
|
|
$0.08
|
|
$0.25
|
|
$0.19
|
|
Diluted
|
$0.12
|
|
$0.08
|
|
$0.24
|
|
$0.19
|
|
Weighted
average shares of common stock (basic)
|
22,668,020
|
|
22,495,605
|
|
22,652,844
|
|
22,392,427
|
|
Weighted
average shares of common stock (diluted)
|
23,079,739
|
|
22,756,006
|
|
23,110,364
|
|
22,583,358
|
|
Weighted
average O.P. units outstanding
|
82,618,015
|
|
82,790,430
|
|
82,633,191
|
|
82,893,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FUNDS
FROM OPERATIONS
|
Three
Months
Ended
Jun 30,
2012
|
|
Three
Months
Ended
Jun 30,
2011
|
|
Six
Months
Ended
Jun 30,
2012
|
|
Six
Months
Ended
Jun 30,
2011
|
|
Funds from
operations
|
$12,153
|
|
$13,708
|
|
$26,303
|
|
$29,950
|
|
Funds from
operations per share (2)
|
$0.11
|
|
$0.13
|
|
$0.25
|
|
$0.28
|
|
Outstanding common stock
|
22,668,020
|
|
22,584,770
|
|
22,668,020
|
|
22,584,770
|
|
Outstanding O.P. units
|
82,618,015
|
|
82,701,265
|
|
82,618,015
|
|
82,701,265
|
|
Weighted
average O.P. units and common stock
outstanding (diluted)
|
105,697,754
|
|
105,546,436
|
|
105,743,555
|
|
105,476,966
|
|
|
|
|
|
|
|
|
|
FUNDS
FROM OPERATIONS CALCULATION
|
Three
Months Ended
Jun 30,
2012
|
|
Three
Months Ended
Jun 30,
2011
|
|
Six
Months Ended
Jun 30,
2012
|
|
Six
Months Ended
Jun 30,
2011
|
|
Net
income
|
$13,709
|
|
$7,370
|
|
$26,962
|
|
$17,305
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
6,445
|
|
6,384
|
|
12,911
|
|
12,736
|
|
Depreciation and amortization
in
unconsolidated joint
venture
|
60
|
|
60
|
|
119
|
|
119
|
|
Less:
|
|
|
|
|
|
|
|
|
Noncontrolling interests in joint
ventures
|
(72)
|
|
(106)
|
|
(181)
|
|
(210)
|
|
Gain on sale of real estate
|
(7,989)
|
|
-
|
|
(13,508)
|
|
-
|
|
Funds from
operations
|
$12,153
|
|
$13,708
|
|
$26,303
|
|
$29,950
|
|
|
|
|
|
|
|
|
|
Funds From
Operations ("FFO") is a non-GAAP financial measurement used by real
estate investment trusts ("REITs") to measure and compare operating
performance. As defined by NAREIT, FFO represents net income (loss)
(computed in accordance with GAAP, accounting principles generally
accepted in the United States of America), excluding gains (or
losses) from debt restructuring and sales of property, plus real
estate related depreciation and amortization (excluding
amortization of deferred financing costs and depreciation of
non‑real estate assets) and after adjustments for unconsolidated
partnerships and joint ventures. Management considers FFO to be an
appropriate supplemental measure of the Company's operating and
financial performance because when compared year over year, it
reflects the impact to operations from trends in occupancy rates,
rental rates, operating costs, general and administrative expenses
and interest costs, providing a perspective not immediately
apparent from net income. In addition, management believes
that FFO provides useful information about the Company's financial
performance when compared to other REITs since FFO is generally
recognized as the industry standard for reporting the operations of
REITs. FFO should neither be considered as an alternative for net
income as a measure of profitability nor is it comparable to cash
flows provided by operating activities determined in accordance
with GAAP. FFO is not comparable to similarly entitled items
reported by other REITs that do not define them exactly as we
define FFO.
|
|
|
PROPERTY AND OTHER DATA:
|
Three
Months Ended
Jun 30,
2012
|
|
Three
Months Ended
Jun 30,
2011
|
|
Six
Months Ended
Jun 30,
2012
|
|
Six
Months Ended
Jun 30,
2011
|
|
Total
properties, end of period
|
104
|
|
111
|
|
104
|
|
111
|
|
Total
square feet, end of period
|
7,840,477
|
|
8,011,026
|
|
7,840,477
|
|
8,011,026
|
|
Average
monthly rental revenue per square foot (3)
|
$1.26
|
|
$1.29
|
|
$1.27
|
|
$1.34
(8)
|
|
Occupancy
for leased properties (6)
|
70.3%
|
|
66.5%
|
|
70.3%
|
|
66.5%
|
|
Straight-line rent
|
($25)
|
|
$260
|
|
($226)
|
|
($375)
|
|
Leasing
commissions
|
-
|
|
$128
|
|
$26
|
|
$323
|
|
Non-recurring capital expenditures
|
-
|
|
$613
|
|
-
|
|
$1,539
|
|
|
|
|
|
|
|
|
|
Lease
Rollover Schedule:
|
|
|
|
|
|
|
|
|
Year
|
|
# of
Leases
|
|
Rentable
Square Feet
|
|
2012 Base
Rent (5)
|
|
2012
(4)
|
|
4
|
|
132,710
|
|
$1,486
|
|
2013
|
|
9
|
|
376,683
|
|
5,436
|
|
2014
|
|
19
|
|
1,774,442
|
|
28,532
|
|
2015
|
|
7
|
|
427,437
|
|
5,007
|
|
2016
|
|
8
|
|
394,806
|
|
4,552
|
|
2017
|
|
12
|
|
727,552
|
|
9,817
|
|
2018
|
|
8
|
|
480,839
|
|
6,133
|
|
2019
|
|
2
|
|
232,480
|
|
3,731
|
|
2020
|
|
3
|
|
208,768
|
|
4,471
|
|
Thereafter
|
|
3
|
|
476,000
|
|
11,023
|
|
Total
|
|
75
|
|
5,231,717
|
|
$80,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
June
30, 2012
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investments in real estate:
|
|
|
|
|
|
|
|
|
Land
|
$323,173
|
|
$306,474
|
|
|
|
|
|
Buildings and
improvements
|
757,453
|
|
745,962
|
|
|
|
|
|
Real estate related
intangible assets
|
3,561
|
|
3,561
|
|
|
|
|
|
Total investments in properties
|
1,084,187
|
|
1,055,997
|
|
|
|
|
|
Accumulated depreciation and
amortization
|
(241,196)
|
|
(229,211)
|
|
|
|
|
|
Assets held for sale,
net
|
21,574
|
|
54,361
|
|
|
|
|
|
Net
investments in properties
|
864,565
|
|
881,147
|
|
|
|
|
|
Investment in unconsolidated
joint venture
|
3,540
|
|
3,557
|
|
|
|
|
|
Net
investments in real estate
|
868,105
|
|
884,704
|
|
|
|
|
|
Cash and
cash equivalents
|
3,114
|
|
-
|
|
|
|
|
|
Deferred
rent
|
16,424
|
|
16,650
|
|
|
|
|
|
Other
assets, net
|
31,173
|
|
35,133
|
|
|
|
|
|
Total
assets
|
$918,816
|
|
$936,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Mortgage notes
payable
|
$323,550
|
|
$331,166
|
|
|
|
|
|
Mortgage note payable –
related parties
|
6,831
|
|
7,139
|
|
|
|
|
|
Revolving line of
credit
|
-
|
|
3,305
|
|
|
|
|
|
Interest payable
|
1,543
|
|
1,606
|
|
|
|
|
|
Security deposits
|
4,333
|
|
4,317
|
|
|
|
|
|
Prepaid rent and deferred
revenue
|
11,375
|
|
5,836
|
|
|
|
|
|
Dividends and distributions
payable
|
13,687
|
|
13,687
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
15,193
|
|
16,344
|
|
|
|
|
|
Total liabilities
|
376,512
|
|
383,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock, $.001 par
value
|
23
|
|
23
|
|
|
|
|
|
Additional paid-in
capital
|
176,723
|
|
175,900
|
|
|
|
|
|
Distributions in excess of
accumulated earnings
|
(35,271)
|
|
(32,962)
|
|
|
|
|
|
Total stockholders' equity
|
141,475
|
|
142,961
|
|
|
|
|
|
Noncontrolling interests in operating
partnerships
|
400,829
|
|
410,126
|
|
|
|
|
|
Total equity
|
542,304
|
|
553,087
|
|
|
|
|
|
Total liabilities and equity
|
$918,816
|
|
$936,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
approximately $406 and $56 in amortization expense for the three
months ended June 30, 2012 and 2011, respectively, and $813 and
$180 in amortization expense for the six months ended June 30, 2012
and 2011, respectively, for the amortization of in-place lease
value intangible asset pursuant to the Business Combinations Topic
of the Financial Accounting Standards Board Accounting Standards
Codification.
|
|
(2)
|
Calculated
on a fully diluted basis. Assumes conversion of all O.P. units
outstanding into the Company's common stock.
|
|
(3)
|
Average
monthly rental revenue per square foot has been determined by
taking the cash base rent for the period divided by the number of
months in the period, and then divided by the average occupied
square feet in the period. Properties classified as assets held for
sale were excluded from the 2012 calculation.
|
|
(4)
|
Excludes
six month-to-month leases for approximately 80,000 rentable square
feet and approximately $188 in cash rent.
|
|
(5)
|
Base rent
reflects cash rent.
|
|
(6)
|
The
occupancy rate at June 30, 2012, excludes properties classified as
assets held for sale.
|
|
(7)
|
Includes a
one-time rent adjustment of approximately $1,638 from a tenant
dispute resolution.
|
|
(8)
|
Includes a
one-time rent adjustment of approximately $1,638. Excluding the
adjustment, the average monthly rental revenue per square foot
would have been $1.29.
|
SOURCE Mission West Properties, Inc.
