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Agree Realty Corp. Reports Operating Results (10-Q)

August 07, 2009 | About:

Agree Realty Corp. (ADC) filed Quarterly Report for the period ended 2009-06-30.

Agree Realty Corp. is a self-administered self-managed real estateinvestment trust which develops acquires owns and operates properties which are primarily leased to major national and regional retail companies under net leases. Agree Realty Corp. has a market cap of $154.5 million; its shares were traded at around $19.49 with a P/E ratio of 7.2 and P/S ratio of 4.4. The dividend yield of Agree Realty Corp. stocks is 10.3%.

Highlight of Business Operations:

Minimum rental income increased $298,000, or 4%, to $8,431,000 in 2009, compared to $8,133,000 in 2008. The increase was the result of the development of a Walgreens drug store in Ypsilanti, Michigan in May 2008, the development of a Walgreens drug store in Ocala, Florida in June 2008, the development of a Walgreens drug store in Shelby Township, Michigan in July 2008, the development of a Walgreens drug store in Silver Springs Shores, Florida in January 2009, the development of a Walgreens drug store in Brighton, Michigan in February 2009 and the development of a Walgreens drug store in Port St John, Florida in June 2009. Our revenue increase from these developments amounted to $421,000. In addition, rental income from our Big Rapids, Michigan shopping center increased by $43,000 as a result of redevelopment activities and rental income decreased ($134,000) as a result of the closing of a Circuit City in Boynton Beach, Florida.

Property operating expenses (shopping center maintenance, snow removal, insurance and utilities) decreased $27,000, or 7%, to $332,000 in 2009 compared to $359,000 in 2008. The net decrease was the result of: a decrease in shopping center maintenance costs of ($17,000); a decrease in snow removal costs of ($8,000); and a decrease in insurance costs of ($2,000) in 2009 versus 2008.

Minimum rental income increased $830,000, or 5%, to $16,942,000 in 2009, compared to $16,112,000 in 2008. The increase was the result of the development of a Walgreens drug store and a bank land lease in Macomb Township, Michigan in March 2008, the development of a Walgreens drug store in Ypsilanti, Michigan in May 2008, the development of a Walgreens drug store in Ocala, Florida in June 2008, the development of a Walgreens drug store in Shelby Township, Michigan in July 2008, the development of a Walgreens drug store in Silver Springs Shores, Florida in January 2009, the development of a Walgreens drug store in Brighton, Michigan in February 2009 and the development of a Walgreens drug store in Port St John, Florida in June 2009. Our revenue increase from these developments amounted to $904,000. In addition, rental income from our Big Rapids, Michigan shopping center increased by $117,000 as a result of redevelopment activities and rental income decreased ($164,000) as a result of the closing of a Circuit City store in Boynton Beach, Florida.

Property operating expenses (shopping center maintenance, snow removal, insurance and utilities) decreased $163,000, or 17%, to $791,000 in 2009 compared to $954,000 in 2008. The net decrease was the result of: a decrease in shopping center maintenance costs of ($41,000); a decrease in snow removal costs of ($113,000); an increase in utility costs of $5,000; and a decrease in insurance costs of ($14,000) in 2009 versus 2008.

Our cash flows from operations increased $1,018,000 to $11,635,000 for the six months ended June 30, 2009, compared to $10,617,000 for the six months ended June 30, 2009. Cash used in investing activities decreased $4,792,000 to $6,129,000 in 2009, compared to $10,921,000 in 2008. Cash used in financing activities increased $5,849,000 to $5,909,000 in 2009, compared to $60,000 in 2008.

As of June 30, 2009, we had total mortgage indebtedness of $65,955,255. Of this total mortgage indebtedness, $41,565,995 is fixed rate, self-amortizing debt with a weighted average interest rate of 6.64% and the remaining mortgage debt of $24,389,260 has a maturity date of July 14, 2013, can be extended at our option for two additional years and bears interest a 150 basis points over LIBOR (or 1.82% as of June 30, 2009). In January 2009, the Company entered into an interest rate swap agreement that fixes the interest rate during the initial term of the variable-interest mortgage at 3.744%.

Read the The complete Report

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