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Cogdell Spencer Inc. Reports Third Quarter 2007 Financial Results
Date:11/6/2007

CHARLOTTE, N.C., Nov. 6 /PRNewswire-FirstCall/ -- Cogdell Spencer Inc. (NYSE: CSA), a real estate investment trust (REIT) that invests in specialty office buildings for the medical profession, including medical offices, ambulatory surgery and diagnostic centers, today announced financial results for the quarter ended September 30, 2007.

Third Quarter 2007 Results

Cogdell Spencer Inc. reports Funds from Operations (FFO) per share and operating partnership unit of $0.30 and net loss per share of ($0.13) for the three months ended September 30, 2007.

FFO for the three months ended September 30, 2007 was $5.0 million, or $0.30 per share and operating partnership unit, basic and diluted. The weighted average number of basic and diluted shares and operating partnership units outstanding totaled 16,529,682 and 16,544,774, respectively, for the quarter ended September 30, 2007.

Net loss was ($1.6 million) for the three months ended September 30, 2007, or ($0.13) per share basic and diluted. The weighted average number of basic and diluted shares outstanding totaled 11,934,164 for the quarter ended September 30, 2007.

As of September 30, 2007, the Company's portfolio consisted of 55 wholly- owned properties and five joint venture properties, comprising a total of approximately 3.2 million square feet. The overall percentage of leased space at the Company's in-service, wholly-owned properties as of September 30, 2007, was 94.2%. In addition, the Company manages 57 properties for third party clients totaling approximately 2.5 million square feet.

Results for the Nine Months Ended September 30, 2007

FFO for the nine months ended September 30, 2007 was $13.2 million, or $0.86 per share and Association of Real Estate Investment

Trusts, or NAREIT, funds from operations, or FFO, represents net

income (computed in accordance with generally accepted accounting

principles, or GAAP), excluding gains from sales of property, plus

real estate depreciation and amortization (excluding amortization of

deferred financing costs) and after adjustments for unconsolidated

partnerships and joint ventures. The Company presents FFO because the

Company considers it an important supplemental measure of the

Company's operational performance and believes it is frequently used

by securities analysts, investors and other interested parties in the

evaluation of REITs, many of which present FFO when reporting their

results. FFO is intended to exclude GAAP historical cost depreciation

and amortization of real estate and related assets, which assumes

that the value of real estate assets diminishes ratably over time.

Historically, however, real estate values have risen or fallen with

market conditions. Because FFO excludes depreciation and amortization

unique to real estate, gains and losses from property dispositions

and extraordinary items, it provides a performance measure that, when

compared year over year, reflects the impact to operations from

trends in occupancy rates, rental rates, operating costs, development

activities and interest costs, providing perspective not immediately

apparent from net income. The Company computes FFO in accordance with

standards established by the Board of Governors of NAREIT in its

March 1995 White Paper (as amended in November 1999 and April 2002),

which may differ from the methodology for calculating FFO utilized by

other equity REITs and, accordingly, may not be comparable to such

other REITs. Further, FFO does not represent amounts available for

management's discretionary use because of needed capital replacement

or expansion, debt service obligations, or other commitments and

uncertainties. FFO should not be considered as an alternative to net

income (loss) (computed in accordance with GAAP) as an indicator of

the Company's performance, nor is it indicative of funds available to

fund the Company's cash needs, including the Company's ability to pay

dividends or make distributions.

(2) Real estate depreciation and amortization consists of depreciation

and amortization from wholly-owned real estate properties of $7,160

and $7,675 and the Company's share of joint venture real estate

depreciation and amortization of $20 and $9 for the three months

ended September 30, 2007 and 2006, respectively. Real estate

depreciation and amortization consists of depreciation and

amortization from wholly-owned real estate properties of $20,334 and

$21,500 and the Company's share of joint venture real estate

depreciation and amortization of $61 and $46 for the nine months

ended September 30, 2007 and 2006, respectively.

operating partnership unit, basic and diluted. The weighted average number of basic and diluted shares and operating partnership units outstanding totaled 15,317,189 and 15,334,995, respectively, for the nine months ended September 30, 2007.

Net loss was ($5.0 million) for the nine months ended September 30, 2007, or ($0.47) per share basic and diluted. The weighted average number of basic and diluted shares outstanding totaled 10,755,342 for the nine months ended September 30, 2007.

Acquisitions

On August 30, 2007, Cogdell Spencer Inc. acquired Summit Professional Plaza I and II in Brunswick, Georgia, for approximately $24.3 million in cash, inclusive of transaction costs. The two-building complex totals 97,272 net rentable square feet. Southeast Georgia Health System, a 356-bed not-for- profit healthcare system, is the anchor tenant and currently leases approximately 38% of the complex. Southeast Georgia Health System is 'A' rated by Standard & Poor's Ratings Services.

Development

In September 2007, Cogdell Spencer Inc. completed a 64,276 square foot ambulatory surgery center and medical office building (ASC/MOB) in Lancaster, Pennsylvania. This facility is owned by Cogdell Spencer Inc. and physician tenants in a consolidated joint venture. This facility, located on the Lancaster General Health Campus includes The Physicians' Surgery Center, which occupies the first floor; The Westphal Group, a local orthopedic practice; and various outpatient services associated with Lancaster General Hospital.

Financing

In connection with the acquisition of Summit Professional Plaza I and II, the Company obtained a $15.9 million, ten year, interest-only mortgage note payable. The note payable has a fixed interest rate of 6.18%.

Dividend

On September 14, 2007, the Company announced that its Board of Directors had declared a quarterly dividend of $0.35 per share of common stock payable on October 19, 2007 to stockholders of record on October 5, 2007. The dividend covers the third quarter of 2007.

Outlook

Cogdell Spencer's management expects that FFO per share and operating partnership unit for the year ending December 31, 2007 will be between $1.14 and $1.23. A reconciliation of the range of projected net loss to projected FFO for the year ending December 31, 2007 is below:

(In thousands, except per share and

operating partnership unit data)

Net loss before minority interests

in Operating Partnership $(9,200) -- $(8,800)

Plus real estate related

depreciation and amortization 27,000 -- 28,000

Less gain from sale of real estate

property and partnerships - -- -

Funds from Operations (FFO) $17,800 -- $19,200

FFO per share and unit - diluted $1.14 -- $1.23

Weighted average shares and units

outstanding - diluted 15,600 15,600

Supplemental operating and financial data are available in the Investors Relations section of the Company's Web site at http://www.cogdellspencer.com.

The reported results are unaudited and there can be no assurance that the results will not vary from the final information for the three months and nine months ended September 30, 2007. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.

FFO is a supplemental non-GAAP financial measure used by the real estate industry to measure the operating performance of real estate companies. The Company presents FFO because it considers it an important supplemental measure of operational performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing a perspective not immediately apparent from net income. The Company computes FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of the Company's performance, nor is it indicative of funds available to fund its cash needs, including its ability to pay dividends or make distributions. A reconciliation from GAAP net loss to FFO is included as an attachment to this press release.

Conference Call

Cogdell Spencer Inc. invites you to attend the Third Quarter 2007 Conference Call on Wednesday, November 7, 2007 at 10:00 a.m. (Eastern Time). The number to call for this teleconference is (877) 407-0781 (domestic) or (201) 689-8567 (international), no passcode is required. In addition, the conference call can be accessed via the Internet at http://www.cogdellspencer.com through the "Q3 2007 Cogdell Spencer Earnings Conference Call" link on the Investor Relations page, as well as at http://www.streetevents.com and http://www.earnings.com.

A playback will begin at 12:00 p.m. on November 7, 2007 and will be available until November 24, 2007. To access the playback, please dial (877) 660-6853 (domestic) or (201) 612-7415 (international) and enter the account number: 286, followed by the conference ID number: 257487. The replay can also be accessed via the Internet at http://www.cogdellspencer.com through the "Q3 2007 Cogdell Spencer Earnings Conference Call" link on the Investor Relations page, as well as at http://www.streetevents.com and http://www.earnings.com.

About Cogdell Spencer Inc.

Charlotte-based Cogdell Spencer Inc. (NYSE: CSA) is a fully-integrated, self-administered and self-managed real estate investment trust (REIT) that invests in specialty office buildings for the medical profession, including medical offices, ambulatory surgery and diagnostic centers. As of September 30, 2007, the Cogdell Spencer Inc. portfolio consisted of 55 wholly owned properties, five joint venture properties, and 57 managed medical office buildings. For more information on Cogdell Spencer Inc., please visit the Company's web site at http://www.cogdellspencer.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements reflect the Company's views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ materially. Factors that may contribute to these differences include, but are not limited to the following: market trends; our ability to obtain future financing arrangements; our ability to renew ground leases; defaults by tenants; and changes in the reimbursement available to our tenants by government or private payors. For a further list and description of such risks and uncertainties, see the reports filed by the company with the Securities and Exchange Commission, including the company's Form 10-K for the year ended December 31, 2006. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be realized. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Cogdell Spencer Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)

Three Months Ended Nine Months Ended

September September September September

30, 2007 30, 2006 30, 2007 30, 2006

Revenues:

Rental $16,389 $13,394 $45,314 $38,492

Management fee revenue 526 188 1,621 748

Expense reimbursements 315 89 989 398

Development fee revenue 25 19 276 108

Interest and other income 226 202 827 736

Total revenues 17,481 13,892 49,027 40,482

Expenses:

Property operating and

management 6,797 5,050 18,766 14,139

General and administrative 1,513 1,387 5,447 4,822

Depreciation and amortization 7,273 7,737 20,664 21,663

Interest 4,101 4,195 11,324 9,979

Prepayment penalty on early

extinguishment of debt - 37 - 37

Total expenses 19,684 18,406 56,201 50,640

Loss from continuing operations (2,203) (4,514) (7,174) (10,158)

Equity in earnings of unconsolidated

real estate partnerships 2 2 (2) 7

Gain from sale of real estate

partnership interests - 484 - 484

Minority interests in real estate

partnerships (16) (24) (55) (77)

Minority interests in operating

partnership 615 1,430 2,226 3,438

Discontinued operations - 283 - 276

Net loss $(1,602) $(2,339) $(5,005) $(6,030)

Basic and diluted loss per share $(0.13) $(0.29) $(0.47) $(0.76)

Weighted average common shares - basic

and diluted (1) 11,934 7,976 10,755 7,975

(1) 15 and 20 shares of unvested restricted common stock are anti-

dilutive due to the net loss for the three months ended September 30,

2007 and 2006, respectively. 18 and 23 shares of unvested restricted

common stock are anti-dilutive due to the net loss for the nine

months ended September 30, 2007 and 2006, respectively.

Cogdell Spencer Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(unaudited)

As of As of

September 30, 2007 December 31, 2006

Assets

Real estate properties:

Operating real estate properties $458,327 $361,982

Less: Accumulated depreciation (39,065) (23,664)

Total operating real estate

properties, net 419,262 338,318

Construction in progress 10,110 12,854

Total real estate properties, net 429,372 351,172

Cash and cash equivalents 3,184 1,029

Restricted cash 1,311 982

Investment in capital lease 5,964 6,193

Acquired above market leases, net 1,003 966

Acquired in place lease value and

deferred leasing costs, net 18,076 18,205

Acquired ground leases, net 3,046 3,092

Deferred financing costs, net 1,315 1,018

Goodwill 5,335 5,326

Other assets 7,046 5,075

Total assets $475,652 $393,058

Liabilities and stockholders' equity

Notes payable under line of credit $46,100 $77,487

Mortgage loans 233,629 184,544

Accounts payable and accrued

liabilities 16,345 9,851

Accrued dividends and distributions 5,779 4,404

Acquired below market leases, net 3,489 3,096

Total liabilities 305,342 279,382

Minority interests 49,051 54,001

Stockholders' equity 121,259 59,675

Total liabilities and stockholders'

equity $475,652 $393,058

Cogdell Spencer Inc.

Reconciliation of Net Loss to Funds from Operations (FFO) (1)

(In thousands, except per share and unit amounts)

(unaudited)

Three Months Ended Nine Months Ended

September September September September

30, 2007 30, 2006 30, 2007 30, 2006

Net loss $(1,602) $(2,339) $(5,005) $(6,030)

Plus minority interests in

operating partnership (615) (1,276) (2,226) (3,288)

Plus real estate related

depreciation and amortization (2) 7,180 7,684 20,395 21,546

Less gain on sale of real estate

property and partnerships - (919) - (919)

Funds from Operations (FFO) (1) $4,963 $3,150 $13,164 $11,309

FFO per share and unit - basic

and diluted $0.30 $0.26 $0.86 $0.92

Weighted average shares and units

outstanding - basic 16,530 12,347 15,317 12,342

Weighted average shares and units

outstanding - diluted 16,545 12,367 15,335 12,365

(1) As defined by the National
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SOURCE Cogdell Spencer Inc.
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