Golf Trust of America Inc. Reports First Quarter Operations
Funds From Operations Grow 32 Percent
CHARLESTON, SC, May 11, 1998 -- Golf Trust of America, Inc. (AMEX:GTA) a self-administered real estate investment trust, today reported first quarter Funds from Operations (FFO) of $6.8 million or $0.54 per share, on revenues of $8.9 million compared to FFO of $3.3 million, or $.41 per share, on revenues of $3.8 million for the prior year's pro forma first quarter results. The 32% increase in FFO per share is principally due to acquisitions during the year. The prior year's pro forma is based on the actual results of operations from February 12, 1997 to March 31, 1997 and pro forma results of operations for January 1, 1997 to February 11, 1997.
In the first quarter of 1998, GTA purchased six courses for a total investment of approximately $100 million. As of March 31, 1998, the Company had an interest in a total of 28 courses. Since its initial acquisition of ten courses in February 1997, GTA has acquired interests in eighteen golf courses for total investment in excess of $225 million.
For the first quarter of 1998, same store revenues increased 13% and average revenues per round increased 12.5%, while rounds played at GTA golf courses increased .7% over the same period in 1997. Same store rounds and revenues are computed excluding first quarter acquisitions.
Brad Blair, President and CEO stated, "We are very pleased with the first quarter's acquisitions as well as same store course performance. Our coast to coast high profile acquisitions of Sandpiper (Santa Barbara, California) and Emerald Dunes (West Palm Beach, Florida) bracketing Mystic Creek in the Detroit, Michigan area, Persimmon Ridge in Louisville, Kentucky and Bonaventure in Ft. Lauderdale, Florida, is a reflection of our plan to expand our presence on a national basis while adding to our strategic partner relationships with the likes of Environmental Golf, Emerald Dunes Golf Management and Total Golf. The capitalization rate average was 9.8% on the first quarter acquisitions. While first quarter same store round numbers were affected by the El Nino wet weather for parts of Florida and the Carolinas, the improvement in revenue on a per player basis caused same store revenues to show impressive gains for the quarter.
GTA continues to see a wide array of opportunities in the golf and leisure sectors in part due to GTA's unique structure and upscale focus. Consequently, we are very comfortable with current analysts' consensus estimates and encouraged by the prospect of exceeding such estimates. The pending tax legislation which has created uncertainty as to the future of the paired share structure has appeared to slightly improve the pricing of golf course acquisitions from a buyer perspective. GTA's recently restructured $125 million unsecured line of credit with its grid pricing further facilitates and positions the Company for these acquisition opportunities."
With Golf Trust of America's annual meeting scheduled for Monday, May 18, 1998 in Charleston, South Carolina, the Company plans to host a conference call at the end of the month.
As previously reported on April 24, 1998, the company's board of directors declared a first quarter dividend distribution of $0.41 per share of common stock for the quarter ended March 31, 1998 payable on May 18, 1998 to shareholders of record on May 4, 1998.
Golf Trust of America, Inc. with headquarters in Charleston, SC, is a self-administered real estate investment trust (REIT) formed to capitalize on the consolidation opportunities in the ownership of golf courses in the United States. The business strategy of the company is to acquire high quality golf courses and lease them to qualified third party operators, including affiliates of the sellers. The company currently has an interest in 28 courses in Florida (9), South Carolina (6), Georgia, (2), Virginia (2), Alabama, California, Kansas, Kentucky, Michigan, Nebraska, North Carolina, Ohio and Texas.
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors including general economic conditions, competition for golf course acquisitions, the availability of equity and debt financing, interest rates and other risk factors as outlined in the Company's SEC reports, including the prospectus dated November 4, 1997 and the annual report on Form 10-K dated March 31, 1998.
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