Golf Trust of America Inc. Announces 20-Percent
Increase in FFO per Share for Third Quarter
CHARLESTON, SC, Aug. 12, 1998 -- Golf Trust of America, Inc. (AMEX:GTA) a self-administered real estate investment trust, today reported third quarter 1998 Funds From Operations (FFO) per share of $0.59, representing an increase of 20% over the same period in 1997. For the quarter ended September 30, 1998, FFO amounted to $7.8 million versus $4.3 million or $0.49 per share for the quarter ended September 30, 1997.
FFO amounted to $21.9 million, or $1.69 per share, for the nine months ended September 30, 1998 versus $11.1 million, or $1.30 per share, for the same period last year, an increase of 30% on a per share basis.
For the quarter ended September 30, 1998, total revenues increased 97% to $12.0 million from $6.1 million for the same quarter last year. For the nine months ended September 30, 1998, total revenues amounted to $31.4 million, an increase of 126% over the $13.9 million of total revenues for the same period last year.
All FFO per share amounts reported include common stock and common stock equivalents (fully diluted) as well as operating partnership (OP) units convertible into common stock. All information for the nine months ended September 30, 1997 is based on the actual results of operations from February 12, 1997 to September 30, 1997, and pro forma results of operations for January 1, 1997 to February 11, 1997. Earnings per share and FFO per share have been restated for 1997 to reflect the application of SFAS No. 128, "Earnings Per Share," which was effective for the financial statements issued after December 15, 1997.
Income from operations before minority interest and extraordinary items for the quarter totaled $4.7 million, or $0.35 per share, versus $3.4 million, or $0.37 per share, for the quarter ended September 30, 1997, a decrease of 6% on a per share basis. Income from operations before minority interest and extraordinary items for the nine months ended September 30, 1998 totaled $14.1 million, or $1.08 per common share, versus $8.5 million or $0.98 per common share for the same period last year, an increase of 10% on a per share basis.
For the third quarter ended September 30, 1998, same store revenues were flat and average revenues per round increased 6.8%, while total rounds played at GTA golf courses were down 6% for the same period in 1997. Thirteen of 41 GTA courses contributed percentage rents in the third quarter. Same store rounds and revenues are computed for the courses in which GTA had an interest since July 1, 1997.
During the third quarter of 1998, GTA purchased 6 courses for a total investment of approximately $45.4 million. On July 13, 1998, GTA acquired Polo Trace Golf and Country Club, an 18-hole upscale golf facility in Delray Beach, Florida for $12.3 million. On July 22, 1998, GTA closed its acquisition of Ohio Prestwick Country Club, an 18-hole private golf facility located near Akron, Ohio for $6.4 million. On September 2, 1998, GTA announced the acquisition of Osage National Golf Course, a 27-hole upscale golf facility located near Lake of the Ozarks, Missouri, for $11.2 million. On September 21, 1998, GTA announced the acquisition of Wekiva Golf Club and Sweetwater Country Club, both located near Orlando, Florida, for $11.3 million. On September 30, 1998, GTA acquired Cypress Creek Country Club, an 18-hole semi-private golf facility located in Boynton Beach, Florida, for $4.2 million. The Polo Trace and Cypress Creek courses in southeast Florida, and Ohio Prestwick in Akron, Ohio continued the clustering strategy with GTA's existing courses with common lessees in those markets.
As of September 30, 1998, the Company carried total debt of approximately $186.9 million, with a weighted average annual interest rate of 7%. The Company had 7.6 million shares of common stock and 5.2 million OP units outstanding as of quarter end. The total of fully diluted weighted average common stock and OP Units was 13.0 million for the quarter.
W. Bradley Blair, II, President and Chief Executive Officer of Golf Trust of America, Inc. stated, "GTA's acquisition structure and growth strategy continues to prove itself with the solid additions to our upscale golf course portfolio in the third quarter. Both the sale/leaseback and strategic partner transaction are reflected in the third quarter additions.
"While rounds were down, principally due to weather conditions at those courses in the South and Southeast, revenues per round were up. As reflected in the recent National Golf Foundation survey, a demand in 1997 saw an increase in golf rounds and golfer participation rates of 15% and 7% respectively. Our courses continue to bear out this increase in demand when you look at the weather limitations"
The Emerging Issues Task Force ("EITF") of the Financial Accounting Standards Board has enacted a change in accounting rules ("EITF 98-9") that potentially affects recognition of percentage rent received by the Company. Under EITF 98-9, revenues from percentage rent are recognized in the quarterly periods in which the specified target that triggers the percentage rent is achieved. Under the terms of the percentage leases entered into by the Company, percentage rent is payable quarterly based on increases in revenue over a corresponding quarter in a base year. The Company is evaluating, together with its accountants, the adoption of EITF 98-9 and any impact such adoption may have on the Company. Based on the structure of the Company's leases, the Company does not believe EITF 98-9 will have a material affect on the Company's results of operations. Regardless of the application of EITF 98-9, no change in the calculation of FFO will occur and on an annual basis there will be no change in the Company's earnings.
As of September 30, 1998, the Company had an interest in a total of 41 courses. Since its initial acquisition of ten courses in February 1997, GTA has acquired interest in 31 18-hole equivalents, for a total investment in excess of $330 million.
Golf Trust of America, Inc. with headquarters in Charleston, South Carolina, is a self-administered REIT formed to capitalize on the consolidation opportunities in the ownership of golf courses in the United States. The Company's business strategy is to acquire high quality golf courses and lease them to qualified third party operators, including affiliates of the sellers.
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.
|
