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American Land Lease Announces Third Quarter 2008 Results -
-Strong Property Operating Results Impacted by Difficult New Home Sales Environment
CLEARWATER, Fla., November 12, 2008 /Business Wire/ -- American Land Lease, Inc. (NYSE: ANL - news) today released third quarter results for 2008.
Ongoing Strategic Review
As previously reported, the Companys Board of Directors has undertaken a year-long strategic review of how best to maximize shareholder value. This strategic review remains ongoing.
In support of its strategic review, the Board of Directors has authorized management to undertake a formal process to determine investor interest in the purchase of some or all of the Companys real estate assets. This process is ongoing as of the date of this release. In connection with this process, the Company has received expressions of interest to purchase one or more of its properties from a number of interested parties. The Company is considering several such offers. If any such transactions are agreed to and concluded, the Board of Directors may consider a special distribution of any sales proceeds, among other possible uses. There is no assurance that any such transaction will be concluded or that the Companys Board of Directors will distribute any proceeds as a special distribution.
Additionally, as part of this strategic review, the Board of Directors has been analyzing the Companys business and operating strategy and outside factors on an ongoing basis. In particular, the Board of Directors has considered adverse factors such as the poor market for new home sales and uncertain prospects for its recovery; the costs of developing sites for new homes in advance of their use; volatility in the market for property debt and its increased price; the increased risk of non-performance by counterparties; the price of the Companys common stock and the limited volume of its trading. The Companys Board of Directors also has considered the continued investor interest in the Companys land lease communities and its sources and uses of liquidity.
As a result of this ongoing review, the Board of Directors has determined to reduce the Companys efforts and costs to make new home sales and to reduce the cost and the rate of development of additional home sites.
Further, in order to conserve liquidity, our Board of Directors has determined against payment of a quarterly dividend on our shares of common stock during the current quarter. The Board of Directors determined to pay a dividend on our shares of preferred stock during the current quarter. These dividend determinations are discussed in more detail below under Dividends.
Summary Financial Results
Diluted Earnings Per Share (Diluted EPS) were $0.07 for the three-month period ended September 30, 2008, compared to $1.26 for the same period one year ago, a decrease of 94.4% on a per share basis. Net income was impacted by a $1.16 gain recognized on the sale of a community in the period ending September 30, 2007.
Funds from Operations (FFO), a non-GAAP financial measure defined on page 11 of this press release, were $1,975,000 or $0.23 per diluted common share, for the quarter, compared to $2,190,000 or $0.25 per diluted common share, for the same period one year ago, a decrease of 8.0% on a per share basis.
Home sales volume was $3,403,000, a decline of 52.5% from the same period one year ago, consisting of 29 new home closings. This result compares with 51 new home closings in third quarter 2007.
Same Store (a non-GAAP financial measure defined on page 12 of this release) results provided a revenue increase of 4.7%, an expense increase of 3.4% and an increase of 5.3% in Net Operating Income (NOI; a non-GAAP financial measure defined on page 11 of this release).
Same Site (a non-GAAP financial measure defined on page 12 of this release) results provided a revenue increase of 3.5%, an expense increase of 2.2% and an increase of 4.1% in NOI.
FFO, NOI, Same Store and Same Site are supplemental non-GAAP financial measures that are defined in the glossary beginning on page 11. We use FFO in measuring our operating performance because we believe that the items that result in a difference between FFO and net income have a different impact to the ongoing operating performance of a real estate company as compared to other businesses. We use NOI to evaluate the operating performance of our properties and we believe that it is relevant and useful information as a measure of property performance on an unleveraged basis. We use NOI on a Same Store and Same Site basis as useful information to measure property performance without the impact of newly acquired or newly disposed properties. Neither FFO nor NOI should be considered an alternative to net income or net cash flows from operating activities, as calculated in accordance with GAAP, as an indication of our performance or as a measure of liquidity. A reconciliation of FFO to the comparable GAAP financial measure is included on page 16. A reconciliation of NOI, Same Store and Same Site to the comparable GAAP financial measure is included on page 17.
The following information was filed by American Land Lease Inc on Wednesday, November 12, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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