-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DjtHmoWMvz8KpsK9hA9Q8G6eciEp4JifO1pvIrLgv0ynRmm/F+D0Z1//qIJ/z3zN Wp+Cx8ljvNxCqBNHmJ+GGA== /in/edgar/work/20000612/0000950137-00-002799/0000950137-00-002799.txt : 20000919 0000950137-00-002799.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950137-00-002799 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000430 FILED AS OF DATE: 20000612 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GETTY REALTY CORP /MD/ CENTRAL INDEX KEY: 0001052752 STANDARD INDUSTRIAL CLASSIFICATION: [5171 ] IRS NUMBER: 113412575 STATE OF INCORPORATION: MD FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13777 FILM NUMBER: 653112 BUSINESS ADDRESS: STREET 1: 125 JERICHO TURNPIKE CITY: JERICHO STATE: NY ZIP: 11753 BUSINESS PHONE: 5163382600 MAIL ADDRESS: STREET 1: 125 JERICHO TURNPIKE CITY: JERICHO STATE: NY ZIP: 11753 10-Q 1 0001.txt QUARTERLY REPORT 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For quarter ended APRIL 30, 2000 Commission file number 001-13777 -------------- --------- GETTY REALTY CORP. ------------------ (Exact name of registrant as specified in its charter) MARYLAND 11-3412575 - -------------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 125 JERICHO TURNPIKE, JERICHO, NEW YORK 11753 - --------------------------------------- ----- (Address of principal executive offices) (Zip Code) (516) 338-2600 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Registrant had outstanding 12,778,215 shares of Common Stock, par value $.01 per share, and 2,878,068 shares of Series A Participating Convertible Redeemable Preferred Stock, par value $.01 per share, as of May 31, 2000. ================================================================================ 2 GETTY REALTY CORP. INDEX Part I. FINANCIAL INFORMATION Page Number - ------------------------------ ----------- Item 1. Financial Statements Consolidated Balance Sheets as of April 30, 2000 and January 31, 2000 1 Consolidated Statements of Operations for the three months ended April 30, 2000 and 1999 2 Consolidated Statements of Cash Flows for the three months ended April 30, 2000 and 1999 3 Notes to Consolidated Financial Statements 4 - 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 - 8 Part II. OTHER INFORMATION - -------------------------- Item 6. Exhibits and Reports on Form 8-K 9 Signatures 9 3 GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
- ----------------------------------------------------------------------------------------------------------------- April 30, January 31, - ----------------------------------------------------------------------------------------------------------------- Assets: 2000 2000 - ----------------------------------------------------------------------------------------------------------------- (unaudited) Real Estate: Land $ 136,089 $ 136,039 Buildings and improvements 180,005 179,963 --------------- ---------------- 316,094 316,002 Less - accumulated depreciation and amortization 76,724 74,502 --------------- ---------------- Real estate, net 239,370 241,500 Cash and equivalents 531 651 Mortgages and accounts receivable, net 5,748 6,024 Recoveries from state underground storage tank funds 11,753 9,883 Prepaid expenses and other assets 2,119 2,694 --------------- ---------------- Total assets $ 259,521 $ 260,752 =============== ================ - ----------------------------------------------------------------------------------------------------------------- Liabilities and Stockholders' Equity: - ----------------------------------------------------------------------------------------------------------------- Borrowings under credit lines $ 23,200 $ 14,800 Mortgages payable 27,650 29,193 Accounts payable and accrued expenses 9,887 12,440 Environmental remediation costs 27,715 26,424 Deferred income taxes 36,141 36,084 Income taxes payable 1,631 - --------------- ---------------- Total liabilities 126,224 118,941 --------------- ---------------- Stockholders' equity: Preferred stock, par value $.01 per share; authorized 20,000,000 shares for issuance in series of which 3,000,000 shares are classified as Series A Participating Convertible Redeemable Preferred; issued 2,888,798 at April 30, 2000 and January 31, 2000 72,220 72,220 Common stock, par value $.01 per share; authorized 50,000,000 shares; issued 13,567,335 at April 30, 2000 and January 31, 2000 136 136 Paid-in capital 67,036 67,036 Retained earnings 3,299 3,114 Preferred stock held in treasury, at cost (4,730 shares at April 30, 2000 and 700 shares at January 31, 2000) (91) (14) Common stock held in treasury, at cost (755,306 shares at April 30, 2000 and 59,916 shares at January 31, 2000) (9,303) (681) --------------- ---------------- Total stockholders' equity 133,297 141,811 --------------- ---------------- Total liabilities and stockholders' equity $ 259,521 $ 260,752 =============== ================
See accompanying notes. 1 4 GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)
---------------------------------------------------------------------------------------------------- Three months ended April 30, ---------------------------------------------------------------------------------------------------- 2000 1999 ---------------------------------------------------------------------------------------------------- Revenues: Revenues from rental properties $14,725 $14,760 Other income 668 660 ------------------------------------ 15,393 15,420 ------------------------------------ Rental property expenses 3,063 3,068 Environmental expenses 2,475 2,209 General and administrative expenses 549 1,255 Depreciation and amortization 2,503 2,505 Interest expense 800 624 ------------------------------------ 9,390 9,661 ------------------------------------ Earnings before provision for income taxes 6,003 5,759 Provision for income taxes 2,548 2,416 ------------------------------------ Net earnings 3,455 3,343 Preferred stock dividends 1,280 1,282 ------------------------------------ Net earnings applicable to common stockholders $ 2,175 $ 2,061 ==================================== Net earnings per common share: Basic $ .16 $ .15 Diluted $ .16 $ .15 Weighted average common shares outstanding: Basic 13,231 13,566 Diluted 13,231 13,569
See accompanying notes. 2 5 GETTY REALTY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
Three months ended April 30, ------------------------------ 2000 1999 ------------------------------ Cash flows from operating activities: Net earnings $3,455 $3,343 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 2,503 2,505 Deferred income taxes 57 1,372 Gain on dispositions of real estate (518) (480) Changes in assets and liabilities, net of effect of acquisitions and dispositions: Mortgages and accounts receivable 276 (57) Recoveries from state underground storage tank funds (1,870) 221 Prepaid expenses and other assets 545 909 Accounts payable and accrued expenses (2,553) (1,876) Environmental remediation costs 1,291 (2,748) Income taxes payable 1,631 439 ------------------------------ Net cash provided by operating activities 4,817 3,628 ------------------------------ Cash flows from investing activities: Capital expenditures (267) (2,853) Property acquisitions (155) (3,894) Proceeds from dispositions of real estate 597 1,263 ------------------------------ Net cash provided by (used in) investing activities 175 (5,484) ------------------------------ Cash flows from financing activities: Borrowings under credit lines 8,400 5,300 Repayment of mortgages payable (1,543) (1,108) Cash dividends (3,270) (2,639) Purchase of common and preferred stock for treasury (8,699) - ------------------------------ Net cash provided by (used in) financing activities (5,112) 1,553 ------------------------------ Net decrease in cash and equivalents (120) (303) Cash and equivalents at beginning of period 651 657 ------------------------------ Cash and equivalents at end of period $ 531 $ 354 ============================== Supplemental disclosures of cash flow information Cash paid during the period for: Interest $1,116 $ 621 Income taxes, net 257 605
See accompanying notes. 3 6 GETTY REALTY CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. General: The accompanying consolidated financial statements include the accounts of Getty Realty Corp. and its wholly-owned subsidiaries (the "Company"). The consolidated financial statements have been prepared in conformity with generally accepted accounting principles and include amounts that are based on management's best estimates and judgments. While all available information has been considered, actual amounts could differ from those estimates. The consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation. These statements should be read in conjunction with the consolidated financial statements and related notes which appear in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2000. 2. Earnings per common share: Basic earnings per common share is computed by dividing net earnings less preferred dividends by the weighted average number of common shares outstanding during the period. Diluted earnings per common share also gives effect to the potential dilution from the exercise of stock options in the amount of 3,000 shares for the quarter ended April 30, 1999. For the quarters ended April 30, 2000 and 1999, conversion of the Series A Participating Convertible Redeemable Preferred stock into common stock utilizing the if-converted method would have been antidilutive and therefore conversion was not assumed for purposes of computing diluted earnings per common share. 4 7 3. Stockholders' equity: A summary of the changes in stockholders' equity for the three months ended April 30, 2000 is as follows (in thousands, except per share amounts):
Preferred Common Stock Held Stock Held Preferred Common Paid-in Retained in Treasury, in Treasury, Stock Stock Capital Earnings at Cost at Cost Total - ---------------------------------------------------------------------------------------------------------------------------------- Balance, January 31, 2000 $72,220 $136 $67,036 $3,114 ($14) ($681) $141,811 Net earnings 3,455 3,455 Cash dividends: Common -- $.15 per share (1,990) (1,990) Preferred -- $.44375 per share (1,280) (1,280) Purchase of preferred stock for treasury (77) (77) Purchase of common stock for treasury, net (8,622) (8,622) - ---------------------------------------------------------------------------------------------------------------------------------- Balance, April 30, 2000 $72,220 $136 $67,036 $3,299 ($91) ($9,303) $133,297 ==================================================================================================================================
5 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The Company is a real estate company specializing in the ownership and leasing of service stations, convenience stores and petroleum marketing terminals. The Company leases most of its properties on a long-term net basis to Getty Petroleum Marketing Inc. ("Marketing"), which was spun-off to its stockholders on March 21, 1997. Our financial results largely depend on rental income from Marketing and other lessees and sublessees. Therefore, our financial results are materially dependent upon the ability of Marketing to meet its lease obligations; however, we do not anticipate that Marketing will have difficulty making rental payments in the foreseeable future. Results of Operations Revenues from rental properties for the quarter ended April 30, 2000 was $14.7 million, which was comparable to the quarter ended April 30, 1999. Approximately $14.1 million of these rentals for each of the quarters were from properties leased to Marketing under master lease agreements. Other income was $.7 million for the quarter ended April 30, 2000, which was comparable to the quarter ended April 30, 1999. Rental property expenses, which are principally comprised of rent expense and real estate taxes, were $3.1 million for each of the quarters ended April 30, 2000 and 1999. Environmental expenses for the quarter ended April 30, 2000 were $2.5 million as compared with $2.2 million for the quarter ended April 30, 1999. The current quarter included a change in estimated remediation costs of $2.3 million as compared to $2.0 million during the prior year quarter. These charges are the result of contamination discovered during work performed to meet certain federal underground storage tank standards and revisions to estimates at other sites where remediation is ongoing. As of April 30, 2000, we had accrued $27.7 million as management's best estimate for future environmental remediation costs and had recorded $11.8 million as management's best estimate for recoveries from state underground storage tank remediation funds. Such accruals are reviewed on a regular basis and any revisions thereto are reflected in our financial statements as they become known. General and administrative expenses for the quarter ended April 30, 2000 were $.5 million, a decrease of $.7 million as compared with the quarter ended April 30, 1999. The decrease was primarily due to a reduction in employee related expenses, lower retrospective insurance charges relating to the spun-off petroleum marketing business and lower legal fees. Included in general and administrative expenses for the quarters ended April 30, 2000 and 1999 are $159,000 and $227,000 respectively, of net fees paid to Marketing for certain administrative and technical services performed under a services agreement. 6 9 Depreciation and amortization was $2.5 million for each of the quarters ended April 30, 2000 and 1999. Interest expense for the three months ended April 30, 2000 was $.8 million as compared with $.6 million for the quarter ended April 30, 1999. The increase was principally due to higher average borrowings under credit lines and higher interest rates. Liquidity and Capital Resources Our principal sources of liquidity are cash flows from our business and short-term uncommitted lines of credit with two banks. Management believes that cash requirements for our business, including capital expenditures and debt service can be met by cash flows from operations, available cash and equivalents and credit lines. As of April 30, 2000, we had lines of credit amounting to $30 million, of which $23.2 million was utilized for short-term borrowings and $2.4 million in connection with outstanding letters of credit. Borrowings under the lines of credit are unsecured and bear interest at the prime rate or, at our option, LIBOR plus 1.0% or 1.1%. The lines of credit are subject to renewal at the discretion of the banks. Although we expect that the existing sources of liquidity will be sufficient to meet our expected business and debt service requirements, we may be required to obtain additional sources of capital in the future, which we believe are available. During the quarters ended April 30, 2000 and 1999, the Board of Directors declared quarterly preferred stock dividends of $.44375 per share and quarterly cash common stock dividends of $.15 and $.10 per share, respectively. These dividends aggregated $3.3 million and $2.6 million for the quarters ended April 30, 2000 and 1999, respectively. In March 2000, the Board of Directors approved the purchase of up to an aggregate of 500,000 shares of the Company's common and preferred stock. As of April 30, 2000, we purchased 459,856 shares of common stock and 330 shares of preferred stock at an aggregate cost of $5.8 million. In May 2000, we completed this stock buyback program which resulted in the purchase of an additional 33,814 shares of common stock and 6,000 shares of preferred stock at an additional cost of $.5 million. Capital expenditures for the quarter ended April 30, 2000 were $.3 million, primarily related to the replacement of underground storage tanks and vapor recovery facilities at gasoline stations. These expenditures and certain environmental liabilities and obligations continue to be our responsibility after the spin-off. During the quarter ended April 30, 2000, the Company acquired one property located in New York. 7 10 Special Factors Regarding Forward-Looking Statements Certain statements in this Quarterly Report on Form 10-Q may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When we use the words "believes", "expects", "plans", "estimates" and similar expressions, we intend to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance and achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, but are not limited to: risks associated with owning and leasing real estate generally; dependence on Marketing as a lessee and on rentals from companies engaged in the petroleum marketing and convenience store businesses; competition for locations and tenants; risk of tenant non-renewal; the effects of regulation; and our expectations as to the cost of completing environmental remediation. As a result of these and other factors, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, operating results and stock prices. An investment in our stock involves various risks, including those mentioned above and elsewhere in this report and those which are detailed from time to time in filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements, which reflect our view only as of the date hereof. We undertake no obligation to publicly release revisions to these forward-looking statements that reflect future events or circumstances or reflect the occurrence of unanticipated events. 8 11 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Designation of Exhibit in this Quarterly Report on Form 10-Q Description of Exhibit ------------ ---------------------- 27 Financial Data Schedule (b) Reports filed on Form 8-K: None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GETTY REALTY CORP. ------------------ (Registrant) Dated: June 12, 2000 BY: /s/ John J. Fitteron ---------------------- (Signature) JOHN J. FITTERON Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) Dated: June 12, 2000 BY: /s/ Leo Liebowitz ---------------------- (Signature) LEO LIEBOWITZ President and Chief Executive Officer 9 EX-27 2 0002.txt FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF GETTY REALTY CORP. AND SUBSIDIARIES AS OF APRIL 20, 2000 AND FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS. 1,000 3-MOS JAN-31-2001 APR-30-2000 531 0 5,896 148 0 0 316,094 76,724 259,521 0 50,850 0 72,220 136 60,941 259,521 0 15,393 0 8,041 0 3 800 6,003 2,548 3,455 0 0 0 3,455 .16 .16
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