Cedar Shopping Centers Inc. Q1 2010 Earnings Call Transcript

Cedar Shopping Centers Inc. Q1 2010 Earnings Call Transcript
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Cedar Shopping Centers Inc. (CDR)

Q1 2010 Earnings Call Transcript

May 7, 2010 9:00 am ET


Brad Cohen – IR, ICR

Leo Ullman – Chairman, CEO & President

Larry Kreider – CFO

Nancy Mozzachio – VP, Leasing


Nate Isbee – Stifel Nicolaus

Todd Thomas – KeyBanc Capital Markets

RJ Milligan – Raymond James

Arthur Friedman – Friedman Asset Management

Jim Rosenwatt [ph] – Private Fund Management [ph]

Dave Fick – Stifel Nicolaus



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Good morning, and welcome to the Cedar Shopping Centers Inc. first quarter 2010 earnings conference call. At this time, all participants have been placed in a listen-only mode and the floor will be open to your questions following the presentation.

It’s now my pleasure to turn the floor over to your host, Brad Cohen with ICR. Please go ahead, sir.

Brad Cohen

Thank you very much, operator.

Good morning.

At this time, management would like me to inform you that certain statements made during this conference call, which are not historical facts may be deemed forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995.

Although the company believes that expectations reflect in any forward-looking statements are based upon reasonable assumptions, they are subject to various risks and uncertainties. The Company can provide no assurance of expectations will be achieved and actual results may differ.

Many of the factors and risks that could cause actual results to differ materially from expectations are detailed in the Company's press release and that release was put out yesterday and from time-to-time in the Company's filings with the Securities and Exchange Commission. In the end, the Company undertakes no obligation to revise or update any forward-looking statements reflected in or circumstances after the date of the Company's release.

It is now my pleasure to turn the call over to Mr. Leo Ullman, Chairman, Chief Executive Officer and President. Leo?

Leo Ullman

Thank you very much, Brad. Your disclaimer was just as powerful as it was last quarter. Good morning, everyone, and thank you very much for joining us today on the Cedar Shopping Centers Earnings Conference Call for the first quarter 2010 Results.

With me on the call today is Larry Kreider, our Chief Financial Officer. Other members of our team including Tom Richey, President of our Development and Construction Division, Brenda Walker, our Chief Operating Officer and Nancy Mozzachio, our Vice President of Leasing are also on the call and available to you.

The most important message that we wish to convey today is that our company is continuing to execute on its business plan. Thus, the first quarter reflected continuing steady operating results with high occupancy which we have been able to maintain at 95% for our stabilized assets now for a matter of years not just quarters and the continued movements to further enhance and delever our company’s balance sheet.

This continued execution of our business plan focusing on both our operations and our balance sheet has indeed positioned our company to enhance shareholder value and participate effectively in future acquisitions and to a lesser extent in development opportunities during this and coming years.

Let me discuss a few of the important steps which we have taken during the past quarter and the weeks subsequent thereto relevant to the execution of our business plan. First of all, our financial and joint venture arrangements with RioCan, the largest REIT in Canada and a major owner of shopping center properties in Canada, have been to a large extent transformative for a company and continued to drive benefits for our company.

We have now closed on the transfer of six of the seven joint venture properties previously in Cedar’s own portfolio to the 80% RioCan and 20% Cedar joint venture of which two were completed during the last couple of weeks.

The one remaining property to be transferred Loyal Plaza and Williamsport, Pennsylvania has been awaiting lender approval from the special service for a matter of many months.

RioCan just this past week has also exercised its warrant for the purchase of approximately 1.4 million shares of stock at a purchase price of $7 per share, resulting in cash proceeds to the company of an additional $10 million. Thus the company has been able to raise approximately $110 million in cash from the joint venture arrangements in stock purchases by RioCan to-date while we’re moving nearly a $100 million of debt from our balance sheet.

In addition, we raised an additional $60 million plus through an add-on overnight public offering in February and a related sale to RioCan. The underwriting group for that offering consisted primarily of members and affiliates of the syndicate for our credit facility which is now in place at $285 million for two years plus a one year option.

As a result of the focus on our balance sheet our company has been able to effect a reduction in the outstanding balance under the credit facility to a level of less than $90 million. We will thus have reduced the amount outstanding under our credit facility by nearly $200 million in one year. Again, by nearly $200 million in one year. This, of course, is a significant indeed singular achievement.

Importantly, it has also created substantial availability and driven down our debt to capital ratio to an exemplary level. With respect to our fixed-rate debt we have basically no maturities this year and only a couple of manageable loan maturities next year.

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