UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): May 13, 2005
Stratus
Properties Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware |
0-19989 |
72-1211572 | ||
|
(State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(IRS
Employer Identification Number) |
|
98
San Jacinto Blvd., Suite 220 |
|
|
Austin,
Texas |
78701 |
|
(Address
of principal executive offices) |
(Zip
Code) |
Registrant's
telephone number, including area code: (512) 478-5788
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
2.02. Results
of Operations and Financial Condition.
Stratus
Properties Inc. issued a press release dated May 13, 2005, announcing its
first-quarter 2005 results (see exhibit 99.1).
Item
9.01. Financial
Statements and Exhibits.
(c)
Exhibits.
The
Exhibits included as part of this Current Report are listed in the attached
Exhibit Index.
SIGNATURE
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 hereunto
duly authorized.
Stratus
Properties Inc.
By: /s/
John E. Baker
----------------------------------------
John E.
Baker
Senior
Vice President and
Chief
Financial Officer
(authorized
signatory and
Principal
Financial Officer)
Date: May
13, 2005
Stratus
Properties Inc.
Exhibit
Index
Exhibit
Number
|
Press
release dated May 13, 2005, titled “Stratus Properties Inc. Reports
First-Quarter 2005 Results.” | ||
|
NEWS
RELEASE | |
|
NASDAQ
Symbol: “STRS” | |
|
Stratus
Properties Inc. |
Financial
and Media Contact: |
|
98
San Jacinto Blvd. Suite 220 |
William
H. Armstrong III |
|
Austin,
Texas 78701 |
(512)
478-5788 |
STRATUS
PROPERTIES INC. REPORTS
FIRST-QUARTER
2005 RESULTS
HIGHLIGHTS
| · |
First-quarter
2005 developed property sales totaled $2.3 million compared with $1.0
million in the first quarter of 2004. |
| · |
Stratus’
scheduled real estate sales, which are under existing homebuilder
agreements, over the remainder of 2005 include at
least: |
| o |
60
lots at its Deerfield project for $3.7
million |
| o |
14
lots in its Circle C community for $0.9
million |
| o |
9
lots at its Wimberly Lane Phase II subdivision for $1.4
million |
| · |
Stratus
is working with Advanced Micro Devices, Inc. (NYSE: AMD) to develop a
proposed project at Stratus’ 282-acre Lantana project area in southwest
Austin. |
| · |
Stratus
was selected by the City of Austin to develop a proposed mixed-use project
in downtown Austin. |
|
First
Quarter |
||||||
|
2005 |
2004 |
|||||
|
(In
Thousands, Except |
||||||
|
Per
Share Amounts) |
||||||
|
Revenues |
$ |
3,630 |
$ |
1,947 |
||
|
Operating
loss |
(645 |
) |
(1,580 |
) | ||
|
Net
loss applicable to common stock |
(912 |
) |
(1,805 |
) | ||
|
Net
loss per share of common stock |
$ |
(0.13 |
) |
$ |
(0.25 |
) |
|
Average
shares of common stock outstanding |
7,216 |
7,147
|
||||
AUSTIN,
TX, May 13, 2005 - Stratus Properties Inc. (NASDAQ: STRS) reported a net loss of
$0.9 million, $0.13 per share, for the first quarter of 2005 compared to a net
loss of $1.8 million, $0.25 per share, for the first quarter of
2004.
Real
Estate Revenues. Stratus’
real estate revenues for the first quarter of 2005 totaled $2.3 million,
including sales of 16 lots at its Deerfield project in Plano, Texas for $1.0
million, a residential estate lot at its Escala Drive subdivision in Austin,
Texas for $0.9 million and a lot at its Austin-area Wimberly Lane Phase II
subdivision for $0.3 million. Stratus’ real estate revenues for the first
quarter of 2004 totaled $1.0 million, which included sales of a residential
estate lot at its Mirador subdivision for $0.4 million and the first courtyard
home at Calera Court for $0.6 million.
Rental
Income and Other Revenues. For the
first quarter of 2005, Stratus received rental income of $0.9 million from its
two fully leased 7000 West office buildings in the Lantana project in southwest
Austin, compared to $0.7 million for the first quarter of 2004. In addition,
Stratus earned $0.3 million in rental income related to its fully leased
75,000-square-foot office building at 7500 Rialto Boulevard for the first
quarter of 2005, compared to $0.1 million for the first quarter of 2004, as the
occupancy rate doubled to approximately 100 percent in the first quarter of 2005
from 50 percent in the first quarter of 2004.
Stratus’
other revenue, in addition to management fees and sales commissions, also
included the sale of development fee credits to third parties totaling $0.1
million for the first quarters of 2005 and 2004.
Development
Activities. As
previously announced, Stratus is working with AMD on site planning and related
matters necessary to develop a proposed project at Stratus’ Lantana project. The
project consists of approximately 825,000 square feet of office and related uses
located on a 59-acre site at the southeast corner of West William Cannon Drive
and Southwest Parkway. Lantana is a partially developed, mixed-use project with
remaining entitlements for approximately three million square feet of office and
retail use on 282 acres. Regional utility and road infrastructure is in place
with capacity to serve Lantana at full build-out. Development of the AMD project
is subject to several conditions, including finalizing definitive agreements and
securing financing.
At March
31, 2005, Stratus’ 75,000-square-foot office building at 7500 Rialto Boulevard
is fully leased. As demand for office space within Lantana has increased,
Stratus plans to commence construction of a second 75,000-square-foot office
building at 7500 Rialto Boulevard during 2005, subject to securing suitable
tenant leases.
The City
of Austin selected Stratus’ proposal to develop a mixed-use project in downtown
Austin immediately north of the new City Hall complex. The project is planned
for retail, office and residential uses. Stratus and the City of Austin have
entered an exclusive negotiation period to reach agreement on the project’s
design and transaction terms and structure. Subject to successful negotiations
with the City of Austin, Stratus plans to pursue this project in partnership
with nationally recognized office, retail and apartment developers.
In May
2004, Stratus entered into a contract with a national homebuilder to sell 41
lots within the Wimberly Lane Phase II subdivision. In June 2004, the
homebuilder paid Stratus a non-refundable $0.6 million deposit for the right to
purchase the 41 lots, which was used to pay ongoing development costs of the
lots. The deposit will be recognized as income as lots are sold. The lots will
be sold on a scheduled takedown basis, with six lots sold upon substantial
completion of subdivision utilities, and then three lots per quarter beginning
150 days after the sale of the initial lots. The average purchase price for each
of the 41 lots is $150,400, subject to a six percent annual escalator commencing
upon substantial completion of development. Subdivision streets and utilities
were completed in October 2004 and the initial lot closings occurred in December
2004. Scheduled homebuilder sales during the remainder of 2005 total nine lots
for $1.4 million, including three lots for $0.5 million in the second quarter of
2005. Wimberly Lane Phase II also includes six estate lots, each averaging
approximately five acres, which we are retaining and marketing. Estate lot sales
in 2005 through April 30 include three lots (one in the first quarter and two in
April) for $0.8 million.
In
January 2004, Stratus acquired approximately 68 acres of land in Plano, Texas,
for $7.0 million. The property (Deerfield) is zoned and subject to a preliminary
subdivision plan for 234 residential lots. In February 2004, Stratus executed an
Option Agreement and a Construction Agreement with a national homebuilder.
Pursuant to the Option Agreement, Stratus was paid $1.4 million for an option to
purchase all 234 lots over 36 monthly take-downs. The net purchase price for
each of the 234 lots is $61,500, subject to certain terms and conditions. The
$1.4 million option payment is non-refundable, but would be applied against
subsequent purchases of lots by the homebuilder after certain thresholds are
achieved and will be recognized as income as lots are sold. The Construction
Agreement requires the homebuilder to complete development of the entire project
by March 15, 2007. Stratus agreed to fund up to $5.2 million of the
homebuilder’s development costs. The homebuilder must pay all property taxes and
maintenance costs. In February 2004, Stratus entered into a $9.8 million
three-year loan agreement with Comerica Bank to finance the acquisition and
development of Deerfield. Development is proceeding on schedule and Stratus had
$4.8 million of remaining availability under its Deerfield loan at March 31,
2005. The initial lot sale occurred in November 2004 and subsequent lot sales
are on schedule with 16 lot sales closing in the first quarter of 2005 as
discussed above. Under the agreement terms, Stratus expects to complete 60 lot
sales for $3.7 million during the remainder of 2005.
Stratus
also has commenced development activities at the Circle C community based on the
entitlements set forth in its 2002 Circle C Settlement with the City of Austin,
which permits development of one million square feet of commercial space, 900
multi-family units and 830 single-family residential lots. The preliminary plan
has been approved for Meridian, an 800-lot residential development at the Circle
C community. In October 2004, Stratus received final City of Austin plat and
construction permit approvals for the first phase of Meridian, and construction
commenced in January. During the first quarter of 2005, Stratus contracted to
sell a total of 494 lots in its Meridian project to three national homebuilders
in four phases. Sales for each of the four phases commence upon substantial
completion of development for that phase, and continue every quarter until all
of the lots have been sold. The first phase, which is currently under
development, includes 134 lots and substantial completion is projected prior to
year-end. Development of the second phase of approximately 134 lots will
commence in the third quarter of 2005, with completion projected by early 2006.
Stratus estimates its sales from the first phase of Meridian to total at least
14 lots for $0.9 million during the remainder of 2005.
In
addition, several retail sites at the Circle C community have received final
City of Austin approvals and are being developed. Zoning for Escarpment Village,
a 160,000-square-foot retail project anchored by a grocery store, was approved
during the second quarter of 2004, and construction has commenced with
completion expected by year-end. In December 2004, Stratus obtained an $18.5
million project loan from Comerica Bank to fund the construction of Escarpment
Village, as well as a $22.8 million commitment from the Teachers Insurance and
Annuity Association of America for a long-term mortgage for the completed
project.
During
2004, Stratus completed construction of four courtyard homes at Calera Court
within the Barton Creek community, one of which was sold in the first quarter of
2004. Calera Court, the initial phase of the “Calera Drive” subdivision, will
include 17 courtyard homes on 16 acres. The second phase of Calera Drive,
consisting of 53 single-family lots, has received final plat and construction
permit approval, and the development of these lots, many of which adjoin the
Fazio Canyons Golf Course, has commenced. Development of the third and last
phase of Calera Drive, which will include approximately 70 single-family lots,
is not expected to commence until after 2005. Funding for the construction of
courtyard homes at Calera Court is provided by a $3.0 million project loan,
which Stratus established with Comerica Bank in September 2003.
Stratus
is a diversified real estate company engaged in the acquisition, development,
management and sale of commercial, multi-family and residential real estate
properties located primarily in the Austin, Texas area.
____________________________
CAUTIONARY
STATEMENT. This press release contains certain forward-looking statements
regarding proposed real estate sales and development activities at the Deerfield
project, the Barton Creek community, the Circle C community and at Lantana and
the proposed development of a mixed-use project in downtown Austin. Important
factors that might cause future results to differ from those projections include
economic and business conditions, the availability of financing, regulatory
approvals and environmental regulations, which are described in more detail in
Stratus’ 2004 Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
A copy of
this release is available on our web site,
www.stratusproperties.com.
# # #
STRATUS
PROPERTIES INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
(In
Thousands, Except Per Share Amounts)
|
Three
Months Ended |
||||||
|
March
31, |
||||||
|
2005 |
2004 |
|||||
|
Revenues: |
||||||
|
Real
estate |
$ |
2,252 |
$ |
972 |
||
|
Rental
income |
1,220 |
828 |
||||
|
Commissions,
management fees and other |
158 |
147 |
||||
|
Total
revenues |
3,630 |
1,947 |
||||
|
Cost
of sales: |
||||||
|
Real
estate, net |
1,892 |
1,113 |
||||
|
Rental |
608 |
689 |
||||
|
Depreciation |
418 |
345 |
||||
|
Total
cost of sales |
2,918 |
2,147 |
||||
|
General
and administrative expenses |
1,357 |
1,380 |
||||
|
Total
costs and expenses |
4,275 |
3,527 |
||||
|
Operating
loss |
(645 |
) |
(1,580 |
) | ||
|
Interest
expense, net |
(294 |
) |
(237 |
) | ||
|
Interest
income |
27 |
12 |
||||
|
Net
loss applicable to common stock |
$ |
(912 |
) |
$ |
(1,805 |
) |
|
Basic
and diluted net loss per share of common stock |
$ |
(0.13 |
) |
$ |
(0.25 |
) |
|
Basic
and diluted average shares of common stock outstanding |
7,216 |
7,147 |
||||
I
STRATUS
PROPERTIES INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In
Thousands)
|
March
31, |
December
31, |
|||||
|
2005 |
2004 |
|||||
|
ASSETS |
||||||
|
Current
assets: |
||||||
|
Cash
and cash equivalents, including restricted cash of |
||||||
|
$123
and $124, respectively |
$ |
1,032 |
$ |
379 |
||
|
Accounts
receivable |
242 |
345 |
||||
|
Prepaid
expenses |
90 |
40 |
||||
|
Notes
receivable from property sales |
47 |
47 |
||||
|
Total
current assets |
1,411 |
811 |
||||
|
Real
estate, commercial leasing assets and facilities, net: |
||||||
|
Property
held for sale - developed or under development |
113,393 |
104,526 |
||||
|
Property
held for sale - undeveloped |
17,068 |
20,919 |
||||
|
Property
held for use, net |
21,356 |
21,676 |
||||
|
Other
assets |
4,350 |
4,140 |
||||
|
Notes
receivable from property sales |
783 |
789 |
||||
|
Total
assets |
$ |
158,361 |
$ |
152,861 |
||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY |
||||||
|
Current
liabilities: |
||||||
|
Accounts
payable and accrued liabilities |
$ |
4,811 |
$ |
1,343 |
||
|
Accrued
interest, property taxes and other |
2,074 |
2,390 |
||||
|
Current
portion of long-term debt |
7,913 |
a |
1,531 |
|||
|
Total
current liabilities |
14,798 |
5,264 |
||||
|
Long-term
debt |
51,156 |
54,116 |
||||
|
Other
liabilities |
5,349 |
5,285 |
||||
|
Stockholders’
equity |
87,058 |
88,196 |
||||
|
Total
liabilities and stockholders’ equity |
$ |
158,361 |
$ |
152,861 |
||
| a. |
Includes
$6.6 million for 7500 Rialto Boulevard project loan which matures on
January 31, 2006. |
II
STRATUS
PROPERTIES INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
(In
Thousands)
|
Three
Months Ended |
||||||
|
March
31, |
||||||
|
2005 |
2004 |
|||||
|
Cash
flow from operating activities: |
||||||
|
Net
loss |
$ |
(912 |
) |
$ |
(1,805 |
) |
|
Adjustments
to reconcile net loss to net cash provided by |
||||||
|
(used
in) operating activities: |
||||||
|
Depreciation |
418 |
345 |
||||
|
Cost
of real estate sold |
1,442 |
718 |
||||
|
Stock-based
compensation |
70 |
42 |
||||
|
Long-term
notes receivable and other |
(205 |
) |
(119 |
) | ||
|
(Increase)
decrease in working capital: |
||||||
|
Accounts
receivable and prepaid expenses |
53 |
730 |
||||
|
Accounts
payable, accrued liabilities and other |
3,216 |
(369 |
) | |||
|
Net
cash provided by (used in) operating activities |
4,082 |
(458 |
) | |||
|
Cash
flow from investing activities: |
||||||
|
Purchases
and development of real estate properties |
(6,458 |
) |
(9,488 |
) | ||
|
Development
of commercial leasing properties |
(98 |
) |
(323 |
) | ||
|
Net
cash used in investing activities |
(6,556 |
) |
(9,811 |
) | ||
|
Cash
flow from financing activities: |
||||||
|
Borrowings
from revolving credit facility |
6,500 |
3,228 |
||||
|
Payments
on revolving credit facility |
(2,447 |
) |
(816 |
) | ||
|
Borrowings
from project loans |
468 |
5,852 |
||||
|
Payments
on project loans |
(1,100 |
) |
(44 |
) | ||
|
Net
proceeds from exercise of stock options |
41 |
136 |
||||
|
Purchases
of Stratus common shares |
(335 |
) |
- |
|||
|
Net
cash provided by financing activities |
3,127 |
8,356 |
||||
|
Net
increase (decrease) in cash and cash equivalents |
653 |
(1,913 |
) | |||
|
Cash
and cash equivalents at beginning of year |
379 |
3,413 |
||||
|
Cash
and cash equivalents at end of period |
1,032 |
1,500 |
||||
|
Less
cash restricted as to use |
(123 |
) |
(204 |
) | ||
|
Unrestricted
cash and cash equivalents at end of period |
$ |
909 |
$ |
1,296 |
||
III