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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): FEBRUARY 17, 2000
KOGER EQUITY, INC.
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(Exact Name of Registrant as Specified in Its Charter)
FLORIDA
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State or Other Jurisdiction of Incorporation)
1-9997 59-2898045
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(Commission File Number) (IRS Employer Identification No.)
8880 FREEDOM CROSSING TRAIL
JACKSONVILLE, FLORIDA 32256
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(Address of Principal Executive Offices) (Zip Code)
(904) 732-1000
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(Registrant's Telephone Number, Including Area Code)
NA
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(Former Name or Former Address, if Changed Since Last Reports)
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Item 5. Other Events.
The Board of Directors of Koger Equity, Inc. has, effective March 1, 2000,
appointed Thomas J. Crocker as Chief Executive Officer of Koger Equity and has,
effective February 17, 2000, elected Mr. Crocker to the company's board of
directors. Robert E. Onisko has been appointed as Chief Financial Officer
effective March 1, 2000. Both men, who will be based at Koger's corporate
headquarters at 8880 Freedom Crossing Trail in Jacksonville, come to Koger from
Crocker Realty Trust, Inc., located in Boca Raton, a private real estate
investment trust with a $480 million portfolio encompassing 6.1 million feet of
office space in 127 buildings located in the Southeast. Messrs. Crocker and
Onisko, have worked together since 1984.
With the appointments of Messrs. Crocker and Onisko, Victor A. Hughes, Jr. and
David B. Hiley, the Company's current CEO and CFO, respectively, will retire
from those respective positions. Mr. Hughes will continue as Chairman of the
Board and Mr. Hiley will continue to serve as a member of the Board and a member
of the Board's Finance Committee while J.C. "Bud" Teagle, president, Chief
Operating Officer and a member of the Board, will continue to function in these
roles. As part of the retirement of Messrs. Hughes and Hiley, the Company is
buying out their management contracts and making certain payments related to
their pensions. The company estimates the total costs of these retirement
benefits at $3 million which will be taken as a special charge in the first
quarter.
After working as a real estate lending officer at Chemical Bank in the early
1980s, Mr. Crocker, 46, headed up Crocker & Company, a privately-held
development firm responsible for development, leasing and property management
services. He then formed Crocker Realty Trust, Inc. and built it into one of the
Southeast's largest office-based REITs, with regional offices in Atlanta,
Memphis and Charlotte and ownership of over 5.7 million feet in 70 buildings
located in seven states.
Crocker Realty Trust, Inc. was acquired by Highwoods Properties in 1996. At that
time, in conjunction with Apollo Real Estate Advisors, L.P., Fidelity Management
and Research Company, and Morgan Stanley Asset Management, Crocker formed the
private REIT, Crocker Realty Trust, Inc. (taking the same name as his previous
company), acquiring a $480 million portfolio encompassing 6.1 million feet of
space in 127 office buildings located in the Southeast. Messrs. Crocker and
Onisko served as the private REIT's senior executives prior to joining Koger
Equity.
A graduate of the University of Miami with a BS in Business Administration, Mr.
Crocker is a member of the Board of Trustees of InnKeepers USA and a member of
the Board of Trustees for BBQ Company. He is also a board member of the National
Conference for Community & Justice. He has received numerous awards for his work
in commercial real estate development and for his commitment to organizations
such as the Anti-Defamation League and Junior Achievement. He is a past chairman
of the Boca Raton Chamber of Commerce.
Robert Onisko, 48, served as CFO for both Crocker Realty Trust entities. Prior
to joining Crocker Realty, he held various accounting and financial management
positions with Arvida Corp. and The Cadillac Fairview Corp. Limited, both
national real estate developers. He began his career with Peat, Marwick,
Mitchell & Co. in Boston.
A graduate of Clark University with a BS degree in Business Administration,
Onisko also holds a Masters in Business Administration from Babson College. He
is a member of both the American Institute of CPAs and the Florida Institute of
CPAs.
At its meeting on February 17, the Koger Board approved a $0.35 per share
quarterly dividend, payable May 4, 2000 to shareholders of record March 31,
2000.
Also at its meeting on February 17, 2000, the Koger Board authorized the
repurchase of up to 2,650,000 shares of its Common Stock to be acquired from
time to time in the open market or in negotiated transactions, 500,000 of which
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shares will be offered to Mr. Crocker and 150,000 of which shares will be
offered to Mr. Onisko at prices paid by the Company.
Koger Equity, Inc. news release dated February 18, 2000, and February 23, 2000,
which are Exhibits 99(a) and 99(b), respectively, to this Report are
incorporated herein by reference.
For more information on Koger Equity, contact the company at 904-732-1000 or
visit its Web site at www.koger.com.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
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<CAPTION>
Exhibit
Number Description of Exhibit
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<S> <C>
99(a) Koger Equity, Inc. News Release, dated February 18, 2000.
99(b) Koger Equity, Inc. News Release, dated February 23, 2000.
</TABLE>
2
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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.
KOGER EQUITY, INC.
Dated: February 28, 2000 By: /s/ W. LAWRENCE JENKINS
------------------------
W. Lawrence Jenkins
Title: Vice President/Administration and
Corporate Secretary
3
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EXHIBIT INDEX
The following designated exhibits are filed herewith:
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<CAPTION>
Exhibit
Number Description of Exhibit
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<S> <C>
99(a) Koger Equity, Inc. News Release, dated February 18, 2000.
99(b) Koger Equity, Inc. News Release, dated February 23, 2000.
</TABLE>
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<PAGE> 1
EXHIBIT 99(A)
KOGER EQUITY, INC.
8880 Freedom Crossing Trail
Jacksonville, Florida 32256
(904) 732-1000
N E W S
KOGER EQUITY NAMES TWO SENIOR EXECUTIVES, AUTHORIZES STOCK PURCHASE AND APPROVES
DIVIDEND
- -New CEO and CFO Bring Years of Experience Working Together in the Real Estate
Investment Trust Industry-
Jacksonville, FL, February 18, 2000 - Koger Equity (AMEX Symbol: KE), one of the
Southeast's leading office park Real Estate Investment Trusts (REIT), has
announced the appointment of two top managers to help lead the company in the
decade ahead.
Thomas J. Crocker has been appointed CEO of Koger Equity effective March 1,
2000, and has also been elected to the company's board of directors. Robert E.
Onisko has been appointed CFO. Both men, who will be based at Koger's corporate
headquarters at 8880 Freedom Crossing Trail in Jacksonville, come to Koger from
Crocker Realty Trust, Inc., located in Boca Raton, a private real estate
investment trust with a $480 million portfolio encompassing 6.1 million feet of
office space in 127 buildings located in the Southeast.
"Tom Crocker and Bob Onisko, who have worked together since 1984, will provide
Koger with significant senior level management experience in taking Koger Equity
to its next level of development," commented Koger Chairman Victor Hughes, Jr.
in making the announcement. "Their addition to our management team represents a
strategic leadership acquisition for us, and we are very pleased to have them on
board."
Hughes added, "I've been with the organization for 18 years, and for the last
nine in executive management as either CFO or CEO. We've made our mark, and now
is precisely the right time for younger leaders to join our existing team of
senior real estate professionals, whose average length of service with us is
almost 23 years."
With Crocker and Onisko joining the company, Chairman Hughes will concentrate on
broader strategic issues for the company. Koger veteran J.C. "Bud" Teagle,
president and COO, will continue to function in both roles, while former CFO
David Hiley will continue to serve on Koger's board of directors and its finance
committee. Hughes noted that Hiley has made a "significant contribution" to the
organization over the years, both as CFO and as a director.
<PAGE> 2
STOCK PURCHASE/SENIOR EXECUTIVE TEAM
Elaborating on the timing of the appointments in conjunction with board
directives, Chairman Hughes commented, "Our foremost goal, always, is to improve
our shareholders' return on investment. In this regard, we believe the best
investment we can make at this time is in Koger Equity stock. As long as there
are these values in our stock, and it's financially prudent to do so, we will
use some of our cash and proceeds from asset sales to buy up to 2.65 million
shares of our stock, as the Koger Board directs.
"At the same time, Koger Equity successfully operates in a very competitive
marketplace overall, and we will continue to execute our strategic plan in order
to grow, expanding and repositioning our portfolio in the process. So, in
addition to buying in our own stock, strengthening and streamlining the duties
of our senior executive team - and resolving any management succession issue in
the process - is the best course of action for us to take at this time."
BACKGROUND ON CROCKER REALTY
After working as a real estate lending officer at Chemical Bank in the early
1980s, Tom Crocker, 46, headed up Crocker & Company, a privately-held
development firm responsible for development, leasing and property management
services. He then formed Crocker Realty Trust, Inc. and built it into one of the
Southeast's largest office-based REITs, with regional offices in Atlanta,
Memphis and Charlotte and ownership of over 5.7 million feet in 70 buildings
located in seven states.
Crocker Realty Trust, Inc. was acquired by Highwoods Properties in 1996. At that
time, in conjunction with Apollo Real Estate Advisors, L.P., Fidelity Management
and Research Company, and Morgan Stanley Asset Management, Crocker formed the
private REIT, Crocker Realty Trust, Inc. (taking the same name as his previous
company), acquiring a $480 million portfolio encompassing 6.1 million feet of
space in 127 office buildings located in the Southeast. Tom Crocker and Bob
Onisko served as the private REIT's senior executives prior to joining Koger
Equity.
A graduate of the University of Miami with a BS in Business Administration, he
is a member of the Board of Trustees of InnKeepers USA and a member of the Board
of Trustees for BBQ Company. He is also a board member of the National
Conference for Community & Justice. He has received numerous awards for his work
in commercial real estate development and for his commitment to organizations
such as the Anti-Defamation League and Junior Achievement. He is a past chairman
of the Boca Raton Chamber of Commerce.
Robert Onisko, 48, served as CFO for both Crocker Realty Trust entities. Prior
to joining Crocker Realty, he held various accounting and financial management
positions with Arvida Corp. and The Cadillac Fairview Corp. Limited, both
national real estate developers. He began his career with Peat, Marwick,
Mitchell & Co. in Boston.
A graduate of Clark University with a BS degree in Business Administration,
Onisko also holds a Masters in Business Administration from Babson College. He
is a member of both the American Institute of CPAs and the Florida Institute of
CPAs.
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DIVIDEND APPROVED
At its meeting on February 17, the Koger Board approved a $0.35 per share
quarterly dividend, payable May 4, 2000 to shareholders of record March 31,
2000.
KOGER EQUITY
Koger Equity is a Jacksonville-based, self-managed REIT specializing in
developing, owning and operating state-of-the-art suburban office parks under
the "Koger Center" brand name. The company, in business since 1988, owns and
operates a total of 220 office buildings, containing over 12 million feet,
located in 15 cities throughout the Southeast and extending into the Southwest.
The company also provides property management services to a third party for a
suburban office center containing 542,000 feet in Nashville. An affiliate, Koger
Realty Services, manages six suburban office parks containing 3.8 million feet
located in six cities in Florida, Virginia, and North and South Carolina. Koger
Centers, located in high-growth cities, are distinguished by their architectural
design, campus-like settings, ease of access, and hands-on property management
and tenant service.
For more information on Koger Equity, contact the company at 904-732-1000 or
visit its Web site at www.koger.com.
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EXHIBIT 99(B)
KOGER EQUITY, INC.
8880 Freedom Crossing Trail
Jacksonville, Florida 32256-8280
Main Telephone # (904) 732-1000
Exhibit 99(a)
NEWS
Koger Equity Reports Record Year-End Results
Jacksonville, Florida--February 23, 2000--Koger Equity, Inc. today reported
record results for the quarter and year ended December 31, 1999.
Victor A. Hughes, Jr., Chairman and CEO of the Company, said, "We experienced a
strong fourth quarter contributing to year-end results in which the Company
achieved or surpassed its objectives for its over-all business plan, FFO growth,
and the operating portfolio of suburban office properties.
"A major element in our business plan was to maximize returns on existing
inventory - resulting in net operating income on same store sales increasing
9.7% over last year, one of the highest for any suburban or CBD office REIT.
This outstanding same store sales NOI performance, in combination with the
successful execution of sales of the Jacksonville Central and Charlotte East
office parks, the acquisition of the newly developed assets in two new
submarkets, Charlotte (University) and Orlando (Lake Mary), and our successful
development activity across multiple markets, were highlights of an excellent
year.
"Koger Equity operates in a very competitive marketplace overall, and we will
continue to execute our strategic plan in order to grow, expanding and
repositioning our portfolio in the process. One of the best investments the
Company can make at this time is the purchase of our common stock. As a part of
our foremost goal, improving shareholder return, we will utilize cash from the
proceeds of asset sales to buy up to 2.65 million shares.
"The recently announced addition to our senior management team of Tom Crocker as
CEO and Bob Onisko as CFO, resolves any management succession issue, strengthens
and streamlines the duties of our senior executive team, and represents an
excellent strategic leadership acquisition for us.
"I've been with the organization for 18 years. We have made our mark and now is
precisely the right time for these two fine, younger leaders to join Bud Teagle,
our chief operating officer, and our existing experienced team of senior real
estate professionals. Working together, they have a strong platform to grow this
company to higher valuations for all shareholders."
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FINANCIAL HIGHLIGHTS
For the quarter ended December 31, 1999, compared to the same period last year:
- Total rental and other rental services revenues increased $3.3
million (up 9.2%).
- Net income increased $935,000 (up 12.9%).
- Funds from operations ("FFO") increased $2 million (up 13.8%).
- On a per diluted share/unit basis, FFO increased 11.3% to
$0.59 per diluted share/unit in the fourth quarter 1999, from
$0.53 per diluted share/unit for the fourth quarter of 1998.
For the year ended December 31, 1999, compared to the year ended December 31,
1998:
- Total rental and other rental services revenues increased
$22.5 million (up 16.8%).
- Net income increased $7 million (up 23.6%).
- FFO increased $8.5 million (up 15.1%).
- On a per diluted share/unit basis, FFO increased 11.5% to
$2.32 per diluted share/unit for 1999, from $2.08, per diluted
share/unit for 1998.
At December 31, 1999, the debt-to-total market capitalization ratio of the
Company was approximately 43%.
During the fourth quarter, the Company's Board of Directors declared a dividend
of $0.35 per share.
ACQUISITION ACTIVITY
- On November 1, 1999, the Company acquired the following
recently constructed properties:
- Two buildings, containing 190,600 feet, in Charlotte,
North Carolina, for $23.1 million.
- Two buildings, containing 318,000 feet, in Orlando,
Florida, for $41 million.
Leasing Activity
- Rental revenues on same store sales totaled $116.9 million for
1999, up 6.9% over 1998.
- Net operating income on same store sales totaled $71.8 million
for 1999, up 9.7% over 1998.
- The average rental rate on new leases signed during 1999 was
$18.36 per net rentable square foot, and the weighted average
term of these leases was 71 months.
- The average renewal rate for 1999 was $17.37 per net rentable
square foot, a 13.4% increase over the rate prior to renewal.
- The Company's average rental rate on its entire portfolio
increased by 6.1% in 1999, to $16.79 per square foot.
- -
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Significant leasing activity for the fourth quarter included:
- 176,000 feet with Landstar System Holdings Inc. in
Jacksonville, Florida.
- 42,500 feet with Best Software, Inc. in St. Petersburg,
Florida.
- 18,900 feet with Harleysville Mutual Insurance in Greensboro,
North Carolina.
- 18,000 feet with U. S. Government - Internal Revenue Service
in St. Petersburg, Florida.
- 13,800 feet with Cisco Systems in San Antonio, Texas.
- 12,700 feet with CBS Radio in St. Petersburg, Florida.
- Occupancy increased to 93%, from 90%.
DEVELOPMENT ACTIVITY
- During December 1999, construction of the 180,900 foot
Landstar Building in Jacksonville, Florida, was completed. The
building was 100% leased at December 31, 1999.
- At December 31, 1999, six buildings containing approximately
579,000 feet were under construction and were 14% pre-leased.
Currently, Koger Equity (ASE:KE), a Florida-based real estate investment trust,
owns and operates office properties containing 12.1 million feet in 15 cities in
the Southeast and Southwest. The properties owned on December 31, 1999,
including acquisitions and new development, were 93% leased. Excluding the four
buildings which were in the lease-up period at December 31, 1999, the remainder
of the Company's buildings were on average 94% leased. The Company also provides
property management services to a third party for 8 office buildings, containing
542,000 feet, located in one city in the Southeast.
On February 17, 2000, the Board of Directors declared a quarterly dividend of
$0.35 per share to be paid on May 4, 2000, to shareholders of record on March
31, 2000.
For more information about Koger Equity, Inc., please visit our website at
www.koger.com. You may also obtain a copy of the Company's fourth quarter and
year-end 1999 Supplemental Information by contacting Mary McNeal, Director of
Investor Relations, at 904/538-8872, or on our website.
The foregoing message contains forward-looking statements concerning 2000. The
actual results of operations for 2000 could differ materially from those
projected because of factors affecting the financial markets, reactions of the
Company's existing and prospective investors, the ability of the Company to
identify and execute development projects and acquisition opportunities, the
ability of the Company to renew and enter into new leases on favorable terms,
and other risk factors. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Cautionary Statement Relevant to
Forward-Looking Information for Purpose of the `Safe Harbor' Provisions of the
Private Securities Litigation Reform Act of 1995" in the Company's Annual Report
on Form 10-K for the Fiscal Year Ended December 31, 1998.
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KOGER EQUITY, INC.
Selected Income Information
(In Thousands except per Share Data)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Year Ended
12/31/99 12/31/98 12/31/99 12/31/98
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Rental and other rental services revenues $ 39,813 $ 36,468 $ 156,153 $ 133,663
Total revenues 40,817 37,695 160,093 138,082
Property operations expense 14,342 14,522 60,582 53,719
Depreciation and amortization 8,580 7,965 32,314 28,381
Mortgage and loan interest expense 5,580 5,098 21,893 16,616
General and administrative expense 2,387 2,076 8,633 6,953
Gain (loss) on sale or disposition of assets (14) 29 3,851 35
Net income $ 8,174 $ 7,239 $ 36,586 $ 29,602
Earnings per common share:
Basic $ 0.31 $ 0.27 $1.37 $ 1.13
Diluted $ 0.30 $ 0.27 $1.35 $ 1.10
Weighted average shares outstanding:
Basic 26,764 26,578 26,689 26,294
Diluted 27,066 26,996 27,019 26,901
Funds from operations:
Net income $ 8,174 $ 7,239 $ 36,586 $ 29,602
Depreciation - real estate 7,793 6,903 28,800 25,146
Amortization - deferred tenant costs 430 380 2,132 1,464
Amortization - goodwill 43 42 170 170
Minority interest 248 139 1,174 139
Gain on sale or disposition of assets 14 (29) (3,851) (35)
Funds from operations $ 16,702 $ 14,674 $ 65,011 $ 56,486
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Weighted average shares/units
outstanding - diluted 28,066 27,758 28,019 27,093
Funds from operations, per diluted
share/unit $ 0.59 $ 0.53 $ 2.32 $ 2.08
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