SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
AMENDMENT NO. 1
TO
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 31, 2000
GROVE PROPERTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-13080 06-1391084
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification Number)
598 Asylum Avenue, Hartford, Connecticut 06105
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (860) 246-1126
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements and Exhibits.
-------------------------------------------
Item 7 (a) and (b) - Grove Property Trust
Financial Statements of Properties Acquired and Pro Forma
Financial Information
The Rolling Green Portfolio:
Report of Independent Auditors............................................3
Combined Historical Summary of
Gross Income and Direct Operating
Expenses for the three months
ended March 31, 2000 and
the year ended December 31, 1999......................................4
Notes to Combined Historical Summary
of Gross Income and Direct Operating
Expenses..............................................................5
Grove Property Trust
Pro Forma Condensed Consolidated Financial Information....................6
Pro Forma Condensed Consolidated Balance Sheet ...........................7
Notes to Pro Forma Condensed Consolidated Balance Sheet...................8
Pro Forma Condensed Consolidated Statements of
Income for the three months ended March 31, 2000......................9
and the year ended December 31, 1999.................................10
Notes to Pro Forma Condensed Consolidated Statements of
Income...............................................................11
2
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Shareholders and Board of Trust Managers
Grove Property Trust
We have audited the accompanying Combined Historical Summary of Gross Income and
Direct Operating Expenses (the "Historical Summary") for Rolling Green
Apartments at Amherst, Rolling Green Apartments at Fall River and Rolling Green
Apartments at Milford (collectively, known as the "Rolling Green Portfolio") for
the year ended December 31, 1999. This Historical Summary is the responsibility
of the Rolling Green Portfolio's management. Our responsibility is to express an
opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit also
includes assessing the basis of accounting used and significant estimates made
by management, as well as evaluating the overall presentation of the Historical
Summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K/A of Grove Property Trust as
described in Note 1, and is not intended to be a complete presentation of the
Rolling Green Portfolio's revenues and expenses.
In our opinion, the Historical Summary presents fairly, in all material
respects, the combined gross income and direct operating expenses as described
in Note 1 of the Rolling Green Portfolio for the year ended December 31, 1999,
in conformity with accounting principles generally accepted in the United
States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
June 15, 2000
3
<PAGE>
<TABLE>
COMBINED HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
FOR THE ROLLING GREEN PORTFOLIO
(Dollars in thousands)
<CAPTION>
Three Months Ended Year Ended
March 31, December 31,
2000 1999
-------------- -------------
(Unaudited)
<S> <C> <C>
Gross Income
Rental income ................................ $2,053 $7,639
Other income ................................. 61 408
------ ------
Total gross income ................................ 2,114 8,047
------ ------
Direct Operating Expenses
Property operating expenses ................... 881 3,514
Taxes and insurance ........................... 130 479
General and administrative .................... 128 605
------ ------
Total direct operating expenses ................... 1,139 4,598
------ ------
Gross income in excess of direct operating expenses $ 975 $3,449
====== ======
</TABLE>
See accompanying notes to financial statement.
4
<PAGE>
THE ROLLING GREEN PORTFOLIO
NOTES TO COMBINED HISTORICAL SUMMARY OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
(Dollars in thousands)
1. General Information and Summary of Significant Accounting Policies
Presented herein is the combined historical summary of gross income and
direct operating expenses ("Historical Summary") of Rolling Green
Apartments at Amherst, Rolling Green Apartments at Fall River and Rolling
Green Apartments at Milford (collectively known as the "Rolling Green
Portfolio"), all held under common control. The properties are located in
Amherst, Fall River and Milford, Massachusetts, respectively. The Rolling
Green Portfolio was acquired by Grove Property Trust, a Maryland real
estate investment trust, (the "Company") on May 31, 2000.
The Historical Summary has been prepared in accordance with Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission for inclusion in
the Current Report on Form 8-K/A of the Company. Accordingly, certain
historical expenses which may not be comparable to the expenses expected to
be incurred in the proposed future operations of the Rolling Green
Portfolio have been excluded. Expenses excluded consist of interest,
depreciation and amortization and other costs not directly related to the
future operations of the Rolling Green Portfolio.
The Historical Summary for the three months ended March 31, 2000, is
unaudited. In the opinion of management, all adjustments necessary for a
fair presentation of such information have been included. The results of
operations for this period are not necessarily indicative of the results to
be obtained for a full fiscal year.
Rental income is recognized on a straight-line basis over the term of the
leases, which are generally one year. Included in other income is interest
income of $33 (unaudited) and $124 for the three months ended March 31,
2000 and the year ended December 31, 1999, respectively, related to
earnings on various restricted cash accounts which are required by certain
mortgages which have been acquired by the Company.
Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments are capitalized.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
5
<PAGE>
GROVE PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
MARCH 31, 2000
(Unaudited)
The Rolling Green Apartments at Amherst, Rolling Green Apartments at Fall
River and Rolling Green Apartments at Milford (collectively known as the
"Rolling Green Portfolio"), all held under common control, were acquired by
Grove Property Trust (the Company) on May 31, 2000.
The accompanying unaudited pro forma condensed consolidated balance sheet
of the Company is presented as if the acquisition of the Rolling Green
Portfolio had occurred as of March 31, 2000. The unaudited pro forma
condensed consolidated statements of income have been prepared to reflect
the acquisition of the Rolling Green Portfolio as if such transactions had
occurred at the beginning of the periods presented.
The pro forma information is unaudited and is not necessarily indicative of
the consolidated results that would have occurred if the transactions and
adjustments reflected therein had been consummated in the period or on the
date presented, or on any particular date in the future, nor does it
purport to represent the financial position or results of operations for
future periods. The pro forma information should be read in conjunction
with the Company's historical financial statements and notes thereto.
6
<PAGE>
Grove Property Trust
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
March 31, 2000
(Dollars in thousands)
Rolling Green
Historical (A) Portfolio (B) Pro Forma
------------- ------------- ---------
Assets
Real estate, net ............... $298,021 $ 33,536 $331,557
Cash equivalents ............... 12,734 12,734
Other assets ................... 3,672 3,672
-------- -------- --------
Total assets ................... $314,427 $ 33,536 $347,963
======== ======== ========
Liabilities and
shareholders' equity
Mortgage notes payable ......... $178,263 $ 21,511 $199,774
Revolving credit facility....... 13,700 12,025 25,725
Accounts Payable and
other liabilities (b) ....... 21,388 21,388
-------- -------- --------
Total liabilities .............. 213,351 33,536 246,887
Minority interest in
operating partnership ....... 32,351 32,351
Shareholders' equity ........... 68,725 68,725
-------- -------- --------
Total liabilities and
shareholders' equity ........ $314,427 $ 33,536 $347,963
======== ======== ========
7
<PAGE>
GROVE PROPERTY TRUST
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
MARCH 31, 2000
(A) Reflects the Company's historical condensed consolidated balance sheet as
of March 31, 2000.
(B) Reflects the acquisition of the Rolling Green Portfolio which was
consummated by the Company on May 31, 2000. The aggregate purchase price
for the Rolling Green Portfolio was approximately $33.5 million, including
cash paid of $12.0 million and mortgage debt assumed of $21.5 million. The
cash portion of the purchase price was funded with the Company's revolving
credit facility.
8
<PAGE>
<TABLE>
GROVE PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Dollars in thousands, except per share data)
<CAPTION>
Rolling Green
Historical (A) Portfolio (B) Adjustments (C) Pro Forma
-------------- ------------- --------------- ---------
<S> <C> <C> <C> <C>
Revenue
Rental income .................... $15,524 $ 2,053 $17,577
Other income ..................... 343 61 404
------- ------- ------- -------
Total revenue ........................ 15,867 2,114 -- 17,981
Expenses
Property operating ............... 5,819 881 6,700
Real estate taxes ................ 1,346 130 1,476
Interest ......................... 3,624 $ 417(D) 4,041
Depreciation and amortization..... 2,598 238(C) 2,836
General and administrative ....... 519 128 647
------- ------- ------- -------
Total expenses ....................... 13,906 1,139 655 15,700
------- ------- ------- -------
Income before gain on sales,
minority interests ................ 1,961 975 (655) 2,281
Gain on sales of property ............ 1,533 1,533
------- ------- ------- -------
Income before minority interests ..... 3,494 975 (655) 3,814
Minority interest in operating
partnership ...................... 1,122 1,122
------- ------- ------- -------
Net income ........................... $ 2,372 $ 975 $ (655) $ 2,692
======= ======= ======= =======
Net income per common share
-basic $ 0.29 $ 0.33
======= =======
-diluted $ 0.28 $ 0.32
======= =======
Weighted average number of
common shares outstanding
(in thousands)
-basic 8,217 8,217
===== =====
-diluted 8,423 8,423
===== =====
</TABLE>
9
<PAGE>
<TABLE>
GROVE PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1999
(Dollars in thousands, expect per share data)
<CAPTION>
Rolling Green
Historical (A) Portfolio (B) Adjustments (C) Pro Forma
-------------- ------------- --------------- ---------
<S> <C> <C> <C> <C>
Revenue
Rental income .................. $62,925 $ 7,639 $70,564
Other income ................... 1,532 408 1,940
------- ------- ------- -------
Total revenue ...................... 64,457 8,047 -- 72,504
Expenses
Property operating expenses ..... 23,342 3,514 26,856
Real estate taxes ............... 5,631 479 6,110
Interest expense ................ 14,103 $ 2,163(D) 16,266
Depreciation and
amortization expense .......... 10,289 951(C) 11,240
General and administrative ...... 8,510 605 9,115
------- ------- ------- -------
Total expense ...................... 61,875 4,598 3,114 69,587
------- ------- ------- -------
Income before gain on sales,
minority interests
and extraordinary items ......... 2,582 3,449 (3,114) 2,917
Gain on sales of property .......... 3,342 3,342
------- ------- ------- -------
Income before minority interests and
extraordinary item .............. 5,924 3,449 (3,114) 6,259
Minority interest in
consolidated partnerships ....... 65 65
Minority interest in operating
partnership ..................... 1,838 1,838
------- ------- ------- -------
Income before extraordinary item ... $ 4,021 $ 3,449 $(3,114) $ 4,356
======= ======= ======= =======
Income before extraordinary items
per common share
-basic $ 0.48 $ 0.52
======= =======
-diluted $ 0.47 $ 0.51
======= =======
Weighted average number of common
shares outstanding (in
thousands)
-basic 8,457 8,457
======= =======
-diluted 8,618 8,618
======= =======
</TABLE>
10
<PAGE>
GROVE PROPERTY TRUST
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
A. Reflects the historical condensed consolidated statements of income of the
Company for the three months ended March 31, 2000 and the year ended
December 31, 1999.
B. Reflects the historical results of operations for the Rolling Green
Portfolio for the three months ended March 31, 2000 and for the year ended
December 31, 1999. See the Combined Historical Summary of Gross Income and
Direct Operating Expenses and notes thereto included elsewhere in this
Current Report on Form 8-K/A.
C. Reflects estimated depreciation based upon an asset life of 30 years and an
allocation between land and buildings of $5.0 million and $28.5 million,
respectively.
D. Reflects interest expense on assumed mortgage of $21.5 million at a
weighted average fixed interest rate of 7.9% and borrowing of $12.0 million
from the Company's revolving credit facility at an interest rate of 8%.
11
<PAGE>
(c) Exhibits.
Exhibit No. Description
----------- -----------
2.1 Purchase and Sale Agreement dated February 18, 2000 between
Roberts-Amherst Associates Limited Partnership and Grove
Corporation (incorporated by reference to Exhibit 2.1 to the
Company's Current Report on Form 8-K dated May 31, 2000
(Commission File No. 1-13080))
2.2 Purchase and Sale Agreement dated February 18, 2000 between
Roberts-Fall River Associates Limited Partnership and Grove
Corporation (incorporated by reference to Exhibit 2.2 to the
Company's Current Report on Form 8-K dated May 31, 2000
(Commission File No. 1-13080))
2.3 Purchase and Sale Agreement dated February 18, 2000 between
Roberts-Milford Associates Limited Partnership and Grove
Corporation (incorporated by reference to Exhibit 2.3 to the
Company's Current Report on Form 8-K dated May 31, 2000
(Commission File No. 1-13080))
23 Consent of Ernst & Young LLP
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GROVE PROPERTY TRUST
By: /s/ GERALD A. MCNAMARA
----------------------------
Gerald A. McNamara
Executive Vice President
Date: August 4, 2000
13
<PAGE>
Exhibit Index
-------------
Exhibit No. Description
----------- -----------
2.1 Purchase and Sale Agreement dated February 18, 2000 between
Roberts-Amherst Associates Limited Partnership and Grove
Corporation (incorporated by reference to Exhibit 2.1 to the
Company's Current Report on Form 8-K dated May 31, 2000
(Commission File No. 1-13080))
2.2 Purchase and Sale Agreement dated February 18, 2000 between
Roberts-Fall River Associates Limited Partnership and Grove
Corporation (incorporated by reference to Exhibit 2.2 to the
Company's Current Report on Form 8-K dated May 31, 2000
(Commission File No. 1-13080))
2.3 Purchase and Sale Agreement dated February 18, 2000 between
Roberts-Milford Associates Limited Partnership and Grove
Corporation (incorporated by reference to Exhibit 2.3 to the
Company's Current Report on Form 8-K dated May 31, 2000
(Commission File No. 1-13080))
23 Consent of Ernst & Young LLP
