GREAT NECK, NEW YORK--(Marketwired - Nov. 7, 2017) - One Liberty Properties, Inc. (NYSE:OLP), a real estate investment trust focused on the ownership of net leased properties, today announced operating results for the quarter ended September 30, 2017.
Patrick J. Callan, Jr., President and Chief Executive Officer of One Liberty stated, "We continued to execute on our strategic objectives during the third quarter, having successfully sold two retail assets for an aggregate sales price of $15.3 million, using the proceeds to pay down debt and fund the post-quarter acquisition of a distribution facility located in Memphis, Tennessee. We remain focused on enhancing and strengthening the quality of our platform. As we look to the end of 2017 and beyond, our balance sheet provides enhanced capacity and flexibility to support our growth objectives as we increase cash flow and build long term value for stockholders."
Operating Results:
Rental income grew 5.5% to $17.2 million for the three months ended September 30, 2017, from $16.3 million in the corresponding quarter in the prior year, primarily due to properties acquired in 2016 and 2017.
Total operating expenses for the third quarter of 2017 were $10.8 million compared to $9.8 million for the same period in 2016. Approximately $591,000 of the increase is due to additional depreciation and approximately $252,000 of the increase is due to additional real estate expenses, in each case as associated with the properties acquired in 2016 and 2017.
Net income attributable to One Liberty in the third quarter of 2017 was $7.1 million, or $0.38 per diluted share, compared to $4.3 million, or $0.24 per diluted share, in the third quarter of 2016. Net income for the 2016 quarter includes $119,000, or less than $0.01 per diluted share, gain on the sale of real estate compared to the 2017 quarter which includes a $3.3 million, or $0.17 per diluted share, gain on the sale of real estate.
Funds from Operations, or FFO, was $9.3 million for the quarter ended September 30, 2017, compared to $9.0 million in the corresponding quarter of 2016, with FFO per diluted share of $0.50 for the third quarter of 2017 and $0.51 for the corresponding quarter of 2016.
Adjusted Funds from Operations, or AFFO, was $9.9 million for the quarter ended September 30, 2017, compared to $9.2 million in the corresponding quarter of the prior year, with AFFO per diluted share of $0.53 in the third quarter of 2017 and 2016.
The Company's per share results, and in particular, the per share FFO and AFFO results, were affected by the 6.4% increase over the past 12 months in the weighted average number of shares of common stock outstanding due to a combination of stock issuances pursuant to One Liberty's at-the-market, dividend reinvestment and equity incentive programs. A reconciliation of GAAP amounts to non-GAAP amounts is presented with the financial information included in this release.
Balance Sheet:
At September 30, 2017, the Company had $14.9 million of cash and cash equivalents, total assets of $737.6 million, total debt of $402.8 million, net of $4.7 million of deferred financing costs, and total stockholders' equity of $295.1 million.
At November 3, 2017, One Liberty's available liquidity was $99.3 million, including $12.7 million of cash and cash equivalents (net of the credit facility's required $3 million deposit maintenance balance) and $86.6 million available under its credit facility.
Dispositions:
In July 2017, the Company sold a retail property tenanted by Kohl's, located in Kansas City, Missouri, for a sales price of $10.3 million and a net gain of $2.2 million.
In August 2017, the Company sold a retail property formerly tenanted by hhgregg, Inc., located in Niles, Illinois, for $5.0 million and a net gain of $1.1 million.
Subsequent Events:
In October 2017, the Company acquired a 224,749 square foot distribution facility/corporate headquarters on 16.41 acres located in Memphis, Tennessee for $8.0 million.
Non-GAAP Financial Measures:
One Liberty computes FFO in accordance with the "White Paper on Funds From Operations" issued by the National Association of Real Estate Investment Trusts ("NAREIT") and NAREIT's related guidance. FFO is defined in the White Paper as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus real estate depreciation and amortization (including amortization of deferred leasing costs), plus impairment write-downs of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. One Liberty computes AFFO by adjusting from FFO for straight-line rent accruals and amortization of lease intangibles, deducting lease termination fees and gain on extinguishment of debt and adding back amortization of restricted stock compensation, amortization of costs in connection with its financing activities (including its share of its unconsolidated joint ventures) and debt prepayment costs. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO may vary from one REIT to another.
One Liberty believes that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assumes that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, management believes that FFO and AFFO provide a performance measure that when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. Management also considers FFO and AFFO to be useful in evaluating potential property acquisitions.
FFO and AFFO do not represent net income or cash flows from operating, investing or financing activities as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance nor as an alternative to cash flows as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of the Company's cash needs.
Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating the Company's performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities.
Forward-Looking Statement:
Certain information contained in this press release, together with other statements and information publicly disseminated by One Liberty Properties, Inc. is forward looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. We intend such forward looking statements to be covered by the safe harbor provision for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for the purpose of complying with these safe harbor provisions. Information regarding certain important factors that could cause actual outcomes or other events to differ materially from any such forward looking statements appear in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 and in particular "Item 1A. Risk Factors" included therein. You should not rely on forward looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performance or achievements.
About One Liberty Properties:
One Liberty is a self-administered and self-managed real estate investment trust incorporated in Maryland in 1982. The primary business of the Company is to acquire, own and manage a geographically diversified portfolio consisting primarily of retail, industrial, restaurant, health and fitness and theater properties. Many of these properties are subject to long term net leases under which the tenant is typically responsible for the property's real estate taxes, insurance and ordinary maintenance and repairs.
| ONE LIBERTY PROPERTIES, INC. | |||||||||
| CONDENSED BALANCE SHEETS | |||||||||
| (Amounts in Thousands) | |||||||||
| (Unaudited) | |||||||||
| September 30, | December 31, | ||||||||
| 2017 | 2016 | ||||||||
| ASSETS | |||||||||
| Real estate investments, net | $ | 659,833 | $ | 651,213 | |||||
| Investment in unconsolidated joint ventures | 10,648 | 10,833 | |||||||
| Cash and cash equivalents | 14,926 | 17,420 | |||||||
| Restricted cash | 530 | 643 | |||||||
| Unbilled rent receivable | 13,839 | 13,797 | |||||||
| Unamortized intangible lease assets, net | 31,774 | 32,645 | |||||||
| Other assets | 6,032 | 6,894 | |||||||
| Total assets | $ | 737,582 | $ | 733,445 | |||||
| LIABILITIES AND EQUITY | |||||||||
| Liabilities: | |||||||||
| Mortgages payable, net of $3,960 and $4,294 deferred financing costs, respectively | $ | 397,093 | $ | 394,898 | |||||
| Line of credit-outstanding, net of $702 and $936 deferred financing costs, respectively | 5,698 | 9,064 | |||||||
| Unamortized intangible lease liabilities, net | 17,990 | 19,280 | |||||||
| Other liabilities | 19,943 | 18,276 | |||||||
| Total liabilities | 440,724 | 441,518 | |||||||
| Total One Liberty Properties, Inc. stockholders' equity | 295,145 | 290,133 | |||||||
| Non-controlling interests in consolidated joint ventures | 1,713 | 1,794 | |||||||
| Total equity | 296,858 | 291,927 | |||||||
| Total liabilities and equity | $ | 737,582 | $ | 733,445 | |||||
| ONE LIBERTY PROPERTIES, INC. (NYSE:OLP) | ||||||||||||||||||||
| (Amounts in Thousands, Except Per Share Data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Rental income, net | $ | 17,217 | $ | 16,334 | $ | 50,770 | $ | 46,985 | ||||||||||||
| Tenant reimbursements | 1,920 | 1,687 | 5,252 | 4,614 | ||||||||||||||||
| Total revenues | 19,137 | 18,021 | 56,022 | 51,599 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Depreciation and amortization | 5,115 | 4,663 | 15,858 | 13,246 | ||||||||||||||||
| General and administrative | 2,701 | 2,681 | 8,409 | 7,961 | ||||||||||||||||
| Real estate expenses | 2,689 | 2,188 | 7,765 | 6,521 | ||||||||||||||||
| Real estate acquisition costs | - | 162 | - | 610 | ||||||||||||||||
| Federal excise and state taxes | 90 | 43 | 401 | 198 | ||||||||||||||||
| Leasehold rent | 77 | 77 | 231 | 231 | ||||||||||||||||
| Impairment loss | 153 | - | 153 | - | ||||||||||||||||
| Total operating expenses | 10,825 | 9,814 | 32,817 | 28,767 | ||||||||||||||||
| Operating income | 8,312 | 8,207 | 23,205 | 22,832 | ||||||||||||||||
| Other income and expenses: | ||||||||||||||||||||
| Equity in earnings of unconsolidated joint ventures | 212 | 228 | 663 | 794 | ||||||||||||||||
| Prepayment costs on debt | - | - | - | (577 | ) | |||||||||||||||
| Other income | 57 | 362 | 399 | 431 | ||||||||||||||||
| Interest: | ||||||||||||||||||||
| Expense | (4,459 | ) | (4,404 | ) | (13,380 | ) | (12,593 | ) | ||||||||||||
| Amortization and write-off of deferred financing costs | (263 | ) | (189 | ) | (717 | ) | (644 | ) | ||||||||||||
| Income before gain on sale of real estate, net | 3,859 | 4,204 | 10,170 | 10,243 | ||||||||||||||||
| Gain on sale of real estate, net | 3,269 | 119 | 9,837 | 9,824 | ||||||||||||||||
| Net income | 7,128 | 4,323 | 20,007 | 20,067 | ||||||||||||||||
| Net income attributable to non-controlling interests | (23 | ) | (24 | ) | (65 | ) | (40 | ) | ||||||||||||
| Net income attributable to One Liberty Properties, Inc. | $ | 7,105 | $ | 4,299 | $ | 19,942 | $ | 20,027 | ||||||||||||
| Net income per share attributable to common stockholders-diluted | $ | 0.38 | $ | 0.24 | $ | 1.07 | $ | 1.15 | ||||||||||||
| Funds from operations - Note 1 | $ | 9,285 | $ | 9,030 | $ | 26,669 | $ | 24,017 | ||||||||||||
| Funds from operations per common share-diluted - Note 2 | $ | 0.50 | $ | 0.51 | $ | 1.44 | $ | 1.39 | ||||||||||||
| Adjusted funds from operations - Note 1 | $ | 9,856 | $ | 9,238 | $ | 28,984 | $ | 25,291 | ||||||||||||
| Adjusted funds from operations per common share-diluted - Note 2 | $ | 0.53 | $ | 0.53 | $ | 1.56 | $ | 1.46 | ||||||||||||
| Weighted average number of common and | ||||||||||||||||||||
| unvested restricted shares outstanding: | ||||||||||||||||||||
| Basic | 18,613 | 17,449 | 18,481 | 17,211 | ||||||||||||||||
| Diluted | 18,691 | 17,567 | 18,583 | 17,328 | ||||||||||||||||
| ONE LIBERTY PROPERTIES, INC. (NYSE:OLP) | |||||||||||||
| (Amounts in Thousands, Except Per Share Data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| Note 1: | 2017 | 2016 | 2017 | 2016 | |||||||||
| NAREIT funds from operations is summarized in the following table: | |||||||||||||
| GAAP net income attributable to One Liberty Properties, Inc. | $ | 7,105 | $ | 4,299 | $ | 19,942 | $ | 20,027 | |||||
| Add: depreciation and amortization of properties | 5,036 | 4,583 | 15,621 | 13,026 | |||||||||
| Add: our share of depreciation and amortization of unconsolidated joint ventures | 215 | 223 | 656 | 670 | |||||||||
| Add: impairment loss | 153 | - | 153 | - | |||||||||
| Add: amortization of deferred leasing costs | 79 | 80 | 237 | 220 | |||||||||
| Add: Federal excise tax relating to gain on sale | - | - | - | 6 | |||||||||
| Deduct: gain on sale of real estate | (3,269) | (119) | (9,837) | (9,824) | |||||||||
| Adjustments for non-controlling interests | (34) | (36) | (103) | (108) | |||||||||
| NAREIT funds from operations applicable to common stock | 9,285 | 9,030 | 26,669 | 24,017 | |||||||||
| Deduct: straight-line rent accruals and amortization of lease intangibles | (397) | (788) | (802) | (2,215) | |||||||||
| Add: our share of straight-line rent accruals and amortization | |||||||||||||
| of lease intangibles of unconsolidated joint ventures | 10 | 13 | 27 | 36 | |||||||||
| Add: amortization of restricted stock compensation | 684 | 770 | 2,341 | 2,176 | |||||||||
| Add: prepayment costs on debt | - | - | - | 577 | |||||||||
| Add: amortization and write-off of deferred financing costs | 263 | 189 | 717 | 644 | |||||||||
| Add: our share of amortization and write-off of deferred financing costs | |||||||||||||
| of unconsolidated joint ventures | 6 | 7 | 19 | 19 | |||||||||
| Adjustments for non-controlling interests | 5 | 17 | 13 | 37 | |||||||||
| Adjusted funds from operations applicable to common stock | $ | 9,856 | $ | 9,238 | $ | 28,984 | $ | 25,291 | |||||
| Note 2: | |||||||||||||
| NAREIT funds from operations is summarized in the following table: | |||||||||||||
| GAAP net income attributable to One Liberty Properties, Inc. | $ | 0.38 | $ | 0.24 | $ | 1.07 | $ | 1.15 | |||||
| Add: depreciation and amortization of properties | 0.27 | 0.26 | 0.84 | 0.76 | |||||||||
| Add: our share of depreciation and amortization of unconsolidated joint ventures | 0.01 | 0.01 | 0.04 | 0.04 | |||||||||
| Add: impairment loss | 0.01 | - | 0.01 | - | |||||||||
| Add: amortization of deferred leasing costs | - | - | 0.02 | 0.01 | |||||||||
| Deduct: gain on sale of real estate | (0.17) | - | (0.53) | (0.57) | |||||||||
| Adjustments for non-controlling interests | - | - | (0.01) | - | |||||||||
| NAREIT funds from operations per share of common stock-diluted | 0.50 | 0.51 | 1.44 | 1.39 | |||||||||
| Deduct: straight-line rent accruals and amortization of lease intangibles | (0.02) | (0.03) | (0.05) | (0.13) | |||||||||
| Add: amortization of restricted stock compensation | 0.04 | 0.04 | 0.13 | 0.13 | |||||||||
| Add: prepayment costs on debt | - | - | - | 0.03 | |||||||||
| Add: amortization and write-off of deferred financing costs | 0.01 | 0.01 | 0.04 | 0.04 | |||||||||
| Adjustments for non-controlling interests | - | - | - | - | |||||||||
| Adjusted funds from operations per share of common stock-diluted | $ | 0.53 | $ | 0.53 | $ | 1.56 | $ | 1.46 | |||||
