SOURCE: BRT Realty Trust

December 14, 2009 17:10 ET

BRT Realty Trust Reports Results of Operations for the Quarter and Year Ended September 30, 2009

GREAT NECK, NY--(Marketwire - December 14, 2009) - BRT REALTY TRUST (NYSE: BRT) today announced its results of operations for the year and the three months ended September 30, 2009. For the year ended September 30, 2009, BRT reported total revenues of $14,602,000 and a net loss of $47,755,000, or a loss per share of $4.10. For the year ended September 30, 2008, BRT reported total revenues of $22,386,000 and a net loss of $260,000, or a loss per share of $.02. The weighted average number of common shares outstanding for the years ended September 30, 2009 and 2008 was 11,643,972 and 11,648,885, respectively.

BRT also reported that for the three months ended September 30, 2009, it had total revenues of $3,540,000 and net income of $3,467,000, or $.30 per share. For the three months ended September 30, 2008, BRT reported revenues of $4,673,000 and net income of $2,206,000, or $.19 per share. The weighted average number of common shares outstanding for the three months ended September 30, 2009 and 2008 was 11,575,475 and 11,728,412, respectively.

Commenting on the results of operations, Jeffrey A. Gould, President and Chief Executive Officer of BRT, noted that the economic recession and the unprecedented disruptions in the real estate and credit markets over the past two fiscal years caused significant declines in the values of commercial real estate properties, which materially and adversely affected BRT's business and its operating results. Specifically, Mr. Gould noted:

Fiscal 2009 compared to Fiscal 2008

--  Revenues declined by 35% year-over-year due primarily to significant
    declines in interest and fees on real estate loans as a result of decreases
    in loan originations.  The decrease in loan originations is due to reduced
    demand for BRT's short-term bridge loans and its conservatism in
    originating loans due to concerns about the ability of potential borrowers
    to repay loans in the current economic environment.  The decrease in new
    originations was offset to a limited extent by the origination in 2009 of
    senior purchase money mortgage loans to facilitate the sale of real estate
    assets acquired in foreclosure proceedings.  Also contributing to the
    decline in revenues was a decrease in investment income of $1,040,000.
    
--  Loan loss provisions of $17,110,000 were taken in the 2009 Fiscal Year
    compared to loan loss provisions of $15,260,000 in the 2008 Fiscal Year.
    
--  Impairment charges of $12,762,000 were taken against the real estate
    portfolio in the 2009 Fiscal Year (excluding impairment charges taken
    against real estate assets held for sale).  For the prior fiscal year
    impairment charges totaled $2,680,000.
    
--  Operating expenses related to real estate properties (including real
    estate assets held for sale) exceeded rental revenues by $3,018,000 in the
    2009 Fiscal Year compared to $1,030,000 in the 2008 Fiscal Year, resulting
    primarily from operating deficits at properties acquired in foreclosure
    proceedings.
    
--  Equity in earnings of unconsolidated ventures decreased by $4,149,000
    year-over-year to a loss of $2,791,000.  This decrease is primarily the
    result of a loss incurred in our joint venture with CIT Capital USA, Inc.
    due to loan loss provisions.  This venture has been terminated and is in
    the process of winding up its affairs.
    
--  Discontinued operations represents the income from operations,
    impairment charges and gains from the sale of properties sold during the
    fiscal year and interest and fee income on loans classified as held for
    sale.  Loss from discontinued operations was $16,400,000 in the 2009 Fiscal
    Year primarily due to impairment charges of $18,284,000 taken with respect
    to real estate held for sale.  In Fiscal Year 2008 the loss from
    discontinued operations was $5,078,000, principally due to impairment
    charges of $6,535,000.
    
--  Offsetting the losses incurred in Fiscal 2009 is (i) a $6,443,000 gain
    on early extinguishment of debt as a result of BRT's purchase at a discount
    of a portion of its outstanding junior subordinated notes, (ii) a
    $1,016,000 gain on a sale of available-for-sale securities, and (iii) a
    decrease of $2,209,000 in interest expense due to paydowns during the year
    and the cancellation of our credit line and the restructuring of our trust
    preferred securities.  In the 2008 Fiscal Year, BRT benefitted
    substantially from a $19,940,000 gain on the sale of available-for-sale
    securities.
    

Quarter Ended September 30, 2009 compared to the quarter ended September 30, 2008

--  Revenues declined quarter-over-quarter by 24% for the reasons
    expressed with respect to the decline in our revenues for the entire fiscal
    year.
    
--  Although no additional provisions for loan losses were taken in the
    quarter ended September 30, 2009, impairment charges of $3,700,000 were
    taken in the quarter against real estate assets (excluding real estate
    assets held for sale).  In the comparable quarter of Fiscal 2008 provisions
    of $3,560,000 and impairment charges of $1,630,000 were recorded.
    
--  Operating expenses of real estate properties (including real estate
    assets held for sale), primarily real estate properties acquired in
    foreclosure proceedings, exceeded rental revenues by $840,000 and $172,000,
    in the current quarter versus the prior year's quarter, respectively.
    
--  A loss of $808,000 in equity of unconsolidated ventures was recognized
    in the current quarter compared to modest income in the last quarter of
    2008.
    
--  Discontinued operations in the Fiscal 2009 fourth quarter reflects
    income of $1,307,000 primarily as a result of a $1,986,000 gain from sale
    of real estate assets.  In the fourth quarter of Fiscal 2008, BRT reported
    a loss from discontinued operations of $319,000 primarily because of
    $785,000 of impairment charges taken against real estate held for sale.
    
--  The gain on early extinguishment of debt of $6,443,000 and the gain on
    sale of available-for-sale securities of $924,000 were the principal
    reasons that BRT reported net income of $3,467,000 for the current quarter.
    In the prior year's quarter an $8,237,000 gain on sale of available-for-
    sale securities was the primary reason for net income of $2,206,000.
    

Mr. Gould noted that significant increases in loan defaults in the years ended September 30, 2008 and September 30, 2009 caused BRT to modify its business focus from origination activities to servicing its loan portfolio. During Fiscal 2009, BRT focused its energy and resources on workout activities, pursuing foreclosure actions, acquiring title to real estate properties securing loans and, subsequent to acquiring title, operating and selling such properties. Mr. Gould stated that "by focusing on our liquidity position, specifically acquiring properties securing defaulted loans and selling such properties, BRT has generated cash and cash equivalents, including securities available-for-sale, aggregating approximately $55,000,000 as of December 8, 2009." Mr. Gould commented that "our current cash position allows us to be in a position to actively reengage in our principal business of originating and holding for investment senior, short-term mortgage loans. We intend to be active in the lending area in the new year."

BRT REALTY TRUST is a mortgage-oriented real estate investment Trust.

Certain information contained herein is forward looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding moving ahead with loan originations and other positive business activities. BRT intends such forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may," "will," "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions or variations thereof. Forward looking statements, including our reengagement in originating senior short-term loans and our activity in lending in the New Year, involve known and unknown risks, uncertainties and other factors, which, in some cases, are beyond BRT's control and could materially affect actual results, performance or achievements. Investors are cautioned not to place undue reliance on any forward-looking statements.

                             BRT REALTY TRUST
              CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                  (In thousands, except per share data)

                                  (Unaudited)             (Audited)
                              Three Months Ended     Twelve Months Ended
                                 September 30,           September 30,
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------

Revenues                    $    3,540  $    4,673  $   14,602  $   22,386

Expenses (1)                     8,413      10,377      51,501      38,727
                            ----------  ----------  ----------  ----------


  Total revenues less total
   expenses                     (4,873)     (5,704)    (36,899)    (16,341)

Equity in (loss) earnings
 of unconsolidated joint
 ventures                         (808)         36      (2,791)      1,358
Gain on sale of joint
 venture interest                    -           -         271           -
Gain on sale of
 available-for-sale
 securities                        924       8,237       1,016      19,940
Gain on early
 extinguishment of debt          6,443           -       6,443           -
Minority Interest                  474         (44)        605        (139)
                            ----------  ----------  ----------  ----------
Income (loss) from
 continuing operations           2,160       2,525     (31,355)      4,818

Discontinued operations:
Income from operations             (91)        372        (315)        (60)
Impairment charges                (514)       (785)    (18,284)     (6,535)
 Gain on sale of real
  estate assets                  1,912          94       2,199       1,517
                            ----------  ----------  ----------  ----------
Income from discontinued
 operations                      1,307        (319)    (16,400)     (5,078)

                            ----------  ----------  ----------  ----------
Net income (loss) income    $    3,467  $    2,206  $  (47,755) $     (260)
                            ==========  ==========  ==========  ==========



Basic and diluted income
 (loss) per share of
 beneficial interest:

Income (loss) from
 continuing operations      $     0.19  $     0.22  $    (2.69) $     0.41
Income from discontinued
 operations                       0.11       (0.03)      (1.41)      (0.43)
                            ----------  ----------  ----------  ----------
 Basic and diluted
  Earnings (loss) earnings
  per share                 $     0.30  $     0.19  $    (4.10) $    (0.02)
                            ==========  ==========  ==========  ==========


Cash distribution per share $     0.12  $     1.33  $     0.12  $     3.19
Stock distribution per
 share                            1.03           -        1.03           -
                            ----------  ----------  ----------  ----------
  Total distribution per
   common share             $     1.15  $     1.33  $     1.15  $     3.19
                            ==========  ==========  ==========  ==========

Weighted average number of
 common shares outstanding:
   Basic                    11,575,475  11,725,236  11,643,972  11,648,885
                            ==========  ==========  ==========  ==========
   Diluted                  11,575,475  11,728,412  11,643,972  11,648,885
                            ==========  ==========  ==========  ==========




(1) Includes impairment charges of $3,700,000 and $1,630,000 for the three
    months ended and $12,762,000 and $2,680,000 for the twelve months
    ended September 30, 2009 and 2008 respectively.
    Also includes provision for loan loss of $(420,000) and $3,560,000
    for the three months ended and $17,110,000 and $15,260,000 for the
    twelve months ended September 30, 2009 and 2008 respectively.

Contact Information

  • Contact:
    Simeon Brinberg
    (516) 466-3100