GREAT NECK, NY--(Marketwire - December 14, 2009) - BRT REALTY TRUST (
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