SOURCE: BRT Realty Trust

December 13, 2010 16:05 ET

BRT Realty Trust Reports Results of Operations for the Quarter and Year Ended September 30, 2010

GREAT NECK, NY--(Marketwire - December 13, 2010) - BRT REALTY TRUST (NYSE: BRT) today announced its results of operations for the quarter and year ended September 30, 2010. For the three months ended September 30, 2010, BRT reported total revenues of $1.88 million and a net loss of $1.17 million, or $.08 per share. This compares with total revenues of $2.89 million and net income of $3.47 million, or $0.30 per share, for the three months ended September 30, 2009. The weighted average number of common shares outstanding for the three months ended September 30, 2010 and 2009 is 14,082,236 and 11,575,475, respectively.

For the year ended September 30, 2010, BRT reported total revenues of $8.14 million and a net loss of $8.02 million, or a net loss of $.58 per share. For the year ended September 30, 2009, BRT reported total revenues of $12.15 million and a net loss of $47.76 million, or a net loss of $4.10 per share. The weighted average number of common shares outstanding for the year ended September 30, 2010 and 2009 is 13,871,668 and 11,643, 972, respectively.

Commenting on the operations, Jeffrey A. Gould, President and Chief Executive Officer, stated that the economic recession and the disruptions in real estate and credit markets over the past two fiscal years materially and adversely affected our business and our operating results. On the revenue side, he noted, "We were adversely affected primarily by a significant decrease in the average balance of performing loans outstanding caused by an increase in non-performing loans. On the expense side operating results were adversely affected primarily by loan loss provisions, impairment charges and foreclosure related professional fees."

Further commenting on operations, Mr. Gould stated as follows: "In the latter part of our 2010 fiscal year and first two months of our 2011 fiscal year, we have experienced a more positive lending environment. Comparing the immediately preceding quarter ending June 30, 2010 to the quarter ending September 30, 2010, the progress we have made in resolving our problems and refocusing on our primary lending business is apparent. As compared to the preceding quarter, the current quarter reflects an increase in interest income, loan fee income and operating income from real estate owned, with no additional loan loss provisions or impairment charges, although our foreclosure related professional fees increased as we actively litigate in bankruptcy court against the borrower of one defaulted loan. Our net loss decreased from the June 30, 2010 quarter to the September 30, 2010 quarter by $1.8 million to $1.17 million. In addition in the first two months of the 2011 fiscal year, we originated a total of $24.5 million of mortgage loans as compared to $4.2 million and $2.6 million originated in the last two quarters of fiscal 2010. "Our immediate challenge, Mr. Gould noted, is to originate more quality loans and complete the court proceedings related to three outstanding non-performing loans, which aggregate of $35.1 million.

Specifically commenting on the results of operations for the three months and year end September 30, 2010, Mr. Gould pointed out the following:

Three Month Ended September 30, 2010 Compared to Three Month Ended September 30, 2009.

--  Total revenues decreased by $1 million, or 36%, quarter-over-quarter
    primarily due to a $30.3 million decline in the average balance of
    outstanding performing loans and a decline in the outstanding balance
    of purchase mortgages due to payoffs.  Offsetting this decrease is a
    $177,000 increase in operating income on real estate owned, primarily
    the result of increased rental revenues derived from our Newark
    properties.

--  Total expenses decreased by $454,000, or 12%, quarter-over-quarter
    reflecting decreases in interest on borrowed funds, the advisor's fee,
    loan loss provisions, general and administrative expenses and operating
    expenses relating to real estate owned.  The quarter, however, reflects
    a $146,000 increase in foreclosure related professional fees due to a
    litigation involving a bankruptcy filing by one of our borrowers.

--  Discontinued operations, which represents the operations, impairment
    charges and gains on the sale of assets held for sale, decreased from a
    loss of $2,736,000 in the three months ended September 30, 2009 to
    income of $13,000 in the three months ending September 30, 2010.  The
    loss in the three months ended September 30, 2009 is primarily
    attributable to impairment charges of $4,213,000 and a loss from
    operations of $435,000, offset by a gain on sale of real estate assets
    of $1,912,000.

Year Ended September 30, 2010 Compared to the Year Ended September 30, 2009.

--  Revenues declined $4,019,000, or 33%, primarily the result of a decline
    of $57.6 million in the average balance of performing loans
    outstanding.  Offsetting this decline was an increase of $1.7 million
    in rental revenues from real estate properties, primarily from our
    Newark properties, and a $365,000 recovery on previously provided loan
    loss allowances.

--  Total expenses declined by $16.5 million, or 45%, due primarily to a
    $13.9 million decrease in loan loss provisions.  The Trust also
    benefited from declines in interest expense, the advisor's fee,
    foreclosure related professional fees and general and administrative
    expenses.  The year ending September 30, 2009 included an expense of
    $685,000 for fees related to restructuring our outstanding junior
    subordinated notes.  Partially offsetting these expense declines
    year-over-year was an increase in impairment charges resulting
    primarily from an additional reserve taken against an undeveloped
    parcel owned by the Trust.

--  Discontinued operations, which represents the operations, impairment
    charges and gains on sale of assets held for sale, increased from a
    loss of $29.1 million in the year ended September 30, 2009 to income of
    $590,000 in the year ended September 30, 2010.  The change is primarily
    attributable to the inclusion in the year ending September 30, 2009 of
    impairment charges of $29.8 million and a loss from operations of $1.5
    million, offset by a net gain on asset sales of $2.2 million.  For the
    year ended September 30, 2010, the Trust reported impairment charges of
    $745,000 and a loss from operations of $602,000, offset by a gain of
    $1.9 million from the sale of real estate assets.

In conclusion, Mr. Gould commented that "although in the current economic environment there are no assurances that our business will continue the recent positive trend, we are somewhat optimistic based upon the current level of interest in our short-term lending product."

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 relating to a more positive lending environment and the recent positive trend in, and optimism concerning, BRT's business. 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,
                               2010        2009        2010        2009
                            ----------  ----------  ----------  ----------

Interest and fees on loans  $      933  $    2,070  $    3,877  $    9,710
Rental revenue from real
 estate properties                 812         635       3,422       1,718
Other revenues                     137         189         836         726
                            ----------  ----------  ----------  ----------
Total revenues                   1,882       2,894       8,135      12,154

Interest - borrowed funds          201         710       1,773       4,435
Provision for loan loss              -        (420)      3,165      17,110
Impairment Charges                   -           -       2,625       1,272
General and administrative
 expenses                        1,482       1,712       6,063       7,045
Operating expenses on real
 estate properties                 804         997       3,866       2,361
Other expenses                     783         725       2,352       4,106
                            ----------  ----------  ----------  ----------
  Total expenses                 3,270       3,724      19,844      36,329

                            ----------  ----------  ----------  ----------
  Total revenues less total
   expenses                     (1,388)       (830)    (11,709)    (24,175)

Equity in earnings (loss)
 of unconsolidated ventures         53        (808)        196      (2,791)
Gain on sale of joint
 venture interests                   -           -           -         271
Gain on sale of
 available-for-sale
 securities                          -         924       1,586       1,016
Gain on early
 extinguishment of debt              -       6,443           -       6,443
                            ----------  ----------  ----------  ----------
Loss from continuing
 operations                     (1,335)      5,729      (9,927)    (19,236)

Discontinued operations:
  Loss from operations              (7)       (435)       (602)     (1,549)
  Impairment Charges                 -      (4,213)       (745)    (29,774)
  Gain on sale of real
   estate assets                    20       1,912       1,937       2,199
                            ----------  ----------  ----------  ----------
   Income (loss) from
    discontinued operations         13      (2,736)        590     (29,124)

                            ----------  ----------  ----------  ----------
Net loss                        (1,322)      2,993      (9,337)    (48,360)

Less: net loss attributable
 to noncontrolling interest        156         474       1,322         605

                            ----------  ----------  ----------  ----------
Net loss attributable to
 common shareholders        $   (1,166) $    3,467  $   (8,015) $  (47,755)
                            ==========  ==========  ==========  ==========



Basic and diluted per share
 amounts attributable to
 common shareholders:

Loss from continuing
 operations                 $    (0.08) $     0.54  $    (0.62) $    (1.60)
Income (loss) from
 discontinued operations          0.00       (0.24)       0.04       (2.50)
                            ----------  ----------  ----------  ----------
 Basic and diluted loss
  per share                 $    (0.08) $     0.30  $    (0.58) $    (4.10)
                            ==========  ==========  ==========  ==========

Amounts attributable to BRT
 Realty Trust
   Loss from continuing
    operations              $   (1,179) $    6,203  $   (8,605) $  (18,631)
   Income (loss) from
    discontinued operations         13      (2,736)        590     (29,124)
                            ----------  ----------  ----------  ----------
     Net loss               $   (1,166) $    3,467  $   (8,015) $  (47,755)
                            ==========  ==========  ==========  ==========

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

Weighted average number of
 common shares outstanding:
   Basic and diluted        14,082,236  11,575,475  13,871,668  11,643,972
                            ==========  ==========  ==========  ==========

Contact Information

  • Contact:
    Simeon Brinberg
    (516) 466-3100