SOURCE: BRT Realty Trust

August 09, 2012 08:30 ET

BRT Realty Trust Reports Third Quarter Results

GREAT NECK, NY--(Marketwire - Aug 9, 2012) - BRT REALTY TRUST (NYSE: BRT), a real estate investment trust that originates and holds for investment short-term senior mortgage loans secured by commercial and multi-family real estate and participates as an equity investor in joint ventures which acquire multi-family residential properties and other real estate assets, today announced operating results for the three months ended June 30, 2012.

Operating Results:

Total revenues for the three months ended June 30, 2012 were approximately $5.55 million, an increase of $211,000 or 4.0% from $5.34 million the corresponding quarter in the prior year. The increase is due to a $1.91 million, or 250%, increase in rental revenue from real estate properties due to the multi-family residential properties acquired in March 2012. Partially offsetting the increase was an $814,000 decrease in interest on real estate loans and the recovery of $1 million with respect to previously provided allowances recognized in the corresponding period of the prior year. 

During the current quarter, the Trust originated approximately $20.1 million in loans compared to $23.6 million in the corresponding quarter in the prior year.

Total expenses for the three months ended June 30, 2012 were approximately $6.76 million, an increase of approximately $3.25 million, or 92.6%, from $3.51 million in the quarter ended June 30, 2011. The increase is primarily due to an aggregate of $2.7 million in increases in interest on borrowed funds, amortization and depreciation, and operating expenses related to real estate owned attributable to the multi-family residential properties acquired in March 2012 and property acquisition costs of $471,000 related to the Trust's acquisition of a multi-family residential property during the current quarter.

Net loss attributable to common shareholders was $142,000 or $0.01 per share in the current quarter, compared to net income of $3.17 million or $0.23 per share in the corresponding prior year period.

Funds from Operations:

Funds from Operations ("FFO") was $803,000 in the third quarter of 2012 compared to $2.72 million in the third quarter of 2011. FFO per diluted share was $0.06 in the third quarter of 2012 compared to $0.19 in the same period in 2011. A description and reconciliation of non-GAAP financial measures to GAAP financial measures is presented later in this release.

About BRT Realty Trust:

BRT Realty Trust is a business trust organized in Massachusetts. BRT's primary business is to originate and hold for investment senior mortgage loans secured by commercial and multi-family real estate property in the United States. Beginning in the quarter ended March 31, 2012, BRT expanded its activities by acquiring for investment, with venture partners, multi-family residential properties. Interested parties are encouraged to review the Form 10-Q for the quarter ended June 30, 2012 filed with the Securities and Exchange Commission for additional information. The Form 10-Q, as well as additional financial and descriptive information on BRT, its operations and its portfolio, is available at BRT's website at: www.BRTRealty.com.

Non-GAAP Financial Measures:

In view of its recent equity investments in joint ventures which have acquired multi-family residential properties, BRT has and anticipates that in the future it will disclose funds from operations ("FFO") because it believes that FFO is a widely recognized and appropriate measure of the performance of an equity REIT. BRT believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of equity REITs, many of which present FFO when reporting their results. FFO is intended to exclude historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.

BRT has determined FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT"). FFO is defined by NAREIT as net income (or loss) computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from sales of property, plus depreciation and amortization, plus impairment write-downs of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs. FFO should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow as a measure of liquidity.

Forward Looking Statements:

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 lending activities 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 loan origination and property acquisition activities, 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 and to carefully review the section entitled "Item 1A. Risk Factors" in BRT's Annual Report on Form 10-K for the year ended September 30, 2011 and our Quarterly Report on Form 10-Q for the period ended March 31, 2012.

                   
BRT REALTY TRUST AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Dollars in thousands, except per share data)  
                         
    Three months ended     Nine months ended  
    June 30,     June 30,  
    2012     2011     2012     2011  
                                 
Revenues:                                
  Interest and fees on loans   $ 2,562     $ 3,518     $ 7,016     $ 6,938  
  Rental revenue from real estate properties     2,668       763       4,455       2,576  
  Recovery of previously provided allowance     9       1,002       19       3,568  
  Other income     316       61       906       411  
    Total revenues     5,555       5,344       12,396       13,493  
                                 
Expenses:                                
  Interest on borrowed funds     1,416       452       2,758       1,651  
  Property acquisition costs     471       -       2,264       -  
  General and administrative expenses     1,734       1,585       5,414       4,645  
  Operating expenses relating to real estate properties     1,733       889       3,478       2,655  
  Other expenses     333       399       777       1,218  
Depreciation and amortization     1,077       183       1,441       555  
    Total expenses     6,764       3,508       16,132       10,724  
                                 
    Total revenues less total expenses     (1,209 )     1,836       (3,736 )     2,769  
                                 
Equity in earnings (loss) of unconsolidated ventures     20       60       (95 )     195  
Gain on sale of available-for-sale securities     96       176       420       1,190  
Gain on sale of loan     -       -       3,192       -  
Loss on extinguishment of debt     -       -       -       (2,138 )
    (Loss) income from continuing operations     (1,093 )     2,072       (219 )     2,016  
                                 
Discontinued operations:                                
    Gain on sale of real estate assets     302       645       792       1,342  
      Discontinued operations     302       645       792       1,342  
                                 
Net (loss) income     (791 )     2,717       573       3,358  
                                 
Plus: net loss attributable to non-controlling interests     649       455       2,131       1,153  
                                 
Net (loss) income attributable to common shareholders   $ (142 )   $ 3,172     $ 2,704     $ 4,511  
                                 
                                 
                                 
Basic and diltued per share amounts attributable to common shareholders:                          
                                 
(Loss) Income from continuing operations   $ (0.03 )   $ 0.18     $ 0.13     $ 0.22  
Discontinued operations     0.02       0.05       0.06       0.10  
  Basic and diluted (loss) income per share   $ (0.01 )   $ 0.23       0.19       0.32  
                                 
Amounts attributable to BRT Realty Trust:                                
    (Loss) Income from continuing operations   $ (444 )   $ 2,527     $ 1,912     $ 3,169  
    Discontinued operations     302       645       792       1,342  
      Net (loss) income   $ (142 )   $ 3,172     $ 2,704     $ 4,511  
                                 
Funds from operations - Note 1   $ 803     $ 2,725     $ 3,627     $ 3,760  
                                 
Funds from operations per share - basic and diluted - Note 2   $ 0.06     $ 0.19     $ 0.25     $ 0.26  
                                 
Weighted average number of common shares outstanding:                                
    Basic and diluted     14,056,357       14,070,774       14,029,364       14,031,861  
                                 
Note 1:                                
Funds from operations is summarized in the following table:                                
Net (loss) income   $ (142 )   $ 3,172     $ 2,704     $ 4,511  
Add: depreciation of properties     1,074       177       1,430       528  
Add: our share of depreciation in unconsolidated joint ventures     157       10       237       29  
Add: amortization of capitalized leasing expenses     16       11       48       34  
Deduct: net gain on sales of real estate     (302 )     (645 )     (792 )     (1,342 )
Funds from operations   $ 803     $ 2,725     $ 3,627     $ 3,760  
                                 
Note 2:                                
Funds from operations is summarized in the following table:                                
Net (loss) income   $ (0.01 )   $ 0.23     $ 0.19     $ 0.32  
Add: depreciation of properties     0.08       0.01       0.10       0.04  
Add: our share of depreciation in unconsolidated joint ventures     0.01       -       0.02       -  
Add: amortization of capitalized leasing expenses     -       -       -       -  
Deduct: net gain on sales of real estate     (0.02 )     (0.05 )     (0.06 )     (0.10 )
Funds from operations per common share basic and diluted   $ 0.06     $ 0.19     $ 0.25     $ 0.26  

Contact Information

  • Contact:
    David W. Kalish
    (516) 466-3100
    BRT REALTY TRUST
    60 Cutter Mill Road
    Suite 303
    Great Neck, New York 11021
    Telephone (516) 466-3100
    Telecopier (516) 466-3132
    www.BRTRealty.com