SOURCE: One Liberty Properties, Inc.

One Liberty Properties, Inc.

November 09, 2015 08:30 ET

One Liberty Properties Reports Third Quarter 2015 Results

Grows Revenues 5.9% Over Prior Year; Produces 6.3% Increase in Adjusted FFO to $0.51 per Diluted Share

GREAT NECK, NY--(Marketwired - Nov 9, 2015) - One Liberty Properties, Inc. (NYSE: OLP), a real estate investment trust focused on net leased properties, today announced operating results for the quarter ended September 30, 2015.

Patrick J. Callan, Jr., President and Chief Executive Officer of One Liberty commented: "Our third quarter results reflect the ongoing strong performance of our diverse portfolio of properties. Our occupancy of 98.2% is reflective of the long-term stable cash flow assets that we own in our portfolio. Our strategy of proactively managing our existing portfolio, while continuing to pursue select accretive growth opportunities, is reflected in our improved year-over-year results. We will remain disciplined as we seek to identify and add properties in markets with positive long-term real estate fundamentals that will drive additional value for stockholders."

Operating Results:

Total revenues grew 5.9% to $16.1 million for the three months ended September 30, 2015, from $15.2 million for the corresponding period in the prior year, due primarily to properties acquired since October 2014. Total revenues for the three months ended September 30, 2014 includes $1.1 million of rental income from properties disposed of in late 2014 and early 2015.

Total operating expenses for the third quarter of 2015 increased 2.4% to $8.4 million, from $8.2 million for the third quarter in the prior year. The change is due primarily to increased real estate expenses and depreciation and amortization with respect to properties acquired since October 2014, and additional general and administrative costs. The three months ended September 30, 2014 includes an impairment loss of $1.1 million.

Net income attributable to One Liberty in the third quarter of 2015 was $3.8 million, or $0.22 per diluted share, compared to $2.6 million, or $0.16 per diluted share, for the third quarter of 2014. The three months ended September 30, 2014 includes a $1.1 million, or $0.07 per share, impairment loss.

Funds from Operations, or FFO, was $8.4 million, or $0.50 per diluted share, for the quarter ended September 30, 2015, compared to $7.5 million, or $0.46 per diluted share, in the corresponding period of 2014. Adjusted Funds from Operations, or AFFO, was $8.5 million, or $0.51 per diluted share, for the quarter ended September 30, 2015, compared to $7.8 million, or $0.48 per diluted share in the corresponding prior year period. FFO and AFFO per share were impacted by the increase in the weighted average number of shares outstanding due to share issuances under One Liberty's equity incentive, at-the-market offering and dividend reinvestment 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, 2015, One Liberty had $13.9 million of cash and cash equivalents, total assets of $655.4 million, total debt of $361.4 million and total stockholders' equity of $255.4 million.

At November 2, 2015, One Liberty's available liquidity was approximately $58.3 million, including approximately $6.5 million of cash and cash equivalents (net of the credit facility's required $3 million deposit maintenance balance) and $51.8 million available under its credit facility.

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 accepting accounting principles), excluding gains (or losses) from sales of property, plus real estate depreciation and amortization, plus impairment write-downs of depreciable real estate, after adjustments for unconsolidated partnerships, joint ventures and non-controlling interests. Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one REIT to another. One Liberty computes AFFO by deducting from FFO its straight-line rent accruals, amortization of lease intangibles and lease termination fee income 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 prepayment costs associated with mortgage debt.

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 operations 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 should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.

FFO and AFFO do not measure whether cash flow is sufficient to fund all of the Company's cash needs, including principal amortization, capital improvements and distributions to stockholders. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP.

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. Management also examines the reconciliation of GAAP net income to FFO and AFFO. 

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, 2014 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 of retail, industrial, flex, health and fitness and other properties under long term leases. Most of the Company's leases are "net leases", under which the tenant is responsible for real estate taxes, insurance and ordinary maintenance and repairs.

         
         
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP)
CONDENSED BALANCE SHEETS
(Amounts in Thousands)
         
         
    September 30,   December 31,
ASSETS   2015   2014
Real estate investments, net   $ 576,361   $ 504,850
Property held-for-sale     -     10,176
Investment in unconsolidated joint ventures     11,273     4,907
Cash and cash equivalents     13,896     20,344
Restricted cash     1,108     1,607
Unbilled rent receivable     13,707     12,815
Unamortized intangible lease assets, net     30,188     27,387
Other assets     8,863     8,353
  Total assets   $ 655,396   $ 590,439
             
LIABILITIES AND EQUITY            
Liabilities:            
Mortgages payable   $ 325,601   $ 292,049
Line of credit - outstanding     35,750     13,250
Unamortized intangible lease liabilities, net     14,827     10,463
Other liabilities     21,719     18,773
  Total liabilities     397,897     334,535
             
Total One Liberty Properties, Inc. stockholders' equity     255,421     254,276
Non-controlling interests in consolidated joint ventures     2,078     1,628
  Total equity     257,499     255,904
  Total liabilities and equity   $ 655,396   $ 590,439
               
               
               
                         
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP)  
(Amounts in Thousands, Except Per Share Data)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2015     2014     2015     2014  
Revenues:                                
  Rental income, net   $ 15,273     $ 14,552     $ 44,159     $ 42,308  
  Tenant reimbursements     835       635       2,407       1,677  
  Lease termination fee     -       -       650       1,269  
  Total revenues     16,108       15,187       47,216       45,254  
                                 
Operating expenses:                                
  Depreciation and amortization     4,435       3,685       12,090       10,985  
  General and administrative     2,350       2,153       7,132       6,497  
  Real estate expenses     1,415       1,085       4,022       3,061  
  Federal excise and state taxes     68       6       266       175  
  Real estate acquisition costs     90       83       417       211  
  Leasehold rent     77       77       231       231  
  Impairment loss     -       1,093       -       1,093  
  Total operating expenses     8,435       8,182       24,158       22,253  
                                 
Operating income     7,673       7,005       23,058       23,001  
                                 
Other income and expenses:                                
  Gain on sale of real estate, net     -       -       5,392       -  
  Purchase price fair value adjustment     -       -       960       -  
  Prepayment costs on debt     -       -       (568 )     -  
  Equity in earnings of unconsolidated joint ventures     347       134       311       397  
  Gain on sale-investment in BRT Realty Trust (related party)   -       -       -       134  
  Other income     2       10       77       20  
  Interest:                                
    Expense     (4,044 )     (4,227 )     (11,690 )     (12,215 )
    Amortization and write-off of deferred financing costs     (187 )     (275 )     (828 )     (741 )
                                 
Income from continuing operations     3,791       2,647       16,712       10,596  
Income from discontinued operations     -       -       -       13  
                                 
Net income     3,791       2,647       16,712       10,609  
Net income attributable to non-controlling interests     (3 )     (27 )     (1,386 )     (76 )
                                 
Net income attributable to One Liberty Properties, Inc.   $ 3,788     $ 2,620     $ 15,326     $ 10,533  
                                 
                                 
Per common share attributable to common stockholders- diluted:                              
  Income from continuing operations   $ 0.22     $ 0.16     $ 0.92     $ 0.64  
                                 
                                 
NAREIT funds from operations applicable to common stock- Note 1 $ 8,402     $ 7,461     $ 22,977     $ 22,785  
NAREIT funds from operations per common share-diluted - Note 2 $ 0.50     $ 0.46     $ 1.39     $ 1.42  
                                 
Adjusted funds from operations applicable to common stock - Note 1 $ 8,524     $ 7,787     $ 23,654     $ 22,585  
Adjusted funds from operations per common share-diluted - Note 2 $ 0.51     $ 0.48     $ 1.43     $ 1.40  
                                 
Weighted average number of common and                                
unvested restricted shares outstanding:                                
  Basic     16,553       16,131       16,439       15,999  
  Diluted     16,653       16,231       16,539       16,099  
                                   
                                   
                                   
                         
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP)  
(Amounts in Thousands, Except Per Share Data)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
Note 1:   2015     2014     2015     2014  
NAREIT funds from operations is summarized in the following table:                              
GAAP net income attributable to One Liberty Properties, Inc.   $ 3,788     $ 2,620     $ 15,326     $ 10,533  
Add: depreciation of properties     4,384       3,639       11,906       10,866  
Add: our share of depreciation of unconsolidated joint ventures   229       93       410       280  
Add: amortization of deferred leasing costs     51       46       184       119  
Add: Federal excise tax relating to gain on sales     25       -       109       (19 )
Add: impairment loss     -       1,093       -       1,093  
Deduct: gain on sale of real estate     -       -       (5,392 )     -  
Deduct: purchase price fair value adjustment     -       -       (960 )     -  
Adjustments for non-controlling interests     (75 )     (30 )     1,394       (87 )
                                 
NAREIT funds from operations applicable to common stock   8,402       7,461       22,977       22,785  
                                 
Deduct: straight-line rent accruals and amortization of lease intangibles   (654 )     (403 )     (1,633 )     (1,061 )
Deduct: lease termination fee income     -       -       (650 )     (1,269 )
Add: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures     (9 )     -       (9 )     (1 )
Add: amortization of restricted stock compensation     580       448       1,742       1,368  
Add: prepayment costs on debt     -       -       568       -  
Add: amortization and write-off of deferred financing costs     187       275       828       741  
Add: our share of amortization of deferred financing costs of unconsolidated joint ventures     7       4       18       13  
Adjustments for non-controlling interests     11       2       (187 )     9  
                                 
Adjusted funds from operations applicable to common stock $ 8,524     $ 7,787     $ 23,654     $ 22,585  
                                 
Note 2:                                
NAREIT funds from operations is summarized in the following table:                              
GAAP net income attributable to One Liberty Properties, Inc.   $ 0.22     $ 0.16     $ 0.92     $ 0.64  
Add: depreciation of properties     0.26       0.22       0.72       0.68  
Add: our share of depreciation of unconsolidated joint ventures   0.02       0.01       0.03       0.02  
Add: amortization of deferred leasing costs     -       -       0.01       0.01  
Add: Federal excise tax relating to gain on sales     -       -       0.01       -  
Add: impairment loss     -       0.07       -       0.07  
Deduct: gain on sale of real estate     -       -       (0.33 )     -  
Deduct: purchase price fair value adjustment     -       -       (0.06 )     -  
Adjustments for non-controlling interests     -       -       0.09       -  
                                 
NAREIT funds from operations per common share-diluted   0.50       0.46       1.39       1.42  
                                 
Deduct: straight-line rent accruals and amortization of lease intangibles   (0.04 )     (0.03 )     (0.10 )     (0.07 )
Deduct: lease termination fee income     -       -       (0.04 )     (0.08 )
Add: our share of straight-line rent accruals and amortization                                
of lease intangibles of unconsolidated joint ventures     -       -       -       -  
Add: amortization of restricted stock compensation     0.04       0.03       0.11       0.09  
Add: prepayment costs on debt     -       -       0.03       -  
Add: amortization and write-off of deferred financing costs     0.01       0.02       0.05       0.04  
Add: our share of amortization of deferred financing costs of unconsolidated joint ventures     -       -       -       -  
Adjustments for non-controlling interests     -       -       (0.01 )     -  
                                 
Adjusted funds from operations per common share-diluted $ 0.51     $ 0.48     $ 1.43     $ 1.40  
                               

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