-- Increased rental income by 9.6% to $10.6 million quarter over quarter -- Completed the acquisition of two properties -- Declared a quarterly cash dividend of $0.30 per share -- Reinstated the DRIP programPatrick J. Callan, Jr. President and Chief Executive Officer of the Company stated, "We have increased our rental income this quarter through selective acquisitions this year. Each of the properties acquired is characterized by a long term lease with contractual increases, providing both visibility and embedded growth to our income stream. These transactions mark One Liberty's return to the acquisitions arena after stepping away during 2009. We believe that the current market is offering a number of opportunities and we expect to continue to add to the acquisitions that we have completed thus far in 2010." Operating Results: Rental income for the three months ended June 30, 2010 was $10.6 million compared to $9.7 million for the three months ended June 30, 2009. Rental income increases were due to the effect of acquisitions, as well as increased revenues associated with lease revisions within the existing portfolio. Total revenues for the three months ended June 30, 2010 were $10.6 million as compared to $11.5 million in June 30, 2009, which included a $1.8 million lease termination fee. Total operating expenses for the three months ended June 30, 2010 were $4.8 million compared to $4.0 million for the three months ended June 30, 2009. The roughly $800,000 increase was attributed to a $340,000 increase in real estate expenses related primarily to the inclusion of expenses from a community shopping center purchased in the first quarter 2010; a $311,000 increase in general and administrative expenses related in part to costs associated with financing activities; and $168,000 in real estate acquisitions costs. One Liberty Properties achieved $2.4 million of net income for the quarter ended June 30, 2010 or $0.21 per diluted share versus $4.4 million and $0.41 per diluted share of net income, respectively, for the year ago period. The $1.8 million lease termination fee represented income of $0.17 per diluted share in the 2009 period. The Company generated Funds from Operations ("FFO") of $4.5 million or $0.40 per diluted share for the quarter ended June 30, 2010 as compared to $6.9 million or $0.64 per diluted share in the year ago period. Also impacting the per share results was the higher share count year-over-year that represented $0.01 of net income per diluted share and $0.02 of FFO per diluted share. The following tables outline the Company's FFO for the three and six months ended June 30, 2010 and 2009 and provide a reconciliation of (i) net income presented in accordance with generally accepted accounting principles ("GAAP") to FFO and (ii) net income per diluted share, presented in accordance with GAAP, to FFO per diluted share, for each period presented (amounts shown in thousands, except share data - unaudited):
Three Months Ended Six Months Ended
Reconciliation of Net Income to June 30, June 30,
Funds from Operations: 2010 2009 2010 2009
------- -------- ------- --------
Net Income $ 2,399 $ 4,443 $ 4,820 $ 7,096
Add:
Depreciation of properties 2,148 2,334 4,274 4,692
OLP share of depreciation in
unconsolidated joint ventures 78 81 158 162
Amortization of capitalized leasing
expenses 8 17 17 35
Deduct: OLP share of net gain on sale
in unconsolidated joint venture (107) - (107) -
------- -------- ------- --------
Funds from operations $ 4,526 $ 6,875 $ 9,162 $ 11,985
======= ======== ======= ========
Reconciliation of Net Income Per Diluted Share
to Funds from Operations Per Diluted Share:
Net Income
Add: $ 0.21 $ 0.41 $ 0.42 $ 0.67
Depreciation of properties 0.19 0.22 0.37 0.45
OLP share of depreciation in
unconsolidated joint ventures 0.01 0.01 0.02 0.02
Amortization of capitalized leasing
expenses - - - -
Deduct: OLP share of net gain on sale
in unconsolidated joint venture (0.01) - (0.01) -
------- -------- ------- --------
Funds from operations $ 0.40 $ 0.64 $ 0.80 $ 1.14
======= ======== ======= ========
Weighted Average Diluted Shares 11,453 10,751 11,453 10,515
======= ======== ======= ========
Balance Sheet:
During the quarter, the Company extended the availability of its revolving
line of credit until March 31, 2012. Under the agreement, borrowings were
reduced to $40 million from $62.5 million; the interest rate was increased
to the greater of (i) 90 day LIBOR plus 3% or (ii) 6% per annum, with an
unused facility fee of 1/4%. At June 30, 2010 there was $27.0 million
outstanding under this line.
Acquisitions and Dispositions:
On April 28, 2010, the Company acquired a 6,000 square foot retail property
in Monroeville, Pennsylvania, a suburb of Pittsburgh, leased by a Men's
Wearhouse pursuant to a long term net lease. The purchase price was
approximately $1.3 million, including $300,000 of contracted building
improvements.
On the last day of the quarter, the Company completed the acquisition of an
88,000 square foot retail department store situated on 7.47 acres in Kansas
City, Missouri for an all-cash purchase price of $8.95 million. The
property is net leased to Kohl's Department Stores, Inc. through January
31, 2025 (with tenant options to extend) and is located in the Wilshire
Plaza Shopping Center.
On April 30, 2010, one of the Company's unconsolidated joint ventures sold
its only property for $3.2 million, net of closing costs. The sale
resulted in a gain to the Company of $107,000.
Dividend:
During the quarter, the Company's board of directors declared a cash
dividend of $0.30 per share on the common stock of the Company. The
dividend was paid on July 7, 2010 to stockholders of record at the close of
business on June 28, 2010. Based on the quarter's FFO per diluted share of
$0.40, the current quarterly dividend represents a payout ratio of 75%.
On June 18, 2010, the Company announced that it had reinstated its Dividend
Reinvestment Plan pursuant to which stockholders will again be able to
reinvest all, or a portion of their cash dividend in the Company's stock at
a five percent discount to market, pricing consistent with pre-suspension
discount levels.
Subsequent Events:
On July 14, 2010, the Company sold a vacant property for $1.1 million and
will realize a gain of approximately $147,000.
On July 30, 2010, the Company acquired three Wendy's Old Fashioned
hamburger fast food restaurants located in Pennsylvania in a sale/leaseback
transaction for $3.84 million. The lease has an initial 20 year term with
a nine year renewal option.
Outlook:
The Company affirms its estimate for FFO per diluted share for the year
will be between $1.55 and $1.64. The Company's estimate is forward-looking
and based on management's view of current and future market conditions.
The Company's actual result may differ materially from this estimate.
Non-GAAP Financial Measures:
We believe that FFO is a useful and a standard supplemental measure of the
operating performance for equity REITs and is used frequently by securities
analysts, investors and other interested parties in evaluating equity
REITs, many of which present FFO when reporting their operating results.
FFO is intended to exclude GAAP historical cost depreciation and
amortization of real estate assets, which assures 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, we believe that FFO provides a performance measure that when
compared year over year, should reflect the impact on 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. We also consider FFO to be useful to us in evaluating potential
property acquisitions.
FFO does not represent net income or cash flows from operations as defined
by GAAP. You should not consider FFO to be an alternative to net income as
a reliable measure of our operating performance; nor should you consider
FFO to be an alternative to cash flows from operating, investing or
financing activities (as defined by GAAP) as measures of liquidity.
FFO does not measure whether cash flow is sufficient to fund all of our
cash needs, including principal amortization, capital improvements and
distributions to stockholders. FFO does not represent cash flows from
operating, investing or financing activities as defined by GAAP.
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 Form 10-K for the year
ended December 31, 2009. 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:
ONE LIBERTY PROPERTIES, INC. is a self-administered and self-managed real
estate investment trust incorporated under the laws of Maryland in December
1982. The primary business of the Company is to acquire, own and manage a
geographically diversified portfolio of retail, industrial, office and
other properties under long term leases. Substantially all of our 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 )
(Amounts in Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
-------- -------- -------- --------
Revenues:
Rental income - Note 1 $ 10,642 $ 9,706 $ 20,717 $ 19,506
Lease termination fee - 1,784 - 1,784
-------- -------- -------- --------
Total revenues 10,642 11,490 20,717 21,290
-------- -------- -------- --------
Operating expenses:
Depreciation and amortization 2,151 2,154 4,279 4,270
General and administrative 1,913 1,602 3,566 3,252
Real estate acquisition costs 168 - 514 -
Real estate expenses 485 145 665 303
Leasehold rent 77 77 154 154
-------- -------- -------- --------
Total operating expenses 4,794 3,978 9,178 7,979
-------- -------- -------- --------
Operating income 5,848 7,512 11,539 13,311
Other income and expenses:
Equity in earnings of
unconsolidated joint ventures 128 149 253 308
Gain on disposition of real
estate held by unconsolidated
joint venture 107 - 107 -
Other income, including realized
gain on sale of
available-for-sale
securities and interest income 174 179 225 207
Interest:
Expense (3,745) (3,424) (7,067) (6,850)
Amortization of deferred
financing costs (150) (146) (292) (402)
-------- -------- -------- --------
Income from continuing operations 2,362 4,270 4,765 6,574
-------- -------- -------- --------
Discontinued operations:
Income from operations - Note 2 37 173 55 751
Impairment charge on property
sold at a loss - - - (229)
-------- -------- -------- --------
Income from discontinued operations 37 173 55 522
-------- -------- -------- --------
Net income $ 2,399 $ 4,443 $ 4,820 $ 7,096
======== ======== ======== ========
Net income per common share -
diluted:
Income from continuing
operations $ 0.21 $ 0.40 $ 0.42 $ 0.63
Income from discontinued
operations - 0.01 - 0.04
-------- -------- -------- --------
Net income per common share $ 0.21 $ 0.41 $ 0.42 $ 0.67
======== ======== ======== ========
Funds from operations - Note 3 $ 4,526 $ 6,875 $ 9,162 $ 11,985
======== ======== ======== ========
Funds from operations per common
share-diluted - Note 4 $ 0.40 $ 0.64 $ 0.80 $ 1.14
======== ======== ======== ========
Weighted average number of common
shares outstanding:
Basic 11,453 10,488 11,424 10,327
======== ======== ======== ========
Diluted 11,453 10,751 11,453 10,515
======== ======== ======== ========
Note 1 - Rental income includes straight line rent accruals and
amortization of lease intangibles of $870 and $435 for the six and
three months ended June 30, 2010 and $363 and $108 for the six and
three months ended June 30, 2009, respectively.
Note 2 - Income from discontinued operations includes straight line rent
accruals and amortization of lease intangibles of $3 and $45 for
the six and three months ended June 30, 2009. The six and three
months ended June 30, 2010 did not include any such income.
Note 3 - Funds from operations is summarized in the following table:
Net income $ 2,399 $ 4,443 $ 4,820 $ 7,096
Add: depreciation of properties 2,148 2,334 4,274 4,692
Add: our share of depreciation in
unconsolidated joint ventures 78 81 158 162
Add: amortization of capitalized
leasing expenses 8 17 17 35
Deduct: our share of net gain on
sale in unconsolidated joint
ventures (107) - (107) -
-------- -------- -------- --------
Funds from operations (a) $ 4,526 $ 6,875 $ 9,162 $ 11,985
======== ======== ======== ========
Note 4 - Funds from operations per common share is summarized in the
following table:
Net income $ 0.21 $ 0.41 $ 0.42 $ 0.67
Add: depreciation of properties 0.19 0.22 0.37 0.45
Add: our share of depreciation in
unconsolidated joint ventures 0.01 0.01 0.02 0.02
Add: amortization of capitalized
leasing expenses - - - -
Deduct: our share of net gain on
sale in unconsolidated joint
ventures (0.01) - (0.01) -
-------- -------- -------- --------
Funds from operations per common
share-diluted (a) $ 0.40 $ 0.64 $ 0.80 $ 1.14
======== ======== ======== ========
ONE LIBERTY PROPERTIES, INC.
CONDENSED BALANCE SHEETS
(Amounts in Thousands)
June 30, December 31,
2010 2009
-------------- --------------
ASSETS
Real estate investments, net $ 373,544 $ 344,738
Property held for sale 942 955
Investment in unconsolidated joint ventures 5,968 5,839
Cash and cash equivalents 18,482 28,036
Available for sale securities (including
$3,999 treasury bills at 12/31/09) 729 6,762
Unbilled rent receivable 11,586 10,706
Unamortized intangible lease assets 7,829 7,157
Other assets 6,355 4,493
-------------- --------------
Total assets $ 425,435 $ 408,686
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable $ 205,816 $ 190,518
Line of credit 27,000 27,000
Unamortized intangible lease liabilities 4,986 4,827
Other liabilities 7,476 6,213
-------------- --------------
Total liabilities 245,278 228,558
Stockholders' equity 180,157 180,128
-------------- --------------
Total liabilities and stockholders' equity $ 425,435 $ 408,686
============== ==============
Contact Information: One Liberty Properties, Inc. Investor Relations Phone: (516) 466-3100 www.onelibertyproperties.com