One Liberty Properties Reports Third Quarter 2021 Results


GREAT NECK, N.Y., Nov. 04, 2021 (GLOBE NEWSWIRE) -- 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, 2021.

Operating Results:

Rental income was $20.3 million in the third quarter of 2021, compared to $21.1 million in the third quarter of 2020. The decrease is due primarily to the impact of property dispositions in 2020 and 2021.

Total operating expenses in the third quarter of 2021 improved to $12.4 million from $13.1 million for the third quarter of 2020. Contributing to the improvement were the inclusion, in the corresponding 2020 period, of a non-cash impairment charge related to a casualty loss, and, in the 2021 period, a reduction in litigation expense and a real estate tax refund, offset by, in the 2021 period, a non-cash increase in compensation expense related to equity incentive plan awards.

Net income attributable to One Liberty in the third quarter of 2021 was $6.1 million, or $0.28 per diluted share, compared to $13.7 million, or $0.67 per diluted share, in the third quarter of 2020. Net income for the 2020 quarter benefitted from a $10.3 million, or $0.50 per diluted share, gain on the sale of a property. Net income for the 2021 quarter includes a $1.3 million, or $0.06 per diluted share, gain on the sale of a property.

Adjusted Funds from Operations, or AFFO1, was $10.1 million, or $0.48 per diluted share, for the quarter ended September 30, 2021, compared to $10.0 million, or $0.49 per diluted share, for the corresponding quarter in the prior year. In the 2021 quarter, AFFO, on an absolute basis benefitted from lower interest and real estate expense, offset by a reduction in rental income primarily related to property dispositions in 2020 and 2021.

Funds from Operations, or FFO, was $9.8 million, or $0.47 per diluted share, for the third quarter of 2021, compared to $9.7 million, or $0.47 per diluted share, in the third quarter of 2020. In the 2021 quarter, FFO benefitted from the decrease in interest and real estate expenses and an insurance recovery from a casualty loss, offset by a reduction in a rental income.

Net income, FFO and AFFO on a diluted per share basis were negatively impacted due to the 583,000 increase in the weighted average shares outstanding as a result of issuances of stock in- lieu-of a portion of the cash dividend and the equity incentive and dividend reinvestment programs.

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1 A reconciliation of GAAP amounts to non-GAAP amounts (i.e., FFO and AFFO) is presented with the financial information included in this release.

Balance Sheet:

At September 30, 2021, the Company had $13.7 million of cash and cash equivalents, total assets of $752.0 million, total debt of $406.4 million, and total stockholders' equity of $304.2 million.

At November 1, 2021, One Liberty's available liquidity was approximately $105.2 million, including approximately $11.9 million of cash and cash equivalents (including the credit facility's required $3.0 million average deposit maintenance balance) and $93.3 million available under its credit facility.

Recent Transactions:

On September 29, 2021, One Liberty acquired a 103,000 square foot industrial property in Lehigh Acres, a suburb of Fort Myers, Florida, for a purchase price of $9.4 million, including a ten-year fixed rate (i.e., 3.17%) mortgage of $6.1 million. The property is leased to two tenants and the remaining average lease term is four years.

One Liberty anticipates that in November it will complete the purchase, for $8.0 million, of a 102,000 square foot warehouse distribution center well-located near the main commercial airport in Omaha, Nebraska, and net leased to Home Depot USA, Inc, the primary operating company of The Home Depot. The property is leased at an annual base rent of $546,000.

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 (calculated in accordance with generally accepted accounting principles), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.

One Liberty computes AFFO by adjusting from FFO for straight-line rent accruals and amortization of lease intangibles, deducting lease termination and certain other fees and adding back amortization of restricted stock and restricted stock unit compensation expense, amortization of costs in connection with its financing activities (including its share of its unconsolidated joint ventures), income on insurance recoveries from casualties and debt prepayment costs. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO may vary from one REIT to another.

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 operating, investing or financing activities as defined by GAAP. FFO and AFFO should not be an alternative to net income as a reliable measure of our operating performance nor as an alternative to cash flows 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.

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. 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. Information regarding risks, uncertainties and factors that could cause actual outcomes or other events to differ materially from any such forward looking statements appear under “Forward Looking Statements”, “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the “Annual Report”), and the Company’s Quarterly Reports on Form 10-Q or the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) filed after the filing of the Annual Report. Currently, a significant uncertainty the Company is facing is the COVID-19 pandemic and its impact, and potential impact, on the Company’s and its tenants’ financial condition, results of operations, cash flows and performance, the real estate market and the global economy and financial markets. The extent to which the pandemic impacts the Company and its tenants depends on future developments, which are highly uncertain and cannot be predicted with confidence.

About One Liberty Properties:

One Liberty is a self-administered and self-managed real estate investment trust incorporated in Maryland in 1982. The Company acquires, owns and manages a geographically diversified portfolio consisting primarily of industrial, retail, restaurant, health and fitness and theater properties. Many of these properties are subject to long term net leases under which the tenant is typically responsible for the property's real estate taxes, insurance and ordinary maintenance and repairs.

Contact:
One Liberty Properties
Investor Relations
Phone: (516) 466-3100
www.1liberty.com

           
ONE LIBERTY PROPERTIES, INC.   
CONDENSED BALANCE SHEETS   
(Amounts in Thousands)   
   (Unaudited)       
   September 30, December 31,     
    2021   2020      
           
 ASSETS         
 Real estate investments, at cost $834,455  $839,058      
 Accumulated depreciation  (157,499)  (147,136)     
 Real estate investments, net  676,956   691,922      
           
 Investment in unconsolidated joint ventures  10,178   10,702      
 Cash and cash equivalents  13,740   12,705      
 Unbilled rent receivable  14,470   15,438      
 Unamortized intangible lease assets, net  21,498   24,703      
 Other assets  15,131   20,667      
 Total assets $751,973  $776,137      
           
 LIABILITIES AND EQUITY         
 Liabilities:         
 Mortgages payable, net of $3,477 and $3,845 of deferred financing costs, respectively $403,452  $429,704      
 Line of credit-outstanding, net of $270 and $425 of deferred financing costs, respectively  2,930   12,525      
 Unamortized intangible lease liabilities, net  10,702   11,189      
 Other liabilities  29,790   30,759      
 Total liabilities  446,874   484,177      
           
 Total One Liberty Properties, Inc. stockholders' equity  304,172   290,767      
 Non-controlling interests in consolidated joint ventures  927   1,193      
 Total equity  305,099   291,960      
 Total liabilities and equity $751,973  $776,137      
           
           
           
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP)   
(Amounts in Thousands, Except Per Share Data)   
(Unaudited)   
           
    Three Months Ended
  Nine Months Ended
   September 30,  September 30,
    2021   2020    2021   2020 
Revenues:         
 Rental income, net $20,349  $21,071   $61,338  $63,171 
 Lease termination fees  87     336  
 Total revenues  20,436   21,071    61,674   63,171 
           
Operating expenses:         
 Depreciation and amortization  5,596   5,723    17,055   17,201 
 General and administrative  3,559   3,456    10,970   10,244 
 Real estate operating expenses  3,199   3,451    10,272   10,098 
 State taxes  55   75    221   227 
 Impairment due to casualty loss   430     430 
 Total operating expenses  12,409   13,135    38,518   38,200 
           
Other operating income         
      Gain on sale of real estate, net  1,277   10,316    22,768   14,568 
Operating income  9,304   18,252    45,924   39,539 
           
Other income and expenses:         
 Equity in earnings of unconsolidated joint ventures  77   132    75   186 
 Equity in earnings from sale of unconsolidated joint venture properties  801     801   121 
 Prepayment costs on debt  (38)  (58)   (837)  (1,123)
 Other income  678   453    865   462 
 Interest:         
  Expense  (4,365)  (4,752)   (13,573)  (14,583)
  Amortization and write-off of deferred financing costs  (245)  (301)   (754)  (760)
           
Net income  6,212   13,726    32,501   23,842 
Net income attributable to non-controlling interests  (153)  (1)   (151)  (7)
           
Net income attributable to One Liberty Properties, Inc. $6,059  $13,725   $32,350  $23,835 
           
           
Net income per share attributable to common stockholders-diluted $0.28  $0.67   $1.55  $1.17 
           
           
Funds from operations - Note 1 $9,816  $9,680   $26,316  $27,135 
Funds from operations per common share-diluted - Note 2 $0.47  $0.47   $1.25  $1.34 
           
Adjusted funds from operations - Note 1 $10,140  $10,026   $30,299  $29,676 
Adjusted funds from operations per common share-diluted - Note 2$0.48  $0.49   $1.44  $1.46 
           
Weighted average number of common shares outstanding:         
         Basic  20,115   19,640    20,044   19,483 
         Diluted  20,273   19,686    20,198   19,511 
           
           
           
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP)   
(Amounts in Thousands, Except Per Share Data)   
(Unaudited)   
           
    Three Months Ended    Nine Months Ended 
    September 30,    September 30, 
Note 1:  2021   2020    2021   2020 
NAREIT funds from operations is summarized in the following table:        
 GAAP net income attributable to One Liberty Properties, Inc. $6,059  $13,725   $32,350  $23,835 
 Add: depreciation and amortization of properties  5,483   5,623    16,735   16,895 
 Add: our share of depreciation and amortization of unconsolidated joint ventures  121   135    387   409 
 Add: impairment due to casualty loss   430     430 
 Add: amortization of deferred leasing costs  113   100    320   306 
 Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures  5   5    20   14 
 Deduct: gain on sale of real estate, net  (1,277)  (10,316)   (22,768)  (14,568)
 Deduct: equity in earnings from sale of unconsolidated joint venture properties   (801)    (801)  (121)
 Adjustments for non-controlling interests  113   (22)   73   (65)
NAREIT funds from operations applicable to common stock   9,816   9,680    26,316   27,135 
           
Deduct: straight-line rent accruals and amortization of lease intangibles (366)  (685)   (685)  (2,226)
Deduct: our share of straight-line rent accruals and amortization of lease intangibles of     unconsolidated joint ventures  (11)  (40)   (11)  (143)
Deduct: lease termination fee income  (87)    (336) 
Deduct: lease assignment fee income     (100) 
Add: amortization of restricted stock compensation  1,163   1,136    4,191   3,441 
Add: prepayment costs on debt  38   58    837   1,123 
Deduct: income on insurance recoveries from casualty loss  (675)  (430)   (695)  (430)
Add: amortization and write-off of deferred financing costs  245   301    754   760 
Add: our share of amortization and write-off of deferred financing costs of unconsolidated
 joint ventures
  4   4    13   13 
Adjustments for non-controlling interests  13   2    15   3 
Adjusted funds from operations applicable to common stock  $10,140  $10,026   $30,299  $29,676 
           
Note 2:         
NAREIT funds from operations is summarized in the following table:          
GAAP net income attributable to One Liberty Properties, Inc.  $0.28  $0.67   $1.55  $1.17 
Add: depreciation and amortization of properties   0.26   0.27    0.78   0.84 
Add: our share of depreciation and amortization of unconsolidated joint ventures  0.01   0.01    0.02   0.02 
Add: impairment due to casualty loss   0.02     0.02 
Add: amortization of deferred leasing costs   0.01     0.02   0.02 
Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures     
Deduct: gain on sale of real estate, net   (0.06)  (0.50)   (1.09)  (0.72)
Deduct: equity in earnings from sale of unconsolidated joint venture properties   (0.04)    (0.04)  (0.01)
Adjustments for non-controlling interests   0.01     0.01  
NAREIT funds from operations per share of common stock-diluted (a)   0.47   0.47    1.25   1.34 
Deduct: straight-line rent accruals and amortization of lease intangibles   (0.03)  (0.03)   (0.04)  (0.12)
Deduct: our share of straight-line rent accruals and amortization of lease intangibles of   unconsolidated joint ventures      (0.01)
Deduct: lease termination fee income      (0.02) 
Deduct: lease assignment fee income      
Add: amortization of restricted stock compensation   0.06   0.06    0.20   0.17 
Add: prepayment costs on debt      0.04   0.06 
Deduct: income on insurance recoveries from casualty loss   (0.03)  (0.02)   (0.03)  (0.02)
Add: amortization and write-off of deferred financing costs   0.01   0.01    0.04   0.04 
Add: our share of amortization and write-off of deferred financing costs of unconsolidated
 joint ventures
     
Adjustments for non-controlling interests      
Adjusted funds from operations per share of common stock-diluted (a)  $0.48  $0.49   $1.44  $1.46 
           

(a) The weighted average number of diluted common shares used to compute FFO and AFFO applicable to common stock includes unvested restricted shares that are excluded from the computation of diluted EPS.