Urstadt Biddle Properties Inc. (NYSE:UBA and UBP), a real estate
investment trust, today reported its operating results for the
three and nine month periods ended July 31, 2015.
Diluted Funds from Operations (FFO) for the quarter ended July
31, 2015 was $10,749,000 or $0.32 per Class A Common share and
$0.28 per Common share when compared to $8,973,000 or $0.29 per
Class A Common share and $0.26 per Common share in last year’s
third quarter. For the first nine months of fiscal 2015, diluted
FFO amounted to $28,378,000 or $0.83 per Class A Common share and
$0.74 per Common share when compared to $24,982,000 or $0.81 per
Class A Common share and $0.72 per Common share in the
corresponding period of fiscal 2014. The FFO amounts above
include significant non-recurring items in fiscal 2015 and
2014. In an effort to assist investors in analyzing changes
to FFO, we have included a second FFO reconciliation table at the
end of this report which explains the effect of these non-recurring
items on the company’s Diluted FFO. After removing these
non-recurring items from both the three and nine-month periods of
fiscal 2015 and 2014, our adjusted Diluted FFO for the three month
period ended July 31, 2015 was $10,823,000 or $0.32 per diluted
Class A Common share and $0.28 per diluted Common share
compared with $9,036,000 or $0.29 per diluted Class A Common
share and $0.26 per diluted Common share in last year’s third
quarter. Our adjusted (recurring) FFO for the nine month
period ended July 31, 2015 was $30,666,000 or $0.90 per diluted
Class A Common share and $0.80 per diluted Common share
compared with $25,458,000 or $0.82 per diluted Class A Common
share and $0.73 per diluted Common share in last year’s first nine
months.
Net income from continuing operations applicable to Class A
Common and Common stockholders for the third quarter of fiscal 2015
was $4,870,000 or $0.14 per diluted Class A Common share and $0.13
per diluted Common share compared to $3,890,000 or $0.12 per
diluted Class A Common share and $0.11 per diluted Common share in
last year’s third quarter. Net income from continuing operations
applicable to Class A Common and Common stockholders for the first
nine months of fiscal 2015 was $10,664,000 or $0.31 per diluted
Class A Common share and $0.28 per diluted Common share compared to
$9,783,000 or $0.31 per diluted Class A Common share and $0.28 per
diluted Common share in the first nine months of fiscal 2014.
The per share amounts for both FFO and net income for the nine
months ended July 31, 2015 and 2014 include one-time property
acquisition costs of $2.0 million and $476,000, respectively. The
acquisition costs of $2.0 million in the first nine months of
fiscal 2015 were incurred primarily from the company’s purchase of
four retail properties in New Jersey in December 2014 for $124.6
million (exclusive of the acquisition related expenses). In
addition, the per share amounts for both FFO and net income include
the dilutive effect of the issuance of 3 million shares of a new
Series G preferred stock and 2.875 million Class A Common shares in
follow-on public offerings. The Series G preferred stock was issued
in October and early November 2014 and the Class A Common shares
were issued in early November 2014. The preferred stock offering
raised $72.6 million of which $61.5 million was used to redeem the
company’s Series D preferred stock on November 21, 2014. The
balance of the Series G preferred stock proceeds, along with $59.8
million of proceeds raised in the Class A Common share offering,
were used to fund a portion of the $124.6 million purchase price of
the four New Jersey retail properties. As a result of issuing the
Series G preferred stock a month before the Series D could be
redeemed, the company incurred $268,000 in preferred stock
dividends that will not be recurring.
At July 31, 2015, the company’s consolidated core properties
were 96.3% leased (versus 94.8% at the end of fiscal 2014) and
95.3% occupied. The above percentages exclude the company’s
unconsolidated joint ventures and the company’s White Plains
property. In November, 2014, the company obtained a zoning change
from the City of White Plains to convert this property to a higher
and better use and the company is in contract to sell the property.
The company is maintaining vacancies to conform to certain closing
conditions of the sale. At July 31, 2015, the company had equity
interests in seven unconsolidated joint ventures (745,000 square
feet), which were approximately 98.3% leased (97.7% at October 31,
2014).
Commenting on the quarter’s operating results, Willing L.
Biddle, President and CEO of UBP, said “We are pleased with the
company’s results this quarter. On the leasing front, the
percentage of our core and joint venture portfolio that is leased
continued to strengthen to 96.6% and we have a strong pipeline of
deals in process on a good portion of our remaining vacancies. Our
improving leasing results continue to have a direct positive effect
on our earnings and FFO. On the acquisitions front, our team was
able to acquire two grocery anchored properties in our target
market this quarter. The first property, a 7,000 square foot single
tenant grocery store located in Fort Lee, NJ, was acquired for $4
million and is leased to the Korean supermarket chain HMART. The
second property, a 26,000 square foot shopping center located in
Harrison, New York, was acquired for $10 million and is anchored by
an A&P grocery store - one of nine A&P leases in the
company’s portfolio. While A&P filed for bankruptcy protection
this quarter, five of its leases with the company, including the
Harrison location, are among a large number of leases included in a
stalking horse bid to acquire certain leases from A&P made by
the established supermarket chains Albertsons, Stop & Shop and
Key Foods. We believe that the remaining four A&P leases, which
are not included in the stalking horse bid, present an opportunity
as their current rents are at or below market. Should these leases
not be assumed and assigned in the bankruptcy proceedings, the
company is confident that those locations will be readily leasable
to other supermarkets or alternative users. On the dispositions
front, we completed the sale of our Townline Square shopping center
in Meriden, CT shortly after quarter end. The sale of Townline
Square achieves the objective we set approximately two years ago to
divest the company of certain properties that were located outside
of the New York Metro area. Over the past two years, we have sold
our warehouse properties in Dallas and St. Louis, our shopping
center in Springfield, MA and now our shopping center in Meriden
CT. The proceeds have been used to buy shopping centers in Pompton
Lakes, Wykoff, Kinnelon, Midland Park, and Ft. Lee, NJ, Greenwich,
CT, Harrison, NY and to reduce debt. We now have a portfolio almost
exclusively located in the suburbs around New York City with an
occupancy rate of almost 97% and a leverage level that continues to
be among the lowest in the REIT industry. The reallocation of
assets in our portfolio has caused the weighted average household
income within a three mile ring of our core and joint venture
retail properties to improve from approximately $112,000 to its
current position of $117,000, which is among the highest of all
retail REITs.”
At their regular quarterly meeting, the Directors of Urstadt
Biddle Properties Inc. declared quarterly dividends on the
company’s Class A Common Stock (UBA) and Common Stock (UBP). The
dividends were declared in the amount of $0.255 for each share of
Class A Common Stock and $0.225 for each share of Common Stock. The
dividends were declared at the same rate as the previous quarter
and are the 183rd consecutive quarterly dividends declared since
the company began operating in 1969.
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
74 properties containing approximately 4.9 million square feet of
space. Listed on the New York Stock Exchange since 1970, it
provides investors with a means of participating in ownership of
income-producing properties. It has paid 182 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and has raised total dividends to its shareholders for the last 21
consecutive years.
Certain statements contained herein may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other
things, risks associated with the timing of and costs associated
with property improvements, financing commitments and general
competitive factors.
(Table Follows)
URSTADT BIDDLE PROPERTIES INC. (NYSE: UBA AND UBP)
NINE MONTHS AND THREE MONTHS ENDED JULY 31, 2015 AND 2014
(UNAUDITED)
(in thousands, except per share
data)
Nine Months Ended
Three Months Ended July 31, July 31,
2015 2014
2015
2014
Revenues Base rents
$ 63,228 $ 55,708
$
21,042 $ 18,714 Recoveries from tenants
22,676 18,778
7,028 5,645 Lease termination income
147 183
103 131 Other income
1,324
1,433
646
465 Total Revenues
87,375
76,102
28,819
24,955
Expenses Property
operating
16,423 14,713
4,384 3,837 Property taxes
13,667 12,772
4,631 4,205 Depreciation and
amortization
16,834 14,196
5,541 4,761 General and
administrative
6,493 6,074
2,214 1,987 Provision for
tenant credit losses
738 594
212 235 Acquisition
costs
2,020 476
74 63 Directors' fees and expenses
261 243
70 71 Total Operating
Expenses
56,436
49,068
17,126
15,159
Operating Income 30,939 27,034
11,693 9,796
Non-Operating Income (Expense):
Interest expense
(10,111) (7,611)
(3,417) (2,602)
Equity in net income from unconsolidated joint ventures
1,414 1,096
467 291 Interest, dividends and other
investment income
185
78
42 9
Income From Continuing Operations Before Discontinued
Operations 22,427 20,597
8,785 7,494
Discontinued operations: Income from discontinued operations
- 141
- - Gain on sale of properties
- 12,525
- (87)
Income from discontinued
operations - 12,666
- (87)
Net
Income 22,427 33,263
8,785 7,407
Noncontrolling interests: Net income attributable to
noncontrolling interests
(728)
(455)
(344)
(151) Net income attributable to Urstadt Biddle Properties
Inc.
21,699 32,808
8,441 7,256 Preferred stock
dividends
(11,035)
(10,359)
(3,571)
(3,453)
Net Income Applicable to Common and Class A
Common Stockholders $ 10,664 $
22,449
$ 4,870 $
3,803
Diluted Earnings Per Share: Per Common
Share: Income from continuing operations
$ 0.28 $
0.28
$ 0.13 $ 0.11 Income from discontinued
operations
$ - $ 0.37
$ - $ -
Net Income
Applicable to Common Stockholders $
0.28 $ 0.65
$ 0.13
$ 0.11 Per Class A Common Share: Income from
continuing operations
$ 0.31 $ 0.31
$
0.14 $ 0.12 Income from discontinued operations
$
- $ 0.41
$
- $ -
Net Income Applicable to Class A
Common Stockholders $ .031 $
0.72
$ 0.14 $ 0.12
Weighted Average Shares Outstanding (Diluted): Common
8,702 8,497
8,752 8,606 Class A
Common
26,343
23,412 26,380
23,452
Results of Operations
The following information summarizes the Urstadt Biddle
Properties Inc. (the “Company’s”) results of operations for the
nine month and three month periods ended July 31, 2015 and 2014
(amounts in thousands):
Nine Months Ended
July
31,
Change Attributable
to:
Revenues
2015
2014
Increase(decrease)
%Change
PropertyAcquisitions/Sales
Properties HeldIn Both Periods(Note 1)
Base rents
$ 63,228 $ 55,708 $ 7,520 13.5 % $ 6,995 $
525 Recoveries from tenants
22,676 18,778 3,898 20.8 % 2,157
1,741 Other income
1,324 1,433 (109 ) -7.6 % 28 (137 )
Operating Expenses Property operating expenses
16,423 14,713 1,710 11.6 % 1,022 688 Property taxes
13,667 12,772 895 7.0 % 983 (88 ) Depreciation and
amortization
16,834 14,196 2,638 18.6 % 2,492 146 General
and administrative expenses
6,493 6,074 419 6.9 % n/a n/a
Other Income/Expenses Interest expense
10,111
7,611 2,500 32.8 % 2,616 (116 ) Interest, dividends and other
investment income
185 78 107 137.2 % n/a n/a
Note 1 – Properties held in both periods include only properties
owned for the entire periods of 2015 and 2014. All other properties
are included in the property acquisition/sales column. There are no
properties excluded from the analysis.
Three Months Ended
July
31,
Change Attributable
to:
Revenues
2015
2014
Increase(decrease)
%Change
PropertyAcquisitions
/Sales
Properties HeldIn Both Periods(Note 2)
Base rents $ 21,042 $ 18,714 $ 2,328 12.4 % $ 2,527 ($199 )
Recoveries from tenants 7,028 5,645 1,383 24.5 % 605 778 Other
income 646 465 181 38.9 % (14 ) 195
Operating
Expenses Property operating expenses 4,384 3,837 547 14.3 % 353
194 Property taxes 4,631 4,205 426 10.1 % 340 86 Depreciation and
amortization 5,541 4,761 780 16.4 % 981 (201 ) General and
administrative expenses 2,214 1,987 227 11.4 % n/a n/a
Other Income/Expenses Interest expense 3,417 2,602 815 31.3
% 901 (86 ) Interest, dividends and other investment income 42 9 33
367 % n/a n/a
Note 2 – Properties held in both periods include only properties
owned for the three month periods of 2014 and 2015. All other
properties are included in the property acquisition/sales column.
There are no properties excluded from the analysis.
Revenues:
Base rents increased by 13.5% to $63.2 million for the nine
month period ended July 31, 2015 as compared with $55.7 million in
the comparable period of 2014. Base rents increased by 12.4% to
$21.0 million for the three month period ended July 31, 2015 as
compared with $18.7 million in the comparable period of 2014. The
change in base rentals and the changes in other income statement
line items were attributable to:
Property Acquisitions/Sales:
In fiscal 2014 and the first nine months of fiscal 2015, the
Company purchased equity interests in twelve properties totaling
approximately 706,000 square feet of GLA and sold two properties
totaling 280,000 square feet of GLA, whose operating results are
included in continuing operations. These properties accounted for
all of the revenue and expense changes attributable to property
acquisitions and sales during the three and nine month periods
ended July 31, 2015. The Company also sold two properties in fiscal
2014 that are included in discontinued operations. The revenue and
expense changes for these two properties are not included in the
above variance analysis.
Properties Held in Both
Periods:
Revenues
Base rents increased during the nine month period ended July 31,
2015 by $525,000 when compared with the corresponding prior period
primarily as the result of an increase in base rents billed at two
properties for which the Company completed re-development and
re-tenanting after the first nine months of fiscal 2014. This
increase was offset by the loss of rent caused by the departure of
two large tenants in the Company’s Westchester Pavilion property
after January 31, 2015. The Company is in the process of
re-developing, or potentially selling this property and is allowing
the property to become vacant in order to accomplish either of
these scenarios. Base rents decreased during the three month period
ended July 31, 2015 by $199,000 when compared with the
corresponding prior period primarily as the result of two leases
expiring at the Company’s Westchester Pavilion property as
discussed above.
In the first nine months of fiscal 2015, the Company leased or
renewed 379,000 square feet (or approximately 8.95% of total
consolidated core property leasable area). At July 31, 2015, the
Company’s consolidated core properties were approximately 96.3%
leased (excluding the Westchester Pavilion), an increase of 1.45%
from the end of fiscal 2014. Overall core property occupancy
increased to 95.3% at July 31, 2015, up from 94.15% at the end of
fiscal 2014.
In the nine month and three month periods ended July 31, 2015,
recoveries from tenants for properties owned in both periods (which
represents reimbursements from tenants for operating expenses and
property taxes) increased by a net $1.7 million and $778,000,
respectively. This increase was a result of an increase in the
percentage of the portfolio that is leased, which allows the
Company to bill and collect a higher percentage of operating costs
from its tenants. This net increase was offset slightly by an
increase in operating expenses at our properties held in the nine
month and three month periods ended July 31, 2015. This operating
expense increase was predominantly the result of an increase in
snow removal costs and parking lot repairs.
Expenses
Property operating expenses for properties held in both periods
increased in the nine month and three month periods ended July 31,
2015 when compared with the corresponding prior periods by $688,000
and $194,000, respectively, as a result of an increase in expenses
relating to snow removal costs and parking lot repairs.
Real estate taxes for properties held in both periods were
relatively unchanged in the nine month and three month periods
ended July 31, 2015 when compared with the corresponding prior
periods as a result of normal property tax assessment increases at
a majority of the properties held in both periods offset by a
reduction in tax expense at the Company's Westchester Pavilion
property caused by a property tax assessment reduction.
Depreciation and amortization for properties held in both the
nine month and three month periods ended July 31, 2015 were
relatively unchanged when compared with the corresponding prior
periods.
General and administrative expense increased in the nine month
and three month periods ended July 31, 2015 when compared with the
corresponding prior periods by $419,000 and $227,000, respectively,
as a result of increased compensation expense for additional
staffing at the Company over the last quarter of fiscal 2014 and
the first three quarters of fiscal 2015.
Interest expense for properties owned in the nine month and
three month periods ended July 31, 2015 were relatively unchanged
when compared with the corresponding prior periods.
Non-GAAP Financial MeasureFunds from Operations
(“FFO”)
The Company considers FFO to be a meaningful additional measure
of operating performance primarily because it excludes the
assumption that the value of its real estate assets diminishes
predictably over time and industry analysts have accepted it as a
performance measure. FFO is presented to assist investors in
analyzing the performance of the Company. The Company reports FFO
in addition to net income applicable to common shareholders and net
cash provided by operating activities. FFO is helpful as it
excludes various items included in net income that are not
indicative of the Company’s operating performance, such as gains
(or losses) from sales of property and depreciation and
amortization. The Company has adopted the definition suggested by
the National Association of Real Estate Investment Trusts
(“NAREIT”). The Company defines FFO as net income computed in
accordance with generally accepted accounting principles (“GAAP”),
excluding gains (or losses) from sales of property plus real estate
related depreciation and amortization, and after adjustments for
unconsolidated joint ventures. FFO does not represent cash flows
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 the
Company’s operating performance or as an alternative to cash flow
as a measure of liquidity. Since all companies do not calculate FFO
in a similar fashion, the Company’s calculation of FFO presented
herein may not be comparable to similarly titled measures as
reported by other companies.
(TABLE FOLLOWS)
URSTADT BIDDLE PROPERTIES
INC. (NYSE: UBA AND UBP) FUNDS FROM OPERATIONS NINE
MONTHS AND THREE MONTHS ENDED JULY 31, 2015 AND 2014
(in thousands, except per share data)
Nine Months EndedJuly31,
Three Months EndedJuly 31,
2015
2014
2015
2014
Net Income Applicable to Common and Class A Common Stockholders
$ 10,664 $ 22,449
$ 4,870 $ 3,803
Real property depreciation
14,097 11,411
4,730
3,714 Amortization of tenant improvements and allowances
2,350 2,330
680 880 Amortization of deferred leasing
costs
332 402
111 150 Depreciation and amortization
on unconsolidated joint ventures
1,058 915
356 339
(Gain)/loss on sale of property
(123
)
(12,525
)
2
87
Funds from Operations Applicable to Common and Class A Common
Stockholders
$
28,378
$ 24,982
$ 10,749 $
8,973 Funds from Operations (Diluted) Per
Share: Common
$ .74
$ .72 $
.28 $ .26 Class A
Common
$ .83
$ .81 $
.32 $ .29
The following table reconciles the company’s net income
available to Common and Class A Common Stockholders to Funds From
Operations after removing excess preferred stock dividends and
acquisition costs for the nine months and three months ended July
31, 2015.
Reconciliation of Net Income Available to
Common and
Class A Common Stockholders To Recurring Funds
From Nine Months Ended Three Months Ended
Operations:
July 31,
July 31,
2015
2014
2015
2014
Net Income Applicable to Common and Class A Common Stockholders
$10,664 $22,449
$4,870 $3,803 Add: Acquisition costs
2,020 476
74 63 Add: Excess preferred stock dividends
(Note 1) 268 -
- - Net Income Applicable to
Common and Class A Common Stockholders
12,952 22,925
4,944 3,866 Real property depreciation
14,097
11,411
4,730 3,714 Amortization of tenant improvements and
allowances
2,350 2,330
680 880 Amortization of
deferred leasing costs
332 402
111 150 Depreciation
and amortization on unconsolidated joint ventures
1,058 915
356 339 (Gain)/loss on sale of asset
(123) (12,525)
2 87 Funds from Operations
Applicable to Common and Class A Common Stockholders
$30,666 $25,458
$10,823 $9,036 Funds
from Operations (Diluted) Per Share: Common
$.80 $.73 $.28
$.26 Class A Common
$.90
$.82 $.32 $.29
Note 1 – The Company sold preferred stock in
October and November of 2014 for the principal purpose of redeeming
its Series D preferred stock. The Company redeemed the Series D on
November 21, 2014. The Company incurred excess preferred stock
dividends of $268,000 in the first quarter of fiscal 2015 as a
result of having the new series of preferred stock outstanding
prior to being able to redeem the series D preferred stock.
URSTADT BIDDLE PROPERTIES INC. (NYSE: UBA AND UBP)
THIRD QUARTER JULY 31, 2015
(in thousands)
Balance Sheet Highlights
(in thousands) July 31, October
31,
2015
2014
(Unaudited)
Assets Cash and Cash Equivalents
$6,576 $73,029 Real
Estate investments before accumulated depreciation
$979,003 $830,304
Investments in and advances to unconsolidated joint ventures
$39,241 $39,213 Total
Assets $892,628 $819,005
Liabilities Revolving credit lines
$37,250 $15,550
Unsecured term loan $25,000
$25,000 Mortgage notes payable and other
loans $261,986 $205,147
Total Liabilities $348,493
$325,098 Redeemable Noncontrolling
Interests $15,602 $18,864
Total Stockholders’ Equity
$528,533 $475,043
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version on businesswire.com: http://www.businesswire.com/news/home/20150904005749/en/
Urstadt Biddle Properties Inc.Willing L. Biddle, CEOJohn T.
Hayes, CFO203-863-8200
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