Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today announced its fourth quarter and
full year financial results for the fiscal year ended October 31,
2015. The company also announced an increase in the quarterly
dividend rate on its Common and Class A Common stock.
Diluted funds from operations ("FFO") for the quarter ended
October 31, 2015 amounted to $9,678,000 or $0.28 per Class A Common
share and $0.25 per Common share compared with $8,049,000 or $0.26
per Class A Common share and $0.23 per Common share in last year’s
fourth quarter. For the year ended October 31, 2015, diluted FFO
amounted to $38,056,000 or $1.12 per Class A Common share and $0.99
per Common share compared with $33,032,000 or $1.06 per Class A
Common share and $0.95 per Common share in 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 our adjusted diluted FFO for the
three month period ended October 31, 2015 was $9,726,000 or $0.29
per diluted Class A Common share and $0.25 per diluted
Common share compared with $10,109,000 or $0.32 per diluted
Class A Common share and $0.29 per diluted Common share
in last year’s fourth quarter. Our adjusted (recurring)
FFO for the year ended October 31, 2015 was $40,392,000 or $1.19
per diluted Class A Common share and $1.05 per diluted
Common share compared with $35,568,000 or $1.15 per diluted
Class A Common share and $1.02 per diluted Common share in
fiscal 2014.
Net income applicable to Class A Common and Common stockholders
for the quarter ended October 31, 2015 amounted to $23,995,000 or
$0.70 per diluted Class A Common share and $0.62 per diluted Common
share compared with $27,019,000 or $0.87 per diluted Class A Common
share and $0.77 per diluted Common share in last year’s fourth
quarter. For the year ended October 31, 2015, net income applicable
to Class A Common and Common stockholders was $34,659,000 or $1.02
per diluted Class A Common share and $0.90 per diluted Common share
compared to $49,469,000 or $1.59 per diluted Class A Common share
and $1.42 per diluted Common share in fiscal 2014.
The per share amounts for net income in fiscal 2015 reflect the
sale of the company’s Meriden, CT property from which it realized a
gain on sale of properties in the amount of $20.0 million. The per
share amounts for net income in fiscal 2014 reflect the sale of the
company’s Springfield, MA property from which it realized a gain on
sale of property in the amount of $24.3 million and the sale of the
company’s two non-core properties from which it realized a gain on
sale of properties in the amount of $12.5 million. In addition, the
per share amounts for both FFO and net income in fiscal 2015 and
2014 include one-time property acquisition costs of $2.1 million
and $666,000, respectively. The acquisition costs of $2.1 million
in 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 shares of Class A Common
stock in follow-on public offerings. The Series G preferred stock
was issued in October and early November 2014 and the Class A
Common stock was 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 stock
offering, was 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 in fiscal 2015 that will not be recurring.
At October 31, 2015, the company’s consolidated core properties
were 95.8% leased (versus 94.8% at the end of fiscal 2014) and
95.0% occupied (versus 94.2% at the end of fiscal 2014). 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
at this property to conform to certain closing conditions of the
sale. At October 31, 2015, the company had equity interests in
seven unconsolidated joint ventures (745,000 square feet), which
were approximately 98.1% leased (97.7% at October 31, 2014).
Commenting on the quarter’s operating results, Willing L.
Biddle, President and CEO of UBP, said "We continue to have strong
operating results, despite the company having largely vacated our
Westchester Pavilion property in order to ready it for sale. We
hope to soon complete this sale, enabling us to redeploy the
proceeds into grocery anchored shopping centers in our core
marketplace, which we expect will further improve our operating
results. On the leasing front, the leased rate of our core and
joint venture portfolios continues to strengthen and there is
strong tenant interest in a large portion of our remaining
vacancies. Our improving lease rate continues to have a direct
effect on our earnings and FFO. We continue to focus on growing our
portfolio of quality properties located in the suburbs surrounding
New York City. In fiscal 2015 we were able to acquire six grocery
or pharmacy anchored shopping centers in our core marketplace. In
addition to four centers in northern New Jersey that we purchased
in our first quarter, we acquired two additional properties in our
third and fourth quarters. One property, which we acquired for $4
million, is a 7,000 square foot property located in Fort Lee, NJ
net leased to HMART, a NY area Korean supermarket chain. The other
property, which we acquired for $10 million, is a 26,000 square
foot shopping center located close to the Harrison, NY Metro North
train station. The Harrison property’s anchor tenant at the time of
our acquisition was A&P which was in bankruptcy. Since our
acquisition, Key Food Stores purchased A&P’s lease as
expected and we are now actively working with Key Food on a
coordinated renovation of the property and its new store."
Mr. Biddle continued, "The A&P bankruptcy in July has been a
major focus of ours in the past few months. UBP had eight A&P
leases in its portfolio at the time of their bankruptcy and nine
leases after the purchase of the Harrison shopping center. Of the
nine A&P leases, five have been acquired directly from A&P
by either ACME or Key Food. Of the remaining four locations, UBP
was the successful bidder in a bankruptcy court lease auction for
two locations. Our goal was to recapture below market leases with
store fixtures so that we could potentially rent them to other
supermarket operators at higher rents. We are actively marketing
for lease both stores that we acquired and the two stores that
remain in A&P’s possession. In connection with ACME’s purchase
of A&P’s location in Eastchester, NY, we were able to negotiate
a rent increase in exchange for providing the tenant future options
to extend the lease. While we expect UBP will potentially receive
rent increases in some locations and potentially need to offer rent
concessions in other locations, we believe the overall outcome of
the A&P bankruptcy will be a net positive for UBP and will
result in an increase in net income and an improvement in the
quality of the supermarket anchor in the affected centers leading
to improved customer counts at those centers. One negative of the
A&P bankruptcy for the company was that we were forced to write
off about $313,000 in billed rents for two of the A&P leases in
our portfolio that were not assumed by new operators. This was the
main factor for the increase in our provision for tenant credit
losses in fiscal 2015 when compared with fiscal 2014.
On the dispositions front, we completed the sale of our Townline
Square shopping center in Meriden, CT in the fourth quarter of
fiscal 2015. The sale of Townline Square achieves the objective we
set approximately two years ago to divest 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, Wyckoff, Kinnelon, Midland Park, and Ft.
Lee, NJ, Greenwich, CT and Harrison, NY and also to reduce debt. We
now have a portfolio almost exclusively located in the suburbs
around New York City with an occupancy rate of 96% and a leverage
level that continues to be among the lowest in the REIT industry.
In addition, in the fourth quarter the company acted on its board
approved stock repurchase program and repurchased 188,753 shares of
the company’s Class A Common stock at an average price of $17.79
per share. We felt that price was a large discount to what we
believe to be the fair value of the stock and the purchase
represented a 6.7% return on our 2015 recurring FFO per share."
UBP Announces an Increase in Dividends to its Shareholders
for the Twenty-Second Consecutive Year
At their regular December meeting, the company’s Directors
approved an increase in the quarterly dividend rate on shares of
the company’s Class A Common stock and Common stock. The quarterly
dividend rate declared for Class A Common stock was increased to
$0.26 per share and the quarterly dividend rate declared for Common
stock was increased to $0.23 per Common share, which represents an
annualized increase of $0.02 per share for the both classes of
common stock. The $0.02 dividend increase on both the Class A
Common stock and Common stock represents the twenty-second
consecutive year that the company has increased total dividends to
its shareholders. The Class A Common and Common dividends are
payable January 15, 2016 to stockholders of record on January 5,
2016.
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 183 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and has raised total dividends to its shareholders for the last 22
consecutive years.
Non-GAAP Financial Measure
Funds from Operations ("FFO")
The company considers FFO to be a meaningful additional measure
of operating performance because it primarily 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 accounting principles generally accepted in the
United States of America ("U.S. 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 U.S. 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. The company also has presented an alternative
table of reconciliation between Net Income Available to Common and
Class A Common Stockholders to FFO, removing the effects of
preferred stock redemption costs, excess preferred stock dividends
and property acquisition costs from both fiscal 2014 and fiscal
2015 operating results.
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.
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
FISCAL YEAR AND FOURTH QUARTER 2015
RESULTS
(in thousands, except per share data)
Fiscal Year Ended Three Months
Ended October 31, October 31,
2015 2014
2015 2014 (Unaudited)
(Unaudited) (Unaudited)
Revenues Base rents
$
83,885 $ 75,099
$ 20,657 $ 19,391 Recoveries
from tenants
28,703 24,947
6,027 6,169 Lease
termination income
472 183
325 - Other income
2,252 2,099
928 666
Total Revenues
115,312
102,328
27,937 26,226
Expenses Property operating
21,267 18,926
4,844 4,213 Property taxes
18,224 16,997
4,557
4,225 Depreciation and amortization
22,435 19,249
5,601 5,053 General and administrative
8,576 8,016
2,083 1,942 Provision for tenant credit losses
1,271
917
533 323 Acquisition costs
2,068 666
48 190
Directors' fees and expenses
330
314 69
71 Total Operating Expenses
74,171 65,085
17,735 16,017
Operating Income 41,141 37,243
10,202
10,209
Non-Operating Income (Expense): Interest expense
(13,475 ) (10,235 )
(3,364 ) (2,624 )
Gain on sale of properties
20,377 24,345
20,377
24,345 Equity in net income from unconsolidated joint ventures
1,941 1,604
527 508 Interest, dividends and other
investment income
228
134 43
56 Income from Continuing Operations Before
Discontinued Operations 50,212 53,091
27,785
32,494
Discontinued Operations: Income from discontinued
operations
- 141
- -
Gain on sale of
properties -
12,526 -
- Income from discontinued
operations -
12,667 -
- Net Income 50,212 65,758
27,785 32,494
Noncontrolling interests: Net income
attributable to noncontrolling interests
(948 )
(607 ) (220
) (152 )
Net income attributable to Urstadt Biddle Properties Inc.
49,264 65,151
27,565 32,342 Preferred stock dividends
(14,605 ) (13,812 )
(3,570 ) (3,453 )
Redemption of preferred stock
-
(1,870 )
- (1,870
) Net Income Applicable to Common and Class A
Common Stockholders $
34,659 $
49,469 $
23,995 $
27,019 Diluted Earnings Per
Share: Per Common Share: Income from continuing operations
$ 0.90 $ 1.06
$ 0.62 $ 0.77 Income from
discontinued operations
$ -
$ 0.36
$ - $
- Net Income Applicable to Common
Stockholders $ 0.90
$ 1.42
$ 0.62
$ 0.77 Per Class A Common
Share: Income from continuing operations
$ 1.02 $
1.19
$ 0.70 $ 0.87 Income from discontinued
operations
$ -
$ 0.40 $
- $ -
Net Income Applicable to Class A Common Stockholders
$ 1.02
$ 1.59 $
0.70 $ 0.87
Weighted Average Number of Diluted Shares
Outstanding: Common and Common Equivalent
8,728 8,536
8,807 8,650
Class A Common and Class A Common Equivalent
26,332 23,427
26,284 23,472
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
FISCAL YEAR AND FOURTH QUARTER ENDED
2015 RESULTS
(in thousands, except per share data)
Reconciliation of Net Income Available to Common
and Class A Common Stockholders To Funds From Operations:
Fiscal Year Ended
October 31,
Three Months Ended
October 31,
2015 2014
2015 2014 Net Income
Applicable to Common and Class A Common Stockholders
$
34,659 $ 49,469
$ 23,995 $ 27,019 Real
property depreciation
18,750 15,361
4,653 3,950
Amortization of tenant improvements and allowances
3,161
3,298
811 968 Amortization of deferred leasing costs
449 520
117 118 Depreciation and amortization on
unconsolidated joint ventures
1,414 1,255
356 340
(Gain) on sale of property
(20,377
) (36,871 )
(20,254 )
(24,346 ) Funds from Operations
Applicable to Common and Class A Common Stockholders
$ 38,056
$ 33,032 $
9,678 $ 8,049
Funds from Operations (Diluted) Per Share:
Common
$ 0.99
$ 0.95 $
0.25 $ 0.23
Class A Common
$
1.12 $ 1.06
$ 0.28
$ 0.26
The following table reconciles the company’s net income
available to Common and Class A Common Stockholders to Funds From
Operations for the three months and fiscal year ended October 31,
2015 and 2014 after removing the excess preferred stock dividends,
preferred stock redemption charges and property acquisition costs.
(See Note 1).
Reconciliation of Net Income Available
to Common and Class A Common Stockholders To Recurring Funds From Operations:
Fiscal Year Ended
October 31,
Three Months Ended
October 31,
2015 2014
2015 2014 Net Income
Applicable to Common and Class A Common Stockholders
$
34,659 $ 49,469
$ 23,995 $ 27,019 Add:
Redemption of preferred stock charges
- 1,870
- 1,870
Add: Excess preferred stock dividends (Note 1)
268 -
- - Add: Property Acquisition Costs
2,068 666
48 190
Net Income Applicable to Common and Class A Common Stockholders
$ 36,995 52,005
$ 24,043 29,079
Real property depreciation
18,750 15,361
4,653 3,950
Amortization of tenant improvements and allowances
3,161
3,298
811 968 Amortization of deferred leasing costs
449 520
117 118 Depreciation and amortization on
unconsolidated joint ventures
1,414 1,255
356 340
(Gain) on sale of property
(20,377
) (36,871 )
(20,254 )
(24.346 ) Funds from Operations
Applicable to Common and Class A Common Stockholders
$ 40,392
$ 35,568 $
9,726 $ 10,109
Funds from Operations (Diluted) Per Share:
Common
$ 1.05
$ 1.02 $
.25 $ 0.29
Class A Common
$
1.19 $ 1.15
$ .29
$ 0.32
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. Balance Sheet
Highlights (in thousands) October
31, October 31,
2015 2014
(Unaudited)
Assets Cash and Cash Equivalents
$ 6,623 $
73,029 Real Estate investments before
accumulated depreciation $
941,690 $ 830,304
Investments in and advances to unconsolidated joint
ventures $ 39,305
$ 39,213 Total Assets
$ 861,075 $
819,005 Liabilities Revolving credit
lines $ 22,750
$ 15,550 Unsecured term
loan $ - $
25,000 Mortgage notes payable and other
loans $ 260,457
$ 205,147 Total Liabilities
$ 304,342 $
325,098 Redeemable Noncontrolling
Interests $ 15,955
$ 18,864 Preferred Stock
$ 204,375 $
199,375 Total Stockholders’ Equity
$ 540,778 $
475,043
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Urstadt Biddle Properties Inc.Willing L. Biddle, CEOorJohn T.
Hayes, CFO(203) 863-8200
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