Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today reported its operating results for
the period ended April 30, 2013.
Diluted Funds from Operations (FFO) for the quarter ended April
30, 2013 was $7,652,000 or $0.25 per Class A Common share and $0.22
per Common share, compared to $7,915,000 or $0.28 per Class A
Common share and $0.25 per Common share in last year’s second
quarter. For the first six months of fiscal 2013, diluted FFO
amounted to $11,353,000 or $0.37 per Class A Common share and $0.33
per Common share compared to $16,146,000 or $0.57 per Class A
Common share and $0.52 per Common share in the corresponding period
of fiscal 2012.
Net income (loss) applicable to Class A Common and Common
stockholders was $3,086,000 or $0.10 per diluted Class A Common
share and $0.09 per diluted Common share in the second quarter of
fiscal 2013 compared to $3,400,000 or $0.12 per diluted Class A
Common share and $0.11 per diluted Common share in the same quarter
last year. Net income applicable to Common and Class A Common
stockholders for the first six months of fiscal 2013 was $2,380,000
or $0.08 per diluted Class A Common share and $0.07 per diluted
Common share compared to $7,164,000 or $0.25 per diluted Class A
Common share and $0.23 per diluted Common share for the same period
last year.
The per share amounts for both FFO and net income in the three
and six month periods ended April 30, 2013 include the dilutive
effect of the company issuing 2.5 million Class A Common shares in
a follow-on public offering and issuing 5.175 million shares of a
new Series F Preferred Stock, both in October 2012. The common
stock offering raised net proceeds of $48 million and the preferred
stock offering an additional $125 million and these funds were not
fully invested until May of 2013. The primary purpose of the
preferred stock offering was to fund the future redemption of the
Series E and Series C preferred stock. Although the company
incurred an incremental $476,000 in preferred stock dividends in
each of the quarters ending January 31, 2013 and April 30, 2013 as
a result of the October 2012 preferred offering, the lower coupon
rate of that offering will save the company $1.375 million in
annual preferred dividends in perpetuity upon full redemption of
the Series E and Series C preferred stock. The company redeemed the
Series E preferred stock in November 2012 at a make whole price
$25.77 per share, which included a $0.77 per share make whole
premium of $1.8 million over the $25 per share liquidation
preference. In addition, the company also re-purchased
approximately 44% of the Series C preferred stock outstanding at a
slight premium, but for less than the cost of scheduled dividends
to the stated call date. The company redeemed the remaining Series
C preferred stock at $25 per share (par value) on May 29, 2013,
which was the earliest date permissible. As a result of the
redemption of the Series E preferred stock and the Series C
preferred stock, the company incurred charges to expense the
original issue costs of these preferred shares and the Series E
premium of $4.2 million, of which $3.8 million was chargeable in
the quarter ended January 31, 2013 and $405,000 was chargeable in
the quarter ended April 30, 2013. The Company will have one
remaining charge related to the Series C redemption in the amount
of $68,000 for the three month period ending July 31, 2013.
Base rental income (exclusive of a provision for tenant credit
losses and straight line rent) from properties owned in the three
month periods ended April 30, 2013 and 2012 was relatively
unchanged. For the six month period base rental income (exclusive
of a provision for tenant credit losses and straight line rent)
from these properties increased by $181,000 as a result of normal
base rental increases in the portfolio and new leasing in excess of
new vacancies. Net operating income from properties owned in the
three month and six month periods ended April 30, 2013 and 2012
decreased by $222,000 and $328,000, respectively, mostly as a
result of higher CAM costs at some of these properties, not all of
which is recoverable through billings to the tenants.
Base rental income and net operating income for the six months
ended April 30, 2013 from properties acquired in the second half of
fiscal 2012 and first half of fiscal 2013 increased by $938,000 and
$754,000, respectively. At April 30, 2013, the percentage of the
gross leasable area of the Company’s core properties that was
leased amounted to 90.78%, an increase of 1.61% from the end of
fiscal 2012 and up 1.2% from last quarter. The Company has 5 equity
investments in unconsolidated joint ventures (537,000 square feet);
at April 30, 2013, those properties were 96.01% leased.
Commenting on the quarter’s operating results, Willing L.
Biddle, President and Chief Operating Officer of UBP, said “In the
second quarter, we continued making progress investing our capital
from recent equity sales by acquiring equity interests in three
freestanding mature net leased restaurant properties in our market
for $3.0 million. Additionally, after quarter end we closed on a
$35 million 109,000 square foot grocery anchored shopping center
located in our core marketplace in New Providence, New Jersey; the
center is anchored by a 46,000 square foot A&P Fresh
supermarket. Also, subsequent to quarter end, we closed on an $18
million purchase of two retail properties located on U.S. Route 1
in Greenwich, CT. One property contains 10,000 square feet of GLA
and includes Cosi and JP Morgan Chase Bank and is shadow anchored
by a Stop & Shop grocery store, while the other property
contains 15,000 square feet of retail including Jos A. Bank and
other retailers that provide basic community necessities. The
decline in our Funds from Operations for both the quarter and first
half of the year was expected due to the payment of preferred stock
dividends during the period when both the newly issued Series F
preferred shares and the recently redeemed, and more costly, Series
C and E preferred shares were outstanding, and from charges related
to the redemption of the Series C and E shares. The Company made
the strategic decision to accept the higher short term expense in
order to lower its fixed charges significantly in perpetuity.”
Continuing, Mr. Biddle said, “the Company’s number one focus
remains leasing the vacant space in our portfolio. Overall, we feel
good about the direction of our leasing, although we do have five
properties where the leasing environment coming out of the
recession has been more challenging. For each of these properties,
we believe we have an effective strategy in place to improve the
property’s position in its local marketplace and, as a result, we
expect to be successful in leasing the vacant space at three of
those properties in fiscal 2013. In the second quarter we were able
to sign two substantial leases for our Meriden property, the first
with Fitness Edge, a regional quality health club, for 33,500 sf
and the second with PetSmart, for 13,000 sf. We are currently
exploring a zoning change at the fourth property which, if granted,
may significantly improve our ability to re-develop that center. In
addition, after quarter end, we received zoning approval to enable
us to construct and operate a self-storage facility in 89,000 sf of
warehouse space at the fifth property in Yorktown, NY property,
which should enable us to generate higher income than the former
warehouse use.”
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
66 properties containing approximately 5.1 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 174 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and raised its dividend to its shareholders for the last 19
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 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.
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)SIX MONTHS AND THREE MONTHS ENDED APRIL 30, 2013
AND 2012(in thousands, except per share data)
Six Months
Ended
Three Months
Ended
April
30,
April
30,
2013
2012
2013
2012
Revenues Base rents
$ 34,359 $ 33,857
$
17,271 $ 17,143 Recoveries from tenants
11,887 10,130
5,564 4,828 Lease termination income
24 87
24
- Other income
1,100
1,095
375
514
Total Revenues
47,370
45,169
23,234
22,485
Expenses Property operating
9,695 7,155
4,437 3,436 Property taxes
7,537 7,454
3,729
3,702 Depreciation and amortization
8,382 8,383
4,227
4,171 General and administrative
4,146 3,808
1,994
1,861 Acquisition Costs
278 310
125 225 Directors'
fees and expenses
180
140
72
69
Total Operating Expenses
30,218
27,250
14,584
13,464
Operating Income 17,152 17,919
8,650
9,021
Non-Operating Income (Expense): Interest expense
(4,243 ) (4,320 )
(2,023 ) (2,285 )
Equity in net income from unconsolidated joint ventures
601
(166 )
419 (192 ) Interest, dividends and other investment
income
1,242
449
510
224
Net Income 14,752 13,882
7,556 6,768
Noncontrolling interests: Net income attributable to
noncontrolling interests
(317
)
(171
)
(135
)
(94
)
Net income attributable to Urstadt Biddle Properties Inc.
14,435 13,711
7,421 6,674 Preferred stock dividends
(7,890 ) (6,547 )
(3,929 ) (3,274 )
Redemption of preferred stock
(4,165
)
-
(406
)
-
Net Income Applicable to Common and Class A Common
Stockholders $ 2,380
$ 7,164
$ 3,086
$ 3,400 Diluted Earnings
Per Share: Common
$ .07 $ .23
$ .09
$ .11 Class A Common
$ .08 $ .25
$ .10
$ .12
Dividends Per Share: Common
$ .4500
$ .4500 $
.2250 $ .2250
Class A Common
$
.5000 $ .4950
$ .2500
$ .2475 Weighted Average
Number of Shares Outstanding Common and Common Equivalent
8,317 8,113
8,411
8,237 Class A Common and Class A Common
Equivalent
23,328
20,748 23,367
20,786
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)SIX MONTHS AND THREE MONTHS ENDED APRIL 30, 2013
AND 2012(in thousands, except per share data)
Six Months EndedApril 30,
Three Months EndedApril 30,
2013
2012
2013
2012
Net Income Applicable to Common and Class
A CommonStockholders
$ 2,380 $ 7,164
$ 3,086 $ 3,400
Real property depreciation
6,507 6,509
3,279 3,282
Amortization of tenant improvements and allowances
1,612
1,595
812 748 Amortization of deferred leasing costs
229 251
117 128 Depreciation and amortization on
unconsolidated joint ventures
450 627
262 357 Loss on
sale of property
175
-
96
-
Funds from Operations Applicable to Common
and Class ACommon Stockholders
$ 11,353 $
16,146 $ 7,652
$ 7,915 Funds from Operations
(Diluted) Per Share: Common
$
0.33 $ 0.52
$ 0.22 $
0.25 Class A Common
$
0.37 $ 0.57
$ 0.25 $
0.28
The following table reconciles the company’s net income
(loss) available to Common and Class A Common Stockholders to Funds
From Operations after removing the preferred stock redemption
charges and excess preferred stock dividends for the six months and
three months ended April 30, 2013 (Note 1).
Reconciliation of Net Income (Loss)
Available to Common and Class A Common Stockholders To
Recurring Funds From Operations:
Six Months EndedApril 30,
Three Months EndedApril 30,
2013
2012
2013
2012
Net Income (loss) Applicable to Common and
Class A CommonStockholders
$ 2,380 $ 7,164
$ 3,086 $ 3,400 Add:
Redemption of preferred stock charges
4,165 -
406 -
Add: Excess preferred stock dividends (Note 1)
952
-
476
-
Net Income Applicable to Common and Class
A CommonStockholders
$ 7,497 $ 7,164
$ 3,968 $ 3,400
Real property depreciation
6,507 6,509
3,279 3,282
Amortization of tenant improvements and allowances
1,612
1,595
812 748 Amortization of deferred leasing costs
229 251
117 128 Depreciation and amortization on
unconsolidated joint ventures
450 627
262 357 Loss on
sale of property
175
-
96
-
Funds from Operations Applicable to Common
and Class ACommon Stockholders
$ 16,470 $
16,146 $ 8,534
$ 7,915 Funds from Operations
(Diluted) Per Share: Common
$
.48 $ .52
$ .25 $
.25 Class A Common
$
.53 $ .57
$ .28 $
.28
Note 1 – The Company sold preferred stock in October of 2012 for
the main purpose of redeeming its Series E and Series C preferred
stock. The company redeemed the Series E on November 21, 2012 and
redeemed the Series C on May 29, 2013. $22,000,000 of the amount
raised from the sale of the new preferred stock was used to redeem
the remaining Series C preferred stock in May of 2013. Until this
redemption was able to take place the Company incurred excess
preferred stock dividends in the first and second quarter of fiscal
2013 of approximately $476,000 per quarter.
Balance Sheet Highlights
(in thousands)
April 30,
October31,
2013 2012 (Unaudited)
Assets Real Estate investments before accumulated
depreciation $671,461 $660,375
Investments in and advances to unconsolidated joint
ventures $31,409 $26,708
Total Assets $646,691
$724,243 Liabilities Revolving credit
lines $- $11,600
Mortgage notes payable and other loans
$141,787 $143,236 Total
liabilities $181,941 $228,304
Redeemable Preferred Stock $-
$21,510 Redeemable Noncontrolling
Interests $12,987 $11,421
Total Stockholders’ Equity
$451,763 $463,008
Urstadt Biddle Properties Inc.Willing L. Biddle,
203-863-8200PresidentorJohn T. Hayes, 203-863-8200CFO
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