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, 2014.
Diluted Funds from Operations (FFO) for the quarter ended July
31, 2014 was $8,973,000 or $0.29 per Class A Common share and $0.26
per Common share, compared to $9,052,000 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 2014, diluted FFO
amounted to $24,982,000 or $0.81 per Class A Common share and $0.72
per Common share compared to $20,405,000 or $0.66 per Class A
Common share and $0.59 per Common share in the corresponding period
of fiscal 2013. The above FFO amounts for fiscal 2013 include
several significant one-time items. 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 one-time items on the company’s FFO per
share.
Net income applicable to Class A Common and Common stockholders
for the third quarter of fiscal 2014 was $3,803,000 or $0.12 per
diluted Class A Common share and $0.11 per diluted Common share
compared to $4,241,000 or $0.14 per diluted Class A Common share
and $0.12 per diluted Common share in last year’s third quarter.
Net income applicable to Common and Class A Common stockholders for
the first nine months of fiscal 2014 was $22,449,000 or $0.72 per
diluted Class A Common share and $0.65 per diluted Common share
compared to $6,621,000 or $0.21 per diluted Class A Common share
and $0.19 per diluted Common share for the same period last year.
Net income applicable to Class A Common and Common stockholders for
the nine month period ended July 31, 2014 includes a $12.5 million
gain on sale of properties.
The per share amounts for both FFO and net income in the first
nine months of fiscal 2013 include the dilutive effect of the
issuance of 2.5 million Class A Common shares in a follow-on public
offering and 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 raised an
additional $125 million, which funds were not fully invested until
May 2013. With respect to those funds, $100 million of proceeds
from the preferred stock offering was used to redeem the Series E
preferred stock in November 2013 and the Series C preferred stock,
which was fully redeemed by May 2013. As a result of these
redemptions, the company incurred charges to expense the original
issue costs of the preferred stock of $68,000 in the third quarter
of fiscal 2013, $406,000 in the second quarter of fiscal 2013 and
$3.8 million in the first quarter of fiscal 2013. The first two
quarters of fiscal 2013 also included payment of $476,000 in
preferred stock dividends related to the Series C preferred stock
and the third quarter of fiscal 2013 included payment of $153,000
in preferred stock dividends related to the Series C preferred
stock, while the first three quarters of fiscal 2014 did not
include dividends on this preferred stock as all such shares were
redeemed by May of fiscal 2013. In addition, the per share amounts
for FFO and net income for the nine months ended July 31, 2014 and
2013 include one-time property acquisition costs of $476,000 and
$815,000, respectively.
At July 31, 2014, the Company’s consolidated core properties
were 91.2% leased, an increase of 1.0% from the end of fiscal 2013.
Overall consolidated core property occupancy increased to 88.6% at
July 31, 2014 from 86.8% at the end of fiscal 2013. The Company has
equity interests in seven unconsolidated joint ventures (730,000
square feet). At July 31, 2014, these joint ventures were
approximately 98.2% leased.
Commenting on the quarter’s operating results, Willing L.
Biddle, President and CEO of UBP, said “During our third quarter we
had continued success with one of the company’s most important
priorities which has been, and will continue to be, leasing the
remaining vacant space in our portfolio. This quarter we completed
170,400 square feet of new lease or renewal transactions which
increased our consolidated core portfolio leased rate to 91.2%, an
increase of 1.0% from the beginning of our fiscal year. Prior to
the third quarter, we completed the re-tenanting of nearly all of
the previously vacant space in our Meriden, CT shopping center and
we are working diligently to complete the re-development of the
Westchester Pavilion center in White Plains, NY, where we are
seeking a zoning change that will increase the permitted buildable
area to 860,000 square feet from the current 187,000 square feet.
The re-development of our Chilmark center in Briarcliff Manor, NY,
is nearing completion and we delivered a new 14,000 square foot
store to CVS on August 1. In addition, the redevelopment includes
construction of 3,000 square feet of new retail space, new building
façades, relocation of several existing tenants to newly built
store fronts, and the leveling and re-paving of the parking lots in
the shopping center. Once complete, this redevelopment will have
transformed one of our older looking shopping centers to a
contemporary property and provided the community and the consumer
with an easily accessible and attractive shopping destination.”
Continuing, Mr. Biddle said, “Although the competition for
retail properties in our primary marketplace remains extremely
competitive, we are fortunate that our pipeline for property
acquisitions remains active with grocery anchored retail properties
that meet our investment objectives. Shortly after quarter end, we
acquired two such properties in Greenwich, CT totaling 89,000
square feet, anchored by a King’s Supermarket and a CVS Pharmacy,
respectively. These two properties, coupled with more potential
acquisitions in our pipeline, will help us maintain the acquisition
momentum we have established in fiscal 2014 going into the fourth
quarter and early next year.”
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
67 properties containing approximately 5.0 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 179 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and has raised total dividends to its shareholders for the last 20
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 AND THREE MONTHS ENDED 2014 RESULTS
(UNAUDITED)(in thousands, except per share data)
Nine Months EndedJuly 31,
Three Months EndedJuly 31,
2014 2013
2014 2013
Revenues Base rents
$ 55,708 $ 51,947
$
18,714 $ 17,911 Recoveries from tenants
18,778 17,067
5,645 5,180 Lease termination income
183 148
131 124 Other income
1,433 1,720
465 620 Total Revenues
76,102
70,882
24,955 23,835
Expenses
Property operating
14,713 13,612
3,837 3,917 Property
taxes
12,772 11,548
4,205 4,011 Depreciation and
amortization
14,196 12,904
4,761 4,556 General and
administrative
6,074 6,245
1,987 2,099 Provision for
tenant credit losses
594 698
235 222 Acquisition
costs
476 815
63 537 Directors' fees and expenses
243 250
71 70 Total
Operating Expenses
49,068 46,072
15,159 15,412
Operating Income
27,034 24,810
9,796 8,423
Non-Operating
Income (Expense): Interest expense
(7,611) (6,774)
(2,602) (2,531) Gain on sale of marketable securities
- 1,460
- 1,460
Equity in net income from unconsolidated
jointventures
1,096 950
291 349 Interest, dividends and other
investment income
78 1,381
9
139
Income From Continuing Operations
Before Discontinued Operations
20,597 21,827
7,494 7,840
Discontinued
operations: Income from discontinued operations
141 990
- 225 Gain (loss) on sale of properties
12,525
-
(87) -
Income (loss) from
discontinued operations 12,666 990
(87) 225
Net Income 33,263
22,817
7,407 8,065
Noncontrolling interests:
Net income attributable to
noncontrollinginterests
(455) (467)
(151) (150)
Net income attributable to Urstadt
BiddleProperties Inc.
32,808 22,350
7,256 7,915 Preferred stock dividends
(10,359) (11,496)
(3,453) (3,606) Redemption of
preferred stock
- (4,233)
-
(68)
Net Income Applicable to Common and
Class A Common Stockholders
$ 22,449 $ 6,621
$ 3,803 $ 4,241
Diluted Earnings Per Share: Per Common Share: Income from
continuing operations
$ 0.28 $ 0.16
$
0.11 $ 0.11 Income from discontinued operations
$
0.37 $ 0.03
$ - $ 0.01
Net Income Applicable to Common
Stockholders
$ 0.65 $ 0.19
$ 0.11 $ 0.12 Per Class A
Common Share: Income from continuing operations
$
0.31 $ 0.18
$ 0.12 $ 0.13 Income from
discontinued operations
$ 0.41 $ 0.03
$
- $ 0.01
Net Income Applicable to Class A
Common Stockholders
$ 0.72 $ 0.21 $ 0.12
$ 0.14 Weighted Average Shares Outstanding
(Diluted): Common
8,497 8,364
8,606 8,454 Class A Common
23,412 23,347
23,452 23,383
Results of Operations
The following information summarizes the Company’s results of
operations for the nine month and three months periods ended July
31,
2014 and 2013 (amounts in thousands):
Nine Months
EndedJuly
31,
Change Attributable
to:
Revenues
2014
2013
Increase(decrease)
%Change
PropertyAcquisitions
Properties HeldIn Both Periods(Note 1)
Base rents $55,708 $51,947 $3,761 7.2% $3,534 $227 Recoveries from
tenants 18,778 17,067 1,711 10.0% 1,594 117 Other income 1,433
1,720 (287) -16.7% 35 (322)
Operating Expenses
Property operating expenses 14,713 13,612 1,101 8.1% 939 162
Property taxes 12,772 11,548 1,224 10.6% 838 386 Depreciation and
amortization 14,196 12,904 1,292 10.0% 1,153 139 General and
administrative expenses 6,074 6,245 (171) -2.7% n/a n/a
Other Income/Expenses Interest expense 7,611 6,774 837 12.4%
959 (122)
Interest, dividends and otherinvestment
income
78 1,381 (1,303) -94.4% n/a n/a
Note 1 – Properties held in both periods includes only
properties owned for the entire periods of 2014 and 2013. All other
properties are included in the property acquisition column. There
are no properties excluded from the analysis.
Three Months EndedJuly 31,
Change Attributable
to:
Revenues
2014
2013
Increase(decrease)
%Change
PropertyAcquisitions
Properties HeldIn Both Periods(Note 2)
Base rents $18,714 $17,911 $803 4.5% $777 $26 Recoveries from
tenants 5,645 5,180 465 9.0% 359 106 Other income 465 620 (155)
-25.0% 2 (157)
Operating Expenses Property operating
expenses 3,837 3,917 (80) -2.0% 190 (270) Property taxes 4,205
4,011 194 4.8% 176 18 Depreciation and amortization 4,761 4,556 205
4.5% 248 (43) General and administrative expenses 1,987 2,099 (112)
-5.3% n/a n/a
Other Income/Expenses Interest expense
2,602 2,531 71 2.8% 140 (69)
Interest, dividends and otherinvestment
income
9 139 (130) -93.5% n/a n/a
Note 2 – Properties held in both periods includes only
properties owned for the entire periods of 2014 and 2013. All other
properties are included in the property acquisition column. There
are no properties excluded from the analysis.
Revenues:
Base rents increased by 7.2% to $55.7 million for the nine month
period ended July 31, 2014 as compared with $51.9 million in the
comparable period of 2013. Base rents increased 4.5% to $18.7
million for the three months ended July 31, 2014 as compared with
$17.9 million in the comparable period of 2013. The change in base
rentals and the changes in other income statement line items were
attributable to:
Property Acquisitions:
In fiscal 2013 and the first nine months of fiscal 2014, the
Company purchased equity interests in fourteen properties totaling
approximately 327,000 square feet of GLA. These properties
accounted for all of the revenue and expense changes attributable
to property acquisitions during the nine month and three month
periods ended July 31, 2014. In addition, the Company purchased an
equity interest in two properties in the first nine months of
fiscal 2014 that are accounted for by the equity method of
accounting and are not consolidated into the financial statements
of the Company and as such are not included in any of the variance
analysis presented below.
Properties Held in Both
Periods:
Revenues
Base rents increased during the nine month and three month
periods ended July 31, 2014 by $227,000 and $26,000, respectively
when compared with the corresponding prior periods as the
percentage of the portfolio that was leased was increased slightly.
In the first nine months of fiscal 2014, the Company leased or
renewed 444,700 square feet (or approximately 10.35% of total
consolidated core property leasable area). At July 31, 2014, the
Company’s consolidated core properties were approximately 91.15%
leased, an increase of 1.04% from the end of fiscal 2013. Overall
core property occupancy increased to 88.56% at July 31, 2014 up
from 86.78% at the end of fiscal 2013.
In the nine month and three month periods ended July 31, 2014,
recoveries from tenants for properties owned in both periods (which
represents reimbursements from tenants for operating expenses and
property taxes) increased by a net $117,000 and $106,000,
respectively. This net increase was a result of higher operating
expenses at its properties held in the nine month period ended July
31, 2014 when compared to the corresponding prior period due
predominantly to an increase in expenses relating to parking lots,
building roofs, building repairs and snow removal. The increase in
the three month period ended July 31, 2014 when compared to the
corresponding prior period was a result of an increase in the
proportionate share of common area costs that the Company
anticipates it will recover tenants because the percentage of the
portfolio under lease increased in the third quarter of fiscal 2014
when compared with the third quarter of fiscal 2013.
Interest, dividends and other investment income decreased in the
nine month and three month periods ended July 31, 2014 when
compared to the corresponding prior periods by $1.3 million and
$130,000, respectively predominantly as a result of the Company
investing approximately $28 million of the proceeds from its two
equity offerings completed in October 2012 in income producing
securities in the first half of fiscal 2013. These securities were
sold in the third quarter of fiscal 2013.
Expenses
Property operating expenses for properties held in both periods
increased by $162,000 in the nine month period ended July 31, 2014
and decreased by $270,000 in the three month period ended July 31,
2014 when compared with the corresponding prior periods as a result
of an increase in expenses relating to parking lots, building
roofs, building repairs and snow removal cost in the nine month
period and a decrease in non-recoverable operating costs in the
three month period ended July 31, 2014 when compared with the prior
periods.
Real estate taxes for properties held in both periods increased
in the nine month and three month periods ended July 31, 2014 when
compared with the corresponding prior periods as a result of normal
tax assessment increases.
Interest expense for properties owned in the nine month and
three month periods ended July 31, 2014 was relatively unchanged as
a result of normal amortization of secured mortgages causing a
reduction in interest expense offset by an increase in the
outstanding mortgage principal balance in fiscal 2014 as a result
of mortgages assumed in property acquisitions in the first nine
months of fiscal 2014. In addition, interest expense increased as a
result of additional unsecured borrowing in the first nine months
of fiscal 2014 when compared to the first nine months of fiscal
2013.
Depreciation and amortization expense from properties held in
both periods was relatively unchanged.
General and administrative was relatively unchanged.
Non-GAAP Financial Measure
Funds 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)NINE MONTHS AND THREE MONTHS ENDED JULY 31, 2014
AND 2013 (UNAUDITED)(in thousands, except per share data)
Reconciliation of Net Income Available
to Commonand Class A Common Stockholders To FundsFrom
Operations (in thousands):
Nine Months EndedJuly 31,
Three Months EndedJuly 31,
2014
2013
2014
2013
Net Income Applicable to Common and Class
A CommonStockholders
$22,449 $6,621
$3,803 $4,241 Real property
depreciation
11,411 10,435
3,714 3,928 Amortization
of tenant improvements and allowances
2,330 2,065
880
469 Amortization of deferred leasing costs
402 351
150 140 Depreciation and amortization on discontinued
operations
- 47
- 13 Depreciation and amortization on
unconsolidated joint ventures
915 711
339 261
(Gain)/Loss on sale of property
(12,525)
175
87
-
Funds from Operations Applicable to Common
and Class ACommon Stockholders
$24,982
$20,405
$8,973
$9,052
Funds from Operations (Diluted) Per Share: Common
$.72
$.59
$.26
$.26
Class A Common
$.81
$.66
$.29
$.29
The following table reconciles the company’s net income
available to Common and Class A Common Stockholders to Funds From
Operations for the nine month and three months periods ended July
31, 2014 after removing the preferred stock redemption charges,
excess preferred stock dividends, property acquisitions costs and
gain on marketable securities. (See Note 1).
Reconciliation of Net Income Available
to Common and Class A Common Stockholders To Recurring Funds From Operations (in
thousands):
Nine Months Ended
July
31,
Three Months Ended
July
31,
2014
2013
2014
2013
Net Income (loss) Applicable to Common and
Class A CommonStockholders
$22,449 $6,621
$3,803 $4,241 Add: Redemption of
preferred stock charges
- 4,233
- 68 Add: Excess
preferred stock dividends (Note 1)
- 1,106
- 153 Add:
Property Acquisition Costs
476 815
63 537 Less: Gain
on marketable equity securities
-
(1,460)
-
(1,460)
Net Income Applicable to Common and Class
A CommonStockholders
$22,925 11,315
3,866 3,539 Real property
depreciation
11,411 10,435
3,714 3,928 Amortization
of tenant improvements and allowances
2,330 2,065
880
469 Amortization of deferred leasing costs
402 351
150 140 Depreciation and amortization on discontinued
operations
- 47
- 13 Depreciation and amortization on
unconsolidated joint ventures
915 711
339 261 Loss on
sale of property
(12,525)
175
87
-
Funds from Operations Applicable to Common
and Class A CommonStockholders
$25,458
$25,099 $9,036 $8,350
Funds from Operations (Diluted) Per Share: Common
$.73 $.73 $.26
$.24 Class A Common
$.82
$.81 $.29 $.27
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 preferred stock in various stages through May
of 2013. The company incurred excess preferred stock dividends of
approximately $476,000 in each of the first and second quarters of
fiscal 2013 and $153,000 in the third quarter of fiscal 2013 as a
result of having the new series of preferred stock outstanding
prior to being able to redeem the series C preferred stock.
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)BALANCE SHEET HIGHLIGHTS
July 31, October 31,
2014
2013
(Unaudited)
Assets
Cash and Cash Equivalents $3,291
$2,945
Real Estate investments before
accumulated depreciation
$780,353 $732,159
Investments in and advances to unconsolidated joint ventures
$39,248 $31,432 Total
Assets $695,675 $650,026
Liabilities
Revolving credit lines $37,600
$9,250 Mortgage notes payable and other
loans $178,953 $166,246
Total liabilities $236,283
$192,269 Redeemable Noncontrolling
Interests $12,188 $11,843
Total Stockholders’ Equity
$447,204 $445,914
Urstadt Biddle Properties Inc.Willing L. Biddle,
203-863-8200CEOorJohn T. Hayes, 203-863-8200CFO
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