BRT APARTMENTS CORP. (NYSE:BRT), a real estate investment trust
that owns, operates and develops multi-family properties today
announced its results of operations for the quarter and fiscal year
ended September 30, 2018.
This corrected press release
is issued to include the condensed consolidated statements of
operations for the three and twelve months ended September 30, 2018
and the related reconciliation of GAAP net income to FFO and
AFFO.
FISCAL FOURTH QUARTER AND YEAR-END 2018
HIGHLIGHTS:
- Grows rental and other revenues from real estate in the fourth
quarter of 2018 by 11.4% over the same period in 2017;
- Improves net income per diluted share to $1.61 in 2018, up 66%
from 2017;
- Increases annual FFO1 per diluted share to $1.03, or 53.7%,
from the prior year;
- Improves annual AFFO per diluted share to $0.97, or 10.2%, from
the prior year;
- Grows 2018 rental and other revenues by 13.8% over 2017 through
select acquisitions;
- Acquires six multi-family properties with 1,921 units for
$230.3 million in 2018;
- Sells three multi-family properties with 1,368 units for $170.5
million and a gain of $64.0 million – our share of this gain is
$36.4 million, after giving effect to $27.6 million allocated to
the non-controlling partners; and
- Buys out the interests of joint venture partners in two
properties for an aggregate purchase price of $5.2 million.
Jeffrey A. Gould, President and Chief Executive Officer of BRT
commented: “BRT completed a highly productive year that resulted in
meaningful year-over-year increases in FFO and AFFO. We
created value in 2018 through targeted property sales that
generated IRRs ranging from 15.7% to 25% and recycled our share of
the net sale proceeds into six value-add properties that we believe
have long-term growth potential. We expect to benefit in 2019
from our value-add program and the demographic and economic
tailwinds supporting rental housing. Given our extensive JV
relationships in high growth southern markets, we anticipate that
2019 will be another productive year in our efforts to generate
long-term stockholder value.”
Results for the Three Months Ended September 30,
2018:
Net loss attributable to common stockholders for the fourth
quarter of 2018 was $3.1 million, or $0.20 per diluted share,
compared to net income attributable to common stockholders of $5.5
million, or $0.39 per diluted share, for the 2017 period. Net
income for the 2017 quarter includes $16.8 million, or $1.19 per
diluted share, of gain on sale of real estate. The 2018
quarter includes an aggregate $1.3 million, or $0.08 per diluted
share, of gains from an insurance recovery and the sale of real
estate.
Funds from Operations, or FFO, were $4.1 million or $0.26 per
diluted share, in the fourth quarter of 2018, compared to $3.1
million, or $0.22 per diluted share, in the 2017 period. FFO for
the 2018 quarter includes $1.3 million, or $0.08 per diluted share,
from a gain on an insurance recovery. Adjusted Funds from
Operations, or AFFO, were $3.4 million, or $0.21 per diluted share,
in the fourth quarter of 2018, compared to AFFO of $3.9 million, or
$0.27 per diluted share, in the 2017 quarter.
1 A reconciliation of GAAP amounts to non-GAAP amounts is
presented with the financial information included in this
release.
Diluted per share net income, FFO and AFFO were impacted during
the quarter ended September 30, 2018 by the approximate 1,512,218
share increase in the weighted average number of shares of common
stock outstanding in 2018 due primarily to stock issuances pursuant
to the Company’s at-the-market offering program.
Rental and other revenues from real estate for the three months
ended September 30, 2018 grew 11.4% to $31.3 million from $28.1
million for the three months ended September 30, 2017. These
revenues increased primarily due to the operations of the
multi-family properties acquired in 2018 and 2017, net of such
revenues from properties sold in 2018. Total expenses for the
current three months increased to $37.0 million from $32.5 million
for the three months ended September 30, 2017, due primarily to
additional operating expenses, interest expense and depreciation
relating to multi-family properties acquired in 2018 and 2017, net
of such expenses from properties sold in 2018.
Results for the Year Ended September 30,
2018:
Net income attributable to common stockholders in 2018 was $23.8
million, or $1.61 per diluted share, compared to net income of
$13.6 million, or $0.97 per diluted share, in 2017. Net
income for 2018 includes $64.9 million, or $4.39 per diluted share,
of gain on sale of real estate and $4.5 million, or $0.30 per
diluted share, of gain on an insurance recovery. Net income
attributable to common stockholders in 2017 includes $52.6 million,
or $3.75 per diluted share, of gain on sale of real estate.
FFO was $15.2 million, or $1.03 per diluted share, in 2018,
compared to $9.3 million, or $0.67 per diluted share, in 2017.
FFO for 2018 includes the $4.5 million gain on an insurance
recovery. AFFO was $14.4 million, or $0.97 per diluted share,
in 2018, compared to $12.3 million, or $0.88 per diluted share, in
2017.
Diluted per share net income, FFO and AFFO were impacted during
the year ended September 30, 2018 by the approximate 761,555 share
increase in the weighted average number of shares of common stock
outstanding in 2018 due primarily to stock issuances pursuant to
BRT’s at-the-market offering program.
Rental and other revenues from real estate properties rose 13.8%
to $118.9 million from $104.5 million in 2017. The increase
is due primarily to the revenues generated by multi-family
properties acquired in 2018 and 2017, net of such revenues from
properties sold in 2018.Total expenses increased to $139.8 million
from $119.3 million in 2017, due primarily to additional operating
expenses, depreciation and interest expense related to the
multi-family properties acquired in 2018 and 2017, net of such
expenses from properties sold in 2018.
Transaction Activity:
The Company continued to actively manage its portfolio through
its opportunistic purchase and sale activities in 2018, completing
over $400 million in cumulative transactions. Acquisitions
contributed approximately $230.3 million of the total and
dispositions of multi-family properties totaling approximately
$170.5 million.
At September 30, 2018, BRT owned 36 multi-family properties with
an aggregate of 10,121 units, including 402 units under
development. Most of the Company’s properties are located in
the Southeast United States and Texas.
Balance Sheet:
At September 30, 2018, the Company had $27.4 million of cash and
cash equivalents, total assets of $1.15 billion, total debt of
$829.4 million and total stockholders’ equity of $198.0 million. At
November 30, 2018, the Company had approximately $21.6 million of
cash and cash equivalents. During the fiscal year, the
Company raised approximately $20.5 million of equity on its
“At-the-Market” equity sales program, selling 1,590,935 shares at a
weighted average share price of $13.15.
Subsequent Events:
On October 30, 2018, BRT, through a joint venture in which it
has a 90% ownership interest, purchased Crestmont at Thornblade, a
266-unit value-add multi-family property located in Greenville,
South Carolina, for $37.8 million, including a ten year, 4.69%
fixed rate mortgage of $26.4 million.
On November 7, 2018, the Company sold Factory at Garco Park, a
recently developed multi-family property located in N. Charleston,
South Carolina, for a sales price of $51.7 million. The
Company estimates that its share of the gain, which will be
recognized in the first quarter of fiscal 2019, will be
approximately $5.7 million, after giving effect to non-controlling
interests of $6.3 million.
We entered into a contract to sell Cedar Lakes--Lake St. Louis,
Missouri, for a sales price of $41.3 million. We anticipate that
such transaction will close in December 2018 and that if the
transaction closes, we will recognize, during the quarter ending
December 31, 2018, a gain on the sale of the property of
approximately $7.5 million, of which approximately $1.9 million
will be allocated to the non-controlling partner.
Supplemental Financial Information:
In an effort to enhance its financial disclosures to investors,
BRT has posted a supplemental financial information report which
can be accessed on the Company’s website at www.brtapartments.com
under the caption “Investor Relations – Financial Statements and
SEC Filings.”
Non-GAAP Financial Measures:
BRT discloses FFO and AFFO because it believes that such metrics
are widely recognized and appropriate measure of the performance of
an equity REIT.
BRT 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 (loss) (computed in
accordance with generally accepting accounting principles),
excluding gains (or losses) from sales of property, plus
depreciation and amortization, plus impairment write-downs of
depreciable real estate and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect funds
from operations on the same basis. In computing FFO, BRT does not
add back to net income the amortization of costs in connection with
its financing activities or depreciation of non-real estate assets.
BRT computes AFFO by adjusting FFO for loss on extinguishment of
debt, straight-line rent accruals, and restricted stock and
restricted stock unit expense and deferred mortgage costs
(including its share of its unconsolidated joint ventures) and gain
on insurance recovery. Since the NAREIT White Paper only
provides guidelines for computing FFO, the computation of AFFO may
vary from one REIT to another.
BRT 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 assures 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, BRT 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. BRT 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
operations as defined by GAAP. FFO and AFFO should not be
considered to be an alternative to net income as a reliable measure
of our operating performance; nor should FFO and AFFO be considered
an alternative to cash flows from operating, investing or financing
activities (as defined by GAAP) as measures of liquidity. FFO
and AFFO do not measure whether cash flow is sufficient to fund all
of our cash needs, including principal amortization and capital
improvements.
Management recognizes that there are limitations in the use of
FFO and AFFO. In evaluating BRT’s performance, management is
careful to examine GAAP measures such as net income (loss) and cash
flows from operating, investing and financing activities.
Management also reviews the reconciliation of net income (loss) to
FFO and AFFO.
Forward Looking Information:
Certain information contained herein is forward looking within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. BRT intends such forward looking statements to be
covered by the safe harbor provisions for forward looking
statements contained in the Private Securities Litigation Reform
Act of 1995 and includes this statement for purposes of complying
with these safe harbor provisions. Forward-looking
statements, which are based on certain assumptions and describe our
future plans, strategies and expectations, are generally
identifiable by use of the words “may,” “will,” “believe,”
“expect,” “intend,” “anticipate,” “estimate,” “project,”
“apparent,” “experiencing” or similar expressions or variations
thereof. Forward looking statements, including statements
with respect to BRT’s multi-family property acquisition and
ownership activities, involve known and unknown risks,
uncertainties and other factors, which, in some cases, are beyond
BRT’s control and could materially affect actual results,
performance or achievements. Investors are cautioned not to
place undue reliance on any forward-looking statements and to
carefully review the section entitled “Item 1A. Risk Factors” in
our Annual Report on Form 10-K for the year ended September 30,
2018.
Additional information:
BRT is a real estate investment trust that owns, operates and
develops multi-family properties. Interested parties are urged to
review the Form 10-K filed with the Securities and Exchange
Commission for the year ended September 30, 2018 for further
details. The Form 10-K can also be linked through the “Investor
Relations” section of BRT’s website. For additional information on
BRT’s operations, activities and properties, please visit its
website at www.brtapartments.com.
Contact: Investor Relations
BRT APARTMENTS CORP.60 Cutter
Mill RoadSuite 303Great Neck, New York 11021Telephone (516)
466-3100Telecopier (516) 466-3132www.brtapartments.com
|
BRT APARTMENTS CORP. AND
SUBSIDIARIESCONDENSED BALANCE
SHEETS(Dollars in thousands) |
|
|
September 30,2018 |
|
September 30,2017 |
ASSETS |
|
|
|
Real estate properties,
net of accumulated depreciation |
$ |
1,020,874 |
|
$ |
902,281 |
Real estate loan |
4,900 |
|
5,500 |
Cash and cash
equivalents |
27,360 |
|
12,383 |
Restricted cash |
6,686 |
|
6,151 |
Other assets |
54,616 |
|
58,613 |
Real estate properties
held for sale |
38,928 |
|
8,969 |
Total
Assets |
$ |
1,153,364 |
|
$ |
993,897 |
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Mortgages payable, net
of deferred costs |
$ |
792,432 |
|
$ |
697,826 |
Junior subordinated
notes, net of deferred costs |
37,038 |
|
37,018 |
Accounts payable and
accrued liabilities |
27,409 |
|
22,348 |
Total
Liabilities |
856,879 |
|
757,192 |
|
|
|
|
Total BRT Apartments
Corp. stockholders’ equity |
197,987 |
|
165,996 |
Non-controlling
interests |
98,498 |
|
70,709 |
Total Equity |
296,485 |
|
236,705 |
Total
Liabilities and Equity |
$ |
1,153,364 |
|
$ |
993,897 |
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Twelve Months Ended September 30, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Rental
and other revenue from real estate |
|
$ |
31,283 |
|
|
$ |
28,073 |
|
|
$ |
118,872 |
|
|
$ |
104,477 |
|
|
Other
income |
|
|
198 |
|
|
|
314 |
|
|
|
763 |
|
|
|
1,294 |
|
|
Total
revenues |
|
|
31,481 |
|
|
|
28,387 |
|
|
|
119,635 |
|
|
|
105,771 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
Real
estate operating expenses |
|
|
15,661 |
|
|
|
13,641 |
|
|
|
57,665 |
|
|
|
51,279 |
|
|
Interest
expense |
|
|
8,966 |
|
|
|
7,902 |
|
|
|
34,389 |
|
|
|
28,171 |
|
|
General
and administrative |
|
|
2,002 |
|
|
|
2,100 |
|
|
|
9,210 |
|
|
|
9,396 |
|
|
Depreciation |
|
|
10,416 |
|
|
|
8,861 |
|
|
|
38,504 |
|
|
|
30,491 |
|
|
Total
expenses |
|
|
37,045 |
|
|
|
32,504 |
|
|
|
139,768 |
|
|
|
119,337 |
|
|
Total
revenues less total expenses |
|
|
(5,564 |
) |
|
|
(4,117 |
) |
|
|
(20,133 |
) |
|
|
(13,566 |
) |
|
Equity in
loss of unconsolidated joint ventures |
|
|
(173 |
) |
|
|
(77 |
) |
|
|
(388 |
) |
|
|
(384 |
) |
|
Gain on sale of real estate |
|
|
424 |
|
|
|
16,763 |
|
|
|
64,924 |
|
|
|
52,601 |
|
|
Gain on insurance recovery |
|
|
1,271 |
|
|
|
- |
|
|
|
4,498 |
|
|
|
- |
|
|
Loss on
extinguishment of debt |
|
|
- |
|
|
|
(664 |
) |
|
|
(850 |
) |
|
|
(1,463 |
) |
|
(Loss)
income from continuing operations |
|
|
(4,042 |
) |
|
|
11,905 |
|
|
|
48,051 |
|
|
|
37,188 |
|
|
Provision for taxes |
|
|
96 |
|
|
|
61 |
|
|
|
50 |
|
|
|
1,560 |
|
|
Net (loss) income |
|
|
(4,138 |
) |
|
|
11,844 |
|
|
|
48,001 |
|
|
|
35,628 |
|
|
Loss (income)
attributable to non-controlling interests |
|
|
1,027 |
|
|
|
(6,383 |
) |
|
|
(24,228 |
) |
|
|
(22,028 |
) |
|
Net (loss) income
attributable to common stockholders |
|
$ |
(3,111 |
) |
|
$ |
5,461 |
|
|
$ |
23,773 |
|
|
$ |
13,600 |
|
|
|
|
|
|
|
|
|
|
|
|
Per share amounts
attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.20 |
) |
|
$ |
0.39 |
|
|
$ |
1.63 |
|
|
$ |
0.97 |
|
|
Diluted |
|
$ |
(0.20 |
) |
|
$ |
0.39 |
|
|
$ |
1.61 |
|
|
$ |
0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations -
Note 1 |
|
$ |
4,080 |
|
|
$ |
3,080 |
|
|
$ |
15,189 |
|
|
$ |
9,349 |
|
|
Funds from operations
per common share - diluted - Note 2 |
|
$ |
0.26 |
|
|
$ |
0.22 |
|
|
$ |
1.03 |
|
|
$ |
0.67 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted funds from
operations - Note 1 |
|
$ |
3,360 |
|
|
$ |
3,880 |
|
|
$ |
14,390 |
|
|
$ |
12,298 |
|
|
Adjusted funds from
operations per common share - diluted -Note 2 |
|
$ |
0.21 |
|
|
$ |
0.27 |
|
|
$ |
0.97 |
|
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
15,635,953 |
|
|
|
14,023,735 |
|
|
|
14,580,398 |
|
|
|
13,993,638 |
|
|
Diluted |
|
|
15,635,953 |
|
|
|
14,123,735 |
|
|
|
14,780,398 |
|
|
|
14,018,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRT APARTMENTS CORP. AND
SUBSIDIARIES |
|
(Dollars in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
Note 1: |
|
|
|
|
|
|
|
|
|
Funds from operations
is summarized in the following table: |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders |
|
$ |
(3,111 |
) |
|
$ |
5,461 |
|
|
$ |
23,773 |
|
|
$ |
13,600 |
|
|
Add: depreciation of
properties |
|
|
10,416 |
|
|
|
8,861 |
|
|
|
38,504 |
|
|
|
30,491 |
|
|
Add: our share of
depreciation in unconsolidated joint ventures |
|
|
386 |
|
|
|
216 |
|
|
|
1,587 |
|
|
|
737 |
|
|
Add: amortization of
deferred leasing costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Deduct: gain on sales
of real estate and partnership interests |
|
|
(424 |
) |
|
|
(16,763 |
) |
|
|
(64,924 |
) |
|
|
(52,601 |
) |
|
Adjustment for
non-controlling interests |
|
|
(3,187 |
) |
|
|
5,305 |
|
|
|
16,249 |
|
|
|
17,122 |
|
|
NAREIT Funds
from operations attributable to common stockholders |
|
|
4,080 |
|
|
|
3,080 |
|
|
|
15,189 |
|
|
|
9,349 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjust for:
straight-line rent accruals |
|
|
(10 |
) |
|
|
(10 |
) |
|
|
(40 |
) |
|
|
(56 |
) |
|
Add: loss on
extinguishment of debt |
|
|
- |
|
|
|
664 |
|
|
|
850 |
|
|
|
1,463 |
|
|
Add: amortization of
restricted stock and RSU expense |
|
|
15 |
|
|
|
155 |
|
|
|
988 |
|
|
|
1,218 |
|
|
Add: amortization of
deferred mortgage and debt costs |
|
|
297 |
|
|
|
370 |
|
|
|
1,432 |
|
|
|
1,244 |
|
|
Deduct: gain on
insurance recovery |
|
|
(1,271 |
) |
|
|
- |
|
|
|
(4,498 |
) |
|
|
- |
|
|
Adjustment for
non-controlling interests |
|
|
249 |
|
|
|
(379 |
) |
|
|
469 |
|
|
|
(920 |
) |
|
Adjusted funds
from operations attributable to common shareholders |
|
$ |
3,360 |
|
|
$ |
3,880 |
|
|
$ |
14,390 |
|
|
$ |
12,298 |
|
|
|
|
|
|
|
|
|
|
|
|
Note 2: |
|
|
|
|
|
|
|
|
|
Funds from
operations per share is summarized in the following table: |
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders |
|
$ |
(0.20 |
) |
|
$ |
0.39 |
|
|
$ |
1.61 |
|
|
$ |
0.97 |
|
|
Add: depreciation of
properties |
|
|
0.67 |
|
|
|
0.62 |
|
|
|
2.60 |
|
|
|
2.18 |
|
|
Add: our share of
depreciation in unconsolidated joint ventures |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.11 |
|
|
|
0.05 |
|
|
Add: amortization of
deferred leasing costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Deduct: gain on sales
of real estate and partnership interests |
|
|
(0.03 |
) |
|
|
(1.19 |
) |
|
|
(4.39 |
) |
|
|
(3.75 |
) |
|
Adjustment for
non-controlling interests |
|
|
(0.20 |
) |
|
|
0.38 |
|
|
|
1.10 |
|
|
|
1.22 |
|
|
NAREIT Funds from operations per diluted common
share |
|
|
0.26 |
|
|
|
0.22 |
|
|
|
1.03 |
|
|
|
0.67 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for:
straight-line rent accruals |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Add: loss on
extinguishment of debt |
|
|
- |
|
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.10 |
|
|
Add: amortization of
restricted stock and RSU expense |
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
0.05 |
|
|
|
0.09 |
|
|
Add: amortization of
deferred mortgage and debt costs |
|
|
0.02 |
|
|
|
0.03 |
|
|
|
0.10 |
|
|
|
0.09 |
|
|
Deduct: gain on
insurance recovery |
|
|
(0.08 |
) |
|
|
- |
|
|
|
(0.30 |
) |
|
|
- |
|
|
Adjustment for
non-controlling interests |
|
|
0.02 |
|
|
|
(0.03 |
) |
|
|
0.03 |
|
|
|
(0.07 |
) |
|
Adjusted funds from operations per diluted common
share |
|
$ |
0.21 |
|
|
$ |
0.27 |
|
|
$ |
0.97 |
|
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
BRT Apartments (NYSE:BRT)
Historical Stock Chart
From Apr 2024 to May 2024
BRT Apartments (NYSE:BRT)
Historical Stock Chart
From May 2023 to May 2024