Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today reported its operating results for
the quarter ended January 31, 2013.
Diluted Funds from Operations (FFO) for the first quarter of
fiscal 2013 was $3,701,000 or $0.12 per Class A Common share and
$0.11 per Common share, compared to $8,231,000 or $0.29 per Class A
Common share and $0.27 per Common share in last year’s first
quarter. FFO for the first quarter of fiscal 2013 includes
$4,235,000 (approximately $0.14 per Class A Common Share) in
incremental preferred stock dividends and one time non-recurring
charges related to the redemption of preferred stock. In an
effort to assist investors in analyzing changes to FFO, we have
included a second FFO reconciliation table located at the end of
this press release that explains the effect of these one time
charges on the company’s FFO and FFO per share in the first quarter
of fiscal 2013.
Net income (loss) applicable to Class A Common and Common
stockholders was $(706,000) or $(0.02) per diluted Class A Common
share and $(0.02) per diluted Common share in the first quarter of
fiscal 2013 compared to $3,764,000 or $0.13 per diluted Class A
Common share and $0.12 per diluted Common share in the same quarter
last year.
The per share amounts for both FFO and net income in the first
quarter of fiscal 2013 include the 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. 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 for the three months ended January 31,
2013 as a result of the October 2012 preferred offering, the
pricing of that offering will allow the company to save $1.375
million in annual preferred dividends in perpetuity upon full
redemption of the Series E and Series C preferred stock. Following
the stock offerings, the company elected to redeem the Series E
preferred stock in November 2012 at a make whole price of $1.8
million plus the $25 per share liquidation value and 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 plans on
redeeming the remaining Series C preferred stock in May 2013 at the
earliest date permissible. As a result of the redemption of the
Series E preferred stock, a portion of the Series C preferred stock
and the Company’s announced intention to redeem the remaining
outstanding shares of the Series C preferred stock, the company
incurred charges to expense the original issue costs of the Series
C and Series E preferred stock of $3.8 million of which $1.9
million was chargeable in the quarter ended January 31, 2013.
Base rental income (exclusive of a provision for tenant credit
losses and straight line rent) from properties owned in the three
months ended January 31, 2013 increased by $140,000 when compared
to the same properties owned in fiscal 2012. This resulted from
normal base rent increases for in-place leases at our existing
properties. Net operating income from properties owned in the three
months ended January 31, 2013, when compared to the same properties
owned in fiscal 2012, decreased by $160,000 as a result of
increased common area maintenance on some of our properties, not
all of which could be passed through to tenants. Properties
acquired in fiscal 2012 and the first quarter of fiscal 2013
increased base rental income and net operating income in the first
quarter of fiscal 2013 by $436,000 and $376,000, respectively. At
January 31, 2013 the percentage of the gross leasable area of the
core properties that was leased amounted to 89.6%, an increase of
0.4% from the end of fiscal 2012. Our leased percentage continues
to be negatively affected by five properties which are under
re-development. The re-development at these five properties ranges
from building re-configurations to accommodate tenants to
rebuilding facades and reconfiguring portions of the properties to
make the properties more marketable to new tenants. For
informational purposes, excluding these re-development properties
from our leased percentage calculation results in an occupancy rate
of 94% for the remaining 55 core properties. The company has five
equity investments in unconsolidated joint ventures (537,000 square
feet); at January 31, 2013 those properties were approximately 96%
leased.
Commenting on the quarter’s operating results, Willing L.
Biddle, President and Chief Operating Officer of UBP, said “In the
first quarter, we made progress investing our capital from recent
equity sales by acquiring equity interests in seven properties. We
purchased a 50% interest in a 76,000 square foot Fresh Market
grocery anchored center in Montvale, NJ and a 50% interest in a
24,000 square foot center in Spring Valley, NY. We also purchased
two office properties located in Bernardsville and Chester, NJ
which were part of a three building package. We expect to close on
the third property, a grocery anchored center located in NJ, within
45 days. We also purchased three free standing mature net leased
restaurant properties in our market during the quarter and are
in contract to purchase three more, which should close in the near
future. The decline in our Funds from Operations for the quarter
was expected due to increased preferred stock dividends related to
newly issued shares and charges related to the redemption of more
costly shares. At the end of fiscal 2012, the company completed two
successful public stock offerings. In early October the company
sold 2.5 million shares of Class A Common stock at a net price of
$19.16 per share, close to an all time high at the time, which
raised net proceeds of $48 million for the company. In late October
the company sold 5.175 million shares of a new series of perpetual
preferred stock with a 7.125% coupon rate, raising an additional
$125 million in net proceeds for the company. The 7.125% coupon on
the new preferred stock was the lowest perpetual preferred stock
coupon rate in the company’s history. In the fourth quarter of
fiscal 2012 the company used $18.2 million of the proceeds to
re-purchase and retire a portion of its Series C preferred stock
bearing an 8.5% coupon rate. Shortly following the end of the
fiscal year, an additional $62 million was utilized to redeem all
of the Series E preferred stock, also bearing a coupon rate of
8.5%. With the planned redemption of the remaining Series C stock
in May 2013, the company should realize annual savings of $1.375
million in preferred stock dividend payments beginning in June
2013. Both offerings were extremely well received by the investment
community and demand for the preferred stock offering significantly
exceeded supply.”
Mr. Biddle continued, “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 these properties, we
believe we have an effective strategy in place to improve each
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. 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, we are currently seeking zoning approval to construct and
operate a self storage facility in the newly vacant 89,000 sf
warehouse space at our Yorktown, NY property, which if approved,
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
60 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 173 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)
FIRST QUARTER 2013 RESULTS
(in thousands, except per share data)
Three Months Ended
January
31,
2013
2012
Revenues Base rents $17,088 $16,714 Recoveries from tenants
6,323 5,302 Lease termination income - 87 Other income
725
581
Total Revenues
24,136
22,684
Operating Expenses Property operating 5,258 3,719
Property taxes 3,808 3,752 Depreciation and amortization 4,155
4,212 General and administrative 2,152 1,947 Acquisition costs 153
85 Directors' fees and expenses
108
71
Total Operating Expenses
15,634
13,786
Operating Income 8,502 8,898
Non-Operating
Income (Expense): Interest expense (2,220) (2,035) Equity in
net income from unconsolidated joint ventures 182 26 Interest,
dividends and other investment income
732
225
Net Income 7,196 7,114
Noncontrolling
interests Net income attributable to noncontrolling interest
(182)
(77)
Net income attributable to Urstadt Biddle Properties Inc.
7,014 7,037 Preferred stock dividends (3,961) (3,273) Redemption of
preferred stock
(3,759)
-
Net Income (Loss) Applicable to Common and Class A Common
Stockholders $(706) $3,764
Diluted Earnings (Loss) Per Share: Common:
$(.02) $.12 Class A Common
$(.02) $.13 Dividends Per
Share: Common
$.2250 $.2250 Class A
Common
$.2500 $.2475 Weighted
Average Number of Shares Outstanding (Diluted): Common and
Common Equivalent
7,543 7,990 Class A
Common and Class A Common Equivalent
23,120
20,710
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
FIRST QUARTER 2013 RESULTS
(in thousands, except per share data)
Reconciliation of Net Income (Loss)
Available to Commonand Class A Common Stockholders To Funds
FromOperations:
Three Months Ended
January
31,
2013
2012 Net Income (loss) Applicable to Common and Class
A Common Stockholders
$(706) $3,764 Real property
depreciation
3,228 3,227 Amortization of tenant improvements
and allowances
800 847 Amortization of deferred leasing
costs
112 123 Depreciation and amortization on
unconsolidated joint ventures
188 270 Gain on sale of
property
79 - Funds from
Operations Applicable to Common and Class A Common Stockholders
$3,701 $8,231 Funds from
Operations (Diluted) Per Share: Common
$.11
$.27 Class A Common
$.12
$.29
The following table reconciles the company’s net income
(loss) available to Common and Class A Common Stockholder to Funds
From Operations after removing the first quarter preferred stock
redemption charges and excess preferred stock dividends (Note
1).
Reconciliation of Net Income (Loss)
Available to Commonand Class A Common Stockholders To
Recurring FundsFrom Operations:
Three Months Ended
January
31,
2013 2012 Net
Income (loss) Applicable to Common and Class A Common Stockholders
$(706) $3,764 Add: Redemption of preferred stock charges
3,759 - Add: Excess preferred stock dividends (Note 1)
476 - Net Income Applicable to
Common and Class A Common Stockholders
$3,529 $3,764
Real property depreciation
3,228 3,227 Amortization of
tenant improvements and allowances
800 847 Amortization of
deferred leasing costs
112 123 Depreciation and amortization
on unconsolidated joint ventures
188 270 Loss on sale of
property
79 - Funds from
Operations Applicable to Common and Class A Common Stockholders
$7,936 $8,231 Funds from
Operations (Diluted) Per Share: Common
$.23
$.27 Class A Common
$.26
$.29 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 but will not be able to redeem the
Series C until May of 2013. $22,000,000 of the amount raised from
the sale of the new preferred stock will be used to redeem the
remaining Series C preferred stock in May of 2013. Until this
redemption can take place the Company is incurring excess preferred
stock dividends of approximately $476,000 per quarter.
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
FIRST QUARTER 2013 RESULTS
(in thousands, except per share data)
Balance Sheet Highlights (in thousands)
January 31, October 31,
2013
2012
(Unaudited)
Assets
Real Estate investments before accumulated depreciation
$668,334 $660,375
Investments in and advances to unconsolidated joint ventures
$31,239 $26,708
Total Assets $651,971
$724,243
Liabilities
Revolving credit lines $-
$11,600 Mortgage notes payable and
other loans $142,502
$143,236 Total liabilities
$162,488 $228,304
Redeemable Preferred Stock $21,929
$21,510 Redeemable Noncontrolling
Interests $12,052
$11,421 Total Stockholders’
Equity $455,502
$463,008
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