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,
2017.
Net income applicable to Class A Common and Common stockholders
for the quarter ended October 31, 2017 amounted to $324,000, or
$0.01 per diluted Class A Common share and $0.01 per diluted Common
share, compared to $6,750,000, or $0.18 per diluted Class A Common
share and $0.16 per diluted Common share in last year’s fourth
quarter. For the year ended October 31, 2017, net income applicable
to Class A Common and Common stockholders was $33,898,000, or $0.90
per diluted Class A Common share and $0.80 per diluted Common
share, compared to $19,436,000, or $0.56 per diluted Class A Common
share and $0.49 per diluted Common share in fiscal 2016. Net income
applicable to Class A Common and Common stockholders for the year
ended October 31, 2017 includes a net gain on sale of properties of
$18.7 million. Net income applicable to Class A Common and Common
stockholders for both the fourth quarter and year ended October 31,
2017 was reduced by $4.1 million of preferred stock redemption
charges related to the company redeeming its 7.125% Series F
Cumulative Redeemable Preferred Stock (the “Series F preferred
stock”) on October 24, 2017. The company replaced the Series F
preferred stock with a less expensive new series of preferred stock
that was issued in September 2017. The new lower yield 6.250%
Series H Cumulative Preferred Stock (the “Series H preferred
stock”) will save the company $1 million per annum in preferred
stock dividends. In addition, the company will save $1 million more
in preferred stock dividends per annum as the dollar amount of the
outstanding Series H preferred stock is $14.4 million less than the
redeemed Series F preferred stock.
Funds from operations (“FFO”) for the quarter ended October 31,
2017 was $7,819,000, or $0.21 per diluted Class A Common share and
$0.18 per diluted Common share, compared with $13,331,000, or $0.36
per diluted Class A Common share and $0.31 per diluted Common share
in last year’s fourth quarter. For the year ended October 31, 2017,
FFO amounted to $43,203,000, or $1.15 per diluted Class A Common
share and $1.02 per diluted Common share, compared to $43,603,000,
or $1.25 per diluted Class A Common share and $1.10 per diluted
Common share in the corresponding period of fiscal 2016. FFO for
both the fourth quarter and year ended October 31, 2017 is reduced
by the $4.1 million in preferred stock redemption charges related
to the company redeeming its Series F preferred Stock on October
24, 2017 as discussed in the preceding paragraph.
At October 31, 2017, the company’s consolidated properties were
92.7% leased (versus 93.3% at the end of fiscal 2016) and 91.0%
occupied (versus 92.8% at the end of fiscal 2016).
Both the percentage of property leased and the percentage of
property occupied referenced in the preceding paragraph exclude the
company’s unconsolidated joint ventures. At October 31, 2017, the
company had equity interests in seven unconsolidated joint ventures
(753,000 square feet), which were 97.7% leased (versus 98.4% at the
end of fiscal 2016).
Commenting on the quarter’s operating results, Willing L.
Biddle, President and CEO of Urstadt Biddle Properties Inc., said,
“We had another strong operating quarter in the fourth quarter of
2017. Although our FFO is down when compared with the fourth
quarter of fiscal 2016, there were one-time charges in each of
those fourth quarters that skew the results. In the fourth quarter
of fiscal 2017, we completed a very successful financing
transaction redeeming our higher yielding Series F preferred stock
with a lower yielding and lower principal balance Series H
preferred stock, which will save the company over $2 million per
annum in preferred stock dividends. However, as a result of the
Series F preferred stock redemption, we had to take a $4.1 million
charge in the fiscal 2017 fourth quarter to record the original
issue costs associated with issuing our Series F preferred stock in
fiscal 2012. This decrease in FFO in fiscal 2017 was partially
offset by an increase in FFO caused by the operating results
attributable to the acquisitions we made in the last half of 2016
and fiscal 2017, and the interest expense savings from the
refinancing of our $44 million mortgage in July 2017, which is
secured by our largest property, Ridgeway, located in Stamford, CT.
The refinancing reduced the interest rate on that mortgage from
5.52% per annum to 3.398% per annum. Last year’s fourth quarter FFO
included a one-time increase in the amount of $2.9 million related
to closing extension fees we received from the purchaser for
extending the sale of our White Plains, NY property, which sale
closed in March 2017.”
Mr. Biddle continued……“As previously announced, in August 2017,
we were able to acquire another quality property by purchasing a
31% equity interest in a new DownReit entity that was formed to own
the Washington Commons Shopping Center located in Dumont, NJ.
Washington Commons is a 72,000 square foot, grocery-anchored
mixed-use property consisting of two buildings. One building
contains a free-standing 44,300 square foot Stop & Shop and
adjacent strip of stores. The second building is a three-story
retail and multi-family building occupied by Valley Medical Group,
Great Clips, Pet Valu, Blimpie and 26 residential apartments. The
property is currently 100% leased. All retail tenants, except for
Great Clips, have been in occupancy since 1997, and the grocery
store is one of Stop & Shop’s best performing stores in New
Jersey. We continue to monitor the impact that e-commerce is having
on the retail industry and its associated effects on the commercial
real estate industry, but we are confident that we continue to have
a good strategy. We believe that because consumers prefer to
purchase food and certain other staple goods and services in
person, the nature of our properties makes them less vulnerable to
the encroachment of e-commerce than other properties whose tenants
may more directly compete with internet retailers. We also believe
the nature of our properties makes them less susceptible to
economic downturns than other retail properties whose anchor
tenants are not supermarkets or other staple goods providers. We
have been and continue to be cognizant of our tenant mix in our
shopping centers and when feasible, we actively work to place
tenants that are less susceptible to internet encroachment, such as
restaurants, fitness centers, healthcare and personal
services.”
UBP Announces an Increase in Dividends to its Shareholders
for the Twenty-Fourth 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
$0.27 per share and the quarterly dividend rate declared for Common
stock was increased to $0.24 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-fourth
consecutive year that the company has increased total dividends to
its shareholders. The Class A Common and Common dividends are
payable January 19, 2018 to stockholders of record on January 5,
2018.
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
81 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 191 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and has raised total dividends to its shareholders for the last 24
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.
URSTADT BIDDLE PROPERTIES INC. (NYSE: UBA AND UBP)
YEAR ENDED OCTOBER 31, 2017 AND 2016 RESULTS
(in thousands, except per share data)
Year
Ended
Three Months
Ended
October
31,
October
31,
2017
2016
2017
2016
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Revenues Base rents
$88,383 $87,172
$23,520 $23,997 Recoveries from tenants
28,676
25,788 7,697 7,045 Lease termination income
2,432 619 - 239 Mortgage interest and
other
4,069 3,213
1,096 618 Total Revenues
123,560 116,792
32,313 31,899
Operating Expenses Property operating
20,074
18,717 5,439 4,947 Property taxes
19,621 18,548 5,145 4,808 Depreciation
and amortization
26,512 23,025 7,070
6,223 General and administrative
9,183 9,284
2,290 2,144 Provision for tenant credit losses
583 1,161 154 326 Acquisition costs
- 412 - 207 Directors' fees and
expenses
321 318
81 83 Total Operating
Expenses
76,294 71,465
20,179 18,738 Operating
Income 47,266 45,327 12,134 13,161
Non-Operating Income (Expense): Interest expense
(12,981) (12,983) (3,181) (3,232)
Equity in net income from unconsolidated joint ventures
2,057 2,019 579 535 Interest, dividends
and other investment income
356
242 202
86 Income Before Gain/(loss) on Sale of
Properties 36,698 34,605 9,734
10,550 Gain/(loss) on sale of properties
18,734 -
(38) - Net Income
55,432 34,605 9,696 10,550
Noncontrolling interests: Net income attributable to
noncontrolling interests
(2,499)
(889) (1,048)
(230) Net income attributable to Urstadt Biddle
Properties Inc.
52,933 33,716 8,648
10,320 Preferred stock dividends
(14,960)
(14,280) (4,249) (3,570) Redemption of
preferred stock
(4,075) -
(4,075) - Net Income
Applicable to Common and Class A Common Stockholders
$33,898 $19,436
$324 $6,750
Diluted Earnings Per Share: Per Common Share:
$0.80 $0.49
$0.01 $0.16 Per Class A
Common Share:
$0.90 $0.56
$0.01 $0.18
Weighted Average Number of Shares Outstanding (Diluted):
Common and Common Equivalent
9,026
8,910 9,110
9,000 Class A Common and Class A Common
Equivalent
29,503 27,112
29,547 29,486
Results of Operations
The following information summarizes the Company's results of
operations for the years ended October 31, 2017 and 2016 (amounts
in thousands):
Year Ended October31,
Change Attributable to
Revenues 2017 2016
Increase(Decrease)
%Change
PropertyAcquisitions/Sales
Properties Held In BothPeriods (Note
1)
Base rents
$88,383 $87,172 $1,211 1.4% $1,539
$(328) Recoveries from tenants
28,676 25,788
2,888 11.2% 1,950 938 Other income
4,069 3,213 856 26.6% 155
701
Operating Expenses Property operating
20,074 18,717 1,357 7.3% 720 637 Property taxes
19,621 18,548 1,073 5.8% 641 432 Depreciation and
amortization
26,512 23,025 3,487 15.1% 2,302 1,185 General
and administrative
9,183 9,284 (101) -1.1% n/a n/a -
Non-Operating Income/Expense - Interest expense
12,981 12,983 (2) 0.0% 1,098 (1,100) Interest, dividends,
and other investment income
356 242 114 47.1% n/a n/a
Note 1 – Properties held in both periods includes only
properties owned for the entire periods of 2017 and 2016. All other
properties are included in the property acquisition/sales column.
There are no properties excluded from the analysis.
Revenues
Base rents increased by 1.4% to $88.4 million in fiscal 2017, as
compared with $87.2 million in the comparable period of 2016. The
increase in base rents and the changes in other income statement
line items were attributable to:
Property Acquisitions and Properties
Sold:
In fiscal 2017, the company purchased four properties totaling
114,700 square feet of GLA, invested in two joint ventures that own
four properties totaling 173,600 square feet, whose operations we
consolidate, and sold two properties totaling 203,800 square feet.
In fiscal 2016, the company purchased two properties totaling
101,400 square feet. These properties accounted for all of the
revenue and expense changes attributable to property acquisitions
and sales in the year ended October 31, 2017 when compared with
fiscal 2016.
Properties Held in Both
Periods:
Revenues
Base Rent
The decrease in base rents for properties owned in both periods
was caused predominantly by a slight reduction in the percent of
the portfolio that is leased in fiscal 2017 when compared with
fiscal 2016.
In fiscal 2017, the company leased or renewed approximately
649,000 square feet (or approximately 15.0% of total consolidated
property leasable area). At October 31, 2017, the company’s
consolidated properties were approximately 92.7% leased (93.3%
leased at October 31, 2016).
Tenant Recoveries
For the year ended October 31, 2017, recoveries from tenants for
properties owned in both periods (which represent reimbursements
from tenants for operating expenses and property taxes) increased
by $938,000. This increase was a result of an increase in both
property operating expenses and property tax expense in the
consolidated portfolio for properties owned for the entire periods
of fiscal 2017 and 2016, along with an increase in leased rate at
some properties which increased the rate at which the company could
bill operating expenses to tenants in fiscal 2017 versus fiscal
2016.
Expenses
Property operating expenses for properties owned in both fiscal
year 2017 and 2016 increased by $637,000. This increase was
predominantly as a result of an increase in snow removal costs at
our properties.
Real estate taxes for properties owned in both fiscal year 2017
and 2016 increased by $432,000 as a result of normal tax assessment
increases at some of our properties.
Interest expense for properties owned in both fiscal year 2017
and 2016 decreased by $1.1 million as a result of the refinancing
of our largest mortgage in July 2017. In July 2017, we refinanced
our mortgage loan secured by our Stamford, CT property and although
the principal increased from $44 million to $50 million the
interest rate was reduced from 5.52% to 3.398% per annum. In
addition, we repaid our mortgage at our Bloomfield, NJ property
after the second quarter of fiscal 2016. In addition, the reduction
was accentuated by normal recurring amortization payments on our
portfolio of mortgages, which reduced interest expense in fiscal
2017 when compared with fiscal 2016 for the same mortgages.
Depreciation and amortization expense for properties owned in
both fiscal year 2017 and 2016 increased by $1.2 million as a
result of an increase in capital improvements on properties held in
both periods in fiscal 2016 and 2017.
General and Administrative Expenses
General and administrative expense for the year ended October
31, 2017, when compared with the year ended October 31, 2016,
decreased by $101,000, as a result of a decrease in restricted
stock amortization, which reduces compensation expense and a
reduction in professional fees offset by increased compensation
expense for additional staffing at the company and increased bonus
compensation for our employees in fiscal 2017 when compared with
fiscal 2016.
Non-GAAP Financial MeasureFunds from Operations
(“FFO”)
The company considers FFO to be an additional measure of our
operating performance. We report FFO in addition to net income
applicable to common stockholders and net cash provided by
operating activities. Management has adopted the definition
suggested by The National Association of Real Estate Investment
Trusts (“NAREIT”) and defines FFO to mean net income (computed in
accordance with GAAP) excluding gains or losses from sales of
property, plus real estate-related depreciation and amortization
and after adjustments for unconsolidated joint ventures.
Management considers FFO a meaningful, additional measure of
operating performance because it primarily excludes the assumption
that the value of the company’s 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. It is helpful as it
excludes various items included in net income that are not
indicative of our operating performance, such as gains (or losses)
from sales of property and depreciation and amortization. However,
FFO:
- does not represent cash flows from
operating activities in accordance with GAAP (which, unlike FFO,
generally reflects all cash effects of transactions and other
events in the determination of net income); and
- should not be considered an alternative
to net income as an indication of our performance.
FFO as defined by us may not be comparable to similarly titled
items reported by other real estate investment trusts due to
possible differences in the application of the NAREIT definition
used by such REITs. The table below provides a reconciliation of
net income applicable to Common and Class A Common Stockholders in
accordance with GAAP to FFO for three month and fiscal years ended
October 31, 2017 and 2016:
URSTADT BIDDLE PROPERTIES INC. (NYSE: UBA AND UBP)
FISCAL YEAR AND FOURTH QUARTER ENDED 2017 RESULTS
(in thousands, except per share data)
Reconciliation of Net Income Available
to Common andClass A Common Stockholders To Funds From
Operations
Fiscal Year EndedOctober 31,
Three Months EndedOctober 31,
2017
2016
2017
2016
Net Income Applicable to Common and Class A Common Stockholders
$33,898 $19,436
$324 $6,750 Real property
depreciation
20,505 18,866
5,400 4,750 Amortization
of tenant improvements and allowances
4,448 3,517
1,208 1,276 Amortization of deferred leasing costs
1,468 557
440 173 Depreciation and amortization on
unconsolidated joint ventures
1,618 1,589
409 385
(Gain)/loss on sale of asset
(18,734)
(362) 38 (3) Funds
from Operations Applicable to Common and Class A Common
Stockholders
$43,203 $43,603
$7,819 $13,331 Funds
from Operations (Diluted) Per Share: Common
$1.02 $1.10
$0.18 $0.31 Class A Common
$1.15 $1.25
$0.21 $0.36
Urstadt Biddle Properties Inc. (NYSE: UBA AND UBP)
Balance Sheet Highlights (in thousands)
October 31, October 31,
2017
2016
(Unaudited)
Assets Cash and Cash Equivalents
$8,674 $7,271 Real
Estate investments before accumulated depreciation
$1,090,402 $1,016,838
Investments in and advances to unconsolidated joint ventures
$38,049 $38,469 Mortgage
note receivable $- $13,500
Total Assets $996,713
$931,324 Liabilities Revolving credit
line $4,000 $8,000
Mortgage notes payable and other loans
$297,071 $273,016 Total
Liabilities $328,122 $314,038
Redeemable Noncontrolling Interests
$81,361 $18,253
Preferred Stock $190,000
$204,375 Total Stockholders’ Equity
$587,230 $599,033
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version on businesswire.com: http://www.businesswire.com/news/home/20171215005859/en/
Urstadt Biddle Properties Inc.Willing L. Biddle, CEO orJohn T.
Hayes, CFO203-863-8200
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