FREEHOLD, N.J., Aug. 6, 2014 /PRNewswire/ -- Monmouth Real Estate Investment Corporation (NYSE: MNR) reported Core Funds from Operations (Core FFO) of $7,771,000 or $0.15 per diluted share for the three months ended June 30, 2014 as compared to $5,682,000 or $0.13 per diluted share for the three months ended June 30, 2013. Excluding gains realized from the sale of securities during the quarter, Core FFO was $6,864,000 or $0.14 per diluted share for the three months ended June 30, 2014, as compared to $4,619,000 or $0.11 per diluted share for the three months ended June 30, 2013. Adjusted Funds from Operations (AFFO), which excludes gains or losses from the sale of securities and excludes lease termination income, were $0.12 per diluted share for the three months ended June 30, 2014 as compared to $0.11 per diluted share for the three months ended June 30, 2013.
A summary of significant financial information for the three and nine months ended June 30, 2014 and 2013 is as follows:
Three Months Ended June 30, | ||||
2014 | 2013 | |||
Rental Revenue | $ | 13,384,000 | $ | 11,712,000 |
Reimbursement Revenue | $ | 2,356,000 | $ | 2,342,000 |
Lease Termination Income | $ | 1,183,000 | $ | - |
Net Operating Income (NOI) (1) | $ | 12,877,000 | $ | 11,363,000 |
Total Expenses | $ | 8,811,000 | $ | 7,846,000 |
Interest and Dividend Income | $ | 942,000 | $ | 844,000 |
Gain on Sale of Securities Transactions, net | $ | 907,000 | $ | 1,063,000 |
Income from Continuing Operations | $ | 5,594,000 | $ | 4,185,000 |
Income (Loss) from Discontinued Operations | $ | - | $ | (5,000) |
Net Income Attributable to Common Shareholders | $ | 3,442,000 | $ | 2,029,000 |
Net Income Attributable to Common Shareholders Per Diluted Common Share | $ | 0.07 | $ | 0.05 |
Core FFO (1) | $ | 7,771,000 | $ | 5,682,000 |
Core FFO per Diluted Common Share (1) | $ | 0.15 | $ | 0.13 |
AFFO (1) | $ | 5,924,000 | $ | 4,725,000 |
AFFO per Diluted Common Share (1) | $ | 0.12 | $ | 0.11 |
Weighted Avg. Diluted Common Shares Outstanding | 50,760,000 | 42,823,000 | ||
Nine Months Ended June 30, | ||||
2014 | 2013 | |||
Rental Revenue | $ | 41,039,000 | $ | 34,760,000 |
Reimbursement Revenue | $ | 6,707,000 | $ | 5,428,000 |
Lease Termination Income | $ | 1,183,000 | $ | 691,000 |
Net Operating Income (NOI) (1) | $ | 39,406,000 | $ | 33,721,000 |
Total Expenses | $ | 25,883,000 | $ | 21,607,000 |
Interest and Dividend Income | $ | 2,877,000 | $ | 2,972,000 |
Gain on Sale of Securities Transactions, net | $ | 1,483,000 | $ | 6,976,000 |
Income from Continuing Operations | $ | 14,641,000 | $ | 17,239,000 |
Income from Discontinued Operations | $ | - | $ | 292,000 |
Net Income Attributable to Common Shareholders | $ | 8,186,000 | $ | 11,076,000 |
Net Income Attributable to Common Shareholders Per Diluted Common Share | $ | 0.17 | $ | 0.26 |
Core FFO (1) | $ | 21,438,000 | $ | 21,940,000 |
Core FFO per Diluted Common Share (1) | $ | 0.45 | $ | 0.52 |
AFFO (1) | $ | 19,080,000 | $ | 14,175,000 |
AFFO per Diluted Common Share (1) | $ | 0.40 | $ | 0.34 |
Weighted Avg. Diluted Common Shares Outstanding | 47,634,000 | 41,959,000 | ||
A summary of significant balance sheet information as of June 30, 2014 and September 30, 2013 is as follows:
June 30, 2014 | September 30, 2013 | |||
Net Real Estate Investments | $ | 611,043,000 | $ | 536,799,000 |
Securities Available for Sale at Fair Value | $ | 60,642,000 | $ | 45,452,000 |
Total Assets | $ | 739,392,000 | $ | 617,241,000 |
Mortgage Notes Payable | $ | 279,866,000 | $ | 250,093,000 |
Loans Payable | $ | 25,200,000 | $ | 22,200,000 |
Total Shareholders' Equity | $ | 423,540,000 | $ | 335,915,000 |
Michael P. Landy, President and CEO, commented on the results for the third quarter of fiscal 2014:
"Monmouth continued to make progress over the recent quarter across several fronts:
- AFFO per diluted share for the current quarter increased 9% as compared to the prior year quarter and increased 18% for the nine months ended June 30, 2014 as compared to the nine months ended June 30, 2013.
- As of June 30, 2014, the Company's occupancy rate was 94.3% and our average lease maturity increased to 6.8 years as compared to 6.2 years a year ago.
- On June 26, 2014, we leased our 60,400 square foot building located in Carlstadt, NJ for 10.5 years at an average rate of $8.34 per square foot as compared to $7.61 per square foot that was paid by the prior tenant representing an increase of 10%. This building was vacant since April 1, 2014.
- On May 28, 2014, the Company completed a common equity offering that generated net proceeds of approximately $65.1 million.
- During the quarter, we grew our acquisition pipeline to eleven new Class A build-to-suit industrial properties, representing approximately 3.5 million square feet, for a total purchase price of approximately $255.7 million. In keeping with our business model, these high quality properties are leased primarily to investment grade tenants pursuant to long-term net leases and are strategically situated at major airports, major transportation hubs, and manufacturing plants that are integral to our tenants' operations. These new properties are expected to generate annualized rental revenue of approximately $17.6 million and will benefit from an average lease term of approximately 11.4 years. Subject to satisfactory due diligence, we anticipate closing these transactions upon completion of construction and occupancy over the next several quarters.
- In addition to our six recently completed building expansions, we entered into agreements to expand five of our properties by approximately 236,000 square feet pursuant to which we will invest a total of approximately $18.7 million. Upon completion, the expansions will result in a new ten year lease extension for each of these properties and will result in increased annual rent of approximately $1.9 million.
- Subsequent to quarter end, on July 18, 2014, we entered into a three year lease agreement withCharlotte Pipe and Foundry Company for our 160,000 square foot building located in Monroe, NC that was previously vacant. Annual rent commenced on August 1, 2014 at a rate of $560,000 or $3.50 per square foot with 2% increases each year. As a result of leasing our building in Monroe, NC, the Company's occupancy rate as of August 1, 2014 increased to 95.8%.
Our gross leasable area has increased by 15% to 10.8 million square feet over the prior year period and is expected to grow to over 14.0 million square feet in fiscal 2015 upon the completion of the acquisitions and expansions mentioned above. Our successful leasing activity has resulted in a very strong current occupancy level of 95.8%. Our recent equity offering provides us with the capital to fund our highly accretive acquisition and expansion pipeline. With 86% of our rental revenue derived from investment grade tenants our earnings quality is among the highest in the REIT sector. We look forward to building on the substantial growth that we have achieved to date by adding high quality properties and tenants to our portfolio while enhancing long-term returns for our shareholders."
Monmouth Real Estate Investment Corporation will host its Third Quarter 2014 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, August 7, 2014 at 10:00 a.m. Eastern Time.
The Company's third quarter 2014 financial results being released herein will be available on the Company's website at www.mreic.com in the "Financial Filings" section.
To participate in the Webcast, select the microphone icon in the Webcast section of the Company's homepage on the Company's website at www.mreic.com. Interested parties can also participate via conference call by calling toll free 888-317-6016 (domestically) or 412-317-6016 (internationally).
The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, August 7, 2014. It will be available until November 30, 2014, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10047730. A transcript of the call and the webcast replay will be available at the Company's website, www.mreic.com.
Monmouth Real Estate Investment Corporation, founded in 1968 and one of the oldest public equity REITs in the U.S., specializes in net-leased industrial properties subject to long-term leases primarily to investment grade tenants. The Company is a fully integrated and self-managed real estate company, whose property portfolio consists of eighty-one properties located in twenty-seven states, containing a total of approximately 10.8 million rentable square feet. In addition, the Company owns a portfolio of REIT securities.
Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company's current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company's annual report on Form 10-K and described from time to time in the Company's other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
Notes:
(1) Non-US GAAP Information: FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income applicable to common shareholders, excluding gains or losses from sales of depreciable assets, plus real estate-related depreciation and amortization. We define Core FFO as FFO plus acquisition costs. We define AFFO as Core FFO excluding lease termination income, gains or losses on securities transactions, stock based compensation expense, amortization of deferred financing and deferred leasing costs, recurring capital expenditures and straight-line rent adjustments. We define NOI as recurring rental and reimbursement revenues less real estate and other operating expenses. FFO, Core FFO and AFFO per diluted common share are defined as FFO, Core FFO and AFFO divided by weighted average diluted common shares outstanding. FFO, Core FFO and AFFO per diluted common share, as well as NOI, should be considered as supplemental measures of operating performance used by real estate investment trusts (REITs). FFO, Core FFO and AFFO per diluted common share exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. The items excluded from FFO, Core FFO and AFFO per diluted common share are significant components in understanding the Company's financial performance.
FFO, Core FFO and AFFO per diluted common share (A) do not represent cash flow from operations as defined by accounting principles generally accepted in the United States of America; (B) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (C) are not alternatives to cash flow as a measure of liquidity. FFO, Core FFO and AFFO per diluted common share, as well as NOI, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs.
The Company's FFO and Core FFO for the three and nine months ended June 30, 2014 and 2013 are calculated as follows:
Three Months Ended | Nine Months Ended | ||||||
06/30/2014 | 06/30/2013 | 06/30/2014 | 06/30/2013 | ||||
Net Income Attributable to Common Shareholders | $3,442,000 | $2,029,000 | $8,186,000 | $11,076,000 | |||
Depreciation Expense (including Discontinued Operations) | 3,991,000 | 3,194,000 | 11,779,000 | 9,596,000 | |||
Amortization of Intangible Assets | 338,000 | 385,000 | 1,010,000 | 1,154,000 | |||
Gain on Sale of Investment Property | - | - | - | (346,000) | |||
FFO Attributable to Common Shareholders | 7,771,000 | 5,608,000 | 20,975,000 | 21,480,000 | |||
Acquisition Costs | - | 74,000 | 463,000 | 460,000 | |||
Core FFO Attributable to Common Shareholders | $7,771,000 | $5,682,000 | $21,438,000 | $21,940,000 | |||
The Company's Core FFO, excluding the net Gain on Securities Transactions for the three and nine months ended June 30, 2014 and 2013 are calculated as follows:
Three Months Ended | Nine Months Ended | ||||||
06/30/2014 | 06/30/2013 | 06/30/2014 | 06/30/2013 | ||||
Core FFO Attributable to Common Shareholders | $7,771,000 | $5,682,000 | $21,438,000 | $21,940,000 | |||
Less: Gain on Sale of Securities Transactions, net | 907,000 | 1,063,000 | 1,483,000 | 6,976,000 | |||
Core FFO, excluding net Gain on Sale of Securities Transactions Attributable to Common Shareholders | $6,864,000 | $4,619,000 | $19,955,000 | $14,964,000 | |||
The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the nine months ended June 30, 2014 and 2013:
Nine Months Ended | |||
06/30/2014 | 06/30/2013 | ||
Operating Activities | $28,869,000 | $17,197,000 | |
Investing Activities | (101,136,000) | (41,059,000) | |
Financing Activities | 102,578,000 | 12,341,000 | |
SOURCE Monmouth Real Estate Investment Corporation
