Monmouth Real Estate Investment Corporation Reports Results For The Fiscal Year Ended And The Fourth Quarter Ended September 30, 2013
FREEHOLD, N.J., Dec. 11, 2013 /PRNewswire/ -- Monmouth Real Estate Investment Corporation (NYSE: MNR) reported Core Funds from Operations (Core FFO) of $27,378,000 or $0.65 per diluted share for the fiscal year ended September 30, 2013 as compared to $26,796,000 or $0.67 per diluted share for the fiscal year ended September 30, 2012. Adjusted Funds from Operations (AFFO), for the fiscal year ended September 30, 2013 was $20,213,000 or $0.48 per diluted share versus $20,908,000 or $0.53 per diluted share for the fiscal year ended September 30, 2012. During the fiscal years ended September 30, 2013 and 2012, the Company reported one-time lease termination income of $691,000 and $3,222,000, respectively.
Core FFO for the three months ended September 30, 2013 was $5,409,000 or $0.12 per diluted share versus $4,203,000 or $0.10 per diluted share for the three months ended September 30, 2012. AFFO for the three months ended September 30, 2013 was $5,347,000 or $0.12 per diluted share versus $3,416,000 or $0.08 per diluted share for the three months ended September 30, 2012.
A summary of significant financial information for the three and twelve months ended September 30, 2013 and 2012 is as follows:
| Three Months Ended September 30, |
||||
| 2013 |
2012 |
|||
| Rental Revenue |
$ |
12,121,000 |
$ |
11,234,000 |
| Reimbursement Revenue |
$ |
2,299,000 |
$ |
1,785,000 |
| Net Operating Income (NOI) (1) |
$ |
11,657,000 |
$ |
10,828,000 |
| Total Expenses |
$ |
8,003,000 |
$ |
7,339,000 |
| Interest and Dividend Income |
$ |
914,000 |
$ |
784,000 |
| Gain on Securities Transactions, net |
$ |
157,000 |
$ |
366,000 |
| Income from Continuing Operations |
$ |
3,864,000 |
$ |
2,841,000 |
| Income (Loss) from Discontinued Operations |
$ |
- |
$ |
(16,000) |
| Net Income Attributable to Common Shareholders |
$ |
1,712,000 |
$ |
673,000 |
| Net Income Attributable to Common Shareholders Per Diluted Common Share |
$ |
0.03 |
$ |
0.02 |
| Core FFO (1) |
$ |
5,409,000 |
$ |
4,203,000 |
| Core FFO per Diluted Common Share (1) |
$ |
0.12 |
$ |
0.10 |
| AFFO (1) |
$ |
5,347,000 |
$ |
3,416,000 |
| AFFO per Diluted Common Share (1) |
$ |
0.12 |
$ |
0.08 |
| Weighted Avg. Diluted Common Shares Outstanding |
43,893,000 |
40,703,000 |
||
| Twelve Months Ended September 30, |
||||
| 2013 |
2012 |
|||
| Rental Revenue |
$ |
46,880,000 |
$ |
43,274,000 |
| Reimbursement Revenue |
$ |
7,727,000 |
$ |
7,095,000 |
| NOI (1) |
$ |
45,378,000 |
$ |
41,537,000 |
| Lease Termination Income |
$ |
691,000 |
$ |
3,222,000 |
| Total Expenses |
$ |
29,609,000 |
$ |
28,311,000 |
| Interest and Dividend Income |
$ |
3,886,000 |
$ |
3,359,000 |
| Gain on Securities Transactions, net |
$ |
7,133,000 |
$ |
6,044,000 |
| Income from Continuing Operations |
$ |
21,104,000 |
$ |
18,700,000 |
| Income (Loss) from Discontinued Operations |
$ |
292,000 |
$ |
(15,000) |
| Net Income Attributable to Common Shareholders |
$ |
12,788,000 |
$ |
13,171,000 |
| Net Income Attributable to Common Shareholders Per Diluted Common Share |
$ |
0.30 |
$ |
0.33 |
| Core FFO (1) |
$ |
27,378,000 |
$ |
26,796,000 |
| Core FFO per Diluted Common Share (1) |
$ |
0.65 |
$ |
0.67 |
| Core FFO Excluding Lease Termination Income (1) |
$ |
26,687,000 |
$ |
23,574,000 |
| Core FFO Excluding Lease Termination Income per Diluted Common Share (1) |
$ |
0.63 |
$ |
0.59 |
| AFFO (1) |
$ |
20,213,000 |
$ |
20,908,000 |
| AFFO per Diluted Common Share (1) |
$ |
0.48 |
$ |
0.53 |
| AFFO Excluding Lease Termination Income (1) |
$ |
19,522,000 |
$ |
17,686,000 |
| AFFO Excluding Lease Termination Income per Diluted Common Share (1) |
$ |
0.46 |
$ |
0.44 |
| Weighted Avg. Diluted Common Shares Outstanding |
42,432,000 |
39,820,000 |
||
A summary of significant balance sheet information as of September 30, 2013 and September 30, 2012 is as follows:
| September 30, |
September 30, 2012 |
|||
| Net Real Estate Investments |
$ |
536,799,000 |
$ |
467,886,000 |
| Securities Available for Sale at Fair Value |
$ |
45,452,000 |
$ |
61,685,000 |
| Total Assets |
$ |
617,241,000 |
$ |
574,508,000 |
| Mortgage Notes Payable |
$ |
250,093,000 |
$ |
237,944,000 |
| Subordinated Convertible Debentures |
$ |
- |
$ |
8,615,000 |
| Loans Payable |
$ |
22,200,000 |
$ |
5,200,000 |
| Total Shareholders' Equity |
$ |
335,915,000 |
$ |
315,687,000 |
Michael P. Landy, President and CEO, commented on the results of fiscal year 2013, "Monmouth continued to successfully grow our high quality portfolio and build long-term value for our shareholders in fiscal 2013. During the year, the Company accomplished the following:
- Acquired 1.1 million square feet of high quality industrial space at an aggregate cost of $63.8 million.
- Re-leased 1.0 million square feet including 837,000 square feet in lease renewals.
- Achieved an industrial sector leading occupancy rate of 96%.
- Achieved an industrial sector leading tenant retention rate of 93%.
- Expanded our credit facility to $40 million with an accordion feature up to $60 million.
- Grew our acquisition pipeline to approximately 2.0 million square feet representing over $130 million in total acquisitions. Due to the substantial amount of recent acquisition activity, our current acquisition pipeline is approximately 690,000 square feet representing $48.8 million in future acquisitions.
- Generated $7.1 million in realized gains on our REIT securities investments.
Mr. Landy stated, "Our business model of investing in net-leased industrial properties on long-term leases to investment grade tenants continued to deliver solid performance. Core FFO, excluding lease termination income, for the full fiscal year 2013 was $26.7 million versus $23.6 million in 2012. On a per share basis, Core FFO excluding lease termination income was $0.63 per diluted share in fiscal 2013 compared to $0.59 per diluted share in 2012, representing a 7% increase. During fiscal 2013, we successfully re-leased 10 of the 11 expiring leases as well as obtained 2 new leases for buildings that were previously vacant representing a total of 1,002,000 square feet of leasing activity. 10 of these new leases containing a total of 837,000 square feet were renewals with existing tenants. This represents an overall 93% tenant retention rate. Our occupancy rate increased 80 basis points over the year and is now at 96%."
"In addition to the 1.1 million square feet representing $63.8 million in acquisitions in fiscal 2013, Monmouth has recently added 5 Class A industrial properties containing a total of 1.1 million square feet. These new built-to-suit properties were acquired at an aggregate cost of $73.9 million. This brings our total portfolio to 81 properties and 10.7 million square feet. In view of the significant positive investment spread associated with these transactions, we expect that they will be very accretive to our earnings going into 2014."
"While the strong automotive, housing, and manufacturing sectors have all helped drive demand for industrial space, the biggest factor continues to be the rise in e-commerce. The growth in internet sales are far outpacing the growth in brick and mortar sales and it is the primary reason that we view the long-term prospects for the industrial property type, and especially Monmouth's portfolio very favorably. Our major tenant, FedEx, has recently asked us to expand 5 buildings totaling 275,000 square feet."
"With regards to our future acquisition pipeline, we have entered into agreements to purchase three new built-to-suit industrial buildings totaling 690,000 square feet that are currently being developed. The total purchase price for these properties is approximately $48.8 million. The Company remains very focused on continuing to deliver positive results, and we look forward to building upon the substantial growth that was achieved in fiscal 2013."
Monmouth Real Estate Investment Corporation will host its Fourth Quarter and Year End 2013 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, December 12, 2013 at 10:00 a.m. Eastern Time.
The Company's fourth quarter and year end financial results being released herein will be available on the Company's website at www.mreic.com in the "Financial Information and Filings" section.
To participate in the Webcast, select the microphone icon at the top of the 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, December 12, 2013. It will be available until February 1, 2014, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10035092. 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 industrial properties and one shopping center located in twenty-seven states, containing a total of approximately 10.7 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 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 twelve months ended September 30, 2013 and 2012 are calculated as follows:
| Three Months Ended |
Twelve Months Ended |
||||||
| 9/30/2013 |
9/30/2012 |
9/30/2013 |
9/30/2012 |
||||
| Net Income Attributable to Common Shareholders |
$1,712,000 |
$673,000 |
$12,788,000 |
$13,171,000 |
|||
| Depreciation Expense (including Discontinued Operations) |
3,281,000 |
3,019,000 |
12,877,000 |
11,471,000 |
|||
| Amortization of Intangible Assets |
361,000 |
464,000 |
1,544,000 |
1,478,000 |
|||
| (Gain) Loss on Sales of Depreciable Assets |
- |
- |
(346,000) |
8,000 |
|||
| FFO Attributable to Common Shareholders |
5,354,000 |
4,156,000 |
26,863,000 |
26,128,000 |
|||
| Acquisition Costs |
55,000 |
47,000 |
515,000 |
668,000 |
|||
| Core FFO Attributable to Common Shareholders |
$5,409,000 |
$4,203,000 |
$27,378,000 |
$26,796,000 |
|||
The Company's Core FFO, excluding Lease Termination Income for the three and twelve months ended September 30, 2013 and 2012 are calculated as follows:
| Three Months Ended |
Twelve Months Ended |
||||||
| 9/30/2013 |
9/30/2012 |
9/30/2013 |
9/30/2012 |
||||
| Core FFO Attributable to Common Shareholders |
$5,409,000 |
$4,203,000 |
$27,378,000 |
$26,796,000 |
|||
| Less Lease Termination Income |
- |
- |
691,000 |
3,222,000 |
|||
| Core FFO excluding Lease Termination Income Attributable to Common Shareholders |
$5,409,000 |
$4,203,000 |
$26,687,000 |
$23,574,000 |
|||
The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the twelve months ended September 30, 2013 and 2012:
| Twelve Months Ended |
|||
| 9/30/2013 |
9/30/2012 |
||
| Operating Activities |
$27,095,000 |
$26,809,000 |
|
| Investing Activities |
(59,931,000) |
(80,640,000) |
|
| Financing Activities |
20,589,000 |
72,105,000 |
|
SOURCE Monmouth Real Estate Investment Corporation
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