Monmouth Real Estate Investment Corporation Reports Results For The First Quarter Ended December 31, 2015

Feb 03, 2016, 16:24 ET from Monmouth Real Estate Investment Corporation

FREEHOLD, N.J., Feb. 3, 2016 /PRNewswire/ -- Monmouth Real Estate Investment Corporation (NYSE: MNR) reported Core Funds from Operations (Core FFO) of $11,012,000 or $0.17 per diluted share for the three months ended December 31, 2015 as compared to $8,634,000 or $0.15 per diluted share for the three months ended December 31, 2014. Adjusted Funds from Operations (AFFO), for the three months ended December 31, 2015 was $10,725,000 or $0.17 per diluted share versus $7,795,000 or $0.14 per diluted share for the three months ended December 31, 2014 representing an increase in AFFO per share of 21.4%. 

A summary of significant financial information for the three months ended December 31, 2015 and 2014 is as follows:

Three Months Ended

December 31,

2015

2014

Rental Revenue

$

19,065,000

$

15,430,000

Reimbursement Revenue

$

3,194,000

$

2,247,000

Lease Termination Income

$

-

$

239,000

Net Operating Income (NOI) (1)

$

18,656,000

$

14,687,000

Total Expenses

$

11,167,000

$

9,583,000

Interest and Dividend Income

$

1,185,000

$

1,035,000

Gain on Sale of Securities Transactions, net

$

8,000

$

377,000

Net Income

$

6,939,000

$

5,424,000

Net Income Attributable to Common Shareholders

$

4,787,000

$

3,272,000

Net Income Attributable to Common Shareholders Per Diluted Common Share

$

0.08

$

0.06

Core FFO (1)

$

11,012,000

$

8,634,000

Core FFO per Diluted Common Share (1)

$

0.17

$

0.15

AFFO (1)

$

10,725,000

$

7,795,000

AFFO per Diluted Common Share (1)

$

0.17

$

0.14

Weighted Avg. Diluted Common Shares Outstanding

62,949,000

57,446,000

A summary of significant balance sheet information as of December 31, 2015 and September 30, 2015 is as follows:

December 31, 2015

September 30, 2015

Net Real Estate Investments

$

862,813,000

$

816,801,000

Securities Available for Sale at Fair Value

$

61,033,000

$

54,541,000

Total Assets

$

972,370,000

$

915,992,000

Mortgage Notes Payable

$

400,720,000

$

373,991,000

Loans Payable

$

99,980,000

$

85,041,000

Total Shareholders' Equity

$

458,387,000

$

446,011,000

Michael P. Landy, President and CEO, commented on the results for the first quarter of fiscal 2016,

"This was a record quarter for Monmouth and represents an excellent start to fiscal 2016.  We are pleased to report continued strength across multiple fronts. During the quarter we:

  • Increased our occupancy rate 250 basis points to 98.8% over the prior year period and 110 basis points over the prior quarter. Subsequent to quarter end, we increased our occupancy rate an additional 70 basis points to 99.5% effective January 1, 2016.
  • Increased our per share AFFO to $0.17, representing a 21% increase over the prior year period and a 13% increase sequentially
  • Increased our Net Operating Income (NOI) 27% over the prior year period
  • Increased our Same Property NOI 3.9% on a GAAP basis and 5.5% on a Cash basis over the prior year period
  • Increased our quarterly common stock dividend 6.7% to $0.16 per share
  • Acquired two new Class A built-to-suit properties containing a total of 506,000 square feet, for an aggregate cost of $50.4 million
  • Grew our acquisition pipeline to nine new Class A build-to-suit properties, representing 2.2 million square feet, for a total purchase price of approximately $248.6 million.  These properties are all net-leased to investment grade tenants or their subsidiaries. These acquisitions are expected to generate annualized rental revenue of approximately $16.5 million and will benefit from an average lease term of approximately 13.4 years.  Subject to satisfactory due diligence, we anticipate closing these transactions upon completion of construction and occupancy over the next several quarters.
  • Entered into agreements to expand four of our properties by approximately 312,000 square feet at a cost of approximately $18.4 million.  Upon completion, the expansions will result in a new ten year lease extension for three buildings and a new twelve year lease extension for one building being expanded. These expansions will result in increased annual rent of approximately $1.7 million
  • Renewed two of the three leases scheduled to expire this fiscal year totaling 326,000 square feet. These lease renewals resulted in a 4.8% increase in rents on a GAAP basis and represent a weighted average lease term of 4.4 years. The last remaining lease renewal is under discussion.
  • Increased our gross leasable area (GLA) 16% to 14.4 million square feet over the prior year period. Our GLA is expected to grow to 17.0 million square feet upon the completion of the above acquisitions and expansions."

Mr. Landy stated, "On October 1st, following 24 consecutive years of maintaining or increasing our common stock dividend, we announced a 6.7% dividend increase. This long-term track record of dividends and profitability makes Monmouth not only one of the few REITs that maintained its cash dividend throughout the Global Financial Crisis, but also one of the very few REITs that is paying out a higher cash dividend today than prior to the Global Financial Crisis. This consistent long-term performance underscores the high-quality of our business model, our tenant base, and our property portfolio."

"We've put together a high-quality industrial property portfolio that has and will continue to benefit from the opportunities presented by e-commerce and the evolving global supply chain. While our strong showing this quarter bears this out, we remain very confident that the best is yet to come."

Monmouth Real Estate Investment Corporation will host its First Quarter FY 2016 Financial Results Webcast and Conference Call on Thursday, February 4, 2016 at 10:00 a.m. Eastern Time.  Senior management will discuss the results, current market conditions and future outlook.

The Company's First Quarter FY 2016 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 877-510-5852 (domestically) or 412-902-4138 (internationally).               

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, February 4, 2016.  It will be available until April 30, 2016, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10077955.  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 is one of the oldest public equity REITs in the U.S. The Company specializes in single-tenant, net-leased industrial properties, subject to long-term leases, primarily to investment grade tenants.  Monmouth Real Estate Investment Corporation is a fully-integrated and self-managed real estate company, whose property portfolio consists of ninety-three properties located in twenty-nine states, containing a total of approximately 14.4 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-U.S. 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, depreciation of corporate office tenant improvements, amortization of deferred financing costs, U.S. GAAP straight-line rent adjustments and less recurring capital expenditures.  We define recurring capital expenditures as all capital expenditures, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal.  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 following is a reconciliation of the Company's U.S. GAAP Net Income to the Company's FFO, Core FFO and AFFO for the three months ended December 31, 2015 and 2014:

 Three Months Ended

12/31/2015

12/31/2014

Net Income Attributable to Common Shareholders

$4,787,000

$3,272,000

Plus: Depreciation Expense (excluding Corporate Office)

5,567,000

4,484,000

Plus: Amortization of Intangible Assets

323,000

347,000

Plus: Amortization of Capitalized Lease Costs

189,000

139,000

FFO Attributable to Common Shareholders

10,866,000

8,242,000

Plus: Acquisition Costs

146,000

392,000

Core FFO Attributable to Common Shareholders

11,012,000

8,634,000

Plus: Stock Compensation Expense

105,000

90,000

Plus: Depreciation of Corporate Office Tenant Improvements

28,000

-

Plus: Amortization of Financing Costs

234,000

193,000

Less: Lease Termination Income

-

(239,000)

Less: Gain on Sale of Securities Transactions, net

(8,000)

(377,000)

Less: U.S. GAAP Straight-line Rent Adjustment

(310,000)

(332,000)

Less: Recurring Capital Expenditures

(336,000)

(174,000)

AFFO Attributable to Common Shareholders

$10,725,000

$7,795,000

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the three months ended December 31, 2015 and 2014:

Three Months Ended

12/31/2015

12/31/2014

Operating Activities

$11,637,000

$8,365,000

Investing Activities

(55,597,000)

(62,093,000)

Financing Activities

44,813,000

48,554,000

 

 

SOURCE Monmouth Real Estate Investment Corporation



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