Griffin Industrial Realty, Inc. (Nasdaq: GRIF)
(“Griffin”) reported total revenue of $8,403,000 and
$33,800,000 for the three months ended November 30, 2018 (the “2018
fourth quarter”) and the fiscal year ended November 30, 2018
(“fiscal 2018”), respectively, as compared to $8,864,000 and
$43,884,000 for the three months ended November 30, 2017 (the “2017
fourth quarter”) and the fiscal year ended November 30, 2017
(“fiscal 2017”), respectively. The lower total revenue in the 2018
fourth quarter and fiscal 2018, versus the comparable 2017 periods,
reflected decreases in revenue from property sales partially offset
by increases in rental revenue.
Rental revenue increased to $8,403,000 and $32,777,000 for the
2018 fourth quarter and fiscal 2018, respectively, from $7,869,000
and $29,939,000 for the 2017 fourth quarter and fiscal 2017,
respectively. The $534,000 increase in rental revenue in the 2018
fourth quarter, as compared to the 2017 fourth quarter, principally
reflected rental revenue from 220 Tradeport Drive (“220
Tradeport”), an approximately 234,000 square foot build-to-suit
industrial/warehouse building in New England Tradeport (“NE
Tradeport”), Griffin’s industrial park located in Windsor and East
Granby, Connecticut, which was completed and fully leased pursuant
to a twelve and a half year full building lease early in the 2018
fourth quarter. The $2,838,000 increase in rental revenue in fiscal
2018, as compared to fiscal 2017, principally reflected increased
rental revenue from 215 International Drive
(“215 International”), an approximately 277,000 square foot
industrial/warehouse building in Concord, North Carolina (in the
greater Charlotte area) that was acquired and became fully leased
in the fiscal 2017 third quarter, rental revenue from
330 Stone Road (“330 Stone”), an approximately 137,000 square
foot industrial/warehouse building in NE Tradeport that was
completed and placed in service near the end of fiscal 2017, rental
revenue from 220 Tradeport and rental revenue from other new
leases of previously vacant space, partially offset by a decrease
in rental revenue from leases that expired.
There were no property sales in the 2018 fourth quarter, as
compared to revenue from property sales of $995,000 in the 2017
fourth quarter. Revenue from property sales was $1,023,000 in
fiscal 2018 as compared to $13,945,000 in fiscal 2017. Fiscal 2017
revenue from property sales primarily reflected $10,250,000 from
the sale of approximately 67 acres of undeveloped land (the “2017
Phoenix Crossing Land Sale”) in Phoenix Crossing, an approximately
268 acre business park master planned by Griffin that straddles the
town line between Windsor and Bloomfield, Connecticut. Property
sales occur periodically and year to year changes in revenue and
gains from property sales may not be indicative of any trends in
Griffin’s real estate business.
Griffin reported a net loss of ($139,000) and a basic and
diluted net loss per share of ($0.03) for the 2018 fourth quarter,
as compared to a net loss of ($490,000) and a basic and diluted net
loss per share of ($0.10) for the 2017 fourth quarter. The lower
net loss in the 2018 fourth quarter, as compared to the 2017 fourth
quarter, principally reflected higher profit from leasing
activities1 (which Griffin defines as rental revenue less operating
expenses of rental properties) and lower general and administrative
expenses, partially offset by higher depreciation and amortization
expense and higher interest expense in the 2018 fourth
quarter.
Griffin reported a net loss of ($1,653,000) and a basic and
diluted net loss per share of ($0.33) for fiscal 2018, as compared
to net income of $4,627,000 and basic and diluted net income per
share of $0.92 in fiscal 2017. The net loss in fiscal 2018, as
compared to net income in fiscal 2017, principally reflected: (a) a
pretax gain of $879,000 from property sales in fiscal 2018 as
compared to a pretax gain of $10,165,000 from property sales in
fiscal 2017 (including a pretax gain of $7,975,000 on the 2017
Phoenix Crossing Land Sale); (b) an increase in depreciation and
amortization expense; and (c) an increase in interest expense.
Those items were partially offset by an increase in profit from
leasing activities, lower general and administrative expenses and a
lower income tax provision in fiscal 2018, as compared to fiscal
2017.
Profit from leasing activities increased to $6,149,000 and
$23,245,000 in the 2018 fourth quarter and fiscal 2018,
respectively, from $5,825,000 and $21,073,000 in the 2017 fourth
quarter and fiscal 2017, respectively. The increases in profit from
leasing activities in the 2018 fourth quarter and fiscal 2018, over
the comparable periods in 2017, reflected the aforementioned
increases in rental revenue partially offset by increases in
operating expenses of rental properties in the 2018 fourth quarter
and fiscal 2018 of $210,000 and $666,000, respectively, over the
comparable 2017 periods.
The increase in depreciation and amortization expense to
$2,954,000 in the 2018 fourth quarter, from $2,691,000 in the 2017
fourth quarter, principally reflected depreciation and amortization
expense related to 220 Tradeport. The increase in depreciation
and amortization expense to $11,404,000 in fiscal 2018, from
$10,064,000 in fiscal 2017, principally reflected depreciation and
amortization expense related to 215 International,
330 Stone, 220 Tradeport and tenant improvements and lease
commissions related to new leases entered into in the latter part
of fiscal 2017 and fiscal 2018. The decreases in general and
administrative expenses in the 2018 fourth quarter and fiscal 2018,
versus the comparable 2017 periods, principally reflected lower
expenses related to Griffin’s non-qualified deferred compensation
plan, lower incentive compensation expense and the inclusion in the
2017 fourth quarter of the write-off of expenditures related to a
land purchase that was not completed. The increases in interest
expense in the 2018 fourth quarter and fiscal 2018, versus the
comparable 2017 periods, principally reflected the higher amount of
debt outstanding in fiscal 2018 as compared to fiscal 2017.
As of November 30, 2018, Griffin’s thirty-seven building
portfolio of rental properties aggregated approximately 4,078,000
square feet and was 93% leased, as compared to 35 buildings
aggregating approximately 3,710,000 square feet that was 95% leased
as of November 30, 2017. The increase in Griffin’s portfolio as of
November 30, 2018, as compared to November 30, 2017, reflected the
2018 fourth quarter additions to the portfolio of
220 Tradeport and 6975 Ambassador Drive (“6975
Ambassador”), an approximately 134,000 square foot
industrial/warehouse building in the Lehigh Valley of Pennsylvania
that was built on speculation. 6975 Ambassador is not yet leased.
As of November 30, 2018, Griffin’s portfolio included twenty-five
industrial/warehouse buildings aggregating approximately 3,645,000
square feet (89% of Griffin’s total square footage) that was 95%
leased (99% leased excluding 6975 Ambassador). As of November
30, 2018, Griffin’s office/flex buildings aggregated approximately
433,000 square feet and were 72% leased.
Forward-Looking Statements:
This Press Release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Although Griffin believes that its plans, intentions and
expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such plans, intentions or
expectations will be achieved. The projected information disclosed
herein is based on assumptions and estimates that, while considered
reasonable by Griffin as of the date hereof, are inherently subject
to significant business, economic, competitive and regulatory
uncertainties and contingencies, many of which are beyond the
control of Griffin and which could cause actual results and events
to differ materially from those expressed or implied in the
forward-looking statements. Important factors that could affect the
outcome of the events set forth in these statements are described
in Griffin’s Securities and Exchange Commission filings, including
the “Business,” “Risk Factors” and “Forward-Looking Information”
sections in Griffin’s Annual Report on Form 10-K for the fiscal
year ended November 30, 2018. Griffin disclaims any obligation to
update any forward-looking statements as a result of developments
occurring after the date of this press release except as required
by law.
1 Profit from leasing activities is not a financial measure in
conformity with accounting principles generally accepted in the
United States of America (“U.S. GAAP”). It is presented because
Griffin believes it is a useful financial indicator for measuring
results of its real estate leasing activities. However, it
should not be considered as an alternative to operating income as a
measure of operating results in accordance with U.S. GAAP.
CONTACT:Anthony
GaliciChief Financial
Officer(860) 286-1307
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Griffin Industrial Realty, Inc. |
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Consolidated Statements of Operations |
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(amounts in thousands, except per share data) |
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(unaudited) |
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Three Months Ended |
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Fiscal Year Ended |
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Nov. 30, 2018 |
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Nov. 30, 2017 |
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Nov. 30, 2018 |
|
Nov. 30, 2017 |
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Rental revenue (1) |
$ |
8,403 |
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$ |
7,869 |
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|
$ |
32,777 |
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|
$ |
29,939 |
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Revenue from property
sales (2) |
|
- |
|
|
|
995 |
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|
|
1,023 |
|
|
|
13,945 |
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Total revenue |
|
8,403 |
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|
8,864 |
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|
33,800 |
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43,884 |
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Operating expenses of
rental properties (1) |
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2,254 |
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|
|
2,044 |
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9,532 |
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|
|
8,866 |
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Depreciation and
amortization expense |
|
2,954 |
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2,691 |
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11,404 |
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|
10,064 |
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General and
administrative expenses |
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1,934 |
|
|
|
2,421 |
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|
7,749 |
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|
|
8,552 |
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Costs related to
property sales |
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- |
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|
|
865 |
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|
|
144 |
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|
3,780 |
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Total expenses |
|
7,142 |
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|
8,021 |
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|
28,829 |
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|
31,262 |
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Operating income |
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1,261 |
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|
|
843 |
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|
4,971 |
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|
12,622 |
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Interest expense
(3) |
|
(1,704 |
) |
|
|
(1,490 |
) |
|
|
(6,270 |
) |
|
|
(5,690 |
) |
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Investment income |
|
76 |
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|
|
24 |
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|
151 |
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|
|
93 |
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Gain on
sales of common stock of Centaur Media, plc |
|
- |
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|
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- |
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|
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- |
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|
275 |
|
|
(Loss) income before
income tax benefit (provision) |
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(367 |
) |
|
|
(623 |
) |
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(1,148 |
) |
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|
7,300 |
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Income tax benefit
(provision) |
|
228 |
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|
|
133 |
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(505 |
) |
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(2,673 |
) |
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Net (loss)
income |
$ |
(139 |
) |
|
$ |
(490 |
) |
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$ |
(1,653 |
) |
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$ |
4,627 |
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Basic net (loss) income
per common share |
$ |
(0.03 |
) |
|
$ |
(0.10 |
) |
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$ |
(0.33 |
) |
|
$ |
0.92 |
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Diluted net (loss)
income per common share |
$ |
(0.03 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.33 |
) |
|
$ |
0.92 |
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Weighted average common
shares outstanding for computation of basic per share results |
|
5,053 |
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|
|
5,001 |
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|
5,023 |
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|
|
5,010 |
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Weighted average common
shares outstanding for computation of diluted per share
results |
|
5,053 |
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|
5,001 |
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|
5,023 |
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|
|
5,038 |
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(1) Profit from leasing
activities: |
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Three Months Ended |
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Fiscal Year Ended |
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Nov. 30, 2018 |
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Nov. 30, 2017 |
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Nov. 30, 2018 |
|
Nov. 30, 2017 |
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Rental revenue |
$ |
8,403 |
|
|
$ |
7,869 |
|
|
$ |
32,777 |
|
|
$ |
29,939 |
|
|
Operating expenses of
rental properties |
|
2,254 |
|
|
|
2,044 |
|
|
|
9,532 |
|
|
|
8,866 |
|
|
Profit from leasing
activities |
$ |
6,149 |
|
|
$ |
5,825 |
|
|
$ |
23,245 |
|
|
$ |
21,073 |
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(2) Revenue from property sales in the fiscal year ended
November 30, 2018 included $850 from the sale of approximately 49
acres of undeveloped land in Southwick, Massachusetts. |
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Revenue from property sales in the fiscal year ended November
30, 2017 included $10,250 from the 2017 Phoenix Crossing Land Sale
and $2,100 from the sale of 76 acres of undeveloped land in
Southwick, Massachusetts. |
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(3) Interest expense is primarily for mortgages on Griffin's
rental properties. |
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