One Liberty Properties, Inc. (NYSE: OLP), a real estate investment
trust focused on net leased properties, today announced operating
results for the quarter ended June 30, 2021.
“As we emphasize acquiring industrial assets, given the
competitive environment for these properties, we will continue to
realize value from the sale of assets that have achieved maximum
value for us while remaining disciplined in allocating capital,”
stated Patrick J. Callan, Jr., President and Chief Executive
Officer of One Liberty. “The team remains focused on generating the
cash flow required to support and grow our dividend and build value
for stockholders.”
Operating Results:
Rental income was $20.3 million in the second quarter of 2021
compared to $20.9 million in the second quarter of 2020. The change
is due primarily to the sale of two properties in December
2020.
Total operating expenses in the second quarter of 2021 were
$12.9 million compared to $12.6 million for the second quarter of
2020. The change is due primarily to the increase in non-cash
compensation expense.
Gain on sale of real estate in the second quarter of 2021 was
$21.5 million, or $1.03 per diluted share, before giving effect to
the related $799,000, or $0.04 per diluted share, swap termination
charge. The gain was realized from the previously reported sale of
the property tenanted by Whole Foods located in Hartford,
Connecticut.
Net income attributable to One Liberty in the second quarter of
2021 was $23.3 million, or $1.12 per diluted share, compared to
$2.3 million, or $0.10 per diluted share, in the second quarter of
2020. Net income for the 2021 quarter includes the gain
on the sale of the Whole Foods property.
Adjusted Funds from Operations, or AFFO1, was $10.2 million, or
$0.48 per diluted share, for the quarter ended June 30, 2021,
compared to $9.5 million, or $0.47 per diluted share, for the
corresponding quarter in the prior year. Contributing
to the increase in the current quarter in AFFO and AFFO per diluted
share was a reduction in interest expense offset and an increase in
rental income before the effect of straight-line rent accruals.
1 A reconciliation of GAAP amounts to non-GAAP
amounts (i.e., FFO and AFFO) is presented with the financial
information included in this release.
Funds from Operations, or FFO, was $7.7 million, or $0.37 per
diluted share, for the second quarter of 2021, compared to $8.2
million, or $0.41 per diluted share, in the second quarter of 2020.
Contributing to the change in the current quarter in FFO and FFO
per diluted per share were the factors contributing to the change
in AFFO as well as the inclusion, in the 2020 quarter, of
straight-line rent accruals related to lease extensions for several
tenants whose rents were abated during the 2020 quarter, and an
increase, in the current quarter, in non-cash compensation
expense.
Gains on property sales are excluded from the calculation of FFO
and AFFO.
Diluted per share net income, FFO and AFFO were impacted
negatively in the quarter ended June 30, 2021 by an average
increase of approximately 691,000 in the weighted average number of
shares of common stock outstanding as a result of issuances, in
July and October 2020, of stock in lieu of a portion of cash
dividends, and issuances of stock in connection with the Company’s
dividend reinvestment and equity incentive programs.
Balance Sheet:
At June 30, 2021, the Company had $16.0 million of cash and cash
equivalents, total assets of $753.3 million, total debt of $408.6
million, and total stockholders’ equity of $303.8 million.
At August 2, 2021, One Liberty’s available liquidity was
approximately $105.7 million, including $10.6 million of cash and
cash equivalents (including the credit facility’s required $3.0
million average deposit maintenance balance) and $95.1 million
available under its credit facility.
Subsequent Events:
On July 1, 2021, One Liberty sold a vacant retail property in
Philadelphia, Pennsylvania owned by a consolidated joint venture in
which it had a 90% interest for $8.3 million. The Company
anticipates that it will recognize, during the third quarter, a
$1.3 million gain from this sale, of which the Company’s share will
be $1.2 million.
On July 12, 2021, an unconsolidated joint venture in which the
Company has a 50% interest sold a portion of a land parcel located
in Savannah, Georgia for $2.7 million. The Company
anticipates that its share of the gain from this sale, which it
will recognize in the third quarter, will be $801,000.
Non-GAAP Financial Measures:
One Liberty computes FFO in accordance with the “White Paper on
Funds from Operations” issued by the National Association of Real
Estate Investment Trusts (“NAREIT”) and NAREIT’s related guidance.
FFO is defined in the White Paper as net income (calculated in
accordance with generally accepted accounting principles),
excluding depreciation and amortization related to real estate,
gains and losses from the sale of certain real estate assets, gains
and losses from change in control, impairment write-downs of
certain real estate assets and investments in entities where the
impairment is directly attributable to decreases in the value of
depreciable real estate held by the entity. Adjustments for
unconsolidated partnerships and joint ventures are calculated to
reflect FFO on the same basis.
One Liberty computes AFFO by adjusting from FFO for
straight-line rent accruals and amortization of lease intangibles,
deducting lease termination fees and adding back amortization of
restricted stock compensation, amortization of costs in connection
with its financing activities (including its share of its
unconsolidated joint ventures) and debt prepayment costs. Since the
NAREIT White Paper does not provide guidelines for computing AFFO,
the computation of AFFO may vary from one REIT to another.
One Liberty believes that FFO and AFFO are useful and standard
supplemental measures of the operating performance for equity REITs
and are used frequently by securities analysts, investors and other
interested parties in evaluating equity REITs, many of which
present FFO and AFFO when reporting their operating results. FFO
and AFFO are intended to exclude GAAP historical cost depreciation
and amortization of real estate assets, which assumes that the
value of real estate assets diminish predictability over time. In
fact, real estate values have historically risen and fallen with
market conditions. As a result, management believes that FFO and
AFFO provide a performance measure that when compared year over
year, should reflect the impact to operations from trends in
occupancy rates, rental rates, operating costs, interest costs and
other matters without the inclusion of depreciation and
amortization, providing a perspective that may not be necessarily
apparent from net income. Management also considers FFO and AFFO to
be useful in evaluating potential property acquisitions.
FFO and AFFO do not represent net income or cash flows from
operating, investing or financing activities as defined by GAAP.
FFO and AFFO should not be an alternative to net income as a
reliable measure of our operating performance nor as an alternative
to cash flows as measures of liquidity. FFO and AFFO do not measure
whether cash flow is sufficient to fund all of the Company’s cash
needs.
Forward Looking Statement:
Certain information contained in this press release, together
with other statements and information publicly disseminated by One
Liberty Properties, Inc. is forward looking within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended. We
intend such forward looking statements to be covered by the safe
harbor provision for forward looking statements contained in the
Private Securities Litigation Reform Act of 1995 and include this
statement for the purpose of complying with these safe harbor
provisions. You should not rely on forward looking statements since
they involve known and unknown risks, uncertainties and other
factors which are, in some cases, beyond our control and which
could materially affect actual results, performance or
achievements. Information regarding risks,
uncertainties and factors that could cause actual outcomes or other
events to differ materially from any such forward looking
statements appear under “Forward Looking Statements”, “Risk
Factors” or “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company's Annual Report
on Form 10-K for the year ended December 31, 2020 (the “Annual
Report”), and the Company’s Quarterly Reports on Form 10-Q or the
Company’s Current Reports on Form 8-K filed with the Securities and
Exchange Commission (the “SEC”) filed after the filing of the
Annual Report. Currently, one of the most significant uncertainties
the Company is facing is the resurgence of the COVID-19 pandemic
and its impact, and potential impact, on the Company’s and its
tenants’ financial condition, results of operations, cash flows and
performance, the real estate market and the global economy and
financial markets. The extent to which the resurgence of the
pandemic impacts the Company and its tenants will depend on future
developments, which are highly uncertain and cannot be predicted
with confidence. Investors are cautioned to interpret the risks,
challenges and uncertainties discussed in the Annual Report and the
Company’s other filings with the SEC as being heightened as a
result of the adverse impacts of the resurgent pandemic.
About One Liberty Properties:
One Liberty is a self-administered and
self-managed real estate investment trust incorporated in Maryland
in 1982. The Company acquires, owns and manages a geographically
diversified portfolio consisting primarily of industrial, retail,
restaurant, health and fitness and theater properties. Many of
these properties are subject to long term net leases under which
the tenant is typically responsible for the property’s real estate
taxes, insurance and ordinary maintenance and repairs.
Contact:
One Liberty PropertiesInvestor RelationsPhone: (516)
466-3100www.1liberty.com
|
|
|
|
|
ONE LIBERTY
PROPERTIES, INC. |
CONDENSED
BALANCE SHEETS |
(Amounts in
Thousands) |
|
|
(Unaudited) |
|
|
|
|
June
30, |
|
December
31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Real estate
investments, at cost |
|
$ |
823,745 |
|
|
$ |
839,058 |
|
Accumulated
depreciation |
|
|
(153,114 |
) |
|
|
(147,136 |
) |
Real estate
investments, net |
|
|
670,631 |
|
|
|
691,922 |
|
|
|
|
|
|
Property
held-for-sale |
|
|
6,446 |
|
|
|
— |
|
Investment
in unconsolidated joint ventures |
|
|
10,600 |
|
|
|
10,702 |
|
Cash and
cash equivalents |
|
|
15,981 |
|
|
|
12,705 |
|
Unbilled
rent receivable |
|
|
14,252 |
|
|
|
15,438 |
|
Unamortized
intangible lease assets, net |
|
|
22,048 |
|
|
|
24,703 |
|
Other
assets |
|
|
13,352 |
|
|
|
20,667 |
|
Total assets |
|
$ |
753,310 |
|
|
$ |
776,137 |
|
|
|
|
|
|
LIABILITIES
AND EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
Mortgages
payable, net of $3,523 and $3,845 of deferred financing costs,
respectively |
|
$ |
408,580 |
|
|
$ |
429,704 |
|
Line of
credit-outstanding, net of $0 and $425 of deferred financing costs,
respectively |
|
|
— |
|
|
|
12,525 |
|
Unamortized
intangible lease liabilities, net |
|
|
10,425 |
|
|
|
11,189 |
|
Other
liabilities |
|
|
29,344 |
|
|
|
30,759 |
|
Total liabilities |
|
|
448,349 |
|
|
|
484,177 |
|
|
|
|
|
|
Total One
Liberty Properties, Inc. stockholders' equity |
|
|
303,765 |
|
|
|
290,767 |
|
Non-controlling interests in consolidated joint ventures |
|
|
1,196 |
|
|
|
1,193 |
|
Total equity |
|
|
304,961 |
|
|
|
291,960 |
|
Total liabilities and equity |
|
$ |
753,310 |
|
|
$ |
776,137 |
|
ONE LIBERTY
PROPERTIES, INC. (NYSE: OLP) |
(Amounts in
Thousands, Except Per Share Data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
Six
Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Rental
income, net |
|
$ |
20,305 |
|
|
$ |
20,861 |
|
|
$ |
40,989 |
|
|
$ |
42,100 |
|
|
Lease
termination fees |
|
|
117 |
|
|
|
— |
|
|
|
249 |
|
|
|
— |
|
|
Total
revenues |
|
|
20,422 |
|
|
|
20,861 |
|
|
|
41,238 |
|
|
|
42,100 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
|
5,702 |
|
|
|
5,804 |
|
|
|
11,459 |
|
|
|
11,478 |
|
|
General and
administrative |
|
|
3,769 |
|
|
|
3,454 |
|
|
|
7,411 |
|
|
|
6,788 |
|
|
Real estate
operating expenses |
|
|
3,387 |
|
|
|
3,305 |
|
|
|
7,073 |
|
|
|
6,647 |
|
|
State
taxes |
|
|
91 |
|
|
|
70 |
|
|
|
166 |
|
|
|
152 |
|
|
Total
operating expenses |
|
|
12,949 |
|
|
|
12,633 |
|
|
|
26,109 |
|
|
|
25,065 |
|
|
|
|
|
|
|
|
|
|
|
Other operating income |
|
|
|
|
|
|
|
|
Gain on sale of real estate,
net |
|
|
21,491 |
|
|
|
— |
|
|
|
21,491 |
|
|
|
4,252 |
|
Operating income |
|
|
28,964 |
|
|
|
8,228 |
|
|
|
36,620 |
|
|
|
21,287 |
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses: |
|
|
|
|
|
|
|
|
|
Equity in
earnings (loss) of unconsolidated joint ventures |
|
|
20 |
|
|
|
(10 |
) |
|
|
(2 |
) |
|
|
54 |
|
|
Equity in earnings from sale of unconsolidated joint venture
property |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
121 |
|
|
Prepayment
costs on debt |
|
|
(799 |
) |
|
|
(775 |
) |
|
|
(799 |
) |
|
|
(1,065 |
) |
|
Other
income |
|
|
17 |
|
|
|
5 |
|
|
|
187 |
|
|
|
9 |
|
|
Interest: |
|
|
|
|
|
|
|
|
|
Expense |
|
|
(4,574 |
) |
|
|
(4,947 |
) |
|
|
(9,208 |
) |
|
|
(9,831 |
) |
|
Amortization and write-off of deferred financing costs |
|
|
(296 |
) |
|
|
(216 |
) |
|
|
(509 |
) |
|
|
(459 |
) |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
23,332 |
|
|
|
2,285 |
|
|
|
26,289 |
|
|
|
10,116 |
|
Net (income) loss attributable to non-controlling interests |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
2 |
|
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
Net income attributable to One Liberty Properties, Inc. |
|
$ |
23,329 |
|
|
$ |
2,284 |
|
|
$ |
26,291 |
|
|
$ |
10,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to common
stockholders-diluted |
|
$ |
1.12 |
|
|
$ |
0.10 |
|
|
$ |
1.26 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations - Note 1 |
|
$ |
7,661 |
|
|
$ |
8,206 |
|
|
$ |
16,500 |
|
|
$ |
17,455 |
|
Funds from operations per common share-diluted - Note 2 |
|
$ |
0.37 |
|
|
$ |
0.41 |
|
|
$ |
0.79 |
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted funds from operations - Note 1 |
|
$ |
10,150 |
|
|
$ |
9,469 |
|
|
$ |
20,159 |
|
|
$ |
19,649 |
|
Adjusted funds from operations per common share-diluted - Note
2 |
$ |
0.48 |
|
|
$ |
0.47 |
|
|
$ |
0.96 |
|
|
$ |
0.97 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
20,013 |
|
|
|
19,445 |
|
|
|
20,008 |
|
|
|
19,403 |
|
Diluted |
|
|
20,187 |
|
|
|
19,505 |
|
|
|
20,175 |
|
|
|
19,433 |
|
|
|
|
|
|
|
|
|
|
|
ONE LIBERTY
PROPERTIES, INC. (NYSE: OLP) |
(Amounts in
Thousands, Except Per Share Data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
|
Six
Months Ended |
|
|
|
June 30, |
|
|
June 30, |
Note 1: |
|
|
2021 |
|
|
|
2020 |
|
|
|
|
2021 |
|
|
|
2020 |
|
NAREIT funds from operations is summarized in the following
table: |
|
|
|
|
|
|
|
|
GAAP net income attributable to One Liberty Properties, Inc. |
|
$ |
23,329 |
|
|
$ |
2,284 |
|
|
|
$ |
26,291 |
|
|
$ |
10,110 |
|
Add: depreciation and amortization of properties |
|
|
5,597 |
|
|
|
5,699 |
|
|
|
|
11,253 |
|
|
|
11,272 |
|
Add: our share of depreciation and amortization of unconsolidated
joint ventures |
|
|
132 |
|
|
|
136 |
|
|
|
|
267 |
|
|
|
275 |
|
Add: amortization of deferred leasing costs |
|
|
105 |
|
|
|
105 |
|
|
|
|
206 |
|
|
|
206 |
|
Add: our share of amortization of deferred leasing costs of
unconsolidated joint ventures |
|
|
8 |
|
|
|
5 |
|
|
|
|
15 |
|
|
|
9 |
|
Deduct: gain on sale of real estate, net |
|
|
(21,491 |
) |
|
|
— |
|
|
|
|
(21,491 |
) |
|
|
(4,252 |
) |
Deduct: equity in earnings from sale of unconsolidated joint
venture property |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(121 |
) |
Adjustments for non-controlling interests |
|
|
(19 |
) |
|
|
(23 |
) |
|
|
|
(41 |
) |
|
|
(44 |
) |
NAREIT funds from operations applicable to common
stock |
|
|
7,661 |
|
|
|
8,206 |
|
|
|
|
16,500 |
|
|
|
17,455 |
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: straight-line rent accruals and amortization of lease
intangibles |
|
(182 |
) |
|
|
(971 |
) |
|
|
|
(319 |
) |
|
|
(1,541 |
) |
Add/Deduct: our share of straight-line rent accruals and
amortization of lease intangibles of unconsolidated joint
ventures |
|
|
2 |
|
|
|
(90 |
) |
|
|
|
1 |
|
|
|
(103 |
) |
Deduct: lease termination fee income |
|
|
(117 |
) |
|
|
— |
|
|
|
|
(249 |
) |
|
|
— |
|
Deduct: lease assignment fee income |
|
|
— |
|
|
|
— |
|
|
|
|
(100 |
) |
|
|
— |
|
Add: amortization of restricted stock compensation |
|
|
1,685 |
|
|
|
1,329 |
|
|
|
|
3,028 |
|
|
|
2,305 |
|
Add: prepayment costs on debt |
|
|
799 |
|
|
|
775 |
|
|
|
|
799 |
|
|
|
1,065 |
|
Deduct: income on insurance recoveries from casualty loss |
|
|
— |
|
|
|
— |
|
|
|
|
(20 |
) |
|
|
— |
|
Add: amortization and write-off of deferred financing costs |
|
|
296 |
|
|
|
216 |
|
|
|
|
509 |
|
|
|
459 |
|
Add: our share of amortization and write-off of deferred financing
costs of unconsolidated joint ventures |
|
|
4 |
|
|
|
4 |
|
|
|
|
8 |
|
|
|
8 |
|
Adjustments for non-controlling interests |
|
|
2 |
|
|
|
— |
|
|
|
|
2 |
|
|
|
1 |
|
Adjusted funds from operations applicable to common
stock |
|
$ |
10,150 |
|
|
$ |
9,469 |
|
|
|
$ |
20,159 |
|
|
$ |
19,649 |
|
|
|
|
|
|
|
|
|
|
|
|
Note 2: |
|
|
|
|
|
|
|
|
|
NAREIT funds
from operations is summarized in the following table: |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable to One Liberty Properties, Inc. |
|
|
$ |
1.12 |
|
|
$ |
0.10 |
|
|
|
$ |
1.26 |
|
|
$ |
0.49 |
|
Add: depreciation and amortization of properties |
|
|
|
0.27 |
|
|
|
0.29 |
|
|
|
|
0.54 |
|
|
|
0.58 |
|
Add: our share of depreciation and amortization of unconsolidated
joint ventures |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
|
0.01 |
|
|
|
0.01 |
|
Add: amortization of deferred leasing costs |
|
|
|
— |
|
|
|
0.01 |
|
|
|
|
0.01 |
|
|
|
0.01 |
|
Add: our share of amortization of deferred leasing costs of
unconsolidated joint ventures |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Deduct: gain on sale of real estate, net |
|
|
|
(1.03 |
) |
|
|
— |
|
|
|
|
(1.03 |
) |
|
|
(0.21 |
) |
Deduct: equity in earnings from sale of unconsolidated joint
venture property |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(0.01 |
) |
Adjustments for non-controlling interests |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
NAREIT funds from operations per share of common
stock-diluted (a) |
|
|
|
0.37 |
|
|
|
0.41 |
|
|
|
|
0.79 |
|
|
|
0.87 |
|
Deduct: straight-line rent accruals and amortization of lease
intangibles |
|
|
|
(0.01 |
) |
|
|
(0.06 |
) |
|
|
|
(0.02 |
) |
|
|
(0.07 |
) |
Add/Deduct: our share of straight-line rent accruals and
amortization |
|
|
|
|
|
|
|
|
|
Add/Deduct: our share of straight-line rent accruals and
amortization of lease intangibles of unconsolidated joint
ventures |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(0.01 |
) |
Deduct: lease termination fee income |
|
|
|
(0.01 |
) |
|
|
— |
|
|
|
|
(0.01 |
) |
|
|
— |
|
Deduct: lease assignment fee income |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Add: amortization of restricted stock compensation |
|
|
|
0.08 |
|
|
|
0.07 |
|
|
|
|
0.14 |
|
|
|
0.11 |
|
Add: prepayment costs on debt |
|
|
|
0.04 |
|
|
|
0.04 |
|
|
|
|
0.04 |
|
|
|
0.05 |
|
Deduct: income on insurance recoveries from casualty loss |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Add: amortization and write-off of deferred financing costs |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
|
0.02 |
|
|
|
0.02 |
|
Add: our share of amortization and write-off of deferred financing
costs of unconsolidated joint ventures |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Adjustments for non-controlling interests |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Adjusted funds from operations per share of common
stock-diluted (a) |
|
|
$ |
0.48 |
|
|
$ |
0.47 |
|
|
|
$ |
0.96 |
|
|
$ |
0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) The
weighted average number of diluted common shares used to compute
FFO and AFFO applicable to common stock includes unvested
restricted shares that are excluded from the computation of diluted
EPS. |
One Liberty Properties (NYSE:OLP)
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