UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
|
Date
of Report (Date of earliest event reported): May 8, 2015 |
|
|
BRT REALTY TRUST |
|
|
(Exact name of
Registrant as specified in charter) |
|
Massachusetts |
|
001-07172 |
|
13-2755856 |
(State
or other jurisdiction |
|
(Commission
file No.) |
|
(IRS
Employer |
of
incorporation) |
|
|
|
I.D.
No.) |
60
Cutter Mill Road, Suite 303, Great Neck, New York |
|
11021 |
(Address of principal
executive offices) |
|
(Zip code) |
Registrant's
telephone number, including area code 516-466-3100
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to
Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition.
On
May 8, 2015, BRT Realty Trust issued a press release (the “Press Release”) announcing its results of operations for
the quarter ended March 31, 2015. The press release is attached as an exhibit to this Current Report on Form 8-K. This information
and the exhibit attached hereto are being furnished pursuant to Item 2.02 of Form 8-K and are not to be considered "filed"
under the Exchange Act, and shall not be incorporated by reference into any previous or future filing by registrant under the
Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
No. | |
Description |
99.1 | |
Press release dated May 8, 2015. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
BRT
REALTY TRUST |
|
|
|
Date: May 8,
2015 |
By: |
/s/ David W.
Kalish |
|
|
David W. Kalish |
|
|
Senior Vice President
- Finance |
3
Exhibit 99.1
BRT
REALTY TRUST REPORTS SECOND QUARTER 2015 RESULTS
Great
Neck, New York – May 8, 2015 – BRT REALTY TRUST (NYSE:BRT), today announced operating results for the three months
ended March 31, 2015.
Jeffrey
A. Gould, President and Chief Executive Officer stated: “We are pleased with the progress of our
multi-family operations as reflected in the increase in funds from operations to $0.12 per diluted share in the current
quarter from $0.00 per share in the three months ended March 31, 2014. We also benefitted from our $1.7 million share of the
$2.7 million gain from the February 2015 sale of the Lawrenceville, Georgia multi-family property acquired three years ago.
The operations and sale of this property generated a 27% internal rate of return on our investment and reflects
favorably on our multi-family underwriting activities.”
Operating
Results:
Total
revenues for the three months ended March 31, 2015 were approximately $20.5 million, an increase of $5.3 million, or 34.9%, from
$15.2 million in the corresponding quarter in the prior year. The increase is due primarily to $4.4 million from the inclusion
of six multi-family properties acquired since April 2014 and $790,000 primarily due to improved rental rates from many of the
multi-family properties acquired before April 2014.
Total
expenses for the three months ended March 31, 2015 were $23.6 million, an increase of $4.6 million, or 24.2%, from $19.0 million
in the quarter ended March 31, 2014. Contributing to the change were increases of $1.9 million in real estate operating expenses,
$1.7 million in depreciation and amortization and $916,000 of interest expense, due primarily to the multi-family properties acquired
since April 2014.
Net
loss attributable to common shareholders for the three months ended March 31, 2015 was $748,000, or $0.05 per share, compared
to net loss of $2.6 million, or $0.18 per share, for the three months ended March 31, 2014. The decrease is due primarily to
our $1.7 million share, net of non-controlling interests, of the gain recognized from the February 2015 sale of the
Lawrenceville, Georgia multi-family property. Excluding depreciation, amortization and the Trust’s share of the gain
on the sale of this property, net income attributable to common shareholders was $2.7 million, or $0.19 per share, in the
current period, compared to $792,000, or $0.05 per share, in the corresponding period of the prior year.
Funds
from Operations; Adjusted Funds from Operations:
Funds
from Operations, or FFO, was $1.6 million, or $0.12 per fully diluted share, in the current quarter, compared to $(75,000), or
$0.00 per diluted share, in the second quarter of 2014. Adjusted Funds from Operations, or AFFO, was $2.1 million, or $0.16 per
diluted share, in the current quarter, compared to $353,000, or $0.04 per diluted share, in the second quarter of 2014. The increase
in FFO and AFFO is attributable primarily to multi-family properties acquired after March 31, 2014 and improved operations at
multi-family properties acquired before April 1, 2014.
A
reconciliation of net income to FFO and AFFO, presented in accordance with GAAP, is provided with the financial information included
later in this release.
Balance
Sheet:
At
March 31, 2015, the Trust had $18.0 million of cash and cash equivalents, assets of $760.1 million, debt of $553.9 million and
total BRT shareholders’ equity of $121.8 million.
At
April 30, 2015, the Trust has approximately $15.7 million of cash and cash equivalents.
As
further described in our Quarterly Report on Form 10-Q for the period ended March 31, 2015, the Newark Joint Venture may require
additional funds to complete the Teachers Village project.
Disposition
In
February 2015, the Trust sold a 170 unit multi-family property located in Lawrenceville, Georgia for $9.7 million, realizing a
net gain of $2.7 million. The Trust’s share of this gain, net of non-controlling interests, is $1.7 million.
Subsequent
Event:
On
April 9, 2015, the Trust entered into a contract to sell a 798 unit multi-family property in Houston, TX, for
$39.9 million, including the assumption of $24.1 million mortgage debt. The transaction is anticipated to close in the
quarter ending September 30, 2015, subject to the satisfaction of customary closing conditions, including the lender’s
consent to the buyer’s assumption of the mortgage. The Trust anticipates it will record a gain of approximately $5.3
million on the sale, and that its share of the gain, net of non-controlling interests, will be approximately $4.2
million.
Non-GAAP
Financial Measures:
In
view of BRT’s equity investments in joint ventures which have acquired multi- family properties, it discloses FFO and AFFO
because management believes that such metrics are a widely recognized and appropriate measure of the performance of an equity
REIT.
BRT
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 (computed in accordance with generally accepting accounting principles), excluding gains (or losses) from sales of property,
plus depreciation and amortization, plus impairment write-downs of depreciable real estate and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect
funds from operations on the same basis. In computing FFO, BRT does not add back to net income the amortization of costs in connection
with its financing activities or depreciation of non-real estate assets. Since the NAREIT White Paper only provides guidelines
for computing FFO, the computation of FFO may vary from one REIT to another. BRT computes AFFO by deducting from FFO, straight
line rent accruals and deferrals, adding back amortization of restricted stock compensation and amortization of costs in connection
with financing activities, and adjusting for non-controlling interests.
Management
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 operations as defined by GAAP. FFO and AFFO should not be considered to
be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative
to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
FFO
and AFFO do not measure whether cash flow is sufficient to fund all of BRT’s cash needs, including principal amortization
and capital improvements. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined
by GAAP.
Management
recognizes that there are limitations in the use of FFO and AFFO. In evaluating BRT’s performance, management examines GAAP
measures such as net income and cash flows from operating, investing and financing activities. Management also reviews the reconciliation
of net income to FFO and AFFO.
Forward
Looking Statements:
Certain
information contained herein is forward looking 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, including statements regarding lending activities and other positive
business activities. BRT intends such forward looking statements to be covered by the safe harbor provisions for forward looking
statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying
with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future
plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “believe,”
“expect,” “intend,” “anticipate,” “estimate,” “project,” or similar
expressions or variations thereof. Forward looking statements, including our loan origination and property acquisition activities,
involve known and unknown risks, uncertainties and other factors, which, in some cases, are beyond BRT’s control and could
materially affect actual results, performance or achievements. Investors are cautioned not to place undue reliance on any forward-looking
statements and to carefully review the section entitled “Item 1A. Risk Factors” in BRT’s Annual Report on Form
10-K for the year ended September 30, 2014.
About
BRT Realty Trust:
BRT
is a real estate investment trust that participates as an equity investor in joint ventures which own and operate multi-family
properties, owns and operates and develops commercial, mixed use and other real estate assets. Additional financial and descriptive
information on BRT, its operations and its portfolio, is available at BRT’s website at: www.BRTRealty.com. Interested
parties are encouraged to review the Form 10-Q for the quarter ended March 31, 2015 to be filed with the Securities and Exchange
Commission for additional information.
Contact:
Investor Relations – (516) 466-3100
BRT REALTY
TRUST
60 Cutter
Mill Road
Suite 303
Great Neck,
New York 11021
Telephone
(516) 466-3100
Telecopier
(516) 466-3132
www.BRTRealty.com
BRT
REALTY TRUST AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars
in thousands, except per share data)
| |
Three months ended | | |
Six months ended | |
| |
March 31, | | |
March 31, | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| |
| | |
| | |
| | |
| |
Revenues: | |
| | |
| | |
| | |
| |
Rental and other revenues from real estate | |
$ | 20,186 | | |
$ | 14,877 | | |
$ | 39,667 | | |
$ | 28,684 | |
Other income | |
| 286 | | |
| 280 | | |
| 582 | | |
| 551 | |
Total revenues | |
| 20,472 | | |
| 15,157 | | |
| 40,249 | | |
| 29,235 | |
| |
| | | |
| | | |
| | | |
| | |
Expenses: | |
| | | |
| | | |
| | | |
| | |
Real estate operating expenses | |
| 10,314 | | |
| 8,395 | | |
| 20,723 | | |
| 16,029 | |
Interest expense | |
| 5,865 | | |
| 4,949 | | |
| 12,066 | | |
| 9,633 | |
Advisor's fee, related party | |
| 605 | | |
| 414 | | |
| 1,189 | | |
| 776 | |
Property acquisition costs | |
| - | | |
| 292 | | |
| 295 | | |
| 1,528 | |
General and administrative expenses | |
| 1,736 | | |
| 1,596 | | |
| 3,393 | | |
| 3,170 | |
Depreciation and amortization | |
| 5,115 | | |
| 3,384 | | |
| 9,273 | | |
| 6,574 | |
Total expenses | |
| 23,635 | | |
| 19,030 | | |
| 46,939 | | |
| 37,710 | |
| |
| | | |
| | | |
| | | |
| | |
Total revenues less total expenses | |
| (3,163 | ) | |
| (3,873 | ) | |
| (6,690 | ) | |
| (8,475 | ) |
| |
| | | |
| | | |
| | | |
| | |
Gain on sale of real estate | |
| 2,777 | | |
| - | | |
| 2,777 | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Loss from continuing operations | |
| (386 | ) | |
| (3,873 | ) | |
| (3,913 | ) | |
| (8,475 | ) |
| |
| | | |
| | | |
| | | |
| | |
Discontinued operations: | |
| | | |
| | | |
| | | |
| | |
Income from operations | |
| - | | |
| 362 | | |
| - | | |
| 1,213 | |
Net loss | |
| (386 | ) | |
| (3,511 | ) | |
| (3,913 | ) | |
| (7,262 | ) |
| |
| | | |
| | | |
| | | |
| | |
Plus: net (income) loss attributable to non-controlling interests | |
| (362 | ) | |
| 919 | | |
| 667 | | |
| 1,937 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss attributable to common shareholders | |
$ | (748 | ) | |
$ | (2,592 | ) | |
$ | (3,246 | ) | |
$ | (5,325 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted per share amounts attributable to common shareholders: | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Loss from continuing operations | |
| (0.05 | ) | |
| (0.21 | ) | |
| (0.23 | ) | |
| (0.46 | ) |
Discontinued operations | |
| - | | |
| 0.03 | | |
| - | | |
| 0.09 | |
Basic and diluted (loss) income per share | |
$ | (0.05 | ) | |
$ | (0.18 | ) | |
$ | (0.23 | ) | |
$ | (0.37 | ) |
| |
| | | |
| | | |
| | | |
| | |
Funds from operations - Note 1 | |
$ | 1,645 | | |
$ | (75 | ) | |
$ | 2,260 | | |
$ | (447 | ) |
Funds from operations per common share - diluted - Note 2 | |
$ | 0.12 | | |
$ | (0.00 | ) | |
$ | 0.16 | | |
$ | (0.03 | ) |
| |
| | | |
| | | |
| | | |
| | |
Adjusted funds from operations - Note 1 | |
$ | 2,107 | | |
$ | 353 | | |
$ | 3,313 | | |
$ | 345 | |
Adjusted funds from operations per common share - diluted -Note 2 | |
$ | 0.16 | | |
$ | 0.04 | | |
$ | 0.24 | | |
$ | 0.02 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted | |
| 14,086,761 | | |
| 14,294,022 | | |
| 14,165,826 | | |
| 14,227,734 | |
Note 1: | |
| | |
| | |
| | |
| |
Funds from operations is summarized in the following table: | |
| | |
| | |
| | |
| |
Net (loss) attributable to common shareholders | |
$ | (748 | ) | |
$ | (2,592 | ) | |
$ | (3,246 | ) | |
$ | (5,325 | ) |
Add: depreciation of properties | |
| 5,112 | | |
| 3,377 | | |
| 9,266 | | |
| 6,565 | |
Add: our share of depreciation in unconsolidated joint ventures | |
| 5 | | |
| 5 | | |
| 10 | | |
| 10 | |
Add: amortization of deferred leasing costs | |
| 28 | | |
| 16 | | |
| 31 | | |
| 31 | |
Deduct: gain on sale of real estate assets | |
| (2,777 | ) | |
| - | | |
| (2,777 | ) | |
| - | |
Adjustments for non-controlling interests - depreciation of properties | |
| (1,213 | ) | |
| (874 | ) | |
| (2,261 | ) | |
| (1,715 | ) |
Adjustments for non-controlling interests - deferred leasing costs | |
| (12 | ) | |
| (7 | ) | |
| (13 | ) | |
| (13 | ) |
Adjustments for non-controlling interests - gain on sale of real estate | |
| 1,250 | | |
| - | | |
| 1,250 | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Funds from operations | |
$ | 1,645 | | |
$ | (75 | ) | |
$ | 2,260 | | |
$ | (447 | ) |
| |
| | | |
| | | |
| | | |
| | |
Adjust for straight line rents | |
| (101 | ) | |
| (133 | ) | |
| (201 | ) | |
| (268 | ) |
Add: amortization of restricted stock compensation | |
| 239 | | |
| 214 | | |
| 445 | | |
| 394 | |
Add: amortization of deferred financing costs | |
| 464 | | |
| 457 | | |
| 1,209 | | |
| 869 | |
Adjustments for non-controlling interests - straight line rents | |
| 60 | | |
| 76 | | |
| 119 | | |
| 152 | |
Adjustments for non-controlling interests - deferred financing costs | |
| (200 | ) | |
| (186 | ) | |
| (519 | ) | |
| (355 | ) |
| |
| | | |
| | | |
| | | |
| | |
Adjusted funds from operations | |
$ | 2,107 | | |
$ | 353 | | |
$ | 3,313 | | |
$ | 345 | |
| |
| | | |
| | | |
| | | |
| | |
Note 2: | |
| | | |
| | | |
| | | |
| | |
Funds from operations per share is summarized in the following table: | |
| | | |
| | | |
| | | |
| | |
Net (loss) income attributable to common shareholders | |
$ | (0.05 | ) | |
$ | (0.18 | ) | |
$ | (0.23 | ) | |
$ | (0.37 | ) |
Add: depreciation of properties | |
| 0.37 | | |
| 0.23 | | |
| 0.66 | | |
| 0.46 | |
Add: our share of depreciation in unconsolidated joint ventures | |
| - | | |
| - | | |
| - | | |
| - | |
Add: amortization of deferred leasing costs | |
| - | | |
| - | | |
| - | | |
| - | |
Deduct: gain on sale of real estate asset | |
| (0.20 | ) | |
| - | | |
| (0.20 | ) | |
| - | |
Adjustments for non-controlling interests - depreciation of properties | |
| (0.09 | ) | |
| (0.05 | ) | |
| (0.16 | ) | |
| (0.12 | ) |
Adjustments for non-controlling interests - deferred leasing costs | |
| - | | |
| - | | |
| - | | |
| - | |
Adjustment for non-controlling interest - gain on sale of real estate | |
| 0.09 | | |
| - | | |
| 0.09 | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Funds from operations per common share basic and diluted | |
| 0.12 | | |
| 0.00 | | |
| 0.16 | | |
| (0.03 | ) |
| |
| | | |
| | | |
| | | |
| | |
Adjust for straight line rents | |
| (0.01 | ) | |
| (0.01 | ) | |
| (0.01 | ) | |
| (0.02 | ) |
Add: amortization of restricted stock compensation | |
| 0.02 | | |
| 0.02 | | |
| 0.03 | | |
| 0.03 | |
Add: amortization of deferred financing costs | |
| 0.04 | | |
| 0.03 | | |
| 0.09 | | |
| 0.06 | |
Adjustments for non-controlling interests - straight line rents | |
| 0.01 | | |
| - | | |
| 0.01 | | |
| - | |
Adjustments for non-controlling interests - deferred financing costs | |
| (0.02 | ) | |
| - | | |
| (0.04 | ) | |
| (0.02 | ) |
| |
| | | |
| | | |
| | | |
| | |
Adjusted funds from operations per common share basic and diluted | |
$ | 0.16 | | |
$ | 0.04 | | |
$ | 0.24 | | |
$ | 0.02 | |
5
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