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):
August 5, 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 August 5, 2015, we issued a press release
announcing our results of operations for the third quarter ended June 30, 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 Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any previous or future
filing by us under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
Item 9.01 |
Financial Statements and Exhibits. |
|
99.1 |
Press release dated August 5, 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: August 5, 2015 |
By: |
/s/ George Zweier |
|
|
George Zweier |
|
|
Vice President and Chief Financial Officer |
3
Exhibit
99.1
BRT
REALTY TRUST REPORTS THIRD QUARTER 2015 RESULTS
Great
Neck, New York – August 5, 2015 – BRT REALTY TRUST (NYSE:BRT), today announced operating results for the three
months ended June 30, 2015.
Jeffrey
A. Gould, President and Chief Executive Officer stated: “The operations at our multi-family properties continue to improve,
as reflected by the higher rental rates many of these properties are generating. The strength of our multi-family underwriting
activities will be further highlighted in the fourth quarter when we will recognize an aggregate gain of $12.0 million from the
July 2015 sale of our Marietta, GA and Houston, TX multi-family properties, of which an aggregate of $3.9 million will be allocated
to the non-controlling partners. The operations and sales of the Marietta, GA and Houston, TX properties generated levered internal
rates of return of 31.7% and 14.8%, respectively, on these investments.”
Operating Results:
Total
revenues for the three months ended June 30, 2015 were approximately $21.2 million, an increase of $3.4 million, or 19.1%, from
$17.8 million in the corresponding quarter in the prior year. The increase is due to $2.4 million from multi-family properties
acquired since April 2014 and $1.2 million primarily from rental increases at many of the multi-family properties acquired before
April 2014.
Total
expenses for the three months ended June 30, 2015 were $24.7 million, an increase of $2.7 million, or 12.3%, from $22 million
in the quarter ended June 30, 2014. Contributing to the change were increases of $1.4 million in real estate operating expenses,
$1.2 million in depreciation and amortization and $595,000 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 June 30, 2015 was $2.6 million, or $0.18 per share, compared
to net loss of $331,000, or $0.02 per share, for the three months ended June 30, 2014. Contributing to the change is the inclusion
in the 2014 period of a $2.6 million adjustment to non-controlling interest. The adjustment reflects the add back of the Newark
Joint Venture’s minority partner’s share of interest expense due to a non-recurring deferred interest payment to the
Trust by the Newark Joint Venture on debt eliminated in consolidation. Excluding the impact of this adjustment, net loss attributable
to common shareholders would have been $2.9 million, or $0.21 per share, in the three months ended June 30, 2014.
Funds from Operations;
Adjusted Funds from Operations:
Funds
from Operations, or FFO, was $1.3 million, or $0.09 per fully diluted share, in the current quarter, compared to $2.5 million,
or $0.18 per diluted share, in the third quarter of 2014. Adjusted Funds from Operations, or AFFO, was $1.7 million, or $0.13
per diluted share, in the current quarter, compared to $3.0 million, or $0.21 per diluted share, in the third quarter of 2014.
The decrease in FFO and AFFO is attributable primarily to the inclusion, in the third quarter of 2014, of the $2.6 million adjustment
to non-controlling interest. Excluding the effect of such adjustment, FFO and AFFO for the three months ended June 30, 2014 would
have been $(130,000), or $(0.07) per share, and $313,000, or $0.02 per share, respectively.
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
June 30, 2015, the Trust had $16.2 million of cash and cash equivalents, assets of $766.5 million, debt of $564.2 million and
total BRT shareholders’ equity of $119.0 million.
At
July 31, 2015, the Trust has approximately $29.3 million of cash and cash equivalents. As further described in our Quarterly Report
on Form 10-Q for the period ended June 30, 2015, the Newark Joint Venture may require additional funds to complete the Teachers
Village project.
Subsequent Events:
On
July 7, 2015, the Trust sold a 207 unit multi-family property in Marietta, GA, for $17.6 million. The Trust estimates it will
record a gain on the sale of approximately $8.0 million, of which $3.1 million will be allocated to the non-controlling partner.
On
July 21, 2015, the Trust sold a 798 unit multi-family property in Houston, TX, for $39.9 million, including the purchaser’s
assumption of mortgage debt of $24.1 million. The Trust estimates it will record a gain on the sale of approximately $4.0 million,
of which $800,000 will be allocated to the non-controlling partner.
On
July 27, 2015, the Trust acquired, through a consolidated joint venture in which it has an approximate 61% equity interest, a
618 unit multi-family property in Valley, AL for $44.0 million, including mortgage debt financing of $30 million. The mortgage
debt has an annual interest rate of 4.49%, is interest only until maturity and matures in 2025.
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 June 30, 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 | |
Nine months ended |
| |
June 30, | |
June 30 |
| |
2015 | |
2014 | |
2015 | |
2014 |
| |
| |
| |
| |
|
Revenues: | |
| | | |
| | | |
| | | |
| | |
Rental and other revenues from real estate | |
$ | 20,945 | | |
$ | 17,449 | | |
$ | 60,612 | | |
$ | 46,133 | |
Other income | |
| 280 | | |
| 319 | | |
| 862 | | |
| 870 | |
Total revenues | |
| 21,225 | | |
| 17,768 | | |
| 61,474 | | |
| 47,003 | |
| |
| | | |
| | | |
| | | |
| | |
Expenses: | |
| | | |
| | | |
| | | |
| | |
Real estate operating expenses | |
| 11,424 | | |
| 10,042 | | |
| 32,147 | | |
| 26,071 | |
Interest expense | |
| 6,006 | | |
| 5,411 | | |
| 18,072 | | |
| 15,044 | |
Advisor's fee, related party | |
| 612 | | |
| 475 | | |
| 1,801 | | |
| 1,251 | |
Property acquisition costs | |
| — | | |
| 718 | | |
| 295 | | |
| 2,246 | |
General and administrative expenses | |
| 1,654 | | |
| 1,512 | | |
| 5,047 | | |
| 4,682 | |
Depreciation and amortization | |
| 5,037 | | |
| 3,801 | | |
| 14,310 | | |
| 10,375 | |
Total expenses | |
| 24,733 | | |
| 21,959 | | |
| 71,672 | | |
| 59,669 | |
| |
| | | |
| | | |
| | | |
| | |
Total revenues less total expenses | |
| (3,508 | ) | |
| (4,191 | ) | |
| (10,198 | ) | |
| (12,666 | ) |
| |
| | | |
| | | |
| | | |
| | |
Gain on sale of real estate | |
| — | | |
| 3 | | |
| 2,777 | | |
| 3 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from continuing operations | |
| (3,508 | ) | |
| (4,188 | ) | |
| (7,421 | ) | |
| (12,663 | ) |
| |
| | | |
| | | |
| | | |
| | |
Discontinued operations: | |
| | | |
| | | |
| | | |
| | |
Income from operations | |
| — | | |
| 185 | | |
| — | | |
| 1,398 | |
Net loss | |
| (3,508 | ) | |
| (4,003 | ) | |
| (7,421 | ) | |
| (11,265 | ) |
| |
| | | |
| | | |
| | | |
| | |
Plus: net loss attributable to non-controlling interests | |
| 930 | | |
| 3,672 | | |
| 1,597 | | |
| 5,609 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss attributable to common shareholders | |
$ | (2,578 | ) | |
$ | (331 | ) | |
$ | (5,824 | ) | |
$ | (5,656 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diltued per share amounts attributable to common shareholders: | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Loss from continuing operations | |
| (0.18 | ) | |
| (0.03 | ) | |
| (0.41 | ) | |
| (0.49 | ) |
Discontinued operations | |
| — | | |
| 0.01 | | |
| — | | |
| 0.09 | |
Basic and diluted (loss) per share | |
$ | (0.18 | ) | |
$ | (0.02 | ) | |
$ | (0.41 | ) | |
$ | (0.40 | ) |
| |
| | | |
| | | |
| | | |
| | |
Funds from operations - Note 1 | |
$ | 1,267 | | |
$ | 2,520 | | |
$ | 4,735 | | |
$ | 2,073 | |
Funds from operations per common share - diluted - Note 2 | |
$ | 0.09 | | |
$ | 0.18 | | |
$ | 0.33 | | |
$ | 0.14 | |
| |
| | | |
| | | |
| | | |
| | |
Adjusted funds from operations - Note 1 | |
$ | 1,747 | | |
$ | 2,963 | | |
$ | 6,267 | | |
$ | 3,308 | |
Adjusted funds from operations per common share - diluted -Note 2 | |
$ | 0.13 | | |
$ | 0.21 | | |
$ | 0.44 | | |
$ | 0.23 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted | |
| 14,101,056 | | |
| 14,303,237 | | |
| 14,144,236 | | |
| 14,252,902 | |
| |
| | | |
| | | |
| | | |
| | |
Note 1: | |
| | | |
| | | |
| | | |
| | |
Funds from operations is summarized in the following table: | |
| | | |
| | | |
| | | |
| | |
GAAP Net (loss) attributable to common shareholders | |
$ | (2,578 | ) | |
$ | (331 | ) | |
$ | (5,824 | ) | |
$ | (5,656 | ) |
Add: depreciation of properties | |
| 5,033 | | |
| 3,799 | | |
| 14,299 | | |
| 10,365 | |
Add: our share of depreciation in unconsolidated joint ventures | |
| 5 | | |
| 5 | | |
| 15 | | |
| 15 | |
Add: amortization of deferred leasing costs | |
| 16 | | |
| 16 | | |
| 47 | | |
| 46 | |
Deduct: gain on sale of real estate assets | |
| — | | |
| (3 | ) | |
| (2,777 | ) | |
| (3 | ) |
Adjustments for non-controlling interests - depreciation of properties | |
| (1,208 | ) | |
| (960 | ) | |
| (2,260 | ) | |
| (2,675 | ) |
Adjustments for non-controlling interests - deferred leasing costs | |
| (1 | ) | |
| (6 | ) | |
| (14 | ) | |
| (19 | ) |
Adjustments for non-controlling interests - gain on sale of real estate | |
| — | | |
| — | | |
| 1,249 | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Funds from operations attributable to common shareholders | |
$ | 1,267 | | |
$ | 2,520 | | |
$ | 4,735 | | |
$ | 2,073 | |
| |
| | | |
| | | |
| | | |
| | |
Adjust for straight line rents | |
| (117 | ) | |
| (136 | ) | |
| (318 | ) | |
| (404 | ) |
Add: amortization of restricted stock compensation | |
| 232 | | |
| 206 | | |
| 676 | | |
| 599 | |
Add: amortization of deferred financing costs | |
| 514 | | |
| 492 | | |
| 1,723 | | |
| 1,362 | |
Adjustments for non-controlling interests - straight line rents | |
| 68 | | |
| 77 | | |
| 186 | | |
| 229 | |
Adjustments for non-controlling interests - deferred financing costs | |
| (217 | ) | |
| (196 | ) | |
| (735 | ) | |
| (551 | ) |
| |
| | | |
| | | |
| | | |
| | |
Adjusted funds from operations attributable to common shareholders | |
$ | 1,747 | | |
$ | 2,963 | | |
$ | 6,267 | | |
$ | 3,308 | |
| |
| | | |
| | | |
| | | |
| | |
Note 2: | |
| | | |
| | | |
| | | |
| | |
Funds from operations per share is summarized in the following table: | |
| | | |
| | | |
| | | |
| | |
GAAP Net (loss) income attributable to common shareholders | |
$ | (0.18 | ) | |
$ | (0.02 | ) | |
$ | (0.41 | ) | |
$ | (0.40 | ) |
Add: depreciation of properties | |
| 0.36 | | |
| 0.27 | | |
| 1.01 | | |
| 0.73 | |
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 | ) | |
| — | |
Adjustments for non-controlling interests - depreciation of properties | |
| (0.09 | ) | |
| (0.07 | ) | |
| (0.16 | ) | |
| (0.19 | ) |
Adjustments for non-controlling interests - deferred leasing costs | |
| — | | |
| — | | |
| — | | |
| — | |
Adjustment for non-controlling interest - gain on sale of real estate | |
| — | | |
| — | | |
| 0.09 | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Funds from operations per common share basic and diluted | |
| 0.09 | | |
| 0.18 | | |
| 0.33 | | |
| 0.14 | |
| |
| | | |
| | | |
| | | |
| | |
Adjust for straight line rents | |
| (0.01 | ) | |
| (0.01 | ) | |
| (0.02 | ) | |
| (0.03 | ) |
Add: amortization of restricted stock compensation | |
| 0.02 | | |
| 0.01 | | |
| 0.05 | | |
| 0.04 | |
Add: amortization of deferred financing costs | |
| 0.04 | | |
| 0.03 | | |
| 0.12 | | |
| 0.10 | |
Adjustments for non-controlling interests - straight line rents | |
| — | | |
| 0.01 | | |
| 0.01 | | |
| 0.02 | |
Adjustments for non-controlling interests - deferred financing costs | |
| (0.01 | ) | |
| (0.01 | ) | |
| (0.05 | ) | |
| (0.04 | ) |
| |
| | | |
| | | |
| | | |
| | |
Adjusted funds from operations per common share basic and diluted | |
$ | 0.13 | | |
$ | 0.21 | | |
$ | 0.44 | | |
$ | 0.23 | |
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