FREEHOLD, N.J., May 8, 2018 /PRNewswire/ -- Monmouth Real Estate
Investment Corporation (NYSE:MNR) reported Net Income Attributable
to Common Shareholders of $7,397,000
or $0.10 per diluted share for the
three months ended March 31, 2018 as
compared to $4,843,000 or
$0.07 per diluted share for the three
months ended March 31, 2017
representing an increase per share of 43%. Core Funds from
Operations (Core FFO) were $16,830,000 or $0.22 per diluted share for the three months
ended March 31, 2018 as compared to
$12,396,000 or $0.17 per diluted share for the three months
ended March 31, 2017 representing an
increase in Core FFO per share of 29%. Adjusted Funds from
Operations (AFFO), for the three months ended March 31, 2018 were $16,847,000 or $0.22 per diluted share versus $12,511,000 or $0.18 per diluted share for the three months
ended March 31, 2017 representing an
increase in AFFO per share of 22%.
A summary of significant financial information for the three and
six months ended March 31, 2018 and
2017 is as follows:
|
|
Three Months
Ended
March
31,
|
|
|
2018
|
|
2017
|
Rental
Revenue
|
$
|
28,610,000
|
$
|
23,611,000
|
Reimbursement
Revenue
|
$
|
5,012,000
|
$
|
3,697,000
|
Net Operating Income
(NOI) (1)
|
$
|
28,366,000
|
$
|
23,168,000
|
Total
Expenses
|
$
|
16,921,000
|
$
|
13,785,000
|
Dividend and Interest
Income
|
$
|
2,888,000
|
$
|
1,439,000
|
Gain on Sale of
Securities Transactions
|
$
|
11,000
|
$
|
- 0 -
|
Net Income
|
$
|
11,645,000
|
$
|
8,425,000
|
Net Income
Attributable to Common Shareholders
|
$
|
7,397,000
|
$
|
4,843,000
|
Net Income
Attributable to Common Shareholders Per Diluted Common
Share
|
$
|
0.10
|
$
|
0.07
|
Core FFO
(1)
|
$
|
16,830,000
|
$
|
12,396,000
|
Core FFO per Diluted
Common Share (1)
|
$
|
0.22
|
$
|
0.17
|
AFFO (1)
|
$
|
16,847,000
|
$
|
12,511,000
|
AFFO per Diluted
Common Share (1)
|
$
|
0.22
|
$
|
0.18
|
Dividends Declared
per Common Share
|
$
|
0.17
|
$
|
0.16
|
|
|
|
|
|
Weighted Avg. Diluted
Common Shares Outstanding
|
|
78,156,000
|
|
71,407,000
|
|
|
|
|
|
|
|
Six Months
Ended
March
31,
|
|
|
2018
|
|
2017
|
Rental
Revenue
|
$
|
56,302,000
|
$
|
46,892,000
|
Reimbursement
Revenue
|
$
|
10,061,000
|
$
|
7,598,000
|
Lease Termination
Income
|
$
|
210,000
|
$
|
- 0 -
|
Net Operating Income
(NOI) (1)
|
$
|
55,808,000
|
$
|
46,148,000
|
Total
Expenses
|
$
|
33,189,000
|
$
|
27,048,000
|
Dividend and Interest
Income
|
$
|
5,752,000
|
$
|
2,731,000
|
Gain on Sale of
Securities Transactions
|
$
|
111,000
|
$
|
806,000
|
Gain on Sale of Real
Estate Investments
|
$
|
5,388,000
|
$
|
- 0 -
|
Net Income
|
$
|
29,275,000
|
$
|
18,279,000
|
Net Income
Attributable to Common Shareholders
|
$
|
20,710,000
|
$
|
10,999,000
|
Net Income
Attributable to Common Shareholders Per Diluted Common
Share
|
$
|
0.27
|
$
|
0.16
|
Core FFO
(1)
|
$
|
33,763,000
|
$
|
26,253,000
|
Core FFO per Diluted
Common Share (1)
|
$
|
0.44
|
$
|
0.37
|
AFFO (1)
|
$
|
33,319,000
|
$
|
25,450,000
|
AFFO per Diluted
Common Share (1)
|
$
|
0.43
|
$
|
0.36
|
Dividends Declared
per Common Share
|
$
|
0.34
|
$
|
0.32
|
|
|
|
|
|
Weighted Avg. Diluted
Common Shares Outstanding
|
|
77,362,000
|
|
70,608,000
|
A summary of significant balance sheet information as of
March 31, 2018 and September 30, 2017 is as follows:
|
|
March 31,
2018
|
|
September 30,
2017
|
Net Real Estate
Investments
|
$
|
1,351,926,000
|
$
|
1,260,856,000
|
Securities Available
for Sale at Fair Value
|
$
|
144,630,000
|
$
|
123,765,000
|
Total
Assets
|
$
|
1,559,892,000
|
$
|
1,443,038,000
|
Fixed Rate Mortgage
Notes Payable, net of Unamortized Debt Issuance Costs
|
$
|
632,051,000
|
$
|
591,364,000
|
Loans
Payable
|
$
|
154,342,000
|
$
|
120,091,000
|
Total Shareholders'
Equity
|
$
|
750,358,000
|
$
|
712,866,000
|
Michael P. Landy, President and
CEO, commented on the results for the second quarter of fiscal
2018, "This was another strong quarter for Monmouth and we are pleased to report
continued growth across multiple fronts. During the quarter we:
- Increased our per share AFFO to $0.22, representing a 22% increase over the prior
year period
- Increased our Net Income Attributable to Common Shareholders to
$0.10 per share, representing a 43%
increase over the prior year period
- Increased our Net Operating Income (NOI) by 22% over the prior
year period
- Acquired one brand new Class A property comprising 832,000
square feet, for a cost of $57.5
million
- Increased our gross leasable area (GLA) by 20% to 19.9 million
square feet over the prior year period. Subsequent to quarter end,
our GLA increased to 20.3 million square feet
- Increased our weighted average lease maturity by 5% from 7.4
years at the end of the prior year quarter to 7.8 years at the end
of the current quarter
- Renewed six of the sixteen leases scheduled to expire in fiscal
2018. These six leases consist of 569,000 square feet and
result in a 3.9% increase in GAAP rents and a 1.5% increase on a
cash basis. These lease renewals have a weighted average lease term
of 6.1 years
- Reduced our weighted average interest rate on our fixed rate
debt by 26 bps to 4.11% as of the current quarter end from 4.37% as
of the prior year quarter end
- Extended our weighted average debt maturity on our fixed rate
debt by 8% to 11.5 years as of the current quarter end from 10.7
years as of the prior year quarter end, and
- Subsequent to the quarter end, acquired one brand new Class A
property comprising 399,000 square feet, for a cost of $30.8 million."
Mr. Landy further stated, "Monmouth has maintained or increased its
common stock dividend for 26 consecutive years. We have increased
our AFFO per share by 22% over the prior year quarter and by 19%
year over year for the six month period. With a very conservative
77% AFFO dividend payout ratio this quarter, we remain confident
about continuing to provide our shareholders with the high-quality,
reliable income streams we have delivered for over a quarter
century. This quarter represented our 9th consecutive quarter with
an occupancy rate of 99% or greater. At quarter end, our weighted
average lease maturity increased to 7.8 years, and our weighted
average debt maturity increased to 11.5 years."
"During the quarter, we acquired a brand new 832,000 square foot
industrial building for $57.5
million, leased for 10 years to Shaw Industries, a division
of Berkshire Hathaway. This property is strategically well located
at the Port of Savannah. With over 400 million tons in shipments
last year, the recently expanded Panama Canal has been surpassing
all projections. In a similar manner to building our large
ecommerce exposure, we have assembled a portfolio that is very well
positioned to benefit from the remaking of the global supply chain.
Subsequent to quarter end, we also acquired a brand new 399,000
square foot industrial building for $30.8
million, leased for 10 years to B. Braun Medical in Daytona
Beach, Florida. Through the first half of fiscal 2018, we
have acquired four buildings comprising 1.7 million square feet for
a total purchase price of $140.4
million."
"Thus far in fiscal 2018, we have renewed six of the sixteen
leases that were set to expire. These six lease renewals total
569,000 square feet, representing 37% of the expiring square
footage. These lease renewals resulted in a 3.9% rental increase on
a GAAP basis and a 1.5% increase on a cash basis. These six lease
renewals have a weighted average lease term of 6.1 years. Two of
the remaining sixteen properties were sold, generating substantial
gains during the previous quarter. One additional property is under
contract for sale and another one has been re-tenanted. We expect
to have more to report on the remaining six properties during the
second half of fiscal 2018."
"The rising interest rate environment has resulted in a
pronounced sell-off in REIT securities. Our securities portfolio
went from $4.1 million in unrealized
losses at the end of last quarter to $31.1
million in unrealized losses at the end of this quarter.
Because real estate is priced simultaneously in two markets, public
and private, arbitrage opportunities can present themselves. The
public REIT market now represents a substantial discount to private
market valuations. We are confident that this discrepancy will be
resolved over time. We increased our securities holdings from
$123.8 million at the end of fiscal
2017 to $144.6 million at the end of
the current quarter. At quarter end, our securities portfolio
represented 8.3% of our undepreciated total assets. Our dividend
and interest income increased by 101% over the prior year period,
from $1.4 million in the second
quarter of fiscal 2017 to $2.9
million in the second quarter of fiscal 2018."
"Our acquisition pipeline grew over the quarter and currently
contains two new Class A build-to-suit industrial buildings.
One is a new 363,000 square foot industrial building leased to
Amazon. The second property is a new 261,000 square foot industrial
building leased to FedEx Ground that is being developed in
Charleston, SC. The total purchase
price for these two properties is approximately $80.9 million with a weighted average lease term
of 12.3 years. We anticipate closing these transactions
sometime during the remainder of fiscal 2018 and the first quarter
of fiscal 2019. We look forward to reporting continued
progress throughout the year."
Monmouth Real Estate Investment Corporation will host its Second
Quarter FY 2018 Financial Results Webcast and Conference Call on
Wednesday, May 9, 2018 at
10:00 a.m. Eastern Time. Senior
management will discuss the results, current market conditions and
future outlook.
The Company's Second Quarter FY 2018 financial results being
released herein will be available on the Company's website at
www.mreic.reit in the Investor Relations section, under Filings and
Reports.
To participate in the Webcast, select the 2Q2018
Webcast and Earnings Call "Link to Webcast" on the homepage of
the Company's website at www.mreic.reit, in the Highlights section,
which is located towards the bottom of the homepage.
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 Wednesday,
May 9, 2018. It will be available until August 1, 2018, and can be accessed by dialing
toll free 877-344-7529 (domestically) and 412-317-0088
(internationally) and entering the passcode 10117592. A
transcript of the call and the webcast replay will be available at
the Company's website on the Investor Relations homepage,
www.mreic.reit.
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 is a fully-integrated and
self-managed real estate company, whose property portfolio consists
of 110 properties containing a total of approximately 20.3 million
rentable square feet, geographically diversified across 30 states.
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, non-recurring other expense, 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. However, other REITs may use different methodologies
to calculate FFO, Core FFO and AFFO and, accordingly, our FFO, Core
FFO and AFFO may not be comparable to all other REITs. 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 and
six months ended March 31, 2018 and
2017:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
3/31/2018
|
|
3/31/2017
|
|
3/31/2018
|
|
3/31/2017
|
|
Net Income
Attributable to Common Shareholders
|
$7,397,000
|
|
$4,843,000
|
|
$20,710,000
|
|
$10,999,000
|
|
Plus: Depreciation
Expense (excluding Corporate Office Capitalized Costs)
|
8,819,000
|
|
7,100,000
|
|
17,263,000
|
|
14,054,000
|
|
Plus: Amortization of
Intangible Assets
|
397,000
|
|
241,000
|
|
741,000
|
|
509,000
|
|
Plus: Amortization of
Capitalized Lease Costs
|
217,000
|
|
212,000
|
|
437,000
|
|
417,000
|
|
Less: (Gain) / Plus:
Loss on Sale of Real Estate Investments
|
- 0 -
|
|
- 0 -
|
|
(5,388,000)
|
|
95,000
|
|
FFO Attributable
to Common Shareholders
|
16,830,000
|
|
12,396,000
|
|
33,763,000
|
|
26,074,000
|
|
Plus: Acquisition
Costs
|
- 0 -
|
|
- 0 -
|
|
- 0 -
|
|
179,000
|
|
Core FFO
Attributable to Common Shareholders
|
16,830,000
|
|
12,396,000
|
|
33,763,000
|
|
26,253,000
|
|
Plus: Depreciation of
Corporate Office Capitalized Costs
|
39,000
|
|
39,000
|
|
79,000
|
|
78,000
|
|
Plus: Stock
Compensation Expense
|
111,000
|
|
166,000
|
|
242,000
|
|
266,000
|
|
Plus: Amortization of
Financing Costs
|
302,000
|
|
385,000
|
|
596,000
|
|
666,000
|
|
Less: Gain on Sale of
Securities Transactions
|
(11,000)
|
|
- 0 -
|
|
(111,000)
|
|
(806,000)
|
|
Less: Lease
Termination Income
|
- 0 -
|
|
- 0 -
|
|
(210,000)
|
|
- 0 -
|
|
Less: Recurring
Capital Expenditures
|
(64,000)
|
|
(188,000)
|
|
(284,000)
|
|
(377,000)
|
|
Less: Effect of
Non-cash U.S. GAAP Straight-line Rent Adjustment
|
(360,000)
|
|
(287,000)
|
|
(756,000)
|
|
(630,000)
|
|
AFFO Attributable
to Common Shareholders
|
$16,847,000
|
|
$12,511,000
|
|
$33,319,000
|
|
$25,450,000
|
|
The following are the Cash Flows provided (used) by Operating,
Investing and Financing Activities for the six months ended
March 31, 2018 and 2017:
|
Six Months
Ended
|
|
3/31/2018
|
|
3/31/2017
|
|
|
|
|
Operating
Activities
|
$42,839,000
|
|
$30,846,000
|
Investing
Activities
|
(161,056,000)
|
|
(79,130,000)
|
Financing
Activities
|
120,462,000
|
|
(24,513,000)
|
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SOURCE Monmouth Real Estate Investment Corporation