FREEHOLD, N.J., Aug. 1, 2018 /PRNewswire/ -- Monmouth Real Estate
Investment Corporation (NYSE: MNR) reported Net Income Attributable
to Common Shareholders of $10,323,000
or $0.13 per diluted share for the
three months ended June 30, 2018 as
compared to $5,217,000 or
$0.07 per diluted share for the three
months ended June 30, 2017
representing an increase per share of 86%. Core Funds from
Operations (Core FFO) were $17,988,000 or $0.23 per diluted share for the three months
ended June 30, 2018 as compared to
$15,441,000 or $0.21 per diluted share for the three months
ended June 30, 2017 representing an
increase in Core FFO per share of 10%. Adjusted Funds from
Operations (AFFO), for the three months ended June 30, 2018 were $17,348,000 or $0.22 per diluted share versus $13,960,000 or $0.19 per diluted share for the three months
ended June 30, 2017 representing an
increase in AFFO per share of 16%.
A summary of significant financial information for the three and
nine months ended June 30, 2018 and
2017 is as follows:
|
|
Three Months
Ended
June
30,
|
|
|
2018
|
|
2017
|
Rental
Revenue
|
$
|
29,256,000
|
$
|
24,400,000
|
Reimbursement
Revenue
|
$
|
6,942,000
|
$
|
4,209,000
|
Net Operating Income
(NOI) (1)
|
$
|
28,789,000
|
$
|
24,036,000
|
Total
Expenses
|
$
|
19,073,000
|
$
|
14,131,000
|
Dividend and Interest
Income
|
$
|
3,628,000
|
$
|
1,899,000
|
Gain on Sale of
Securities Transactions
|
$
|
- 0 -
|
$
|
1,488,000
|
Gain on Sale of Real
Estate Investments
|
$
|
2,097,000
|
$
|
- 0 -
|
Net Income
|
$
|
14,571,000
|
$
|
11,730,000
|
Net Income
Attributable to Common Shareholders
|
$
|
10,323,000
|
$
|
5,217,000
|
Net Income
Attributable to Common Shareholders Per Diluted Common
Share
|
$
|
0.13
|
$
|
0.07
|
Core FFO
(1)
|
$
|
17,988,000
|
$
|
15,441,000
|
Core FFO per Diluted
Common Share (1)
|
$
|
0.23
|
$
|
0.21
|
AFFO (1)
|
$
|
17,348,000
|
$
|
13,960,000
|
AFFO per Diluted
Common Share (1)
|
$
|
0.22
|
$
|
0.19
|
Dividends Declared
per Common Share
|
$
|
0.17
|
$
|
0.16
|
|
|
|
|
|
Weighted Avg. Diluted
Common Shares Outstanding
|
|
79,572,000
|
|
73,054,000
|
|
|
|
|
|
|
|
Nine Months
Ended
June
30,
|
|
|
2018
|
|
2017
|
Rental
Revenue
|
$
|
85,559,000
|
$
|
71,292,000
|
Reimbursement
Revenue
|
$
|
17,003,000
|
$
|
11,807,000
|
Lease Termination
Income
|
$
|
210,000
|
$
|
- 0 -
|
Net Operating Income
(NOI) (1)
|
$
|
84,597,000
|
$
|
70,184,000
|
Total
Expenses
|
$
|
52,262,000
|
$
|
41,179,000
|
Dividend and Interest
Income
|
$
|
9,380,000
|
$
|
4,631,000
|
Gain on Sale of
Securities Transactions
|
$
|
111,000
|
$
|
2,294,000
|
Gain on Sale of Real
Estate Investments
|
$
|
7,485,000
|
$
|
- 0 -
|
Net Income
|
$
|
43,846,000
|
$
|
30,009,000
|
Net Income
Attributable to Common Shareholders
|
$
|
31,033,000
|
$
|
16,216,000
|
Net Income
Attributable to Common Shareholders Per Diluted Common
Share
|
$
|
0.40
|
$
|
0.23
|
Core FFO
(1)
|
$
|
51,752,000
|
$
|
41,694,000
|
Core FFO per Diluted
Common Share (1)
|
$
|
0.66
|
$
|
0.58
|
AFFO (1)
|
$
|
50,667,000
|
$
|
39,411,000
|
AFFO per Diluted
Common Share (1)
|
$
|
0.65
|
$
|
0.55
|
Dividends Declared
per Common Share
|
$
|
0.51
|
$
|
0.48
|
|
|
|
|
|
Weighted Avg. Diluted
Common Shares Outstanding
|
|
78,099,000
|
|
71,423,000
|
A summary of significant balance sheet information as of
June 30, 2018 and September 30, 2017 is as follows:
|
|
June 30,
2018
|
|
September 30,
2017
|
Net Real Estate
Investments
|
$
|
1,408,584,000
|
$
|
1,260,856,000
|
Securities Available
for Sale at Fair Value
|
$
|
167,594,000
|
$
|
123,765,000
|
Total
Assets
|
$
|
1,624,481,000
|
$
|
1,443,038,000
|
Fixed Rate Mortgage
Notes Payable, net of Unamortized Debt Issuance Costs
|
$
|
657,083,000
|
$
|
591,364,000
|
Loans
Payable
|
$
|
157,793,000
|
$
|
120,091,000
|
Total Shareholders'
Equity
|
$
|
788,914,000
|
$
|
712,866,000
|
Michael P. Landy, President and
CEO, commented on the results for the third quarter of fiscal
2018,
"We are pleased to report another strong quarter for
Monmouth. During the quarter
we:
- Increased our per share Core FFO to $0.23, representing a 10% increase over the prior
year period
- Increased our per share AFFO to $0.22, representing a 16% increase over the prior
year period
- Increased our Net Income Attributable to Common Shareholders to
$0.13 per share, representing an 86%
increase over the prior year period
- Increased our Net Operating Income (NOI) by 20% over the prior
year period
- Increased our Gross Revenue by 31% to $39.8 million, compared to $30.5 million in the prior year period
- Acquired two, brand new, Class A built-to-suit properties
comprising 762,000 square feet, for a cost of $64.4 million
- Grew our acquisition pipeline over the quarter to four, brand
new, Class A build-to-suit properties, representing 1.1 million
square feet for a total purchase price of $221.4 million, all net-leased to investment
grade tenants
- Increased our gross leasable area (GLA) by 15% to 20.5 million
square feet over the prior year period
- Maintained our weighted average lease maturity at 7.8
years
- Increased our occupancy rate by 40 bps sequentially and
maintained our sector leading occupancy rate year over year at
99.6% as of the quarter end
- Renewed 9 of the sixteen leases scheduled to expire in fiscal
2018. These 9 leases consist of 890,000 square feet and result in a
3.9% increase in GAAP rents and a 2.4% increase on a cash basis.
These lease renewals have a weighted average lease term of 6.5
years
- Increased our securities investments by 16% during the quarter
to $167.6 million, all attributable
to rising prices on our holdings, and
- Reduced our weighted average interest rate on our fixed rate
debt by 10 bps to 4.11% as of the current quarter end, and
maintained our weighted average debt maturity on our fixed rate
debt at 11.5 years."
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 16% over the prior year quarter and by 18%
year over year for the nine-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 10th consecutive quarter with
an occupancy rate above 99%. At quarter end, our weighted average
lease maturity remained 7.8 years, and our weighted average debt
maturity remained 11.5 years, providing excellent long-term
visibility for continued strong results."
"Thus far in fiscal 2018, we have acquired five buildings
comprising 2.0 million square feet and 260.4 total acres, for a
total purchase price of $174.0
million. During the quarter, we acquired two, brand new,
Class A built-to-suit properties for an aggregate cost of
$64.4 million. One property consists
of a 399,000 square foot industrial building, situated on 27.5
acres in Daytona Beach, FL,
net-leased for 10 years to B. Braun Medical Inc. Florida
consistently ranks as one of our nation's strongest and most
business-friendly states and represents 11% of our property
portfolio. The other property is a 363,000 square foot industrial
building, situated on 31.3 acres, located in Mobile, AL, and is net-leased to Amazon for 11
years. This property is strategically located at the Port of
Mobile, a beneficiary of the
recently expanded Panama Canal. With over 400 million tons in
shipments last year, the Panama Canal has surpassed all
projections. In a similar manner to building out our large
ecommerce exposure in anticipation of the digital revolution, we
have assembled a portfolio that is very well positioned to benefit
from the remaking of the global supply chain."
"Thus far in fiscal 2018, we have renewed nine of the sixteen
leases that were set to expire. These nine lease renewals total
890,000 square feet, representing 58% of the expiring square
footage. These lease renewals resulted in a 3.9% rental increase on
a GAAP basis, and a 2.4% increase on a cash basis. These nine lease
renewals have a weighted average lease term of 6.5 years. Three of
the remaining seven properties were sold, generating substantial
gains during fiscal 2018. One property has been re-tenanted and one
80,000 square foot lease did not renew. We expect to have more to
report on the remaining two properties during the remainder of
fiscal 2018."
"Our REIT securities investments performed very well during the
quarter with a total value of $167.6
million at quarter end representing a 16% increase over the
prior quarter. All of this increase is attributable to rising
prices on our holdings. Our securities investments had an
unrealized loss of $8.4 million at
quarter end representing a $22.8
million improvement over the prior quarter. Our securities
investments generated $3.6 million in
dividend income during the quarter representing a 91% increase over
the prior year period. At quarter end, our REIT securities
investments represented 9.2% of our total undepreciated
assets."
"Our acquisition pipeline grew over the quarter and currently
contains four, brand new, Class A build-to-suit industrial
buildings. Each of these four properties is net-leased to
FedEx Ground Package System, Inc. These properties contain
approximately 1.1 million total square feet and are situated on
235.2 total acres. The total purchase price for these four
properties is approximately $221.4
million with a weighted average lease term of 13.9
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 Third
Quarter FY 2018 Financial Results Webcast and Conference Call on
Thursday, August 2, 2018 at
10:00 a.m. Eastern Time. Senior
management will discuss the results, current market conditions and
future outlook.
The Company's Third 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 3Q2018
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 Thursday
August 2, 2018. It will be available until November 20, 2018, and can be accessed by dialing
toll free 877-344-7529 (domestically) and 412-317-0088
(internationally) and entering the passcode 10120748. 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 world. 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 109 properties containing a total of approximately 20.5 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 and costs associated with the redemption of
preferred stock. We define AFFO as Core FFO, excluding lease
termination income, net gain or loss on sale of 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 that are recurring in nature, 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 taxes
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
nine months ended June 30, 2018 and
2017:
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
6/30/2018
|
|
6/30/2017
|
|
6/30/2018
|
|
6/30/2017
|
|
Net Income
Attributable to Common Shareholders
|
$10,323,000
|
|
$5,217,000
|
|
$31,033,000
|
|
$16,216,000
|
|
Plus: Depreciation
Expense (excluding Corporate Office Capitalized Costs)
|
9,123,000
|
|
7,279,000
|
|
26,386,000
|
|
21,333,000
|
|
Plus: Amortization of
Intangible Assets
|
417,000
|
|
263,000
|
|
1,158,000
|
|
771,000
|
|
Plus: Amortization of
Capitalized Lease Costs
|
222,000
|
|
215,000
|
|
660,000
|
|
633,000
|
|
Less: (Gain) / Plus:
Loss on Sale of Real Estate Investments
|
(2,097,000)
|
|
- 0 -
|
|
(7,485,000)
|
|
95,000
|
|
FFO Attributable
to Common Shareholders
|
17,988,000
|
|
12,974,000
|
|
51,752,000
|
|
39,048,000
|
|
Plus: Acquisition
Costs
|
- 0 -
|
|
- 0 -
|
|
- 0 -
|
|
179,000
|
|
Plus: Redemption of
Preferred Stock
|
- 0 -
|
|
2,467,000
|
|
- 0 -
|
|
2,467,000
|
|
Core FFO
Attributable to Common Shareholders
|
17,988,000
|
|
15,441,000
|
|
51,752,000
|
|
41,694,000
|
|
Plus: Depreciation of
Corporate Office Capitalized Costs
|
39,000
|
|
39,000
|
|
118,000
|
|
117,000
|
|
Plus: Stock
Compensation Expense
|
97,000
|
|
175,000
|
|
339,000
|
|
441,000
|
|
Plus: Amortization of
Financing Costs
|
315,000
|
|
283,000
|
|
911,000
|
|
950,000
|
|
Less: Gain on Sale of
Securities Transactions
|
- 0 -
|
|
(1,488,000)
|
|
(111,000)
|
|
(2,294,000)
|
|
Less: Lease
Termination Income
|
- 0 -
|
|
- 0 -
|
|
(210,000)
|
|
- 0 -
|
|
Less: Recurring
Capital Expenditures
|
(490,000)
|
|
(195,000)
|
|
(774,000)
|
|
(572,000)
|
|
Less: Effect of
Non-cash U.S. GAAP Straight-line Rent Adjustment
|
(601,000)
|
|
(295,000)
|
|
(1,358,000)
|
|
(925,000)
|
|
AFFO Attributable
to Common Shareholders
|
$17,348,000
|
|
$13,960,000
|
|
$50,667,000
|
|
$39,411,000
|
|
The following are the Cash Flows provided (used) by Operating,
Investing and Financing Activities for the nine months ended
June 30, 2018 and 2017:
|
Nine Months
Ended
|
|
6/30/2018
|
|
6/30/2017
|
|
|
|
|
Operating
Activities
|
$63,094,000
|
|
$50,191,000
|
Investing
Activities
|
(216,285,000)
|
|
(232,827,000)
|
Financing
Activities
|
149,857,000
|
|
(98,637,000)
|
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SOURCE Monmouth Real Estate Investment Corporation