FREEHOLD, N.J., Nov. 28,
2018 /PRNewswire/ -- Monmouth Real Estate Investment
Corporation (NYSE: MNR) reported Net Income Attributable to Common
Shareholders of $38,815,000 or
$0.49 per diluted share for the
fiscal year ended September 30, 2018
as compared to $22,942,000 or
$0.32 per diluted share for the
fiscal year ended September 30, 2017,
representing an increase in Net Income Attributable to Common
Shareholders per share of 53.1%. The increase in Net Income
Attributable to Common Shareholders was mostly attributable to the
$18,541,000 increase in Net Operating
Income (NOI). Funds From Operations (FFO) were $69,842,000 or $0.89 per diluted share for the fiscal year ended
September 30, 2018 as compared to
$54,443,000 or $0.75 per diluted share for the fiscal year ended
September 30, 2017, representing an
increase in FFO per share of 18.7%. Core Funds from
Operations (Core FFO) were $69,842,000 or $0.89 per diluted share for the fiscal year ended
September 30, 2018 as compared to
$57,088,000 or $0.79 per diluted share for the fiscal year ended
September 30, 2017, representing an
increase in Core FFO per share of 12.7%. Adjusted Funds from
Operations (AFFO), for the fiscal year ended September 30, 2018 were $68,375,000 or $0.87 per diluted share versus $54,880,000 or $0.76 per diluted share for the fiscal year ended
September 30, 2017, representing an
increase in AFFO per share of 14.5%.
Net Income Attributable to Common Shareholders for the three
months ended September 30, 2018 was
$7,782,000 or $0.10 per diluted share as compared to
$6,726,000 or $0.09 per diluted share for the three months
ended September 30, 2017,
representing an increase in Net Income Attributable to Common
Shareholders per share of 11.1%. FFO and Core FFO were
$18,090,000 or $0.22 per diluted share for the three months
ended September 30, 2018 as compared
to $15,395,000 or $0.21 per diluted share for the three months
ended September 30, 2017,
representing an increase in FFO per share and Core FFO per share of
4.8%. AFFO for the three months ended September 30, 2018 was $17,708,000 or $0.22 per diluted share versus $15,470,000 or $0.21 per diluted share for the three months
ended September 30, 2017,
representing an increase in AFFO per share of 4.8%.
A summary of significant financial information for the three and
twelve months ended September 30,
2018 and 2017 is as follows:
|
|
Three Months
Ended
September
30,
|
|
|
2018
|
|
2017
|
Rental
Revenue
|
$
|
30,306,000
|
$
|
26,368,000
|
Reimbursement
Revenue
|
$
|
6,295,000
|
$
|
4,789,000
|
Net Operating Income
(NOI) (1)
|
$
|
30,174,000
|
$
|
26,047,000
|
Total
Expenses
|
$
|
19,472,000
|
$
|
16,294,000
|
Dividend and Interest
Income
|
$
|
3,740,000
|
$
|
2,300,000
|
Gain on Sale of
Securities Transactions
|
$
|
-0-
|
$
|
18,000
|
Net Income
|
$
|
12,160,000
|
$
|
10,262,000
|
Net Income
Attributable to Common Shareholders
|
$
|
7,782,000
|
$
|
6,726,000
|
Net Income
Attributable to Common Shareholders Per Diluted Common
Share
|
$
|
0.10
|
$
|
0.09
|
FFO (1)
|
$
|
18,090,000
|
$
|
15,395,000
|
FFO per Diluted
Common Share (1)
|
$
|
0.22
|
$
|
0.21
|
Core FFO
(1)
|
$
|
18,090,000
|
$
|
15,395,000
|
Core FFO per Diluted
Common Share (1)
|
$
|
0.22
|
$
|
0.21
|
AFFO (1)
|
$
|
17,708,000
|
$
|
15,470,000
|
AFFO per Diluted
Common Share (1)
|
$
|
0.22
|
$
|
0.21
|
Dividends Declared
per Common Share
|
$
|
0.17
|
$
|
0.16
|
|
|
|
|
|
Weighted Avg. Diluted
Common Shares Outstanding
|
|
80,889,000
|
|
74,800,000
|
|
|
|
|
|
|
|
Twelve Months
Ended
September
30,
|
|
|
2018
|
|
2017
|
Rental
Revenue
|
$
|
115,864,000
|
$
|
97,660,000
|
Reimbursement
Revenue
|
$
|
23,298,000
|
$
|
18,726,000
|
Lease Termination
Income
|
$
|
210,000
|
$
|
-0-
|
Net Operating Income
(NOI) (1)
|
$
|
114,772,000
|
$
|
96,231,000
|
Total
Expenses
|
$
|
71,734,000
|
$
|
59,602,000
|
Dividend and Interest
Income
|
$
|
13,120,000
|
$
|
6,931,000
|
Gain on Sale of
Securities Transactions
|
$
|
111,000
|
$
|
2,312,000
|
Gain on Sale of Real
Estate Investments
|
$
|
7,485,000
|
$
|
-0-
|
Net Income
|
$
|
56,006,000
|
$
|
40,271,000
|
Net Income
Attributable to Common Shareholders
|
$
|
38,815,000
|
$
|
22,942,000
|
Net Income
Attributable to Common Shareholders Per Diluted Common
Share
|
$
|
0.49
|
$
|
0.32
|
FFO (1)
|
$
|
69,842,000
|
$
|
54,443,000
|
FFO per Diluted
Common Share (1)
|
$
|
0.89
|
$
|
0.75
|
Core FFO
(1)
|
$
|
69,842,000
|
$
|
57,088,000
|
Core FFO per Diluted
Common Share (1)
|
$
|
0.89
|
$
|
0.79
|
AFFO (1)
|
$
|
68,375,000
|
$
|
54,880,000
|
AFFO per Diluted
Common Share (1)
|
$
|
0.87
|
$
|
0.76
|
Dividends Declared
per Common Share
|
$
|
0.68
|
$
|
0.64
|
|
|
|
|
|
Weighted Avg. Diluted
Common Shares Outstanding
|
|
78,802,000
|
|
72,250,000
|
A summary of significant balance sheet information as of
September 30, 2018 and 2017 is as
follows:
|
|
September 30,
2018
|
|
September 30,
2017
|
Net Real Estate
Investments
|
$
|
1,512,513,000
|
$
|
1,260,830,000
|
Securities Available
for Sale at Fair Value
|
$
|
154,921,000
|
$
|
123,765,000
|
Total
Assets
|
$
|
1,718,378,000
|
$
|
1,443,038,000
|
Fixed Rate Mortgage
Notes Payable, net of Unamortized Debt Issuance Costs
|
$
|
711,546,000
|
$
|
591,364,000
|
Loans
Payable
|
$
|
186,609,000
|
$
|
120,091,000
|
Total Shareholders'
Equity
|
$
|
797,906,000
|
$
|
712,866,000
|
Michael P. Landy, President and
CEO, commented on the results for the fiscal year 2018,
"Fiscal 2018 was a very productive year for Monmouth. We executed exceptionally well and
our achievements were many. During the year, we accomplished
the following:
Solid Financial Results
- Generated 53% per share growth in Net Income Attributable to
Common Shareholders
- Increased our per share FFO to $0.89, representing an 18.7% increase over the
prior year
- Increased our per share AFFO to $0.87, representing a 14.5% increase over the
prior year
- Increased our Gross Revenue by 23.5% to $152.3 million
- Increased our Net Operating Income by 19.3% to $114.8 million
- Increased our common stock dividend by 6.3% on October 2, 2017, representing our second dividend
increase in three years
Strong Growth Record and Solid Pipeline
- Acquired 2.7 million square feet of high-quality industrial
space for $282.3 million, generating
$17.4 million in rental revenue,
comprising seven brand new Class A, built-to-suit properties, all
leased long-term, of which 85% is leased to investment-grade
tenants
- Completed two expansions totaling $3.5
million, generating $367,000
in additional rental revenue, and resulting in 10-year lease
extensions for both properties
- Increased our gross leasable area (GLA) by 12.7%
year-over-year, to 21.2 million square feet
- Entered into commitments to acquire three new build-to-suit
properties containing approximately 745,000 total square feet for a
total cost of $154.0 million, of
which one 347,145 square foot property was acquired for
$85.2 million subsequent to fiscal
yearend
Strong Portfolio Performance
- Renewed 11 of the 16 leases scheduled to expire in fiscal 2018,
including one short term renewal
- Renewed 10 leases comprising 972,000 square feet for a
weighted-average lease term of 6.8 years and resulting in an
increase in the weighted-average lease rate of 4.1% on a U.S. GAAP
straight-line basis and a 2.8% increase on a cash basis
- Sold four properties generating a realized gain of $7.5 million on a GAAP basis, and a $1.2 million gain over our original undepreciated
cost
- Increased our sector-leading occupancy rate by 30 basis points
to 99.6% as of the current fiscal yearend, up from 99.3% as of the
prior fiscal yearend, representing our third consecutive year with
above 99% occupancy
- Extended our weighted average lease maturity to 8.1 years as of
the current fiscal yearend from 7.9 years as of the prior fiscal
yearend
Compelling Returns and Strengthened Capitalization
- Achieved an 8% total shareholder return for fiscal 2018, versus
a 4% total return for the MSCI US REIT Index during the same
period
- Achieved $2.5 billion in total
market capitalization as of September 30,
2018, representing a 17% increase over the prior year
- Raised $90.0 million in equity
through our Dividend Reinvestment and Stock Purchase Plan
- Raised $40.1 million in net
proceeds through our 6.125% Series C Perpetual Preferred Stock ATM
Program
- Extended the weighted-average debt maturity on our fixed-rate
debt to 11.7 years
- Reduced the weighted-average interest rate on our fixed-rate
debt to 4.1% from 4.2%
- Reduced our General and Administrative expenses as a percentage
of gross revenue by 8% to 5.8% for fiscal year 2018, and as a
percentage of undepreciated assets by 4% to 46 basis points."
Mr. Landy stated, "On behalf of the hard-working team at
Monmouth, I am happy to report
these excellent results. The above metrics reflect a strong Company
that has continued to enhance its position over the year. Our
business model of investing in well-located, modern industrial
buildings, leased primarily to investment-grade tenants, has
provided our shareholders with reliable returns throughout the
business cycle. The high-quality of our portfolio is evidenced by
our sector-leading 99.6% occupancy rate."
"During fiscal 2018, we grew our gross leasable area (GLA) by
13% through the acquisition of seven brand-new Class A,
built-to-suit properties for an aggregate cost of $282.3 million. We also completed two property
expansions which resulted in 10-year lease extensions for both
properties. Approximately 80% of our total rental revenue is
generated from investment-grade tenants with the remaining 20%
secured by very strong unrated companies. Our property portfolio
has a weighted-average building age of 8.7 years, and a
weighted-average lease maturity of 8.1 years. We have assembled a
modern industrial portfolio that contains large amounts of excess
land to accommodate future growth. These are highly-automated
industrial assets that are mission-critical to our tenants'
operations."
"During the fiscal year, we raised $90
million in equity capital through our Dividend Reinvestment
and Stock Purchase Plan. Of this amount, a total of $12.9 million in dividends was reinvested,
representing a 24% participation rate. We also sold 1.65 million
shares of our 6.125% Series C preferred stock through our ATM
program generating net proceeds of $40.1
million. Subsequent to fiscal yearend, in October, we
completed our first common stock offering since 2014, with the sale
of 9.2 million shares that generated net proceeds of $132.3 million. Looking ahead, Monmouth is very well capitalized to continue
to execute our qualitative growth strategy."
"Subsequent to fiscal yearend, we also acquired a newly
constructed built-to-suit property containing 347,000 square feet
for $85.2 million. This brings our
current portfolio to a total of 112 properties containing 21.5
million square feet, geographically diversified across 30 states.
Our acquisition pipeline now comprises two brand new build-to-suit,
industrial buildings that are currently being developed in
Georgia and North Carolina. These two pipeline
transactions total approximately 398,000 square feet for an
aggregate purchase price of $68.7
million, and are scheduled to close during the first quarter
of fiscal 2019 and the first half of fiscal 2020."
"At the turn of the century, we anticipated that with the
widespread growth of ecommerce, our property type would gain market
share from the retail sector. Today, demand for industrial assets
has never been stronger. We are now in our fourth consecutive year
with an occupancy rate above 99%. Fiscal 2019 is poised to be
another successful year at Monmouth. We look forward to reporting on our
progress throughout the year."
Monmouth Real Estate Investment Corporation will host its Fourth
Quarter and FY 2018 Financial Results Webcast and Conference Call
on Thursday, November 29, 2018 at
10:00 a.m. Eastern Time. Senior
management will discuss the results, current market conditions and
future outlook.
Our Fourth Quarter and FY 2018 financial results being released
herein will be available on our website at www.mreic.reit in the
Investor Relations section, under Filings and Reports.
To participate in the Webcast, select the 4Q2018 and
Fiscal Yearend Webcast and Earnings Call "Link to Webcast" on
the homepage of our 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 1-877-510-5852 (domestically) or
1-412-902-4138 (internationally).
The replay of the conference call will be available at
12:00 p.m. Eastern Time on Thursday,
November 29, 2018. It will be available until February 1, 2019, and can be accessed by dialing
toll free 1-877-344-7529 (domestically) and 1-412-317-0088
(internationally) and entering the passcode 10123229. A
transcript of the call and the webcast replay will be available at
our 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. We
specialize 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 112 properties containing a total of approximately 21.5 million
rentable square feet, geographically diversified across 30 states.
In addition, we own 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 our current
expectations and involve various risks and uncertainties.
Although we believe the expectations reflected in any
forward-looking statements are based on reasonable assumptions, we
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 our
annual report on Form 10-K and described from time to time in our
other filings with the SEC. We undertake 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, non-cash 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 our 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 us, may not be comparable to
similarly titled measures reported by other REITs.
The following is a reconciliation of our U.S. GAAP Net Income to
our FFO, Core FFO and AFFO for the three and twelve months ended
September 30, 2018 and 2017:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
9/30/2018
|
|
9/30/2017
|
|
9/30/2018
|
|
9/30/2017
|
Net Income
Attributable to Common Shareholders
|
$7,782,000
|
|
$6,726,000
|
|
$38,815,000
|
|
$22,942,000
|
Plus: Depreciation
Expense (excluding Corporate Office Capitalized Costs)
|
9,632,000
|
|
8,146,000
|
|
36,018,000
|
|
29,479,000
|
Plus: Amortization of
Intangible Assets
|
455,000
|
|
301,000
|
|
1,614,000
|
|
1,072,000
|
Plus: Amortization of
Capitalized Lease Costs
|
221,000
|
|
222,000
|
|
880,000
|
|
855,000
|
Less: (Gain) / Plus:
Loss on Sale of Real Estate Investments
|
-0-
|
|
-0-
|
|
(7,485,000)
|
|
95,000
|
FFO Attributable
to Common Shareholders
|
18,090,000
|
|
15,395,000
|
|
69,842,000
|
|
54,443,000
|
Plus: Acquisition
Costs
|
-0-
|
|
-0-
|
|
-0-
|
|
178,000
|
Plus: Redemption of
Preferred Stock
|
-0-
|
|
-0-
|
|
-0-
|
|
2,467,000
|
Core FFO
Attributable to Common Shareholders
|
18,090,000
|
|
15,395,000
|
|
69,842,000
|
|
57,088,000
|
Plus: Stock
Compensation Expense
|
95,000
|
|
184,000
|
|
434,000
|
|
625,000
|
Plus: Depreciation of
Corporate Office Capitalized Costs
|
39,000
|
|
39,000
|
|
158,000
|
|
157,000
|
Plus: Amortization of
Financing Costs
|
310,000
|
|
285,000
|
|
1,220,000
|
|
1,234,000
|
Less: Lease
Termination Income
|
-0-
|
|
-0-
|
|
(210,000)
|
|
-0-
|
Less: Gain on Sale of
Securities Transactions
|
-0-
|
|
(18,000)
|
|
(111,000)
|
|
(2,312,000)
|
Less: Effect of
Non-cash U.S. GAAP Straight-line Rent Adjustment
|
(615,000)
|
|
(103,000)
|
|
(1,973,000)
|
|
(1,028,000)
|
Less: Recurring
Capital Expenditures
|
(211,000)
|
|
(312,000)
|
|
(985,000)
|
|
(884,000)
|
AFFO Attributable
to Common Shareholders
|
$17,708,000
|
|
$15,470,000
|
|
$68,375,000
|
|
$54,880,000
|
The following are the Cash Flows provided (used) by Operating,
Investing and Financing Activities for the twelve months ended
September 30, 2018 and 2017:
|
Twelve Months
Ended
|
|
9/30/2018
|
|
9/30/2017
|
|
|
|
|
Operating
Activities
|
$85,529,000
|
|
$73,868,000
|
Investing
Activities
|
(332,513,000)
|
|
(339,071,000)
|
Financing
Activities
|
246,083,000
|
|
179,680,000
|
View original
content:http://www.prnewswire.com/news-releases/monmouth-real-estate-reports-results-for-the-fiscal-year-ended-and-the-fourth-quarter-ended-september-30-2018-300757213.html
SOURCE Monmouth Real Estate Investment Corporation