One Liberty Properties, Inc. (NYSE: OLP), a real estate investment
trust focused on net leased properties, today announced operating
results for the quarter ended March 31, 2023.
“We are pleased that the work we have undertaken the past
few years to transform our holdings toward owning a greater
percentage of industrial properties is contributing in a positive
manner” stated One Liberty’s President and Chief Executive Officer,
Patrick J. Callan, Jr. “We are also proud that our portfolio
produced 7.0% growth in rental income for the first quarter of 2023
in a challenging macro-economic environment marked by rising rates.
As we move forward, we remain focused on adding to our growth in a
disciplined manner and continuing to selectively monetize assets
where we can realize strong gains or that we believe have
reached their full potential.”
Operating Results:
Rental income grew 7.0% to $23.0 million in the first quarter of
2023 from $21.5 million in the first quarter of 2022.
This growth is due primarily to increases in rental income from
same store properties and to a lesser extent, the net benefit of
select acquisitions and dispositions.
Total operating expenses were $14.4 million in the first quarter
of 2023 compared to $13.4 million for the first quarter of 2022.
The change is primarily due to the properties acquired in 2022 and
the related increases in real estate and depreciation and
amortization expense.
Net income attributable to One Liberty in the first quarter of
2023 was $5.4 million, or
$0.25 per diluted share, compared to $9.3 million, or $0.44 per
diluted share, in the first quarter of 2022. Net income
for the 2023 quarter includes a $1.5 million, or $0.07 per diluted
share, gain-on-sale of real estate. Net income for the 2022 quarter
includes a $4.6 million, or $0.22 per diluted share, gain on sale
of real estate, and a $918,000, or $0.04, per share, insurance
recovery.
Funds from Operations, or FFO1, was $10.1 million, or $0.47 per
diluted share, for the first quarter of 2023, compared to $10.6
million, or $0.50 per diluted share, in the first quarter of 2022.
The decrease is due primarily to the inclusion, in the 2022
quarter, of the $918,000 of insurance recovery and increases, in
the 2023 quarter, in operating and interest expense; the decrease
in FFO was offset by an increase in rental income.
Adjusted Funds from Operations, or AFFO, was $10.8 million, or
$0.50 per diluted share, for the quarter ended March 31, 2023,
compared to $10.7 million, or $0.50 per diluted share, for the
corresponding quarter in the prior year. The change in AFFO is due
to the factors contributing to the changes in FFO excluding the
impact of the insurance recovery and straight-line rent
accruals.
________________________1 A description and
reconciliation of non-GAAP financial measures (i.e., FFO and AFFO)
to GAAP financial measures is presented later in this release.
Dispositions:
In February 2023, the Company sold a restaurant property located
in Hauppauge, New York for $4.1 million and recognized a $1.5
million gain. This property contributed $55,000 of rental income
and $19,000 of depreciation in the three months ended March 31,
2022. The Company used the net proceeds from the sale to reduce the
outstanding balance on its credit facility.
Balance Sheet:
At March 31, 2023, the Company had $7.0 million of cash and cash
equivalents, total assets of $771.1 million, total debt of $417.8
million, and total One Liberty Properties, Inc. stockholders’
equity of $313.7 million.
At May 1, 2023, One Liberty’s available liquidity was $87.9
million, including $7.9 million of cash and cash equivalents
(including the credit facility’s required $3.0 million average
deposit maintenance balance) and $80.0 million available under the
facility. The credit facility is currently available for the
acquisition of commercial real estate, repayment of mortgage debt,
and up to $31.5 million is available for renovation and operating
expense purposes.
Non-GAAP Financial Measures:
One Liberty 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 (calculated in
accordance with GAAP), excluding depreciation and amortization
related to real estate, gains and losses from the sale of certain
real estate assets, gains and losses from change in control,
impairment write-downs of certain real estate assets and
investments in entities where the impairment is directly
attributable to decreases in the value of depreciable real estate
held by the entity. Adjustments for unconsolidated partnerships and
joint ventures are calculated to reflect FFO on the same
basis. In computing FFO, management does not add back
to net income the amortization of costs in connection with its
financing activities or depreciation of non-real estate assets.
One Liberty computes AFFO by adjusting from FFO for
straight-line rent accruals and amortization of lease intangibles,
deducting from income additional rent from ground lease tenant,
income on settlement of litigation, income on insurance recoveries
from casualties, lease termination and assignment fees, and adding
back amortization of restricted stock and restricted stock unit
compensation expense, amortization of costs in connection with its
financing activities (including its share of its unconsolidated
joint ventures), debt prepayment costs and amortization of lease
incentives and mortgage intangible assets. Since the NAREIT White
Paper does not provide guidelines for computing AFFO, the
computation of AFFO varies from one REIT to another.
One Liberty 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
operating, investing or financing activities as defined by GAAP.
FFO and AFFO should not be considered an alternative to net income
as a reliable measure of our operating performance nor as an
alternative to cash flows from operating, investing or financing
activities as measures of liquidity. FFO and AFFO do not measure
whether cash flow is sufficient to fund all of the Company’s cash
needs, including principal amortization, capital improvements and
distributions to stockholders.
Management recognizes that there are limitations in the use of
FFO and AFFO. In evaluating the Company’s performance, management
is careful to examine GAAP measures such as net income and cash
flows from operating, investing and financing activities.
Forward Looking Statement:
Certain information contained in this press release, together
with other statements and information publicly disseminated by One
Liberty Properties, Inc. is forward looking within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended. We
intend such forward looking statements to be covered by the safe
harbor provision for forward looking statements contained in the
Private Securities Litigation Reform Act of 1995 and include this
statement for the purpose 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,” “could,” “believe,” “expect,” “intend,” “anticipate,”
“estimate,” “project,” or similar expressions or variations
thereof. Information regarding important factors that could cause
actual outcomes or other events to differ materially from any such
forward looking statements appear in the Company's Annual Report on
Form 10-K for the year ended December 31, 2022 and the reports
filed with the Securities and Exchange Commission thereafter; in
particular, the sections of such reports entitled “Cautionary Note
Regarding Forward Looking Statements”, “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”, included therein. In addition, estimates of
rental income for 2023 exclude any related variable rent,
anticipated property purchases and/or sales may not be completed
during the period indicated or at all, and estimates of gains from
property sales are subject to adjustment, among other things,
because actual closing costs may differ from the estimated costs.
You should not rely on forward-looking statements since they
involve known and unknown risks, uncertainties and other factors
which are, in some cases, beyond the Company’s control and which
could materially affect the Company’s results of operations,
financial condition, cash flows, performance or future achievements
or events.
About One Liberty Properties:
One Liberty is a self-administered and
self-managed real estate investment trust incorporated in Maryland
in 1982. The Company acquires, owns and manages a geographically
diversified portfolio consisting primarily of industrial and retail
properties. Many of these properties are subject to long-term net
leases under which the tenant is typically responsible for the
property’s real estate taxes, insurance and ordinary maintenance
and repairs.
Contact:One Liberty PropertiesInvestor
RelationsPhone: (516) 466-3100www.onelibertyproperties.com
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ONE LIBERTY PROPERTIES, INC. |
CONDENSED BALANCE SHEETS |
(Amounts in Thousands) |
|
|
(Unaudited) |
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Real estate investments, at cost |
|
$ |
872,604 |
|
|
$ |
879,596 |
|
Accumulated depreciation |
|
|
(175,153 |
) |
|
|
(173,143 |
) |
Real estate investments, net |
|
|
697,451 |
|
|
|
706,453 |
|
|
|
|
|
|
Property held-for-sale |
|
|
2,783 |
|
|
|
— |
|
Investment in unconsolidated joint ventures |
|
|
10,484 |
|
|
|
10,400 |
|
Cash and cash equivalents |
|
|
7,016 |
|
|
|
6,718 |
|
Unbilled rent receivable |
|
|
16,710 |
|
|
|
16,079 |
|
Unamortized intangible lease assets, net |
|
|
18,541 |
|
|
|
19,841 |
|
Other assets |
|
|
18,158 |
|
|
|
23,764 |
|
Total assets |
|
$ |
771,143 |
|
|
$ |
783,255 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
Mortgages payable, net |
|
$ |
406,946 |
|
|
$ |
405,162 |
|
Line of credit-outstanding, net of $686 and $732 of deferred
financing costs, respectively |
|
|
10,814 |
|
|
|
21,068 |
|
Unamortized intangible lease liabilities, net |
|
|
10,824 |
|
|
|
11,125 |
|
Other liabilities |
|
|
27,858 |
|
|
|
28,963 |
|
Total liabilities |
|
|
456,442 |
|
|
|
466,318 |
|
|
|
|
|
|
Total One Liberty Properties, Inc. stockholders' equity |
|
|
313,716 |
|
|
|
315,965 |
|
Non-controlling interests in consolidated joint ventures |
|
|
985 |
|
|
|
972 |
|
Total equity |
|
|
314,701 |
|
|
|
316,937 |
|
Total liabilities and equity |
|
$ |
771,143 |
|
|
$ |
783,255 |
|
|
|
|
|
|
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP) |
(Amounts in Thousands, Except Per Share Data) |
(Unaudited) |
|
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|
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|
Three Months Ended |
|
|
|
March 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
Rental income, net |
|
$ |
22,952 |
|
|
$ |
21,531 |
|
|
Lease termination fees |
|
|
- |
|
|
|
25 |
|
|
Total revenues |
|
|
22,952 |
|
|
|
21,556 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Depreciation and amortization |
|
|
6,145 |
|
|
|
5,843 |
|
|
General and administrative |
|
|
4,039 |
|
|
|
3,792 |
|
|
Real estate expenses |
|
|
4,124 |
|
|
|
3,687 |
|
|
State taxes |
|
|
68 |
|
|
|
74 |
|
|
Total operating expenses |
|
|
14,376 |
|
|
|
13,396 |
|
|
|
|
|
|
|
Other operating income |
|
|
|
|
|
Gain on sale of real estate, net |
|
|
1,534 |
|
|
|
4,649 |
|
Operating income |
|
|
10,110 |
|
|
|
12,809 |
|
|
|
|
|
|
|
Other income and expenses: |
|
|
|
|
|
Equity in earnings of unconsolidated joint ventures |
|
|
85 |
|
|
|
116 |
|
|
Other income |
|
|
15 |
|
|
|
926 |
|
|
Interest: |
|
|
|
|
|
Expense |
|
|
(4,600 |
) |
|
|
(4,306 |
) |
|
Amortization of deferred financing costs |
|
|
(202 |
) |
|
|
(205 |
) |
|
|
|
|
|
|
Net income |
|
|
5,408 |
|
|
|
9,340 |
|
Net income attributable to non-controlling interests |
|
|
(22 |
) |
|
|
(17 |
) |
|
|
|
|
|
|
Net income attributable to One Liberty Properties, Inc. |
|
$ |
5,386 |
|
|
$ |
9,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to common
stockholders-diluted |
|
$ |
0.25 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations - Note 1 |
|
$ |
10,113 |
|
|
$ |
10,635 |
|
Funds from operations per common share-diluted - Note 2 |
|
$ |
0.47 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
Adjusted funds from operations - Note 1 |
|
$ |
10,803 |
|
|
$ |
10,654 |
|
Adjusted funds from operations per common share-diluted - Note
2 |
$ |
0.50 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
Basic |
|
|
20,514 |
|
|
|
20,379 |
|
Diluted |
|
|
20,579 |
|
|
|
20,541 |
|
|
|
|
|
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|
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP) |
(Amounts in Thousands, Except Per Share Data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
Note 1: |
|
|
2023 |
|
|
|
2022 |
|
NAREIT funds from operations is summarized in the following
table: |
|
|
|
|
GAAP net income attributable to One Liberty Properties, Inc. |
|
$ |
5,386 |
|
|
$ |
9,323 |
|
|
Add: depreciation and amortization of properties |
|
|
5,969 |
|
|
|
5,725 |
|
|
Add: our share of depreciation and amortization of unconsolidated
joint ventures |
|
|
130 |
|
|
|
130 |
|
|
Add: amortization of deferred leasing costs |
|
|
176 |
|
|
|
118 |
|
|
Add: our share of amortization of deferred leasing costs of
unconsolidated joint ventures |
|
|
4 |
|
|
|
5 |
|
|
Deduct: gain on sale of real estate, net |
|
|
(1,534 |
) |
|
|
(4,649 |
) |
|
Adjustments for non-controlling interests |
|
|
(18 |
) |
|
|
(17 |
) |
NAREIT funds from operations applicable to common
stock |
|
|
10,113 |
|
|
|
10,635 |
|
|
|
|
|
|
|
|
Deduct: straight-line rent accruals and amortization of lease
intangibles |
|
|
(893 |
) |
|
|
(567 |
) |
|
Deduct: our share of
straight-line rent accruals and amortization of lease intangibles
of unconsolidated joint ventures |
|
|
(5 |
) |
|
|
(8 |
) |
|
Deduct: income on insurance recovery from casualty loss |
|
|
- |
|
|
|
(918 |
) |
|
Deduct: lease termination fee income |
|
|
- |
|
|
|
(25 |
) |
|
Add: amortization of restricted stock and RSU compensation |
|
|
1,328 |
|
|
|
1,325 |
|
|
Add: amortization of deferred financing costs |
|
|
202 |
|
|
|
205 |
|
|
Add: amortization of lease incentives |
|
|
31 |
|
|
|
- |
|
|
Add: amortization of mortgage intangible asset |
|
|
23 |
|
|
|
- |
|
|
Add: our share of amortization
of deferred financing costs of unconsolidated joint ventures |
|
|
4 |
|
|
|
4 |
|
|
Adjustments for non-controlling interests |
|
|
- |
|
|
|
3 |
|
Adjusted funds from operations applicable to common
stock |
|
$ |
10,803 |
|
|
$ |
10,654 |
|
|
|
|
|
|
|
Note 2: |
|
|
|
|
NAREIT funds from operations is summarized in the following
table: |
|
|
|
|
|
GAAP net income attributable to One Liberty Properties, Inc. |
|
$ |
0.25 |
|
|
$ |
0.44 |
|
|
Add: depreciation and amortization of properties |
|
|
0.27 |
|
|
|
0.26 |
|
|
Add: our share of depreciation and amortization of unconsolidated
joint ventures |
|
|
0.01 |
|
|
|
0.01 |
|
|
Add: amortization of deferred leasing costs |
|
|
0.01 |
|
|
|
0.01 |
|
|
Add: our share of amortization of deferred leasing costs of
unconsolidated joint ventures |
|
|
- |
|
|
|
- |
|
|
Deduct: gain on sale of real estate, net |
|
|
(0.07 |
) |
|
|
(0.22 |
) |
|
Adjustments for non-controlling interests |
|
|
- |
|
|
|
- |
|
NAREIT funds from operations per share of common
stock-diluted (a) |
|
|
0.47 |
|
|
|
0.50 |
|
|
|
|
|
|
|
|
Deduct: straight-line rent accruals and amortization of lease
intangibles |
|
|
(0.04 |
) |
|
|
(0.03 |
) |
|
Deduct: our share of straight-line rent accruals and amortization
of lease intangibles of unconsolidated joint ventures |
|
|
- |
|
|
|
- |
|
|
Deduct: income on insurance recovery from casualty loss |
|
|
- |
|
|
|
(0.04 |
) |
|
Deduct: lease termination fee income |
|
|
- |
|
|
|
- |
|
|
Add: amortization of restricted stock and RSU compensation |
|
|
0.06 |
|
|
|
0.06 |
|
|
Add: amortization of deferred financing costs |
|
|
0.01 |
|
|
|
0.01 |
|
|
Add: amortization of lease incentives |
|
|
- |
|
|
|
- |
|
|
Add: amortization of mortgage intangible asset |
|
|
- |
|
|
|
- |
|
|
Add: our share of amortization of deferred financing costs of
unconsolidated joint ventures |
|
|
- |
|
|
|
- |
|
|
Adjustments for non-controlling interests |
|
|
- |
|
|
|
- |
|
Adjusted funds from operations per share of common
stock-diluted (a) |
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
(a) |
The weighted average number of diluted common shares used to
compute FFO and AFFO applicable to common stock includes unvested
restricted shares that are excluded from the computation of diluted
EPS. |
One Liberty Properties (NYSE:OLP)
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One Liberty Properties (NYSE:OLP)
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