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Monmouth Real Estate Investment Corporation Reports Results For The Second Quarter Ended March 31, 2014

  (May 07, 2014)

FREEHOLD, N.J., May 7, 2014 /PRNewswire/ -- Monmouth Real Estate Investment Corporation (NYSE: MNR) reported Core Funds from Operations (Core FFO) of $6,919,000 or $0.15 per diluted share for the three months ended March 31, 2014 as compared to $8,799,000 or $0.21 per diluted share for the three months ended March 31, 2013. Excluding gains realized from the sale of securities during the quarter, Core FFO was $6,494,000 or $0.14 per diluted share for the three months ended March 31, 2014, as compared to $4,997,000 or $0.12 per diluted share for the three months ended March 31, 2013. Adjusted Funds from Operations (AFFO), which excludes gains or losses from the sale of securities, were $0.14 per diluted share for the three months ended March 31, 2014 compared to $0.11 per diluted share for March 31, 2013.

A summary of significant financial information for the three and six months ended March 31, 2014 and 2013 is as follows:




Three Months Ended

March 31,



2014


2013

Rental Revenue

$

14,085,000

$

11,738,000

Reimbursement Revenue

$

2,260,000

$

1,568,000

Net Operating Income (NOI) (1)

$

13,444,000

$

11,221,000

Total Expenses

$

8,656,000

$

6,776,000

Interest and Dividend Income

$

997,000

$

1,005,000

Gain on Sale of Securities Transactions, net

$

425,000

$

3,802,000

Income from Continuing Operations

$

4,757,000

$

7,343,000

Income from Discontinued Operations

$

-

$

300,000

Net Income Attributable to Common Shareholders

$

2,605,000

$

5,492,000

Net Income Attributable to Common Shareholders Per Diluted Common Share

$

0.05

$

0.13

Core FFO (1)

$

6,919,000

$

8,799,000

Core FFO per Diluted Common Share (1)

$

0.15

$

0.21

AFFO (1)

$

6,464,000

$

4,608,000

AFFO per Diluted Common Share (1)

$

0.14

$

0.11






Weighted Avg. Diluted Common Shares Outstanding


46,845,000


41,989,000



Six Months Ended

March 31,



2014


2013

Rental Revenue

$

27,656,000

$

23,048,000

Reimbursement Revenue

$

4,351,000

$

3,086,000

Lease Termination Income

$

-

$

691,000

Net Operating Income (NOI) (1)

$

26,529,000

$

22,358,000

Total Expenses

$

17,072,000

$

13,761,000

Interest and Dividend Income

$

1,936,000

$

2,128,000

Gain on Sale of Securities Transactions, net

$

576,000

$

5,913,000

Income from Continuing Operations

$

9,047,000

$

13,054,000

Income from Discontinued Operations

$

-

$

296,000

Net Income Attributable to Common Shareholders

$

4,744,000

$

9,047,000

Net Income Attributable to Common Shareholders Per Diluted Common Share

$

0.10

$

0.22

Core FFO (1)

$

13,666,000

$

16,259,000

Core FFO per Diluted Common Share (1)

$

0.30

$

0.39

AFFO (1)

$

13,156,000

$

9,450,000

AFFO per Diluted Common Share (1)

$

0.29

$

0.23






Weighted Avg. Diluted Common Shares Outstanding


46,081,000


41,545,000

A summary of significant balance sheet information as of March 31, 2014 and September 30, 2013 is as follows:



March 31, 2014


September 30, 2013

Net Real Estate Investments

$

608,774,000

$

536,799,000

Securities Available for Sale at Fair Value

$

53,466,000

$

45,452,000

Total Assets

$

697,525,000

$

617,241,000

Mortgage Notes Payable

$

286,688,000

$

250,093,000

Loans Payable

$

47,432,000

$

22,200,000

Total Shareholders' Equity

$

352,642,000

$

335,915,000

Michael P. Landy, President and CEO, commented on the results for the second quarter of fiscal 2014:

"The recent quarter represented significant progress across multiple fronts:

  • We have entered into agreements to acquire ten new Class A build-to-suit industrial properties, representing approximately 3.1 million square feet, for a total purchase price of approximately $222.3 million. In keeping with our business model, these high quality properties are leased primarily to investment grade tenants pursuant to long-term net leases and strategically situated at major airports, major transportation hubs, and manufacturing plants that are integral to our tenants' operations. These new properties are expected to generate annualized rental revenue of approximately $15.4 million and will benefit from an average lease term of approximately 11.5 years. Subject to satisfactory due diligence, we anticipate closing these transactions upon completion of construction and occupancy over the next several quarters.
  • We have also entered into agreements to expand seven of our properties by approximately 293,000 square feet pursuant to which we will invest a total of approximately $24 million. Upon completion, the expansions will result in a new ten year lease extension for each of these properties and will result in increased annual rent of approximately $2.4 million.
  • AFFO per diluted share for the current quarter increased 27% as compared to the prior year quarter and increased 26% for the six months ended March 31, 2014 as compared to the six months ended March 31, 2013.
  • Our gross leasable area increased 17% to 10.7 million square feet over the prior year period and is expected to grow to over 14.0 million square feet upon the completion of the above acquisitions and expansions.
  • End of period occupancy increased to 95.4% as compared to 94.7% one year ago. As a result of two previously announced lease expirations subsequent to quarter end, our current occupancy is now 93.5%. Given currently strong market conditions, we anticipate further increased occupancy over the next few quarters.
  • Our average lease maturity increased to 6.8 years compared to 6.1 years a year ago.

We look forward to building on the substantial growth that we have achieved to date by adding high quality properties and tenants to our portfolio while enhancing returns for our shareholders."

Monmouth Real Estate Investment Corporation will host its Second Quarter 2014 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, May 8, 2014 at 10:00 a.m. Eastern Time.

The Company's second quarter 2014 financial results being released herein will be available on the Company's website at www.mreic.com in the "Financial Filings" section.

To participate in the Webcast, select the microphone icon in the Webcast section of the Company's homepage on the Company's website at www.mreic.com. Interested parties can also participate via conference call by calling toll free 888-317-6016 (domestically) or 412-317-6016 (internationally).

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, May 8, 2014. It will be available until July 31, 2014, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10042544. A transcript of the call and the webcast replay will be available at the Company's website, www.mreic.com.

Monmouth Real Estate Investment Corporation, founded in 1968 and one of the oldest public equity REITs in the U.S., specializes in net-leased industrial properties subject to long-term leases primarily to investment grade tenants. The Company is a fully integrated and self-managed real estate company, whose property portfolio consists of eighty industrial properties and one shopping center located in twenty-seven states, containing a total of approximately 10.7 million rentable square feet. 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-US 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, amortization of deferred financing and deferred leasing costs, recurring capital expenditures and straight-line rent adjustments. 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. 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 Company's FFO and Core FFO for the three and six months ended March 31, 2014 and 2013 are calculated as follows:


Three Months Ended


Six Months Ended


03/31/2014


03/31/2013


03/31/2014


03/31/2013

Net Income Attributable to Common Shareholders

$2,606,000


$5,492,000


$4,744,000


$9,047,000

Depreciation Expense (including Discontinued Operations)

3,975,000


3,268,000


7,788,000


6,402,000

Amortization of Intangible Assets

338,000


385,000


671,000


770,000

Gain on Sale of Investment Property

-


(346,000)


-


(346,000)

FFO Attributable to Common Shareholders

6,919,000


8,799,000


13,203,000


15,873,000

Acquisition Costs

-


-


463,000


386,000

Core FFO Attributable to Common Shareholders

$6,919,000


$8,799,000


$13,666,000


$16,259,000

The Company's Core FFO, excluding the net Gain on Securities Transactions for the three and six months ended March 31, 2014 and 2013 are calculated as follows:


Three Months Ended


Six Months Ended


03/31/2014


03/31/2013


03/31/2014


03/31/2013

Core FFO Attributable to Common Shareholders

$6,919,000


$8,799,000


$13,666,000


$16,259,000

Less: Gain on Sale of Securities Transactions, net

425,000


3,802,000


576,000


5,913,000

Core FFO, excluding net Gain on Sale of Securities

Transactions Attributable to Common Shareholders

$6,494,000


$4,997,000


$13,090,000


$10,346,000

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the six months ended March 31, 2014 and 2013:


Six Months Ended


03/31/2014


03/31/2013





Operating Activities

$17,938,000


$10,670,000

Investing Activities

(87,227,000)


(29,587,000)

Financing Activities

67,587,000


14,397,000

SOURCE Monmouth Real Estate Investment Corporation

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