Monmouth Real Estate Investment Corporation Reports Results for the Fiscal Year Ended and the Fourth Quarter Ended September 30, 2016

Montag, 28.11.2016 22:40 von

PR Newswire

FREEHOLD, N.J., Nov. 28, 2016 /PRNewswire/ -- Monmouth Real Estate Investment Corporation (NYSE: MNR) reported Net Income Attributable to Common Shareholders of $20,532,000 or $0.31 per diluted share for the fiscal year ended September 30, 2016 as compared to $16,999,000 or $0.29 per diluted share for the fiscal year ended September 30, 2015 representing an increase of 6.9%.  Core Funds from Operations (Core FFO) were $50,271,000 or $0.77 per diluted share for the fiscal year ended September 30, 2016 as compared to $35,276,000 or $0.60 per diluted share for the fiscal year ended September 30, 2015 representing an increase in Core FFO per share of 28.3%.  Adjusted Funds from Operations (AFFO), for the fiscal year ended September 30, 2016 were $45,865,000 or $0.70 per diluted share versus $33,977,000 or $0.57 per diluted share for the fiscal year ended September 30, 2015 representing an increase in AFFO per share of 22.8%. 

Net Income Attributable to Common Shareholders for the three months ended September 30, 2016 was $4,685,000 or $0.07 per diluted share as compared to $8,036,000 or $0.13 per diluted share for the three months ended September 30, 2015 representing a decrease in Net Income Attributable to Common Shareholders per share of 46.2%.  Core FFO for the three months ended September 30, 2016 was $14,993,000 or $0.22 per diluted share as compared to $9,180,000 or $0.15 per diluted share for the three months ended September 30, 2015 representing an increase in Core FFO per share of 46.7%.  AFFO for the three months ended September 30, 2016 was $11,964,000 or $0.18 per diluted share versus $9,159,000 or $0.15 per diluted share for the three months ended September 30, 2015 representing an increase in AFFO per share of 20.0%. 

A summary of significant financial information for the three and twelve months ended September 30, 2016 and 2015 is as follows:



Three Months Ended

September 30,



2016


2015

Rental Revenue

$

22,127,000

$

18,168,000

Reimbursement Revenue

$

3,449,000

$

2,400,000

Net Operating Income (NOI) (1)

$

21,845,000

$

17,732,000

Total Expenses

$

13,943,000

$

10,875,000

Dividend and Interest Income

$

1,566,000

$

853,000

Gain on Sale of Securities Transactions, net

$

3,239,000

$

428,000

Net Income

$

10,193,000

$

10,188,000

Net Income Attributable to Common Shareholders

$

4,685,000

$

8,036,000

Net Income Attributable to Common Shareholders Per Diluted Common Share

$

0.07

$

0.13

Core FFO (1)

$

14,993,000

$

9,180,000

Core FFO per Diluted Common Share (1)

$

0.22

$

0.15

AFFO (1)

$

11,964,000

$

9,159,000

AFFO per Diluted Common Share (1)

$

0.18

$

0.15

Dividends Declared per Common Share

$

0.16

$

0.15

Weighted Avg. Diluted Common Shares Outstanding


68,159,000


60,514,000

 



Twelve Months Ended

September 30,



2016


2015

Rental Revenue

$

81,592,000

$

67,059,000

Reimbursement Revenue

$

13,324,000

$

10,716,000

Lease Termination Income

$

-

$

239,000

Net Operating Income (NOI) (1)

$

80,187,000

$

65,285,000

Total Expenses

$

49,484,000

$

42,115,000

Dividend and Interest Income

$

5,616,000

$

3,724,000

Gain on Sale of Securities Transactions, net

$

4,399,000

$

805,000

Net Income

$

32,495,000

$

25,606,000

Net Income Attributable to Common Shareholders

$

20,532,000

$

16,999,000

Net Income Attributable to Common Shareholders Per Diluted Common Share

$

0.31

$

0.29

Core FFO (1)

$

50,271,000

$

35,276,000

Core FFO per Diluted Common Share (1)

$

0.77

$

0.60

AFFO (1)

$

45,865,000

$

33,977,000

AFFO per Diluted Common Share (1)

$

0.70

$

0.57

Dividends Declared per Common Share

$

0.64

$

0.60

Weighted Avg. Diluted Common Shares Outstanding


65,558,000


59,201,000

A summary of significant balance sheet information as of September 30, 2016 and 2015 is as follows:



September 30, 2016


September 30, 2015

Net Real Estate Investments

$

1,022,483,000

$

816,111,000

Securities Available for Sale at Fair Value

$

73,605,000

$

54,541,000

Total Assets

$

1,229,758,000

$

915,992,000

Mortgage Notes Payable

$

483,748,000

$

373,991,000

Loans Payable

$

80,791,000

$

85,041,000

Total Shareholders' Equity

$

597,858,000

$

446,011,000

 

Michael P. Landy, President and CEO, commented on the results for the fiscal year 2016,

"Fiscal 2016 was a very productive year for Monmouth. Our Company executed exceptionally well and our achievements were many.  During the year, the Company accomplished the following:

Solid Financial Results

  • Generated AFFO per share growth of 23%, representing our third consecutive year of double digit growth
  • Increased our common stock dividend by 6.7% on October 1, 2015
  • Increased our Gross Revenue by 23% to $100.5 million
  • Increased our Net Operating Income by 23% to $80.2 million

Strong Growth Record and Attractive Pipeline

  • Acquired 1.8 million square feet of high-quality industrial space for $210.7 million comprising eight brand new, Class A built-to-suit properties, all leased long term to investment grade tenants
  • Completed three expansion projects for approximately $13.0 million, adding additional rental space of 261,000 square feet
  • Generated 15% year-over-year growth in gross leasable area from acquisitions and expansions
  • Entered into commitments to purchase nine new build-to-suit properties containing 2.4 million total square feet, representing approximately $247.5 million scheduled to close over the next several quarters, including one property we acquired subsequent to fiscal yearend

Strong Portfolio Performance

  • Renewed all three leases totaling 326,000 square feet that were scheduled to expire in fiscal 2016, resulting in a 100% tenant retention rate for the second consecutive year
  • Increased rents on lease renewals by 5.3% on a U.S. GAAP straight-line basis
  • Increased our sector leading occupancy rate by 190 basis points from 97.7% to 99.6% at fiscal yearend
  • Achieved a 100% occupancy rate subsequent to fiscal yearend
  • Extended our weighted average lease maturity from 7.2 years to 7.6 years currently

Strengthened Capitalization

  • Reduced our net debt to total market capitalization from 38.0% to 29.1%
  • Increased our total market capitalization by 53% to $1.8 billion at fiscal yearend
  • Raised $135.0 million in gross proceeds through our new Series C Perpetual Preferred offering at 6.125%
  • Raised approximately $72.2 million in equity through our Dividend Reinvestment and Stock Purchase Plan
  • Increased and extended our unsecured revolving credit facility from $130 million to $200 million with a $100 million accordion feature, bringing the total potential availability to $300 million
  • Extended our weighted average debt maturity from 8.1 years to 9.6 years at fiscal yearend
  • Reduced our weighted average interest rate on our fixed rate debt from 4.9% to 4.5%, and
  • Generated $4.4 million in net realized gains in addition to the $12.9 million in unrealized gains we held at fiscal yearend on our REIT securities investments."

Mr. Landy stated, "On behalf of the talented team at Monmouth, I am happy to report these exceptional results. The above metrics reflect a strong Company that has clearly enhanced 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 100% occupancy rate. Fiscal 2016 marked our fourth year out of the past seven in which Monmouth delivered a 100% tenant retention rate, illustrating the mission-critical nature of our property portfolio. Our substantial AFFO per share growth of 23% this year marks our third consecutive year of double-digit increases for this important metric."

"During fiscal 2016, we acquired $210.7 million of brand new, Class A built-to-suit properties leased to investment-grade tenants, and completed several building expansions. Approximately 85% of our rental revenue is generated by investment-grade tenants with the remaining 15% secured by unrated but very strong credits as well. Our securities portfolio delivered exceptional results this year, generating $4.4 million in net realized gains in addition to the $12.9 million in unrealized gains we held at fiscal yearend."

"Our recent $135 million preferred stock offering, combined with our expanded revolving credit facility and our low-levered balance sheet, provide us with the growth capital needed in order to continue to deliver these positive results. Subsequent to fiscal yearend, the Company acquired one brand new built-to-suit property containing 339,000 square feet for $35.1 million and completed a 51,000 square foot building expansion.  This brings our current portfolio to a total of 99 properties containing 16.3 million square feet, geographically diversified across 30 states.  We are very excited about our best-in-class acquisition pipeline, which now comprises eight new build-to-suit properties containing 2.1 million total square feet, representing approximately $212 million in acquisitions scheduled to close in fiscal 2017 and fiscal 2018."

"The continued migration toward ecommerce will once again be a leading demand driver for industrial space in 2017. This holiday season is expected to deliver record-breaking results for on-line sales and we are working very closely with some of our tenants in order to continue to capture the growth in consumer spending that is heading our way. We recently launched our new and improved website in order to more accurately portray the transformative growth that Monmouth has enjoyed the past several years. I encourage investors to view it in order to best understand our unique Company. Fiscal 2017 is poised to be another successful year at Monmouth and I look forward to reporting continued progress throughout the year."

Monmouth Real Estate Investment Corporation will host its Fiscal Year End and Fourth Quarter 2016 Financial Results Webcast and Conference Call on Tuesday, November 29, 2016 at 10:00 a.m. Eastern Time.  Senior management will discuss the results, current market conditions and future outlook.

The Company's Fiscal Year End and Fourth Quarter 2016 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 4Q2016 Webcast and Earnings Call link on the homepage of the Company's website at www.mreic.reit, in the Highlights section.  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 Tuesday, November 29, 2016.  It will be available until February 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10091370.  A transcript of the call and the webcast replay will be available at the Company's website, 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 Investment Corporation is a fully-integrated and self-managed real estate company, whose property portfolio consists of ninety-nine properties located in thirty states, containing a total of approximately 16.3 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-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 plus costs associated with the Redemption of Preferred Stock.  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 twelve months ended September 30, 2016 and 2015:


 Three Months Ended


Twelve Months Ended


9/30/2016


9/30/2015


9/30/2016


9/30/2015

Net Income Attributable to Common Shareholders

$4,685,000


$8,036,000


$20,532,000


$16,999,000

Plus: Depreciation Expense (excluding Corporate Office)

6,541,000


5,328,000


23,932,000


19,626,000

Plus: Amortization of Intangible Assets

264,000


330,000


1,178,000


1,370,000

Plus: Amortization of Capitalized Lease Costs

376,000


265,000


956,000


756,000

Less: Gain on Sale of Real Estate Investment

-


(5,021,000)


-


(5,021,000)

FFO Attributable to Common Shareholders

11,866,000


8,938,000


46,598,000


33,730,000

Plus: Acquisition Costs

185,000


242,000


731,000


1,546,000

Plus: Redemption of Preferred Stock

2,942,000


-


2,942,000


-

Core FFO Attributable to Common Shareholders

14,993,000


9,180,000


50,271,000


35,276,000

Plus: Stock Compensation Expense

620,000


165,000


926,000


449,000

Plus: Depreciation of Corporate Office Tenant Improvements

35,000


8,000


124,000


80,000

Plus: Amortization of Financing Costs

403,000


678,000


1,116,000


1,286,000

Plus: Non-recurring other expense (1)

-


-


500,000


-

Less: Lease Termination Income

-


-


-


(239,000)

Less: Gain on Sale of Securities Transactions, net

(3,239,000)


(428,000)


(4,399,000)


(805,000)

Less: U.S. GAAP Straight-line Rent Adjustment

(538,000)


(282,000)


(1,710,000)


(1,446,000)

Less: Recurring Capital Expenditures

(310,000)


(162,000)


(963,000)


(624,000)

AFFO Attributable to Common Shareholders

$11,964,000


$9,159,000


$45,865,000


$33,977,000

     (1)   Consists of one-time payroll expenditures.

 

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the twelve months ended September 30, 2016 and 2015:


Twelve Months Ended


9/30/2016


9/30/2015





Operating Activities

$54,700,000


$38,062,000

Investing Activities

(227,845,000)


(194,470,000)

Financing Activities

256,821,000


148,007,000

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/monmouth-real-estate-investment-corporation-reports-results-for-the-fiscal-year-ended-and-the-fourth-quarter-ended-september-30-2016-300369176.html

SOURCE Monmouth Real Estate Investment Corporation