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Section 1: 8-K

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) May 3, 2017

 

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

MARYLAND   001-33177   22-1897375

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification Number)

 

3499 Route 9N, Suite 3D, Freehold, NJ   07728
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code (732) 577-9996

 

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

[  ] Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 142-12 under the Exchange Act (17 CFR 240.14a-12
   
[  ] Pre-commencement communications pursuant to rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

 

 

 
 

 

Item 2.02 Results of Operations and Financial Condition.

 

Item 7.01 Regulation FD Disclosure.

 

On May 3, 2017, Monmouth Real Estate Investment Corporation issued a press release announcing the results for the second quarter ended March 31, 2017 and disclosed a supplemental information package in connection with its earnings conference call for the second quarter ended March 31, 2017. A copy of the supplemental information package and press release is furnished with this report as Exhibit 99 and is incorporated herein by reference.

 

The information in this report and the exhibit attached hereto is being furnished, not filed, for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to Item 2.02 and Item 7.01 of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

 

Forward-Looking Statements

 

Statements contained in this report, including the documents that are incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995 (the “Exchange Act”). All statements, other than statements of historical facts that address activities, events or developments where the Company uses any of the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” or similar expressions, are forward-looking statements. These forward-looking statements are not guaranteed and are based on the Company’s current intentions and on the Company’s current expectations and assumptions. These statements, intentions, expectations and assumptions involve risks and uncertainties, some of which are beyond the Company’s control that could cause actual results or events to differ materially from those that the Company anticipates or projects, such as:

 

  the ability of the Company’s tenants to make payments under their respective leases, its reliance on certain major tenants and the Company’s ability to re-lease properties that are currently vacant or that become vacant;
     
  the Company’s ability to obtain suitable tenants for its properties;
     
  changes in real estate market conditions, economic conditions in the industrial sector and the market in which the Company’s properties are located and general economic conditions;
     
  the inherent risks associated with owning real estate, including local real estate market conditions, governing laws and regulations and illiquidity of real estate investments;
     
  the Company’s ability to acquire, finance and sell properties on attractive terms;
     
  the Company’s ability to repay debt financing obligations;
     
  the Company’s ability to refinance amounts outstanding under its mortgages and credit facilities at maturity on terms favorable to us, or at all;
     
  the loss of any member of the Company’s management team;
     
  the Company’s ability to comply with debt covenants;
     
  the Company’s ability to integrate acquired properties and operations into existing operations;
     
  continued availability of proceeds from issuances of the Company’s debt or equity securities;
     
  the availability of other debt and equity financing alternatives;
     
  market conditions affecting the Company’s investment in marketable securities of other REIT’s;

 

2
 

 

  changes in interest rates under the Company’s current credit facility and under any additional variable rate debt arrangements that the Company may enter into in the future;
     
  the Company’s ability to successfully implement the Company’s selective acquisition strategy;
     
  the Company’s ability to maintain internal controls and procedures to ensure all transactions are accounted for properly, all relevant disclosures and filings are timely made in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected;
     
  changes in federal or state tax rules or regulations that could have adverse tax consequences;
     
  declines in the market prices of the Company’s investment securities; and
     
  the Company’s ability to qualify as a REIT for federal income tax purposes.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

99 Supplemental information package for the second quarter ended March 31, 2017 and press release dated May 3, 2017.

 

3
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  MONMOUTH REAL ESTATE INVESTMENT CORPORATION
   
  /s/ Kevin S. Miller
  Kevin S. Miller
  Chief Financial and Accounting Officer
   
Date May 3, 2017  

 

4
 

 

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Section 2: EX-99

 

 

 
Table of Contents 

 

 

 

Table of Contents
   
  Page
   
Consolidated Balance Sheets 3
   
Consolidated Statements of Income 4
   
Net Income, FFO, Core FFO, AFFO, Adjusted EBITDA and NOI Reconciliations 5
   
Financial Highlights 6
   
Same Property Statistics 7
   
Consolidated Statements of Cash Flows 9
   
Capital Structure and Leverage Ratios 10
   
Debt Maturity 12
   
Property Table by Tenant 13
   
Property Table by State 14
   
Lease Expirations 15
   
Recent Acquisitions 16
   
Property Table 17
   
Definitions 19
   
Press Release Dated May 3, 2017 20

 

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations, core funds from operations, adjusted funds from operations, net operating income (NOI), Same Property NOI, Same Property cash NOI and Adjusted EBITDA which are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America. Please see page 19 for a definition of these supplemental performance measures. Please see the supplemental statement of operations reconciliation for a reconciliation of certain captions in the supplemental statement of operations reported in this supplemental information package to the statement of operations as reported in the Company’s filings with the SEC on Form 10-Q.

 

 
Table of Contents 

 

Consolidated Balance Sheets        
         
  March 31, 2017   September 30, 2016 
   (unaudited)     
ASSETS        
Real Estate Investments:          
Land  $168,082,315   $165,375,315 
Buildings and Improvements   1,056,125,003    1,005,938,180 
Total Real Estate Investments   1,224,207,318    1,171,313,495 
Accumulated Depreciation   (161,947,883)   (148,830,169)
Real Estate Investments   1,062,259,435    1,022,483,326 
           
Cash and Cash Equivalents   22,951,899    95,749,508 
Securities Available for Sale at Fair Value   99,405,410    73,604,894 
Tenant and Other Receivables   977,700    1,444,824 
Deferred Rent Receivable   7,478,688    6,917,431 
Prepaid Expenses   7,966,014    4,830,987 
Capitalized Lease Costs, net of Accumulated Amortization of $3,512,238 and $3,238,516, respectively   3,932,981    4,165,268 
Intangible Assets, net of Accumulated Amortization of $12,841,419 and $12,332,599, respectively   5,758,872    5,816,153 
Financing Costs, net of Accumulated Amortization of $431,765 and $246,678, respectively   1,063,498    1,245,923 
Other Assets   8,425,238    7,227,571 
TOTAL ASSETS  $1,220,219,735   $1,223,485,885 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
Liabilities:          
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $477,598,305   $477,476,010 
Loans Payable   26,000,000    80,790,684 
Accounts Payable and Accrued Expenses   2,798,104    3,998,771 
Other Liabilities   14,518,225    9,868,572 
Preferred Stock Called for Redemption   -0-    53,493,750 
Total Liabilities   520,914,634    625,627,787 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 2,300,000 Shares Authorized, Issued and Outstanding as of March 31, 2017 and September 30, 2016   57,500,000    57,500,000 
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 8,850,000 and 5,400,000 Shares Authorized as of March 31, 2017 and September 30, 2016, respectively; 8,400,000 and 5,400,000 Shares Issued and Outstanding as of March 31, 2017 and September 30, 2016, respectively   210,000,000    135,000,000 
Common Stock, $0.01 Par Value Per Share: 193,289,750 and 194,600,000 Shares Authorized as of March 31, 2017 and September 30, 2016, respectively; 72,107,640 and 68,920,972 Shares Issued and Outstanding as of March 31, 2017 and September 30, 2016, respectively   721,076    689,210 
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of March 31, 2017 and September 30, 2016; No Shares Issued or Outstanding as of March 31, 2017 and September 30, 2016   -0-    -0- 
Additional Paid-In Capital   418,713,736    391,726,621 
Accumulated Other Comprehensive Income   12,370,289    12,942,267 
Undistributed Income   -0-    -0- 
Total Shareholders’ Equity   699,305,101    597,858,098 
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY  $1,220,219,735   $1,223,485,885 

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 3 of 23

 

 
Table of Contents 

 

Consolidated Statements of Income        
(unaudited)        
         
   Three Months Ended   Six Months Ended 
   3/31/2017   3/31/2016   3/31/2017   3/31/2016 
INCOME:                    
Rental Revenue  $23,610,830   $19,610,868   $46,891,686   $38,675,787 
Reimbursement Revenue   3,697,361    3,355,970    7,598,116    6,550,413 
TOTAL INCOME   27,308,191    22,966,838    54,489,802    45,226,200 
                     
EXPENSES:                    
Real Estate Taxes   2,851,862    2,675,677    5,758,843    5,047,813 
Operating Expenses   1,288,265    1,103,358    2,582,733    2,334,723 
General & Administrative Expenses   2,078,538    2,221,445    3,521,001    3,557,409 
Acquisition Costs   -0-    265,012    178,526    410,597 
Depreciation   7,139,077    5,786,062    14,131,572    11,381,494 
Amortization of Capitalized Lease Costs and Intangible Assets   427,756    486,360    875,553    972,971 
TOTAL EXPENSES   13,785,498    12,537,914    27,048,228    23,705,007 
                     
OTHER INCOME (EXPENSE):                    
Dividend and Interest Income   1,439,182    1,379,668    2,731,333    2,564,321 
Gain on Sale of Securities Transactions   -0-    878,962    806,108    887,342 
Interest Expense, including Amortization of Financing Costs   (6,537,264)   (5,555,607)   (12,700,483)   (10,902,254)
TOTAL OTHER INCOME (EXPENSE)   (5,098,082)   (3,296,977)   (9,163,042)   (7,450,591)
                     
NET INCOME   8,424,611    7,131,947    18,278,532    14,070,602 
                     
Less: Preferred Dividend   3,582,036    2,151,758    7,279,796    4,303,516 
                     
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS  $4,842,575   $4,980,189   $10,998,736   $9,767,086 

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 4 of 23

 

 
Table of Contents 

 

Net Income, FFO, Core FFO, AFFO, Adjusted EBITDA and NOI Reconciliations

(unaudited)

             
               
   Three Months Ended   Six Months Ended 
  3/31/2017   3/31/2016   3/31/2017   3/31/2016 
FFO, Core FFO, AFFO                
Net Income Attributable to Common Shareholders  $4,842,575   $4,980,189   $10,998,736   $9,767,086 
Plus: Depreciation Expense (excluding Corporate Office Tenant Improvements)   7,099,906    5,756,944    14,053,686    11,324,405 
Plus: Amortization of Intangible Assets   240,973    319,736    508,820    643,200 
Plus: Amortization of Capitalized Lease Costs   212,275    192,116    417,717    380,755 
Plus: Loss on Sale of Real Estate Investment   -0-    -0-    95,336    -0- 
FFO Attributable to Common Shareholders   12,395,729    11,248,985    26,074,295    22,115,446 
Plus: Acquisition Costs   -0-    265,012    178,526    410,597 
Core FFO Attributable to Common Shareholders   12,395,729    11,513,997    26,252,821    22,526,043 
Plus: Stock Compensation Expense   166,190    101,968    266,345    206,928 
Plus: Depreciation of Corporate Office Tenant Improvements   39,171    29,118    77,886    57,089 
Plus: Amortization of Financing Costs   384,984    238,671    665,897    473,038 
Plus: Non-recurring other expense   -0-    400,000    -0-    400,000 
Less: Gain on Sale of Securities Transactions   -0-    (878,962)   (806,108)   (887,342)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (286,617)   (512,170)   (629,856)   (821,835)
Less: Recurring Capital Expenditures   (188,390)   (147,861)   (376,802)   (484,052)
AFFO Attributable to Common Shareholders  $12,511,067   $10,744,761   $25,450,183   $21,469,869 

 

   Three Months Ended   Six Months Ended 
  3/31/2017   3/31/2016   3/31/2017   3/31/2016 
Adjusted EBITDA                
Net Income Attributable to Common Shareholders  $4,842,575   $4,980,189   $10,998,736   $9,767,086 
Plus: Preferred Dividends   3,582,036    2,151,758    7,279,796    4,303,516 
Plus: Depreciation & Amortization   7,566,833    6,272,422    15,007,125    12,354,465 
Plus: Interest Expense, Including Amortization of Financing Costs   6,537,264    5,555,607    12,700,483    10,902,254 
Plus: Acquisition Costs   -0-    265,012    178,526    410,597 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25,492    25,492    50,984    50,984 
Plus: Loss on Sale of Real Estate Investment   -0-    -0-    95,336    -0- 
Less: Gain on Sale of Securities Transactions   -0-    (878,962)   (806,108)   (887,342)
Adjusted EBITDA  $22,554,200   $18,371,518   $45,504,878   $36,901,560 

 

   Three Months Ended   Six Months Ended 
  3/31/2017   3/31/2016   3/31/2017   3/31/2016 
Net Operating Income                
Net Income Attributable to Common Shareholders  $4,842,575   $4,980,189   $10,998,736   $9,767,086 
Plus: Preferred Dividends   3,582,036    2,151,758    7,279,796    4,303,516 
Plus: General & Administrative Expenses   2,078,538    2,221,445    3,521,001    3,557,409 
Plus: Acquisition Costs   -0-    265,012    178,526    410,597 
Plus: Depreciation   7,139,077    5,786,062    14,131,572    11,381,494 
Plus: Amortization of Capitalized Lease Costs and Intangible Assets   427,756    486,360    875,553    972,971 
Less: Dividend and Interest Income   (1,439,182)   (1,379,668)   (2,731,333)   (2,564,321)
Less: Gain on Sale of Securities Transactions   -0-    (878,962)   (806,108)   (887,342)
Plus: Interest Expense, including Amortization of Financing Costs   6,537,264    5,555,607    12,700,483    10,902,254 
Net Operating Income - NOI  $23,168,064   $19,187,803   $46,148,226   $37,843,664 

 

   Three Months Ended   Six Months Ended 
  3/31/2017   3/31/2016   3/31/2017   3/31/2016 
Components of Net Operating Income consists of:                
Revenues                    
Rental Revenue  $23,610,830   $19,610,868   $46,891,686   $38,675,787 
Reimbursement Revenue   3,697,361    3,355,970    7,598,116    6,550,413 
Total Rental and Reimbursement Revenue   27,308,191    22,966,838    54,489,802    45,226,200 
                     
Expenses                    
Real Estate Taxes   2,851,862    2,675,677    5,758,843    5,047,813 
Operating Expenses   1,288,265    1,103,358    2,582,733    2,334,723 
Total Real Estate Taxes and Operating Expenses   4,140,127    3,779,035    8,341,576    7,382,536 
                     
Net Operating Income - NOI  $23,168,064   $19,187,803   $46,148,226   $37,843,664 

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 5 of 23

 

 
Table of Contents 

 



Financial Highlights
             
(unaudited)              

 

   Three Months Ended   Six Months Ended 
   3/31/2017   3/31/2016   3/31/2017   3/31/2016 
                 
Weighted Average Common Shares Outstanding                    
Basic   71,243,381    64,657,058    70,456,222    63,757,087 
Diluted   71,406,875    64,736,469    70,607,766    63,828,310 
                     
Net Income Attributable to Common Shareholders  $4,842,575   $4,980,189   $10,998,736   $9,767,086 
                     
Basic  $0.07   $0.08   $0.16   $0.15 
Diluted   0.07    0.08    0.16    0.15 
                     
Net Operating Income – NOI  $23,168,064   $19,187,803   $46,148,226   $37,843,664 
                     
Basic  $0.33   $0.30   $0.65   $0.59 
Diluted   0.32    0.30    0.65    0.59 
                     
Funds From Operations – FFO  $12,395,729   $11,248,985   $26,074,295   $22,115,446 
                     
Basic  $0.17   $0.17   $0.37   $0.35 
Diluted   0.17    0.17    0.37    0.35 
                     
Core Funds From Operations - Core FFO  $12,395,729   $11,513,997   $26,252,821   $22,526,043 
                     
Basic  $0.17   $0.18   $0.37   $0.35 
Diluted   0.17    0.18    0.37    0.35 
                     
Core FFO Excluding Gains on Securities Transactions  $12,395,729   $10,635,035   $25,446,713   $21,638,701 
                     
Basic  $0.17   $0.16   $0.36   $0.34 
Diluted   0.17    0.16    0.36    0.34 
                     
Adjusted Funds From Operations - AFFO  $12,511,067   $10,744,761   $25,450,183   $21,469,869 
                     
Basic  $0.18   $0.17   $0.36   $0.34 
Diluted   0.18    0.17    0.36    0.34 
                     
Dividends Declared per Common Share  $0.16   $0.16   $0.32   $0.32 

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 6 of 23

 

 
Table of Contents 

 

Same Property Statistics
             
   Three Months Ended         
   3/31/2017               3/31/2016   Change   Change % 
                                             
Total Square Feet / Total Properties   16,553,910    /   100                14,550,855    /   94    2,003,055    13.8%
                                                        
Occupancy Percentage at Quarter End   100.0%                            99.6%             40 bps    0.4%
                                                        
Same Property Square Feet / Number of Same Properties                  13,392,274    /    88                          
                                                        
Same Property Occupancy Percentage at Quarter End   100.0%                            100.0%             0 bps    0.0%
                                                        
Same Property Net Operating Income (NOI) (GAAP)  $18,012,762                            $18,032,816             $(20,054)   (0.1)%
                                                        
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (155,783)                            (478,057)             322,274      
Same Property Cash NOI (Cash)  $17,856,979                            $17,554,759             $302,220    1.7%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during these periods.

 

The 0.1% decrease, amounting to $20,054 in Same Property NOI, consists of $147,623 attributable to increased Same Property NOI from filling previously vacant properties offset by a decrease in Same Property NOI from occupied properties of $167,677.

 

The 1.7% increase, amounting to $302,220 in Same Property Cash NOI, consists of $148,046 attributable to increased Same Property Cash NOI from filling previously vacant properties and by an increase in Same Property Cash NOI from occupied properties of $154,174.

  

Reconciliation of Same Property NOI to Total NOI       
         
   Three Months Ended         
   3/31/2017   3/31/2016   Change   Change % 
                 
Same Property NOI (GAAP)  $18,012,762   $18,032,816   $(20,054)   (0.1)%
                     
NOI of properties purchased subsequent to October 1, 2015 (eight properties for fiscal 2017 and one properties for fiscal 2016)   3,591,668    92,403           
                     
NOI of properties expanded subsequent to October 1, 2015 (four properties for fiscal 2017 and 2016)   1,563,634    1,078,478           
                     
NOI of property sold subsequent to October 1, 2015 (one property sold during fiscal 2017)   -0-    (15,894)          
Total NOI  $23,168,064   $19,187,803   $3,980,261    20.7%

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 7 of 23

 


 
Table of Contents 

 

Same Property Statistics 
                                     
   Six Months Ended         
   3/31/2017               3/31/2016   Change   Change % 
                                             
Total Square Feet / Total Properties   16,553,910    /   100                14,550,855    /   94    2,003,055    13.8%
                                                        
Occupancy Percentage at Quarter End   100.0%                            99.6%             40 bps    0.4%
                                                        
Same Property Square Feet / Number of Same Properties                  12,886,242     /     86                          
                                                        
Same Property Occupancy Percentage at Quarter End   100.0%                            100.0%             0 bps    0.0%
                                                        
Same Property Net Operating Income (NOI) (GAAP)  $34,516,046                            $34,173,271             $342,775    1.0%
                                                        
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (338,041)                            (778,609)             440,568      
Same Property Cash NOI (Cash)  $34,178,005                            $33,394,662             $783,343    2.3%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during these periods.

 

The 1.0% increase, amounting to $342,775 in Same Property NOI, consists of $490,389 attributable to increased Same Property NOI from filling previously vacant properties offset by a decrease in Same Property NOI from occupied properties of $147,614.

 

The 2.3% increase, amounting to $783,343 in Same Property Cash NOI, consists of $609,265 attributable to increased Same Property Cash NOI from filling previously vacant properties and by an increase in Same Property Cash NOI from occupied properties of $174,078.

 

Reconciliation of Same Property NOI to Total NOI  Six Months Ended         
   3/31/2017   3/31/2016   Change   Change % 
                 
Same Property NOI (GAAP)  $34,516,046   $34,173,271   $342,775    1.0%
                     
NOI of properties purchased subsequent to October 1, 2015 (ten properties for fiscal 2017 and three properties for fiscal 2016)   8,592,414    1,561,380           
                     
NOI of properties expanded subsequent to October 1, 2015 (four properties for fiscal 2017 and 2016)   3,153,803    2,169,971           
                     
NOI of property sold subsequent to October 1, 2015 (one property sold during fiscal 2017)   (114,037)   (60,958)          
Total NOI  $46,148,226   $37,843,664   $8,304,562    21.9%

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 8 of 23

 

 
Table of Contents 

 

Consolidated Statements of Cash Flows    
(unaudited)  Six Months Ended 
   3/31/2017   3/31/2016 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Income  $18,278,532   $14,070,602 
Noncash Items Included in Net Income:          
Depreciation & Amortization   15,673,022    12,827,503 
Stock Compensation Expense   266,345    206,928 
Gain on Sale of Securities Transactions   (806,108)   (887,342)
Loss on Sale of Real Estate Investment   95,336    -0- 
Changes in:          
Tenant, Deferred Rent and Other Receivables   452,335    (1,135,834)
Prepaid Expenses   (3,135,027)   (2,840,928)
Other Assets and Capitalized Lease Costs   (839,704)   (2,327,353)
Accounts Payable, Accrued Expenses and Other Liabilities   861,044    8,514,594 
NET CASH PROVIDED BY OPERATING ACTIVITIES   30,845,775    28,428,170 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of Real Estate and Intangible Assets   (56,101,538)   (70,418,761)
Capital Improvements   (1,013,209)   (10,193,323)
Proceeds on Sale of Real Estate   4,125,819    -0- 
Return of Deposits on Real Estate   1,000,000    900,000 
Deposits Paid on Acquisitions of Real Estate   (1,575,000)   (850,000)
Proceeds from Sale of Securities Available for Sale   3,739,239    7,416,459 
Purchase of Securities Available for Sale   (29,305,625)   (13,132,910)
NET CASH USED IN INVESTING ACTIVITIES   (79,130,314)   (86,278,535)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Net (Repayments) Proceeds from Loans Payable   (54,790,684)   14,875,497 
Proceeds from Fixed Rate Mortgage Notes Payable   38,000,000    46,670,000 
Principal Payments on Fixed Rate Mortgage Notes Payable   (37,700,474)   (14,235,258)
Financing Costs Paid on Debt   (660,702)   (615,329)
Proceeds from the Exercise of Stock Options   -0-    1,412,050 
Redemption of Series A Preferred Stock   (53,493,750)   -0- 
Proceeds from Underwritten Public Offering of Preferred Stock, net of offering costs   71,017,493    -0- 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   37,812,970    28,200,304 
Preferred Dividends Paid   (6,621,359)   (4,303,516)
Common Dividends Paid, net of Reinvestments   (18,076,564)   (16,292,674)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES   (24,513,070)   55,711,074 
           
           
NET DECREASE IN CASH AND CASH EQUIVALENTS   (72,797,609)   (2,139,291)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   95,749,508    12,073,909 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $22,951,899   $9,934,618 

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 9 of 23

 

 
Table of Contents 

 

Capital Structure and Leverage Ratios           
(unaudited)            
   As of   As of   As of 
  3/31/2017   3/31/2016   9/30/2016 
             
Fixed Rate Mortgage Notes Payable, Net of Unamortized Debt Costs  $477,598,305   $401,083,780   $477,476,010 
Loans Payable   26,000,000    99,916,883    80,790,684 
Preferred Stock Called for Redemption   -0-    -0-    53,493,750 
Total Debt   503,598,305    501,000,663    611,760,444 
                
7.625% Series A Cumul. Redeemable Preferred   -0-    53,493,750    -0- 
7.875% Series B Cumul. Redeemable Preferred   57,500,000    57,500,000    57,500,000 
6.125% Series C Cumul. Redeemable Preferred   210,000,000    -0-    135,000,000 
Total Preferred Stock   267,500,000    110,993,750    192,500,000 
                
Common Stock, Paid-In-Capital & Other   431,805,101    365,812,551    405,358,098 
Total Shareholders’ Equity   699,305,101    476,806,301    597,858,098 
                
Total Book Capitalization   1,202,903,406    977,806,964    1,209,618,542 
                
Accumulated Depreciation   161,947,883    136,359,705    148,830,169 
Total Undepreciated Book Capitalization  $1,364,851,289   $1,114,166,669   $1,358,448,711 
                
Shares Outstanding   72,107,640    65,588,024    68,920,972 
Market Price Per Share  $14.27   $11.89   $14.27 
                
Equity Market Capitalization  $1,028,976,023   $779,841,605   $983,502,270 
Total Debt   503,598,305    501,000,663    611,760,444 
Preferred   267,500,000    110,993,750    192,500,000 
Total Market Capitalization  $1,800,074,328   $1,391,836,018   $1,787,762,714 
                
Total Debt  $503,598,305   $501,000,663   $611,760,444 
less: Cash and Cash Equivalents   22,951,899    9,934,618    95,749,508 
Net Debt  $480,646,406   $491,066,045   $516,010,936 
less: Securities Available for Sale at Fair Value (Securities)   99,405,410    68,646,996    73,604,894 
Net Debt Less Securities  $381,240,996   $422,419,049   $442,406,042 
                
Net Debt / Undepreciated Book Capitalization   35.2%   44.1%   38.0%
Net Debt / Total Market Capitalization   26.7%   35.3%   28.9%
Net Debt Plus Preferred / Total Market Capitalization   41.6%   43.3%   39.6%
Net Debt Less Securities / Undepreciated Book Capitalization   27.9%   37.9%   32.6%
Net Debt Less Securities / Total Market Capitalization   21.2%   30.3%   24.7%
Net Debt Less Securities Plus Preferred / Total Market Capitalization   36.0%   38.3%   35.5%
                
Weighted Average Interest Rate on Fixed Rate Debt   4.37%   4.61%   4.49%

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 10 of 23

 

 
Table of Contents 

 

Capital Structure and Leverage Ratios continued
(unaudited)

 

           Fiscal Year 
   Three Months Ended   Six Months Ended   Ended 
    3/31/2017    3/31/2016    3/31/2017    3/31/2016    9/30/2016 
Net Income  $8,424,611   $7,131,947   $18,278,532   $14,070,602   $32,494,507 
plus: Depreciation & Amortization   7,566,833    6,272,422    15,007,125    12,354,465    26,087,680 
plus: Interest Expense, including Amortization of Financing Costs   6,537,264    5,555,607    12,700,483    10,902,254    22,953,049 
plus: Acquisition Costs   -0-    265,012    178,526    410,597    730,441 
plus: Net Amortization of Acquired Above and  Below Market Lease Revenue   25,492    25,492    50,984    50,984    101,967 
less: Gain on Sale of Securities Transactions   -0-    (878,962)   (806,108)   (887,342)   -0- 
Plus: Loss on Sale of Real Estate Investment   -0-    -0-    95,336    -0-    (4,398,599)
Adjusted EBITDA  $22,554,200   $18,371,518   $45,504,878   $36,901,560   $77,969,045 
                          
Interest Expense, including Amortization of  Financing Costs  $6,537,264   $5,555,607   $12,700,483   $10,902,254   $22,953,049 
Preferred Dividends   3,582,036    2,151,758    7,279,796    4,303,516    9,020,470 
Total Fixed Charges  $10,119,300   $7,707,365   $19,980,279   $15,205,770   $31,973,519 
                          
Interest Coverage    3.5 x     3.3 x     3.6 x     3.4 x    3.4 x 
Fixed Charge Coverage    2.2 x     2.4 x     2.3 x     2.4 x    2.4 x 
                          
Net Debt  $480,646,406   $491,066,045   $480,646,406   $491,066,045   $516,010,936 
Net Debt Less Securities   381,240,996    422,419,049    381,240,996    422,419,049    442,406,042 
Preferred   267,500,000    110,993,750    267,500,000    110,993,750    192,500,000 
Annualized Adjusted EBITDA   90,216,800    73,486,072    91,009,756    73,803,120    77,969,045 
                          
Net Debt / Adjusted EBITDA    5.3 x     6.7 x     5.3 x     6.7 x    6.6 x 
Net Debt Less Securities / Adjusted EBITDA    4.2 x     5.7 x     4.2 x     5.7 x    5.7 x 
Net Debt + Preferred / Adjusted EBITDA    8.3 x     8.2 x     8.2 x    8.2 x    9.1 x 
Net Debt Less Securities + Preferred / Adjusted EBITDA    7.2 x     7.3 x     7.1 x     7.2 x     8.1 x 

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 11 of 23

 

 
Table of Contents 

 

Debt Matuity 
(unaudited) 

 

 

           Loans       % of 
Fiscal Year Ended      Mortgages   Payable   Total   Total 
                     
2017       $28,170,372   $-0-   $28,170,372    5.5%
2018        46,130,441    -0-    46,130,441    9.0%
2019        47,564,829    -0-    47,564,829    9.3%
2020        31,368,909    26,000,000    57,368,909    11.2%
2021        31,916,923    -0-    31,916,923    6.3%
Thereafter        298,896,202    -0-    298,896,202    58.7%
                          
Total as of 3/31/2017   (A)   $484,047,676   $26,000,000   $510,047,676    100.0%
                          
Weighted Average Interest Rate        4.37%   2.68%   4.28%     
Weighted Average Term        10.65 yrs.    3.50 yrs.    10.29 yrs.      

 

(A)Mortgages does not include unamortized debt issuance costs of $6,449,371.

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 12 of 23

 

 
Table of Contents 

 

Property Table by Tenant                             
(unaudited)                                       
 
Tenant
 
 
 
 
 
 
Property
Count
 
 
 
 
Square
Footage
 
 
 
 
Occupied Square
Footage
 
 
 
 
% of Occupied
sf
 
 
 
 
Annual
Rent
 
 
 
 
% of Total
Ann. Rent
 
 
 
 
Rent Per
sf Occup.
 
 
 
 
Undepreciated
Cost
 
 
 
 
Mortgage
Balance
 
 
                                        
FedEx Ground Package System, Inc.      40    6,763,253    6,763,253    40.9%  $49,447,000    51.6%  $7.31   $654,763,153   $292,121,991 
FedEx Corporation      14    973,413    973,413    5.9%   5,372,000    5.6%   5.52    72,179,973    11,363,990 
FedEx Supply Chain Services, Inc.      1    449,900    449,900    2.7%   1,327,000    1.4%   2.95    14,620,887    6,279,685 
Total FedEx      55    8,186,566    8,186,566    49.5%   56,146,000    58.6%   6.86    741,564,013    309,765,666 
                                                 
Milwaukee Electric Tool Corporation      1    861,889    861,889    5.2%   3,010,000    3.1%   3.49    36,914,917    24,307,438 
ULTA, Inc.      1    671,354    671,354    4.1%   2,677,000    2.8%   3.99    37,500,391    22,129,037 
Jim Beam Brands Company      1    599,840    599,840    3.6%   2,032,000    2.1%   3.39    28,000,000    17,975,995 
TreeHouse Private Brands, Inc.      1    558,600    558,600    3.4%   2,186,000    2.3%   3.91    26,767,852    16,358,324 
CBOCS Distribution, Inc.      1    381,240    381,240    2.3%   1,433,000    1.5%   3.76    14,215,126    7,554,896 
Best Buy Warehousing Logistics, Inc.      1    368,060    368,060    2.2%   1,660,000    1.7%   4.51    19,600,000    10,172,294 
The Coca-Cola Company (Western Container Corporation)      2    323,358    323,358    2.0%   1,684,000    1.8%   5.21    20,504,069    6,159,467 
Science Applications International      1    302,400    302,400    1.8%   1,476,000    1.5%   4.88    13,340,592    -0- 
International Paper Company      1    280,000    280,000    1.7%   1,337,000    1.4%   4.78    18,294,108    10,292,790 
Woodstream Corporation  (B)   1    256,000    256,000    1.5%   910,000    0.9%   3.55    8,882,831    -0- 
United Technologies Corporation      2    244,317    244,317    1.5%   1,896,000    2.0%   7.76    22,552,240    7,603,252 
Anda Pharmaceuticals, Inc.      1    234,660    234,660    1.4%   1,200,000    1.3%   5.11    14,550,000    8,464,390 
UGN, Inc.      1    232,200    232,200    1.4%   1,060,000    1.1%   4.57    12,937,000    7,842,218 
Caterpillar Logistics Services, Inc.      1    218,120    218,120    1.3%   1,169,000    1.2%   5.36    14,868,857    -0- 
Anheuser-Busch, Inc.      1    184,800    184,800    1.1%   810,000    0.8%   4.38    12,578,197    -0- 
Carlisle Tire & Wheel Company      1    179,280    179,280    1.1%   787,000    0.8%   4.39    7,225,401    134,949 
NF&M International Inc.  (A)   1    174,802    174,802    1.1%   833,000    0.9%   4.77    5,389,424    -0- 
Home Depot USA, Inc.      1    171,200    171,200    1.0%   988,000    1.0%   5.77    11,298,367    -0- 
Kellogg Sales Company      3    170,279    170,279    1.0%   982,000    1.0%   5.77    12,175,116    -0- 
Bunzl Distribution Midcentral, Inc.      1    158,417    158,417    1.0%   747,000    0.8%   4.72    9,647,403    6,878,520 
Victory Packaging, L.P.      1    148,000    148,000    0.9%   496,000    0.5%   3.35    5,441,876    -0- 
Challenger Lifts, Inc. (Snap-On Inc.)      1    137,500    137,500    0.8%   831,000    0.9%   6.04    11,304,000    7,103,266 
Altec Industries, Inc.  (B)   1    126,880    126,880    0.8%   349,000    0.4%   2.75    4,402,553    -0- 
General Electric Company      1    125,860    125,860    0.8%   1,315,000    1.4%   10.45    19,950,000    12,335,608 
The American Bottling Company (Dr Pepper Snapple)      2    110,080    110,080    0.7%   739,000    0.8%   6.71    10,498,031    1,874,070 
Style Crest, Inc.      1    106,507    106,507    0.6%   381,000    0.4%   3.58    7,238,613    -0- 
Pittsburgh Glass Works, LLC      1    102,135    102,135    0.6%   427,000    0.4%   4.18    4,245,913    -0- 
Holland 1916 Inc.      1    95,898    95,898    0.6%   345,000    0.4%   3.60    7,397,881    -0- 
National Oilwell Varco, Inc.      1    91,295    91,295    0.6%   750,000    0.8%   8.22    8,083,107    2,910,740 
Joseph T. Ryerson and Son, Inc.      1    89,052    89,052    0.5%   506,000    0.5%   5.68    6,932,916    -0- 
CHEP USA, Inc.      1    83,000    83,000    0.5%   497,000    0.5%   5.99    7,405,447    2,362,965 
Datatel Resources Corporation  (A)   1    80,856    80,856    0.5%   243,000    0.3%   3.01    2,492,919    -0- 
Sherwin-Williams Company      2    78,887    78,887    0.5%   640,000    0.7%   8.11    7,244,128    -0- 
RGH Enterprises, Inc.      1    75,000    75,000    0.5%   601,000    0.6%   8.01    5,525,600    -0- 
Tampa Bay Grand Prix      1    68,385    68,385    0.4%   293,000    0.3%   4.28    5,677,982    -0- 
Various Tenants at Retail Shopping Center      1    64,220    64,220    0.4%   735,000    0.8%   11.45    3,072,880    -0- 
SOFIVE, Inc.      1    60,400    60,400    0.3%   548,000    0.6%   9.07    4,903,589    1,821,791 
Siemens Real Estate      1    51,130    51,130    0.2%   479,000    0.5%   9.37    4,452,425    -0- 
Rockwell Collins, Inc.      1    38,833    38,833    0.2%   362,000    0.4%   9.32    5,100,000    -0- 
Keystone Automotive Industries MN, Inc.      1    36,270    36,270    0.2%   141,000    0.1%   3.89    2,161,895    -0- 
Graybar Electric Company      1    26,340    26,340    0.2%   109,000    0.1%   4.14    1,858,594    -0- 
Tenant Total as of 3/31/17      100    16,553,910    16,553,910    100.0%  $95,810,000    100.0%  $5.79   $1,224,196,253   (C)$484,047,676 
                                                 
Acquisitions Subsequent to 3/31/17                                                
FedEx Ground Package System, Inc.      1    343,483    343,483    2.0%   2,102,000    2.1%   6.12    32,120,000    20,875,000 
Pro Forma Total      101    16,897,393    16,897,393    100.0%  $97,912,000    100.0%  $5.79   $1,256,316,253   $504,922,676 

 

  (A) NF&M International and Datatel Resources are located at one property and therefore are counted as one property in the Property Count total.
     
  (B) Woodstream Corporation and Altec Industries, Inc. are located at one property and therefore are counted as one property in the Property Count total. Other than these two properties indicated in footnotes (A) and (B) and the one retail property, all other properties are single-tenant.
     
  (C) Does not include unamortized debt issuance costs of $6,449,371.

 

Second Quarter FY 2017 Supplemental of Monmouth Real Estate Investment Corp. Page 13 of 23

 

 
Table of Contents 

 

Property Table by State                           
(unaudited)                                    
State  
 
Property
Count
 
 
 
 
Square
Footage
 
 
 
 
Occupied Square
Footage
 
 
 
 
% of Total
sf
 
 
 
 
Annual
Rent
 
 
 
 
% of Total
Ann. Rent
 
 
 
 
Rent Per
sf Occup.
 
 
 
 
Undepreciated
Cost
 
 
 
 
Mortgage
Balance
 
 
Florida   12    1,661,887    1,661,887    10.0%  $11,677,000    12.2%   7.03   $162,343,314   $79,157,472 
Texas   9    1,430,093    1,430,093    8.6%   10,988,000    11.5%   7.68    132,162,531    52,992,067 
Kentucky   3    1,295,940    1,295,940    7.8%   5,049,000    5.3%   3.90    66,071,852    41,437,585 
Mississippi   4    1,158,889    1,158,889    7.0%   4,439,000    4.6%   3.83    55,224,199    32,771,828 
Ohio   7    1,032,469    1,032,469    6.2%   6,116,000    6.4%   5.92    72,772,468    22,866,661 
Indiana   2    999,176    999,176    6.0%   4,210,000    4.4%   4.21    61,446,391    33,969,360 
Illinois   9    958,045    958,045    5.8