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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 8, 2018

 

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 Number)

 

(IRS Employer

Identification No.)

 

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 8, 2018, Monmouth Real Estate Investment Corporation issued a press release announcing the results for the second quarter ended March 31, 2018 and disclosed a supplemental information package in connection with its earnings conference call for the second quarter ended March 31, 2018. 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;
  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, 2018 and press release dated May 8, 2018.

 

   2
 

 

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 8, 2018

 

   3
 

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Section 2: EX-99

 

 

 

 

 

 

Table of Contents

 

  Page
   
Consolidated Balance Sheets 3
   
Consolidated Statements of Income 4
   
Net Income, FFO, Core FFO, AFFO, EBITDAre, 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 8, 2018 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, EBITDAre and Adjusted EBITDA, which are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States. 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

 

   As of   As of 
   March 31, 2018   September 30, 2017 
   (unaudited)     
ASSETS          
Real Estate Investments:          
Land  $197,974,389   $187,224,819 
Buildings and Improvements   1,342,261,913    1,244,691,715 
Total Real Estate Investments   1,540,236,302    1,431,916,534 
Accumulated Depreciation   (188,310,757)   (171,060,478)
Real Estate Investments   1,351,925,545    1,260,856,056 
           
Real Estate Held for Sale   9,486,257    14,606,028 
Cash and Cash Equivalents   12,470,188    10,226,046 
Securities Available for Sale at Fair Value   144,630,426    123,764,770 
Tenant and Other Receivables   1,743,865    1,753,054 
Deferred Rent Receivable   8,772,807    8,049,275 
Prepaid Expenses   9,339,758    5,434,874 
Intangible Assets, net of Accumulated Amortization of  $13,267,014 and $13,404,318, respectively   11,934,269    10,010,165 
Capitalized Lease Costs, net of Accumulated Amortization of   $3,331,272 and $3,393,187, respectively   4,271,380    4,180,907 
Financing Costs, net of Accumulated Amortization of   $807,345 and $619,555, respectively   687,919    875,709 
Other Assets   4,629,158    3,280,871 
TOTAL ASSETS  $1,559,891,572   $1,443,037,755 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
Liabilities:          
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $632,051,233   $591,364,371 
Loans Payable   154,341,511    120,091,417 
Accounts Payable and Accrued Expenses   2,497,405    4,450,753 
Other Liabilities   20,643,642    14,265,518 
Total Liabilities   809,533,791    730,172,059 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 12,400,000 Shares Authorized as of March 31, 2018 and September 30, 2017; 11,095,376 and 9,839,445 Shares Issued and Outstanding as of March 31, 2018 and September 30, 2017, respectively   277,384,400    245,986,125 
Common Stock, $0.01 Par Value Per Share: 192,039,750 Shares Authorized as of March 31, 2018 and September 30, 2017; 78,846,177 and 75,630,521 Shares Issued and Outstanding  as of March 31, 2018 and September 30, 2017, respectively   788,462    756,305 
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of March 31, 2018 and September 30, 2017; No Shares Issued or Outstanding as of March 31, 2018 and September 30, 2017   -0-    -0- 
Additional Paid-In Capital   503,309,572    459,552,701 
Accumulated Other Comprehensive Income (Loss)   (31,124,653)   6,570,565 
Undistributed Income   -0-    -0- 
Total Shareholders’ Equity   750,357,781    712,865,696 
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY  $1,559,891,572   $1,443,037,755 

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 3 of 23
Table of Contents  

 

Consolidated Statements of Income

(unaudited)

 

   For The   For The 
  Three Months Ended   Six Months Ended 
   3/31/2018   3/31/2017   3/31/2018   3/31/2017 
INCOME:                    
Rental Revenue  $28,609,985   $23,610,830   $56,302,467   $46,891,686 
Reimbursement Revenue   5,011,523    3,697,361    10,060,863    7,598,116 
Lease Termination Income   -0-    -0-    210,261    -0- 
TOTAL INCOME   33,621,508    27,308,191    66,573,591    54,489,802 
                     
EXPENSES:                    
Real Estate Taxes   3,779,648    2,851,862    7,642,311    5,758,843 
Operating Expenses   1,476,295    1,288,265    2,912,536    2,582,733 
General & Administrative Expenses   2,218,037    2,078,538    4,165,069    3,521,001 
Acquisition Costs   -0-    -0-    -0-    178,526 
Depreciation   8,858,062    7,139,077    17,342,046    14,131,572 
Amortization of Capitalized Lease Costs and Intangible Assets   588,622    427,756    1,126,693    875,553 
TOTAL EXPENSES   16,920,664    13,785,498    33,188,655    27,048,228 
                     
OTHER INCOME (EXPENSE):                    
Dividend and Interest Income   2,888,210    1,439,182    5,752,427    2,731,333 
Gain on Sale of Securities Transactions   11,234    -0-    111,387    806,108 
Interest Expense, including Amortization of Financing Costs   (7,955,285)   (6,537,264)   (15,361,232)   (12,700,483)
TOTAL OTHER INCOME (EXPENSE)   (5,055,841)   (5,098,082)   (9,497,418)   (9,163,042)
                     
INCOME FROM CONTINUING OPERATIONS, BEFORE GAIN ON SALE OF REAL ESTATE INVESTMENTS   11,645,003    8,424,611    23,887,518    18,278,532 
                     
Gain on Sale of Real Estate Investments   -0-    -0-    5,387,886    -0- 
                     
NET INCOME   11,645,003    8,424,611    29,275,404    18,278,532 
                     
Less: Preferred Dividends   4,248,219    3,582,036    8,565,165    7,279,796 
                     
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS  $7,396,784   $4,842,575   $20,710,239   $10,998,736 

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 4 of 23
Table of Contents  

 

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

(unaudited)

 

   For The   For The 
   Three Months Ended   Six Months Ended 
FFO, Core FFO, AFFO  3/31/2018   3/31/2017   3/31/2018   3/31/2017 
Net Income Attributable to Common Shareholders  $7,396,784   $4,842,575   $20,710,239   $10,998,736 
Plus: Depreciation Expense (Excluding Corporate Office Capitalized Costs)   8,818,574    7,099,906    17,263,081    14,053,686 
Plus: Amortization of Intangible Assets   397,116    240,973    740,862    508,820 
Plus: Amortization of Capitalized Lease Costs   217,183    212,275    437,185    417,717 
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments   -0-    -0-    (5,387,886)   95,336 
FFO Attributable to Common Shareholders   16,829,657    12,395,729    33,763,481    26,074,295 
Plus: Acquisition Costs   -0-    -0-    -0-    178,526 
Core FFO Attributable to Common Shareholders   16,829,657    12,395,729    33,763,481    26,252,821 
Plus: Depreciation of Corporate Office Capitalized Costs   39,488    39,171    78,965    77,886 
Plus: Stock Compensation Expense   111,406    166,190    242,169    266,345 
Plus: Amortization of Financing Costs   302,556    384,984    596,450    665,897 
Less: Gain on Sale of Securities Transactions   (11,234)   -0-    (111,387)   (806,108)
Less: Lease Termination Income   -0-    -0-    (210,261)   -0- 
Less: Recurring Capital Expenditures   (64,474)   (188,390)   (283,720)   (376,802)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (360,458)   (286,617)   (756,486)   (629,856)
AFFO Attributable to Common Shareholders  $16,846,941   $12,511,067   $33,319,211   $25,450,183 

 

   Three Months Ended   Six Months Ended 
EBITDAre, Adjusted EBITDA  3/31/2018   3/31/2017   3/31/2018   3/31/2017 
Net Income Attributable to Common Shareholders  $7,396,784   $4,842,575   $20,710,239   $10,998,736 
Plus: Preferred Dividends   4,248,219    3,582,036    8,565,165    7,279,796 
Plus: Interest Expense, including Amortization of Financing Costs   7,955,285    6,537,264    15,361,232    12,700,483 
Plus: Depreciation and Amortization   9,446,684    7,566,833    18,468,739    15,007,125 
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments   -0-    -0-    (5,387,886)   95,336 
EBITDAre   29,046,972    22,528,708    57,717,489    46,081,476 
Plus: Acquisition Costs   -0-    -0-    -0-    178,526 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25,677    25,492    51,354    50,984 
Less: Gain on Sale of Securities Transactions   (11,234)   -0-    (111,387)   (806,108)
Adjusted EBITDA  $29,061,415   $22,554,200   $57,657,456   $45,504,878 

 

   Three Months Ended   Six Months Ended 
Net Operating Income  3/31/2018   3/31/2017   3/31/2018   3/31/2017 
Net Income Attributable to Common Shareholders  $7,396,784   $4,842,575   $20,710,239   $10,998,736 
Plus: Preferred Dividends   4,248,219    3,582,036    8,565,165    7,279,796 
Plus: General & Administrative Expenses   2,218,037    2,078,538    4,165,069    3,521,001 
Plus: Acquisition Costs   -0-    -0-    -0-    178,526 
Plus: Depreciation   8,858,062    7,139,077    17,342,046    14,131,572 
Plus: Amortization of Capitalized Lease Costs and Intangible Assets   588,622    427,756    1,126,693    875,553 
Plus: Interest Expense, including Amortization of Financing Costs   7,955,285    6,537,264    15,361,232    12,700,483 
Less: Dividend and Interest Income   (2,888,210)   (1,439,182)   (5,752,427)   (2,731,333)
Less: Gain on Sale of Securities Transactions   (11,234)   -0-    (111,387)   (806,108)
Less: Gain on Sale of Real Estate Investments   -0-    -0-    (5,387,886)   -0- 
Less: Lease Termination Income   -0-    -0-    (210,261)   -0- 
Net Operating Income – NOI  $28,365,565   $23,168,064   $55,808,483   $46,148,226 

 

   Three Months Ended   Six Months Ended 
Components of Net Operating Income Consists of:  3/31/2018   3/31/2017   3/31/2018   3/31/2017 
Revenues:                    
Rental Revenue  $28,609,985   $23,610,830   $56,302,467   $46,891,686 
Reimbursement Revenue   5,011,523    3,697,361    10,060,863    7,598,116 
Total Rental and Reimbursement Revenue   33,621,508    27,308,191    66,363,330    54,489,802 
                     
Expenses:                    
Real Estate Taxes   3,779,648    2,851,862    7,642,311    5,758,843 
Operating Expenses   1,476,295    1,288,265    2,912,536    2,582,733 
Total Real Estate Taxes and Operating Expenses   5,255,943    4,140,127    10,554,847    8,341,576 
Net Operating Income – NOI  $28,365,565   $23,168,064   $55,808,483   $46,148,226 

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 5 of 23
Table of Contents  

 

Financial Highlights

(unaudited)

 

   For The   For The 
   Three Months Ended   Six Months Ended 
   3/31/2018   3/31/2017   3/31/2018   3/31/2017 
                 
Weighted Average Common Shares Outstanding                    
Basic   77,992,007    71,243,381    77,174,821    70,456,222 
Diluted   78,155,938    71,406,875    77,362,197    70,607,766 
                     
Net Income Attributable to Common Shareholders  $7,396,784   $4,842,575   $20,710,239   $10,998,736 
                     
Basic  $0.10   $0.07   $0.27   $0.16 
Diluted   0.10    0.07    0.27    0.16 
                     
Net Operating Income – NOI  $28,365,565   $23,168,064   $55,808,483   $46,148,226 
                     
Basic  $0.36   $0.33   $0.72   $0.65 
Diluted   0.36    0.32    0.72    0.65 
                     
Funds From Operations – FFO  $16,829,657   $12,395,729   $33,763,481   $26,074,295 
                     
Basic  $0.22   $0.17   $0.44   $0.37 
Diluted   0.22    0.17    0.44    0.37 
                     
Core Funds From Operations - Core FFO  $16,829,657   $12,395,729   $33,763,481   $26,252,821 
                     
Basic  $0.22   $0.17   $0.44   $0.37 
Diluted   0.22    0.17    0.44    0.37 
                     
Core FFO Excluding Gain on Sale of Securities Transactions and Excluding Lease Termination Income  $16,818,423   $12,395,729   $33,441,883   $25,446,713 
                     
Basic  $0.22   $0.17   $0.43   $0.36 
Diluted   0.22    0.17    0.43   $0.36 
                     
Adjusted Funds From Operations – AFFO  $16,846,941   $12,511,067   $33,319,211   $25,450,183 
                     
Basic  $0.22   $0.18   $0.43   $0.36 
Diluted   0.22    0.18    0.43   $0.36 
                     
Dividends Declared per Common Share  $0.17   $0.16   $0.34   $0.32 
                     
Dividend/AFFO Payout Ratio   77.3%               

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 6 of 23
Table of Contents  

 

Same Property Statistics

(unaudited)

 

   For The        
   Three Months Ended        
   3/31/2018       3/31/2017   Change   Change %  
                        
Total Square Feet / Total Properties   19,928,001 / 109         16,553,910 / 100    3,374,091   20.4 %
                        
Occupancy Percentage at End of Period   99.2%        100.0%   (80) bps   (0.8 )%
                          
Same Property Square Feet / Number of Same Properties        15,901,307 / 96                
                           
Same Property Occupancy Percentage at End of Period   98.9%        100.0%   (110) bps   (1.1 )%
                          
Same Property Net Operating Income (NOI) (GAAP)  $22,335,043        $22,284,650   $50,393   0.2 %
                          
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (274,433)        (286,619)   12,186      
Same Property Cash NOI (Cash)  $22,060,610        $21,998,031   $62,579   0.3 %

 

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

 

The 0.2% increase, amounting to $50,393 in Same Property NOI, consists of $172,909 attributable to increased Same Property NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $122,516.

 

The 0.3% increase, amounting to $62,579 in Same Property Cash NOI, consists of $185,095 attributable to increased Same Property Cash NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $122,516.

 

Reconciliation of Same Property NOI to Total NOI

 

   For The         
   Three Months Ended         
   3/31/2018   3/31/2017   Change   Change % 
                 
Same Property NOI (GAAP)  $22,335,043   $22,284,650   $50,393    0.2%
                     
NOI of properties purchased subsequent to December 31, 2016 (three properties for fiscal 2018 and eight properties for fiscal 2017)   5,266,454    -0-           
                     
NOI of properties expanded subsequent to December 31, 2016 (two properties for fiscal 2018 and 2017)   764,068    724,134           
                     
NOI of properties sold subsequent to December 31, 2016 (two properties sold during the first quarter of fiscal 2018)   -0-    159,280           
Total NOI  $28,365,565   $23,168,064   $5,197,501    22.4%

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 7 of 23
Table of Contents  

 

Same Property Statistics

(unaudited)

 

   For The        
   Six Months Ended        
   3/31/2018       3/31/2017   Change   Change %  
                        
Total Square Feet / Total Properties   19,928,001 /  109         16,553,910 /  100    3,374,091   20.4 %
                        
Occupancy Percentage at End of Period   99.2%        100.0%   (80) bps   (0.8 )%
                        
Same Property Square Feet / Number of Same Properties        15,562,723 / 95              
                        
Same Property Occupancy Percentage at End of Period   98.9%        100.0%   (110) bps   (1.1 )%
                        
Same Property Net Operating Income (NOI) (GAAP)  $43,418,000        $43,660,113   $(242,113)  (0.6 )%
                        
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (498,470)        (583,942)   85,472    
Same Property Cash NOI (Cash)  $42,919,530        $43,076,171   $(156,641)  (0.4 )%

 

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

 

The 0.6% decrease, amounting to $242,113 in Same Property NOI, consists of $38,673 attributable to increased Same Property NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $280,786.

 

The 0.4% decrease, amounting to $156,641 in Same Property Cash NOI, consists of $161,760 attributable to increased Same Property Cash NOI from occupied properties offset by a 110 bps decline in Same Property Occupancy Percentage amounting to $318,401.

 

Reconciliation of Same Property NOI to Total NOI

 

   For The         
   Six Months Ended         
   3/31/2018   3/31/2017   Change   Change % 
                 
Same Property NOI (GAAP)  $43,418,000   $43,660,113   $(242,113)   (0.6)%
                     
NOI of properties purchased subsequent to September 30, 2016 (three properties for fiscal 2018 and ten properties for fiscal 2017)   11,333,712    1,523,467           
                     
NOI of properties expanded subsequent to September 30, 2016 (one property for fiscal 2018 and 2017)   841,918    759,254           
                     
NOI of properties sold subsequent to September 30, 2016 (two properties sold during fiscal 2018 and one during fiscal 2017)   214,853    205,392           
Total NOI  $55,808,483   $46,148,226   $9,660,257    20.9%

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 8 of 23
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Consolidated Statements of Cash Flows

(unaudited)

 

   For The 
   Six Months Ended 
   3/31/18   3/31/17 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Income  $29,275,404   $18,278,532 
Noncash Items Included in Net Income:          
Depreciation & Amortization   19,065,189    15,673,022 
Deferred Straight Line Rent   (756,486)   (629,856)
Stock Compensation Expense   242,170    266,345 
Gain on Sale of Securities Transactions   (111,387)   (806,108)
(Gain) / Loss on Sale of Real Estate Investments   (5,387,886)   95,336 
Changes in:          
Tenant & Other Receivables   850,945    1,082,191 
Prepaid Expenses   (3,904,884)   (3,135,027)
Other Assets & Capitalized Lease Costs   20,263    (839,704)
Accounts Payable, Accrued Expenses & Other Liabilities   3,545,246    861,044 
NET CASH PROVIDED BY OPERATING ACTIVITIES   42,838,574    30,845,775 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of Real Estate & Intangible Assets   (110,045,832)   (56,101,538)
Capital Improvements   (2,310,665)   (1,013,209)
Proceeds from Sale of Real Estate Investments   10,499,704    4,125,819 
Return of Deposits on Real Estate   450,000    1,000,000 
Deposits Paid on Acquisitions of Real Estate   (1,200,000)   (1,575,000)
Proceeds from Sale of Securities Available for Sale   2,619,433    3,739,239 
Purchase of Securities Available for Sale   (61,068,920)   (29,305,625)
NET CASH USED IN INVESTING ACTIVITIES   (161,056,280)   (79,130,314)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Net Draws (Repayments) on Loans Payable   34,250,094    (54,790,684)
Proceeds from Fixed Rate Mortgage Notes Payable   67,100,000    38,000,000 
Principal Payments on Fixed Rate Mortgage Notes Payable   (26,225,677)   (37,700,474)
Financing Costs Paid on Debt   (596,121)   (660,702)
Proceeds from the Exercise of Stock Options   569,600    -0- 
Redemption of 7.625% Series A Preferred Stock   -0-    (53,493,750)
Proceeds from Underwritten Public Offering of Preferred Stock,
net of offering costs
   -0-    71,017,493 
Proceeds from At-The-Market Preferred Equity Program,
net of offering costs
   30,941,972    -0- 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   42,996,991    37,812,970 
Preferred Dividends Paid   (8,301,342)   (6,621,359)
Common Dividends Paid, net of Reinvestments   (20,273,669)   (18,076,564)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   120,461,848    (24,513,070)
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   2,244,142    (72,797,609)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   10,226,046    95,749,508 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $12,470,188   $22,951,899 

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 9 of 23
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Capital Structure and Leverage Ratios

(unaudited)

 

   As of   As of   As of 
   3/31/2018   3/31/2017   9/30/2017 
             
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $632,051,233   $477,598,305   $591,364,371 
Loans Payable   154,341,511    26,000,000    120,091,417 
Total Debt   786,392,744    503,598,305    711,455,788 
                
7.875% Series B Cumulative Redeemable Preferred Stock   -0-    57,500,000    -0- 
6.125% Series C Cumulative Redeemable Preferred Stock   277,384,400    210,000,000    245,986,125 
Total Preferred Stock   277,384,400    267,500,000    245,986,125 
                
Common Stock, Paid-In-Capital & Other   472,973,381    431,805,101    466,879,571 
Total Shareholders’ Equity   750,357,781    699,305,101    712,865,696 
                
Total Book Capitalization   1,536,750,525    1,202,903,406    1,424,321,484 
                
Accumulated Depreciation   191,051,270    161,947,883    177,372,518 
Total Undepreciated Book Capitalization  $1,727,801,795   $1,364,851,289   $1,601,694,002 
                
Shares Outstanding   78,846,177    72,107,640    75,630,521 
Market Price Per Share  $15.04   $14.27   $16.19 
                
Equity Market Capitalization  $1,185,846,502   $1,028,976,023   $1,224,458,135 
Total Debt   786,392,744    503,598,305    711,455,788 
Total Preferred Stock   277,384,400    267,500,000    245,986,125 
Total Market Capitalization  $2,249,623,646   $1,800,074,328   $2,181,900,048 
                
Total Debt  $786,392,744   $503,598,305   $711,455,788 
less: Cash and Cash Equivalents   12,470,188    22,951,899    10,226,046 
Net Debt  $773,922,556   $480,646,406   $701,229,742 
less: Securities Available for Sale at Fair Value (Securities)   144,630,426    99,405,410    123,764,770 
Net Debt Less Securities  $629,292,130   $381,240,996   $577,464,972 
                
Net Debt / Total Undepreciated Book Capitalization   44.8%   35.2%   43.8%
Net Debt / Total Market Capitalization   34.4%   26.7%   32.1%
Net Debt Plus Preferred Stock / Total Market Capitalization   46.7%   41.6%   43.4%
Net Debt Less Securities / Total Undepreciated Book Capitalization   36.4%   27.9%   36.1%
Net Debt Less Securities / Total Market Capitalization   28.0%   21.2%   26.5%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization   40.3%   36.0%   37.7%
                
Weighted Average Interest Rate on Fixed Rate Debt   4.11%   4.37%   4.18%
Weighted Average Term on Fixed Rate Debt   11.5 yrs.    10.7 yrs.    11.6 yrs 
Weighted Average Lease Term   7.8 yrs.    7.4 yrs.    7.9 yrs 

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 10 of 23
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Capital Structure and Leverage Ratios continued

(unaudited)

 

                   Fiscal Year 
   Three Months Ended   Six Months Ended   Ended 
   3/31/2018   3/31/2017   3/31/2018   3/31/2017   9/30/2017 
Net Income  $11,645,003   $8,424,611   $29,275,404   $18,278,532   $40,271,085 
plus: Interest Expense, including Amortization of Financing Costs   7,955,285    6,537,264    15,361,232    12,700,483    25,754,121 
plus: Depreciation & Amortization   9,446,684    7,566,833    18,468,739    15,007,125    31,459,749 
less: (Gain) / plus: Loss on Sale of Real Estate Investments   -0-    -0-    (5,387,886)   95,336    95,336 
EBITDAre   29,046,972    22,528,708    57,717,489    46,081,476    97,580,291 
plus: Acquisition Costs   -0-    -0-    -0-    178,526    178,526 
plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25,677    25,492    51,354    50,984    101,968 
less: Gain on Sale of Securities Transactions   (11,234)   -0-    (111,387)   (806,108)   (2,311,714)
Adjusted EBITDA  $29,061,415   $22,554,200   $57,657,456   $45,504,878   $95,549,071 
                          
Interest Expense, including Amortization of Financing Costs  $7,955,285   $6,537,264   $15,361,232   $12,700,483   $25,754,121 
Preferred Dividends   4,248,219    3,582,036    8,565,165    7,279,796    14,861,686 
Total Fixed Charges  $12,203,504   $10,119,300   $23,926,397   $19,980,279   $40,615,807 
                          
Interest Coverage   3.7 x    3.5 x    3.8 x    3.6 x    3.7 x 
Fixed Charge Coverage   2.4 x    2.2 x    2.4 x    2.3 x    2.4 x 
                          
Net Debt  $773,922,556   $480,646,406   $773,922,556   $480,646,406   $701,229,742 
Net Debt Less Securities   629,292,130    381,240,996    629,292,130    381,240,996    577,464,972 
Total Preferred Stock   277,384,400    267,500,000    277,384,400    267,500,000    245,986,125 
Annualized Adjusted EBITDA   116,245,660    90,216,800    115,314,912    91,009,756    95,549,071 
                          
Net Debt / Adjusted EBITDA   6.7 x    5.3 x    6.7 x    5.3 x    7.3 x 
Net Debt Less Securities / Adjusted EBITDA   5.4 x    4.2 x    5.5 x    4.2 x    6.0 x 
Net Debt + Preferred Stock / Adjusted EBITDA   9.0 x    8.3 x    9.1 x    8.2 x    9.9 x 
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA   7.8 x    7.2 x    7.9 x    7.1 x    8.6 x 

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 11 of 23
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          Loans       % of 
Fiscal Year Ended     Mortgages   Payable   Total   Total 
                    
2018     $23,077,134   $44,341,511(B)  $67,418,645    8.5%
2019      59,035,637    -0-    59,035,637    7.4%
2020      43,285,121    110,000,000(C)   153,285,121    19.3%
2021      44,295,790    -0-    44,295,790    5.6%
2022      65,782,393    -0-    65,782,393    8.3%
Thereafter      404,360,815    -0-    404,360,815    50.9%
                        
Total as of 3/31/2018  (A)  $639,836,890   $154,341,511   $794,178,401    100.0%
                        
Weighted Average Interest Rate      4.11%   3.13%   3.92%     
Weighted Average Term      11.5 yrs.    1.8 yrs.    9.6 yrs.      

 

  (A) Mortgages does not include unamortized debt issuance costs of $7,785,657.
     
  (B) Represents margin debt which is due upon demand and bears and interest rate of 2.00%.
     
  (C) Represents the amount drawn down on a line of credit that has a one year extension option, which is not reflected above.

 

Second Quarter FY 2018 Supplemental of Monmouth Real Estate Investment Corp. Page 12 of 23
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Property Table by Tenant

(unaudited)

 

                     Property   Square   Occupied Square   % of Occupied   Annual   % of Total   Rent Per sf   Undepreciated   Mortgage 
Tenant     Count   Footage   Footage   sf   Rent   Ann. Rent   Occup.   Cost   Balance 
                                        
FedEx Ground Package System, Inc.      43    7,967,706    7,967,706    40.0%  $59,396,000    50.9%  $7.45   $811,701,200   $358,280,093 
FedEx Corporation      16    1,544,996    1,544,996    7.8%   8,000,000    6.9%   5.18    108,575,992    23,477,029 
Total FedEx      59    9,512,702    9,512,702    47.8%   67,396,000    57.8%   7.08    920,277,192    381,757,122 
                                                 
Milwaukee Electric Tool Corporation      1    861,889    861,889    4.3%   3,032,000    2.6%   3.52    36,914,917    22,600,414 
Shaw Industries, Inc.      1    831,764    831,764    4.2%   3,551,000    3.0%   4.27    56,025,945    33,146,461 
ULTA, Inc.      1    671,354    671,354    3.4%   2,702,000    2.3%   4.02    37,512,071    20,828,554 
Jim Beam Brands Company      1    599,840    599,840    3.0%   2,051,000    1.8%   3.42    28,000,000    17,105,559