Toggle SGML Header (+)


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 9, 2019

 

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

MARYLAND   001-33177   22-1897375
(State or other jurisdiction   (Commission   (IRS Employer
 of incorporation)   File Number)   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. [  ]

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         
Common Stock   MNR   New York Stock Exchange
6.125% Series C Cumulative Redeemable Preferred Stock   MNR-PC   New York Stock Exchange

 

 

 

 
   

 

Item 2.02 Results of Operations and Financial Condition.

 

Item 7.01 Regulation FD Disclosure.

 

On May 9, 2019, Monmouth Real Estate Investment Corporation issued a press release announcing the results for the second quarter ended March 31, 2019 and disclosed a supplemental information package in connection with its earnings conference call for the second quarter ended March 31, 2019. 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, 2019 and press release dated May 9, 2019.

 

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 9, 2019  

 

3
 

 

(Back To Top)

Section 2: EX-99

 

 

  
 

 

MREIC Logo black text

 

Table of Contents

 

  Page
Consolidated Balance Sheets 3
Consolidated Statements of Income (Loss) 4
FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA 5
NOI Reconciliations 6
Financial Highlights 7
Same Property Statistics 8
Consolidated Statements of Cash Flows 10
Capital Structure and Leverage Ratios 11
Debt Maturity 13
Securities Portfolio Historic Performance 14
Property Table by Tenant 16
Property Table by State 17
Lease Expirations 18
Recent Acquisitions 19
Property Table 20
Definitions 23
Press Release Dated May 9, 2019 24

 

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations (FFO), core funds from operations (Core FFO), adjusted funds from operations (AFFO), net operating income (NOI), 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 23 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

(in thousands except for per share amounts)

 

   As of   As of 
   March 31, 2019   September 30, 2018 
   (unaudited)     
ASSETS         
           
Real Estate Investments:          
Land  $236,497   $224,719 
Buildings and Improvements   1,600,972    1,494,859 
Total Real Estate Investments   1,837,469    1,719,578 
Accumulated Depreciation   (228,092)   (207,065)
Real Estate Investments   1,609,377    1,512,513 
           
Cash and Cash Equivalents   16,358    9,324 
Securities Available for Sale at Fair Value   177,359    154,921 
Tenant and Other Receivables   1,702    1,249 
Deferred Rent Receivable   10,373    9,656 
Prepaid Expenses   10,231    6,190 
Intangible Assets, net of Accumulated Amortization of $14,705 and $13,700, respectively   15,471    14,590 
Capitalized Lease Costs, net of Accumulated Amortization of $3,651 and $3,271, respectively   4,839    5,232 
Financing Costs, net of Accumulated Amortization of $1,183 and $995, respectively   313    500 
Other Assets   4,031    4,203 
TOTAL ASSETS  $1,850,054   $1,718,378 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
Liabilities:          
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $754,123   $711,546 
Loans Payable   129,759    186,609 
Accounts Payable and Accrued Expenses   2,654    5,891 
Other Liabilities   20,406    16,426 
Total Liabilities   906,942    920,472 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 16,400 Shares Authorized as of March 31, 2019 and September 30, 2018; 11,969 and 11,488 Shares Issued and Outstanding as of March 31, 2019 and September 30, 2018, respectively   299,230    287,200 
Common Stock, $0.01 Par Value Per Share: 188,040 Shares Authorized as of March 31, 2019 and September 30, 2018; 93,869 and 81,503 Shares Issued and Outstanding as of March 31, 2019 and September 30, 2018, respectively   939    815 
Excess Stock, $0.01 Par Value Per Share: 200,000 Shares Authorized as of March 31, 2019 and September 30, 2018; No Shares Issued or Outstanding as of March 31, 2019 and September 30, 2018   -0-    -0- 
Additional Paid-In Capital   642,943    534,635 
Accumulated Other Comprehensive Loss   -0-    (24,744)
Undistributed Income   -0-    -0- 
Total Shareholders’ Equity   943,112    797,906 
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY  $1,850,054   $1,718,378 

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION3
Table of Contents 

 

Consolidated Statements of Income (Loss)

(unaudited) (in thousands)

 

   For The   For The 
   Three Months Ended   Six Months Ended 
   3/31/2019   3/31/2018   3/31/2019   3/31/2018 
INCOME:                    
Rental Revenue  $32,934   $28,610   $65,551   $56,302 
Reimbursement Revenue   6,372    5,734    12,902    11,506 
Lease Termination Income   -0-    -0-    -0-    210 
TOTAL INCOME   39,306    34,344    78,453    68,018 
                     
EXPENSES:                    
Real Estate Taxes   5,088    4,502    10,052    9,087 
Operating Expenses   1,673    1,476    3,537    2,913 
General & Administrative Expenses   2,252    2,218    4,069    4,165 
Depreciation   10,756    8,858    21,234    17,342 
Amortization of Capitalized Lease Costs and Intangible Assets   721    589    1,423    1,127 
TOTAL EXPENSES   20,490    17,643    40,315    34,634 
                     
OTHER INCOME (EXPENSE):                    
Dividend Income   3,515    2,888    7,882    5,752 
Gain on Sale of Securities Transactions   -0-    11    -0-    111 
Unrealized Holding Gains (Losses) Arising During the Periods   15,568    -0-    (27,059)   -0- 
Interest Expense, including Amortization of Financing Costs   (9,598)   (7,955)   (18,603)   (15,360)
TOTAL OTHER INCOME (EXPENSE)   9,485    (5,056)   (37,780)   (9,497)
                     
INCOME FROM OPERATIONS   28,301    11,645    358    23,887 
                     
Gain on Sale of Real Estate Investments   -0-    -0-    -0-    5,388 
                     
NET INCOME   28,301    11,645    358    29,275 
                     
Less: Preferred Dividends   4,480    4,248    8,901    8,565 
                     
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS  $23,821   $7,397   $(8,543)  $20,710 

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION4
Table of Contents 

 

FFO, Core FFO, AFFO, EBITDAre and Adjusted EBITDA Reconciliations

(unaudited) (in thousands)

 

   For The   For The 
   Three Months Ended   Six Months Ended 
FFO, Core FFO, AFFO  3/31/2019   3/31/2018   3/31/2019   3/31/2018 
Net Income (Loss) Attributable to Common Shareholders (1)  $23,821   $7,397   $(8,543)  $20,710 
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)   10,589    8,819    21,026    17,263 
Plus: Amortization of Intangible Assets   505    397    1,005    741 
Plus: Amortization of Capitalized Lease Costs   241    217    470    437 
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (5,388)
FFO Attributable to Common Shareholders (1)   35,156    16,830    13,958    33,763 
Less / Plus: Unrealized Holding (Gains) Losses Arising During the Periods   (15,568)   -0-    27,059    -0- 
Core FFO Attributable to Common Shareholders   19,588    16,830    41,017    33,763 
Plus: Depreciation of Corporate Office Capitalized Costs   167    39    208    79 
Plus: Stock Compensation Expense   215    111    344    242 
Plus: Amortization of Financing Costs   320    303    637    596 
Less: Gain on Sale of Securities Transactions   -0-    (11)   -0-    (111)
Less: Lease Termination Income   -0-    -0-    -0-    (210)
Less: Recurring Capital Expenditures   (630)   (64)   (1,187)   (284)
Less: Effect of non-cash U.S. GAAP Straight-line Rent Adjustment   (488)   (361)   (825)   (756)
AFFO Attributable to Common Shareholders  $19,172   $16,847   $40,194   $33,319 

 

   For The   For The 
   Three Months Ended   Six Months Ended 
EBITDAre, Adjusted EBITDA  3/31/2019   3/31/2018   3/31/2019   3/31/2018 
Net Income (Loss) Attributable to Common Shareholders  $23,821   $7,397   $(8,543)  $20,710 
Plus: Preferred Dividends   4,480    4,248    8,901    8,565 
Plus: Interest Expense, including Amortization of Financing Costs   9,598    7,955    18,603    15,360 
Plus: Depreciation and Amortization   11,477    9,447    22,658    18,470 
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (5,388)
EBITDAre   49,376    29,047    41,619    57,717 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25    25    51    51 
Less / Plus: Unrealized Holding (Gains) Losses Arising During the Periods   (15,568)   -0-    27,059    -0- 
Less: Gain on Sale of Securities Transactions   -0-    (11)   -0-    (111)
Adjusted EBITDA  $33,833   $29,061   $68,729   $57,657 

 

(1) Effective October 1, 2018 we adopted ASU 2016-01. This new accounting standard requires unrealized gains or losses on our securities investments to flow through our income statement. Periods shown here prior to October 1, 2018 do not include the effect of this accounting change and therefore Net Income Attributable to Common Shareholders and FFO Attributable to Common Shareholders between these periods are not comparable.

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION5
Table of Contents 

 

NOI Reconciliations

(unaudited) (in thousands)

 

   For The   For The 
   Three Months Ended   Six Months Ended 
Net Operating Income  3/31/2019   3/31/2018   3/31/2019   3/31/2018 
Net Income (Loss) Attributable to Common Shareholders  $23,821   $7,397   $(8,543)  $20,710 
Plus: Preferred Dividends   4,480    4,248    8,901    8,565 
Plus: General & Administrative Expenses   2,252    2,218    4,069    4,165 
Plus: Depreciation   10,756    8,858    21,234    17,342 
Plus: Amortization of Capitalized Lease Costs and Intangible Assets   721    589    1,423    1,127 
Plus: Interest Expense, including Amortization of Financing Costs   9,598    7,955    18,603    15,360 
Less/Plus: Unrealized Holding (Gains) Losses Arising During the Periods   (15,568)   -0-    27,059    -0- 
Less: Dividend Income   (3,515)   (2,888)   (7,882)   (5,752)
Less: Gain on Sale of Securities Transactions   -0-    (11)   -0-    (111)
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (5,388)
Less: Lease Termination Income   -0-    -0-    -0-    (210)
Net Operating Income – NOI  $32,545   $28,366   $64,864   $55,808 

 

   For The   For The 
   Three Months Ended   Six Months Ended 
Components of Net Operating Income Consists of:  3/31/2019   3/31/2018   3/31/2019   3/31/2018 
Revenues:                    
Rental Revenue  $32,934   $28,610   $65,551   $56,302 
Reimbursement Revenue   6,372    5,734    12,902    11,506 
Total Rental and Reimbursement Revenue   39,306    34,344    78,453    67,808 
                     
Expenses:                    
Real Estate Taxes   5,088    4,502    10,052    9,087 
Operating Expenses   1,673    1,476    3,537    2,913 
Total Real Estate Taxes and Operating Expenses   6,761    5,978    13,589    12,000 
Net Operating Income – NOI  $32,545   $28,366   $64,864   $55,808 

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION6
Table of Contents 

 

Financial Highlights

(unaudited) (in thousands except for per share amounts)

 

   For The   For The 
   Three Months Ended   Six Months Ended 
   3/31/2019   3/31/2018   Change (%)   3/31/2019   3/31/2018   Change (%) 
                         
Weighted Average Common Shares Outstanding                              
Basic   92,978    77,992    19.2%   91,728    77,175    18.9%
Diluted   93,059    78,156    19.1%   91,831    77,362    18.7%
                               
Net Income (Loss) Attributable to Common Shareholders (1)  $23,821   $7,397    222.0%  $(8,543)  $20,710    (141.3)%
                               
Basic  $0.26   $0.10    160.0%  $(0.09)  $0.27    (133.3)%
Diluted   0.26    0.10    160.0%   (0.09)   0.27    (133.3)%
                               
Net Operating Income – NOI  $32,545   $28,366    14.7%  $64,864   $55,808    16.2%
                               
Basic  $0.35   $0.36    (2.8)%  $0.71   $0.72    (1.4)%
Diluted   0.35    0.36    (2.8)%   0.71    0.72    (1.4)%
                               
Funds From Operations – FFO (1)  $35,156   $16,830    108.9%  $13,958   $33,763    (58.7)%
                               
Basic  $0.38   $0.22    72.7%  $0.15   $0.44    (65.9)%
Diluted   0.38    0.22    72.7%   0.15    0.44    (65.9)%
                               
Core Funds From Operations - Core FFO  $19,588   $16,830    16.4%  $41,017   $33,763    21.5%
                               
Basic  $0.21   $0.22    (4.5)%  $0.45   $0.44    2.3%
Diluted   0.21    0.22    (4.5)%   0.45    0.44    2.3%
                               
Adjusted Funds From Operations – AFFO  $19,172   $16,847    13.8%  $40,194   $33,319    20.6%
                               
Basic  $0.21   $0.22    (4.5)%  $0.44   $0.43    2.3%
Diluted   0.21    0.22    (4.5)%   0.44    0.43    2.3%
                               
Dividends Declared per Common Share  $0.17   $0.17        $0.34   $0.34      
                               
Dividend/AFFO Payout Ratio   81.0%   77.3%        77.3%   79.1%     

 

(1) Effective October 1, 2018 we adopted ASU 2016-01. This new accounting standard requires unrealized gains or losses on our securities investments to flow through our income statement. Periods shown here prior to October 1, 2018 do not include the effect of this accounting change and therefore Net Income Attributable to Common Shareholders and FFO Attributable to Common Shareholders between these periods are not comparable.

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION7
Table of Contents 

 

Same Property Statistics

(unaudited) (in thousands except for square feet)

 

   For The
Three Months Ended
         
   3/31/2019       3/31/2018   Change   Change % 
                     
Total Square Feet / Total Properties   21,802,046 / 113        19,928,001 / 109    1,874,045    9.4%
                          
Occupancy Percentage at End of Period   98.9%       99.2%   (30) bps    (0.3)%
                          
Same Property Square Feet / Number of Same Properties       18,531,228 / 104                
                          
Same Property Occupancy Percentage at End of Period   98.7%       99.6%   (90) bps    (0.9)%
                          
Same Property Net Operating Income (NOI) (GAAP)  $26,471       $26,848   $(377)   (1.4)%
                          
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment   (269)       (432)   163      
Same Property Cash NOI  $26,202       $

26,416

   $(214)   (0.8)%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during the periods presented. Historically, there have been many properties expanded in our portfolio and these expansions have resulted in very favorable economic returns. This factor should be taken into account when analyzing our Same Property results.

 

The 1.4% decrease, amounting to $377 in Same Property NOI, consists of $69 derived from decreased NOI from occupied properties and $308 attributable to decreased NOI from vacant properties.

 

The 0.8% decrease, amounting to $214 in Same Property Cash NOI, consists of $308 derived from decreased NOI from vacant properties offset by a $94 increase in Cash NOI from occupied properties.

 

Reconciliation of Same Property NOI to Total NOI

(unaudited) (in thousands)

 

    For The
Three Months Ended
             
    3/31/2019     3/31/2018     Change     Change %  
                         
Same Property NOI (GAAP)   $ 26,471     $ 26,848     $ (377 )     (1.4 )%
                                 
NOI of properties purchased subsequent to December 31, 2017 (two properties purchased during fiscal 2019 and five properties purchased during fiscal 2018)     5,339       694                  
                                 
NOI of properties expanded subsequent to December 31, 2017 (one property expanded during fiscal 2019 and one property expanded during 2018)     735       599                  
                                 
NOI of property sold subsequent to December 31, 2017 (two properties sold during the 3rd quarter of fiscal 2018)     -0-       225                  
Total NOI   $ 32,545     $ 28,366     $ 4,179       14.7 %

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION8
Table of Contents 

 

Same Property Statistics

(unaudited) (in thousands except for square feet)

 

    For The
Six Months Ended
             
    3/31/2019           3/31/2018     Change     Change %  
                               
Total Square Feet / Total Properties     21,802,046 / 113               19,928,001 / 109       1,874,045       9.4 %
                                         
Occupancy Percentage at End of Period     98.9 %             99.2 %     (30) bps       (0.3 )%
                                         
Same Property Square Feet / Number of Same Properties             17,781,723 / 101                          
                                         
Same Property Occupancy Percentage at End of Period     98.7 %             99.5 %     (80) bps       (0.8 )%
                                         
Same Property Net Operating Income (NOI) (GAAP)   $ 50,781             $ 51,347     $ (566 )     (1.1 )%
                                         
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment     (482 )             (756 )     274          
Same Property Cash NOI   $ 50,299             $ 50,591     $ (292 )     (0.6 )%

 

Same Property Statistics include all properties owned during the entire periods presented with the exclusion of properties expanded during the periods presented. Historically, there have been many properties expanded in our portfolio and these expansions have resulted in very favorable economic returns. This factor should be taken into account when analyzing our Same Property results.

 

The 1.1% decrease, amounting to $566 in Same Property NOI, consists of $93 derived from decreased NOI from occupied properties and $473 attributable to decreased NOI from vacant properties.

 

The 0.6% decrease, amounting to $292 in Same Property Cash NOI, consists of $446 derived from decreased NOI from vacant properties offset by a $154 increase in Cash NOI from occupied properties.

 

Reconciliation of Same Property NOI to Total NOI

(unaudited) (in thousands)

 

   For The Six Months Ended         
   3/31/2019   3/31/2018   Change   Change % 
                 
Same Property NOI (GAAP)  $50,781   $51,347   $(566)   (1.1)%
                     
NOI of properties purchased subsequent to September 30, 2017 (two properties purchased during fiscal 2019 and seven properties purchased during fiscal 2018)   11,841    1,867           
                     
NOI of properties expanded subsequent to September 30, 2017 (one property expanded during fiscal 2019 and two properties expanded during 2018)   2,242    2,049           
                     
NOI of property sold subsequent to September 30, 2017 (four properties sold during fiscal 2018)   -0-    545           
Total NOI  $64,864   $55,808   $9,056    16.2%

  

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION9
Table of Contents 

 

Consolidated Statements of Cash Flows

(unaudited) (in thousands)

 

   For The 
   Six Months Ended 
   3/31/2019   3/31/2018 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Income  $358   $29,275 
Noncash Items Included in Net Income:          
Depreciation & Amortization   23,294    19,065 
Deferred Straight Line Rent   (825)   (756)
Stock Compensation Expense   344    242 
Unrealized Holding Losses Arising During the Periods   27,059    -0- 
Gain on Sale of Securities Transactions   -0-    (111)
Gain on Sale of Real Estate Investments   -0-    (5,388)
Changes in:          
Tenant & Other Receivables   (401)   851 
Prepaid Expenses   (4,041)   (3,905)
Other Assets & Capitalized Lease Costs   1,349    20 
Accounts Payable, Accrued Expenses & Other Liabilities   3,511    3,545 
NET CASH PROVIDED BY OPERATING ACTIVITIES   50,648    42,838 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchase of Real Estate & Intangible Assets   (113,406)   (110,046)
Capital Improvements   (9,205)   (2,310)
Proceeds from Sale of Real Estate Investments   -0-    10,500 
Return of Deposits on Real Estate   200    450 
Deposits Paid on Acquisitions of Real Estate   (1,550)   (1,200)
Proceeds from Sale of Securities Available for Sale   -0-    2,619 
Purchase of Securities Available for Sale   (49,497)   (61,069)
NET CASH USED IN INVESTING ACTIVITIES   (173,458)   (161,056)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Net Draws (Repayments) on Loans Payable   (56,850)   34,250 
Proceeds from Fixed Rate Mortgage Notes Payable   72,500    67,100 
Principal Payments on Fixed Rate Mortgage Notes Payable   (29,929)   (26,226)
Financing Costs Paid on Debt   (443)   (596)
Proceeds from the Exercise of Stock Options   567    570 
Proceeds from Underwritten Public Offering of Common Stock, net of offering costs   132,338    -0- 
Proceeds from At-The-Market Preferred Equity Program, net of offering costs   11,282    30,942 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   32,147    42,997 
Preferred Dividends Paid   (8,839)   (8,301)
Common Dividends Paid, net of Reinvestments   (22,929)   (20,274)
NET CASH PROVIDED BY FINANCING ACTIVITIES   129,844    120,462 
           
NET INCREASE IN CASH AND CASH EQUIVALENTS   7,034    2,244 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   9,324    10,226 
CASH AND CASH EQUIVALENTS - END OF PERIOD  $16,358   $12,470 

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION10
Table of Contents 

 

Capital Structure and Leverage Ratios

(unaudited) (in thousands except for per share amounts)

 

   As of   As of   As of 
   3/31/2019   3/31/2018   9/30/2018 
             
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs  $754,123   $632,051   $711,546 
Loans Payable   129,759    154,342    186,609 
Total Debt   883,882    786,393    898,155 
                
6.125% Series C Cumulative Redeemable Preferred Stock   299,230    277,384    287,200 
Common Stock, Paid-In-Capital & Other   643,882    472,974    510,706 
Total Shareholders’ Equity   943,112    750,358    797,906 
                
Total Book Capitalization   1,826,994    1,536,751    1,696,061 
                
Accumulated Depreciation   228,092    191,051    207,065 
Total Undepreciated Book Capitalization  $2,055,086   $1,727,802   $1,903,126 
                
Shares Outstanding   93,869    78,846    81,503 
Market Price Per Share  $13.18   $15.04   $16.72 
                
Equity Market Capitalization  $1,237,194   $1,185,847   $1,362,732 
Total Debt   883,882    786,393    898,155 
Total Preferred Stock   299,230    277,384    287,200 
Total Market Capitalization  $2,420,306   $2,249,624   $2,548,087 
                
Total Debt  $883,882   $786,393   $898,155 
less: Cash and Cash Equivalents   16,358    12,470    9,324 
Net Debt  $867,524   $773,923   $888,831 
less: Securities Available for Sale at Fair Value (Securities)   177,359    144,630    154,921 
Net Debt Less Securities  $690,165   $629,293   $733,910 
                
Net Debt / Total Undepreciated Book Capitalization   42.2%   44.8%   46.7%
Net Debt / Total Market Capitalization   35.8%   34.4%   34.9%
Net Debt Plus Preferred Stock / Total Market Capitalization   48.2%   46.7%   46.2%
Net Debt Less Securities / Total Undepreciated Book Capitalization   33.6%   36.4%   38.6%
Net Debt Less Securities / Total Market Capitalization   28.5%   28.0%   28.8%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization   40.9%   40.3%   40.1%
                
Weighted Average Interest Rate on Fixed Rate Debt   4.07%   4.11%   4.07%
Weighted Average Term on Fixed Rate Debt   11.6 yrs.    11.5 yrs.    11.7 yrs. 
Weighted Average Lease Term   8.0 yrs.    7.8 yrs.    8.1 yrs. 

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION11
Table of Contents 

 

Capital Structure and Leverage Ratios

(unaudited) (in thousands)

 

   For the Three Months Ended   For the Six Months Ended   Fiscal Year Ended 
   3/31/2019   3/31/2018   3/31/2019   3/31/2018   9/30/2018 
Net Income (Loss) Attributable to Common Shareholders  $23,821   $7,397   $(8,543)  $20,710   $38,815 
Plus: Preferred Dividends   4,480    4,248    8,901    8,565    17,190 
Plus: Interest Expense, including Amortization of Financing Costs   9,598    7,955    18,603    15,360    32,350 
Plus: Depreciation and Amortization   11,477    9,447    22,658    18,470    38,567 
Less: Gain on Sale of Real Estate Investments   -0-    -0-    -0-    (5,388)   (7,485)
EBITDAre   49,376    29,047    41,619    57,717    119,437 
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue   25    25    51    51    103 
Less/Plus: Unrealized Holding (Gains) Losses Arising During the Periods   (15,568)   -0-    27,059    -0-    -0- 
Less: Gain on Sale of Securities Transactions   -0-    (11)   -0-    (111)   (111)
Adjusted EBITDA  $33,833   $29,061   $68,729   $57,657   $119,429 
                          
Interest Expense, including Amortization of Financing Costs  $9,598   $7,955   $18,603   $15,360   $32,350 
Preferred Dividends   4,480    4,248    8,901    8,565    17,190 
Total Fixed Charges  $14,078   $12,203   $27,504   $23,925   $49,540 
                          
Interest Coverage   3.5 x    3.7 x    3.7 x    3.8 x    3.7 x 
Fixed Charge Coverage   2.4 x    2.4 x    2.5 x    2.4 x    2.4 x 
                          
Net Debt  $867,524   $773,923   $867,524   $773,923   $888,831 
Net Debt Less Securities   690,165    629,293    690,165    629,293    733,910 
Total Preferred Stock   299,230    277,384    299,230    277,384    287,200 
Annualized Adjusted EBITDA   135,332    116,244    137,458    115,314    119,429 
                          
Net Debt / Adjusted EBITDA   6.4 x    6.7 x    6.3 x    6.7 x    7.4 x 
Net Debt Less Securities / Adjusted EBITDA   5.1 x    5.4 x    5.0 x    5.5 x    6.1 x 
Net Debt + Preferred Stock / Adjusted EBITDA   8.6 x    9.0 x    8.5 x    9.1 x    9.8 x 
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA   7.3 x    7.8 x    7.2 x    7.9 x    8.5 x 

 

SECOND QUARTER FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION12
Table of Contents 

 

Debt Maturity

(unaudited) (In thousands)

 

 

       Loans         % of 
Fiscal Year Ended  Mortgages   Payable     Total   Total 
                   
2019  $33,097   $19,759 (B)  $52,856    5.9%
2020   52,275    110,000 (C)   162,275    18.2%
2021   53,925    -0-      53,925    6.0%
2022   76,022    -0-      76,022    8.5%
2023   54,683    -0-      54,683    6.1%
Thereafter   492,338    -0-      492,338    55.3%
                       
Total as of 3/31/2019(A) $762,340   $129,759     $892,099    100.0%
                       
Weighted Average Interest Rate   4.07%   4.02%     4.06%     
Weighted Average Term   11.6 yrs.    1.3 yrs.      10.1 yrs.      

 

  (A) Mortgages does not include unamortized debt issuance costs of $8,217.
  (B) Represents margin debt which is due upon demand.
  (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 FISCAL YEAR 2019 SUPPLEMENTAL INFORMATION13
Table of Contents 

 

Securities Portfolio Historic Performance (Fiscal Year)

(unaudited)

 

 

Fiscal Year  Securities Portfolio Cost (A)   Securities Available for Sale (A)   Dividend Income   Net Realized Gain on Sale of Securities   Change in Unrealized Gain/(Loss)(B)   Total Return   Total Return % 
                             
2010  $24,027,834   $27,824,665   $2,387,757   $2,609,149   $6,319,226   $11,316,132    47.10%
2011   32,401,668    42,517,725    2,981,534    5,238,203    (7,747,894)   471,843    1.46%
2012   41,896,896    44,265,059    3,144,837    6,044,065    3,015,774    12,204,676    29.13%
2013   56,301,236    61,685,173    3,861,374    7,133,252    (3,394,669)   7,599,957    13.50%
2014   43,462,472    45,451,740    3,863,136    2,166,766    (1,867,912)   4,161,990    9.58%
2015   59,190,047    59,311,403    3,707,498    805,513    (5,562,959)   (1,049,948)   (1.77)%
2016   59,982,840    54,541,237    5,607,403    4,398,599    18,383,870    28,389,872    47.33%
2017   60,662,627    73,604,894    6,919,973    2,311,714    (6,371,702)   2,859,985    4.71%
2018   117,194,205    123,764,770    13,099,316    111,387    (31,315,144)   (18,104,441)   (15.45)%
As of 3/31/19   179,665,124    154,920,545    7,834,544    -0-    (27,058,929)   (19,224,385)   (10.70)%
                                    
Total            $53,407,372   $30,818,648   $(55,600,339)  $28,625,681    Avg. 12.49% 

 

  (A) Fiscal Year beginning balance
  (B) Fiscal Year end balance