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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      

Commission file number: 333-136110

 

GTJ REIT, INC.

(Exact name of registrant as specified in its charter)

 

 

Maryland

20-5188065

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

60 Hempstead Avenue

West Hempstead, New York

11552

(Address of principal executive offices)

(Zip Code)

(516) 693-5500

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

None

 

None

 

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

  

Smaller reporting company

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. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 13,627,220 shares of common stock as of August 4, 2020.

 

 

 

 


GTJ REIT, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2020

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheets at June 30,2020 (Unaudited) and December 31, 2019

2

 

 

 

 

Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019

3

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019

5

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

6

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

 

 

 

Item 4.

Controls and Procedures

31

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

32

 

 

 

Item 1A.

Risk Factors

32

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

33

 

 

 

Item 3.

Defaults Upon Senior Securities

33

 

 

 

Item 4.

Mine Safety Disclosures

34

 

 

 

Item 5.

Other Information

34

 

 

 

Item 6.

Exhibits

34

 

 

Signatures

35

 

 

 

1


Part I – Financial Information

 

Item 1. Financial Statements

 

GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

 

 

June 30,

 

 

December 31,

 

 

2020

 

 

2019

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Real estate, at cost:

 

 

 

 

 

 

 

      Land

$

197,745

 

 

$

197,745

 

      Buildings and improvements

 

301,085

 

 

 

300,063

 

Total real estate, at cost

 

498,830

 

 

 

497,808

 

Less: accumulated depreciation and amortization

 

(69,725

)

 

 

(64,950

)

Net real estate held for investment

 

429,105

 

 

 

432,858

 

Cash and cash equivalents

 

38,240

 

 

 

26,853

 

Restricted cash

 

2,568

 

 

 

2,232

 

Rental income in excess of amount billed

 

15,821

 

 

 

15,253

 

Acquired lease intangible assets, net

 

8,793

 

 

 

9,713

 

Investment in unconsolidated affiliate

 

4,052

 

 

 

4,096

 

Other assets

 

13,926

 

 

 

13,804

 

Total assets

$

512,505

 

 

$

504,809

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Mortgage notes payable, net

$

363,537

 

 

$

361,332

 

Secured revolving credit facility

 

50,000

 

 

 

40,000

 

Accounts payable and accrued expenses

 

3,834

 

 

 

4,306

 

Dividends payable

 

1,363

 

 

 

1,353

 

Acquired lease intangible liabilities, net

 

3,684

 

 

 

4,120

 

Other liabilities

 

6,772

 

 

 

8,049

 

Total liabilities

 

429,190

 

 

 

419,160

 

Commitments and contingencies (Note 8)

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

Series A, Preferred stock, $.0001 par value; 500,000 shares authorized; none

   issued and outstanding

 

 

 

 

 

Series B, Preferred stock, $.0001 par value; non-voting; 6,500,000 shares authorized;

   none issued and outstanding

 

 

 

 

 

Common stock, $.0001 par value; 100,000,000 shares authorized; 13,627,220 and 13,537,856 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

 

1

 

 

 

1

 

Additional paid-in capital

 

160,872

 

 

 

160,308

 

Distributions in excess of net income

 

(111,707

)

 

 

(109,889

)

Total stockholders’ equity

 

49,166

 

 

 

50,420

 

Noncontrolling interest

 

34,149

 

 

 

35,229

 

Total equity

 

83,315

 

 

 

85,649

 

Total liabilities and equity

$

512,505

 

 

$

504,809

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2


GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2020 and 2019

(Unaudited, amounts in thousands, except share and per share data)

 

 

 

Three Months Ended,

 

 

Six Months Ended,

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

14,398

 

 

$

13,974

 

 

$

28,715

 

 

$

28,134

 

Total revenues

 

 

14,398

 

 

 

13,974

 

 

 

28,715

 

 

 

28,134

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

2,962

 

 

 

2,824

 

 

 

5,927

 

 

 

5,893

 

General and administrative

 

 

2,625

 

 

 

2,355

 

 

 

4,516

 

 

 

4,191

 

Depreciation and amortization

 

 

3,169

 

 

 

3,182

 

 

 

6,339

 

 

 

6,466

 

Total operating expenses

 

 

8,756

 

 

 

8,361

 

 

 

16,782

 

 

 

16,550

 

Operating income

 

 

5,642

 

 

 

5,613

 

 

 

11,933

 

 

 

11,584

 

Interest expense

 

 

(4,342

)

 

 

(4,550

)

 

 

(8,669

)

 

 

(9,026

)

Equity in earnings of unconsolidated affiliate

 

 

33

 

 

 

85

 

 

 

56

 

 

 

162

 

Other (loss) income

 

 

(7

)

 

 

53

 

 

 

13

 

 

 

108

 

Net income

 

 

1,326

 

 

 

1,201

 

 

 

3,333

 

 

 

2,828

 

Less: Net income attributable to noncontrolling interest

 

 

421

 

 

 

386

 

 

 

1,080

 

 

 

912

 

Net income attributable to common stockholders

 

$

905

 

 

$

815

 

 

$

2,253

 

 

$

1,916

 

Net income per common share attributable to common stockholders - basic and diluted earnings per share

 

$

0.07

 

 

$

0.06

 

 

$

0.17

 

 

$

0.14

 

Weighted average common shares outstanding – basic

 

 

13,564,370

 

 

 

13,536,021

 

 

 

13,551,113

 

 

 

13,552,750

 

Weighted average common shares outstanding – diluted

 

 

13,601,818

 

 

 

13,557,108

 

 

 

13,588,561

 

 

 

13,573,837

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

 

3


GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2020 and 2019

 

(Unaudited, amounts in thousands, except share data)

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

Distributions

 

 

Total

 

 

 

 

 

 

 

 

 

 

Preferred

 

 

Outstanding

 

 

Par

 

 

Additional-

 

 

in Excess of

 

 

Stockholders’

 

 

Noncontrolling

 

 

 

 

 

 

Stock

 

 

Shares

 

 

Value

 

 

Paid-In-Capital

 

 

Net Income

 

 

Equity

 

 

Interest

 

 

Total Equity

 

Balance at January 1, 2020

$

 

 

 

13,537,856

 

 

$

1

 

 

$

160,308

 

 

$

(109,889

)

 

$

50,420

 

 

$

35,229

 

 

$

85,649

 

Common stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,708

)

 

 

(2,708

)

 

 

 

 

 

(2,708

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

80

 

 

 

 

 

 

80

 

 

 

 

 

 

80

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,437

)

 

 

(1,437

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

1,348

 

 

 

1,348

 

 

 

659

 

 

 

2,007

 

Balance at March 31, 2020

$

 

 

 

13,537,856

 

 

$

1

 

 

$

160,388

 

 

$

(111,249

)

 

$

49,140

 

 

$

34,451

 

 

$

83,591

 

Common stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,363

)

 

 

(1,363

)

 

 

 

 

 

(1,363

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

484

 

 

 

 

 

 

484

 

 

 

 

 

 

484

 

Issuance of shares

 

 

 

 

89,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(723

)

 

 

(723

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

905

 

 

 

905

 

 

 

421

 

 

 

1,326

 

Balance at June 30, 2020

$

 

 

 

13,627,220

 

 

$

1

 

 

$

160,872

 

 

$

(111,707

)

 

$

49,166

 

 

$

34,149

 

 

$

83,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

Distributions

 

 

Total

 

 

 

 

 

 

 

 

 

 

Preferred

 

 

Outstanding

 

 

Par

 

 

Additional-

 

 

in Excess of

 

 

Stockholders’

 

 

Noncontrolling

 

 

 

 

 

 

Stock

 

 

Shares

 

 

Value

 

 

Paid-In-Capital

 

 

Net Income

 

 

Equity

 

 

Interest

 

 

Total Equity

 

Balance at January 1, 2019

$

 

 

 

13,569,664

 

 

$

1

 

 

$

161,219

 

 

$

(107,730

)

 

$

53,490

 

 

$

36,225

 

 

$

89,715

 

Common stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,578

)

 

 

(2,578

)

 

 

 

 

 

(2,578

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

88

 

 

 

 

 

 

88

 

 

 

 

 

 

88

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,357

)

 

 

(1,357

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

1,101

 

 

 

1,101

 

 

 

526

 

 

 

1,627

 

Balance at March 31, 2019

$

 

 

 

13,569,664

 

 

$

1

 

 

$

161,307

 

 

$

(109,207

)

 

$

52,101

 

 

$

35,394

 

 

$

87,495

 

Common stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,354

)

 

 

(1,354

)

 

 

 

 

 

(1,354

)

Repurchases - common stock

 

 

 

 

(111,547

)

 

 

 

 

 

(1,322

)

 

 

 

 

 

(1,322

)

 

 

 

 

 

(1,322

)

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

436

 

 

 

 

 

 

436

 

 

 

 

 

 

436

 

Issuance of shares

 

 

 

 

79,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(718

)

 

 

(718

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

815

 

 

 

815

 

 

 

386

 

 

 

1,201

 

Reallocation of equity

 

 

 

 

 

 

 

 

 

 

(317

)

 

 

 

 

 

(317

)

 

 

317

 

 

 

 

Balance at June 30, 2019

$

 

 

 

13,537,856

 

 

$

1

 

 

$

160,104

 

 

$

(109,746

)

 

$

50,359

 

 

$

35,379

 

 

$

85,738

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2020 and 2019

(Unaudited, amounts in thousands)

 

 

Six Months Ended,

 

 

June 30,

 

 

2020

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income

$

3,333

 

 

$

2,828

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

 

4,806

 

 

 

4,841

 

Amortization of intangible assets and deferred charges

 

1,775

 

 

 

1,932

 

Stock-based compensation

 

564

 

 

 

524

 

Rental income in excess of amount billed

 

(558

)

 

 

66

 

Distributions from unconsolidated affiliate

 

56

 

 

 

166

 

Income from equity investment in unconsolidated affiliate

 

(56

)

 

 

(162

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Other assets

 

(1,123

)

 

 

207

 

Accounts payable and accrued expenses

 

(307

)

 

 

(628

)

Other liabilities

 

(1,154

)

 

 

(19

)

Net cash provided by operating activities

 

7,336

 

 

 

9,755

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Expenditures for improvements to real estate

 

(1,188

)

 

 

(2,896

)

Return of capital from unconsolidated affiliate

 

44

 

 

 

743

 

Net cash used in investing activities

 

(1,144

)