Exhibit 99.1
GTJ REIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA FINACIAL INFORMATION
The accompanying Unaudited Pro Forma Consolidated Financial Statements are presented to reflect that on January 12, 2012, GTJ REIT, Inc. (the “Company”) and each of its wholly-owned subsidiaries, ShelterClean, Inc. (“ShelterClean”) and MetroClean Express Corp. (“MCE”), closed the sale of substantially all of their assets and business to Triangle Services, Inc. (“Purchaser”) and two affiliated entities, pursuant to the terms of separate asset sale and purchase agreements entered into on December 27, 2011 (collectively, the “Asset Purchase Agreements”). Simultaneously therewith, the Company and its wholly-owned subsidiary, ShelterClean of Arizona, Inc. (“ShelterAZ”), entered into a certain Bill of Sale and Assignment and Assumption Agreement (collectively, the “AZ Agreements”) for the sale of certain assets and the business of ShelterAZ to Shelter Clean Services, Inc., a wholly-owned subsidiary of Purchaser.
The Unaudited Pro Forma Consolidated Financial Statements include adjustments to reflect the effects of the sale of substantially all of the assets and business of ShelterClean and MCE as well as certain assets and the business of ShelterAZ. The Unaudited Pro Forma Consolidated Statement of Income for the fiscal year ended December 31, 2010 and nine months ended September 30, 2011 are presented as if the sale was completed as of January 1, 2010. The Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2011 is presented as if the sale was consummated at September 30, 2011. The accompanying Unaudited Pro Forma Consolidated Financial Statements should be read in conjunction with the Company’s historical consolidated financial statements and related notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2011.
Pro forma information is intended to provide investors with information about the continuing impact of a transaction by showing how a specific transaction might have affected historical financial statements, illustrating the scope of the change in the historical financial position and results of operations. The adjustments made to historical financial information give effect to events that are directly attributable to the sale of assets and businesses, are factually supportable, and expected to have a continuing impact. The Unaudited Pro Forma Consolidated Financial Statements are prepared in accordance with Article 11 of Regulation S-X.
The Unaudited Pro Forma Consolidated Financial Statements set forth below are not fact and there can be no assurance that our actual results will not differ significantly from those set forth below or that the impact of the sales will not differ significantly from those presented below. Accordingly, the Unaudited Pro Forma Consolidated Financial Statements are presented for illustrative purposes only and do not purport to represent, and are not necessarily indicative of, what our actual financial position and results of operations would have been had the sale occurred on the dates indicated, nor are they indicative of our future financial position or results of operations. Readers are cautioned not to place undue reliance on such information and the Company makes no representations regarding the information set forth below or its ultimate performance compared to it.
GTJ REIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(amounts in thousands, except share data)
| | Historical as of September 30, | | Disposition of Assets and | | | Pro Forma as of September 30, | |
| | 2011 | | Businesses | | | 2011 | |
| | (Unaudited) | | | | | | |
| ASSETS | | | | | | | |
| Real estate at cost: | | | | | | | |
| Land | $ | 88,584 | | $ | - | | | $ | 88,584 | |
| Buildings and improvements | | 24,727 | | | - | | | | 24,727 | |
| | | 113,311 | | | - | | | | 113,311 | |
| Less: accumulated depreciation and amortization | | (9,953 | ) | | - | | | | (9,953 | ) |
| Net real estate held for investment | | 103,358 | | | - | | | | 103,358 | |
| Cash and cash equivalents | | 8,033 | | | 2,198 | | A | | 10,231 | |
| Available-for-sale securities | | 2,327 | | | - | | | | 2,327 | |
| Restricted cash | | 756 | | | - | | | | 756 | |
| Accounts receivable, net | | 263 | | | - | | | | 263 | |
| Other assets | | 8,013 | | | - | | | | 8,013 | |
| Deferred charges, net | | 3,484 | | | - | | | | 3,484 | |
| Assets of discontinued operations | | 6,223 | | | (3,301 | ) | B | | 2,922 | |
| Intangible assets, net | | 682 | | | - | | | | 682 | |
| Machinery and equipment, net | | 1,486 | | | - | | | | 1,486 | |
| Total assets | $ | 134,625 | | $ | (1,103 | ) | | $ | 133,522 | |
| | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | |
| Mortgage note payable | $ | 45,500 | | $ | - | | | $ | 45,500 | |
| Accounts payable and accrued expenses | | 54 | | | - | | | | 54 | |
| Unpaid losses and loss-adjustment expenses | | 1,988 | | | - | | | | 1,988 | |
| Liabilities of discontinued operations | | 1,161 | | | (402 | ) | C | | 759 | |
| Other liabilities, net | | 2,700 | | | (109 | ) | D | | 2,591 | |
| Total liabilities | | 51,403 | | | (511 | ) | | | 50,892 | |
| Stockholders’ equity: | | | | | | | | | | |
| Preferred stock, $.0001 par value; 10,000,000 shares authorized and none issued and outstanding | | - | | | - | | | | - | |
| Common stock, $.0001 par value; 100,000,000 shares authorized; 13,587,051 and 13,529,131 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively | | 1 | | | - | | | | 1 | |
| Additional paid-in capital | | 137,784 | | | - | | | | 137,784 | |
| Cumulative distributions in excess of net income | | (54,854 | ) | | (592 | ) | E | | (55,446 | ) |
| Accumulated other comprehensive income | | 291 | | | - | | | | 291 | |
| Total stockholders’ equity | | 83,222 | | | (592 | ) | | | 82,630 | |
| Total liabilities and stockholders’ equity | $ | 134,625 | | $ | (1,103 | ) | | $ | 133,522 | |
| | | | | | | | | | | |
See accompanying notes to these unaudited pro forma consolidated financial statements.
GTJ REIT, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
The Unaudited Pro Forma Consolidated Balance Sheet reflects the effects of the sale of substantially all of the assets and business of ShelterClean and MCE as well as certain assets and the business of ShelterAZ as if the transaction occurred on September 30, 2011. The Unaudited Pro Forma Consolidated Balance Sheet includes the following adjustments:
| (A) | Reflects the cash proceeds from the sale of ShelterClean, MCE, and ShelterAZ. |
| (B) | Reflects the disposition of ShelterClean, MCE, and ShelterAZ’s assets as a result of the sale. |
| (C) | Reflects the disposition of ShelterClean, MCE, and ShelterAZ’s liabilities as a result of the sale. |
| (D) | Reflects the elimination of other accruals associated with the discontinued operations of ShelterClean, MCE, and ShelterAZ. |
| (E) | Represents the elimination of ShelterClean, MCE, and ShelterAZ’s retained earnings as a result of the sale. |
GTJ REIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(amounts in thousands, except share and per share data)
| | Historical for the nine months ended September 30, 2011 | | Disposition of Assets and Businesses (A) | | Pro Forma for the nine months ended September 30, 2011 | |
| Revenues: | | | | | | |
| Property rentals | $ | 10,397 | | $ | - | | $ | 10,397 | |
| Other revenue | | 1,093 | | | - | | | 1,093 | |
| Total revenues | | 11,490 | | | - | | | 11,490 | |
| Operating expenses: | | | | | | | | | |
| General and administrative expenses | | 5,475 | | | - | | | 5,475 | |
| Equipment maintenance and garage expenses | | 464 | | | - | | | 464 | |
| Transportation expenses | | 23 | | | - | | | 23 | |
| Contract maintenance and station expenses | | 91 | | | - | | | 91 | |
| Insurance and safety expenses | | 380 | | | - | | | 380 | |
| Operating and highway taxes | | 221 | | | - | | | 221 | |
| Other operating expenses | | 1,219 | | | - | | | 1,219 | |
| Depreciation and amortization expense | | 1,011 | | | - | | | 1,011 | |
| Total operating expenses | | 8,884 | | | - | | | 8,884 | |
| Operating income | | 2,606 | | | - | | | 2,606 | |
| Other income (expense): | | | | | | | | | |
| Interest income | | 66 | | | - | | | 66 | |
| Interest expense | | (1,889 | ) | | - | | | (1,889 | ) |
| Change in insurance reserves | | (149 | ) | | - | | | (149 | ) |
| Other | | (141 | ) | | (109 | ) | | (32 | ) |
| Total other income (expense): | | (2,113 | ) | | (109 | ) | | (2,004 | ) |
| Income (loss) from continuing operations before loss from equity affiliates and income taxes | | 493 | | | (109 | ) | | 602 | |
| Income from equity affiliates | | - | | | - | | | - | |
| Income (loss) before provision for income taxes | | 493 | | | (109 | ) | | 602 | |
| Provision for income taxes | | 1 | | | - | | | 1 | |
| Income (loss) from continuing operations, net of income taxes | | 492 | | | (109 | ) | | 601 | |
| | | | | | | | | | |
| Discontinued Operations: | | | | | | | | | |
| (Loss) income from discontinued operations, net of income taxes | | (1,339 | ) | | 146 | | | (1,485 | ) |
| | | | | | | | | | |
| Net (loss) income | $ | (847 | ) | $ | 37 | | $ | (884 | ) |
| Income per common share - basic and diluted: | | | | | | | | | |
| Income from continuing operations | $ | 0.04 | | $ | - | | $ | 0.04 | |
| Loss from discontinued operations | $ | (0.10 | ) | $ | - | | $ | (0.10 | ) |
| Net loss | $ | (0.06 | ) | $ | - | | $ | (0.06 | ) |
| Weighted-average common shares outstanding – basic and diluted | | 13,553,105 | | | - | | | 13,553,105 | |
See accompanying notes to these unaudited pro forma consolidated financial statements.
GTJ REIT, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
The Unaudited Pro Forma Consolidated Statement of Income for the nine months ended September 30, 2011 reflects the effects of the sale of substantially all of the assets and business of ShelterClean and MCE as well as certain assets and the business of ShelterAZ as if the transaction occurred on January 1, 2010. The Unaudited Pro Forma Consolidated Statement of Income:
| (A) | Reflects the elimination of the combined net income from the operations of ShelterClean, MCE, and ShelterAZ for the nine months ended September 30, 2011. |
GTJ REIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(amounts in thousands, except share and per share data)
| | Historical for the year ended December 30, 2010 | | Disposition of Assets and Businesses (A) | | Pro Forma for the year ended December 30, 2010 | |
| Revenues: | | | | | | |
| Property rentals | $ | 13,469 | | $ | - | | $ | 13,469 | |
| Other revenue | | 18,786 | | | 17,966 | | | 820 | |
| Total revenues | | 32,255 | | | 17,966 | | | 14,289 | |
| Operating expenses: | | | | | | | | | |
| General and administrative expenses | | 9,909 | | | 5,717 | | | 4,192 | |
| Equipment maintenance and garage expenses | | 1,706 | | | 1,143 | | | 563 | |
| Transportation expenses | | 1,423 | | | 1,317 | | | 106 | |
| Contract maintenance and station expenses | | 8,595 | | | 8,583 | | | 12 | |
| Insurance and safety expenses | | 1,821 | | | 1,344 | | | 477 | |
| Operating and highway taxes | | 1,344 | | | 868 | | | 476 | |
| Other operating expenses | | 1,225 | | | 724 | | | 501 | |
| Depreciation and amortization expense | | 1,718 | | | 333 | | | 1,385 | |
| Total operating expenses | | 27,741 | | | 20,029 | | | 7,712 | |
| Operating income (loss) | | 4,514 | | | (2,063 | ) | | 6,577 | |
| Other income (expense): | | | | | | | | | |
| Interest income | | 296 | | | 163 | | | 133 | |
| Interest expense | | (2,178 | ) | | - | | | (2,178 | ) |
| Change in insurance reserves | | (341 | ) | | - | | | (341 | ) |
| Other | | 861 | | | (299 | ) | | 1,160 | |
| Total other income (expense): | | (1,362 | ) | | (136 | ) | | (1,226 | ) |
| Income (loss) from continuing operations before loss from equity affiliates and income taxes | | 3,152 | | | (2,199 | ) | | 5,351 | |
| Income from equity affiliates | | 38 | | | 38 | | | - | |
| Income (loss) before provision for income taxes | | 3,190 | | | (2,161 | ) | | 5,351 | |
| Provision for income taxes | | 63 | | | 18 | | | 45 | |
| Income (loss) from continuing operations, net of income taxes | | 3,127 | | | (2,179 | ) | | 5,306 | |
| | | | | | | | | | |
| Discontinued Operations: | | | | | | | | | |
| Loss from discontinued operations, net of income taxes | | (34 | ) | | 1,469 | | | (1,503 | ) |
| | | | | | | | | | |
| Net income (loss) | $ | 3,093 | | $ | (710 | ) | $ | 3,803 | |
| Income per common share - basic and diluted: | | | | | | | | | |
| Income from continuing operations | $ | 0.23 | | $ | - | | $ | 0.39 | |
| Loss from discontinued operations | $ | - | | $ | - | | $ | (0.11 | ) |
| Net income | $ | 0.23 | | $ | - | | $ | 0.28 | |
| Weighted-average common shares outstanding – basic and diluted | | 13,503,120 | | | - | | | 13,503,120 | |
See accompanying notes to these unaudited pro forma consolidated financial statements.
GTJ REIT, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
The Unaudited Pro Forma Consolidated Statement of Income for the year ended December 31, 2010 reflects the effects of the sale of substantially all of the assets and business of ShelterClean and MCE as well as certain assets and the business of ShelterAZ as if the transaction occurred on January 1, 2010. The Unaudited Pro Forma Consolidated Statement of Income:
| | (A) | Reflects the elimination of the combined net loss from the operations of ShelterClean, MCE, and ShelterAZ for the year ended December 31, 2010. |
