SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 0-11083
ONE LIBERTY PROPERTIES, INC.
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(Exact name of registrant as specified in its charter)
MARYLAND 13-3147497
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
60 Cutter Mill Road, Great Neck, New York 11021
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 466-3100
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Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.
As of May 1, 2000, the Registrant had 2,989,075 shares of Common Stock and
654,658 shares of Redeemable Convertible Preferred Stock outstanding.
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 X No
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Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Per Share Data)
March 31, December 31,
2000 1999
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(Unaudited)
Assets
Real estate investments, at cost
Land $21,014 $16,639
Buildings 77,380 59,269
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98,394 75,908
Less accumulated depreciation 5,460 5,138
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92,934 70,770
Cash and cash equivalents 4,251 11,247
Unbilled rent receivable 1,870 1,737
Rent, interest, deposits and other receivables 906 733
Note receivable - officer 240 80
Investment in BRT Realty Trust-(related party) 225 240
Deferred financing costs 1,027 732
Other (including available-for-sale securities of
$338 and $352) 402 410
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Total assets $101,855 $85,949
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Liabilities and Stockholders' Equity
Liabilities:
Mortgages payable $50,578 $35,735
Accrued expenses and other liabilities 335 412
Dividends payable 1,156 -
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Total liabilities 52,069 36,147
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Commitments and contingencies - -
Stockholders' equity:
Redeemable convertible preferred stock,
$1 par value; $1.60 cumulative annual
dividend; 2,300 shares authorized;
655 shares issued; liquidation and
redemption values of $16.50 (Note 3) 10,802 10,802
Common stock, $1 par value; 25,000
shares authorized; 2,980 shares issued
and outstanding 2,980 2,980
Paid-in capital 31,338 31,338
Accumulated other comprehensive income - net
unrealized gain on available-for-sale securities 33 33
Accumulated undistributed net income 4,633 4,649
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Total stockholders' equity 49,786 49,802
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Total liabilities and stockholders' equity $101,855 $85,949
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See accompanying notes to consolidated financial statements.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
2000 1999
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Revenues:
Rental income $2,448 $2,040
Interest and other income 111 148
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2,559 2,188
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Expenses:
Depreciation and amortization 454 390
Interest - mortgages payable 749 569
Leasehold rent 72 72
General and administrative 291 216
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1,566 1,247
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Income before gain on sale 993 941
Gain on sale of real estate and
available-for-sale securities, net 147 10
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Net income $1,140 $951
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Calculation of net income applicable to common stockholders:
Net income $1,140 $951
Less: dividends and accretion (1999)
on preferred stock 262 362
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Net income applicable to
common stockholders $ 878 $589
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Weighted average number of common shares outstanding:
Basic 2,980 2,947
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Diluted 2,980 2,947
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Net income per common share:
Basic $ .29 $ .20
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Diluted $ .29 $ .20
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Cash distributions per share:
Common Stock $ .30 $ .30
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Preferred Stock $ .40 $ .40
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See accompanying notes to consolidated financial statements.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the three month period ended March 31, 2000
and the year ended December 31, 1999
(Amounts in Thousands)
(Unaudited)
Net Unrealized
Gain (loss) on Accumulated
Preferred Common Paid-in Available-for- Undistributed
Stock Stock Capital Sale Securities Net Income Total
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Balances, January 1, 1999 $ - $2,940 $30,965 $100 $4,490 $38,495
Distributions -
common stock - - - - (3,552) (3,552)
Distributions -
preferred stock - - - - (1,168) (1,168)
Preferred stock 10,802 - - 10,802
Accretion on
preferred stock - - (79) - - (79)
Preferred shares converted
to common stock - 1 7 - - 8
Shares issued through
dividend reinvestment plan - 39 445 - - 484
Net income - - - - 4,879 4,879
Other comprehensive income-
net unrealized loss on
available-for-sale securities - - - (67) - (67)
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Comprehensive income - - - - - 4,812
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Balances, December 31, 1999 10,802 2,980 31,338 33 4,649 49,802
Distributions -
common stock - - - - (894) (894)
Distributions -
preferred stock - - - - (262) (262)
Net income and
comprehensive income - - - - 1,140 1,140
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Balances,
March 31, 2000 $10,802 $2,980 $31,338 $ 33 $4,633 $49,786
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See accompanying notes to consolidated financial statements.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Three Months Ended
March 31,
2000 1999
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Cash flows from operating activities:
Net income $ 1,140 $ 951
Adjustments to reconcile net income
to net cash provided by operating activities:
Gain on sale of real estate and
available-for-sale securities, net (147) (10)
Increase in rental income from straight-lining of rent (133) (138)
Depreciation and amortization 454 390
Changes in assets and liabilities:
Increase in rent, interest,
deposits and other receivables (179) (52)
(Decrease) increase in accrued expenses and other liabilities (66) 228
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Net cash provided by operating activities 1,069 1,369
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Cash flows from investing activities:
Additions to real estate (23,123) (10,207)
Net proceeds from sale of real estate 697 -
Purchase of available-for-sale securities - (662)
Net proceeds from sale of available-for-sale securities 21 254
Collection of mortgages receivable - 5
Payments to minority interest by subsidiary (13) (5)
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Net cash used in investing activities (22,418) (10,615)
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Cash flows from financing activities:
Proceeds from mortgages payable 15,000 -
Repayment of mortgages payable (156) (117)
Payment of financing costs (331) (21)
Cash distributions - common stock - (883)
Cash distributions - preferred stock - (323)
Note receivable - officer (160) -
Issuance of shares through dividend reinvestment plan - 81
Repurchase of preferred stock, which was cancelled - (39)
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Net cash provided by (used in) financing activities 14,353 (1,302)
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Net decrease in cash and cash equivalents (6,996) (10,548)
Cash and cash equivalents at beginning of period 11,247 19,090
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Cash and cash equivalents at end of period $ 4,251 $ 8,542
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Supplemental disclosures of cash flow information:
Cash paid during the period for interest expense $ 749 $ 570
Supplemental schedule of non cash investing and financing activities:
Assumption of mortgage payable in connection
with purchase of real estate $ - $ 1,065
See accompanying notes to consolidated financial statements.
One Liberty Properties, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 - Basis of Preparation
The accompanying interim unaudited consolidated financial statements as of March
31, 2000 and for the three months ended March 31, 2000 and 1999 reflect all
normal, recurring adjustments which are, in the opinion of management, necessary
for a fair presentation of the results for such interim periods. The results of
operations for the three months ended March 31, 2000 are not necessarily
indicative of the results for the full year.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. Actual
results could differ from those estimates.
The consolidated financial statements include the accounts of One Liberty
Properties, Inc., its wholly-owned subsidiaries and a majority-owned limited
liability company. Material intercompany balances and transactions have been
eliminated. One Liberty Properties, Inc., its subsidiaries and the limited
liability company are hereinafter referred to as the "Company".
Certain amounts reported in previous consolidated financial statements have been
reclassified in the accompanying consolidated financial statements to conform to
the current year's presentation.
These statements should be read in conjunction with the consolidated financial
statements and related notes which are included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1999.
Note 2 - Earnings Per Common Share
For the three months ended March 31, 2000 and 1999 basic earnings per share was
determined by dividing net income applicable to common stockholders for the
period by the weighted average number of shares of Common Stock outstanding
during each period.
Diluted earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue Common Stock were exercised or converted
into Common Stock or resulted in the issuance of Common Stock that then shared
in the earnings of the Company. For the three month periods ended March 31, 2000
and 1999 diluted earnings per share was determined by dividing net income
applicable to common stockholders for the period by the total of the weighted
average number of
One Liberty Properties, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
Note 2 - Earnings Per Common Share (Continued)
shares of Common Stock outstanding plus the dilutive effect of the Company's
outstanding options (206 and 46 for the three months ended March 31, 2000 and
1999, respectively) using the treasury stock method. The Preferred Stock was not
considered for the purpose of computing diluted earnings per share because their
assumed conversion is antidilutive.
Options to purchase 128,000 shares of Common Stock at $12.375, $14.50 and $13.50
per share (which were granted during March 1999, 1998 and 1997, respectively)
were not included in the computation of diluted earnings per share because the
exercise price of these options are greater than the average market price of the
common shares as of March 31, 2000 and, therefore, the effect would be
antidilutive.
Note 3 - Preferred and Common Stock Dividend Distributions
On March 15, 2000 the Board of Directors declared quarterly cash distributions
of $.30 and $.40 per share on the Company's common and preferred stock,
respectively, payable on April 3, 2000 to stockholders of record on March 28,
2000.
Note 4 - Revolving Credit Facility
On March 24, 2000, the Company consummated a $15,000,000 Revolving Credit
Facility ("Facility") with European American Bank ("EAB"). The Facility provides
that the Company pay interest at EAB's prime rate on funds borrowed under the
Facility and an unused facility fee of 1/4 of 1%. The Company paid $175,000 in
fees and closing costs which are being amortized over the term of the loan. The
Facility matures on March 24, 2002 with an option to extend the term for one
year. The Facility is guaranteed by all of the Company's subsidiaries which own
unencumbered properties.
The Facility will be used primarily to finance the acquisition of commercial
real estate. The Company is required to comply with certain covenants. Net
proceeds received from the sale or refinance of properties are required to be
used to repay amounts outstanding under the Facility if proceeds from the
Facility were used to purchase the property.
One Liberty Properties, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Continued)
Note 5 - Property Acquisitions
During the three months ended March 31, 2000, the Company acquired three
properties for a total consideration of approximately $23,123,000. First
mortgages totaling $15,000,000 were placed on two of these properties and the
balance was paid in cash.
On April 11, 2000, an additional property was purchased for a consideration of
approximately $11,500,000. The property was financed at closing by taking title
to an existing first mortgage with a balance of approximately $9,000,000 and the
balance was funded from the Company's revolving credit facility.
Item 2. Management's Discussion And Analysis Of Financial Condition And
Results Of Operations
Liquidity and Capital Resources
The Company's primary sources of liquidity are cash and cash equivalents
($4,251,000 at March 31, 2000), the $15,000,000 revolving credit facility and
cash generated from operating activities. On March 24, 2000 the Company entered
into an agreement with European American Bank ("EAB") to provide a $15,000,000
revolving credit facility ("Facility"). The Facility will be used primarily to
finance the acquisition of commercial real estate. The Facility matures on March
24, 2002 with an option to extend through March 24, 2003. Borrowings under the
Facility bear interest at EAB's prime rate and there is an unused facility fee
of one-quarter of 1%. The Company is required to comply with certain covenants.
Net proceeds received from the sale or refinance of properties are required to
be used to repay amounts outstanding under the Facility if proceeds from the
Facility were used to purchase the property. The Facility is guaranteed by all
Company subsidiaries which own unencumbered properties. The Company had not
drawn down any funds under the credit agreement as of March 31, 2000.
During the three months ended March 31, 2000, the Company acquired three
properties for a total consideration of approximately $23,123,000. First
mortgages totaling $15,000,000 were placed on two of these properties and the
balance of $8,123,000 was paid in cash.
In April 2000, the Company acquired a property located in Hanover, Pennsylvania
for a consideration of approximately $11,500,000, of which $2,500,000 was funded
from the Facility. The Company assumed a mortgage note with an outstanding
balance of approximately $9,000,000 which was collateralized by the property.
The building is triple net leased on a long term basis to a large manufacturing
company.
The Company is currently in discussions concerning the acquisition of additional
net leased properties. Cash provided from operations and the Company's cash
position will provide funds for cash distributions to shareholders and operating
expenses. These sources of funds as well as funds available from the credit
facility will provide funds for future property acquisitions. It will continue
to be the Company's policy to make sufficient cash distributions to shareholders
in order for the Company to maintain its real estate investment trust status
under the Internal Revenue Code.
Results of Operations
Three Months Ended March 31, 2000 and 1999
Rental income increased by $408,000 to $2,448,000 for the three months ended
March 31, 2000 as compared to the three months ended March 31, 1999 primarily
due to the acquisition of three properties in 2000 and the inclusion of rental
income on four properties acquired in 1999 for a full quarter.
Interest and other income decreased by $37,000 to $111,000 for the three months
March 31, 2000 primarily due to a decrease in interest earned on cash and cash
equivalents available for investment as a result of the cash used to fund
property acquisitions.
The increase in depreciation and amortization expense of $64,000 for the three
months ended March 31, 2000 to $454,000 primarily results from depreciation on
the seven properties acquired during 2000 and 1999.
The increase in interest-mortgages payable to $749,000 for the three months
ended March 31, 2000 from $569,000 for the three months ended March 31, 1999 is
due to mortgages placed on six of the properties acquired during 2000 and 1999.
General and administrative expenses increased by $75,000 to $287,000 for the
three months ended March 31, 2000. This increase was primarily due to an
increase in payroll and payroll related expenses.
Gain on sale of real estate and available-for-sale securities during the three
months ended March 31, 2000 results substantially from a gain of $156,000 on the
sale of a property located in South Carolina.
Item 3. - Quantitative and Qualitative Disclosures About Market Risks
The Company has considered the effects of derivatives and exposures to market
risk relating to interest rate, foreign currency exchange rate, commodity price
and equity price risk. The Company 's mortgages payable bear fixed interest
rates and therefore there is no material market risk associates with these
instruments.
Part II - Other Information
Item 6. - Exhibits and Reports on Form 8-K
On February 18, 2000, the Company filed a current report on Form 8-K to report
the acquisition on February 10, 2000 of a property located in Plano, Texas for
approximately $7,650,000. In connection with the acquisition, the Company
obtained a $5,000,000 first mortgage. Audited financial statements and unaudited
pro forma financial statements relating to this acquisition were filed on Form
8-K/A on April 24, 2000.
On March 31, 2000, the Company filed a current report on Form 8-K to report that
on March 24, 2000 the Company consummated a $15,000,000 revolving credit
facility with European American Bank.
On April 11, 2000, the Company filed a current report on Form 8-K to report the
acquisition on March 29, 2000 of a property located in El Paso, Texas for
approximately $14,066,000. In connection with the acquisition, the Company
obtained a $10,000,000 first mortgage. Audited financial statements and
unaudited pro forma financial statements relating to this acquisition were filed
on Form 8-K/A on May 11, 2000.
On May 2, 2000, the Company filed a current report on Form 8-K to report the
acquisition on April 11, 2000 of a property located in Hanover, Pennsylvania for
approximately $11,463,000. The property was financed at closing by taking title
to an existing first mortgage with a balance of approximately $9,000,000.
Audited financial statements and unaudited pro forma financial statements
relating to this acquisition were filed on Form 8-K/A on May 11, 2000.
ONE LIBERTY PROPERTIES, INC.
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 thereunto duly authorized.
One Liberty Properties, Inc.
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(Registrant)
May 15, 2000 /s/ Jeffrey Fishman
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Date Jeffrey Fishman
President
May 15, 2000 /s/ David W. Kalish
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Date David W. Kalish
Vice President and
Chief Financial Officer