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, 1996
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.
(Exact name of registrant as specified in its charter)
MARYLAND 13-3147497
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
60 Cutter Mill Road, Great Neck, New York 11021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(516) 466-3100
Indicate the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.
As of May 14, 1996, the Registrant had 1,438,619 shares
of Common Stock and 808,776 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
___
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1996 1995
(Unaudited)
Assets
Real estate investments, at cost
Land $ 7,299,417 $ 7,299,417
Buildings 18,154,919 18,154,919
___________ __________
25,454,336 25,454,336
Less accumulated depreciation 1,326,653 1,200,571
___________ __________
24,127,683 24,253,765
Mortgages receivable-less unamortized
discount-(substantially all from
related parties) 6,144,984 7,036,141
Senior secured note receivable-
less unamortized discount-
(related party) 435,567 528,575
Cash and cash equivalents 4,988,697 3,844,409
Unbilled rent receivable 65,072 86,767
Rent, interest, deposits and
other receivables 550,032 696,790
Investment in U.S. Government
obligations and securities 1,298,373 1,274,747
Investment in BRT Realty Trust-
(related party) 142,728 127,704
Other 322,412 191,348
___________ _________
Total assets $38,075,548 $38,040,246
=========== ===========
Liabilities and Stockholders' Equity
Liabilities:
Mortgages payable $ 6,569,461 $ 6,590,154
Accounts payable and accrued
expenses 205,413 193,767
Dividends payable 755,096 748,346
___________ ___________
Total liabilities 7,529,970 7,532,267
___________ __________
Commitments and contingencies -
(Note 4) - -
Redeemable convertible preferred
stock, $1 par value; $1.60
cumulative annual dividend;
2,300,000 shares authorized;
808,776 shares issued; liquidation
and redemption values of $16.50 12,834,881 12,796,475
___________ __________
Stockholders' equity:
Common stock, $1 par value;
25,000,000 shares authorized;
1,438,619 and 1,416,119
shares issued outstanding 1,438,619 1,416,119
Paid-in capital 13,363,163 13,218,757
Net unrealized gain (loss) on
available-for-sale securities 4,161 ( 6,758)
Accumulated undistributed net
income 2,904,754 3,083,386
__________ __________
Total stockholders' equity 17,710,697 17,711,504
__________ __________
Total liabilities and
stockholders' equity $38,075,548 $38,040,246
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
1996 1995
Revenues:
Rental income $ 743,563 $ 566,597
Interest from
related parties 292,970 495,335
Dividends from
related party -- 13,940
Interest and other
income 57,937 132,136
________ _________
1,094,470 1,208,008
________ _________
Expenses:
Depreciation 126,082 99,758
Interest -
mortgages payable 143,544 144,489
Leasehold rent 72,208 64,980
General and
administrative 176,172 157,020
________ ________
518,006 466,247
________ ________
Net income $ 576,464 $ 741,761
========= ========
Calculation of net
income applicable to
common stockholders:
Net income $ 576,464 $ 741,761
Less: dividends
and accretion on
preferred stock 361,916 361,458
_______ ________
Net income
applicable
to common
stockholders $ 214,548 $ 380,303
======== =========
Weighted average
number of
common shares
outstanding 1,421,064 1,399,231
========= =========
Net income per
common share
(Note 2) $ .15 $ .27
========= =========
Cash distributions
per share:
Common Stock $ .30 $ .125
========= =========
Preferred Stock $ .40 $ .40
========= =========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the three month period ended March 31, 1996
and the year ended December 31, 1995
(Unaudited)
Net
Unrealized Gain
(Loss) on Accumulated
Common Paid-in Available-for- Undistributed
Stock Capital Sale Securities Net Income Total
Balances,
January 1,
1995 $1,399,119 $13,233,109 $(34,913) $2,730,523 $17,327,838
Net income - - - 3,096,302 3,096,302
Distributions
-common
stock - - - (1,449,397)(1,449,397)
Distributions
-preferred
stock - - - (1,294,042)(1,294,042)
Accretion on
preferred
stock - (152,477) - - (152,477)
Exercise of
options 17,000 138,125 - 155,125
Net unrealized
gain on avail-
able-for-sale-
securities - - 28,155 - 28,155
________ ___________ ________ _________ ________
Balances,
December
31,
1995 1,416,119 13,218,757 ( 6,758) 3,083,386 17,711,504
Net income - - - 576,464 576,464
Distributions
-common
stock - - - (431,586) (431,586)
Distributions
-preferred
stock - - - (323,510) (323,510)
Accretion on
preferred
stock - ( 38,406) - - (38,406)
Exercise of
stock
options 22,500 182,812 - - 205,312
Net unrealized
gain on
available
-for- sale-
securities - - 10,919 - 10,919
________ ___________ ________ ______ ________
Balances,
March
31,
1996 $1,438,619 $13,363,163 $ 4,161 $2,904,754 $17,710,697
========== =========== ======== ========== ===========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months ended March 31,
1996 1995
_______ _________
Cash flows from operating
activities:
Net income $ 576,464 $ 741,761
Adjustments to reconcile
net income to net
cash provided by
operating activities:
Depreciation and
amortization 136,556 116,322
Changes in assets and
liabilities:
Decrease in rent,
interest, deposits
and other receivables 106,887 53,652
Increase (decrease) in
accounts payable accrued
expenses 11,646 (10,508)
_________ __________
Net cash provided by
operating
activities 831,553 901,227
_________ _________
Cash flows from investing
activities:
Costs of acquisition of
real estate and mortgage
receivable from Gould
Investors L.P.-related party -- (90,514)
Collection of mortgages
receivable-
(including $884,099 and
$35,957 891,157 41,777
from related parties)
Collection of senior secured
note receivable-BRT Realty
Trust-related party 93,008 354,991
(Purchase) sale of U.S.
Government obligations
and securities, net (27,731) 1,711,086
___________ _________
Net cash provided by
investing activities 956,434 2,017,340
___________ ________
Cash flows from financing
activities:
Satisfaction of mortgage
payable -- (2,753,700)
Repayment of mortgage
payable (20,693) (12,385)
Payment of financing costs (79,972) --
Exercise of stock options 205,312 45,625
Cash distributions-common
stock (424,836) (174,890)
Cash distributions-preferred
stock (323,510) (323,510)
__________ _________
Net cash (used in)
financing activities (643,699) (3,218,860)
_________ _________
Net increase (decrease)
in cash and cash
equivalents 1,144,288 (300,293)
Cash and cash equivalents at
beginning of period 3,844,409 2,701,456
_________ _________
Cash and cash equivalents at
end of period $4,988,697 $2,401,163
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (continued)
Three Months Ended March 31,
1996 1995
____ ____
Supplemental disclosures of
cash flow information:
Cash paid during the period for
interest expense $136,951 $168,100
Cash paid during the period for
income taxes 84,220 9,024
Supplemental schedule of noncash
investing and financing
activities:
Accretion on preferred stock 38,406 37,498
Acquisition of real estate and
mortgage receivable from
Gould Investors L.P.-
related party -- (9,861,729)
Consideration for acquisition
from Gould Investors L.P.:
Extinguishment of mortgage
receivable -- 6,850,000
Transfer of BRT preferred
stock -- 2,455,355
Transfer of BRT common
stock -- 556,374
<FN>
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, 1996 and for the three months ended
March 31, 1996 and 1995 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, 1996 are not
necessarily indicative of the results for the full year.
The consolidated financial statements include the accounts of One
Liberty Properties, Inc. and its wholly-owned subsidiaries.
Material intercompany items and transactions have been
eliminated. One Liberty Properties, Inc. and its subsidiaries
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, 1995.
Note 2 - Per Share Data
Primary earnings per common share data is based upon the weighted
average number of common shares and assumed equivalent shares
outstanding during the period, after giving effect to dividends
and accretion relating to the Company's preferred stock. The
preferred stock is not considered a common stock equivalent for the
purposes of computing earnings per share because their assumed conversion
is anti-dilutive. The assumed exercise of outstanding stock options, using
the treasury stock method, is not materially dilutive for the primary
earnings per common share computation for the three month periods ended
March 31, 1996 and 1995.
Fully diluted earnings per common share are based on an increase
in the number of common shares that would be outstanding assuming
the exercise of common share options. Since fully diluted
earnings per share amounts are not materially dilutive, such
amounts are not presented.
Note 3 - Preferred and Common Stock Dividend Distributions
On March 1, 1996 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 1, 1996 to
stockholders of record on March 15, 1996.
Note 4 - Credit Agreement
On March 1, 1996 the Company entered into a $5,000,000 revolving
credit agreement ("Credit Agreement") with Bank Leumi Trust Company of New
York ("Bank Leumi"). Borrowings under the Credit Agreement will
be used to provide the Company with funds to acquire properties. The
Credit Agreement will mature February 28, 1999 with a right for the
Company to extend the Credit Agreement until February 29, 2000. As
collateral for any advances to be made by Bank Leumi under the Credit
Agreement, the Company has pledged the stock of each of its subsidiaries
and certain mortgages receivable.
The Company has not drawn down any funds under the Credit Agreement.
Note 5 - Stock Options
Options to purchase a total of 22,500 shares of the Company's
common stock at $9.125 per share were exercised in March 1996. The options
had been granted under the 1989 Stock Option Plan.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 1996, the Company's primary source of liquidity was
approximately $4,989,000 in cash and $1,298,000 in investments in
U.S. Government obligations and securities. Long term debt at March
31, 1996 consisted of $6,569,461 of mortgages payable which are secured by
certain real estate investments.
In March, 1996 the Company entered into a $5 million revolving credit
agreement with Bank Leumi Trust Company of New York ("Bank Leumi").
Borrowings under the credit agreement will provide the Company with funds,
when needed, to acquire additional properties. The credit agreement will
mature February 28, 1999 with a right for the Company to extend the
agreement until February 29, 2000. Under the terms of this agreement the
Company has the ability to add additional lenders to provide a maximum
total facility of $15,000,000. The Company has not drawn down any funds
under the credit agreement as of this date and to date additional lenders
have not been added to the facility.
In April, 1996 the Company acquired a property for a consideration of
approximately $4,040,000, of which $1,315,000 was paid in cash and
$2,725,000 by mortgage financing. The building is net leased on
a long term basis to a retail sporting goods superstore.
The Company is currently in discussions concerning the acquisition of
additional net leased properties. In management's judgement, cash provided
from operations, the Company's cash position and holdings of marketable
government securities and cash available from the credit facility with Bank
Leumi will provide adequate funds for cash distributions to shareholders,
operating expenses and future investment opportunities. 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.
In connection with the lease agreements with Total Petroleum, Inc. ("Total
Petroleum") consummated in 1991, the Company agreed to expend certain funds
to remediate environmental problems at certain locations net leased to
Total Petroleum. It was agreed that the net cost to the Company would not
exceed $350,000 per location, with any excess cost being the responsibility
of Total Petroleum. At that time the Company deposited $2,000,000 with an
independent escrow agent to insure compliance by the Company with its
obligations with respect to the environmental clean up. The escrow agent
held approximately $1,339,000 as of March 31, 1996 which the Company deems
adequate to cover any additional environmental costs.
Results of Operations
Three months ended March 31, 1996 and 1995
Rental income increased to $743,563 for the three months ended
March 31, 1996 from $566,597 for the three months ended March 31, 1995.
The increase of approximately $177,000 is due to rents earned on nineteen
net leased properties acquired during 1995.
The decrease in interest income from related parties of $202,365
from $495,335 in the three months ended March 31, 1995 to $292,970 in
the current three month period is substantially due to accelerated
principal collections during 1995 on a senior note receivable which
resulted in an unusually large amortization of the discount on such note
during the three months ended March 31, 1995. In addition, interest earned
on this note decreased due to the substantial decrease in the balance
outstanding.
In the 1995 three month period dividends from related party amounted to
$13,940, resulting from an investment that the Company no longer owns.
Interest and other income decreased by $74,199 to $57,937 in the current
three month period from $132,136 in the prior three month period primarily
due to a decrease in the amounts received or accrued from The Michigan
Underground Storage Tank Fund Administration ("MUSTFA"). MUSTFA had been
reimbursing qualified companies for environmental costs incurred in the
"clean up" associated with underground storage tanks.
The $26,324 increase in depreciation from $99,758 in the three months ended
March 31, 1995 to $126,082 in the 1996 three month period results from
depreciation on properties acquired during 1995. Although there was a
small decrease in interest - mortgages payable in the 1996 three month
period resulting from the elimination of interest on a $2,753,700 mortgage
loan which was fully repaid in March 1995, going forward interest expense
with respect to mortgages payable will increase due to mortgages placed in
connection with property acquisitions during 1995 and 1996.
In connection with a property acquired in January 1995, the Company must
pay annual fixed leasehold rent of approximately $289,000 through April
2010. The property was not owned for the entire 1995 three month period.
Accordingly, rent is reflected in the 1996 quarterly period for the entire
three months and for two months in the 1995 quarterly period.
General and administrative costs increased in the current period to
$176,172 from $157,020 in the prior period due to a combination of factors,
primarily the inclusion in the current three month period of tax
provisions. The three months ended March 31, 1995 did not include such
provisions.
Part II - Other Information
Item 6. - Exhibits and Reports on Form 8-K
No Form 8-Ks were filed during the quarter ended March 31, 1996.
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.
(Registrant)
May 14, 1996 /s/ Matthew Gould
_______________ _________________
Date Matthew Gould
President
May 14, 1996 /s/ David W. Kalish
_______________ ___________________
Date David W. Kalish
Vice President and
Chief Financial Officer