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 June 30, 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 July 15, 1996, the Registrant had 1,457,478 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
June 30, December 31,
1996 1995
(Unaudited)
Assets
Real estate investments, at cost
Land $ 8,111,313 $ 7,299,417
Buildings 21,402,501 18,154,919
___________ __________
29,513,814 25,454,336
Less accumulated depreciation 1,469,646 1,200,571
Less valuation allowance -
(Note 7) 314,000 -
___________ __________
27,730,168 24,253,765
Mortgages receivable-less unamortized
discount-(substantially all from
related parties) 6,151,122 7,036,141
Senior secured note receivable-
less unamortized discount-
(related party) 201,029 528,575
Cash and cash equivalents 4,216,908 3,844,409
Unbilled rent receivable 43,377 86,767
Rent, interest, deposits and
other receivables 428,160 696,790
Investment in U.S. Government
obligations and securities 1,215,449 1,274,747
Investment in BRT Realty Trust-
(related party) 146,484 127,704
Other 298,847 191,348
___________ _________
Total assets $40,431,544 $38,040,246
=========== ===========
Liabilities and Stockholders' Equity
Liabilities:
Mortgages payable $ 9,269,169 $ 6,590,154
Accounts payable and accrued
expenses 239,620 193,767
Dividends payable 755,096 748,346
___________ ___________
Total liabilities 10,263,885 7,532,267
___________ __________
Commitments and contingencies -
(Note 5) - -
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 12,873,402 12,796,475
___________ __________
Stockholders' equity:
Common stock, $1 par value;
25,000,000 shares authorized;
1,438,619 and 1,416,119
shares issued and outstanding 1,438,619 1,416,119
Paid-in capital 13,324,642 13,218,757
Net unrealized gain (loss) on
available-for-sale securities 13,080 ( 6,758)
Accumulated undistributed net
income 2,517,916 3,083,386
__________ __________
Total stockholders' equity 17,294,257 17,711,504
__________ __________
Total liabilities and
stockholders' equity $40,431,544 $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 Six Months Ended
June 30, June 30,
__________________ __________________
1996 1995 1996 1995
Revenues:
Rental income $ 850,006 $ 664,423 $1,593,569 $1,231,020
Interest from
related parties 326,901 418,440 619,871 913,775
Dividends from
related party -- -- -- 13,940
Interest and other
income 111,564 92,910 169,501 225,046
________ ________ _________ ________
1,288,471 1,175,773 2,382,941 2,383,781
_________ ________ _________ _________
Expenses:
Depreciation 142,993 106,985 269,075 206,743
Interest -
mortgages payable 198,005 92,075 341,549 236,564
Leasehold rent 72,209 74,997 144,417 139,977
General and
administrative 193,006 161,729 369,178 318,749
________ ________ ________ ________
606,213 435,786 1,124,219 902,033
________ ________ ________ ________
Operating income 682,258 739,987 1,258,722 1,481,748
Provision for valua-
tion adjustment of
real estate (Note 7)(314,000) -- (314,000) --
__________ _______ __________ _________
Net income $ 368,258 $739,987 $ 944,722 $1,481,748
========== ======== =========== =========
Calculation of net
income applicable to
common stockholders:
Net income $ 368,258 $739,987 $ 944,722 $1,481,748
Less: dividends
and accretion on
preferred stock 362,031 361,572 723,947 723,030
_________ _______ ________ _________
Net income
applicable
to common
stockholders $ 6,227 $378,415 $ 220,775 $ 758,718
=========== ======== ========= =========
Weighted average
number of
common shares
outstanding 1,438,619 1,405,586 1,429,842 1,402,436
========== ========= ========= =========
Net income per
common share
(Note 2):
Operating
income $ .22 $ .27 $ .37 $ .54
Provision for
valuation ad-
justment of
real estate (.22) - (.22) -
___________ _________ __________ ________
Net income $ - $ .27 $ .15 $ .54
=========== ========= ========= =========
Cash distributions
per share:
Common Stock $ .30 $ .30 $ .60 $ .425
=========== ========= ========= =========
Preferred Stock $ .40 $ .40 $ .80 $ .80
=========== ========= ========= =========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the six month period ended June 30, 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 - - - 944,722 944,722
Distributions
-common
stock - - - (863,172) (863,172)
Distributions
-preferred
stock - - - (647,020) (647,020)
Accretion on
preferred
stock - ( 76,927) - - (76,927)
Exercise of
options 22,500 182,812 - - 205,312
Net unrealized
gain on
available
-for- sale-
securities - - 19,838 - 19,838
_________ __________ __________ __________ ________
Balances,
June
30,1996 $1,438,619 $13,324,642 $ 13,080 $2,517,916$17,294,257
========== =========== ======== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months ended June 30,
1996 1995
_______ _________
Cash flows from operating
activities:
Net income $ 944,722 $ 1,481,748
Adjustments to reconcile
net income to net
cash provided by
operating activities:
Provision for valuation
adjustment of real estate 314,000 -
Depreciation and
amortization 295,876 228,325
Changes in assets and
liabilities:
Decrease in rent,
interest, deposits
and other receivables 265,828 246,369
Increase in accounts
payable and accrued
expenses 45,853 3,975
_________ __________
Net cash provided by
operating
activities 1,866,279 1,960,417
_________ _________
Cash flows from investing
activities:
Additions to real estate (4,059,478) (1,399,338)
Costs of acquisition of
real estate and mortgage
receivable from Gould
Investors L.P.-related party -- (90,514)
Collection of mortgages
receivable-
(including $873,353 and
$72,635 from related
parties) 885,019 83,833
Collection of senior secured
note receivable-BRT Realty
Trust-related party 327,546 623,874
Sale of U.S. Government
obligations and securities,
net 60,356 1,816,594
Other -- (11,588)
___________ _________
Net cash (used in)
provided by investing
activities (2,786,557) 1,022,861
___________ ________
Cash flows from financing
activities:
Proceeds from mortgage payable 2,725,000 --
Satisfaction of mortgage
payable -- (2,753,700)
Repayment of mortgage
payable (45,985) (25,044)
Payment of financing costs (88,108) --
Exercise of stock options 205,312 155,125
Cash distributions-common
stock (856,422) (349,781)
Cash distributions-preferred
stock (647,020) (647,020)
__________ _________
Net cash provided by
(used in)financing
activities 1,292,777 (3,620,420)
_________ _________
Net increase (decrease)
in cash and cash
equivalents 372,499 (637,142)
Cash and cash equivalents at
beginning of period 3,844,409 2,701,456
_________ _________
Cash and cash equivalents at
end of period $4,216,908 $2,064,314
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (continued)
Six Months Ended June 30,
1996 1995
____ ____
Supplemental disclosures of
cash flow information:
Cash paid during the period for
interest expense $315,382 $260,268
Cash paid during the period for
income taxes 92,282 9,811
Supplemental schedule of noncash
investing and financing
activities:
Accretion on preferred stock 76,927 76,010
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 June 30, 1996 and for the six and three months
ended June 30, 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 six and three months ended June
30, 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 six and three month periods ended June 30,
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 - Distribution Reinvestment Plan
In May, 1996, the Company implemented a Distribution Reinvestment
Plan (the "Plan"). The Plan provides owners of record of 100
shares or more of its common and preferred stock the opportunity
to reinvest cash distributions in newly-issued common stock of
the Company at a five percent discount from the market price.
Shares will be purchased from the Company; no open market
purchases will be made under the Plan. On July 2, 1996, the
Company issued 18,859 common shares as a result of the Plan.
Note 4 - Preferred and Common Stock Cash Distributions
On June 7, 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 July 2, 1996 to
stockholders of record on June 20, 1996.
Note 5 - 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 6 - 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.
Note 7 - Provision for Valuation Adjustment
The Company has determined that the estimated fair market value
of two of its "Payless" properties is lower than the carrying
amount. Both properties are located in declining rental markets
and are subject to a ten-year lease expiring December 31, 1996.
These leases are not being renewed by the tenant. The Company
has a signed contract for one of the locations and is negotiating
the sale of the other property. Since the total expected net
sales proceeds are anticipated to be lower than the carrying
amount, the Company has recorded a provision for valuation
adjustment for the difference.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At June 30, 1996, the Company's primary source of liquidity was
approximately $4,217,000 in cash and $1,215,000 in investments in
U.S. Government obligations and securities. Long term debt at
June 30, 1996 consisted of $9,269,169 of mortgages payable
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 no additional lender has been added to the facility.
In July, 1996 the Company invested in a limited liability company
which acquired a property for a consideration, including closing
costs, of approximately $3,360,000. A local real estate operator
became a member of the limited liability company and invested 5%
of the total consideration. The Company provided the balance of
the required funds and is currently in the process of obtaining
mortgage financing on this property. The building is an
industrial/flex office facility and is net leased to a single
tenant.
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 under 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 $1,315,000 as of June 30, 1996,
which the Company deems adequate to cover any additional
environmental costs.
Results of Operations
Six and three months ended June 30, 1996 and 1995
Rental income increased to $1,593,569 and $850,006 for the six
and three months ended June 30, 1996 from $1,231,020 and $664,423
for the six and three months ended June 30, 1995. The respective
increases of approximately $363,000 and $186,000 are due
primarily to rents earned on twenty net leased properties
acquired during 1995 and 1996.
The decrease in interest income from related parties of $293,904
from $913,775 in the six months ended June 30, 1995 to $619,871
in the current six month period and the decrease of $91,539
from $418,440 in the three months ended June 30, 1995 to $326,901
in the current three month period is substantially due to
accelerated principal collections during 1995 on a senior note
receivable which resulted in unusually large amortization of the
discount on such note during the prior year periods and
additionally, resulted in a substantial decrease in interest
earned on such note during the current year periods.
In the 1995 six 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 to $169,501 in the current
six month period from $225,046 in the prior six month period due
to a combination of factors including a decrease of interest
earned on U.S. Government securities resulting from the sale of
some of such investments, the proceeds of which were used to
purchase properties. Interest and other income increased by
$18,654 to $111,564 in the current three month period compared to
the three month period in the prior year due to an increase in
the amounts received from The Michigan Underground Storage Tank
Fund Administration ("MUSTFA"), which has been reimbursing
qualified companies for environmental costs incurred in the
"clean up" associated with underground storage tanks. The
Company cannot estimate the amount, if any, which will be
reimbursed by MUSTFA in the future due to an announced
termination of the program.
The increase in depreciation from $206,743 and $106,985 for the
six and three months ended June 30, 1995 to $269,075 and $142,993
for the six and three month periods ended June 30, 1996 results
from depreciation on properties acquired during 1995 and 1996.
The increase in interest-mortgages payable to $341,549 and
$198,005 in the current six and three month periods from $236,564
and $92,075 in the prior six and three month periods is due to
interest paid on mortgages placed in connection with property
acquisitions during 1995 and 1996. The increase in
interest-mortgages payable for the comparable six month period
was offset slightly by the elimination of interest on a mortgage loan
that was fully repaid in March, 1995.
General and administrative costs increased during the six and
three months ended June 30, 1996 to $369,178 and $193,006 from
$318,749 and $161,729 during the six and three months ended June
30, 1995 due to a combination of factors, including an increase
in income tax provisions and various costs incurred with the
implementation of the Company's distribution reinvestment plan
during the current 1996 periods.
At June 30, 1996, the Company has determined that the estimated
fair market value of two of its "Payless" properties is lower
than the carrying amount. Both properties are located in
declining rental markets and are subject to a ten-year lease
expiring December 31, 1996. These leases are not being renewed
by the tenant. The Company has a signed contract for one of the
locations and is negotiating the sale of the other property.
Since the total expected net sales proceeds are anticipated to be
lower than the carrying amount, the Company has recorded a
provision for valuation adjustment for the difference. There was
no comparable provision in the prior year periods.
Part II - Other Information
Item 6. - Exhibits and Reports on Form 8-K
No Form 8-Ks were filed during the quarter ended June 30, 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)
August 6, 1996 /s/ Matthew Gould
_______________ _________________
Date Matthew Gould
President
August 6, 1996 /s/ David W. Kalish
_______________ ___________________
Date David W. Kalish
Vice President and
Chief Financial Officer