Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real estate investment trust, today announced its third quarter and nine months financial results for the period ended July 31, 2013.
Diluted Funds from Operations (FFO) for the quarter ended July 31, 2013 was $9,052,000 or $0.29 per Class A Common share and $0.26 per Common share, compared to $8,535,000 or $0.30 per Class A Common share and $0.27 per Common share in last year’s third quarter. For the first nine months of fiscal 2013, diluted FFO amounted to $20,405,000 or $0.66 per Class A Common share and $0.59 per Common share compared to $24,681,000 or $0.88 per Class A Common share and $0.80 per Common share in the corresponding period of fiscal 2012.
Net income applicable to Class A Common and Common stockholders was $4,241,000 or $0.14 per diluted Class A Common share and $0.12 per diluted Common share in the third quarter of fiscal 2013 compared to $4,221,000 or $0.15 per diluted Class A Common share and $0.14 per diluted Common share in the same quarter last year. Net income applicable to Common and Class A Common stockholders for the first nine months of fiscal 2013 was $6,621,000 or $0.21 per diluted Class A Common share and $0.19 per diluted Common share compared to $11,385,000 or $0.40 per diluted Class A Common share and $0.37 per diluted Common share for the same period last year.
The per share amounts for both FFO and net income in the nine month period ended July 31, 2013 include the dilutive effect of the company issuing 2.5 million Class A Common shares in a follow-on public offering and issuing 5.175 million shares of a new Series F Preferred Stock, both in October 2012. The common stock offering raised net proceeds of $48 million and the preferred stock offering an additional $125 million, which funds were not fully invested until May 2013. The primary purpose of the preferred stock offering was to fund the future redemption of the Series E and Series C preferred stock. Although the company incurred an additional $153,000 and $1.1 million in preferred stock dividends in the three and nine month periods ended July 31, 2013 as a result of the October 2012 preferred offering, the lower coupon rate of that offering will save the company $1.375 million in annual preferred dividends in perpetuity. The company redeemed the Series E preferred stock in November 2012 at a make whole price $25.77 per share, which included a $0.77 per share make whole premium of $1.8 million over the $25 per share liquidation preference. In addition, the company also re-purchased approximately 44% of the Series C preferred stock outstanding at a slight premium, but for less than the cost of scheduled dividends to the stated call date. The company redeemed the remaining Series C preferred stock at $25 per share (par value) on May 29, 2013, which was the earliest date permissible. As a result of the redemption of the Series E preferred stock and the Series C preferred stock, the company incurred charges to expense the original issue costs of these preferred shares. The costs expensed, together with the Series E premium, amounted to $4.2 million, of which $3.8 million was chargeable in the quarter ended January 31, 2013, $405,000 was chargeable in the quarter ended April 30, 2013 and $68,000 was chargeable in the quarter ended July 31, 2013. In addition, the per share amounts for both FFO and net income in the three and nine months ended July 31, 2013 include a $1.46 million gain on the sale of marketable securities. A majority of the securities sold had been purchased in November 2012 with proceeds from the Company’s stock offerings completed in October 2012. The per share amounts for both the FFO and net income also include property acquisition costs for the three and nine months ended July 31, 2013 of $537,000 and $815,000, respectively.
In an effort to assist investors in analyzing changes to FFO, we have included a second FFO reconciliation table located at the end of this press release that explains the effect of these one-time charges on the company’s FFO and FFO per share in the third quarter and first nine months of fiscal 2013.
Base rental income (exclusive of a provision for tenant credit losses and straight line rent) from properties owned in the nine and three month periods ended July 31, 2013 and 2012 increased by $275,000 and $118,000, respectively as a result of normal base rental increases in the portfolio and new leasing in excess of new vacancies. Net operating income from properties owned in the nine month and three month periods ended July 31, 2013 and 2012 decreased by $329,000 and $17,000, respectively, mostly as a result of higher CAM costs at some of these properties, not all of which is recoverable through billings to the tenants.