UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 13, 2006
ONE LIBERTY PROPERTIES, INC.
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(Exact name of Registrant as specified in charter)
Maryland 001-09279 13-3147497
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, 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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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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__ Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
__ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On March 13, 2006 registrant issued a press release announcing its results of
operations for the quarter and year ended December 31, 2005. The press release
is attached as an exhibit to this Form 8-K. This information as well as Exhibit
99.1 are being furnished pursuant to Item 2.02 of Form 8-K and are not to be
considered "filed" under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and shall not be incorporated by reference into any previous or
future filing by registrant under the Securities Act of 1933, as amended, or the
Exchange Act.
Item 9.01 Financial Statement and Exhibits
(d) Exhibits.
99.1 Press release issued March 13, 2006.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Date: March 15, 2006 By: /s/ Simeon Brinberg
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Simeon Brinberg
Senior Vice President
ONE LIBERTY PROPERTIES, INC.
60 CUTTER MILL ROAD - SUITE 303
GREAT NECK, NY 11021
Telephone 516-466-3100
Telecopier 516-466-3132
www.onelibertyproperties.com
ONE LIBERTY PROPERTIES ANNOUNCES RESULTS OF OPERATIONS
FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2005
Great Neck, New York - March 13, 2006 - One Liberty Properties, Inc. (NYSE: OLP)
today announced that for the year ended December 31, 2005, rental revenues
increased by 30.2% and net income by 94% compared to revenues and net income for
the year ended December 31, 2004. The Company reported rental revenues of
$28,445,000 and net income of $21,280,000, or $2.16 per share on a diluted
basis, for the year ended December 31, 2005. Net income gives effect to the
Company's equity in earnings of unconsolidated joint ventures of $2,102,000
($.21 per diluted share), a net gain on the sale of air rights of $10,248,000
($1.04 per diluted share) and income from discontinued operations of $1,559,000
($.16 per diluted share). For the year ended December 31, 2004, One Liberty
reported rental revenues of $21,844,000, and net income of $10,974,000, or $1.13
per share on a diluted basis. Net income for 2004 includes the Company's equity
in earnings of unconsolidated joint ventures of $2,869,000 ($.29 per diluted
share), net gains of $73,000 ($.01 per diluted share) and income from
discontinued operations of $2,435,000 ($.25 per diluted share). The weighted
average number of common shares outstanding on a diluted basis was 9,843,000 and
9,744,000 for the years ended December 31, 2005 and 2004, respectively.
For the quarter ended December 31, 2005, One Liberty reported rental revenues of
$7,545,000, and net income of $3,545,000, or $.36 per share on a diluted basis.
Net income for the quarter ended December 31, 2005 gives effect to the Company's
equity in earnings of unconsolidated joint ventures of $775,000 ($.08 per
diluted share) and income from discontinued operations of $743,000 ($.08 per
diluted share). This compares with revenues of $6,178,000, net income of
$4,009,000 and net income per share on a diluted basis of $.41 for the quarter
ended December 31, 2004. Net income for the quarter ended December 31, 2004
gives effect to the Company's equity in earnings of unconsolidated joint
ventures of $1,231,000 ($.13 per diluted share) and income from discontinued
operations of $1,033,000 ($.11 per diluted share). The weighted average number
of common shares outstanding on a diluted basis was 9,868,000 and 9,790,000 for
the three months ended December 31, 2005 and 2004, respectively.
One Liberty also reported funds from operations of $26,658,000, or $2.71 per
share on a diluted basis, for the year ended December 31, 2005, as compared to
$16,789,000, or $1.72 per share, on a diluted basis for the year ended December
31, 2004. Funds from operations for the three months ended December 31, 2005 was
$4,772,000, or $.48 per share on a diluted basis, as compared to $5,751,000 or
$.59 per share on a diluted basis, for the three months ended December 31, 2004.
Funds from operations, calculated in accordance with the NAREIT definition, adds
back to net income depreciation of properties, One Liberty's share of
depreciation in unconsolidated joint ventures and amortization of capitalized
leasing expenses, and deducts from net income net gain on property sales.
However, in accordance with the NAREIT definition, funds from operations
reported by One Liberty for the year ended December 31, 2005 includes the
$10,248,000 gain ($1.04 per share) recognized by One Liberty on the sale of air
rights, which One Liberty has deferred for tax purposes pursuant to Section 1031
of the Internal Revenue Code.
Commenting on the results of operations, Fredric H. Gould, Chairman of the Board
and Chief Executive Officer of One Liberty, stated that "the increase in rental
revenues year over year and quarter over quarter was primarily due to our
acquisition of fourteen properties during 2004 and 2005". On the expense side,
Mr. Gould noted that operating expenses increased by 31.8% year over year and
17.2% quarter versus quarter. A 35% increase in depreciation expense year over
year and 20.3% quarter over quarter is directly related to the increase in the
number of properties owned by the Company. General and administrative expenses
increased by 32.4% year over year and by 29.8% quarter versus quarter due to a
number of factors, the largest of which relates to the fees of special counsel
retained by the Company's Audit Committee in connection with an investigation
into certain financial dealings of the Company's former president and chief
executive officer. In addition for the year and the quarter ended December 31,
2005 expenses allocated under the Shared Services Agreement among the Company
and various affiliated companies and other expenses increased due to an increase
in the Company's level of business activity, including property acquisitions,
mortgage financings, Sarbanes-Oxley compliance, an increase in auditing fees and
fees relating to the internal control audit required by Section 404 of
Sarbanes-Oxley, an increase in directors' fees and an increase in directors' and
officers' liability insurance expense.
Commenting further, Mr. Gould noted that negatively impacting the Company's
results of operations in both the current year and the current quarter was a
26.7% and 37% decrease, respectively, in the Company's equity in earnings of
unconsolidated joint ventures. The decrease year versus year results primarily
from a $2,562,000 provision for valuation adjustment taken in 2005 by one of the
Company's 50% owned joint ventures against one of its five properties. The
decrease quarter versus quarter is primarily due to the receipt in the quarter
ended December 31, 2004 of the proceeds from the sale by one of the Company's
joint ventures of a bankruptcy claim. The decrease in equity in earnings of
joint ventures in both the current year and current quarter was offset by the
income earned on two joint ventures organized in the second half of 2004. Also
impacting expenses year versus year and quarter versus quarter is a 24% and
21.2% increase, respectively, in interest expense due to mortgage loans placed
in 2004 and 2005 on acquired properties.
In 2005 the Company sold five properties and the operations of these five
properties are reflected in the 2005 and 2004 results as income from
discontinued operations. For the year ended December 31, 2005, these properties
operated at a $346,000 loss as compared to positive operations in the year ended
December 31, 2004 of $2.4 million. The net gain on sale of these properties in
2005 was $1.9 million. Accordingly, income from discontinued operations was $1.6
million for the year ended December 31, 2005, as compared to $2.4 million for
the year ended December 31, 2004.
On June 30, 2005, the Company closed on the sale of unused development rights
relating to a property owned by it and located in Brooklyn, New York. The
Company reported a financial statement gain of $10.25 million with respect to
this sale in 2005.
Mr. Gould noted that in 2005 the Company invested $58.9 million in the purchase
of eight properties and that at year end it had $26.7 million of available cash
and $62.5 million available under its revolving credit facilities. He further
noted that using available funds, availability under the credit facility and
proceeds derived from mortgage financings, the Company will continue its
property acquisition program in 2006.
One Liberty Properties is a real estate investment trust and invests primarily
in improved commercial real estate under long term net lease.
Certain information contained in this press release, including information with
respect to factors which may improve our future results of operations and future
acquisitions, together with other statements and information publicly
disseminated by One Liberty Properties, Inc. is forward looking within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended. We intend such
forward looking statements to be covered by the safe harbor provision for
forward looking statements contained in the Private Securities Litigation Reform
Act of 1995 and include this statement for the purpose of complying with these
safe harbor provisions. Information regarding certain important factors that
could cause actual outcomes or other events to differ materially from any such
forward looking statements appear in the Company's Form 10-K for the year ended
December 31, 2005. You should not rely on forward looking statements since they
involve known and unknown risks, uncertainties and other factors which are, in
some cases, beyond our control and which could materially affect actual results,
performance or achievements.
Contact: Simeon Brinberg
(516) 466-3100
ONE LIBERTY PROPERTIES, INC. (NYSE: OLP)
(Amounts in Thousands, Except Per Share Data)
Three Months Ended Year Ended
December 31, December 31,
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2005 2004 2005 2004
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Revenues:
Rental income - Note 1 $7,545 $6,178 $28,445 $21,844
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Operating expenses:
Depreciation and amortization 1,545 1,284 5,664 4,197
General and administrative 941 725 4,140 3,127
Real estate expenses 67 158 352 495
Leasehold rent 77 77 308 119
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Total operating expenses 2,630 2,244 10,464 7,938
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Operating income 4,915 3,934 17,981 13,906
Other income and expenses:
Equity in earnings of unconsolidated
joint ventures 775 1,231 2,102 2,869
Interest and other income 86 161 314 386
Interest:
Expense (2,663) (2,198) (10,192) (8,195)
Amortization of deferred financing costs (311) (152) (732) (500)
Gain on sale of air rights and other - - 10,248 60
Gain on sale of real estate - - - 13
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Income from continuing operations 2,802 2,976 19,721 8,539
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Discontinued operations:
Income (loss) from discontinued operations 59 1,033 (346) 2,435
Net gain on sale of discontinued operations 684 - 1,905 -
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Income from discontinued operations 743 1,033 1,559 2,435
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Net income $3,545 $4,009 $21,280 $10,974
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Net income per common share (basic and diluted):
Income from continuing operations $ .28 $ .30 $ 2.00 $ .88
Income from discontinued operations .08 .11 .16 .25
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Net income per common share $ .36 $ .41 $ 2.16 $ 1.13
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Funds from operations * $4,772 $5,751 $26,658 $16,789
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Funds from operations per common share -
diluted ** $ .48 $ .59 $ 2.71 $ 1.72
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Weighted average number of common shares outstanding:
Basic 9,863 9,780 9,838 9,728
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Diluted 9,868 9,790 9,843 9,744
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Note 1 - Rental income includes straight line rent accruals of $1,311 and $410
for the year and three months ended December 31, 2005 and $1,037 and $392 for
the year and three months ended December 31, 2004, respectively.
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* Funds from operations applicable to common stockholders is summarized in
the following table:
Three Months Ended Year Ended
December 31, December 31,
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2005 2004 2005 2004
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Net income $3,545 $4,009 $21,280 (b) $10,974
Add: depreciation of properties 1,545 1,424 5,905 4,758
Add: our share of depreciation in
unconsolidated joint ventures 319 302 1,277 1,075
Add: amortization of capitalized leasing
expenses 47 16 101 55
Deduct: net gain on sale of real estate (684) - (1,905) (73)
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Funds from operations $4,772 $5,751 $26,658(b) $16,789
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** Funds from operations per common share is summarized in the following
table:
Net income $ .36 $ .41 $ 2.16 $ 1.13
Add: depreciation of properties .16 .15 .60 .49
Add: our share of depreciation in
unconsolidated joint ventures .03 .03 .13 .11
Add: amortization of capitalized leasing
expenses - - .01 -
Deduct: net gain on sale of real estate (.07) - (.19) (.01)
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Funds from operations per common share $ .48 $ .59 $ 2.71 $ 1.72
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(a) We believe that FFO is a useful and a standard supplemental measure of
the operating performance for equity REITs and is used frequently by securities
analysts, investors and other interested parties in evaluating equity REITs,
many of which present FFO when reporting their operating results. FFO is
intended to exclude GAAP historical cost depreciation and amortization of real
estate assets, which assures that the value of real estate assets diminish
predictability over time. In fact, real estate values have historically risen
and fallen with market conditions. As a result, we believe that FFO provides a
performance measure that when compared year over year, should reflect the impact
to operations from trends in occupancy rates, rental rates, operating costs,
interest costs and other matters without the inclusion of depreciation and
amortization, providing a perspective that may not be necessarily apparent from
net income. We also consider FFO to be useful to us in evaluating potential
property acquisitions.
FFO does not represent net income or cash flows from operations as defined
by GAAP. You should not consider FFO to be an alternative to net income as a
reliable measure of our operating performance; nor should you consider FFO to be
an alternative to cash flows from operating, investing or financing activities
(as defined by GAAP) as measures of liquidity.
FFO does not measure whether cash flow is sufficient to fund all of our
cash needs, including principal amortization, capital improvements and
distributions to stockholders. FFO does not represent cash flows from operating,
investing or financing activities as defined by GAAP.
(b) Includes net gain on sale of air rights of $10,248, or $1.04 per share
for the year ended December 31, 2005.