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, 2007
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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)
516-466-3100
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Registrant's telephone number, including area code
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):
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))
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Item 9.01 Financial Statements and Exhibits.
On March 13, 2007, the registrant issued a press release announcing its results
of operations for the year and quarter ended December 31, 2006. The press
release is annexed as an exhibit to this Form 8-K.
(a) Financial Statements of Businesses Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Shell Company Transactions. Not applicable.
(d) Exhibits.
99.1 Press release issued March 13, 2007 regarding registrant's
earnings for the year and quarter ended December 31, 2006.
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 hereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Date: March 13, 2007 By: /s/ Simeon Brinberg
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Simeon Brinberg
Senior Vice President
Exhibit 99.1
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, 2006
Great Neck, New York - March 13, 2007 - One Liberty Properties, Inc. (NYSE -
OLP) today reported its results of operations for the year and three months
ended December 31, 2006. During the year, a major sale transaction by joint
ventures in which the company has a 50% interest, and the sale by the company of
a similar property, resulted in substantial gains, as reported below. The
highlights of the 2006 year and the fourth quarter of 2006 are as follows:
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
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o Rental revenues increased by 22.5% to $33.4 million from $27.2 million.
o Net income increased by 71.2% to $36.4 million ($3.67 per diluted
share) from $21.3 million ($2.16 per diluted share). Significantly
benefiting net income in the current year is the company's share
of the gain recognized by its movie theater joint ventures as a
result of the sale of its movie theater portfolios and the gain
relating to the sale of a company owned movie theater. The
company's share of the gain on the joint ventures' sale in 2006 is
$26.9 million ($2.71 per diluted share) and the gain on the sale
of the company owned theater is $3.7 million ($.37 per diluted
share).
o FFO for the current year was $13.7 million ($1.38 per diluted share),
a decrease of 48.6% from FFO of $26.7 million ($2.71 per diluted
share) in 2005. FFO for 2006 was negatively impacted by a $3.3
million loss ($.33 per diluted share) from the operations of our joint
ventures which resulted primarily from mortgage prepayment premiums
of $5.3 million ($.53 per diluted share), representing the company's
share of the prepayment premiums paid by its movie theater joint
ventures in connection with the sale of their movie theater
portfolios. These prepayment premiums are considered as interest
expense for accounting purposes on the books of the joint ventures and
are not netted against the gain recognized on the sale. The inclusion
in FFO in 2005 of the $10.2 million gain ($1.04 per diluted share)
from the sale of air rights further affected the FFO comparison year
versus year.
Quarter Ended December 31, 2006 Compared to Quarter Ended December 31, 2005
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o Rental revenues increased by 23% to $8.9 million from $7.2 million.
o Net income increased by 589% to $24.4 million ($2.46 per diluted
share) from $3.5 million ($.36 per diluted share). Net income
quarter versus quarter significantly benefited from the company's
share of the gain on sale by the joint ventures of eight movie
theater properties and the sale of a company owned theater in the
2006 fourth quarter. The company's share of the gain on the joint
ventures' sale in the quarter is $23.6 million ($2.37 per diluted
share) and the gain on the sale of the company owned theater is
$3.7 million ($.37 per diluted share).
o FFO for the quarter decreased by 118% to a loss of $840,000 (a
loss of $.08 per diluted share) from a profit of $4.8 million
($.48 per diluted share). The decrease is primarily due to the
loss reported by our joint ventures, of which $5.2 million was the
company's share of the prepayment premiums of $9.7 million paid in
connection with the sale of the movie theater joint properties of
which $4.9 million ($.49 per diluted share) is the company's
share. The prepayment premiums are treated as interest expense for
accounting purposes on the books of the joint ventures and are not
netted against the gain recognized on the sale.
Discussion of Operating Results
-------------------------------
For the year ended December 31, 2006, the company reported rental revenues of
$33.4 million and net income of $36.4 million or $3.67 per diluted share. Net
income for 2006 gives effect to the company's loss in earnings of unconsolidated
joint ventures of $3.3 million (a loss of $.33 per diluted share), a gain on the
sale of nine movie theater properties by its unconsolidated joint ventures of
$26.9 million ($2.71 per diluted share) and income from discontinued operations
of $4.5 million ($.46 per diluted share), which includes $3.7 million ($.37 per
diluted share) from the sale of a company owned theater. For the year ended
December 31, 2005, One Liberty reported rental revenues of $27.2 million, and
net income of $21.3 million or $2.16 per share on a diluted basis. Net income
for 2005 includes the company's equity in earnings of unconsolidated joint
ventures of $2.1 million ($.21 per diluted share), gain on the sale of air
rights of $10.2 million ($1.04 per diluted share) and income from discontinued
operations of $2.1 million ($.21 per diluted share).
For the quarter ended December 31, 2006, One Liberty reported rental revenues of
$8.9 million, and net income of $24.4 million, or $2.46 per diluted share. Net
income for the quarter ended December 31, 2006 gives effect to the company's
loss in earnings of unconsolidated joint ventures of $5.2 million (a loss of
$.52 per diluted share), a gain on the sale of eight movie theater properties by
its unconsolidated joint ventures of $23.6 million ($2.37 per diluted share) and
income from discontinued operations of $3.7 million ($.37 per diluted share)
from the sale of a company owned theater. This compares with revenues of $7.2
million, net income of $3.5 million and net income per share on a diluted basis
of $.36 for the quarter ended December 31, 2005. 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 $880,000 ($.09 per diluted share).
FFO for the year ended December 31, 2006 was $13.7 million, or $1.38 per share
on a diluted basis, as compared to $26.7 million, or $2.71 per share on a
diluted basis, for the year ended December 31, 2005. FFO for the three months
ended December 31, 2006 shows a loss of $840,000, or a loss of $.08 per diluted
share, as compared to $4.8 million, or $.48 per share on a diluted basis, for
the three months ended December 31, 2005. FFO, 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 net gain on sale of
real estate and gain on sale of real estate related to unconsolidated joint
ventures. In accordance with the NAREIT definition, FFO for the year and quarter
ended December 31, 2006 deducts $26.9 million ($2.71 per diluted share), and
$23.6 million ($2.37 per diluted share), respectively, representing the
Company's share of the gain recognized by its unconsolidated joint ventures
relating to the sale of the nine and eight movie theater properties,
respectively. Also, in accordance with the NAREIT definition, FFO for the year
ended December 31, 2005 includes the $10.2 million ($1.04 per diluted share)
recognized by the Company on the sale of air rights. FFO for 2006 were
negatively impacted in the year and quarter ended December 31, 2006 by mortgage
prepayment premiums of $5.3 million ($.53 per diluted share) and $4.9 million
($.49 per diluted share), respectively, paid in connection with the sales of the
movie theater properties by our unconsolidated joint ventures. For accounting
purposes, the mortgage prepayment premiums were considered interest expense on
the books of the joint ventures and were not netted against the gain recognized
on the sales.
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 activities," noting that thirty properties were acquired in 2005 and
2006. On the expense side, Mr. Gould noted that operating expenses increased by
30.2% year versus year and 40.9% quarter versus quarter. A 28.8% increase in
depreciation and amortization expense year over year and 28.4% quarter over
quarter is directly related to the increase in the number of properties owned.
General and administrative expenses increased by 26.8% year over year and by
14.7% quarter over quarter due to a number of factors, including (i) an increase
in payroll and payroll related expenses, primarily resulting from a full year of
compensation paid to our president and increases in staff, (ii) professional
fees and expenses and expenses allocated to us under a shared services agreement
(primarily for legal and accounting services) primarily resulting from an SEC
investigation, and a concurrent investigation by the company's Audit Committee,
property acquisition activities and an overall increase in the company's level
of business, and (iii) an increase in compensation expense related to our
restricted stock program. In addition, in 2006 the company expensed $490,000 for
federal excise taxes, which is based on taxable income generated but not yet
distributed. There was no comparable expense in 2005. Interest expense year
versus year and quarter versus quarter increased by 28.3% and 31.8%,
respectively, due to mortgage loans placed or assumed in 2005 and 2006 on
acquired properties.
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, 2006. 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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2006 2005 2006 2005
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Revenues:
Rental income - Note 1 $ 8,911 $7,242 $33,370 $27,232
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Operating expenses:
Depreciation and amortization 1,909 1,487 6,995 5,432
General and administrative 1,079 941 5,250 4,140
Federal excise tax 490 - 490 -
Real estate expenses 68 67 270 344
Leasehold rent 77 77 308 308
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Total operating expenses 3,623 2,572 13,313 10,224
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Operating income 5,288 4,670 20,057 17,008
Other income and expenses:
Equity in (loss) earnings of unconsolidated
joint ventures (5,200) 775 (3,276) 2,102
Gain on disposition of real estate related to
unconsolidated joint ventures 23,614 - 26,908 -
Interest and other income 597 86 899 314
Interest:
Expense (3,370) (2,557) (12,524) (9,764)
Amortization of deferred financing costs (152) (309) (595) (726)
Gain on sale of air rights (in 2005) and other - - 228 10,248
Gain on sale of real estate - - 185 -
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Income from continuing operations 20,777 2,665 31,882 19,182
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(Loss) income from discontinued operations (9) 196 883 193
Net gain on sale of discontinued operations 3,660 684 3,660 1,905
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Income from discontinued operations 3,651 880 4,543 2,098
Net income $ 24,428 $ 3,545 $ 36,425 $21,280
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Net income per common share (basic and diluted):
Income from continuing operations $ 2.09 $ .27 $ 3.21 $ 1.95
Income from discontinued operations .37 .09 .46 .21
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Net income per common share $ 2.46 $ .36 $ 3.67 $ 2.16
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Funds from operations - Note 2 $ (840) $ 4,772 $ 13,707 $26,658
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Funds from operations per common share -
diluted - Note 3 $ (.08) $ .48 $ 1.38 $ 2.71
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Weighted average number of common shares outstanding:
Basic 9,963 9,863 9,931 9,838
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Diluted 9,963 9,868 9,934 9,843
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Note 1 - Rental income includes straight line rent accruals of $1,717 and $454,
respectively, for the year and three months ended December 31, 2006 and $1,466
and $395, for the year and three months ended December 31, 2005, respectively.
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Note 2 - Funds from operations is summarized in the following table:
Three Months Ended Year Ended
December 31, December 31,
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2006 2005 2006 2005
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Net income $24,428 $ 3,545 $36,425 $21,280
Add: depreciation of properties 1,909 1,545 7,091 5,905
Add: our share of depreciation in
unconsolidated joint ventures 84 319 716 1,277
Add: amortization of capitalized leasing
expenses 13 47 43 101
Deduct: net gain on sale of real estate (3,660) (684) (3,660) (1,905)
Deduct: our share of net gain on sale
in unconsolidated joint venture (23,614) - (26,908) -
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Funds from operations (a) $ (840) $ 4,772 $13,707 $26,658
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Note 3 - Funds from operations per common share is summarized in the following
table:
Net income $ 2.46 $ .36 $ 3.67 $ 2.16
Add: depreciation of properties .19 .16 .71 .60
Add: our share of depreciation in
unconsolidated joint ventures .01 .03 .08 .13
Add: amortization of capitalized leasing
expenses - - - .01
Deduct: net gain on sale of real estate (.37) (.07) (.37) (.19)
Deduct: our share of net gain on sale in
unconsolidated joint venture (2.37) - (2.71) -
-------- ------- -------- -------
Funds from operations per common share (a) $ (.08) $ .48 $ 1.38 $ 2.71
======== ======= ======== =======
(a) Net of our share of the mortgage prepayment premium expense
incurred in connection with the gain on sale in unconsolidated
joint ventures of $5,300, or $.53, and $4,900, or $.49, for the
year and three months ended December 31, 2006. Includes net gain
on sale of air rights of $10,248, or $1.04, for the year ended
December 31, 2005.
(b) We believe that FFO is a useful and a standard supplemental
measure of theoperating 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 realestate 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 impacton 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.