-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qbouq2il7jdwViO5bDRVqY+Qhpp1QEgIt5MWAljBiH/bMyHPwBZVY9udRrS7zGBZ eA9Caa6RBGz9WC1ccPbynA== /in/edgar/work/20000914/0001029800-00-000010/0001029800-00-000010.txt : 20000922 0001029800-00-000010.hdr.sgml : 20000922 ACCESSION NUMBER: 0001029800-00-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000731 FILED AS OF DATE: 20000914 FILER: COMPANY DATA: COMPANY CONFORMED NAME: URSTADT BIDDLE PROPERTIES INC CENTRAL INDEX KEY: 0001029800 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 042458042 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12803 FILM NUMBER: 722715 BUSINESS ADDRESS: STREET 1: C/O HRE PROPERTIES INC STREET 2: 321 RAILROAD AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2038638200 MAIL ADDRESS: STREET 1: 321 RAILROAD AVENUE CITY: GREENWICH FORMER COMPANY: FORMER CONFORMED NAME: HRE PROPERTIES INC DATE OF NAME CHANGE: 19961230 10-Q 1 0001.txt FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Quarterly Report under Section 13 or 15(d) of The Securities Exchange Act of 1934 For Quarter Ended July 31,2000 Commission File Number 1-12803 ------------ ------- URSTADT BIDDLE PROPERTIES INC. (Exact Name of Registrant as Specified in Charter) MARYLAND 04-2458042 - -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 321 Railroad Avenue, Greenwich, CT 06830 - ----------------------------------- -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 863-8200 The number of shares of Registrant's Common Stock and Class A Common Stock outstanding as of the close of period covered by this report were: 5,517,007 Common Shares, par value $.01 per share and 5,217,480 Class A Common Shares, par value $.01 per share 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 THE SEC FORM 10-Q, FILED HEREWITH, CONTAINS 16 PAGES, NUMBERED CONSECUTIVELY FROM 1 TO 16 INCLUSIVE, OF WHICH THIS PAGE IS 1. 1 INDEX URSTADT BIDDLE PROPERTIES INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets--July 31,2000 and October 31, 1999. Consolidated Statements of Income--Three months ended July 31, 2000 and 1999; Nine months ended July 31,2000 and 1999. Consolidated Statements of Cash Flows--Nine months ended July 31, 2000 and 1999. Consolidated Statements of Stockholders' Equity--Nine months ended July 31, 2000 and 1999. Notes to Consolidated Financial Statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 3. Quantitative and Qualitative Disclosures About Market Risk. PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 6. Exhibits and Reports on Form 8-K SIGNATURES 2 URSTADT BIDDLE PROPERTIES INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
ASSETS July 31, October 31, -------- ----------- 2000 1999 ---- ---- (Unaudited) Real Estate Investments: Properties owned-- at cost, net of accumulated depreciation $144,031 $144,522 Properties available for sale - at cost, net of accumulated depreciation and recoveries 12,525 16,966 Investment in unconsolidated joint venture 9,279 9,889 Mortgage notes receivable 2,399 2,500 ----- ----- 168,234 173,877 Cash and cash equivalents 4,053 2,758 Interest and rent receivable 3,663 3,370 Deferred charges, net of accumulated amortization 2,653 2,418 Other assets 2,183 1,351 ----- ----- $180,786 $183,774 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Bank loans $ -- $ 2,000 Mortgage notes payable 52,101 51,263 Accounts payable and accrued expenses 1,559 1,907 Deferred officers' compensation 136 155 Other liabilities 1,905 1,810 ----- ----- 55,701 57,135 ------ ------ Minority Interests 5,140 5,140 ----- ----- Preferred Stock, par value $.01 per share; 20,000,000 shares authorized: 8.99% Series B Senior Cumulative Preferred stock (liquidation preference of $100 per share); 350,000 shares issued and outstanding in 2000 and 1999 33,462 33,462 ------ ------ Stockholders' Equity: Excess stock, par value $.01 per share; 10,000,000 shares authorized; none issued and outstanding - - Common stock, par value $.01 per share; 30,000,000 shares authorized; 5,517,007 and 5,531,845 outstanding shares in 2000 and 1999, respectively 55 55 Class A Common stock, par value $.01 per share; 40,000,000 shares authorized; 5,217,480 and 5,184,039 outstanding shares in 2000 and 1999, respectively 52 52 Additional paid in capital 121,124 120,964 Cumulative distributions in excess of net income (32,604) (31,127) Unamortized restricted stock compensation and notes receivable from officers/stockholders (2,144) (1,907) ------- ------- 86,483 88,037 ------ ------ $180,786 $183,774 ======= =======
The accompanying notes to consolidated financial statements are an integral part of these balance sheets. 3 URSTADT BIDDLE PROPERTIES INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share data)
Nine Months Ended Three Months Ended July 31 July 31 --------------------------- ------------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Revenues: Operating leases $22,455 $21,026 $7,353 $7,016 Financing leases 86 185 20 53 Interest and other 519 414 222 134 Equity in income of unconsolidated joint venture 223 225 11 63 ----- ------ ----- ----- 23,283 21,850 7,606 7,266 ------ ------ ----- ----- Operating Expenses: Property expenses 7,548 6,768 2,554 2,270 Interest 3,183 2,809 1,062 989 Depreciation and amortization 4,569 4,369 1,491 1,512 General and administrative expenses 1,921 1,872 541 541 Directors' fees and expenses 125 137 34 34 ----- ----- ----- ----- 17,346 15,955 5,682 5,346 ------ ------ ----- ----- Operating Income before Minority Interests 5,937 5,895 1,924 1,920 Minority Interests in Results of Consolidated Joint Ventures 338 303 113 111 --- --- --- --- Operating Income 5,599 5,592 1,811 1,809 Gains on Sales of Real Estate Investments 1,067 0 0 0 ----- ------ ------- ------ Net Income 6,666 5,592 1,811 1,809 Preferred Stock Dividends 2,360 2,360 787 787 ----- ----- --- --- Net Income Applicable to Common and Class A Common Stockholders $4,306 $3,232 $1,024 $1,022 ====== ====== ====== ====== Basic Earnings per Share: Common $.39 $.30 $.09 $.09 ==== ==== ==== ==== Class A Common $.44 $.32 $.10 $.11 ==== ==== ==== ==== Weighted Average Number of Shares Outstanding: Common 5,342 5,184 5,326 5,387 ===== ===== ===== ===== Class A Common 5,054 5,160 5,028 5,028 ===== ===== ===== ===== Diluted Earnings Per Share: Common $.39 $.30 $.09 $.09 ==== ==== ==== ==== Class A Common $.43 $.32 $.10 $.10 ==== ==== ==== ==== Weighted Average Number of Shares Outstanding: Common and Common Equivalent 5,416 5,255 5,393 5,469 ===== ===== ===== ===== Class A Common and Class A Common Equivalent 5,519 5,544 5,485 5,513 ===== ===== ===== =====
The accompanying notes to consolidated financial statements are an integral part of these statements. 4 URSTADT BIDDLE PROPERTIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
Nine Months Ended July 31, 2000 1999 ---- ---- Operating Activities: Net income $6,666 $5,592 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,569 4,369 Compensation expense relating to restricted stock 465 360 Recovery of investment in properties owned subject to financing leases 1,024 925 Equity in income of unconsolidated joint venture (223) (225) Gains on sales of real estate investments (1,067) 0 (Increase) in interest and rent receivable (293) (128) (Decrease) increase in accounts payable and accrued expenses (348) 166 (Increase) in other assets and other liabilities, net (679) (1,061) ----- ------- Net Cash Provided by Operating Activities 10,114 9,998 ------ ----- Investing Activities: Acquisitions of properties 0 (4,592) Deposits on acquisitions (100) (450) Improvements to properties and deferred charges (3,728) (2,178) Investment in unconsolidated joint venture (366) (510) Distributions received from unconsolidated joint venture 1,200 600 Payments received on mortgage notes receivable 101 79 Net proceed from sales of properties 3,921 0 Miscellaneous 0 339 ----- ----- Net Cash Provided by (Used in) Investing Activities 1,028 (6,712) ----- ------- Financing Activities: Sales of additional Common and Class A Common shares 1,387 2,160 Payments on mortgage notes payable and bank loans (7,662) (14,878) Proceeds from mortgage notes payable and bank loans 6,500 17,000 Dividends paid - Common and Class A Common shares (5,783) (5,604) Dividends paid - Preferred Stock (2,360) (2,360) Purchases of Common and Class A Common shares (1,929) (534) ------- ----- Net Cash Used in Financing Activities (9,847) (4,216) ------- ------- Net Increase (Decrease) In Cash and Cash Equivalents 1,295 (930) Cash and Cash Equivalents at Beginning of Period 2,758 3,900 ----- ----- Cash and Cash Equivalents at End of Period $4,053 $2,970 ====== ======
The accompanying notes to consolidated financial statements are an integral part of these statements. 5 URSTADT BIDDLE PROPERTIES INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (In thousands, except shares and per share data)
Unamortized Common Stock Class A Common Stock Restricted ------------ -------------------- (Cumulative Stock Outstanding Outstanding Additional Distributions Compensation Number of Par Number of Par Paid In In Excess of and Notes Shares Value Shares Value Capital Net Income) Receivable Total ------ ----- ------ ----- ------- ----------- ---------- ----- Balances - October 31, 1998 5,221,602 $52 5,193,650 $52 $118,558 $(29,699) $(1,634) $87,329 Net Income Applicable to Common and Class A Common stockholders - - - - - 3,232 - 3,232 Cash dividends paid : Common Stock ($.51 per share) - - - - - (2,586) - (2,586) Class A Common Stock ($.57 per share) - - - - - (3,018) - (3,018) Deemed repurchase of Class A Common Stock and reissuance of Common Stock 272,727 - (272,727) - - - - - Sale of additional shares 32,000 - 212,000 2 1,943 - - 1,945 Sale of additional shares under dividend reinvestment plan 12,988 - 13,615 - 215 - - 215 Shares issued under restricted stock plan 46,500 1 46,500 1 759 - (761) - Amortization of restricted stock compensation - - - - - - 360 360 Purchases of Common and Class A Common shares (52,300) (1) (14,000) - (533) - - (534) -------- --- -------- --- ----- --------- -------- ------- Balances - July 31,1999 5,533,517 $52 5,179,038 $55 $120,942 $(32,071) $(2,035) $86,943 ========= === ========= === ======== ========= ======== ======= Balances - October 31, 1999 5,531,845 $55 5,184,039 $52 $120,964 $(31,127) $(1,907) $88,037 Net Income Applicable to Common and Class A Common stockholders - - - - - 4,306 - 4,306 Cash dividends paid : Common Stock ($.525 per share) - - - - - (2,818) - (2,818) Class A Common Stock ($.585 per share) - - - - - (2,965) - (2,965) Sale of additional shares 29,400 - 123,400 1 1,159 - - 1,160 Sale of additional shares under dividend reinvestment plan 15,987 - 16,266 - 227 - - 227 Shares issued under restricted stock plan 48,375 1 48,375 1 700 - (702) - Amortization of restricted stock Compensation - - - - - - 465 465 Purchases of Common and Class A Common Shares (108,600) (1) (154,600) (2) (1,926) - - (1,929) --------- --- --------- --- ------- --------- -------- ------- Balances - July 31, 2000 5,517,007 $55 5,217,480 $52 $121,124 $(32,604) $(2,144) $86,483 ========= === ========= === ======== ========= ======== =======
The accompanying notes to consolidated financial statements are an integral part of these statements. 6 URSTADT BIDDLE PROPERTIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JULY 31, 2000 Business Urstadt Biddle Properties Inc., (the "Company") is a Maryland corporation that has qualified as a real estate investment trust (REIT) under the Internal Revenue Code, as amended. The Company is engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers in the northeastern part of the United States. Other assets include office and retail buildings and industrial properties. The Company's major tenants include supermarket chains and other retailers who sell basic necessities. As of July 31, 2000, the Company owned 23 properties containing a total of 3.1 million gross leasable square feet. Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and joint ventures in which the Company has the ability to control the affairs of the venture. All significant intercompany transactions and balances have been eliminated. The Company's investment in an unconsolidated joint venture in which it does not exercise control is accounted for by the equity method of accounting. The financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the three- and nine-month periods ended July 31, 2000 are not necessarily indicative of the results that may be expected for the year ending October 31, 2000. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended October 31, 1999. The preparation of financial statements requires management to make use of estimates and assumptions that affect amounts reported in the financial statements as well as certain disclosures. Actual results could differ from those estimates. Earnings Per Share Basic EPS excludes the impact of dilutive shares and is computed by dividing net income applicable to Common and Class A Common stockholders by the weighted number of Common shares and Class A Common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue Common shares or Class A Common shares were exercised or converted into Common shares or Class A Common shares and then shared in the earnings of the Company. Since the cash dividends declared on the Company's Class A Common stock are higher than the dividends declared on the Common Stock, basic and diluted EPS have been calculated using the "two-class" method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to the weighted average of the dividends declared, outstanding shares per class and participation rights in undistributed earnings. 7 The following table sets forth the reconciliation between basic and diluted EPS (in thousands):
Nine Months Three Months July 31, July 31, 2000 1999 2000 1999 ---- ---- ---- ---- Numerator Net income applicable to Common stockholders - basic $2,099 $1,573 $499 $500 Effect of dilutive securities: Operating partnership units 14 28 13 12 ------ ------ ---- ---- Net income applicable to Common Stockholders - diluted $2,113 $1,601 $512 $512 ====== ====== ==== ==== Denominator Denominator for basic EPS-weighted average Common shares 5,342 5,184 5,326 5,387 Effect of dilutive securities: Stock options and awards 74 71 67 82 ---- ----- ---- ----- Denominator for diluted EPS - weighted average Common equivalent shares 5,416 5,255 5,393 5,469 ===== ===== ===== ===== Numerator Net income applicable to Class A Common stockholders - basic $2,207 $1,659 $ 525 $522 Effect of dilutive securities: Operating partnership units 192 145 55 56 ----- ----- ---- ---- Net income applicable to Class A Common stockholders - diluted $2,399 $1,804 $580 $578 ====== ====== ==== ==== Denominator Denominator for basic EPS - weighted average Class A Common shares 5,054 5,160 5,028 5,028 Effect of dilutive securities: Stock options and awards 82 92 74 102 Operating partnership units 383 292 383 383 ----- ----- ----- ---- Denominator for diluted EPS - weighted average Class A Common equivalent shares 5,519 5,544 5,485 5,513 ===== ===== ===== =====
The weighted average Common equivalent shares and Class A Common equivalent shares for the nine months and three months ended July 31, 2000 and 1999 each exclude 54,553 shares. These shares were not included in the calculation of diluted EPS because the effect would be anti-dilutive. Real Estate Investments In fiscal 2000, the Company sold two of its non-core properties comprising 146,875 square feet of gross leaseable area (GLA) for aggregate proceeds of approximately $4,000,000 and realized net gains on the sales of the properties of $1,067,000. Mortgage Notes Payable and Unsecured Line of Credit In February 2000, the Company closed a $6.5 million non-recourse first mortgage loan secured by one of its retail properties having a net book value of $9 million at July 31, 2000. The mortgage loan has a term of 10 years and bears interest at a fixed rate of 7.78%. Proceeds from the mortgage loan were used to repay a $4.1 million mortgage note and to repay outstanding short-term bank loans. In March 2000, the Company entered into an unsecured line of credit arrangement for $10 million with a major commercial bank. The line of credit expires in 2001 and is available, among other things, to acquire real estate, refinance indebtedness and for working capital needs. Extensions of credit under the arrangement are at the bank's discretion and subject to the bank's satisfaction of certain conditions. Outstanding borrowings bear interest at the prime rate plus 1/2% or LIBOR plus 2 1/2%. The Company pays an annual fee of 1/4% on unused amounts. There were no borrowings outstanding under this line of credit at July 31, 2000. Stockholders' Equity On January 7, 2000, the Company sold 29,400 Common Shares and 123,400 Class A Common shares of the Company for aggregate proceeds of $1.16 million in a private placement which included all of the senior officers and directors of the Company. 8 The Company has a Restricted Stock Plan (Plan) which provides for the grant of restricted stock awards to key employees and directors of the Company. The Plan, as amended, allows for restricted stock awards of up to 350,000 shares of Class A Common stock and Common stock. During the nine months ended July 31, 2000, the Company awarded 48,375 Common shares and 48,375 Class A Common shares (46,500 Common shares and 46,500 Class A Common shares in 1999) to participants in the Plan as an incentive for future services. The shares vest generally after five years. Dividends on vested and non-vested shares are paid as declared. The market value of shares awarded has been recorded as unamortized restricted stock compensation and is shown as a separate component of stockholder's equity. Unamortized restricted stock compensation is being amortized to expense over the vesting periods. The Company's Board of Directors authorized a program to purchase up to one million of the Company's Class A Common and Common shares periodically. During the nine months ended July 31, 2000, the Company purchased 108,600 Common shares and 154,600 Class A Common shares at an aggregate cost of $1,929,000 under this program. In June, 2000, an officer of the Company was awarded stock options to purchase 593,000 shares of Common Stock or Class A Common Stock or a combination of both classes of such stock of the Company as shall total the number of shares subject to the options. The exercise price of the options granted was equal to the fair market value of the Common and Class A Common shares on the date of grant. Options to purchase 294,500 shares of Common Stock and Class A Common Stock previously granted to another officer of the Company were cancelled. Segment Reporting For financial reporting purposes, the Company has grouped its real estate investments into two segments: equity investments and mortgage loans. Equity investments are managed separately from mortgage loans as they require a different operating strategy and management approach. The Company assesses and measures operating results for each of its segments, based on net operating income. For equity investments, net operating income is calculated as rental revenues of the property less its rental expenses (such as common area expenses, property taxes, insurance, etc.) and, for mortgage loans, net operating income consists of interest income less direct expenses, if any. The revenues, net operating income and assets for each of the reportable segments are summarized in the following tables for the nine month periods ended July 31, 2000 and 1999. Non-segment assets include cash and cash equivalents, interest receivable and other assets. The non-segment revenues consist principally of interest income on temporary investments. 9
Equity Mortgage Non Three Months Ending July 31 Investments Loans Segment Total - --------------------------- ----------- ----- ------- ----- 2000 Total Revenues $ 7,402 $ 119 $ 85 $ 7,606 ========= ======== ======= ======== Net Operating Income $ 4,735 $ 119 $ 85 $ 4,939 ========= ======== ======= ======== Total Assets $ 175,752 $ 2,399 $ 2,635 $ 180,786 ========= ========= ======== ========= 1999 Total Revenues $ 7,150 $ 80 $ 36 $ 7,266 ========= ======= ======= ======== Net Operating Income $ 4,769 $ 80 $ 36 $ 4,885 ========= ======= ======= ======== Total Assets $ 171,666 $ 2,528 $ 1,741 $ 175,935 ========= ======== ======= =========
Nine Months Ending July 31, 2000 Total Revenues $ 22,782 $ 299 $ 202 $ 23,283 ======== ======= ====== ======== Net Operating Income $ 14,896 $ 299 $ 202 $ 15,397 ======== ======= ====== ======== Total Assets $ 175,752 $ 2,399 $ 2,635 $ 180,786 ======== ======== ======= ========= 1999 Total Revenues $21,454 $ 241 $ 155 $ 21,850 ====== ======== ======= ======== Net Operating Income $ 14,383 $ 241 $ 155 $ 14,779 ======== ======== ======= ======== Total Assets $ 171,666 $ 2,528 $ 1,741 $ 175,935 ========== ========= ======= =========
The reconciliation to net income for the combined reportable segments and for the Company is as follows:
Nine Months Three Months Ended July 31, Ended July 31, 2000 1999 2000 1999 ----- ----- ----- ---- Net operating income from reportable segments $ 15,397 $ 14,779 $ 4,939 $ 4,885 --------- --------- --------- -------- Additions: Gain on sale of real estate 1,067 - - - ------ ---- ---- ---- Total Additions 1,067 - - - ------ ---- ---- ---- Deductions: General and administrative expenses 2,046 2,009 575 575 Interest expense 3,183 2,809 1,062 989 Depreciation and amortization 4,569 4,369 1,491 1,512 ------ ------ ------ ----- Total Deductions 9,798 9,187 3,128 3,076 ------ ------ ------ ----- Net Income 6,666 5,592 1,811 1,809 Preferred Stock Dividends (2,360) (2,360) (787) (787) ------- ------ ----- ----- Net Income applicable to Common and Class A Common Stockholders $4,306 $ 3,232 $ 1,024 $ 1,022 ========= ======== ========= ========
10 Commitments and Contingencies In April 2000, Countryside Square Limited Partnership, an unconsolidated joint venture which owns the Countryside Square Shopping Center in Clearwater, Florida, contracted to sell the shopping center for $17.2 million. In July 2000, the contract expired and negotiations for the sale of the property were terminated. In July 2000, the Company contracted for the purchase of an office building located in Greenwich, Connecticut at a purchase price of $1,650,000. The Company has entered into an option agreement which permits the option-holder to purchase land owned by the Company at a purchase price of $1,200,000. The option agreement expires in December 2000. Subsequent Event On August 29, 2000, the Company sold 75,000 shares of Class A Common Stock for $562,500 in a private placement with two individuals. 11 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Company's liquidity and capital resources include its cash and cash equivalents, proceeds from bank borrowings and long-term mortgage debt, capital financings and sales of real estate investments. The Company expects to meet its short-term liquidity requirements primarily by generating net cash from the operations of its properties. Payments of expenses related to real estate operations, debt service, management and professional fees, and dividend requirements place demands on the Company's short-term liquidity. The Company believes that its net cash provided by operations will be sufficient to fund its short-term liquidity needs in the near term. The Company expects to meet its long-term liquidity requirements such as property acquisitions, debt maturities and capital improvements through long-term secured indebtedness and/or the issuance of additional equity securities. At July 31, 2000, the Company had cash and cash equivalents of $4.1 million compared to $2.8 million at October 31, 1999. The Company has a $20 million secured revolving credit facility with a bank which expires in 2005 and a $10 million unsecured line of credit which expires in 2001. The credit lines are available to finance the acquisition, management or development of commercial real estate, refinance indebtedness and for working capital purposes. Extensions of credit under the unsecured credit line are at the bank's discretion and subject to the bank's satisfaction of certain conditions. There were no borrowings outstanding under the unsecured credit line at July 31, 2000. Long-term debt consists of mortgage notes payable totaling $40.2 million and outstanding borrowings of $11.9 million under the secured revolving credit facility. In February 2000, the Company obtained a mortgage note payable in the amount of $6.5 million secured by one of its core retail properties having a net book value of $9 million. Proceeds from the financing were used to repay a $4.1 million mortgage note payable and outstanding short-term bank loans. Earlier in the year, the Company completed the sale of approximately $1,160,000 of additional Common and Class A Common shares in a private placement transaction that included all of the Company's directors and senior officers. The Company's Board of Directors has authorized the purchase of up to one million of the Company's Common and Class A Common shares periodically. The repurchase program is subject to termination at any time for, among other reasons, prevailing market prices, availability of cash resources and alternative investment opportunities. In the first nine months of fiscal 2000, the Company repurchased 108,600 Common shares and 154,600 Class A Common shares at an aggregate cost of $1,929,000 from available cash. The Company expects to fund the cost of future share purchases, if any, from available cash. The Company expects to make real estate investments from time to time and invests in its existing properties in connection with its leasing activities and property improvement requirements. As of July 31, 2000 the Company had contracted to purchase an office building property at a cost of $1.7 million. As of July 31, 2000, the Company was committed to spend $5 million in connection with certain new tenant lease obligations. For the first nine months of fiscal 2000, the Company spent $3.7 million from available cash for capital improvements and leasing costs. The Board of Directors has expanded and refined the strategic objectives of the Company to refocus its real estate portfolio into one of self-managed retail properties located in the Northeast and authorized a plan to sell the non-core properties of the Company in the normal course of business over a period of several years. The non-core properties comprise all of the Company's distribution and service facilities, and certain of its office and retail properties and undeveloped land located outside of the Northeast region of the United States. In fiscal 2000, the Company sold two non-core properties totaling 146,875 square feet of gross leasable space for approximately $4 million and realized gains on the sales of these properties totaling $1.1 million. 12 Funds from Operations The Company considers Funds From Operations (FFO) to be an appropriate supplemental financial measure of an equity REIT's operating performance since such measure does not recognize depreciation and amortization of real estate assets as reductions of income from operations. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (computed in accordance with generally accepted accounting principles (GAAP)) excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. The Company considers recoveries of investments in properties subject to finance leases to be analogous to amortization for purposes of calculating FFO. FFO does not represent cash flows from operations as defined by GAAP and should not be considered a substitute for net income as an indicator of the Company's operating performance, or for cash flows as a measure of liquidity or of its dividend paying capacity. Furthermore, FFO as disclosed by other REITs may not be comparable to the Company's calculation of FFO. Effective January 1, 2000, NAREIT clarified the definition of FFO to include non-recurring events except for those that are treated as extraordinary items under GAAP. The table below provides a reconciliation of net income in accordance with GAAP to FFO as calculated under the current NAREIT guidelines for the nine month periods ended July 31, 2000 and 1999 (amounts in thousands):
Nine months ended July 31, 2000 1999 ---- ---- Net Income Applicable to Common and Class A Common Stockholders $4,306 $3,232 Plus: Real property depreciation, amortization of tenant improvements and amortization of lease acquisition costs and recoveries of investments in properties subject to finance leases 5,210 4,849 Adjustments for unconsolidated joint venture 370 490 Less: Gains on sales of real estate investments (1,067) - ------- ------ Funds from Operations $8,819 $8,571 ====== ======
RESULTS OF OPERATIONS Revenues Revenues from operating leases increased $1,429,000 or 6.8% to $22,455,000 in the first nine months of fiscal 2000 as compared with $21,026,000 for the corresponding period in 1999. The increase in operating lease revenues results principally from additional rental income earned from properties acquired in fiscal 1999. The incremental increase in revenues derived from properties acquired in fiscal 1999 amounted to $1,675,000 in the nine months ended July 31, 2000. In the nine-month and three-month periods ended July 31,2000, operating lease revenue for properties owned during both fiscal 2000 and 1999 decreased by 1.9% and 4.6%, respectively, when compared to the same periods in the year ago period. The decreases result principally from the effect of the loss of rental income from three tenants at one of the Company's shopping centers, occupying a total of 32,000 square feet of gross leasable area (GLA), that filed for bankruptcy protection and vacated their respective premises in the first quarter of fiscal 2000. The Company has signed leases with new tenants to re-lease the vacant space. 13 The Company's core properties, consisting of 1.7 million square feet of GLA, were 96% leased at July 31, 2000, an increase of 1% from the end of the last fiscal quarter. The Company leased or renewed 262,000 square feet of GLA during the first nine months of fiscal 2000 compared to 228,000 square feet of GLA in the comparable nine month period a year ago. Expenses Total expenses amounted to $17,346,000 in the first nine months of fiscal 2000 compared to $15,955,000 for the same period last year. The largest expense category is property expenses of the real estate operating properties. The increases in property expenses in the nine-month and three-month periods ended July 31, 2000 result principally from the additional property expenses for properties acquired during fiscal 1999. The incremental increase in property expenses attributable to new properties in the nine-month and three-month periods ended July 31, 2000, was $609,000 and $136,000 respectively. Property expenses for all other properties in the nine-month and three-month periods ended July 31, 2000 increased by 6.3% and 5.8%, respectively compared to the same periods in fiscal 1999. The increases were principally attributable to higher repair and maintenance expenses and real estate taxes at certain of the Company's core properties. Interest expense increased from additional borrowings utilized to complete the acquisition of properties in fiscal 1999 and $25.4 million in new first mortgage loans financed last year. Depreciation and amortization expense increased principally from the additional depreciation expenses on $23 million of properties acquired during fiscal 1999. 14 Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to interest rate risk primarily through its borrowing activities. There is inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Company's future financing requirements. As of July 31, 2000, the Company had approximately $11.9 million of variable rate debt outstanding under its secured line of credit agreement. The interest rate risk of such debt can be mitigated by electing a fixed rate interest option at any time prior to the last year of the agreement as provided for in the agreement. The Company believes the interest rate risk represented by variable-rate debt is not material to the Company or its overall capitalization. The Company has not, and does not plan to, enter into any derivative financial instruments for trading or speculative purposes. As of July 31, 2000 the Company had no other material exposure to market risk. 15 PART II - OTHER INFORMATION Item 1 LEGAL PROCEEDINGS The Company is not presently involved in any litigation, nor to its knowledge is any litigation threatened against the Company or its subsidiaries, that in management's option, would result in any material adverse effect on the Company's ownership, management or operation of its properties, or which is not covered by the Company's liability insurance. Item 6. Exhibits and Reports on Form 8-K Reports on Form 8-K There were no reports on Form 8-K with the Securities and Exchange Commission during the Registrant's fiscal quarter ended July 31, 2000. S I G N A T U R E S 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. URSTADT BIDDLE PROPERTIES INC.. ------------------------------- (Registrant) By /S/ Charles J. Urstadt Charles J. Urstadt Chairman and Chief Executive Officer By: /S/ James R. Moore James R. Moore Executive Vice President/ Chief Financial Officer (Principal Financial Officer Dated: September 14, 2000 and Principal Accounting Officer) EX-27 2 0002.txt FDS -- WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 0001029800 Urstadt Biddle Properties 1 US Dollars 9-mos Oct-31-2000 May-01-2000 Jul-31-2000 1 4,053,000 0 3,663,000 0 0 7,716,000 202,444,000 34,209,000 180,786,000 1,559,000 52,101,000 0 33,462,000 121,231,000 (32,604,000) 180,786,000 0 23,283,000 0 0 14,163,000 0 3,183,000 5,937,000 338,000 6,666,000 0 0 2,360,000 4,306,000 .39 .44 [EPS-BASIC] .39 [EPS-DILUTED] .43 This item consists of Real Estate Investment This item consists of Minority Interest in Consolidated Joint Venture This item consists of Preferred Stock Dividends Applicable to Common Shareholders Applicable to Class A Shareholders
-----END PRIVACY-ENHANCED MESSAGE-----