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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 April 30, 1999 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: 5,256,192
Common Shares, par value $.01 per share and 5,437,157 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 13 PAGES, NUMBERED CONSECUTIVELY
FROM 1 TO13 INCLUSIVE, OF WHICH THIS PAGE IS 1.
<PAGE>
INDEX
URSTADT BIDDLE PROPERTIES INC.
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--April 30, 1999 and October 31, 1998.
Consolidated Statements of Income--Three months ended April 30,
1999 and 1998; Six months ended April 30, 1999 and 1998
Consolidated Statements of Cash Flows--Six months ended April 30,
1999 and 1998.
Consolidated Statements of Stockholders' Equity--Six months ended
April 30, 1999 and 1998.
Notes to Consolidated Financial Statements - April 30, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
2
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
ASSETS April 30, October 31,
1999 1998
---- ----
(Unaudited)
<S> <C> <C>
Real Estate Investments:
Properties owned-- at cost, net of accumulated depreciation $135,658 $122,975
Properties available for sale - at cost, net of accumulated
depreciation and recoveries 19,304 20,350
Investment in unconsolidated joint venture 9,515 9,470
Mortgage notes receivable 2,555 2,607
----- -----
167,032 155,402
Cash and cash equivalents 1,790 3,900
Interest and rent receivable 2,740 2,445
Deferred charges, net of accumulated amortization 2,131 2,320
Other assets 2,406 972
----- ---
$176,099 $165,039
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Bank loans $ 8,000 $ 6,000
Mortgage notes payable 39,007 32,900
Accounts payable and accrued expenses 1,126 1,127
Deferred directors' fees and officers' compensation 135 646
Other liabilities 1,688 1,450
----- -----
49,956 42,123
------- ------
Minority Interests 5,163 2,125
----- -----
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 1999 and 1998 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;
5,256,192 and 5,221,602 outstanding shares in 1999 and 1998, respectively 52 52
Class A Common stock, par value $.01 per share; 40,000,000 shares authorized;
5,437,157 and 5,193,650 outstanding shares in 1999 and 1998, respectively 55 52
Additional paid in capital 120,790 118,558
Cumulative distributions in excess of net income (31,215) (29,699)
Unamortized restricted stock compensation and notes receivable
from officers/stockholders (2,164) (1,634)
------- -------
87,518 87,329
------ ------
$176,009 $165,039
======== ========
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these balance sheets.
3
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
April 30 April 30
--------------------- ---------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Operating leases $14,010 $11,236 $7,331 $5,711
Financing leases 132 177 62 89
Interest and other 280 845 130 617
Equity in income of unconsolidated joint venture 162 61 128 33
--- -- --- --
14,584 12,319 7,651 6,450
------ ------ ----- -----
Operating Expenses:
Property expenses 4,498 3,790 2,348 1,896
Interest 1,820 1,347 943 419
Depreciation and amortization 2,857 2,262 1,467 1,046
General and administrative expenses 1,331 986 717 463
Directors' fees and expenses 103 106 52 47
--- --- -- --
10,609 8,491 5,527 3,871
------ ----- ----- -----
Operating Income before Minority Interests 3,975 3,828 2,124 2,579
Minority Interests in Results of Consolidated Joint Ventures 192 70 88 70
--- -- -- --
Net Income 3,783 3,758 2,036 2,509
Preferred Stock Dividends (1,573) (988) (787) (778)
------- ----- ----- -----
Net Income Applicable to Common and Class A Common
Stockholders $2,210 $2,770 $1,249 $1,731
====== ====== ====== ======
Basic Earnings per Share:
Common $.21 $.26 $.12 $.16
==== ==== ==== ====
Class A Common $.22 $.28 $.12 $.18
==== ==== ==== ====
Weighted Average Number of Shares Outstanding:
Common 5,080 5,130 5,077 5,123
===== ===== ===== =====
Class A Common 5,228 5,130 5,281 5,123
===== ===== ===== =====
Diluted Earnings Per Share:
Common $.21 $.26 $.12 $.16
==== ==== ==== ====
Class A Common $.22 $.28 $.12 $.18
==== ==== ==== ====
Weighted Average Number of Shares Outstanding:
Common and Common Equivalent 5,133 5,298 5,200 5,291
===== ===== ===== =====
Class A Common and Class A Common Equivalent 5,539 5,298 5,747 5,291
===== ===== ===== =====
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
4
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
Months Ended April 30,
----------------------
1999 1998
---- ----
<S> <C> <C>
Operating Activities:
Net income $3,783 $3,758
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 2,857 2,262
Compensation expense relating to restricted stock 231 130
Recovery of investment in properties owned
subject to financing leases 608 564
Equity in income of unconsolidated joint venture (162) (61)
(Increase) decrease in interest and rent receivable (295) 332
(Decrease) in accounts payable and accrued expenses (1) (526)
(Increase) in other assets and other liabilities, net (1,457) (165)
------- -----
Net Cash Provided by Operating Activities 5,564 6,294
----- -----
Investing Activities:
Acquisitions of properties (4,592) (3,535)
Deposits on acquisitions (250) (300)
Improvements to properties and deferred charges (1,317) (968)
Investment in unconsolidated joint venture (383) (27)
Distributions received from unconsolidated Joint Venture 500 -
Payments received on mortgage notes receivable 52 949
Miscellaneous 345 -
--- ---
Net Cash (Used in) Investing Activities (5,645) (3,881)
------- -------
Financing Activities:
Proceeds from sale of preferred stock --- 33,462
Sales of additional Common and Class A Common shares 2,008 152
Proceeds from bank loan 2,000 -
Dividends paid on Common and Class A Common shares (3,726) (3,278)
Dividends paid on Preferred Stock (1,573) (988)
Purchases of Common and Class A Common shares (534) ---
Payments on mortgage notes payable (204) (23,614)
----- --------
Net Cash Provided by (Used in) Financing Activities (2,029) 5,734
------- -----
Net (Decrease) Increase In Cash and Cash Equivalents (2,110) 8,147
Cash and Cash Equivalents at Beginning of Period 3,900 1,922
----- -----
Cash and Cash Equivalents at End of Period $1,790 $10,069
====== =======
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
5
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
(In thousands, except shares and per share data)
<TABLE>
<CAPTION>
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
---------- ----- ------- ------ -------- ------------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances - October 31, 1997 5,167,495 $51 - $ - $117,763 $(28,530) $(994) $88,290
Net Income Applicable to
Common and Class A Common - - - - - 2,770 - 2,770
stockholders
One-for-one stock split
Effected in the form of a
Dividend of a new issue of
Class A Common Stock - - 5,226,991 52 (52) - - -
Cash dividends paid :
Common Stock ($.64 per share) - - - - - (3,278) - (3,278)
Sale of additional Common shares
Under dividend reinvestment 7,414 - - - 140 - - 140
plan
Exercise of stock options 874 - - - 12 - - 12
Common shares issued under
Restricted stock plan - net 47,750 - - - 971 - (971) -
Amortization of restricted stock
compensation - - - - - - 133 133
---------- --- --------- --- -------- ------- ------- -------
Balances - April 30, 1998 5,223,533 $51 5,226,991 $52 $118,834 $(29,038) $(1,832) $88,067
========== === ========= === ======== ======= ======= =======
Balances - October 31, 1998 5,221,602 $52 5,193,650 $52 $118,558 $(29,699) $(1,634) $87,329
Net Income Applicable to
Common and Class A Common
stockholders - - - - - 2,210 - 2,210
Cash dividends paid :
Common Stock ($.34 per share) - - - - - (1,720) - (1,720)
Class A Common Stock ($.38
Per share) - - - - - (2,006) - (2,006)
Sale of additional Common shares
and Class A Common shares 32,000 - 202,000 2 1,863 - - 1,865
Sale of additional Common shares
and Class A Common shares
under dividend reinvestment plan 8,390 - 9,007 - 143 - - 143
Common and Class A shares issued
under restricted stock plan 46,500 1 46,500 1 759 - (761) -
Amortization of restricted stock
compensation - - - - - - 231 231
Purchases of shares (52,300) (1) (14,000) - (533) - - (534)
-------- --- --------- -- ----- ------- --- -----
Balances - April 30, 1999 5,256,192 $52 5,437,157 $55 $120,790 $(31,215) $(2,164) $87,518
========= === ========= === ======== ========= ======== =======
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
6
<PAGE>
URSTADT BIDDLE PROPERTIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1999
Business
Urstadt Biddle Properties Inc., (the "Company") a real estate investment trust,
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.
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 six-month periods ended April 30, 1999
are not necessarily indicative of the results that may be expected for the year
ending October 31, 1999. 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, 1998.
Earnings Per Share
The Company has adopted the provisions of Financial Accounting Standards No. 128
- - "Earnings Per Share". Statement No. 128 replaces the presentation of primary
and fully diluted earnings per share ("EPS") pursuant to Accounting Principles
Board Opinion No. 25 with the presentation of basic and diluted EPS. 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 dividends declared and
participation rights in undistributed earnings.
7
<PAGE>
The following table sets forth the reconciliation between basic and diluted EPS
(in thousands):
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
April 30, April 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
NUMERATOR
Net income applicable to Common Stockholders - basic $1,043 $1,319 $ 589 $ 824
Effect of dilutive securities:
Operating partnership units 44 33 44 33
------ ------ ------- ------
Net income applicable to Common Stockholders - diluted $1,087 $1,352 $ 633 $ 857
====== ====== ======= ======
DENOMINATOR
Denominator for basic EPS - weighted average Common shares 5,080 5,130 5,077 5,123
Effect of dilutive securities:
Stock options and awards 52 113 68 113
Operating partnership units (a) _ 55 55 55
----- ----- ----- ------
Denominator for diluted EPS - weighted average Common equivalent shares 5,133 5,298 5,200 5,291
===== ===== ===== =====
NUMERATOR
Net income applicable to Class A Common Stockholders - basic $1,167 $1,451 $ 660 $ 907
Effect of dilutive securities:
Operating partnership units (a) 105 37 44 37
----- ----- ----- -----
Net income applicable to Class A Common Stockholders - diluted $1,272 $1,488 $ 704 $944
===== ===== ===== =====
DENOMINATOR
Denominator for basic EPS - weighted average Class A Common shares 5,228 5,130 5,281 5,123
Effect of dilutive securities:
Stock options and awards 66 113 83 113
Operating partnership units 245 55 383 55
--- ----- ----- -----
Denominator for diluted EPS - weighted average Class A Common equivalent
shares 5,539 5,298 5,747 5,291
===== ===== ===== =====
</TABLE>
(a) The Class A Common equivalent shares for the six - and three month periods
ended April 30, 1999 and the Common equivalent shares for the six month
period ended April 30, 1999 exclude 54,553 shares for operating partnership
units. These securities were not included in the calculation of diluted
earnings per share because the effect would be antidilutive.
Stockholders' Equity
On June 16, 1998, the Board of Directors declared a special stock dividend on
the Company's Common Stock consisting of one share of a newly created class of
Class A Common Stock, par value $.01 per share for each share of the Company's
Common Stock. The Class A Common Stock entitles the holder to 1/20 of one vote
per share. Each share of Common Stock and Class A Common Stock have identical
rights with respect to dividends except that each share of Class A Common Stock
will receive not less than 110% of the regular quarterly dividends paid on each
share of Common Stock. The stock dividend was paid on August 14, 1998. An amount
equal to the par value of the Class A Common shares issued was transferred from
additional paid in capital to Class A Common Stock. All references to the number
of common shares, except authorized shares, and per share amounts elsewhere in
the consolidated financial statements have been adjusted to reflect the effect
of the stock dividend for all periods presented.
During fiscal 1999, the Company sold 200,000 Class A Common shares in a private
placement with certain individual investors for net proceeds of $1.6 million.
The Company has a Restricted Stock Plan (Plan) which provides for the grant of
restricted stock awards to key employees of the Company. The Plan allows for
restricted stock awards of up to an aggregate of 250,000 Class A Common shares
or Common shares. During the six months ended April 30, 1999, the Company
awarded 46,500 Common shares and 46,500 Class A Common shares (50,250 Common
shares in 1998) to participants in the Plan as an incentive for future services.
The shares vest 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 five year vesting period.
In fiscal 1996, 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 six months ended April
8
<PAGE>
30, 1999, the Company purchased 52,300 Common shares and 14,000 Class A Common
shares at an aggregate cost of $534,000.
Real Estate Investments
On December 11, 1998, the Company acquired the general partner interest in a
limited partnership which owns the Arcadian Shopping Center in Briarcliff, New
York. The limited partners contributed the property subject to a $6.3 million
first mortgage and are entitled to preferential distributions of cash flow from
the property. The limited partners have a right to exchange a portion of their
interests for cash and may after a specified period put the remainder of their
limited partnership interests to the Company for either cash or units of Class A
Common stock of the Company. On January 9, 1999, two limited partners exchanged
their units for cash of approximately $2,025,000. The Company has the option to
purchase the limited partners interests after a specified period for cash. The
partnership agreement, among other things, places certain restrictions on the
sale or refinancing of the property without the limited partners' consent for a
specified period; thereafter the partnership agreement imposes no such
restrictions. The limited partners interest in the partnership is reflected in
the accompanying consolidated financial statements as minority interest.
The contribution of property by the limited partners to the partnership and the
assumption of the first mortgage by the partnership represent noncash investing
and financing activities and therefore are not included in the accompanying
consolidated statement of cash flows.
In February 1999, the Company purchased a 28,000 square foot retail property
including four acres of land adjacent to the Arcadian Shopping Center for a
purchase price of $1,900,000, all cash.
Commitments
The Company has contracted to purchase two retail properties for an aggregate
purchase cost of $4.5 million. The Company has contracted to sell one of its
non-core real estate assets having a net book value of $1.4 million for
$2,825,000, all cash. The sale is expected to close during the Company's third
quarter.
Mortgage Notes Payable and Lines of Credit
On May 14, 1999 the Company closed a $15 million non recourse first mortgage
loan secured by one of its retail properties having a net book value of $21.4
million. The mortgage loan has a term of 10 years and bear interest at a fixed
rate of 7.375%, with 25 year amortization. Proceeds from the mortgage loan were
used to repay the Company's outstanding bank loans of $8 million and to reduce
the outstanding amount on its secured revolving credit facility by $7 million.
9
<PAGE>
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 April 30, 1999, the Company had cash and cash equivalents of $1.8 million
compared to $3.9 million at October 31 1998. The Company also has $25 million in
unsecured short-term lines of credit with two major commercial banks and a $20
million secured revolving credit facility with one of the commercial banks. The
credit lines and revolving credit facility are available to finance the
acquisition, management or development of commercial real estate and for working
capital purposes. The short-term credit lines expire at various periods in 1999
and outstanding borrowings, if any, may be repaid from proceeds of long-term
debt financings or sales of properties. At April 30, 1999, the Company had
outstanding borrowings of $8 million under the short-term lines of credit. It is
the Company's intent to renew the short-term credit lines as they expire in
1999. The Company's $20 million secured revolving credit facility expires in
2005 and borrowings under the secured revolving credit facility can be repaid
and borrowed again during the term of the facility. At April 30, 1999, long-term
debt consists of mortgage notes payable totaling $19.6 million and outstanding
borrowings of $19.4 million under the secured revolving credit facility. In May
1999, the Company closed a $15 million non-recourse mortgage on one of its core
retail properties having a net book amount of $21.4 million. Proceeds from the
mortgage loan were used to repay the outstanding borrowings of $8 million under
the short-term lines of credit and $7 million under the secured revolving credit
facility.
In June 1998, the Board of Directors declared a special stock dividend on the
Company's Common Shares consisting of one share of a newly created class of
Class A Common Shares. The establishment and issuance of the Class A Common
Shares is intended to provide the Company with the flexibility to raise equity
capital to finance acquisition of properties and further the growth of the
Company. Such securities may be utilized as consideration in connection with the
acquisition of properties by the Company and for employee compensation purposes,
in each case without diluting the voting power of the Company's existing
stockholders. The Company utilized securities in this manner to facilitate a
recent shopping center acquisition in Briarcliff, New York (See below). During
fiscal 1999, the Company also issued a total of 200,000 shares of Class A Common
Stock for an aggregate consideration of $1.6 million pursuant to a stock
purchase agreement with certain private investors.
The Company expects to make real estate investments periodically. During fiscal
1999, the Company acquired the Arcadian Shopping Center in Briarcliff, New York.
The property was acquired subject to a $6.3 million non-recourse first mortgage
on the property and was funded through the issuance of 637,741 operating
partnership units (OPU's) which are exchangeable into an equivalent number of
Class A Common Shares after a specified period or cash. On January 9, 1999, two
limited partners exchanged a total of 255,096 OPU's for cash of approximately
$2,025,000. The Company has contracted to purchase two retail properties
containing a total of 45,000 square feet of leasable space for $4,500,000. The
Company expects to fund this purchase from funds available under its existing
bank credit lines or proceeds from sales of assets. The Company also invests in
its properties and, during fiscal 1999, spent approximately $1,317,000 on its
properties for capital improvement and leasing costs.
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 over the next two to
three years. The repurchase program is subject to termination at any
10
<PAGE>
time for, among other reasons, prevailing market prices, availability of cash
resources and alternative investment opportunities. In fiscal 1999, the Company
repurchased 52,300 Common shares and 14,000 Class A Common shares for an
aggregate cost of $534,000 from available cash. The Company expects to fund the
cost of future share purchases, if any, from available cash.
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) plus depreciation and amortization of assets uniquely
significant to the real estate industry, excluding gains or losses on debt
restructuring and sales of property, the elimination of significant
non-recurring charges and credits and after adjustments for unconsolidated 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.
Furthermore, FFO as disclosed by other REITs may not be comparable to the
Company's calculation of FFO. The table below provides a reconciliation of net
income in accordance with GAAP to FFO as calculated under the NAREIT guidelines
for the six month periods ended April 30, 1999 and 1998 (amounts in thousands):
<TABLE>
<CAPTION>
Six months ended April 30
1999 1998
---- ----
<S> <C> <C>
Net Income Applicable to Common and Class A Common Stockholders $2,210 $2,770
Plus: Real property depreciation, amortization of tenant improvements and
amortization of lease acquisition costs and recoveries of investments
in properties subject to finance leases 3,190 2,615
Adjustments for unconsolidated joint venture 320 359
Less:Non-recurring items - (403)
----- -----
FUNDS FROM OPERATIONS $5,720 $5,341
====== ======
</TABLE>
RESULTS OF OPERATIONS
Revenues
Operating lease revenue for the three-and six-month periods ended April 30, 1999
increased 28.4% and 24.7% from the comparable periods in fiscal 1998. The
increases in operating lease revenues results principally from additional rent
income earned from the addition of four properties acquired during fiscal 1999
and 1998. Such new properties increased operating rents by $1,398,000 and
$2,653,000 in the three-and six-months ended April 30, 1999, respectively.
Operating lease revenues for properties owned in both fiscal 1999 and 1998 were
unchanged in the first half of fiscal 1999 when compared to the same period a
year ago.
The company's properties were 95% leased at April 30, 1999, unchanged from the
end of the last fiscal year.
11
<PAGE>
Interest income decreased in the three-and six-month periods ended April 30,
1999. In fiscal 1998, the net proceeds from a $35 million preferred stock issue
sold in january, 1998 were invested in short-term cash investments until such
time as the proceeds were used to make real estate investments and repay
outstanding mortgage indebtedness later in the year. Also, the Company received
additional interest of $278,000 from the repayment of a mortgage note receivable
in the face amount of $1,176,000 with a net carrying amount of $898,000.
Expenses
Total expenses amounted to $10,609,000 in the first half of fiscal 1999 compared
to $8,491,000 in the same period last year. The largest expense category is
property expenses of the real estate operating properties. The increase in
property expenses in fiscal 1999 reflect the effect of the acquisition of four
properties during fiscal 1999 and 1998. Property expenses related to properties
acquired increased operating expenses by $411,000 and $747,000 in the three- and
six-month periods ended April 30, 1999, respectively. Property expenses for
properties owned during both fiscal 1999 and 1998 increased by less than 2%
compared to the same period in fiscal 1998.
Interest expense increased from borrowings on the Company's short-term bank and
secured revolving credit facilities to complete the acquisition of certain
properties in fiscal 1998 and 1999. In addition, the Company acquired the
Arcadian Shopping Center subject to a first mortgage of $6.3 million with
interest at an annual rate of 8.25%.
Depreciation and amortization expense increased principally from the acquisition
of the four properties referred to above.
General and administrative expenses increased in fiscal 1999 from higher legal
and other professional costs and compensation expense related to restricted
stock issued to key employees of the Company.
Impact of Year 2000
The Company has assessed the Year 2000 issue to determine the impact, if any, on
its operations. The Company has determined that it will not be required to
significantly modify or replace its existing hardware or software programs so
that its business systems are able to process information beyond 1999.
The Company has also completed a survey of all of its key tenants, vendors,
banks and other parties to determine the extent to which the Company is
vulnerable in the event those parties fail to remediate their own Year 2000
issue. The estimated costs attributable to the purchase of new computer
equipment and software, third party modification plans, consulting fees, etc.
are not expected to have a material effect on the Company's results of
operations in fiscal 1999.
12
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matter to a Vote of Security Holders.
(a) The date of the Annual meeting was March 10, 1999
(b) Stockholders voted on the following proposal:
To consider and vote upon a shareholder proposal to reverse the
creation of the Class A Common Stock
390,049 combined Common and Class A Common shares were voted in
the affirmative; 3,134,210 combined Common and Class A Common
shares were voted against; and 171,996 combined Common and Class
A Common shares abstained in vote.
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the
three month period ended April 30, 1999.
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: June 14, 1999 and Principal Accounting Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> US dollars
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Oct-31-1999
<PERIOD-START> Nov-01-1998
<PERIOD-END> Apr-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,790,000
<SECURITIES> 0
<RECEIVABLES> 2,740,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 196,841,000 <F1>
<DEPRECIATION> 29,809,000
<TOTAL-ASSETS> 176,099,000
<CURRENT-LIABILITIES> 9,126,000 <F2>
<BONDS> 39,007,000
0
33,462,000
<COMMON> 120,897,000
<OTHER-SE> (33,379,000)
<TOTAL-LIABILITY-AND-EQUITY> 176,009,000
<SALES> 0
<TOTAL-REVENUES> 14,584,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,789,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,820,000
<INCOME-PRETAX> 3,975,000
<INCOME-TAX> 192,000 <F3>
<INCOME-CONTINUING> 3,783,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 1,573,000 <F4>
<NET-INCOME> 2,210,000
<EPS-BASIC> .21 <F5>
<EPS-DILUTED> .21 <F5>
[EPS-BASIC] .22 <F6>
[EPS-DILUTED] .22 <F6>
<FN>
<F1> This item consists of Real Estate Investments
<F2> This item includes Bank Loans of $8,000,000
<F3> This item consists of Minority Interest in Consolidated Joint Ventures
<F4> This item consists of Preferred Stock Dividends
<F5> Applicable to Common Shareholders
<F6> Applicable to Class A Common Shareholders.
</FN>
</TABLE>
