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, 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: 5,538,265
Common Shares, par value $.01 per share and 5,243,211 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 15 PAGES, NUMBERED CONSECUTIVELY
FROM 1 TO15 INCLUSIVE, OF WHICH THIS PAGE IS 1.
1
<PAGE>
INDEX
URSTADT BIDDLE PROPERTIES INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--April 30, 2000 and October 31, 1999.
Consolidated Statements of Income--Three months ended April 30,
2000 and 1999; Six months ended April 30, 2000 and 1999
Consolidated Statements of Cash Flows--Six months ended April 30,
2000 and 1999.
Consolidated Statements of Stockholders' Equity--Six months ended
April 30, 2000 and 1999.
Notes to Consolidated Financial Statements - April 30, 2000.
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 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)(unaudited)
<TABLE>
<CAPTION>
ASSETS April 30, October 31,
2000 1999
<S> <C> <C>
Real Estate Investments:
Properties owned-- at cost, net of accumulated depreciation $143,116 $144,522
Properties available for sale - at cost, net of accumulated
depreciation and recoveries 13,053 16,966
Investment in unconsolidated joint venture 9,629 9,889
Mortgage notes receivable 4,741 2,500
----- -----
170,539 173,877
Cash and cash equivalents 3,976 2,758
Interest and rent receivable 3,906 3,370
Deferred charges, net of accumulated amortization 2,193 2,418
Other assets 2,192 1,351
----- -----
$182,806 $183,774
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Bank loans $ - $ 2,000
Mortgage notes payable 52,241 51,263
Accounts payable and accrued expenses 2,544 1,907
Deferred directors' fees and officers' compensation 127 155
Other liabilities 1,705 1,810
----- -----
56,617 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;
5,538,265 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;
5,243,211 and 5,184,039 outstanding shares in 2000 and 1999, respectively 52 52
Additional paid in capital 121,478 120,964
Cumulative distributions in excess of net income (31,706) (31,127)
Unamortized restricted stock compensation and notes receivable
from officers/stockholders (2,292) (1,907)
------- -------
87,587 88,037
------ ------
$182,806 $183,774
======== ========
</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
---------------------------- --------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Operating leases $15,102 $14,010 $7,488 $7,331
Financing leases 66 132 29 62
Interest and other 297 280 165 130
Equity in income of unconsolidated joint venture 212 162 183 128
--- --- --- ---
15,677 14,584 7,865 7,651
------ ------ ----- -----
Operating Expenses:
Property expenses 4,994 4,498 2,531 2,348
Interest 2,121 1,820 1,006 943
Depreciation and amortization 3,078 2,857 1,568 1,467
General and administrative expenses 1,380 1,331 608 717
Directors' fees and expenses 90 103 38 52
-- --- -- --
11,663 10,609 5,751 5,527
------ ------ ----- -----
Operating Income before Minority Interests 4,014 3,975 2,114 2,124
Minority Interests in Results of Consolidated Joint Ventures 225 192 112 88
--- --- --- --
Operating Income 3,789 3,783 2,002 2,036
Gains on Sales of Real Estate Investments 1,065 0 1,065 0
----- - ----- -
Net Income 4,854 3,783 3,067 2,036
Preferred Stock Dividends 1,573 1,573 787 787
----- ----- --- ---
Net Income Applicable to Common and Class A Common Stockholders $3,281 $2,210 $2,280 $1,249
====== ====== ====== ======
Basic Earnings per Share:
Common $.30 $.21 $.21 $.12
==== ==== ==== ====
Class A Common $.33 $.22 $.23 $.12
==== ==== ==== ====
Weighted Average Number of Shares Outstanding:
Common 5,349 5,080 5,361 5,077
===== ===== ===== =====
Class A Common 5,054 5,228 5,074 5,281
===== ===== ===== =====
Diluted Earnings Per Share:
Common $.30 $.21 $.20 $.12
==== ==== ==== ====
Class A Common $.33 $.22 $.23 $.12
==== ==== ==== ====
Weighted Average Number of Shares Outstanding:
Common and Common Equivalent 5,422 5,132 5,432 5,145
===== ===== ===== =====
Class A Common and Class A Common Equivalent 5,517 5,539 5,535 5,747
===== ===== ===== =====
</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>
Six Months Ended April 30,
2000 1999
---- ----
<S> <C> <C>
Operating Activities:
Net income $4,854 $3,783
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 3,078 2,857
Compensation expense relating to restricted stock 305 231
Recovery of investment in properties owned
subject to financing leases 674 608
Equity in income of unconsolidated joint venture (212) (162)
Gains on sales of real estate investments (1,065) -0-
(Increase) in interest and rent receivable (536) (295)
Increase (Decrease) in accounts payable and accrued expenses 638 (1)
(Increase) in other assets and other liabilities, net (991) (1,457)
----- -------
Net Cash Provided by Operating Activities 6,745 5,564
----- -----
Investing Activities:
Acquisitions of properties -0- (4,592)
Deposits on acquisitions -0- (250)
Improvements to properties and deferred charges (1,046) (1,317)
Investment in unconsolidated joint venture (228) (383)
Distributions received from unconsolidated joint venture 700 500
Payments received on mortgage notes receivable 59 52
Net proceeds from sales of properties 1,620 -0-
Miscellaneous -0- 345
--- ---
Net Cash Provided by(Used in) Investing Activities 1,105 (5,645)
----- -------
Financing Activities:
Sales of additional Common and Class A Common shares 1,312 2,008
Proceeds from (repayment of) bank loans (2,000) 2,000
Proceeds from mortgage notes payable 6,500 -0-
Dividends paid on Common and Class A Common shares (3,860) (3,726)
Dividends paid on Preferred Stock (1,573) (1,573)
Purchases of Common and Class A Common shares (1,488) (534)
Payments on mortgage notes payable (5,523) (204)
------- -----
Net Cash (Used in) Financing Activities (6,632) (2,029)
------- -------
Net Increase (Decrease) In Cash and Cash Equivalents 1,218 (2,110)
Cash and Cash Equivalents at Beginning of Period 2,758 3,900
----- -----
Cash and Cash Equivalents at End of Period $3,976 $1,790
====== ======
</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
Restricted
Common Stock Class A Common Stock (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, 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)
Sales of additional shares 32,000 - 202,000 2 1,863 - - 1,865
Sales of additional shares
under dividend reinvestment plan 8,390 - 9,007 - 143 - - 143
Shares issued under restricted 46,500 1 46,500 1 759 - (761) -
stock plan
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
========= === ========= === ======== ========= ======== =======
Balances - October 31, 1999 5,531,845 $55 5,184,039 $52 $120,964 $(31,127) $(1,907) $88,037
Net Income Applicable to Common
and Class A Common stockholders - - - - - 3,281 - 3,281
Cash dividends paid :
Common Stock ($.35 per share) - - - - - (1,880) - (1,880)
Class A Common Stock ($.39
Per share) - - - - - (1,980) - (1,980)
Sales of additional shares 29,400 - 123,400 1 1,159 - - 1,160
Sales of additional shares
under dividend reinvestment plan 9,720 - 9,972 - 152 - - 152
Shares issued under restricted
stock plan 47,500 1 47,500 1 688 - (690) -
Amortization of restricted stock
compensation - - - - - - 305 305
Purchases of shares (80,200) (1) (121,700) (2) (1,485) (1,488)
-------- --- --------- --- ------- -----------------------------
- -
Balances - April 30, 2000 5,538,265 $55 5,243,211 $52 $121,478 $(31,706) $(2,292) $87,587
========= === ========= === ======== ========= ======== =======
</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, 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 April 30, 2000, the Company owned 22 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 six-month periods ended April 30, 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
<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,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income applicable to Common stockholders - basic $1,597 $1,043 $1,110 $589
Effect of dilutive securities:
Operating partnership units 4 44 (10) 44
------ ------ ------ ----
Net income applicable to Common Stockholders - diluted $1,601 $1,087 $1,100 $633
====== ====== ====== ====
Denominator
Denominator for basic EPS-weighted average Common shares 5,349 5,080 5,361 5,077
Effect of dilutive securities:
Stock options and awards 73 52 71 68
Operating partnership units -- -- -- --
Denominator for diluted EPS - weighted average Common equivalent shares 5,422 5,132 5,432 5,145
===== ===== ===== =====
Numerator
Net income applicable to Class A Common stockholders - basic $1,684 $1,167 $1,170 $660
Effect of dilutive securities:
Operating partnership units 134 105 78 44
------ ------ ----- -----
Net income applicable to Class A Common stockholders - diluted $1,818 $1,272 1,248 $ 704
====== ====== ===== =====
Denominator
Denominator for basic EPS - weighted average Class A Common shares 5,054 5,228 5,074 5,281
Effect of dilutive securities:
Stock options and awards 80 66 78 83
Operating partnership units 383 245 383 383
----- ----- ----- -----
Denominator for diluted EPS - weighted average Class A Common equivalent shares
5,517 5,539 5,535 5,747
===== ===== ===== =====
</TABLE>
The weighted average Common equivalent shares and Class A Common equivalent
shares for the six months and three months ended April 30, 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.
Stockholders' Equity
On January 7, 2000, the Company sold 29,400 Common Shares and 123,400 Class A
Common shares for aggregate net proceeds of $1.16 million in a private placement
which included all of the senior officers and directors of the Company.
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 six months ended April 30, 2000, the
Company awarded 47,500 Common shares and 47,500 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 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.
8
<PAGE>
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 30, 2000, the Company purchased 80,200 Common shares
and 121,700 Class A Common shares at an aggregate cost of $1,488,000 under this
program.
Real Estate Investments
In fiscal 2000, the Company sold two of its non-core properties and realized net
gains on the sales of the properties of $1,065,000. In connection with one of
the sales, the Company received a purchase money mortgage receivable in the
amount of $2,300,000. The mortgage note bears interest at an annual rate of
8.75% and is due on June 22, 2000. The mortgage note receivable represents a non
cash investing activity and is therefore not included in the accompanying
consolidated statements of cash flows.
Mortgage Notes Payable and 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 $9.1
million at April 30, 2000. The mortgage loan has a term of 10 years and bears
interest at a fixed rate of 7.78%. Proceeds for the mortgage loan were used to
repay a $4.1 million mortgage note which matured on April 1, 2000 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 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 will bear interest at the prime
rate plus 1/2% or LIBOR plus 2 1/2%. The Company will pay an annual fee of 1/4%
on unused amounts. There were no borrowings outstanding under this line of
credit at April 30, 2000.
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 six month periods ended
April 30, 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
<PAGE>
<TABLE>
<CAPTION>
Equity Mortgage Non
Quarter Ended April 30 Investments Loans Segment Total
---------------------- ----------- ------------ ------- -----
2000
<S> <C> <C> <C> <C>
Total Revenues $ 15,380 $ 180 $ 117 $ 15,677
======== ======= ======= ========
Net Operating Income $ 10,161 $ 180 $ 117 $ 10,458
======== ======= ======= ========
Total Assets $175,317 $4,741 $2,748 $182,806
======== ======= ======= ========
1999
Total Revenues $ 14,304 $ 161 $ 119 $ 14,584
======== ======== ======= ========
Net Operating Income $ 9,614 $ 161 $ 119 $ 9,894
======== ======== ======= ========
Total Assets $172,807 $ 2,555 $ 737 $176,099
======== ======== ======= ========
</TABLE>
The reconciliation to net income for the combined reportable segments and for
the Company is as follows:
<TABLE>
<CAPTION>
Quarter Ended April 30 (In thousands), 2000 1999
<S> <C> <C>
Net Operating Income from Reportable Segments $10,458 $9,894
------- ------
Additions:
Gains on sales of real estate investments 1,065 -0-
Deductions:
Interest expense 2,121 1,820
Depreciation and amortization 3,078 2,857
General, administrative and
other expenses 1,470 1,434
----- -----
Total Deductions 6,669 6,111
----- -----
Net Income 4,854 3,783
Preferred stock dividends (1,573) (1,573)
------- -------
Net Income Applicable to
Common and Class A Common Stockholders $3,281 $2,210
====== ======
</TABLE>
Commitments and Contingencies
Countryside Square Limited Partnership, an unconsolidated joint venture which
owns the Countryside Square Shopping Center in Clearwater, Florida has
contracted to sell the shopping center for $17.2 million. The sale is expected
to close by the Company's fourth quarter.
10
<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, 2000, the Company had cash and cash equivalents of $3.9 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 is subject to the bank's satisfaction
of certain conditions. At April 30, 2000, long-term debt consists of mortgage
notes payable totaling $40.3 million and outstanding borrowings of $11.9 million
under the secured revolving credit facility. There were no borrowings
outstanding under the unsecured credit line.
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 $9.1 million. Proceeds from the financing were used to repay a $4.1
million mortgage note payable maturing in April 2000 and outstanding short-term
bank loans.
During the first quarter of fiscal 2000, the Company completed a private
placement of approximately $1,160,000 of additional Common and Class A Common
shares.
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 six months of fiscal
2000, the Company repurchased 80,200 Common shares and 121,700 Class A Common
shares at an aggregate cost of $1,488,000 from available cash. The Company
expects to fund the cost of future share purchases, if any, from available cash.
In a prior year, the Board of Directors 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.
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.
11
<PAGE>
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 six month periods ended April 30, 2000 and 1999 (amounts in thousands):
<TABLE>
<CAPTION>
Six months ended April 30
2000 1999
---- ----
<S> <C> <C>
Net Income Applicable to Common and Class A Common Stockholders $3,281 $2,210
Plus: Real property depreciation, amortization of tenant improvements and
amortization of lease acquisition costs and recoveries of investments
in properties subject to finance leases 3,499 3,190
Adjustments for unconsolidated joint venture 198 320
Less: Gains on sales of real estate investments 1,065 -0-
----- ------
Funds from Operations $5,913 $5,720
====== ======
</TABLE>
RESULTS OF OPERATIONS
Revenues
Operating lease revenue increased 7.8% in the first half of fiscal 2000 from the
comparable period in fiscal 1999. The increase in operating lease revenues
results principally from additional rental income earned from properties
acquired in fiscal 1999 and the effect of new leasing at certain of the
Company's core retail properties. Revenues derived from acquisitions completed
in fiscal 1999 totaled $1,893,000 in the six months ended April 30, 2000.
Operating lease revenue for all other properties owned remained substantially
unchanged when compared to the same period in the year ago period.
During fiscal 2000, three tenants with leases totaling 32,000 square feet of
space filed for bankruptcy protection and vacated their premises at one of the
Company's retail properties. The Company is negotiating with several prospective
tenants to re-lease the vacant space.
The Company's core properties were nearly 95% leased at April 30, 2000,
unchanged from the end of the last fiscal quarter. The Company leased or renewed
109,000 square feet of leasable space in the first half of fiscal 2000 compared
to 84,000 square feet of space in the comparable half a year ago.
12
<PAGE>
Expenses
Total expenses amounted to $11,663,000 in the first half of fiscal 2000 compared
to $10,609,000 in the first half last year. The largest expense category is
property expenses of the real estate operating properties. The increase in
property expenses in fiscal 2000 reflect the effect of recent acquisitions of
properties in fiscal 1999. Property expenses of new properties increased
operating expenses by $441,000 in the first half of fiscal 2000. Property
expenses for all other properties increased by 7% compared to the same period in
fiscal 1999. The increases were principally attributable to higher repairs and
maintenance expenses and real estate taxes at certain of the Company's core
properties.
Interest expense increased from additional borrowings on the Company's unsecured
and secured revolving credit facilities 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 acquisition
of nearly $23 million of properties during fiscal 1999.
General and administrative expenses increased in fiscal 2000 from higher legal
and other professional costs and compensation expense related to restricted
stock issued to key employees of the Company.
13
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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 April 30, 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 April 30, 2000 the
Company had no other material exposure to market risk.
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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 opinion,
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 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The date of the Annual meeting was March 15, 2000
(b) Stockholders voted on the following proposal:
To amend the Company's Restricted Stock Award Plan.
2,822,646 combined Common and Class A Common Shares were
voted in the affirmative; 311,423 combined Common and Class A
Common shares were voted against; and 92,383 combined Common
and Class A Common shares abstained in vote.
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K
There were no reports on Form 8-K filed with the Securities
and Exchange Commission during the Registrant's fiscal quarter
ended April 30, 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
and Principal Accounting Officer)
Dated: June 14, 2000
