Monmouth Real Estate Reports Results For The First Quarter Ended December 31, 2016

FREEHOLD, N.J., Feb. 8, 2017 /PRNewswire/ -- Monmouth Real Estate Investment Corporation (NYSE:MNR) reported Net Income Attributable to Common Shareholders of $6,156,000 or $0.09 per diluted share for the three months ended December 31, 2016 as compared to $4,787,000 or $0.08 per diluted share for the three months ended December 31, 2015 representing an increase per share of 13%.  Core Funds from Operations (Core FFO) were $13,857,000 or $0.20 per diluted share for the three months ended December 31, 2016 as compared to $11,012,000 or $0.17 per diluted share for the three months ended December 31, 2015 representing an increase in Core FFO per share of 18%.  Adjusted Funds from Operations (AFFO), for the three months ended December 31, 2016 were $12,939,000 or $0.19 per diluted share versus $10,725,000 or $0.17 per diluted share for the three months ended December 31, 2015 representing an increase in AFFO per share of 12%. 

A summary of significant financial information for the three months ended December 31, 2016 and 2015 is as follows:

A summary of significant balance sheet information as of December 31, 2016 and September 30, 2016 is as follows:

Michael P. Landy, President and CEO, commented on the results for the first quarter of fiscal 2017,

"This was another record quarter for Monmouth and represents an excellent start to fiscal 2017.  We are pleased to report continued strength across multiple fronts. During the quarter we:

• Increased our occupancy rate to 100%, representing a 120 basis points increase over the prior year period and 40 basis points increase over the prior quarter
• Increased our per share AFFO to $0.19, representing a 12% increase over the prior year period and a 6% increase sequentially
• Increased our Net Operating Income (NOI) 23% over the prior year period
• Increased our Same Property NOI 2.4% on a GAAP basis and 3.1% on a cash basis over the prior year period
• Acquired two new Class A built-to-suit properties comprising 552,000 square feet, for an aggregate cost of $56.1 million
• Grew our acquisition pipeline to nine brand-new Class A build-to-suit properties, representing 2.34 million square feet, for a total purchase price of approximately $250.5 million 
• Increased our gross leasable area (GLA) 15% to 16.6 million square feet over the prior year period. Our GLA is expected to grow to 18.9 million square feet upon the completion of the above acquisitions
• Renewed five of thirteen leases scheduled to expire in Fiscal 2017, representing a weighted average lease term of 5.9 years.  These five leases consist of 719,000 square feet and result in a 2.7% increase in GAAP rents. One lease was renewed on a short term basis and the remaining seven leases are currently under discussion
• Generated approximately $806,000 in net realized gains in addition to the $10.2 million in unrealized gains we held at quarter end on our REIT securities investments
• Redeemed all of our 7.625% Series A Preferred Stock for $54.0 million which was funded with a portion of the proceeds from our recent $135 million issue of 6.125% Series C Preferred Stock."

Mr. Landy stated, "We have generated double-digit AFFO per-share growth in each of the prior three years, and with our first quarter AFFO per share up 12% from the prior year, fiscal 2017 is on track to continue this very favorable trend. Our property portfolio is 100% occupied, reflecting the mission-critical nature of our properties."

"Looking forward, we have entered into agreements to acquire nine brand-new, Class A build-to-suit industrial properties, representing approximately 2.34 million square feet, for a total purchase price of approximately $250.5 million. These properties are expected to generate annualized rental revenue of approximately $16.5 million and will benefit from an average lease term of approximately 13.5 years.  Six of the nine purchase commitments, consisting of approximately 1.7 million square feet, or 72%, are leased to investment-grade tenants or their subsidiaries. Subject to satisfactory due diligence, we anticipate closing these transactions upon completion of construction and occupancy over the next five quarters. The Company is very well capitalized to continue building upon the substantial growth that we have achieved to date."

Monmouth Real Estate Investment Corporation will host its First Quarter FY 2017 Financial Results Webcast and Conference Call on Thursday, February 9, 2017 at 10:00 a.m. Eastern Time.  Senior management will discuss the results, current market conditions and future outlook.

The Company's First Quarter FY 2017 financial results being released herein will be available on the Company's website at www.mreic.reit in the Investor Relations section, under Filings and Reports.

To participate in the Webcast, select the 1Q2017 Webcast and Earnings Call "Link to Webcast" on the homepage of the Company's website at www.mreic.reit, in the Highlights section, which is located towards the bottom of the homepage.  Interested parties can also participate via conference call by calling toll free 877-510-5852 (domestically) or 412-902-4138 (internationally).

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, February 9, 2017.  It will be available until May 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10097752.  A transcript of the call and the webcast replay will be available at the Company's website on the Investor Relations homepage, www.mreic.reit.

Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the U.S. The Company specializes in single-tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants.  Monmouth Real Estate is a fully-integrated and self-managed real estate company, whose property portfolio consists of 100 properties containing a total of approximately 16.6 million rentable square feet, geographically diversified across 30 states.  In addition, the Company owns a portfolio of REIT securities.

Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company's current expectations and involve various risks and uncertainties.  Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved.  The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company's annual report on Form 10-K and described from time to time in the Company's other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Notes:

(1)  Non-U.S. GAAP Information:  FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income applicable to common shareholders, excluding gains or losses from sales of depreciable assets, plus real estate related depreciation and amortization.   We define Core FFO as FFO plus acquisition costs.  We define AFFO as Core FFO excluding lease termination income, gains or losses on securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, the effect of non-cash U.S. GAAP straight-line rent adjustments and less recurring capital expenditures.  We define recurring capital expenditures as all capital expenditures, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal.  We define NOI as recurring rental and reimbursement revenues less real estate and other operating expenses.  FFO, Core FFO and AFFO per diluted common share are defined as FFO, Core FFO and AFFO divided by weighted average diluted common shares outstanding.  FFO, Core FFO and AFFO per diluted common share, as well as NOI, should be considered as supplemental measures of operating performance used by real estate investment trusts (REITs).   FFO, Core FFO and AFFO per diluted common share exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis.  However, other REITs may use different methodologies to calculate FFO, Core FFO and AFFO and, accordingly, our FFO, Core FFO and AFFO may not be comparable to all other REITs. The items excluded from FFO, Core FFO and AFFO per diluted common share are significant components in understanding the Company's financial performance.

FFO, Core FFO and AFFO per diluted common share (A) do not represent cash flow from operations as defined by accounting principles generally accepted in the United States of America; (B) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (C) are not alternatives to cash flow as a measure of liquidity.  FFO, Core FFO and AFFO per diluted common share, as well as NOI, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs.

The following is a reconciliation of the Company's U.S. GAAP Net Income to the Company's FFO, Core FFO and AFFO for the three months ended December 31, 2016 and 2015:

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the three months ended December 31, 2016 and 2015:

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SOURCE Monmouth Real Estate Investment Corporation