UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 7, 2006
ONE LIBERTY PROPERTIES, INC.
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(Exact name of Registrant as specified in charter)
Maryland 001-09279 13-3147497
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
-- Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
-- Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
-- Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
-- Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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EXPLANATORY NOTE
On April 11, 2006, the registrant filed a Current Report on Form 8-K reporting
its acquisition of eleven retail properties leased to Haverty Furniture
Companies, Inc. This amendment on Form 8-K/A hereby amends such Form 8-K to
provide the financial information required by Item 9.01.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
(i) Report of Independent Registered Public Accounting Firm 1
(ii) Statements of Revenues and Certain Expenses 2
(iii) Notes to Statements of Revenues and Certain Expenses 3-4
(b) Pro Forma Financial Information (Unaudited).
(i) Pro Forma Consolidated Financial Statements (Unaudited) 5
(ii) Pro Forma Consolidated Balance Sheet (Unaudited) 6
(iii) Pro Forma Consolidated Income Statements (Unaudited) 7-8
(iv) Notes to Pro Forma Consolidated Income Statements (Unaudited) 9-10
(c) Shell Company Transactions.
Not Applicable.
(d) Exhibits.
Not Applicable.
SIGNATURES
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.
ONE LIBERTY PROPERTIES, INC.
Dated: Great Neck, NY By: /s/ David W. Kalish
June 20, 2006 -------------------------------
David W. Kalish
Senior Vice President and
Chief Financial Officer
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
One Liberty Properties, Inc.
We have audited the statement of revenues and certain expenses of eleven
properties leased by Haverty Furniture Companies, Inc. ("Haverty's") as
described in Note 1 to be acquired by a wholly owned subsidiary of One Liberty
Properties, Inc. (the "Company") for the year ended December 31, 2005. The
statement of revenues and certain expenses is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the statement
of revenues and certain expenses is free of material misstatement. We were not
engaged to perform an audit of Haverty's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of Haverty's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues and certain expenses, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall statement
of revenues and certain expenses presentation. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with Rule 3-14 of Regulation S-X of the Securities and
Exchange Commission for inclusion in Form 8-K/A of One Liberty Properties, Inc.
and is not intended to be a complete presentation of Haverty's revenues and
certain expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses of
Haverty's as described in Note 1 for the year ended December 31, 2005, in
conformity with U.S. generally accepted accounting principles.
New York, New York /s/ Ernst & Young LLP
June 2, 2006
1
Haverty's Furniture Stores
Statements of Revenues and Certain Expenses
Three months ended Year ended
March 31, December 31,
2006 2005
---- ----
(unaudited)
Revenues:
Base rents $ 1,111,740 $ 4,446,959
----------- -----------
Total revenues 1,111,740 4,446,959
----------- -----------
Certain expenses:
Asset management fees 20,895 83,580
----------- -----------
Total certain expenses 20,895 83,580
----------- -----------
Revenues in excess of certain expenses $ 1,090,845 $ 4,363,379
=========== ===========
See accompanying notes.
2
Haverty's Furniture Stores
Notes to Statements of Revenues and Certain Expenses
1. Organization and Basis of Presentation
Presented herein is the statement of revenues and certain expenses related to
the operation of eleven retail properties leased by Haverty Furniture Companies,
Inc. (the "Properties"). The Properties have approximately 612,130 square feet
of leaseable space. The Properties were purchased on April 7, 2006 by a wholly
owned subsidiary of One Liberty Properties, Inc. (the "Company").
The accompanying statement of revenues and certain expenses has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for the acquisition of real estate properties. Accordingly,
the statement of revenues and certain expenses exclude certain expenses that may
not be comparable to those expected to be incurred in the future operations of
the aforementioned property. Items excluded consist of interest, depreciation
and amortization.
2. Use of Estimates
The preparation of the statement of revenues and certain expenses in conformity
with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the statement of
revenues and certain expenses and accompanying notes. Actual results could
differ from those estimates.
3. Concentration of Credit Risk
The Properties are leased to a single tenant, Haverty Furniture Companies, Inc.
(the "Tenant"), which occupies 100% of the Properties' total gross leaseable
area under a triple-net lease. Therefore, the Properties' results of operations
are significantly dependent on the overall health of the Tenant and the
furniture industry.
4. Revenue Recognition
The lease with the Tenant is accounted for as an operating lease. Base rent is
recognized on a straight-line basis over the lease term. The rent recognized
exceeded the contractual rent amount due pursuant to the underlying lease by
$380,811 and $95,203 for the year ended December 31, 2005 and the (unaudited)
three months ended March 31, 2006, respectively.
3
Haverty's Furniture Stores
Notes to Statements of Revenues and Certain Expenses (Continued)
5. Future Minimum Rents
Future minimum lease payments to be received by the Properties as of December
31, 2005 under a noncancellable operating lease are as follows:
2006 $ 4,066,148
2007 4,157,636
2008 4,310,116
2009 4,310,116
2010 4,310,116
Thereafter 54,061,792
-----------
$75,215,924
===========
6. Real Estate Management Agreement
Asset management fees were calculated at a percent of acquisition cost and paid
to U.S. Realty Advisors, LLC during the year ended December 31, 2005 and three
months ended March 31, 2006.
7. Interim Unaudited Financial Information
The statement of revenues and certain expenses for the three months ended March
31, 2006 is unaudited, however, in the opinion of management, all adjustments
(consisting solely of normal, recurring adjustments) necessary for the fair
presentation of the statement of revenues and certain expenses for the interim
period have been included. The results of the interim period are not necessarily
indicative of the results to be obtained for a full fiscal year.
4
One Liberty Properties, Inc.
Pro Forma Consolidated Financial Statements
(Unaudited)
On April 7, 2006, a wholly-owned subsidiary of One Liberty Properties, Inc. (the
"Company") acquired, in an arms length transaction, eleven retail furniture
properties located in six states (the "Properties"). The Properties are leased
in their entirety by Haverty Furniture Companies, Inc., a furniture retailer.
The unaudited pro forma consolidated balance sheet of the Company as of March
31, 2006, has been prepared as if the Company's acquisition of the Properties
had been consummated on March 31, 2006. The unaudited pro forma consolidated
income statements for the year ended December 31, 2005 and for the three months
ended March 31, 2006, are presented as if the Company's acquisition of the
Properties had occurred on January 1, 2005 and the effect was carried forward
through the year ended December 31, 2005 and three month period ended March 31,
2006.
The pro forma consolidated financial statements do not purport to represent what
the Company's financial position or results of operations would have been
assuming the completion of the Company's acquisition of the Properties had
occurred on January 1, 2005, nor do they purport to project the Company's
financial position or results of operations at any future date or for any future
period. These pro forma consolidated financial statements should be read in
conjunction with the Company's 2005 annual report on Form 10-K and the Company's
Quarterly report on Form 10-Q for the period ended March 31, 2006.
5
One Liberty Properties, Inc.
Pro Forma Consolidated Balance Sheet (Unaudited)
As of March 31, 2006
(Amounts in thousands)
The
The Company Purchase Company
Historical of Pro Forma
(A) Properties as Adjusted
----------- ---------- -----------
Assets
Real estate investments, at cost:
Land $ 53,846 $ 10,240 B) $ 64,086
Buildings 226,361 40,960(B) 267,321
--------- -------- ---------
280,207 51,200 331,407
Less accumulated depreciation 23,431 - 23,431
--------- -------- ---------
256,776 51,200 307,976
Investment in unconsolidated joint ventures 27,338 - 27,338
Cash and cash equivalents 26,660 (22,250)(B) 4,410
Unbilled rent receivable 6,973 - 6,973
Escrow, deposits and other receivables 4,252 - 4,252
Investment in BRT Realty Trust (related party) 768 - 768
Deferred financing costs 2,689 - 2,689
Other assets 3,414 - 3,414
--------- --------- ---------
$ 328,870 $ 28,950 $ 357,820
========= ========= =========
Liabilities and stockholders' equity
Mortgages payable $ 166,564 $ 26,950 (C) $ 193,514
Line of credit - 2,000 (D) 2,000
Dividends payable 3,275 - 3,275
Accrued expenses and other liabilities 3,300 - 3,300
--------- --------- ---------
Total liabilities 173,139 28,950 202,089
--------- --------- ---------
Commitments and contingencies - - -
Stockholders' equity:
Preferred stock - - -
Common stock 9,781 - 9,781
Paid-in capital 133,692 - 133,692
Accumulated other comprehensive income 927 - 927
Accumulated undistributed net income 11,331 - 11,331
--------- --------- ---------
Total stockholders' equity 155,731 - 155,731
--------- --------- ---------
$ 328,870 $ 28,950 $ 357,820
========= ========= =========
See accompanying notes.
6
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Year Ended December 31, 2005
(Amounts in thousands, except per share data)
Pro The
The Purchase Forma Company
Company of Adjust- Pro Forma
Historical(A) Properties(B) ments as Adjusted
-------------- ------------- ----- -----------
Revenues:
Rental income $ 28,445 $ 4,447 $ 51(C) $ 32,943
--------- -------- -------- --------
Operating expenses:
Depreciation and amortization 5,664 - 1,024(D) 6,688
General and administrative 4,140 - - 4,140
Real estate expenses 352 84 (84)(E) 352
Leasehold rent 308 - - 308
--------- -------- -------- --------
10,464 84 940 11,488
--------- -------- -------- --------
Operating income 17,981 4,363 (889) 21,455
Other income and expenses:
Equity in earnings of unconsol-
idated joint ventures 2,102 - - 2,102
Interest and other income 314 - - 314
Interest:
Expense (10,192) - (2,017) (F) (12,209)
Amortization of deferred
financing costs (732) - - (732)
Gain on sale of air rights 10,248 - - 10,248
-------- -------- --------- --------
Income from continuing operations $ 19,721 $ 4,363 $ (2,906) $ 21,178
======== ======== ========= ========
Income from continuing operations
per common share
basic and diluted: (G) $2.00 $2.15
===== =====
See accompanying notes.
7
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Three Months Ended March 31, 2006
(Amounts in thousands, except per share data)
Pro The
The Purchase Forma Company
Company of Adjust- Pro Forma
Historical(A) Properties(B) ments as Adjusted
------------- ------------- ----- -----------
Revenues:
Rental income $ 7,584 $ 1,112 $ 13(C) $ 8,709
-------- -------- ------- --------
Operating expenses:
Depreciation and amortization 1,554 - 256(D) 1,810
General and administrative 1,103 - - 1,103
Real estate expenses 58 21 (21)(E) 58
Leasehold rent 77 - - 77
-------- -------- ------- --------
2,792 21 235 3,048
-------- -------- ------- --------
Operating income 4,792 1,091 (222) 5,661
Other income and expenses:
Equity in earnings of unconsol-
idated joint ventures 774 - - 774
Interest and other income 216 - - 216
Interest:
Expense (2,799) - (498) (F) (3,297)
Amortization of deferred
financing costs (140) - - (140)
Gain on sale of option to
purchase property 227 - - 227
-------- -------- -------- --------
Income from continuing operations $ 3,070 $ 1,091 $ (720) $ 3,441
======== ======== ======== ========
Income from continuing operations
per common share
basic and diluted: (G) $ .31 $ .35
====== ======
See accompanying notes.
8
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. Notes to Pro Forma Consolidated Balance Sheet as of March 31, 2006
(A) To reflect the unaudited consolidated balance sheet of One Liberty
Properties, Inc. (the "Company") as of March 31, 2006, as reported on the
Company's Quarterly Report on Form 10-Q.
(B) To reflect the April 7, 2006 purchase allocation of the Company's
acquisition of eleven retail furniture properties located in six states
(the "Properties"), as of March 31, 2006, for approximately $51.2 million.
There was no independent valuation performed on the Properties. The Company
intends to account for the acquisition in accordance with SFAS 141 and 142
and is currently in the process of analyzing the fair value of the
Properties' in-place lease. Consequently, no value has yet been assigned to
the lease in the accompanying pro forma balance sheet and therefore, the
purchase price allocation is preliminary and subject to change.
(C) To reflect the assumption of the mortgage of approximately $26.95 million
(bearing interest at a rate of 6.87%) in connection with the April 7, 2006
acquisition of the Properties. The Company has accounted for the assumption
of the mortgage in accordance with SFAS 141 and 142 and has concluded that
it is at fair market value.
(D) To reflect the funds borrowed under the Company's line of credit used to
purchase the Properties.
2. Notes to Pro Forma Consolidated Income Statement for the Year Ended December
31, 2005
(A) To reflect the consolidated historical income statement of the Company for
the year ended December 31, 2005, as reported on the Company's Form 10-K.
(B) To reflect the historical operations of the Properties for the year ended
December 31, 2005.
(C) To reflect $51,000 additional straight line rents due to lease start dates
being on January 1, 2005.
(D) To reflect straight line depreciation for the Properties based on an
estimated useful life of 40 years for the year ended December 31, 2005.
(E) To reflect the removal of the asset management fees due to the fact that
the Company will self-manage the Properties.
(F) To reflect the interest expense for the year ended December 31, 2005 for
borrowings under the revolving line of credit used to fund a portion of the
purchase price ($2 million at approximately 5.6%) and for borrowings under
the mortgage note assumed and secured by the Properties (approximately
$26.95 million at 6.87%).
(G) Basic net income per common share is calculated based on approximately
9,838,000 weighted average common shares outstanding and diluted net income
per common share is calculated based on approximately 9,843,000 weighted
average common shares and common share equivalents outstanding.
9
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) - Continued
3. Notes to Pro Forma Consolidated Income Statement for the Three Months Ended
March 31, 2006
(A) To reflect the consolidated historical income statement of the Company for
the three months ended March 31, 2006, as reported on the Company's
Quarterly Report on Form 10-Q.
(B) To reflect the historical operations of the Properties for the three months
ended March 31, 2006.
(C) To reflect $13,000 additional straight line rents due to lease start dates
being on January 1, 2005.
(D) To reflect straight line depreciation for the Properties based on an
estimated useful life of 40 years for the three months ended March 31,
2006.
(E) To reflect the removal of the asset management fees due to the fact that
the Company will self-manage the Properties.
(F) To reflect the interest expense for the three months ended March 31, 2006
for borrowings under the revolving line of credit used to fund a portion of
the purchase price ($2 million at approximately 6.7%) and for borrowings
under the mortgage note assumed and secured by the Properties
(approximately $26.95 million at 6.87%).
(G) Basic net income per common share is calculated based on approximately
9,894,000 weighted average common shares outstanding and diluted net income
per common share is calculated based on approximately 9,897,000 weighted
average common shares and common share equivalents outstanding.
10