Alexander’s Announces Fourth Quarter Financial Results
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Insights
The reported financial results of Alexander's, Inc. indicate a noteworthy increase in net income for both the fourth quarter and the full year of 2023. The growth in net income from $13.2 million to $16.3 million for the quarter and from $57.6 million to $102.4 million for the year, suggests operational efficiency or significant transactions contributing to the bottom line. Particularly, the sale of the Rego Park III land parcel, which resulted in a $54.0 million gain, is a one-time event that investors should consider separately from recurring operational performance.
While the net income has increased, the Funds from Operations (FFO), a key metric for real estate investment trusts (REITs) as it provides a clearer picture of cash flow from operations, has shown a mixed picture. The FFO per diluted share increased in the fourth quarter but decreased over the full year. This could indicate that while the company may have had a strong end to the year, there were challenges earlier that impacted the annual performance. Investors should scrutinize the underlying factors that contributed to the FFO's yearly decline, despite the quarterly increase, to understand the company's operational health.
The performance of Alexander's, Inc. must be contextualized within the real estate market, particularly in New York City where the company's properties are located. The city's real estate market has unique dynamics that can significantly impact the valuation and profitability of properties. Factors such as rental rates, occupancy levels and property development trends are crucial in assessing the company's future revenue potential.
The sale of the Rego Park III land parcel is a strategic move that could indicate portfolio optimization or capital reallocation for future investments. However, the reliance on such one-time gains can be misleading when evaluating the company's long-term profitability. Investors should consider the company's strategy for reinvestment of the proceeds and how it aligns with market conditions. Additionally, the decrease in annual FFO raises questions about the company's ability to sustain earnings from its core operations, which is critical for long-term growth.
Investors should not overlook the broader economic indicators and the real estate sector's performance when analyzing Alexander's, Inc. The company's financial results are influenced by the economic environment, including interest rates, inflation and consumer spending habits. A strong economic backdrop can bolster property values and rental demand, while a downturn can lead to vacancies and lower rental income.
Furthermore, the REIT sector often moves in correlation with the broader stock market, but with certain idiosyncrasies like sensitivity to interest rate changes. Given that REITs are required to distribute the majority of their income as dividends, the sector is also popular among income-focused investors. The company's ability to maintain or increase its dividend payouts, in light of its FFO performance, will be a critical factor for this investor segment.
PARAMUS, N.J., Feb. 12, 2024 (GLOBE NEWSWIRE) -- ALEXANDER’S, INC. (New York Stock Exchange: ALX) filed its Form 10-K for the year ended December 31, 2023 today and reported:
Fourth Quarter 2023 Financial Results
Net income for the quarter ended December 31, 2023 was
Funds from operations (“FFO”) (non-GAAP) for the quarter ended December 31, 2023 was
Year Ended December 31, 2023 Financial Results
Net income for the year ended December 31, 2023 was
FFO (non-GAAP) for the year ended December 31, 2023 was
Alexander’s, Inc. is a real estate investment trust which has five properties in New York City.
CONTACT:
GARY HANSEN
(201) 587-8541
Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see "Risk Factors" in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2023. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments, the financial condition of our tenants, and general competitive factors.
(tables to follow)
| ALEXANDER'S, INC. FINANCIAL RESULTS FOR THE QUARTERS ENDED DECEMBER 31, 2023 AND 2022 |
Below is a table of selected financial results.
| QUARTER ENDED | |||||||
| DECEMBER 31, | |||||||
| (Amounts in thousands, except share and per share amounts) | 2023 | 2022 | |||||
| Revenues | $ | 62,935 | $ | 53,046 | |||
| Net income | $ | 16,286 | $ | 13,177 | |||
| Net income per common share – basic and diluted | $ | 3.17 | $ | 2.57 | |||
| Weighted average shares outstanding – basic and diluted | 5,130,678 | 5,127,086 | |||||
| FFO (non-GAAP) | $ | 25,603 | $ | 20,639 | |||
| FFO per diluted share (non-GAAP) | $ | 4.99 | $ | 4.03 | |||
| Weighted average shares used in computing FFO per diluted share | 5,130,678 | 5,127,086 | |||||
The following table reconciles net income to FFO (non-GAAP):
| QUARTER ENDED | |||||||
| DECEMBER 31, | |||||||
| (Amounts in thousands, except share and per share amounts) | 2023 | 2022 | |||||
| Net income | $ | 16,286 | $ | 13,177 | |||
| Depreciation and amortization of real property | 9,317 | 7,462 | |||||
| FFO (non-GAAP) | $ | 25,603 | $ | 20,639 | |||
| FFO per diluted share (non-GAAP) | $ | 4.99 | $ | 4.03 | |||
| Weighted average shares used in computing FFO per diluted share | 5,130,678 | 5,127,086 | |||||
| ALEXANDER'S, INC. FINANCIAL RESULTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 |
Below is a table of selected financial results.
| YEAR ENDED | |||||||
| DECEMBER 31, | |||||||
| (Amounts in thousands, except share and per share amounts) | 2023 | 2022 | |||||
| Revenues | $ | 224,962 | $ | 205,814 | |||
| Net income | $ | 102,413 | $ | 57,632 | |||
| Net income per common share – basic and diluted | $ | 19.97 | $ | 11.24 | |||
| Weighted average shares outstanding – basic and diluted | 5,129,330 | 5,126,100 | |||||
| FFO (non-GAAP) | $ | 81,067 | $ | 87,090 | |||
| FFO per diluted share (non-GAAP) | $ | 15.80 | $ | 16.99 | |||
| Weighted average shares used in computing FFO per diluted share | 5,129,330 | 5,126,100 | |||||
The following table reconciles net income to FFO (non-GAAP):
| YEAR ENDED | |||||||
| DECEMBER 31, | |||||||
| (Amounts in thousands, except share and per share amounts) | 2023 | 2022 | |||||
| Net income | $ | 102,413 | $ | 57,632 | |||
| Depreciation and amortization of real property | 32,606 | 29,458 | |||||
| Net gain on sale of real estate | (53,952 | ) | - | ||||
| FFO (non-GAAP) | $ | 81,067 | $ | 87,090 | |||
| FFO per diluted share (non-GAAP) | $ | 15.80 | $ | 16.99 | |||
| Weighted average shares used in computing FFO per diluted share | 5,129,330 | 5,126,100 | |||||
FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of certain real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. A reconciliation of net income to FFO is provided above.
FAQ
What was Alexander’s, Inc.'s net income for Q4 2023?
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