Attached files
| file | filename |
|---|---|
| 8-K - UMH PROPERTIES, INC. | form8-k.htm |
(unaudited)
| Three Months Ended | ||||||||
| 3/31/2017 | 3/31/2016 | |||||||
| Operating Information | ||||||||
| Number of Communities | 106 | 98 | ||||||
| Number of Sites | 19,333 | 17,793 | ||||||
| Rental and Related Income | $ | 24,530,355 | $ | 21,786,180 | ||||
| Community Operating Expenses | $ | 11,480,359 | $ | 10,555,938 | ||||
| Community NOI | $ | 13,049,996 | $ | 11,230,242 | ||||
| Expense Ratio | 46.8 | % | 48.5 | % | ||||
| Sales of Manufactured Homes | $ | 1,918,194 | $ | 1,718,194 | ||||
| Number of Homes Sold | 43 | 41 | ||||||
| Number of Rentals Added | 243 | 182 | ||||||
| Net Income | $ | 2,285,546 | $ | 1,906,469 | ||||
| Net Loss Attributable to Common Shareholders | $ | (1,504,201 | ) | $ | (883,278 | ) | ||
| EBITDA | $ | 12,976,439 | $ | 11,458,713 | ||||
| FFO | $ | 5,060,417 | $ | 4,620,476 | ||||
| Core FFO | $ | 5,060,417 | $ | 4,620,476 | ||||
| Normalized FFO | $ | 5,028,526 | $ | 4,388,471 | ||||
| Shares Outstanding and Per Share Data | ||||||||
| Weighted Average Shares Outstanding Basic and Diluted | 29,954,773 | 27,117,889 | ||||||
| Net Loss Attributable to Common Shareholders per Share- Basic and Diluted | $ | (0.05 | ) | $ | (0.03 | ) | ||
| FFO per Share-Basic and Diluted | $ | 0.17 | $ | 0.17 | ||||
| Core FFO per Share-Basic and Diluted | $ | 0.17 | $ | 0.17 | ||||
| Normalized FFO per Share-Basic and Diluted | $ | 0.17 | $ | 0.16 | ||||
| Dividends per Common Share | $ | 0.18 | $ | 0.18 | ||||
| Balance Sheet | ||||||||
| Total Assets | $ | 725,782,363 | $ | 624,039,950 | ||||
| Total Liabilities | $ | 400,854,409 | $ | 374,487,550 | ||||
| Market Capitalization | ||||||||
| Total Debt, Net of Unamortized Debt Issuance Costs | $ | 387,375,362 | $ | 360,595,790 | ||||
| Equity Market Capitalization | $ | 466,623,210 | $ | 269,584,412 | ||||
| Series A Preferred Stock | $ | 91,595,000 | $ | 91,595,000 | ||||
| Series B Preferred Stock | $ | 95,030,000 | $ | 45,030,000 | ||||
| Total Market Capitalization | $ | 1,040,623,572 | $ | 766,805,202 | ||||
Consolidated Statements of Income (Loss)
(unaudited)
| Three Months Ended | ||||||||
| 3/31/2017 | 3/31/2016 | |||||||
| INCOME: | ||||||||
| Rental and Related Income | $ | 24,530,355 | $ | 21,786,180 | ||||
| Sales of Manufactured Homes | 1,918,194 | 1,718,194 | ||||||
| TOTAL INCOME | 26,448,549 | 23,504,374 | ||||||
| EXPENSES: | ||||||||
| Community Operating Expenses | 11,480,359 | 10,555,938 | ||||||
| Cost of Sales of Manufactured Homes | 1,503,209 | 1,313,928 | ||||||
| Selling Expenses | 759,379 | 783,752 | ||||||
| General and Administrative Expenses | 2,202,302 | 1,696,922 | ||||||
| Depreciation Expense | 6,540,238 | 5,525,842 | ||||||
| TOTAL EXPENSES | 22,485,487 | 19,876,382 | ||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest Income | 473,359 | 408,876 | ||||||
| Dividend Income | 1,851,240 | 1,455,535 | ||||||
| Gain on Sales of Securities, net | 31,891 | 232,005 | ||||||
| Other Income | 48,104 | 93,450 | ||||||
| Interest Expense | (4,057,730 | ) | (3,933,477 | ) | ||||
| TOTAL OTHER INCOME (EXPENSE) | (1,653,136 | ) | (1,743,611 | ) | ||||
| Income before Gain (Loss) on Sales of Investment Property and Equipment | 2,309,926 | 1,884,381 | ||||||
| Gain (Loss) on Sales of Investment Property and Equipment | (24,380 | ) | 22,088 | |||||
| NET INCOME | 2,285,546 | 1,906,469 | ||||||
| Less: Preferred Dividends | 3,789,747 | 2,789,747 | ||||||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (1,504,201 | ) | $ | (883,278 | ) | ||
Consolidated Statements of Cash Flows
(unaudited)
| Three Months Ended | ||||||||
| 3/31/2017 | 3/31/2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | 2,285,546 | $ | 1,906,469 | ||||
| Non-Cash Items Included in Net Income: | ||||||||
| Depreciation | 6,540,238 | 5,525,842 | ||||||
| Amortization of Financing Costs | 174,787 | 186,087 | ||||||
| Stock Compensation Expense | 169,377 | 157,745 | ||||||
| Provision for Uncollectible Notes and Other Receivables | 218,530 | 222,737 | ||||||
| Gain on Sales of Securities, net | (31,891 | ) | (232,005 | ) | ||||
| (Gain) Loss on Sales of Investment Property and Equipment | 24,380 | (22,088 | ) | |||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Inventory of Manufactured Homes | (555,802 | ) | (1,082,086 | ) | ||||
| Notes and Other Receivables, net of Notes Acquired with Acquisitions | (46,954 | ) | 622,710 | |||||
| Prepaid Expenses and Other Assets | 174,097 | (315,919 | ) | |||||
| Accounts Payable | 802,082 | 720,879 | ||||||
| Accrued Liabilities and Deposits | 218,439 | (260,441 | ) | |||||
| Tenant Security Deposits | 366,593 | 229,220 | ||||||
| Net Cash Provided by Operating Activities | 10,339,422 | 7,659,150 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of Manufactured Home Communities | (36,824,379 | ) | -0- | |||||
| Purchase of Investment Property and Equipment | (11,846,814 | ) | (10,478,716 | ) | ||||
| Proceeds from Sales of Investment Property and Equipment | 522,436 | 316,668 | ||||||
| Additions to Land Development Costs | (692,389 | ) | (747,675 | ) | ||||
| Purchase of Securities Available for Sale | (2,145,267 | ) | (8,116,664 | ) | ||||
| Proceeds from Sales of Securities Available for Sale | 1,368,888 | 488,261 | ||||||
| Net Cash Used in Investing Activities | (49,617,525 | ) | (18,538,126 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from Mortgages | 14,250,000 | 7,200,000 | ||||||
| Net Proceeds on Short Term Borrowings | 23,601,802 | 14,118,911 | ||||||
| Principal Payments of Mortgages | (1,852,336 | ) | (1,696,752 | ) | ||||
| Financing Costs on Debt | (109,868 | ) | (124,464 | ) | ||||
| Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments | 13,772,576 | 225,458 | ||||||
| Proceeds from Exercise of Stock Options | 2,231,032 | 71,725 | ||||||
| Preferred Dividends Paid | (3,789,747 | ) | (3,194,404 | ) | ||||
| Common Dividends Paid, net of Reinvestments | (4,735,323 | ) | (4,342,677 | ) | ||||
| Net Cash Provided by Financing Activities | 43,368,136 | 12,257,797 | ||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | 4,090,033 | 1,378,821 | ||||||
| CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD | 4,216,592 | 6,535,897 | ||||||
| CASH AND CASH EQUIVALENTS – END OF PERIOD | $ | 8,306,625 | $ | 7,914,718 | ||||
Reconciliation of Net Income to EBITDA and Net Loss Attributable
to Common Shareholders to FFO, Core FFO and Normalized FFO
(unaudited)
| Three Months Ended | ||||||||
| 3/31/2017 | 3/31/2016 | |||||||
| Reconciliation of Net Income To EBITDA | ||||||||
| Net Income | $ | 2,285,546 | $ | 1,906,469 | ||||
| Interest Expense | 4,057,730 | 3,933,477 | ||||||
| Franchise Taxes | 92,925 | 92,925 | ||||||
| Depreciation Expense | 6,540,238 | 5,525,842 | ||||||
| Acquisition Costs | -0- | -0- | ||||||
| EBITDA | $ | 12,976,439 | $ | 11,458,713 | ||||
| Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations | ||||||||
| Net Loss Attributable to Common Shareholders | $ | (1,504,201 | ) | $ | (883,278 | ) | ||
| Depreciation Expense | 6,540,238 | 5,525,842 | ||||||
| (Gain) Loss on Sales of Depreciable Assets | 24,380 | (22,088 | ) | |||||
| Funds from Operations (“FFO”) and Core Funds from Operations (“Core FFO”) | 5,060,417 | 4,620,476 | ||||||
| Adjustments: | ||||||||
| Gain on Sale of Securities | ||||||||
| Transactions, net | (31,891 | ) | (232,005 | ) | ||||
| Normalized Funds From Operations (“Normalized FFO”) | $ | 5,028,526 | $ | 4,388,471 | ||||
Market Capitalization, Debt and Coverage Ratios
(unaudited)
| Three Months Ended | Year Ended | |||||||||||
| 3/31/2017 | 3/31/2016 | 12/31/2016 | ||||||||||
| Shares Outstanding | 30,678,712 | 27,175,848 | 29,388,811 | |||||||||
| Market Price Per Share | $ | 15.21 | $ | 9.92 | $ | 15.05 | ||||||
| Equity Market Capitalization | $ | 466,623,210 | $ | 269,584,412 | $ | 442,301,606 | ||||||
| Total Debt | 387,375,362 | 360,595,790 | 351,310,977 | |||||||||
| Preferred | 186,625,000 | 136,625,000 | 186,625,000 | |||||||||
| Total Market Capitalization | $ | 1,040,623,572 | $ | 766,805,202 | $ | 980,237,583 | ||||||
| Total Debt | $ | 387,375,362 | $ | 360,595,790 | $ | 351,310,977 | ||||||
| Less: Cash and Cash Equivalents | (8,306,625 | ) | (7,914,718 | ) | (4,216,592 | ) | ||||||
| Net Debt | 379,068,737 | 352,681,072 | 347,094,385 | |||||||||
| Less: Securities Available for Sale at Fair Value (“Securities”) | (107,516,027 | ) | (91,396,472 | ) | (108,755,172 | ) | ||||||
| Net Debt Less Securities | $ | 271,552,710 | $ | 261,284,600 | $ | 238,339,213 | ||||||
| Interest Expense | $ | 4,057,730 | $ | 3,933,477 | $ | 15,432,364 | ||||||
| Capitalized Interest | 113,630 | 81,759 | 359,906 | |||||||||
| Preferred Dividends | 3,789,747 | 2,789,747 | 14,103,432 | |||||||||
| Total Fixed Charges | $ | 7,961,107 | $ | 6,804,983 | $ | 29,895,702 | ||||||
| EBITDA | $ | 12,976,439 | $ | 11,458,713 | $ | 50,565,254 | ||||||
| Debt and Coverage Ratios | ||||||||||||
| Net Debt / Total Market Capitalization | 36.4 | % | 46.0 | % | 35.4 | % | ||||||
| Net Debt Plus Preferred / Total Market Capitalization | 54.4 | % | 63.8 | % | 54.4 | % | ||||||
| Net Debt Less Securities / Total Market Capitalization | 26.1 | % | 34.1 | % | 24.3 | % | ||||||
| Net Debt Less Securities Plus Preferred / Total Market Capitalization | 44.0 | % | 51.9 | % | 43.4 | % | ||||||
| Interest Coverage | 3.1 | x | 2.9 | x | 3.2 | x | ||||||
| Fixed Charge Coverage | 1.6 | x | 1.7 | x | 1.7 | x | ||||||
| Net Debt / EBITDA | 7.3 | x | 7.7 | x | 6.9 | x | ||||||
| Net Debt Less Securities / EBITDA | 5.2 | x | 5.7 | x | 4.7 | x | ||||||
| Net Debt Plus Preferred / EBITDA | 10.9 | x | 10.7 | x | 10.6 | x | ||||||
| Net Debt Less Securities Plus Preferred / EBITDA | 8.8 | x | 8.7 | x | 8.4 | x | ||||||
(unaudited)
| Three Months Ended | ||||||||||||
| 3/31/2017 | 3/31/2016 | 12/31/2016 | ||||||||||
| Debt Outstanding | ||||||||||||
| Mortgages Payable: | ||||||||||||
| Fixed Rate Mortgages (1) | $ | 308,690,220 | $ | 291,541,604 | $ | 296,209,454 | ||||||
| Variable Rate Mortgages | 271,427 | 598,740 | 354,529 | |||||||||
| Total Mortgages Before | ||||||||||||
| Unamortized Debt Issuance Costs | 308,961,647 | 292,140,344 | 296,563,983 | |||||||||
| Unamortized Debt Issuance Costs | (3,510,687 | ) | (3,497,708 | ) | (3,538,391 | ) | ||||||
| Mortgages, Net of Unamortized Debt Issuance Costs | $ | 305,450,960 | $ | 288,642,636 | $ | 293,025,592 | ||||||
| Loans Payable: | ||||||||||||
| Unsecured Line of Credit | $ | 35,000,000 | $ | 15,000,000 | $ | 20,000,000 | ||||||
| Other Loans Payable | 46,995,241 | 57,105,415 | 38,393,439 | |||||||||
| Total Loans Before | ||||||||||||
| Unamortized Debt Issuance Costs | 81,995,241 | 72,105,415 | 58,393,439 | |||||||||
| Unamortized Debt Issuance Costs | (70,839 | ) | (152,261 | ) | (108,054 | ) | ||||||
| Loans, Net of Unamortized | ||||||||||||
| Debt Issuance Costs | $ | 81,924,402 | $ | 71,953,154 | $ | 58,285,385 | ||||||
| Total Debt, Net of Unamortized Debt Issuance Costs | $ | 387,375,362 | $ | 360,595,790 | $ | 351,310,977 | ||||||
| % Fixed/Floating | ||||||||||||
| Fixed | 80.4 | % | 81.5 | % | 85.0 | % | ||||||
| Floating | 19.6 | % | 18.5 | % | 15.0 | % | ||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Weighted Average Interest Rates | ||||||||||||
| Mortgages Payable | 4.40 | % | 4.54 | % | 4.40 | % | ||||||
| Loans Payable | 3.14 | % | 3.45 | % | 3.06 | % | ||||||
| Total Average | 4.14 | % | 4.32 | % | 4.18 | % | ||||||
| Notes: |
(1) Includes a variable rate mortgage with a balance of $10,420,552, $11,218,570 and $10,625,352 as of March 31, 2017, March 31, 2016 and December 31, 2016, respectively, which has been effectively fixed at an interest rate of 3.89% with an interest rate swap agreement. |
(unaudited)
| As of 3/31/17: | |||||||||||||||||
| Fiscal Year Ended | Mortgages | Loans | Total | % of Total | |||||||||||||
| 2017 | $ | 19,403,712 | $ | 13,079,493 | $ | 32,483,205 | 8.3 | % | |||||||||
| 2018 | 9,052,324 | 294,081 | 9,346,405 | 2.4 | % | ||||||||||||
| 2019 | 2,826,514 | 294,114 | 3,120,628 | 0.8 | % | ||||||||||||
| 2020 | 12,430,112 | 39,279,462 | (1) | 51,709,574 | 13.2 | % | |||||||||||
| 2021 | 2,219,761 | 186,764 | 2,406,525 | 0.6 | % | ||||||||||||
| Thereafter | 263,029,224 | 28,861,327 | 291,890,551 | 74.7 | % | ||||||||||||
| Total Debt Before Unamortized Debt Issuance Cost | 308,961,647 | 81,995,241 | 390,956,888 | 100.0 | % | ||||||||||||
| Unamortized Debt Issuance Cost | (3,510,687 | ) | (70,839 | ) | (3,581,526 | ) | |||||||||||
| Total Debt, Net of Unamortized Debt Issuance Costs | $ | 305,450,960 | $ | 81,924,402 | $ | 387,375,362 | |||||||||||
| Notes: |
| (1) Includes $35 million balance outstanding on the Company’s Line of Credit due March 2020, with an additional one year option. |
(unaudited)
| 3/31/2017 | 3/31/2016 | % Change | ||||||||||
| Communities | 106 | 98 | 8.2 | % | ||||||||
| Developed Sites | 19,333 | 17,793 | 8.7 | % | ||||||||
| Occupied | 15,472 | 14,129 | 9.5 | % | ||||||||
| Occupancy % (1) | 80.7 | % | 80.1 | % | 0.6 | % | ||||||
| Monthly Rent Per Site | $ | 424 | $ | 417 | 1.7 | % | ||||||
| Total Rentals | 4,902 | 3,914 | 25.2 | % | ||||||||
| Occupied Rentals | 4,594 | 3,709 | 23.9 | % | ||||||||
| Rental Occupancy % | 93.7 | % | 94.8 | % | -1.1 | % | ||||||
| Monthly Rent per Home Rental | $ | 712 | $ | 687 | 3.6 | % | ||||||
| Region | Number | Total Acreage | Developed Acreage | Vacant Acreage | Total Sites | Occupied Sites | Occupancy Percentage | Monthly Rent Per Site | Total Rentals | Occupied Rentals | Rental Occupancy Percentage | Monthly Rent Per Home Rental | ||||||||||||||||||||||||||||||||||||
| (2) | (2) | (1) | (3) | |||||||||||||||||||||||||||||||||||||||||||||
| Indiana | 11 | 815 | 685 | 130 | 3,216 | 2,398 | 74.6 | % | $ | 395 | 917 | 880 | 96.0 | % | $ | 722 | ||||||||||||||||||||||||||||||||
| Michigan | 2 | 68 | 68 | -0- | 354 | 254 | 71.8 | % | 428 | 137 | 133 | 97.1 | % | 708 | ||||||||||||||||||||||||||||||||||
| New Jersey | 4 | 348 | 187 | 161 | 1,006 | 962 | 95.6 | % | 598 | 40 | 32 | 80.0 | % | 928 | ||||||||||||||||||||||||||||||||||
| New York | 7 | 616 | 308 | 308 | 1,132 | 923 | 81.5 | % | 497 | 266 | 246 | 92.5 | % | 862 | ||||||||||||||||||||||||||||||||||
| Ohio | 32 | 1,473 | 1,065 | 408 | 5,120 | 3,978 | 77.7 | % | 358 | 1,197 | 1,131 | 94.5 | % | 649 | ||||||||||||||||||||||||||||||||||
| Pennsylvania | 43 | 1,944 | 1,588 | 356 | 6,692 | 5,366 | 80.2 | % | 439 | 1,578 | 1,436 | 91.0 | % | 732 | ||||||||||||||||||||||||||||||||||
| Tennessee | 7 | 413 | 321 | 92 | 1,813 | 1,591 | 87.8 | % | 433 | 767 | 736 | 96.0 | % | 697 | ||||||||||||||||||||||||||||||||||
| Total as of March 31, 2017 | 106 | 5,677 | 4,222 | 1,455 | 19,333 | 15,472 | 80.7 | % | $ | 424 | 4,902 | 4,594 | 93.7 | % | $ | 712 | ||||||||||||||||||||||||||||||||
| Notes: | ||
| (1) The 156 Vacant Sites at Memphis Blues are not included in the calculation of occupancy. | ||
| (2) Total and Vacant Acreage of 220 for the Mountain View Estates property is included in the above summary. | ||
| (3) Includes home and site rent charges. | ||
(unaudited)
| For Three Months Ended | ||||||||||||||||
| 3/31/2017 | 3/31/2016 | Change | % Change | |||||||||||||
| Community Net Operating Income | ||||||||||||||||
| Rental and Related Income | $ | 23,416,302 | $ | 21,786,180 | $ | 1,630,122 | 7.5 | % | ||||||||
| Community Operating Expenses | 10,239,538 | 10,078,820 | 160,718 | 1.6 | % | |||||||||||
| Community NOI | $ | 13,176,764 | $ | 11,707,360 | $ | 1,469,404 | 12.6 | % | ||||||||
| As of | ||||||||||||
| 3/31/2017 | 3/31/2016 | % Change | ||||||||||
| Other Information | ||||||||||||
| Total Sites | 17,602 | 17,637 | -0.2 | % | ||||||||
| Occupied Sites | 14,422 | 14,129 | 2.1 | % | ||||||||
| Occupancy % | 81.9 | % | 80.1 | % | 1.8 | % | ||||||
| Number of Properties | 98 | 98 | N/A | |||||||||
| Monthly Rent Per Site | $ | 429 | $ | 417 | 2.9 | % | ||||||
| Total Rentals | 4,753 | 3,914 | 21.4 | % | ||||||||
| Occupied Rentals | 4,479 | 3,709 | 20.8 | % | ||||||||
| Rental Occupancy | 94.2 | % | 94.8 | % | -0.6 | % | ||||||
| Monthly Rent Per Home Rental | $ | 713 | $ | 687 | 3.8 | % | ||||||
| Notes: |
| Same Property includes all properties owned as of January 1, 2016, with the exception of Memphis Blues. |
At Acquisition:
| Year of Acquisition | Number of Communities | Sites | Occupied Sites | Occupancy % | Price | Total Acres | ||||||||||||||||||
| 2015 | 10 | 2,774 | 1,764 | 64 | % | 81,217,000 | 717 | |||||||||||||||||
| 2016 | 3 | 289 | 215 | 74 | % | 7,277,000 | 192 | |||||||||||||||||
| 2017 | 5 | 1,291 | 815 | 63 | % | 36,510,000 | 382 | |||||||||||||||||
2017 Acquisitions
| Community | Date
of Acquisition | State | Number
of Sites | Purchase Price | Number of Acres | Occupancy | ||||||||||||||
| Hillcrest Estates and Marysville Estates | January 20, 2017 | OH | 532 | $ | 9,588,000 | 149 | 57 | % | ||||||||||||
| Boardwalk and Parke Place | January 20, 2017 | IN | 559 | 24,437,000 | 155 | 77 | % | |||||||||||||
| Hillcrest Crossing | January 24, 2017 | PA | 200 | 2,485,000 | 78 | 40 | % | |||||||||||||
| Total 2017 to Date | 1,291 | $ | 36,510,000 | 382 | 63 | % | ||||||||||||||
Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), normalized funds from operations (“Normalized FFO”), community NOI, same property NOI, and earnings before interest, taxes, depreciation and amortization (“EBITDA”), variously defined, as supplemental performance measures. While the Company believes net income available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, it considers Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of U.S. GAAP depreciation and amortization of real estate assets. Core FFO reflects the same assumptions as FFO except that it also adjusts for the effects of acquisitions costs and costs of early extinguishment of debt. Normalized FFO reflects the same assumptions as Core FFO except that it also adjusts for gains and losses realized on securities investments and certain one-time charges. Community NOI and Same Property NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. In addition, Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO are commonly used in various ratios, pricing multiples, yields and returns and valuation of calculations used to measure financial position, performance and value.
As used herein, the Company calculates FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), to be equal to net income (loss) applicable to common shareholders, as defined by U.S. GAAP, excluding extraordinary items as defined by U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on securities investments.
Core FFO is calculated as FFO plus acquisition costs and costs of extinguishment of debt.
Normalized FFO is calculated as Core FFO excluding gains and losses realized on securities investments and certain one-time charges.
Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 30,427,000 shares for the three months ended March 31, 2017, and 27,161,000 shares for the three months ended March 31, 2016. Common stock equivalents resulting from stock options in the amount of 472,000 shares for the three months ended March 31, 2017, and 43,000 shares for the three months ended March 31, 2016, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net Loss per Share as their effect would be anti-dilutive.
Community NOI is calculated as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. Community NOI excludes realized gains (losses) on securities transactions.
Same Property NOI is calculated as Community NOI, using all properties owned as of January 1, 2016, with the exception of Memphis Blues.
EBITDA is calculated as net income plus interest expense, franchise taxes, depreciation expense and acquisition costs.
Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO do not represent cash generated from operating activities in accordance with U.S. GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO should not be considered as substitutes for net income applicable to common shareholders (calculated in accordance with U.S. GAAP) as a measure of results of operations, or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.
Press Release Dated May 9, 2017
| FOR IMMEDIATE RELEASE | May 9, 2017 |
| Contact: Nelli Madden | |
| 732-577-9997 |
UMH PROPERTIES, INC. REPORTS 1st QUARTER 2017 EARNINGS
FREEHOLD, NJ, May 9, 2017........ UMH Properties, Inc. (NYSE:UMH) reported Total Income of $26,449,000 for the quarter ended March 31, 2017 as compared to $23,504,000 for the quarter ended March 31, 2016, representing an increase of 13%. Net Loss Attributable to Common Shareholders amounted to $1,504,000 or $0.05 per diluted share for the quarter ended March 31, 2017 as compared to $883,000 or $0.03 per diluted share for the quarter ended March 31, 2016.
Core Funds from Operations (“Core FFO”) was $5,061,000 or $0.17 per diluted share for the quarter ended March 31, 2017, as compared to $4,620,000 or $0.17 per diluted share for the quarter ended March 31, 2016. Normalized Funds from Operations (“Normalized FFO”) was $5,029,000 or $0.17 per diluted share for the quarter ended March 31, 2017, as compared to $4,388,000 or $0.16 per diluted share for the quarter ended March 31, 2016, representing an increase in Normalized FFO per diluted share of 6.3%.
A summary of significant financial information for the three months ended March 31, 2017 and 2016 is as follows:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
| Total Income | $ | 26,449,000 | $ | 23,504,000 | ||||
| Total Expenses | $ | 22,485,000 | $ | 19,876,000 | ||||
| Gain on Sales of Securities, net | $ | 32,000 | $ | 232,000 | ||||
| Net Loss Attributable to Common Shareholders | $ | (1,504,000 | ) | $ | (883,000 | ) | ||
| Net Loss Attributable to Common Shareholders per Diluted Common Share | $ | (0.05 | ) | $ | (0.03 | ) | ||
| Core FFO (1) | $ | 5,061,000 | $ | 4,620,000 | ||||
| Core FFO (1) per Diluted Common Share | $ | 0.17 | $ | 0.17 | ||||
| Normalized FFO (1) | $ | 5,029,000 | $ | 4,388,000 | ||||
| Normalized FFO (1) per Diluted Common Share | $ | 0.17 | $ | 0.16 | ||||
| Weighted Average Diluted Shares Outstanding | 29,955,000 | 27,118,000 | ||||||
A summary of significant balance sheet information as of March 31, 2017 and December 31, 2016 is as follows:
| March 31, 2017 | December 31, 2016 | |||||||
| Gross Real Estate Investments | $ | 684,457,000 | $ | 640,217,000 | ||||
| Securities Available for Sale at Fair Value | $ | 107,516,000 | $ | 108,755,000 | ||||
| Total Assets | $ | 725,782,000 | $ | 680,445,000 | ||||
| Mortgages Payable, net | $ | 305,451,000 | $ | 293,026,000 | ||||
| Loans Payable, net | $ | 81,924,000 | $ | 58,285,000 | ||||
| Total Shareholders’ Equity | $ | 324,928,000 | $ | 317,032,000 | ||||
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Samuel A. Landy, President and CEO, commented on the results of the first quarter of 2017.
“We are pleased to announce another strong quarter of operating results. While Net Loss Attributable to Common Shareholders (which includes depreciation expense), increased from $0.03 per diluted share to $0.05 per diluted share, our Normalized FFO (which excludes depreciation expenses) increased from $0.16 per diluted share to $0.17 per diluted share, representing a 6.3% year over year increase. We have been growing the Company both internally and externally. Our same-store portfolio continues to perform to our expectations which is driving increased earnings growth. We are also proud of our ability to acquire communities that fit our acquisition criteria and are accretive to earnings. During the quarter, we also:
| ● | Increased Rental and Related Income by 12.6% over the prior year period; | |
| ● | Increased Community Net Operating Income (“NOI”) by 16.2% over the prior year period; | |
| ● | Improved our Operating Expense ratio by 170 basis points over the prior year period from 48.5% to 46.8%; | |
| ● | Increased Same Property NOI by 12.6% over the prior year period; | |
| ● | Increased Same Property Occupancy by 180 basis points over the prior year period from 80.1% to 81.9%; | |
| ● | Increased home sales by 11.6% over the prior year period; | |
| ● | Increased our rental home portfolio by 243 homes, representing an increase of 5.2% from yearend 2016, to approximately 4,900 total rental homes; | |
| ● | Increased rental home occupancy by 220 basis points from 91.5% at yearend 2016 to 93.7% at quarter end; | |
| ● | Acquired 5 communities containing approximately 1,300 homesites for a total cost of $36.5 million; | |
| ● | Reduced the weighted average interest rate on our total debt from 4.3% to 4.1%; | |
| ● | Renewed and expanded our existing unsecured credit facility; and | |
| ● | Achieved a $1 billion total market capitalization, an increase of 35.7% over the prior year period.” |
“We are making substantial progress on many fronts. We have continued to execute on our acquisition program, and in the first quarter, acquired 5 communities containing approximately 1,300 developed homesites for an aggregate cost of approximately $36.5 million. These communities are located in regions where we are seeing increased demand and should provide us with an opportunity to significantly improve community operating results.”
“We are successfully integrating and upgrading our acquisitions, including adding rental homes, which is resulting in increased occupancy and NOI. Same Property NOI increased by 12.6% year over year. Same Property occupancy increased by a healthy 180 basis points. This demonstrates the strength of our business plan of acquiring communities in strong geographic locations, making necessary improvements and implementing our rental, sales and marketing programs.”
“We continue to take advantage of the low interest rate environment and reduced the weighted average interest rate on our total debt to 4.1%. We have also increased our liquidity and further strengthened our financial flexibility and balance sheet with the renewal and expansion of our existing unsecured credit facility.”
UMH Properties, Inc. will host its First Quarter 2017 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Wednesday, May 10, 2017 at 10:00 a.m. Eastern Time.
The Company’s 2017 first quarter financial results being released herein will be available on the Company’s website at www.umh.reit in the “Financial Information and Filings” section.
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To participate in the webcast, select the microphone icon found on the homepage www.umh.reit to access the call. Interested parties can also participate via conference call by calling toll free 877-513-1898 (domestically) or 412-902-4147 (internationally).
The replay of the conference call will be available at 12:00 p.m. Eastern Time on Wednesday, May 10, 2017. It will be available until August 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10104502. A transcript of the call and the webcast replay will be available at the company’s website, www.umh.reit.
UMH Properties, Inc., which was organized in 1968, is a public equity REIT that owns and operates 106 manufactured home communities containing approximately 19,300 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. 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.
Note:
| (1) | Non-GAAP Information: We assess and measure our overall operating results based upon an industry performance measure referred to as Funds From Operations (“FFO”), which management believes is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), represents Net Income (Loss) Attributable to Common Shareholders, as defined by accounting principles generally accepted in the United States of America (“U.S. GAAP”), excluding extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Core Funds From Operations (“Core FFO”) as FFO plus acquisition costs and costs of early extinguishment of debt. We define Normalized Funds From Operations (“Normalized FFO”) as Core FFO excluding gains and losses realized on securities investments and certain non-recurring charges. We define Community NOI as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. FFO, Core FFO and Normalized FFO, as well as Community NOI, should be considered as supplemental measures of operating performance used by REITs. FFO, Core FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO, Core FFO, Normalized FFO and Community NOI and, accordingly, our FFO, Core FFO, Normalized FFO and Community NOI may not be comparable to all other REITs. The items excluded from FFO, Core FFO and Normalized FFO are significant components in understanding the Company’s financial performance. | |
| FFO, Core FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as an alternative to net income (loss) as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity. |
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The reconciliation of the Company’s U.S. GAAP net loss to the Company’s FFO, Core FFO and Normalized FFO for the three months ended March 31, 2017 and 2016 are calculated as follows:
| Three Months Ended | ||||||||
| 3/31/17 | 3/31/16 | |||||||
| Net Loss Attributable to Common Shareholders | $ | (1,504,000 | ) | $ | (883,000 | ) | ||
| Depreciation Expense | 6,540,000 | 5,525,000 | ||||||
| (Gain) Loss on Sales of Depreciable Assets | 25,000 | (22,000 | ) | |||||
| FFO and Core Attributable to Common Shareholders | 5,061,000 | 4,620,000 | ||||||
| Gain on Sales of Securities, net | (32,000 | ) | (232,000 | ) | ||||
| Normalized FFO Attributable to Common Shareholders | $ | 5,029,000 | $ | 4,388,000 | ||||
The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 30,427,000 shares for the three months ended March 31, 2017, and 27,161,000 shares for the three months ended March 31, 2016. Common stock equivalents resulting from stock options in the amount of 472,000 shares for the three months ended March 31, 2017, and 43,000 shares for the three months ended March 31, 2016, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net Loss per Share as their effect would be anti-dilutive.
The following are the cash flows provided (used) by operating, investing and financing activities for the three months ended March 31, 2017 and 2016:
| Three Months Ended | ||||||||
| 3/31/17 | 3/31/16 | |||||||
| Operating Activities | $ | 10,339,000 | $ | 7,659,000 | ||||
| Investing Activities | (49,618,000 | ) | (18,538,000 | ) | ||||
| Financing Activities | 43,368,000 | 12,258,000 | ||||||
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