UMH Properties, Inc. Reports 1st Quarter 2016 Earnings
FREEHOLD, N.J., May 9, 2016 /PRNewswire/ -- UMH Properties, Inc. (NYSE: UMH) reported Core Funds from Operations ("Core FFO") of $4,620,000 or $0.17 per diluted share for the quarter ended March 31, 2016, as compared to $3,159,000 or $0.13 per diluted share for the quarter ended March 31, 2015, representing an increase in Core FFO per diluted share of 30.8%. Normalized Funds from Operations ("Normalized FFO"), was $4,388,000 or $0.16 per diluted share for the quarter ended March 31, 2016, as compared to $3,226,000 or $0.13 per diluted share for the quarter ended March 31, 2015, representing an increase in Normalized FFO per diluted share of 23.1%.
A summary of significant financial information for the three months ended March 31, 2016 and 2015 is as follows:
| For the Three Months Ended |
|||||
| March 31, |
|||||
| 2016 |
2015 |
||||
| Total Income |
$ |
23,504,000 |
$ |
18,344,000 |
|
| Total Expenses |
$ |
19,876,000 |
$ |
16,370,000 |
|
| Gain on Securities Transactions, net |
$ |
232,000 |
$ |
58,000 |
|
| Net Loss Attributable to Common Shareholders |
$ |
(883,000) |
$ |
(1,171,000) |
|
| Net Loss Attributable to Common Shareholders per Diluted Common Share |
$ |
(0.03) |
$ |
(0.05) |
|
| Core FFO (1) |
$ |
4,620,000 |
$ |
3,159,000 |
|
| Core FFO (1) per Diluted Common Share |
$ |
0.17 |
$ |
0.13 |
|
| Normalized FFO (1) |
$ |
4,388,000 |
$ |
3,226,000 |
|
| Normalized FFO (1) per Diluted Common Share |
$ |
0.16 |
$ |
0.13 |
|
| Weighted Average Diluted Shares Outstanding |
27,161,000 |
24,841,000 |
|||
A summary of significant balance sheet information as of March 31, 2016 and December 31, 2015 is as follows:
| March 31, 2016 |
December 31, |
||
| Gross Real Estate Investments |
$ 587,356,000 |
$ 577,709,000 |
|
| Total Assets |
$ 624,040,000 |
$ 600,317,000 |
|
| Securities Available for Sale at Fair Value |
$ 91,396,000 |
$ 75,011,000 |
|
| Mortgages Payable, net |
$ 288,643,000 |
$ 283,050,000 |
|
| Loans Payable, net |
$ 71,953,000 |
$ 57,862,000 |
|
| Total Shareholders' Equity |
$ 249,552,000 |
$ 246,238,000 |
Samuel A. Landy, President and CEO, commented on the results of the first quarter of 2016.
"We are pleased to announce a strong quarter of operating results. During the quarter, we:
- Increased Core FFO per diluted share to $0.17, representing a 30.8% increase over the prior year period and a 21.4% increase sequentially;
- Increased Normalized FFO per diluted share to $0.16, representing a 23.1% increase over the prior year period and a 14.3% increase sequentially;
- Increased Rental and Related Income by 26.5% over the prior year period;
- Increased Community Net Operating Income ("NOI") by 33.6% over the prior year period;
- Increased Same Property Occupancy 140 basis points over the prior year period from 82.1% to 83.5%;
- Increased Same Property NOI by 16.7% over the prior year period;
- Decreased our Operating Expense Ratio 270 basis points over the prior year period from 51.2% to 48.5%;
- Increased homes sales by 52.3% over the prior year period from $1.1 million (24 homes sold) to $1.7 million (41 homes sold);
- Increased our rental home portfolio by 182 homes, representing an increase of 4.9% from yearend 2015 to approximately 3,900 total rental homes;
- Increased rental home occupancy from 92.9% at yearend 2015 to 94.8% at quarterend; and
- Increased unrealized gain (loss) on REIT securities from an unrealized loss of $2.1 million at December 31, 2015 to an unrealized gain of $6.5 million at quarter end, in addition to recognizing realized gains of $232,000 and $1.5 million in dividend income for the quarter."
"We are making substantial progress on many fronts. We are successfully integrating and upgrading our acquisitions, which is resulting in increased occupancy and NOI. Same Property NOI continues to grow at a high rate and increased by 16.7% this recent quarter over the prior year. Home sales showed meaningful growth as well, increasing by 52.3%. Our expense ratio continues to come down decreasing by 270 basis points over the prior year period. These healthier margins should continue to improve and generate increased earnings in the ensuing quarters."
"Subsequent to quarterend, we closed on the sale of 2,000,000 shares of our 8.0% Series B Cumulative Redeemable Preferred Stock in a registered direct placement at a purchase price of $25.50 per share. We raised approximately $49.1 million in net proceeds and intend to use these proceeds for general corporate purposes, which may include purchase of manufactured homes for sale or lease to customers, expansion of our existing communities, potential acquisitions of additional properties, and possible repayment of indebtedness on a short-term basis. We anticipate adding 700 to 800 rental homes this year, which will further improve our operating results. Our strong first quarter results represent an excellent start to 2016 that we intend to build upon going forward."
UMH Properties, Inc. will host its First Quarter 2016 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Tuesday, May 10, 2016 at 10:00 a.m. Eastern Time.
The Company's 2016 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.
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 Tuesday, May 10, 2016. It will be available until August 1, 2016, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10083025. 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 ninety-eight manufactured home communities containing approximately 17,800 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. Community NOI excludes realized gains (losses) on securities transactions. 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. 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. FFO, Core FFO and Normalized FFO, as well as Community NOI, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs. |
|
| 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, 2016 and 2015 are calculated as follows: |
|
| Three Months Ended |
||||
| 3/31/16 |
3/31/15 |
|||
| Net Loss Attributable to Common Shareholders |
$(883,000) |
$(1,171,000) |
||
| Depreciation Expense |
5,525,000 |
4,229,000 |
||
| Gain on Sales of Depreciable Assets |
(22,000) |
(5,000) |
||
| FFO Attributable to Common Shareholders |
4,620,000 |
3,053,000 |
||
| Acquisition Costs |
- |
106,000 |
||
| Core FFO Attributable to Common Shareholders |
4,620,000 |
3,159,000 |
||
| Gain on Sale of Securities Transactions, net |
(232,000) |
(58,000) |
||
| Settlement of Memphis Mobile City Litigation |
- |
125,000 |
||
| Normalized FFO Attributable to Common Shareholders |
$4,388,000 |
$3,226,000 |
||
The following are the cash flows provided (used) by operating, investing and financing activities for the three months ended March 31, 2016 and 2015:
| Three Months Ended |
||||
| 3/31/16 |
3/31/15 |
|||
| Operating Activities |
$7,659,000 |
$7,245,000 |
||
| Investing Activities |
(18,538,000) |
(12,154,000) |
||
| Financing Activities |
12,258,000 |
7,902,000 |
||
SOURCE UMH Properties, Inc.
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