UMH Properties, Inc. Reports 2nd Quarter 2015 Earnings

Aug 06, 2015, 17:00 ET from UMH Properties, Inc.

FREEHOLD, N.J., Aug. 6, 2015 /PRNewswire/ -- UMH Properties, Inc. (NYSE: UMH) reported Normalized Funds from Operations (Normalized FFO) of $3,096,000 or $0.12 per diluted share for the quarter ended June 30, 2015, as compared to $2,507,000 or $0.11 per diluted share for the quarter ended June 30, 2014.  Normalized FFO for the six months ended June 30, 2015 was $6,322,000 or $0.25 per diluted share as compared to $4,423,000 or $0.20 a year ago.  Core Funds from Operations (Core FFO), which includes realized gains on the sale of securities was $3,118,000 or $0.12 per diluted share for the quarter ended June 30, 2015, as compared to $3,214,000 or $0.15 per diluted share for the quarter ended June 30, 2014. 

A summary of significant financial information for the three and six months ended June 30, 2015 and 2014 is as follows:

 

For the Three Months Ended

June 30,

2015

2014

Total Income

$

19,553,000

$

18,149,000

Total Expenses

$

17,485,000

$

16,490,000

Gain on Securities Transactions, net

$

22,000

$

707,000

Net Loss Attributable to Common Shareholders

$

(1,685,000)

$

(412,000)

Net Loss Attributable to Common

  Shareholders per Diluted Common Share

 

$

 

(0.06)

 

$

 

(0.02)

Core FFO (1)

$

3,118,000

$

3,214,000

Core FFO (1) per Diluted Common Share 

$

0.12

$

0.15

Normalized FFO (1)

$

3,096,000

$

2,507,000

Normalized FFO (1) per Diluted Common Share

$

0.12

$

0.11

Weighted Average Diluted Shares Outstanding

25,702,000

22,104,000

 

 

For the Six Months Ended

June 30,

2015

2014

Total Income

$

37,898,000

$

33,998,000

Total Expenses

$

33,855,000

$

31,591,000

Gain on Securities Transactions, net

$

80,000

$

1,215,000

Net Loss Attributable to Common Shareholders

$

(2,856,000)

$

(1,733,000)

Net Loss Attributable to Common

  Shareholders per Diluted Common Share

 

$

 

(0.11)

 

$

 

(0.08)

Core FFO (1)

$

6,277,000

$

5,638,000

Core FFO (1) per Diluted Common Share 

$

0.25

$

0.26

Normalized FFO (1)

$

6,322,000

$

4,423,000

Normalized FFO (1) per Diluted Common Share

$

0.25

$

0.20

Weighted Average Diluted Shares Outstanding

25,262,000

21,701,000

 

 

A summary of significant balance sheet information as of June 30, 2015 and December 31, 2014 is as follows:

June 30,

2015

December 31, 2014

Total Investment Property

$  479,934,000

$  448,164,000

Securities Available for Sale at Fair Value

$    63,348,000

$    63,556,000

Total Assets

$  506,012,000

$  478,269,000

Mortgages Payable

$  224,312,000

$  182,671,000

Loans Payable

$    64,936,000

$    77,439,000

Total Shareholders' Equity

$  205,545,000

$  208,827,000

 

Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2015:

"We are pleased with the progress achieved during the quarter.  Normalized FFO was $3.1 million or $0.12 per diluted share for the second quarter of 2015, compared to $2.5 million or $0.11 per diluted share in the prior year period, representing an increase of 9% on a per share basis. For the six months, normalized FFO increased 25% to $0.25 per diluted share compared to $0.20 per diluted share a year ago.  Because the $40 million net proceeds from our recent financing which was completed at the end of the first quarter have not yet been fully deployed, Normalized FFO was impacted this quarter by an increase in interest expense. The proceeds from this financing will go toward funding our upcoming acquisitions which will generate additional per share earnings accretion once they are fully deployed."

"Community Net Operating Income (NOI) increased 18% to $8.8 million for the second quarter of 2015, as compared to $7.4 million for the same period in 2014.  This growth in earnings has been driven by our recent acquisitions, increased occupancy rates, and the addition of rental homes.  Demand for rental units continues to be strong and we expect to add a total of approximately 700 occupied rental units this year. We have also continued to improve our same property metrics.  Same property occupancy increased 90 basis points over the prior year period from 82.5% to 83.4% currently.  Same property revenue increased 8.2% and expenses decreased 50 basis points.  This resulted in an increase in same property NOI of 16.5% over the prior year period.  For the six months, same property NOI increased 17.8%.  Our community operating expenses as a percent of rental and related income continue to trend down as we upgrade and integrate our acquisitions, and for the current quarter was 51.0%, representing a 190 basis point improvement over the prior year period."

"On the acquisition front, we acquired three Pennsylvania communities during the quarter containing a total of approximately 480 developed homesites for an aggregate purchase price of $8.8 million. In addition to the acquisitions completed thus far in 2015, we have a definitive agreement to purchase six manufactured home communities with a total of approximately 2,200 developed homesites located in Indiana, Ohio and Michigan for a purchase price of approximately $68.6 million.  This acquisition is expected to close during the second half of 2015.  We are negotiating the refinancing of several of our existing communities, as well as the financing of four of the to-be-acquired communities to help fund our growing acquisition pipeline.  We expect to raise approximately $60 to $65 million of net proceeds after the retirement of existing debt. UMH continues to seek acquisitions in our target markets."

"Our portfolio is now comprised of 92 communities, with 15,700 developed homesites, situated on 4,600 total acres, in seven states.   57% of our acreage is in the energy-rich Marcellus and Utica Shale Region.  Shale development is fueling the revitalization of this region and we feel we are still in the very early stages of witnessing the development of these vast energy resources."

UMH Properties, Inc. will host its Second Quarter 2015 Financial Results Webcast and Conference Call.  Senior management will discuss the results, current market conditions and future outlook on Friday, August 7, 2015 at 10:00 a.m. Eastern Time.

The Company's 2015 second quarter financial results being released herein will be available on the Company's website at www.umh.com in the "Financial Information and Filings" section under the "Investors" tab.

To participate in the webcast, select the "Investors" tab at the top of the company's website at www.umh.com, then select the microphone icon.  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 Friday, August 7, 2015.  It will be available until November 1, 2015, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10066873.  A transcript of the call and the webcast replay will be available at the company's website, www.umh.com under the "Investors" tab.

UMH Properties, Inc., which was organized in 1968, is a public equity REIT that owns and operates ninety-two manufactured home communities containing approximately 15,700 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.  Factors and risks 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.

(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.  FFO, Core FFO and Normalized FFO 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 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 income (loss) to the Company's FFO, Core FFO and Normalized FFO for the three and six months ended June 30, 2015 and 2014 are calculated as follows:

 

Three Months Ended

Six Months Ended

6/30/15

6/30/14

6/30/15

6/30/14

Net Income (Loss) Attributable to Common Shareholders          

$(1,685,000)

$(412,000)

$(2,856,000)

$(1,733,000)

Add: Depreciation Expense

4,451,000

3,672,000

8,680,000

7,110,000

Less: (Gain) Loss on Sales of  Depreciable Assets

74,000

(46,000)

69,000

(24,000)

FFO Attributable to Common Shareholders

2,840,000

3,214,000

5,893,000

5,353,000

Add: Acquisition Costs

188,000

-0-

294,000

285,000

Add: Cost of Early Extinguishment of Debt

90,000

-0-

90,000

-0-

Core FFO Attributable to Common Shareholders

3,118,000

3,214,000

6,277,000

5,638,000

Less: Gain on Sale of Securities Transactions, net

(22,000)

(707,000)

(80,000)

(1,215,000)

Add: Settlement of Litigation

-0-

-0-

125,000

-0-

Normalized FFO Attributable to Common Shareholders

$3,096,000

$2,507,000

$6,322,000

$4,423,000

 

The following are the cash flows provided (used) by operating, investing and financing activities for the six months ended June 30, 2015 and 2014:

 

2015

2014

Operating Activities

$10,247,000

$7,947,000

Investing Activities

(37,154,000)

(19,545,000)

Financing Activities

27,855,000

14,992,000

 

 

 

SOURCE UMH Properties, Inc.



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http://www.umh.com