UMH Properties, Inc. Reports 2nd Quarter 2017 Earnings
FREEHOLD, N.J., Aug. 3, 2017 /PRNewswire/ -- UMH Properties, Inc. (NYSE: UMH) reported Total Income of $28,818,000 for the quarter ended June 30, 2017 as compared to $25,211,000 for the quarter ended June 30, 2016, representing an increase of 14%. Net Loss Attributable to Common Shareholders amounted to $200,000 or $0.01 per diluted share for the quarter ended June 30, 2017 as compared to $683,000 or $0.03 per diluted share for the quarter ended June 30, 2016.
Core Funds from Operations ("Core FFO") was $6,527,000 or $0.20 per diluted share for the quarter ended June 30, 2017, as compared to $5,041,000 or $0.18 per diluted share for the quarter ended June 30, 2016, representing an increase of 11%. Normalized Funds from Operations ("Normalized FFO") was $5,507,000 or $0.17 per diluted share for the quarter ended June 30, 2017, as compared to $4,259,000 or $0.16 per diluted share for the quarter ended June 30, 2016, representing an increase in Normalized FFO per diluted share of 6%.
A summary of significant financial information for the three and six months ended June 30, 2017 and 2016 is as follows:
| For the Three Months Ended |
||||||
| June 30, |
||||||
| 2017 |
2016 |
|||||
| Total Income |
$ |
28,818,000 |
$ |
25,211,000 |
||
| Total Expenses |
$ |
24,858,000 |
$ |
21,177,000 |
||
| Gain on Sales of Securities, net |
$ |
1,020,000 |
$ |
782,000 |
||
| Net Loss Attributable to Common Shareholders |
$ |
(200,000) |
$ |
(683,000) |
||
| Net Loss Attributable to Common Shareholders per Diluted Common Share |
$ |
(0.01) |
$ |
(0.03) |
||
| Core FFO (1) |
$ |
6,527,000 |
$ |
5,041,000 |
||
| Core FFO (1) per Diluted Common Share |
$ |
0.20 |
$ |
0.18 |
||
| Normalized FFO (1) |
$ |
5,507,000 |
$ |
4,259,000 |
||
| Normalized FFO (1) per Diluted Common Share |
$ |
0.17 |
$ |
0.16 |
||
| Weighted Average Diluted Shares Outstanding |
31,769,000 |
27,314,000 |
||||
| For the Six Months Ended |
||||||
| June 30, |
||||||
| 2017 |
2016 |
|||||
| Total Income |
$ |
55,266,000 |
$ |
48,715,000 |
||
| Total Expenses |
$ |
47,344,000 |
$ |
41,053,000 |
||
| Gain on Sales of Securities, net |
$ |
1,052,000 |
$ |
1,014,000 |
||
| Net Loss Attributable to Common Shareholders |
$ |
(1,704,000) |
$ |
(1,566,000) |
||
| Net Loss Attributable to Common Shareholders per Diluted Common Share |
$ |
(0.06) |
$ |
(0.06) |
||
| Core FFO (1) |
$ |
11,587,000 |
$ |
9,662,000 |
||
| Core FFO (1) per Diluted Common Share |
$ |
0.37 |
$ |
0.35 |
||
| Normalized FFO (1) |
$ |
10,535,000 |
$ |
8,648,000 |
||
| Normalized FFO (1) per Diluted Common Share |
$ |
0.34 |
$ |
0.32 |
||
| Weighted Average Diluted Shares Outstanding |
30,888,000 |
27,222,000 |
||||
A summary of significant balance sheet information as of June 30, 2017 and December 31, 2016 is as follows:
| June 30, 2017 |
December 31, |
||
| Gross Real Estate Investments |
$ 704,751,000 |
$ 640,217,000 |
|
| Securities Available for Sale at Fair Value |
$ 109,079,000 |
$ 108,755,000 |
|
| Total Assets |
$ 746,221,000 |
$ 680,445,000 |
|
| Mortgages Payable, net |
$ 311,304,000 |
$ 293,026,000 |
|
| Loans Payable, net |
$ 64,178,000 |
$ 58,285,000 |
|
| Total Shareholders' Equity |
$ 356,992,000 |
$ 317,032,000 |
Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2017.
"We are pleased to announce another strong quarter of operating results. Net Loss Attributable to Common Shareholders (which includes depreciation expense), decreased from $0.03 per diluted share to $0.01 per diluted share. Our Core FFO (which excludes depreciation expenses) increased from $0.18 per diluted share to $0.20 per diluted share, representing an 11.1% year over year increase. Normalized FFO increased from $0.16 per diluted share to $0.17 per diluted share, representing a 6.3% year over year increase. The positive momentum created by our strong first quarter performance has continued into the second quarter, with double-digit growth in core FFO, rental revenue, home sales and NOI. We are also pleased to be included in the MSCI REIT Index. We anticipate that this will result in greater visibility and allow us to reach a broader pool of investors. During the quarter, we also:
- Increased Rental and Related Income by 12.8% over the prior year period;
- Increased Community Net Operating Income ("NOI") by 14.7% over the prior year period;
- Improved our Operating Expense ratio by 90 basis points over the prior year period from 47.8% to 46.9%;
- Increased Same Property NOI by 10.5% over the prior year period;
- Increased Same Property Occupancy by 180 basis points over the prior year period from 80.7% to 82.5%;
- Increased home sales by 26.4% over the prior year period;
- Increased our rental home portfolio by 190 homes to approximately 5,100 total rental homes, representing an increase of 9.3% from yearend 2016;
- Increased rental home occupancy by 210 basis points from 91.5% at yearend 2016 to 93.6% at quarter end;
- Acquired our first community in Maryland, a 63-site age restricted community with vacant land for future development for a total of 170 sites;
- Obtained a $16.8 million, 4.12% mortgage and repaid the existing $9 million, 6.175% mortgage;
- Reduced the weighted average interest rate on our mortgage debt from 4.5% to 4.3%;
- Issued 1.4 million shares of our common stock raising net proceeds of $22.5 million, in conjunction with our inclusion in the MSCI REIT Index;
- Raised $15.6 million through our Dividend Reinvestment and Stock Purchase Plan; and,
- Increased our total market capitalization to $1.1 billion, an increase of 36.6% over the prior year period."
"Subsequent to quarter end, we increased our liquidity and further strengthened our financial flexibility and balance sheet by issuing 5 million shares of a new 6.75% Series C Cumulative Redeemable Preferred Stock on July 26, 2017, for net proceeds after deducting the underwriting discount and other estimated offering expenses, of approximately $121 million. In addition, the underwriters exercised their overallotment option and we issued an additional 750,000 shares of Series C Preferred Stock on August 2, 2017 for additional net proceeds of $18 million. We intend to use a portion of the net proceeds from our sale of Series C Preferred Stock to redeem all of the 3,663,800 outstanding shares of our 8.25% Series A Preferred Stock, with a total redemption value of $91.6 million on August 31, 2017. This 150 basis point reduction will result in $1.4 million in annual preferred dividend savings. The balance of the offering proceeds will be used for general corporate purposes, including potential acquisitions, expansions of communities and for the purchase of additional homes for sale or lease to customers, which will generate additional per share earnings accretion once they are fully deployed."
"We look forward to building on the substantial progress we have made thus far."
UMH Properties, Inc. will host its Second Quarter 2017 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, August 4, 2017 at 10:00 a.m. Eastern Time.
The Company's 2017 second 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 Friday, August 4, 2017. It will be available until November 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10108600. 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 107 manufactured home communities containing approximately 19,400 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland. 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, NormalizedFFO 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. |
|
| The reconciliation of the Company's U.S. GAAP net loss to the Company's FFO, Core FFO and Normalized FFO for the three and six months ended June 30, 2017 and 2016 are calculated as follows: |
|
| Three Months Ended |
Six Months Ended |
||||||||
| 6/30/17 |
6/30/16 |
6/30/17 |
6/30/16 |
||||||
| Net Loss Attributable to Common Shareholders |
$(200,000) |
$(683,000) |
$(1,704,000) |
$(1,566,000) |
|||||
| Depreciation Expense |
6,740,000 |
5,679,000 |
13,280,000 |
11,205,000 |
|||||
| Loss on Sales of Depreciable Assets |
(13,000) |
45,000 |
11,000 |
23,000 |
|||||
| FFO and Core FFO Attributable to Common Shareholders |
6,527,000 |
5,041,000 |
11,587,000 |
9,662,000 |
|||||
| Gain on Sales of Securities, net |
(1,020,000) |
(782,000) |
(1,052,000) |
(1,014,000) |
|||||
| Normalized FFO Attributable |
$5,507,000 |
$4,259,000 |
$10,535,000 |
$8,648,000 |
|||||
| The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 32,279,000 and 31,353,000 shares for the three and six months ended June 30, 2017, respectively, and 27,436,000 and 27,301,000 shares for the three and six months ended June 30, 2016, respectively. Common stock equivalents resulting from stock options in the amount of 510,000 and 465,000 shares for the three and six months ended June 30, 2017, respectively, and 122,000 and 79,000 shares for the three and six months ended June 30, 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 six months ended June 30, 2017 and 2016: |
| Six Months Ended |
||||
| 6/30/17 |
6/30/16 |
|||
| Operating Activities |
$16,646,000 |
$11,689,000 |
||
| Investing Activities |
(75,852,000) |
(36,518,000) |
||
| Financing Activities |
63,156,000 |
27,884,000 |
||
SOURCE UMH Properties, Inc.
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