UMH Properties, Inc. Reports 3rd Quarter 2015 Earnings

Nov 04, 2015, 16:30 ET from UMH Properties, Inc.

FREEHOLD, N.J., Nov. 4, 2015 /PRNewswire/ -- UMH Properties, Inc. (NYSE: UMH) reported Normalized Funds from Operations Attributable to Common Shareholders (Normalized FFO) of $4,049,000 or $0.15 per diluted share for the quarter ended September 30, 2015, as compared to $2,842,000 or $0.12 per diluted share for the quarter ended September 30, 2014.  Normalized FFO for the nine months ended September 30, 2015 was $10,371,000 or $0.40 per diluted share as compared to $7,265,000 or $0.33 a year ago.  Core Funds from Operations (Core FFO), which includes realized gains on the sale of securities was $4,096,000 or $0.15 per diluted share for the quarter ended September 30, 2015, as compared to $2,899,000 or $0.13 per diluted share for the quarter ended September 30, 2014. 

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

For the Three Months Ended

September 30,

2015

2014

Total Income

$

21,695,000

$

18,555,000

Total Expenses

$

18,966,000

$

16,777,000

Total Community Net Operating Income (NOI) (1)

$

9,633,000

$

7,747,000

Gain on Securities Transactions, net

$

48,000

$

57,000

Net Loss Attributable to Common Shareholders

$

(842,000)

$

(1,260,000)

Net Loss Attributable to Common

  Shareholders per Diluted Common Share

 

$

 

(0.03)

 

$

 

(0.06)

Core FFO (1)

$

4,096,000

$

2,899,000

Core FFO (1) per Diluted Common Share 

$

0.15

$

0.13

Normalized FFO (1)

$

4,049,000

$

2,842,000

Normalized FFO (1) per Diluted Common Share

$

0.15

$

0.12

Weighted Average Diluted Shares Outstanding

26,426,000

22,889,000

                  

For the Nine Months Ended

September 30,

2015

2014

Total Income

$

59,593,000

$

52,553,000

Total Expenses

$

52,820,000

$

48,369,000

Total Community Net Operating Income (NOI) (1)

$

26,834,000

$

21,734,000

Gain on Securities Transactions, net

$

127,000

$

1,273,000

Net Income (Loss) Attributable to Common Shareholders

$

(3,698,000)

$

(2,993,000)

Net Income (Loss) Attributable to Common

  Shareholders per Diluted Common Share

 

$

 

(0.14)

 

$

 

(0.14)

Core FFO (1)

$

10,373,000

$

8,538,000

Core FFO (1) per Diluted Common Share 

$

0.40

$

0.39

Normalized FFO (1)

$

10,371,000

$

7,265,000

Normalized FFO (1) per Diluted Common Share

$

0.40

$

0.33

Weighted Average Diluted Shares Outstanding

25,641,000

22,096,000

 

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

September 30, 2015

December 31, 2014

Total Investment Property

$  528,682,000

$  448,164,000

Securities Available for Sale at Fair Value

$    61,436,000

$    63,556,000

Total Assets

$  551,135,000

$  478,269,000

Mortgages Payable

$  265,966,000

$  182,671,000

Loans Payable

$    69,158,000

$    77,439,000

Total Shareholders' Equity

$  204,616,000

$  208,827,000

 

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

"We are pleased with the progress achieved during the quarter.  Normalized FFO per diluted share grew 25% over the prior year period from $0.12 to $0.15 currently. For the nine months, normalized FFO per diluted share increased 21.2% from $0.33 a year ago to $0.40 currently."

"Total Community Net Operating Income (NOI) increased 24% to $9.6 million for the third quarter of 2015, as compared to $7.7 million for the same period in 2014.  In addition to community acquisitions, the strength of this growth has been fueled by our rental home operations.  Demand for rental homes continues to be strong and over the first three quarters of 2015, we added a total of approximately 700 units to our rental inventory.  Our community operating expenses as a percent of rental and related income continues to trend down as we upgrade and integrate our acquisitions. For the current quarter this expense ratio was 49.2%, representing a 340 basis point improvement over the prior year period."

"Same property metrics continue to improve.  Same property occupancy increased 70 basis points over the prior year period from 83.1% to 83.8% currently.  Same property revenue increased 10.0% for the quarter, while expenses only increased 1.5%.  This resulted in an increase in same property NOI for the quarter of 18.5% over the prior year period.  For the nine months, same property NOI increased 18.0%."

"On the acquisition front, during the first three quarters, we acquired seven manufactured home communities for an aggregate cost of $45.1 million.  Subsequent to quarter-end, we acquired an additional three communities for a purchase price of $36.1 million.  With the communities acquired subsequent to quarter-end, we have continued to generate substantial portfolio growth of 18% year to date. Our overall occupancy rate at quarter end was 81.7%, down 50 basis points from the prior year period. This decrease is due to our large acquisition activity which had a weighted average occupancy rate of only 70%.  These communities were acquired at a going-in cap rate of approximately 7%. As we improve these communities and drive occupancy growth, our returns will be substantially higher."

"On the mortgage front, we have obtained $101 million of new mortgage loans, $85 million net after the retirement of existing mortgages, reducing our weighted average interest rate on mortgage debt to 4.5%.  Subsequent to quarter-end, we completed the financing of an additional five communities for total proceeds of approximately $39 million at a weighted average interest rate of 4.0%."

"With respect to our capital markets activity, subsequent to quarter-end, we issued 1.8 million shares of 8% Series B Cumulative Redeemable Perpetual Preferred Stock at a purchase price of $25.00 per share.  As a result, the Company received net proceeds of approximately $43.3 million which well positions us to continue our growth strategy while issuing fewer common shares going forward."

UMH Properties, Inc. will host its Third Quarter 2015 Financial Results Webcast and Conference Call.  Senior management will discuss the results, current market conditions and future outlook on Thursday, November 5, 2015 at 10:00 a.m. Eastern Time.

The Company's 2015 third 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 Thursday, November 5, 2015.  It will be available until February 1, 2016, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10071981.  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-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.  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, 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. 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 (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 nine months ended September 30, 2015 and 2014 are calculated as follows:

Three Months Ended

Nine Months Ended

9/30/15

9/30/14

9/30/15

9/30/14

Net Loss Attributable to Common Shareholders          

$(842,000)

$(1,260,000)

$(3,698,000)

$(2,993,000)

Depreciation Expense

4,786,000

3,941,000

13,466,000

11,052,000

(Gain) Loss on Sales of  Depreciable Assets

(3,000)

27,000

66,000

3,000

FFO Attributable to Common Shareholders

3,941,000

2,708,000

9,834,000

8,062,000

Acquisition Costs

155,000

191,000

449,000

476,000

Cost of Early Extinguishment of Debt

-

-

90,000

-

Core FFO Attributable to Common Shareholders

4,096,000

2,899,000

10,373,000

8,538,000

Gain on Sale of Securities Transactions, net

(47,000)

(57,000)

(127,000)

(1,273,000)

Settlement of Litigation

-

-

125,000

-

Normalized FFO Attributable to Common Shareholders

$4,049,000

$2,842,000

$10,371,000

$7,265,000

 

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

2015

2014

Operating Activities

$14,009,000

$14,512,000

Investing Activities

(86,930,000)

(44,312,000)

Financing Activities

72,739,000

24,843,000

 

SOURCE UMH Properties, Inc.



RELATED LINKS

http://www.umh.com