UMH Properties, Inc. Reports 3rd Quarter 2017 Earnings
FREEHOLD, N.J., Nov. 2, 2017 /PRNewswire/ -- UMH Properties, Inc. (NYSE: UMH) reported Total Income of $28,685,000 for the quarter ended September 30, 2017 as compared to $25,355,000 for the quarter ended September 30, 2016, representing an increase of 13%. Net Loss Attributable to Common Shareholders amounted to $5,179,000 or $0.15 per diluted share for the quarter ended September 30, 2017 as compared to $590,000 or $0.02 per diluted share for the quarter ended September 30, 2016.
Core Funds from Operations ("Core FFO") was $5,322,000 or $0.15 per diluted share for the quarter ended September 30, 2017, as compared to $5,350,000 or $0.19 per diluted share for the quarter ended September 30, 2016, representing a decrease of 21%. Normalized Funds from Operations ("Normalized FFO") was $4,856,000 or $0.14 per diluted share for the quarter ended September 30, 2017, as compared to $4,465,000 or $0.16 per diluted share for the quarter ended September 30, 2016, representing a decrease in Normalized FFO per diluted share of 13%.
A summary of significant financial information for the three and nine months ended September 30, 2017 and 2016 is as follows:
| For the Three Months Ended |
|||||
| September 30, |
|||||
| 2017 |
2016 |
||||
| Total Income |
$ |
28,685,000 |
$ |
25,355,000 |
|
| Total Expenses |
$ |
24,705,000 |
$ |
21,567,000 |
|
| Gain on Sales of Securities, net |
$ |
466,000 |
$ |
885,000 |
|
| Net Loss Attributable to Common Shareholders |
$ |
(5,179,000) |
$ |
(590,000) |
|
| Net Loss Attributable to Common Shareholders per Diluted Common Share |
$ |
(0.15) |
$ |
(0.02) |
|
| Core FFO (1) |
$ |
5,322,000 |
$ |
5,350,000 |
|
| Core FFO (1) per Diluted Common Share |
$ |
0.15 |
$ |
0.19 |
|
| Normalized FFO (1) |
$ |
4,856,000 |
$ |
4,465,000 |
|
| Normalized FFO (1) per Diluted Common Share |
$ |
0.14 |
$ |
0.16 |
|
| Weighted Average Diluted Shares Outstanding |
34,102,000 |
27,891,000 |
|||
| For the Nine Months Ended |
|||||
| June 30, |
|||||
| 2017 |
2016 |
||||
| Total Income |
$ |
83,951,000 |
$ |
74,070,000 |
|
| Total Expenses |
$ |
72,048,000 |
$ |
62,621,000 |
|
| Gain on Sales of Securities, net |
$ |
1,518,000 |
$ |
1,899,000 |
|
| Net Loss Attributable to Common Shareholders |
$ |
(6,883,000) |
$ |
(2,156,000) |
|
| Net Loss Attributable to Common Shareholders per Diluted Common Share |
$ |
(0.21) |
$ |
(0.08) |
|
| Core FFO (1) |
$ |
16,909,000 |
$ |
15,012,000 |
|
| Core FFO (1) per Diluted Common Share |
$ |
0.52 |
$ |
0.54 |
|
| Normalized FFO (1) |
$ |
15,391,000 |
$ |
13,113,000 |
|
| Normalized FFO (1) per Diluted Common Share |
$ |
0.48 |
$ |
0.48 |
|
| Weighted Average Diluted Shares Outstanding |
31,918,000 |
27,451,000 |
|||
A summary of significant balance sheet information as of September 30, 2017 and December 31, 2016 is as follows:
| September 30, |
December 31, |
||
| Gross Real Estate Investments |
$ 721,712,000 |
$ 640,217,000 |
|
| Securities Available for Sale at Fair Value |
$ 132,212,000 |
$ 108,755,000 |
|
| Total Assets |
$ 785,795,000 |
$ 680,445,000 |
|
| Mortgages Payable, net |
$ 312,808,000 |
$ 293,026,000 |
|
| Loans Payable, net |
$ 41,489,000 |
$ 58,285,000 |
|
| Total Shareholders' Equity |
$ 417,739,000 |
$ 317,032,000 |
Samuel A. Landy, President and CEO, commented on the results of the third quarter of 2017.
"This quarter, UMH reduced the cost of our preferred capital by redeeming all of the outstanding shares of our 8.25% Series A Preferred Stock and issuing a new 6.75% Series C Preferred Stock. This 150 basis point reduction will result in $1.4 million in annual preferred dividend savings going forward. However, we have not yet fully deployed the additional proceeds from the offering which has temporarily impacted our per share metrics. This quarter also included an additional preferred dividend payment of approximately $800,000 due to the timing of the issuance of the new preferred and the redemption of the old preferred. Net Loss and FFO for the quarter were also impacted by a non-recurring, non-cash $3.5 million preferred redemption charge."
"UMH has been positioning itself for an excellent 2018. Our income growth and overall operating metrics remain on target. Total Income increased 13%, Community Net Operating Income increased 9%, and Same Property Occupancy increased 170 basis points. As the remaining proceeds from this offering are fully deployed, we anticipate generating additional per share earnings accretion."
"During the quarter, we also:
- Increased Rental and Related Income by 11.9% year over year;
- Increased Community Net Operating Income ("NOI") by 9.3% year over year;
- Increased Same Property Occupancy by 170 basis points year over year from 81.3% to 83.0%;
- Increased home sales by 25.7% year over year;
- Increased our rental home portfolio by 257 homes to approximately 5,300 total rental homes, representing an increase of 20.3% year over year and 14.8% from yearend 2016;
- Increased rental home occupancy by 270 basis points from 91.5% at yearend 2016 to 94.2% at quarter end;
- Reduced the weighted average interest rate on our mortgage debt from 4.5% to 4.4% year over year;
- Reduced the weighted average interest rate on our total debt from 4.3% to 4.2% year over year;
- Issued 5,750,000 shares of a new 6.75% Series C Cumulative Redeemable Preferred Stock, for net proceeds after deducting the underwriting discount and other estimated offering expenses, of approximately $139 million;
- Raised $18.7 million through our Dividend Reinvestment and Stock Purchase Plan;
- Reduced our Net Debt to Total Market Capitalization from 39% to 30% year over year; and,
- Increased our total market capitalization to $1.1 billion, an increase of 30.8% year over year."
"We are making substantial progress on many fronts. We have increased our liquidity and further strengthened our financial flexibility and balance sheet with the renewal and expansion of our existing unsecured credit facility, the reduction of the cost of our debt, the extension of our debt maturities, and the reduction of our cost of capital. We continue to execute on our business plan. We have a robust acquisition pipeline of approximately $80 million. We anticipate completing the acquisition of a number of communities in early 2018. We look forward to building on the substantial progress we have made thus far."
UMH Properties, Inc. will host its Third Quarter 2017 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, November 3, 2017 at 10:00 a.m. Eastern Time.
The Company's 2017 third 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, November 3, 2017. It will be available until February 1, 2018, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10111693. 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, 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. |
|
| 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 nine months ended September 30, 2017 and 2016 are calculated as follows: |
|
| Three Months Ended |
Nine Months Ended |
|||||||||||
| 9/30/17 |
9/30/16 |
9/30/17 |
9/30/16 |
|||||||||
| Net Loss Attributable to Common Shareholders |
$(5,179,000) |
$(590,000) |
$(6,883,000) |
$(2,156,000) |
||||||||
| Depreciation Expense |
6,980,000 |
5,888,000 |
20,260,000 |
17,093,000 |
||||||||
| Loss on Sales of Depreciable Assets |
19,000 |
1,000 |
30,000 |
24,000 |
||||||||
| FFO Attributable to Common Shareholders |
1,820,000 |
5,299,000 |
13,407,000 |
14,961,000 |
||||||||
| Acquisition Costs |
-0- |
51,000 |
-0- |
51,000 |
||||||||
| Redemption of Preferred Stock |
3,502,000 |
-0- |
3,502,000 |
-0- |
||||||||
| Core FFO Attributable to Common Shareholders |
5,322,000 |
5,350,000 |
16,909,000 |
15,012,000 |
||||||||
| Gain on Sales of Securities, net |
(466,000) |
(885,000) |
(1,518,000) |
(1,899,000) |
||||||||
| Normalized FFO Attributable to Common |
$4,856,000 |
$4,465,000 |
$15,391,000 |
$13,113,000 |
||||||||
| The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 34,572,000 and 32,388,000 shares for the three and nine months ended September 30, 2017, respectively, and 28,091,000 and 27,601,000 shares for the three and nine months ended September 30, 2016, respectively. Common stock equivalents resulting from stock options in the amount of 470,000 shares for both the three and nine months ended September 30, 2017, respectively, and 200,000 and 150,000 shares for the three and nine months ended September 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 nine months ended September 30, 2017 and 2016: |
| Nine Months Ended |
||||
| 9/30/17 |
9/30/16 |
|||
| Operating Activities |
$29,090,000 |
$21,403,000 |
||
| Investing Activities |
(115,409,000) |
(59,958,000) |
||
| Financing Activities |
96,943,000 |
35,729,000 |
||
SOURCE UMH Properties, Inc.
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