FREEHOLD, N.J., May 9 /PRNewswire-FirstCall/ -- UMH Properties, Inc.
(Amex: UMH) reported net loss of ($305,000) or ($0.03) a share for the quarter
ended March 31, 2008, as compared to net income of $837,000 or $0.08 a share
for the quarter ended March 31, 2007. Included in the loss for 2008 are
losses in our futures contracts of $651,000 or $0.06 a share and an increase
in interest expense of $349,000 or $0.03 per share due to the fair value of
our interest rate swaps.
A summary of significant financial information for the three months ended
March 31, 2008 and 2007 is as follows:
For the Three Months Ended
3/31/08 3/31/07
Total Revenues $8,316,000 $8,800,000
Total Expenses $8,616,000 $7,995,000
Net Income (Loss) $(305,000) $837,000
Net Income per Share $(.03) $.08
FFO (1) $714,000 $1,693,000
FFO per Share (1) $.07 $.16
Weighted Average Shares Outstanding 10,771,000 10,368,000
(1) Non-GAAP Information: Funds from Operations (FFO) is defined as net
income excluding gains (or losses) from sales of depreciable assets,
plus depreciation. FFO per share is defined as FFO divided by the
weighted average shares outstanding. FFO and FFO per share should be
considered as supplemental measures of operating performance used by
real estate investment trust (REITs). FFO and FFO per share exclude
historical cost depreciation as an expense and may facilitate the
comparison of REITs which have different cost bases. The items
excluded from FFO and FFO per share are significant components in
understanding and assessing the Company's financial performance. FFO
and FFO per share (1) do not represent cash flow from operations as
defined by generally accepted accounting principles; (2) should not
be considered as alternatives to net income or net income per share
as measures of operating performance or to cash flows from operating,
investing and financing activities; and (3) are not alternatives to
cash flow as a measure of liquidity. FFO and FFO per share, as
calculated by the Company, may not be comparable to similarly
entitled measures reported by other REITs.
The Company's FFO for the quarter ended March 31, 2008 and 2007 is
calculated as follows:
2008 2007
Net Income (Loss) ($305,000) $837,000
Loss (Gain) on Sales of Depreciable Assets 4,000 (32,000)
Depreciation Expense 1,015,000 888,000
FFO $714,000 $1,693,000
The following are the cash flows provided (used) by operating, investing
and financing activities for the three months ended March 31, 2008 and 2007:
2008 2007
Operating Activities $1,909,000 ($516,000)
Investing Activities (2,979,000) (1,154,000)
Financing Activities 788,000 1,656,000
Samuel A. Landy, President, stated that, "UMH experienced disappointing
earnings for the first quarter ended March 31, 2008. UMH's business plan
envisions a resurgence in sales for affordable manufactured housing. The
decline in the housing market and the unsettling economy has slowed this
resurgence. UMH invested over $5 million in newly-built home sites over the
past twelve months. These expansions upgraded our communities and increased
rental income. The full benefits of these expansions cannot be seen until
these expansions are fully on line and vacant sites are filled. UMH added
several new executives to its staff to position itself for expanded sales and
finance. UMH increased inventory to a record high of $12 million. Instead of
increased sales, sales actually decreased in the first quarter.
"Management remains optimistic that sales will increase substantially.
Affordable housing is a necessity. Conventional home ownership is trending
back down, and we anticipate seeing greater demand for our property type. UMH
is well positioned to benefit from this demand based on our locations, the
quality of our communities and our personnel. The manufactured housing
industry suffers from a lack of financing sources for sales of homes. UMH has
a competitive advantage if it can provide financing to our customers. April's
sales were good for UMH, but it is too early to say if this is the beginning
of a turnaround. We note that occupancy is stable, and rents have increased.
With increased sales and occupancy, UMH will demonstrate improved financial
performance. Our focus, as always, remains on the longer term. In this
regard, it is worth noting that our nation is just now emerging from an
unprecedented conventional housing bubble. I am very proud of our
accomplishments to date and remain optimistic about the future.
"UMH has had to postpone a decision on its dividend policy pending a
clearer picture of our borrowing capacity. Our dividend meeting is now
scheduled for May 28, 2008. We anticipate recommending a reduced dividend in
2008."
UMH, a publicly-owned REIT, owns and operates twenty-eight manufactured
home communities located in New Jersey, New York, Pennsylvania, Ohio and
Tennessee. 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. 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.
SOURCE UMH Properties, Inc.
Contact: Rosemarie Faccone or Susan Jordan, both of UMH Properties, Inc., +1-732-577-9997