FREEHOLD, N.J., March 11 /PRNewswire-FirstCall/ -- UMH Properties, Inc.
(Amex: UMH) reported net income of $2,633,000 or $0.25 a share for the year
ended December 31, 2007, as compared to $5,840,000 or $0.58 a share for the
year ended December 31, 2006.
A summary of significant financial information for the years ended
December 31, 2007 and 2006, and for the quarters ended December 31, 2007 and
2006, is as follows:
For the Years Ended December 31,
2007 2006
Total Revenues $38,841,000 $42,645,000
Total Expenses $36,307,000 $36,963,000
Net Income $2,633,000 $5,840,000
Net Income per Share $.25 $.58
FFO (1) $6,192,000 $9,097,000
FFO per Share (1) $.59 $.90
Weighted Average Shares
Outstanding 10,535,000 10,094,000
For the Quarters Ended December 31,
2007 2006
Total Revenues $8,718,000 $12,895,000
Total Expenses $8,971,000 $10,747,000
Net Income $(243,000) $2,206,000
Net Income per Share $(.02) $.22
FFO (1) $710,000 $3,019,000
FFO per Share (1) $.07 $.29
Weighted Average Shares
Outstanding 10,689,000 10,260,000
(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 trusts (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 is calculated as follows:
For the Years Ended For the Quarters Ended
12/31/07 12/31/06 12/31/07 12/31/06
Net Income $2,633,000 $5,840,000 ($243,000) $2,206,000
Gain on Sales of
Depreciable Assets (99,000) (158,000) (10,000) (58,000)
Depreciation Expense 3,658,000 3,415,000 963,000 871,000
FFO $6,192,000 $9,097,000 $710,000 $3,019,000
The following are the cash flows provided by (used in) operating,
investing and financing activities for the years ended December 31, 2007 and
2006:
2007 2006
Operating Activities $2,767,000 $4,162,000
Investing Activities (21,090,000) (2,592,000)
Financing Activities 18,540,000 (4,121,000)
Samuel A. Landy, President, stated, "There were three factors that we
believe to be non-recurring events that had a negative impact on our reported
earnings in 2007: 1. In 2007, we wrote down approximately $1,000,000 in
securities held for investment which were considered other than temporarily
impaired. We plan on holding these securities as long-term investments and
believe that the intrinsic value of these holdings is substantially above
their current market value. 2. We realized a loss of approximately $700,000 on
our 10 year Treasury futures contracts. Because accounting rules require us to
realize gains or losses on our futures contracts quarterly, this can create
volatility in our reported earnings. It is important that our shareholders
understand that our interest rate risk hedging strategy is a part of our long-
term risk management plan, and that we have offsetting positions that can
benefit from falling 10 year interest rates. 3. The fair value of the
Company's interest rate swaps increased interest expense by $467,000 in 2007
as compared to $68,000 in 2006, a swing of almost $400,000. Because we plan on
holding these loans to maturity, these changes in fair value of our interest
rate swap will ultimately net to $0."
Mr. Landy further stated, "UMH owns 28 manufactured home communities. The
value of our communities continues to rise. We have made substantial
investments in upgrading and expanding our communities. While we do not
publish what we believe to be our Net Asset Value (NAV), we feel that our
current share price is not indicative of our current NAV nor the replacement
costs of these high barrier to entry assets. Occupancy of our manufactured
housing communities has declined to 81% from 82% at year end 2006. UMH has
approximately 1,300 vacant sites. Because our operating expenses are largely
fixed costs, our 1,300 vacant sites provide us with considerable operational
leverage. Now that the conventional home lending environment has returned to
more disciplined lending practices, we believe that the manufactured housing
sector is poised for significant improvement. As new borrowers consider their
housing options, manufactured housing should once again be viewed as an
attractive affordable housing alternative. We have prepared ourselves to take
advantage of the predicted change in the market. The extent of our benefit
should become clearer over the course of the year."
UMH Properties, Inc., a publicly-owned real estate investment trust, 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, +1-732-577-9997, both for UMH Properties, Inc.