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UMH Properties, Inc. Reports 2nd Quarter 2016 Earnings

08/04/2016

FREEHOLD, N.J., Aug. 4, 2016 /PRNewswire/ -- UMH Properties, Inc. (NYSE: UMH) reported Core Funds from Operations ("Core FFO") of $5,041,000 or $0.18 per diluted share for the quarter ended June 30, 2016 as compared to $3,118,000 or $0.12 per diluted share for the quarter ended June 30, 2015, representing an increase in Core FFO per diluted share of 50%.   Normalized Funds from Operations ("Normalized FFO"), was $4,259,000 or $0.16 per diluted share for the quarter ended June 30, 2016, as compared to $3,096,000 or $0.12 per diluted share for the quarter ended June 30, 2015, representing an increase in Normalized FFO per diluted share of 33%. 

A summary of significant financial information for the three and six months ended June 30, 2016 and 2015 is as follows:

 




For the Three Months Ended




June 30,




2016



2015









Total Income

$

25,211,000


$

19,553,000


Total Expenses

$

21,177,000


$

17,485,000


Gain on Securities Transactions, net

$

782,000


$

22,000


Net Loss Attributable to Common Shareholders

$

(683,000)


$

(1,685,000)


Net Loss Attributable to Common

  Shareholders per Diluted Common Share

 

$

 

(0.03)


 

$

 

(0.06)


Core FFO (1)

$

5,041,000


$

3,118,000


Core FFO (1) per Diluted Common Share 

$

0.18


$

0.12


Normalized FFO (1)

$

4,259,000


$

3,096,000


Normalized FFO (1) per Diluted Common Share

$

0.16


$

0.12


Weighted Average Diluted Shares Outstanding


27,436,000



25,702,000

 

 




For the Six Months Ended




June 30,




2016



2015









Total Income

$

48,715,000


$

37,898,000


Total Expenses

$

41,053,000


$

33,855,000


Gain on Securities Transactions, net

$

1,014,000


$

80,000


Net Loss Attributable to Common Shareholders

$

(1,566,000)


$

(2,856,000)


Net Loss Attributable to Common

  Shareholders per Diluted Common Share

 

$

 

(0.06)


 

$

 

(0.11)


Core FFO (1)

$

9,662,000


$

6,277,000


Core FFO (1) per Diluted Common Share 

$

0.35


$

0.25


Normalized FFO (1)

$

8,648,000


$

6,322,000


Normalized FFO (1) per Diluted Common Share

$

0.32


$

0.25


Weighted Average Diluted Shares Outstanding


27,301,000



25,262,000

 

A summary of significant balance sheet information as of June 30, 2016 and December 31, 2015 is as follows:


June 30,

2016


December 31,
2015









Gross Real Estate Investments

$  602,456,000


$  577,709,000

Securities Available for Sale at Fair Value

$  103,916,000


$    75,011,000

Total Assets

$  652,048,000


$  600,317,000

Mortgages Payable, net

$  286,583,000


$  283,050,000

Loans Payable, net

$    45,325,000


$    57,862,000

Total Shareholders' Equity

$  307,313,000


$  246,238,000

 

Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2016.

"We are pleased to announce another strong quarter of operating results.  During the quarter, we:

  • Increased Core FFO per diluted share to $0.18, representing a 50.0% increase over the prior year period;
  • Increased Normalized FFO per diluted share to $0.16, representing a 33.3% increase over the prior year period;
  • Increased Rental and Related Income by 25.0% over the prior year period;
  • Increased Community Net Operating Income ("NOI") by 33.0% over the prior year period;
  • Increased Same Property Occupancy by 180 basis points over the prior year period from 82.4% to 84.2%;
  • Increased Same Property NOI by 21.4% over the prior year period;
  • Decreased our Operating Expense Ratio by 320 basis points over the prior year period from 51.0% to 47.8%;
  • Increased homes sales by 72.4% over the prior year period from $1.6 million to $2.8 million and increased the number of homes sold by 53% from 32 homes sold to 49 homes sold;
  • Increased our rental home portfolio by 228 homes, representing an increase of 5.8% from the first quarter of 2016 and a 42.0% increase over the prior year period to approximately 4,100 total rental homes;
  • Increased rental home occupancy by 150 basis points from 92.9% at yearend 2015 to 94.4% at quarter end;
  • Increased the unrealized gain on our REIT securities investments to $16.4 million at quarter end, in addition to recognizing realized gains of $782,000; and
  • Issued 2,000,000 shares of our 8.0% Series B Cumulative Redeemable Preferred Stock in a registered direct placement at a purchase price of $25.50 per share, raising approximately $49.1 million in net proceeds."

"The positive momentum created by our strong first quarter performance has continued into the second quarter, with double-digit Core FFO and Normalized FFO per share growth.  This growth was fueled by healthy same property metrics.  Over the prior year period, same property occupancy rose 180 basis points, same property revenue increased 14.1% and same property NOI increased 21.4%.  These results demonstrate the strength of our business plan. We have been acquiring communities in strong geographic locations below replacement cost, making necessary improvements and growing occupancy and revenue by utilizing our rental home and sales programs.  We anticipate that this trend will continue throughout the remainder of the year and into 2017."

"The performance of our securities portfolio has been outstanding.  We have brought the portfolio from a $2.1 million unrealized loss at yearend to a $16.4 million unrealized gain at quarter end, representing an increase of $18.5 million over the six month period.  The portfolio continues to deliver outstanding performance subsequent to quarter end." 

"During the quarter we also completed the sale of 2,000,000 shares of our 8.0% Series B Cumulative Redeemable Preferred Stock in a registered direct placement at a purchase price of $25.50 per share.  We raised approximately $49.1 million in net proceeds, which have not yet been fully deployed.  The proceeds from this offering will be used to fund our upcoming acquisitions and for the purchase of additional rental homes, 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 2016 Financial Results Webcast and Conference Call.  Senior management will discuss the results, current market conditions and future outlook on Friday, August 5, 2016 at 10:00 a.m. Eastern Time.

The Company's 2016 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 5, 2016.  It will be available until November 1, 2016, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10087367.  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 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. 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.  Community NOI excludes realized gains (losses) on securities transactions.  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 income (loss) to the Company's FFO, Core FFO and Normalized FFO for the three and six months ended June 30, 2016 and 2015 are calculated as follows:

 

 




Three Months Ended


Six Months Ended





6/30/16


6/30/15


6/30/16


6/30/15


Net Income (Loss) Attributable to Common Shareholders          


$(683,000)


$(1,685,000)


$(1,566,000)


$(2,856,000)


Depreciation Expense


5,679,000

4,451,000


11,205,000


8,680,000


Loss on Sales of  Depreciable Assets


45,000

74,000


23,000


69,000


FFO Attributable to Common Shareholders


5,041,000


2,840,000


9,662,000


5,893,000


Acquisition Costs


-


188,000


-


294,000


Cost of Early Extinguishment of Debt


-


90,000


-


90,000


Core FFO Attributable to Common Shareholders


5,041,000


3,118,000


9,662,000


6,277,000


Gain on Sale of Securities Transactions, net


(782,000)


(22,000)


(1,014,000)


(80,000)


Settlement of Litigation


-


-


-


125,000


Normalized FFO Attributable to Common Shareholders


$4,259,000


$3,096,000


$8,648,000


$6,322,000













 

The following are the cash flows provided (used) by operating, investing and financing activities for the six months ended June 30, 2016 and 2015:

 



2016


2015


Operating Activities

$11,689,000


$10,247,000


Investing Activities

(36,518,000)


(37,154,000)


Financing Activities

27,884,000


27,855,000

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/umh-properties-inc-reports-2nd-quarter-2016-earnings-300309580.html

SOURCE UMH Properties, Inc.

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