FREEHOLD, N.J., Nov. 8, 2016 /PRNewswire/ -- UMH Properties, Inc. (NYSE: UMH) reported Total Income of $25,355,000 for the quarter ended September 30, 2016 as compared to $21,695,000 for the quarter ended September 30, 2015, representing an increase of 17%. Net Loss Attributable to Common Shareholders amounted to $590,000 or $0.02 per diluted share for the quarter ended September 30, 2016 as compared to $842,000 or $0.03 per diluted share for the quarter ended September 30, 2015, representing an improvement of 33%.
Core Funds from Operations ("Core FFO") was $5,350,000 or $0.19 per diluted share for the quarter ended September 30, 2016 as compared to $4,096,000 or $0.15 per diluted share for the quarter ended September 30, 2015, representing an increase in Core FFO per diluted share of 27%. Normalized Funds from Operations ("Normalized FFO"), was $4,465,000 or $0.16 per diluted share for the quarter ended September 30, 2016, as compared to $4,049,000 or $0.15 per diluted share for the quarter ended September 30, 2015, representing an increase in Normalized FFO per diluted share of 7%.
A summary of significant financial information for the three and nine months ended September 30, 2016 and 2015 is as follows:
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| For the Three Months Ended |
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| September 30, |
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|
| 2016 |
|
| 2015 |
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|
|
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|
|
| Total Income | $ | 25,355,000 |
| $ | 21,695,000 |
| Total Expenses | $ | 21,567,000 |
| $ | 18,966,000 |
| Gain on Securities Transactions, net | $ | 885,000 |
| $ | 48,000 |
| Net Loss Attributable to Common Shareholders | $ | (590,000) |
| $ | (842,000) |
| Net Loss Attributable to Common
Shareholders per Diluted Common Share | $ | (0.02) |
| $ | (0.03) |
| Core FFO (1) | $ | 5,350,000 |
| $ | 4,096,000 |
| Core FFO (1) per Diluted Common Share | $ | 0.19 |
| $ | 0.15 |
| Normalized FFO (1) | $ | 4,465,000 |
| $ | 4,049,000 |
| Normalized FFO (1) per Diluted Common Share | $ | 0.16 |
| $ | 0.15 |
| Weighted Average Diluted Shares Outstanding |
| 27,891,000 |
|
| 26,389,000 |
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|
|
|
|
|
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| For the Nine Months Ended |
|
|
| September 30, |
|
|
| 2016 |
|
| 2015 |
|
|
|
|
|
|
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| Total Income | $ | 74,070,000 |
| $ | 59,593,000 |
| Total Expenses | $ | 62,621,000 |
| $ | 52,820,000 |
| Gain on Securities Transactions, net | $ | 1,899,000 |
| $ | 127,000 |
| Net Loss Attributable to Common Shareholders | $ | (2,156,000) |
| $ | (3,698,000) |
| Net Loss Attributable to Common
Shareholders per Diluted Common Share | $ | (0.08) |
| $ | (0.14) |
| Core FFO (1) | $ | 15,012,000 |
| $ | 10,373,000 |
| Core FFO (1) per Diluted Common Share | $ | 0.54 |
| $ | 0.40 |
| Normalized FFO (1) | $ | 13,113,000 |
| $ | 10,371,000 |
| Normalized FFO (1) per Diluted Common Share | $ | 0.48 |
| $ | 0.40 |
| Weighted Average Diluted Shares Outstanding |
| 27,451,000 |
|
| 25,600,000 |
A summary of significant balance sheet information as of September 30, 2016 and December 31, 2015 is as follows:
| September 30,
2016 |
| December 31,
2015 |
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|
|
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|
|
|
Gross Real Estate Investments | $ 622,587,000 |
| $ 577,709,000 |
Securities Available for Sale at Fair Value | $ 111,046,000 |
| $ 75,011,000 |
Total Assets | $ 669,036,000 |
| $ 600,317,000 |
Mortgages Payable, net | $ 285,021,000 |
| $ 283,050,000 |
Loans Payable, net | $ 56,579,000 |
| $ 57,862,000 |
Total Shareholders' Equity | $ 313,911,000 |
| $ 246,238,000 |
Samuel A. Landy, President and CEO, commented on the results of the third quarter of 2016.
"We are pleased to announce another solid quarter of increasing financial operating results. During the quarter, we:
- Increased Core FFO per diluted share to $0.19, representing a 27% increase over the prior year period;
- Increased Normalized FFO per diluted share to $0.16, representing a 7% increase over the prior year period;
- Increased Rental and Related Income by 22% over the prior year period;
- Improved our Operating Expense Ratio by 280 basis points over the prior year period from 49.2% to 46.4%;
- Increased Community Net Operating Income ("NOI") by 29% over the prior year period;
- Increased Same Property Occupancy by 200 basis points over the prior year period from 82.9% to 84.9%;
- Increased Same Property NOI by 23% over the prior year period;
- Completed the acquisition of 2 manufactured home communities, containing 165 homesites for an aggregate cost of approximately $3 million;
- Increased our rental home portfolio by 305 homes, representing an increase of 7% from the second quarter of 2016 and a 33% increase over the prior year period, to approximately 4,400 total rental homes;
- Increased rental home occupancy by 60 basis points from 92.9% at yearend 2015 to 93.5% at quarter end;
- Increased the unrealized gain on our REIT securities investments to $21.0 million at quarter end, in addition to the $1.9 million in realized gains generated thus far; and
- Subsequent to quarter end, completed the refinancing of our Fairview Manor community. The new $16.3 million Freddie Mac mortgage is at an interest rate of 3.85% with a 10-year maturity and principal repayments based on a 30-year amortization schedule."
"Following an excellent first half, our third quarter delivered strong operating results, highlighted by same property NOI growth of 23% and a same property occupancy increase of 200 basis points. This is the 9th consecutive quarter that we have delivered double digit year-over-year NOI growth. Our performance has been driven by strong demand for quality affordable housing throughout our portfolio. Our business plan of acquiring communities below replacement cost, making improvements and implementing a rental home and sales program, has proven to produce excellent results. We are continuing to acquire communities in strong geographic areas, completing the acquisition of two manufactured home communities this quarter. In addition, we anticipate closing on the acquisition of three additional communities prior to yearend. Subsequent to quarter end, we completed the refinancing of our Fairview Manor community generating approximately $350,000 in annual interest savings, as well as demonstrating the increasing value of our communities."
"We look forward to building on the substantial progress we have made thus far."
UMH Properties, Inc. will host its Third Quarter 2016 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Wednesday, November 9, 2016 at 10:00 a.m. Eastern Time.
The Company's 2016 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 conferencecall 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 Wednesday, November 9, 2016. It will be available until February 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10092124. 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 100 manufactured home communities containing approximately 18,000 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 loss to the Company's FFO, Core FFO and Normalized FFO for the three and nine months ended September 30, 2016 and 2015 are calculated as follows:
|
|
| Three Months Ended |
| Nine Months Ended |
|
|
|
| 9/30/16 |
| 9/30/15 |
| 9/30/16 |
| 9/30/15 |
|
Net Loss Attributable to Common Shareholders |
| $(590,000) |
| $(842,000) |
| $(2,156,000) |
| $(3,698,000) |
|
Depreciation Expense |
| 5,888,000 | 4,786,000 |
| 17,093,000 |
| 13,466,000 |
|
Loss on Sales of Depreciable Assets |
| 1,000 | (3,000) |
| 24,000 |
| 66,000 |
|
FFO Attributable to Common Shareholders |
| 5,299,000 |
| 3,941,000 |
| 14,961,000 |
| 9,834,000 |
|
Acquisition Costs |
| 51,000 |
| 155,000 |
| 51,000 |
| 449,000 |
|
Cost of Early Extinguishment of Debt |
| - |
| - |
| - |
| 90,000 |
|
Core FFO Attributable to Common Shareholders |
| 5,350,000 |
| 4,096,000 |
| 15,012,000 |
| 10,373,000 |
|
Gain on Sale of Securities Transactions, net |
| (885,000) |
| (47,000) |
| (1,899,000) |
| (127,000) |
|
Settlement of Litigation |
| - |
| - |
| - |
| 125,000 |
|
Normalized FFO Attributable to Common Shareholders |
| $4,465,000 |
| $4,049,000 |
| $13,113,000 |
| $10,371,000 |
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The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 28,091,000 and 27,601,000 shares for the three and nine months ended September 30, 2016, respectively, and 26,426,000 and 25,641,000 for the three and nine months ended September 30, 2015, respectively. Common stock equivalents resulting from stock options in the amount of 200,000 and 150,000 shares for the three and nine months ended September 30, 2016, respectively, and 37,000 and 41,000 shares for the three and nine months ended September 30, 2015, 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, 2016 and 2015:
|
| 2016 |
| 2015 |
| Operating Activities | $21,403,000 |
| $14,009,000 |
| Investing Activities | (59,958,000) |
| (86,930,000) |
| Financing Activities | 35,729,000 |
| 72,739,000 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/umh-properties-inc-reports-3rd-quarter-2016-earnings-300359416.html
SOURCE UMH Properties, Inc.