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UMH Properties, Inc. Reports 1st Quarter 2017 Earnings

05/09/2017

FREEHOLD, N.J., May 9, 2017 /PRNewswire/ -- UMH Properties, Inc. (NYSE:UMH) reported Total Income of $26,449,000 for the quarter ended March 31, 2017 as compared to $23,504,000 for the quarter ended March 31, 2016, representing an increase of 13%.  Net Loss Attributable to Common Shareholders amounted to $1,504,000 or $0.05 per diluted share for the quarter ended March 31, 2017 as compared to $883,000 or $0.03 per diluted share for the quarter ended March 31, 2016.

Core Funds from Operations ("Core FFO") was $5,061,000 or $0.17 per diluted share for the quarter ended March 31, 2017, as compared to $4,620,000 or $0.17 per diluted share for the quarter ended March 31, 2016.  Normalized Funds from Operations ("Normalized FFO") was $5,029,000 or $0.17 per diluted share for the quarter ended March 31, 2017, as compared to $4,388,000 or $0.16 per diluted share for the quarter ended March 31, 2016, representing an increase in Normalized FFO per diluted share of 6.3%. 

A summary of significant financial information for the three months ended March 31, 2017 and 2016 is as follows:




For the Three Months Ended




March 31,




2017



2016









Total Income

$

26,449,000


$

23,504,000


Total Expenses

$

22,485,000


$

19,876,000


Gain on Sales of Securities, net

$

32,000


$

232,000


Net Loss Attributable to Common Shareholders

$

(1,504,000)


$

(883,000)


Net Loss Attributable to Common

  Shareholders per Diluted Common Share

 

$

 

(0.05)


 

$

 

(0.03)


Core FFO (1)

$

5,061,000


$

4,620,000


Core FFO (1) per Diluted Common Share 

$

0.17


$

0.17


Normalized FFO (1)

$

5,029,000


$

4,388,000


Normalized FFO (1) per Diluted Common Share

$

0.17


$

0.16


Weighted Average Diluted Shares Outstanding


29,955,000



27,118,000

 

A summary of significant balance sheet information as of March 31, 2017 and December 31, 2016 is as follows:


March 31,
2017


December 31,
2016





Gross Real Estate Investments

$  684,457,000


$  640,217,000

Securities Available for Sale at Fair Value

$  107,516,000


$  108,755,000

Total Assets

$  725,782,000


$  680,445,000

Mortgages Payable, net

$  305,451,000


$  293,026,000

Loans Payable, net

$    81,924,000


$    58,285,000

Total Shareholders' Equity

$  324,928,000


$  317,032,000

 

Samuel A. Landy, President and CEO, commented on the results of the first quarter of 2017.

"We are pleased to announce another strong quarter of operating results.  While Net Loss Attributable to Common Shareholders (which includes depreciation expense), increased from $0.03 per diluted share to $0.05 per diluted share, our Normalized FFO (which excludes depreciation expenses) increased from $0.16 per diluted share to $0.17 per diluted share, representing a 6.3% year over year increase.  We have been growing the Company both internally and externally.  Our same-store portfolio continues to perform to our expectations which is driving increased earnings growth. We are also proud of our ability to acquire communities that fit our acquisition criteria and are accretive to earnings.  During the quarter, we also:

  • Increased Rental and Related Income by 12.6% over the prior year period;
  • Increased Community Net Operating Income ("NOI") by 16.2% over the prior year period;
  • Improved our Operating Expense ratio by 170 basis points over the prior year period from 48.5% to 46.8%;
  • Increased Same Property NOI by 12.6% over the prior year period;
  • Increased Same Property Occupancy by 180 basis points over the prior year period from 80.1% to 81.9%;
  • Increased home sales by 11.6% over the prior year period;
  • Increased our rental home portfolio by 243 homes, representing an increase of 5.2% from yearend 2016, to approximately 4,900 total rental homes;
  • Increased rental home occupancy by 220 basis points from 91.5% at yearend 2016 to 93.7% at quarter end;
  • Acquired 5 communities containing approximately 1,300 homesites for a total cost of $36.5 million;
  • Reduced the weighted average interest rate on our total debt from 4.3% to 4.1%;
  • Renewed and expanded our existing unsecured credit facility; and
  • Achieved a $1 billion total market capitalization, an increase of 35.7% over the prior year period."

"We are making substantial progress on many fronts. We have continued to execute on our acquisition program, and in the first quarter, acquired 5 communities containing approximately 1,300 developed homesites for an aggregate cost of approximately $36.5 million.  These communities are located in regions where we are seeing increased demand and should provide us with an opportunity to significantly improve community operating results."  

"We are successfully integrating and upgrading our acquisitions, including adding rental homes, which is resulting in increased occupancy and NOI.  Same Property NOI increased by 12.6% year over year.  Same Property occupancy increased by a healthy 180 basis points.  This demonstrates the strength of our business plan of acquiring communities in strong geographic locations, making necessary improvements and implementing our rental, sales and marketing programs."  

"We continue to take advantage of the low interest rate environment and reduced the weighted average interest rate on our total debt to 4.1%.  We have also increased our liquidity and further strengthened our financial flexibility and balance sheet with the renewal and expansion of our existing unsecured credit facility."

UMH Properties, Inc. will host its First Quarter 2017 Financial Results Webcast and Conference Call.  Senior management will discuss the results, current market conditions and future outlook on Wednesday, May 10, 2017 at 10:00 a.m. Eastern Time.

The Company's 2017 first 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 Wednesday, May 10, 2017.  It will be available until August 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10104502.  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 106 manufactured home communities containing approximately 19,300 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.  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  months ended March 31, 2017 and 2016 are calculated as follows:

 



Three Months Ended





3/31/17


3/31/16



Net Loss Attributable to Common Shareholders          


$(1,504,000)

$(883,000)



Depreciation Expense


6,540,000

5,525,000



(Gain) Loss on Sales of Depreciable Assets


25,000

(22,000)



FFO and Core Attributable to Common Shareholders


5,061,000


4,620,000



Gain on Sales of Securities, net


(32,000)


(232,000)



Normalized FFO Attributable to Common Shareholders


$5,029,000


$4,388,000



 

The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 30,427,000 shares for the three months ended March 31, 2017, and 27,161,000 shares for the three months ended March 31, 2016.  Common stock equivalents resulting from stock options in the amount of 472,000 shares for the three months ended March 31, 2017, and 43,000 shares for the three months ended March 31, 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 three months ended March 31, 2017 and 2016:

 



Three Months Ended





3/31/17


3/31/16



Operating Activities


$10,339,000

$7,659,000



Investing Activities


(49,618,000)

(18,538,000)



Financing Activities


43,368,000

12,258,000



 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/umh-properties-inc-reports-1st-quarter-2017-earnings-300454629.html

SOURCE UMH Properties, Inc.

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