UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 2 |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 3 |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 4 |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 5 |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 6 |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 7 |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 8 |
Notes: |
(1) Includes a variable rate mortgage with a balance of $11,020,831, $11,797,017 and $11,416,309 as of June 30, 2016, June 30, 2015 and December 31, 2015, respectively, which has been effectively fixed at an interest rate of 3.89% with an interest rate swap agreement. |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 9 |
(unaudited)
As of 6/30/2016: | ||||||||||||||||
Fiscal Year Ended | Mortgages | Loans | Total | % of Total | ||||||||||||
2016 | $ | -0- | $ | 8,536,293 | 8,536,293 | 2.5 | % | |||||||||
2017 | 29,958,267 | 19,191,158 | (1) | 49,149,425 | 14.7 | % | ||||||||||
2018 | 9,404,569 | 195,459 | 9,600,028 | 2.9 | % | |||||||||||
2019 | 3,012,833 | 4,197,291 | 7,210,124 | 2.1 | % | |||||||||||
2020 | 12,705,050 | 190,187 | 12,895,237 | 3.8 | % | |||||||||||
Thereafter | 235,068,164 | 13,145,104 | 248,213,268 | 74.0 | % | |||||||||||
Total Debt Before Unamortized Debt Issuance Cost | 290,148,883 | 45,455,492 | 335,604,375 | 100.0 | % | |||||||||||
Unamortized Financing Cost | (3,566,301 | ) | (130,871 | ) | (3,697,172 | ) | ||||||||||
Total Debt, Net of Unamortized | ||||||||||||||||
Debt Issuance Costs | $ | 286,582,582 | $ | 45,324,621 | $ | 331,907,203 |
Notes: |
(1) Includes $15 million balance outstanding on the Company’s Line of Credit due March 2017. |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 10 |
(unaudited)
6/30/2016 | 6/30/2015 | % Change | ||||||||||
Communities | 98 | 92 | 6.5 | % | ||||||||
Developed Sites | 17,760 | 15,654 | 13.5 | % | ||||||||
Occupied | 14,213 | 12,702 | 11.9 | % | ||||||||
Occupancy %(1) | 80.7 | % | 82.0 | % | -1.3 | % | ||||||
Monthly Rent Per Site | $ | 419 | $ | 405 | 3.5 | % | ||||||
Total Rentals | 4,142 | 2,916 | 42.0 | % | ||||||||
Occupied Rentals | 3,911 | 2,771 | 41.1 | % | ||||||||
Rental Occupancy % | 94.4 | % | 95.0 | % | -0.6 | % | ||||||
Monthly Rent per Home Rental | $ | 704 | $ | 681 | 3.4 | % |
Region | Number | Total Acreage | Developed Acreage | Vacant Acreage | Total Sites | Occupied Sites | Occupancy Percentage | Monthly Rent Per Site | Total Rentals | Occupied Rentals | Rental Occupancy Percentage | Monthly Rent Per Home Rental | ||||||||||||||||||||||||||||||||||||
(2) | (2) | (1) | (3) | |||||||||||||||||||||||||||||||||||||||||||||
Indiana | 9 | 661 | 561 | 100 | 2,654 | 1,899 | 71.6 | % | $ | 394 | 741 | 719 | 97.0 | % | $ | 702 | ||||||||||||||||||||||||||||||||
Michigan | 2 | 68 | 68 | -0- | 354 | 233 | 65.8 | % | $ | 419 | 99 | 92 | 92.9 | % | $ | 691 | ||||||||||||||||||||||||||||||||
New Jersey | 4 | 349 | 187 | 162 | 1,006 | 968 | 96.2 | % | $ | 586 | 37 | 37 | 100.0 | % | $ | 918 | ||||||||||||||||||||||||||||||||
New York | 7 | 397 | 301 | 96 | 1,132 | 911 | 80.5 | % | $ | 486 | 229 | 220 | 96.1 | % | $ | 834 | ||||||||||||||||||||||||||||||||
Ohio | 27 | 1,132 | 881 | 251 | 4,301 | 3,355 | 78.0 | % | $ | 350 | 897 | 841 | 93.8 | % | $ | 643 | ||||||||||||||||||||||||||||||||
E. Pennsylvania | 26 | 964 | 805 | 159 | 3,591 | 3,049 | 84.9 | % | $ | 457 | 727 | 667 | 91.7 | % | $ | 726 | ||||||||||||||||||||||||||||||||
W. Pennsylvania | 16 | 904 | 723 | 181 | 2,910 | 2,238 | 76.9 | % | $ | 392 | 709 | 658 | 92.8 | % | $ | 713 | ||||||||||||||||||||||||||||||||
Tennessee | 7 | 414 | 322 | 92 | 1,812 | 1,560 | 86.1 | % | $ | 424 | 703 | 677 | 96.3 | % | $ | 699 | ||||||||||||||||||||||||||||||||
Total as of June 30, 2016 | 98 | 4,889 | 3,848 | 1,041 | 17,760 | 14,213 | 80.7 | % | $ | 419 | 4,142 | 3,911 | 94.4 | % | $ | 704 |
Notes |
(1) The 156 Vacant Sites at Memphis Blues are not included in the calculation of occupancy. |
(2) Total and Vacant Acreage of 220 for the Mountain View Estates property is not included in the summary since there are no current sites and approval for sites is still in process. |
(3) Includes home and site rent charges. |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 11 |
Year to Date | ||||||||||||
6/30/2016 | 6/30/2015 | % Change | ||||||||||
Other Information | ||||||||||||
Total Sites | 14,824 | 14,871 | -0.3 | % | ||||||||
Occupied Sites | 12,483 | 12,253 | 1.9 | % | ||||||||
Occupancy % | 84.2 | % | 82.4 | % | 1.8 | % | ||||||
Number of Properties | 88 | 88 | N/A | |||||||||
Developed Acreage | 3,228 | 3,228 | N/A | |||||||||
Vacant Acreage | 922 | 922 | N/A | |||||||||
Monthly Rent Per Site | $ | 423 | $ | 408 | 3.7 | % | ||||||
Total Rentals | 3,675 | 2,904 | 26.5 | % | ||||||||
Occupied Rentals | 3,470 | 2,763 | 25.6 | % | ||||||||
Rental Occupancy | 94.4 | % | 95.1 | % | -0.7 | % | ||||||
Monthly Rent Per Home Rental | $ | 709 | $ | 681 | 4.1 | % |
Notes: |
Same Property includes all properties owned as of January 1, 2015, with the exception of Memphis Blues. |
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 12 |
Property Portfolio
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 13 |
Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), normalized funds from operations (“Normalized FFO”), community NOI, same property NOI, and earnings before interest, taxes, depreciation and amortization (“EBITDA”), variously defined, as supplemental performance measures. While the Company believes net income available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, it considers Community NOI, Same Property NOI, EBITDA, FFO, and Core FFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of U.S. GAAP depreciation and amortization of real estate assets. Core FFO reflects the same assumptions as FFO except that is also adjusts for the effects of acquisitions costs and costs of early extinguishment of debt. Community NOI and Same Property NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. In addition, Community NOI, Same Property NOI, EBITDA, FFO, and Core FFO are commonly used in various ratios, pricing multiples, yields and returns and valuation of calculations used to measure financial position, performance and value.
As used herein, the Company calculates FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), to be equal to net income (loss) applicable to common shareholders, as defined by U.S. GAAP, excluding extraordinary items as defined by 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. FFO includes gains and losses realized on securities investments.
Core FFO is calculated as FFO plus acquisition costs and costs of extinguishment of debt.
Normalized FFOis calculated as Core FFO excluding gains and losses realized on securities investments and certain one-time charges.
Community NOI is calculated 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.
Same Property NOI is calculated as Community NOI, using all properties owned as of January 1, 2015, with the exception of Memphis Blues.
EBITDAis calculated as net income plus interest expense, franchise taxes and depreciation expense.
Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO do not represent cash generated from operating activities in accordance with U.S. GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO should not be considered as substitutes for net income applicable to common shareholders (calculated in accordance with U.S. GAAP) as a measure of results of operations, or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.
UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 14 |
Press Release Dated August 4, 2016
FOR IMMEDIATE RELEASE | August 4, 2016 |
Contact: Nelli Madden | |
732-577-9997 |
UMH PROPERTIES, INC. REPORTS 2nd QUARTER 2016 EARNINGS
FREEHOLD, NJ, August 4, 2016........ 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 |
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UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 15 |
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.”
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UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 16 |
“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 atwww.umh.reitin the “Financial Information and Filings” section.
To participate in the webcast, select the microphone icon found on the homepagewww.umh.reit to access the call. Interested parties can also participate viaconference 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.
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UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 17 |
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 | -0- | 188,000 | -0- | 294,000 | ||||||||||||
Cost of Early Extinguishment of Debt | -0- | 90,000 | -0- | 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 | -0- | -0- | -0- | 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 |
# # # #
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UMH Properties, Inc. | Second Quarter FY 2016 Supplemental Information | 18 |