UMH Properties, Inc. (NYSE:UMH) (TASE:UMH) reported Total Income
for the quarter ended September 30, 2023 of $56.0 million, as
compared to $51.9 million for the quarter ended September 30, 2022,
representing an increase of 7.9%. Net Loss Attributable to Common
Shareholders amounted to $5.8 million or $0.09 per diluted share
for the quarter ended September 30, 2023, as compared to a Net Loss
of $9.7 million or $0.18 per diluted share for the quarter ended
September 30, 2022, representing a 100% per diluted share increase.
Normalized Funds from Operations Attributable to Common
Shareholders (“Normalized FFO”), was $14.4 million or $0.22 per
diluted share for the quarter ended September 30, 2023, as compared
to $13.1 million or $0.24 per diluted share for the quarter ended
September 30, 2022, and $13.0 million or $0.21 per diluted share
for the quarter ended June 30, 2023, representing a 4.8% per
diluted share increase sequentially.
A summary of significant financial information
for the three and nine months ended September 30, 2023 and 2022 is
as follows (in thousands except per share amounts):
|
|
|
Three Months
Ended |
|
|
|
September
30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Total
Income |
$ |
56,044 |
|
|
$ |
51,937 |
|
|
Total
Expenses |
$ |
46,437 |
|
|
$ |
44,588 |
|
|
Net Loss
Attributable to Common Shareholders |
$ |
(5,831 |
) |
|
$ |
(9,745 |
) |
|
Net Loss
Attributable to Common Shareholders per Diluted Common Share |
$ |
(0.09 |
) |
|
$ |
(0.18 |
) |
|
FFO
(1) |
$ |
13,791 |
|
|
$ |
10,292 |
|
|
FFO (1)
per Diluted Common Share |
$ |
0.21 |
|
|
$ |
0.19 |
|
|
Normalized FFO (1) |
$ |
14,400 |
|
|
$ |
13,079 |
|
|
Normalized FFO (1) per Diluted Common Share |
$ |
0.22 |
|
|
$ |
0.24 |
|
|
Diluted
Weighted Average Shares Outstanding |
|
65,076 |
|
|
|
54,891 |
|
|
|
|
Nine Months
Ended |
|
|
|
September
30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Total
Income |
$ |
163,941 |
|
|
$ |
147,028 |
|
|
Total
Expenses |
$ |
138,048 |
|
|
$ |
123,670 |
|
|
Net Loss
Attributable to Common Shareholders |
$ |
(15,546 |
) |
|
$ |
(36,548 |
) |
|
Net Loss
Attributable to Common Shareholders per Diluted Common Share |
$ |
(0.25 |
) |
|
$ |
(0.68 |
) |
|
FFO
(1) |
$ |
36,474 |
|
|
$ |
18,516 |
|
|
FFO (1)
per Diluted Common Share |
$ |
0.58 |
|
|
$ |
0.34 |
|
|
Normalized FFO (1) |
$ |
39,169 |
|
|
$ |
35,519 |
|
|
Normalized FFO (1) per Diluted Common Share |
$ |
0.63 |
|
|
$ |
0.65 |
|
|
Diluted
Weighted Average Shares Outstanding |
|
61,853 |
|
|
|
53,746 |
|
A summary of significant balance sheet
information as of September 30, 2023 and December 31, 2022 is as
follows (in thousands):
|
September 30, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
Gross Real
Estate Investments |
$ |
1,498,183 |
|
$ |
1,391,588 |
Total
Assets |
$ |
1,392,884 |
|
$ |
1,344,596 |
Mortgages
Payable, net |
$ |
442,164 |
|
$ |
508,938 |
Loans
Payable, net |
$ |
144,623 |
|
$ |
153,531 |
Bonds
Payable, net |
$ |
99,843 |
|
$ |
99,207 |
Total
Shareholders’ Equity |
$ |
677,747 |
|
$ |
551,196 |
Samuel A. Landy, President and CEO, commented on
the results of the third quarter of 2023.
“We are pleased to announce another solid
quarter of operating results. During the quarter, we:
- Increased Rental and Related Income
by 12.2%;
- Increased Community Net Operating
Income (“NOI”) by 15.8%;
- Increased Same Property NOI by
12.9%;
- Increased Same Property Occupancy
by 210 basis points from 86.3% to 88.4%;
- Improved our Same Property expense
ratio from 42.1% in the third quarter of 2022 to 40.6% at quarter
end;
- Increased our rental home portfolio
by 245 homes from June 30, 2023 and 779 homes from yearend 2022 to
approximately 9,900 total rental homes, representing an increase of
8.6%;
- Issued and sold approximately 2.8
million shares of Common Stock through our At-the-Market Sale
Program at a weighted average price of $15.93 per share, generating
gross proceeds of $44.5 million and net proceeds of $43.5 million,
after offering expenses;
- Issued and sold approximately
578,000 shares of Series D Preferred Stock through our
At-the-Market Sale Program at a weighted average price of $21.43
per share, generating gross proceeds of $12.4 million and net
proceeds of $12.2 million, after offering expenses;
- Expanded our revolving line of
credit from $20 million to $35 million;
- Subsequent to quarter end, issued
and sold approximately 190,000 shares of Common Stock through our
At-the-Market Sale Program at a weighted average price of $13.98
per share, generating gross proceeds of $2.7 million and net
proceeds of $2.6 million, after offering expenses; and
- Subsequent to quarter end, issued
and sold approximately 44,000 shares of Series D Preferred Stock
through our At-the-Market Sale Program at a weighted average price
of $21.08 per share, generating gross proceeds of $931,000 and net
proceeds of $916,000, after offering expenses.”
Mr. Landy stated, “We are pleased to report that
Normalized FFO for the third quarter of 2023 was $0.22 per share as
compared to $0.21 per share in the second quarter and $0.20 in the
first quarter resulting in an approximate 5% per quarter increase
each quarter. Our solid operating results are resulting in per
share earnings growth despite the impact that higher interest rates
have had on the real estate industry.”
“At the beginning of the year, UMH was faced
with the challenge of installing and occupying over 1,300 new
inventory units. Our team has stood up to this challenge and we
have rented 900 new homes, an average of 100 homes per month,
through the first nine months of the year. Our inventory levels
have returned to normal levels, approximately 400 units, and our
floorplan lines have largely been paid off. Manufacturer backlogs
have been reduced and we can now order just in time inventory
allowing us to no longer carry large amounts of inventory. This
will allow us to continue to generate similar results next year
without negatively impacting our financial results through elevated
interest expenses and the associated carrying costs of
inventory.”
“Our same property operating results demonstrate
the effectiveness of our long-term value-added business plan. Year
over year, same property occupancy has increased by 546 sites, or
210 basis points, to 88.4%. This occupancy growth and our annual
rent increases generated same property rental and related income
growth of 10.0% for the quarter and 8.4% for the first nine months
of the year. Same property NOI increased 12.9% for the quarter and
10.4% for the first nine months of the year. These increases in
same property occupancy, rental and relate income and in NOI
substantially increases the value of our communities.”
“Sales of manufactured homes are at $23.4
million for the year, representing an increase of 15.3%. We have
sold 264 homes this year of which 122 were new home sales,
averaging $134,000 per sale, and 142 were used home sales,
averaging $50,000 per sale. We are on track to break our all time
sales record of $28.1 million and may reach our sales goal of $30
million.”
“UMH has accomplished a great deal this year
which has laid the foundation for additional earnings growth in the
coming quarters.”
UMH Properties, Inc. will host its Third Quarter
2023 Financial Results Webcast and Conference Call. Senior
management will discuss the results, current market conditions and
future outlook on Thursday, November 9, 2023, at 10:00 a.m. Eastern
Time.
The Company’s 2023 third quarter financial
results being released herein will be available on the Company’s
website at www.umh.reit in the “Financials” section.
To participate in the webcast, select
the webcast icon on the homepage of the Company’s website at
www.umh.reit, in the Upcoming Events section. 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 Thursday, November 9, 2023,
and can be accessed by dialing toll free 877-344-7529
(domestically) and 412-317-0088 (internationally) and entering the
passcode 5082598. 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 135
manufactured home communities containing approximately 25,800
developed homesites. These communities are located in New Jersey,
New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland,
Michigan, Alabama, South Carolina and Georgia. UMH also has an
ownership interest in and operates two communities in Florida,
containing 363 sites, through its joint venture with Nuveen Real
Estate.
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
Attributable to Common Shareholders (“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 gains or losses from sales of
previously depreciated real estate assets, impairment charges
related to depreciable real estate assets, the change in the fair
value of marketable securities, and the gain or loss on the sale of
marketable securities plus certain non-cash items such as real
estate asset depreciation and amortization. Included in the NAREIT
FFO White Paper - 2018 Restatement, is an option pertaining to
assets incidental to our main business in the calculation of NAREIT
FFO to make an election to include or exclude gains and losses on
the sale of these assets, such as marketable equity securities, and
include or exclude mark-to-market changes in the value recognized
on these marketable equity securities. In conjunction with the
adoption of the FFO White Paper - 2018 Restatement, for all periods
presented, we have elected to exclude the gains and losses realized
on marketable securities investments and the change in the fair
value of marketable securities from our FFO calculation. NAREIT
created FFO as a non-U.S. GAAP supplemental measure of REIT
operating performance. We define Normalized Funds from Operations
Attributable to Common Shareholders (“Normalized FFO”), as FFO
excluding amortization and certain one-time charges. FFO and
Normalized FFO should be considered as supplemental measures of
operating performance used by REITs. 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 and
Normalized FFO and, accordingly, our FFO and Normalized FFO may not
be comparable to all other REITs. The items excluded from FFO and
Normalized FFO are significant components in understanding the
Company’s financial performance.
FFO and Normalized FFO (i) do not represent Cash
Flow from Operations as defined by U.S. GAAP; (ii) should not be
considered as alternatives 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 diluted weighted shares outstanding used in
the calculation of FFO per Diluted Common Share and Normalized FFO
per Diluted Common Share were 65.6 million and 62.5 million shares
for the three and nine months ended September 30, 2023,
respectively, and 55.6 million and 54.7 million shares for the
three and nine months ended September 30, 2022, respectively.
Common stock equivalents resulting from stock options in the amount
of 478,000 and 655,000 shares for the three and nine months ended
September 30, 2023, respectively, were excluded from the
computation of the Diluted Net Loss per Share as their effect would
be anti-dilutive. Common stock equivalents resulting from stock
options in the amount of 728,000 and 956,000 shares for the three
and nine months ended September 30, 2022, respectively, were
excluded from the computation of the Diluted Net Loss per Share as
their effect would be anti-dilutive.
The reconciliation of the Company’s U.S. GAAP
net loss to the Company’s FFO and Normalized FFO for the three and
nine months ended September 30, 2023 and 2022 are calculated as
follows (in thousands):
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
|
Net Loss
Attributable to Common Shareholders |
|
$ |
(5,831 |
) |
|
$ |
(9,745 |
) |
|
$ |
(15,546 |
) |
|
$ |
(36,548 |
) |
|
Depreciation
Expense |
|
|
14,147 |
|
|
12,302 |
|
|
|
41,271 |
|
|
|
36,003 |
|
|
Depreciation
Expense from Unconsolidated Joint Venture |
|
|
179 |
|
|
90 |
|
|
|
504 |
|
|
|
257 |
|
|
(Gain) Loss
on Sales of Investment Property and Equipment |
|
|
26 |
|
|
10 |
|
|
|
(11 |
) |
|
|
96 |
|
|
Decrease in
Fair Value of Marketable Securities |
|
|
5,496 |
|
|
|
1,230 |
|
|
|
10,439 |
|
|
|
43,024 |
|
|
(Gain) Loss
on Sales of Marketable Securities, net |
|
|
(226 |
) |
|
|
6,405 |
|
|
|
(183 |
) |
|
|
(24,316 |
) |
|
FFO
Attributable to Common Shareholders |
|
|
13,791 |
|
|
|
10,292 |
|
|
|
36,474 |
|
|
|
18,516 |
|
|
Redemption
of Preferred Stock (2) |
|
-0- |
|
|
896 |
|
|
-0- |
|
|
12,916 |
|
|
Amortization
of Financing Costs(2) |
|
|
536 |
|
|
|
505 |
|
|
|
1,592 |
|
|
|
1,445 |
|
|
Non-Recurring Other Expense (3) |
|
|
73 |
|
|
|
1,386 |
|
|
|
1,103 |
|
|
|
2,642 |
|
|
Normalized FFO Attributable to Common Shareholders
(2) |
|
$ |
14,400 |
|
|
$ |
13,079 |
|
|
$ |
39,169 |
|
|
$ |
35,519 |
|
|
(2) Normalized FFO as previously reported for
the three and nine months ended September 30, 2022, were $11,678
and $29,348, respectively. During 2022, the Company incurred the
carrying cost of excess cash for the redemption of preferred stock.
Additionally, due to the change in sources of capital, amortization
expense is expected to become more significant and is therefore
included as an adjustment to Normalized FFO for the three and nine
months ended September 30, 2023 and 2022. After making these
adjustments for the three and nine months ended September 30, 2022,
Normalized FFO were $13,079 and $35,519, respectively.
(3) Consists of the previously disclosed special
bonus and restricted stock grants for the August 2020
groundbreaking Fannie Mae financing, which are being expensed over
the vesting period ($0 and $862, respectively) and non-recurring
expenses for the joint venture with Nuveen ($43 and $93,
respectively), one-time legal fees ($25 and $75, respectively),
fees related to the establishment of the OZ Fund ($0 and $37,
respectively), and costs associated with acquisitions that were not
completed ($5 and $36, respectively) for the three and nine months
ended September 30, 2023. Consists of the previously disclosed
special bonus and restricted stock grants for the August 2020
groundbreaking Fannie Mae financing, which are being expensed over
the vesting period ($431 and $1.3 million, respectively) and
non-recurring expenses for the joint venture with Nuveen ($2 and
$54, respectively), early extinguishment of debt ($2 and $195,
respectively), one-time legal fees ($38 and $187, respectively),
fees related to the establishment of the OZ Fund ($893) and costs
associated with an acquisition that was not completed ($20) for the
three and nine months ended September 30, 2022.
The following are the cash flows provided by
(used in) operating, investing and financing activities for the
nine months ended September 30, 2023 and 2022 (in thousands):
|
|
|
2023 |
|
|
|
2022 |
|
|
Operating
Activities |
$ |
90,315 |
|
|
$ |
5,083 |
|
|
Investing
Activities |
|
(134,927 |
) |
|
|
(58,435 |
) |
|
Financing
Activities |
|
49,306 |
|
|
|
(577 |
) |
Contact: Nelli
Madden732-577-9997
# # # #
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