UMH Properties, Inc. (NYSE:UMH) reported Total Income for the
quarter ended September 30, 2022 of $51.9 million as compared to
$48.0 million for the quarter ended September 30, 2021,
representing an increase of 8%. Net Loss Attributable to Common
Shareholders amounted to $9.7 million or $0.18 per diluted share
for the quarter ended September 30, 2022 as compared to $3.4
million or $0.07 per diluted share for the quarter ended September
30, 2021.
Funds from Operations Attributable to Common
Shareholders (“FFO”), was $10.3 million or $0.19 per diluted share
for the quarter ended September 30, 2022 as compared to $10.8
million or $0.22 per diluted share for the quarter ended September
30, 2021. Normalized Funds from Operations Attributable to Common
Shareholders (“Normalized FFO”), was $11.7 million or $0.21 per
diluted share for the quarter ended September 30, 2022, as compared
to $11.1 million or $0.23 per diluted share for the quarter ended
September 30, 2021.
A summary of significant financial information
for the three and nine months ended September 30, 2022 and 2021 is
as follows (in thousands except per share amounts):
|
|
For the Three
Months Ended |
|
|
|
September
30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Total
Income |
|
$ |
51,937 |
|
|
$ |
48,030 |
|
Total
Expenses |
|
$ |
44,588 |
|
|
$ |
38,528 |
|
Net Loss
Attributable to Common Shareholders |
|
$ |
(9,745 |
) |
|
$ |
(3,403 |
) |
Net Loss
Attributable to Common Shareholders per Diluted Common Share |
|
$ |
(0.18 |
) |
|
$ |
(0.07 |
) |
FFO
(1) |
|
$ |
10,292 |
|
|
$ |
10,822 |
|
FFO (1)
per Diluted Common Share |
|
$ |
0.19 |
|
|
$ |
0.22 |
|
Normalized FFO (1) |
|
$ |
11,678 |
|
|
$ |
11,146 |
|
Normalized FFO (1) per Diluted Common Share |
|
$ |
0.21 |
|
|
$ |
0.23 |
|
Diluted
Weighted Average Shares Outstanding |
|
|
54,891 |
|
|
|
47,778 |
|
|
|
|
For the Nine
Months Ended |
|
|
|
September
30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Total
Income |
|
$ |
147,028 |
|
|
$ |
140,121 |
|
Total
Expenses |
|
$ |
123,670 |
|
|
$ |
114,663 |
|
Net
Income (Loss) Attributable to Common Shareholders |
|
$ |
(36,548 |
) |
|
$ |
11,839 |
|
Net
Income (Loss) Attributable to Common Shareholders per Diluted
Common Share |
|
$ |
(0.68 |
) |
|
$ |
0.28 |
|
FFO
(1) |
|
$ |
18,516 |
|
|
$ |
29,058 |
|
FFO (1)
per Diluted Common Share |
|
$ |
0.34 |
|
|
$ |
0.63 |
|
Normalized FFO (1) |
|
$ |
29,348 |
|
|
$ |
30,128 |
|
Normalized FFO (1) per Diluted Common Share |
|
$ |
0.54 |
|
|
$ |
0.65 |
|
Diluted
Weighted Average Shares Outstanding |
|
|
53,746 |
|
|
|
46,247 |
|
A summary of significant balance sheet information as of
September 30, 2022 and December 31, 2021 is as follows (in
thousands):
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
Gross Real Estate Investments |
|
$ |
1,297,373 |
|
|
$ |
1,205,091 |
|
Marketable
Securities at Fair Value |
|
$ |
39,217 |
|
|
$ |
113,748 |
|
Total
Assets |
|
$ |
1,266,900 |
|
|
$ |
1,270,820 |
|
Mortgages
Payable, net |
|
$ |
499,697 |
|
|
$ |
452,567 |
|
Loans
Payable, net |
|
$ |
127,342 |
|
|
$ |
46,757 |
|
Bonds
Payable, net |
|
$ |
99,022 |
|
|
$ |
-0- |
|
Total
Shareholders’ Equity |
|
$ |
511,552 |
|
|
$ |
742,140 |
|
|
|
|
|
|
|
|
|
|
Samuel A. Landy, President and CEO, commented on the results of
the third quarter of 2022.
“UMH continues to execute on our long-term
business plan and is primed for future growth. During the quarter,
we:
- Increased Rental and Related Income
by 7%;
- Increased our rental home portfolio
by 142 homes for the quarter and 293 homes from yearend 2021 to
approximately 9,000 total rental homes, representing an increase of
3% from yearend 2021;
- Increased Sales of Manufactured
Homes by 16% year over year and 29% sequentially;
- Issued and sold approximately
237,000 shares of Common Stock through an At-the-Market Sale
Program for our Common Stock at a weighted average price of $19.60
per share, generating gross proceeds of $4.6 million and net
proceeds of $4.5 million, after offering expenses;
- Acquired two communities containing
538 homesites for a total cost of $27.2 million;
- Redeemed all 9.9 million issued and
outstanding shares of our 6.75% Series C preferred Stock for $247.1
million;
- Invested $8.0 million in the UMH
qualified opportunity zone fund to acquire, develop and redevelop
manufactured housing communities located in Qualified Opportunity
Zones;
- Financed four communities and
approximately 250 rental homes within those communities for total
proceeds of approximately $34 million;
- Subsequent to quarter end, issued
and sold approximately 558,000 shares of Common Stock through an
At-the-Market Sale Program for our Common Stock at a weighted
average price of $16.26 per share, generating gross proceeds of
$9.1 million and net proceeds of $8.9 million, after offering
expenses; and
- Subsequent to quarter end, entered
into a Second Amended and Restated Credit Agreement to expand
available borrowings from $75 million to $100 million with a $400
million accordion feature, subject to certain conditions, and to
extend the maturity date to November 7, 2026, with a one-year
extension available at our option.”
Mr. Landy stated, “We are pleased to complete
the recapitalization of our $247.1 million of 6.75% Series C
Preferred Stock. Our opportunistic capital raises at the end of
2021 and the beginning of 2022 would not have been possible in the
current economic climate. While short-term earnings were negatively
impacted, UMH always operates with long-term goals in mind. This
recapitalization will allow us to grow earnings throughout the
remainder of this year and perpetually into the future. The
redemption was completed on July 26, so we did not receive the full
benefit in this quarter. Over a full quarter, FFO for Q3 would have
increased an additional $0.02 per share. Sequentially, normalized
FFO increased by 31%, primarily as a result of this
recapitalization.”
“We have strong demand for homes for sale and
for rent at all of our locations. We anticipate that rising
interest rates will result in more people needing the quality
affordable housing that we provide. We are receiving inventory from
our manufacturers and are in the process of setting up the homes
and increasing occupancy throughout the portfolio. During the
quarter, we added 142 rental homes to our portfolio as compared to
96 last year. We anticipate an acceleration in the addition of
rental homes in the fourth quarter and into 2023. The availability
of inventory has also resulted in an increase in sales. Sales for
the quarter increased 16% from a year ago and 29% sequentially,
generating sales profits of $919,000.”
“Year to date, we have acquired 5 communities
containing 905 sites for a total purchase price of approximately
$44 million. These communities have a blended occupancy rate of
53%. The vacant sites give us the opportunity to meaningfully grow
occupancy, NOI and property values at these locations. We continue
to seek acquisitions that meet our growth criteria. Over the past
two years, we have deployed approximately $80 million into
acquisitions, expansions and developments that are in the
turnaround or infill process and will soon become accretive to
earnings.”
“We have a long-term business plan that has
proven to produce excellent results for our shareholders and have a
positive societal impact. We are well-positioned to take this
blueprint and implement it on a national level.”
UMH Properties, Inc. will host its Third Quarter
2022 Financial Results Webcast and Conference Call. Senior
management will discuss the results, current market conditions and
future outlook on Wednesday, November 9, 2022 at 10:00 a.m. Eastern
Time.
The Company’s 2022 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 Wednesday, November 9, 2022
and can be accessed by dialing toll free 877-344-7529
(domestically) and 412-317-0088 (internationally) and entering the
passcode 6545277. 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 132
manufactured home communities (including one community acquired
through the opportunity zone fund) containing approximately 25,000
developed homesites. These communities are located in New Jersey,
New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan,
Maryland, Alabama and South Carolina. UMH also has an ownership
interest in and operates one community in Florida, containing 219
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 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, 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 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 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, 2022 and 2021 are calculated as
follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
9/30/22 |
|
|
9/30/21 |
|
|
9/30/22 |
|
|
9/30/21 |
|
Net Income (Loss)
Attributable to Common Shareholders |
|
$ |
(9,745 |
) |
|
$ |
(3,403 |
) |
|
$ |
(36,548 |
) |
|
$ |
11,839 |
|
Depreciation Expense |
|
|
12,302 |
|
|
|
11,380 |
|
|
|
36,003 |
|
|
|
33,572 |
|
Depreciation Expense from
Unconsolidated Joint Venture |
|
|
90 |
|
|
|
-0- |
|
|
|
257 |
|
|
|
-0- |
|
Loss on Sales of Depreciable
Assets |
|
|
10 |
|
|
|
91 |
|
|
|
96 |
|
|
|
109 |
|
(Increase) Decrease in Fair
Value of Marketable Securities |
|
|
1,230 |
|
|
|
5,390 |
|
|
|
43,024 |
|
|
|
(14,120 |
) |
(Gain) Loss on Sales of
Marketable Securities, net |
|
|
6,405 |
|
|
|
(2,636 |
) |
|
|
(24,316 |
) |
|
|
(2,342 |
) |
FFO Attributable to
Common Shareholders |
|
|
10,292 |
|
|
|
10,822 |
|
|
|
18,516 |
|
|
|
29,058 |
|
Redemption of Preferred
Stock |
|
|
-0- |
|
|
|
-0- |
|
|
|
8,190 |
|
|
|
-0- |
|
Non- Recurring Other Expense
(2) |
|
|
1,386 |
|
|
|
324 |
|
|
|
2,642 |
|
|
|
1,070 |
|
Normalized FFO
Attributable to Common Shareholders |
|
$ |
11,678 |
|
|
$ |
11,146 |
|
|
$ |
29,348 |
|
|
$ |
30,128 |
|
The diluted weighted shares outstanding used in
the calculation of FFO per Diluted Common Share and Normalized FFO
per Diluted Common Share were 55.6 million and 54.7 million shares
for the three and nine months ended September 30, 2022,
respectively, and 49.1 million and 46.2 million shares for the
three and nine months ended September 30, 2021, respectively.
Common stock equivalents resulting from stock options in the amount
of 728,000 million and 956,000 shares for the three and nine months
ended September 30, 2022, and 1.3 million shares for the three
months ended September 30, 2021 were excluded from the computation
of Diluted Net Income (Loss) per Share as their effect would have
been anti-dilutive. Common stock equivalents resulting from stock
options in the amount of 1.0 million shares for the nine months
ended September 30, 2021 were included in the computation of
Diluted Net Income (Loss) per share.
(2) For the three and nine months ended
September 30, 2022, consists of special bonus and restricted stock
grants for the August 2020 groundbreaking Fannie Mae financing,
which are being expensed over the vesting period ($431 and $1,293,
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 acquisition not completed ($20).
For 2021, consists of special bonus and restricted stock grants for
the August 2020 groundbreaking Fannie Mae financing, which are
being expensed over the vesting period.
The following are the cash flows provided by
(used in) operating, investing and financing activities for the
nine months ended September 30, 2022 and 2021 (in thousands):
|
|
2022 |
|
|
2021 |
|
Operating Activities |
|
$ |
5,083 |
|
|
$ |
46,250 |
|
Investing
Activities |
|
|
(58,435 |
) |
|
|
(63,987 |
) |
Financing
Activities |
|
|
(577 |
) |
|
|
79,614 |
|
Contact: Nelli Madden
732-577-9997
# # # #
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