UMH Properties, Inc. (NYSE:UMH) (TASE:UMH) reported Total Income of
$195.8 million for the year ended December 31, 2022 as compared to
$186.1 million for the year ended December 31, 2021, representing
an increase of 5%. Total Income for the quarter ended December 31,
2022 was $48.7 million as compared to $46.0 million for the quarter
ended December 31, 2021, representing an increase of 6%. Net Income
(Loss) Attributable to Common Shareholders amounted to a loss of
$36.3 million or $0.67 per diluted share for the year ended
December 31, 2022 as compared to income of $21.2 million or $0.45
per diluted share for the year ended December 31, 2021. Net Income
Attributable to Common Shareholders amounted to $283,000 or $0.005
per diluted share for the quarter ended December 31, 2022 as
compared to $9.4 million or $0.17 per diluted share for the quarter
ended December 31, 2021.
Funds from Operations Attributable to Common
Shareholders (“FFO”) was $28.5 million or $0.51 per diluted share
for the year ended December 31, 2022 as compared to $39.1 million
or $0.83 per diluted share for the year ended December 31, 2021.
FFO was $10.0 million or $0.18 per diluted share for the quarter
ended December 31, 2022 as compared to $10.1 million or $0.20 per
diluted share for the quarter ended December 31, 2021. Normalized
Funds from Operations Attributable to Common Shareholders
(“Normalized FFO”), was $46.8 million or $0.85 per diluted share
for the year ended December 31, 2022, as compared to $41.1 million
or $0.87 per diluted share for the year ended December 31, 2021.
Normalized FFO was $11.3 million or $0.20 per diluted share for the
quarter ended December 31, 2022, as compared to $11.0 million or
$0.22 per diluted share for the quarter ended December 31,
2021.
A summary of significant financial information
for the three months and year ended December 31, 2022 and 2021 is
as follows (in thousands except per share amounts):
|
|
For the Three Months Ended |
|
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Total Income |
|
$ |
48,748 |
|
|
$ |
46,002 |
|
Total Expenses |
|
$ |
42,582 |
|
|
$ |
37,500 |
|
Net Income Attributable to
Common Shareholders |
|
$ |
283 |
|
|
$ |
9,410 |
|
Net Income Attributable to Common Shareholders per Diluted Common
Share |
|
$ |
0.005 |
|
|
$ |
0.17 |
|
FFO (1) |
|
$ |
9,973 |
|
|
$ |
10,091 |
|
FFO (1) per Diluted Common
Share |
|
$ |
0.18 |
|
|
$ |
0.20 |
|
Normalized FFO (1) |
|
$ |
11,321 |
|
|
$ |
11,016 |
|
Normalized FFO (1) per Diluted
Common Share |
|
$ |
0.20 |
|
|
$ |
0.22 |
|
Weighted Average Shares
Outstanding |
|
|
56,755 |
|
|
|
51,128 |
|
|
|
For the Year Ended |
|
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Total Income |
|
$ |
195,776 |
|
|
$ |
186,123 |
|
Total Expenses |
|
$ |
166,252 |
|
|
$ |
152,163 |
|
Net Income (Loss) Attributable
to Common Shareholders |
|
$ |
(36,265 |
) |
|
$ |
21,249 |
|
Net Income (Loss) Attributable
to Common Shareholders per Diluted Common Share |
|
$ |
(0.67 |
) |
|
$ |
0.45 |
|
FFO (1) |
|
$ |
28,489 |
|
|
$ |
39,149 |
|
FFO (1) per Diluted Common
Share |
|
$ |
0.51 |
|
|
$ |
0.83 |
|
Normalized FFO (1) |
|
$ |
46,840 |
|
|
$ |
41,144 |
|
Normalized FFO (1) per Diluted
Common Share |
|
$ |
0.85 |
|
|
$ |
0.87 |
|
Weighted Average Shares
Outstanding |
|
|
54,389 |
|
|
|
47,432 |
|
A summary of significant balance sheet information as of
December 31, 2022 and 2021 is as follows (in thousands):
|
|
December 31,2022 |
|
|
December 31,2021 |
|
|
|
|
|
|
|
|
Gross Real Estate
Investments |
|
$ |
1,391,588 |
|
|
$ |
1,205,091 |
|
Marketable Securities at Fair
Value |
|
$ |
42,178 |
|
|
$ |
113,748 |
|
Total Assets |
|
$ |
1,344,596 |
|
|
$ |
1,270,820 |
|
Mortgages Payable, net |
|
$ |
508,938 |
|
|
$ |
452,567 |
|
Loans Payable, net |
|
$ |
153,531 |
|
|
$ |
46,757 |
|
Bonds Payable, net |
|
$ |
99,207 |
|
|
$ |
-0- |
|
Total Shareholders’
Equity |
|
$ |
551,196 |
|
|
$ |
742,140 |
|
Samuel A. Landy, President and CEO, commented on the 2022
results.
“During 2022, UMH made substantial progress on
multiple fronts – generating solid operating results, achieving
strong growth and improving our financial position. We have:
- Increased Rental and Related Income
by 7%;
- Increased Community Net Operating
Income (“NOI”) by 4%;
- Increased our rental home portfolio
by 392 homes from year end 2021 to approximately 9,100 total rental
homes, representing an increase of 5% from year end 2021;
- Acquired seven communities
containing 1,486 homesites for a total cost of $86.2 million;
- Issued $102.7 million of 4.72%
Series A Bonds due 2027 in an offering to investors in Israel, for
total proceeds of $98.7 million, net of offering expenses;
- Completed the addition of
approximately 1,100 homes to our Fannie Mae credit facility, for
total proceeds of approximately $25.6 million;
- Financed four communities and
approximately 250 rental homes within those communities for total
proceeds of approximately $34.2 million;
- Issued and sold approximately 5.0
million shares of Common Stock through an At-the-Market Sale
Program at a weighted average price of $20.58 per share, generating
gross proceeds of $102.6 million and net proceeds of $100.8
million, after offering expenses;
- Issued and sold approximately
406,000 shares of Series D Preferred Stock through an At-the-Market
Sale Program at a weighted average price of $22.90 per share,
generating gross proceeds of $9.3 million and net proceeds of $9.1
million, after offering expenses;
- 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;
- 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; and subsequent to year end, further expanded this line from
$100 million to $180 million;
- Subsequent to year end, acquired
our first community in Georgia, containing 118 developed homesites,
for a total cost of $3.7 million through our qualified opportunity
zone fund;
- Subsequent to year end, issued and
sold approximately 1.9 million shares of Common Stock through an
At-the-Market Sale Program at a weighted average price of $16.99
per share, generating gross proceeds of $32.7 million and net
proceeds of $32.2 million, after offering expenses; and
- Subsequent to year end, issued and
sold approximately 640,000 shares of Series D Preferred Stock
through an At-the-Market Sale Program at a weighted average price
of $22.77 per share, generating gross proceeds of $14.6 million and
net proceeds of $14.4 million, after offering expenses.”
“UMH is well positioned for future earnings
growth. We have invested a considerable amount of capital in
existing acquisitions, expanding our communities and into our joint
venture. This capital has been deployed, but value-add acquisitions
and expansions take time to generate returns. The communities and
expansions we have invested in are well-located and are
experiencing strong demand for sales and rentals which will result
in increased occupancy and revenue.”
“The backlogs from our manufacturers are now
back to pre-pandemic levels, and we have over 1,000 homes being set
up and ready for occupancy. As these homes come online, we
anticipate revenue growth in the 8-9% range which will more than
offset the expense growth resulting in high single or low double
digit NOI growth.”
“During the year, we completed the acquisition
of seven communities containing approximately 1,500 developed
homesites for a total purchase price of approximately $86 million.
These value-add acquisitions provide a runway for long-term NOI and
earnings accretion but impacted our earnings in the short term. We
also completed the development of 225 expansion sites which will
generate sales profits, strong yields and property appreciation in
the future.”
“We are proud of the company that we have built
and the mission we are on to provide the Nation with needed
affordable housing. Our results and future growth prospects allowed
us to raise our dividend for three consecutive years. We believe we
are on track for earnings and dividend growth in the future. We
look forward to continuing to execute on our business plan and
building long-term value for our dedicated shareholders.”
UMH Properties, Inc. will host its Fourth
Quarter and Year Ended December 31, 2022 Financial Results Webcast
and Conference Call. Senior management will discuss the results,
current market conditions and future outlook on Wednesday, March 1,
2023 at 10:00 a.m. Eastern Time.
The Company’s fourth quarter and year ended
December 31, 2022 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 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, March 1, 2023
and can be accessed by dialing toll free 877-344-7529
(domestically) and 412-317-0088 (internationally) and entering the
passcode 7936826. 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 25,700
developed homesites. These communities are located in New Jersey,
New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan,
Maryland, 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 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 income (loss) to the Company’s FFO and Normalized FFO for the
three months and year ended December 31, 2022 and 2021 are
calculated as follows (in thousands):
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
12/31/22 |
|
|
12/31/21 |
|
|
12/31/22 |
|
|
12/31/21 |
|
Net Income (Loss)
Attributable to Common Shareholders |
|
$ |
283 |
|
|
$ |
9,410 |
|
|
$ |
(36,265 |
) |
|
$ |
21,249 |
|
Depreciation Expense |
|
|
12,766 |
|
|
|
11,552 |
|
|
|
48,769 |
|
|
|
45,124 |
|
Depreciation Expense from
Unconsolidated Joint Venture |
|
|
114 |
|
|
|
-0- |
|
|
|
371 |
|
|
|
-0- |
|
Loss on Sales of Investment
Property and Equipment |
|
|
73 |
|
|
|
61 |
|
|
|
169 |
|
|
|
170 |
|
(Increase) Decrease in Fair
Value of Marketable Securities |
|
|
(21,185 |
) |
|
|
(10,932 |
) |
|
|
21,839 |
|
|
|
(25,052 |
) |
Gain on Sales of Marketable
Securities, net |
|
|
17,922 |
|
|
|
-0- |
|
|
|
(6,394 |
) |
|
|
(2,342 |
) |
FFO Attributable to
Common Shareholders |
|
|
9,973 |
|
|
|
10,091 |
|
|
|
28,489 |
|
|
|
39,149 |
|
Redemption of Preferred Stock
(2) |
|
|
-0- |
|
|
|
-0- |
|
|
|
12,916 |
|
|
|
-0- |
|
Amortization (3) |
|
|
511 |
|
|
|
-0- |
|
|
|
1,956 |
|
|
|
-0- |
|
Non-Recurring Other Expense
(4) |
|
|
837 |
|
|
|
925 |
|
|
|
3,479 |
|
|
|
1,995 |
|
Normalized FFO
Attributable to Common Shareholders |
|
$ |
11,321 |
|
|
$ |
11,016 |
|
|
$ |
46,840 |
|
|
$ |
41,144 |
|
The diluted weighted shares outstanding used in
the calculation of FFO per Diluted Common Share and Normalized FFO
per Diluted Common Share were 56.8 million and 55.3 million shares
for the three months and year ended December 31, 2022,
respectively, and 51.1 million and 47.4 million shares for the
three months and year ended December 31, 2021, respectively. Common
stock equivalents resulting from stock options in the amount of
571,000 and 936,000 shares for the three months and year ended
December 31, 2022, respectively, were excluded from the diluted
weighted shares outstanding as they would have been anti-dilutive.
Common stock equivalents resulting from stock options in the amount
of 1.4 million and 1.1 million shares for the three months and year
ended December 31, 2021, respectively, are included in the diluted
weighted shares outstanding.
(2) Primarily consists of redemption charges
related to the original issuance costs ($8,190) and the carrying
costs of excess cash ($4,726) in 2022 from the beginning of the
year through the redemption date.
(3) Due to the change in sources of capital,
this non-cash expense is expected to become more significant and is
therefore included as an adjustment to Normalized FFO for the year
ended December 31, 2022. Had a similar adjustment been made in
prior years, Normalized FFO Attributable to Common Shareholders
would have been $11,293 or $0.22 and $42,145 or $0.89 for the three
months and year ended December 31, 2021, respectively.
(4) 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 $1,724, respectively) and non-recurring expenses for the joint
venture with Nuveen ($210 and $264, respectively), early
extinguishment of debt ($125 and $320, respectively), one-time
legal fees ($10 and $197, respectively), fees related to the
establishment of the Opportunity Zone Fund ($61 and $954,
respectively) and costs associated with acquisition not completed
($0 and $20, respectively) for the three months and year ended
December 31, 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 ($754 and $1,824,
respectively) and non-recurring expenses for the joint venture
($171) for the three months and year ended December 31, 2021.
The following are the cash flows provided by
(used in) operating, investing and financing activities for the
year ended December 31, 2022 and 2021 (in thousands):
|
|
2022 |
|
|
2021 |
|
Operating
Activities |
|
$ |
(7,983 |
) |
|
$ |
65,163 |
|
Investing Activities |
|
|
(124,121 |
) |
|
|
(94,364 |
) |
Financing Activities |
|
|
47,954 |
|
|
|
125,634 |
|
Contact: Nelli
Madden732-577-9997
# # # #
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