FREEHOLD, NJ, May 07, 2020 (GLOBE NEWSWIRE) -- UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended March 31, 2020 of $37.6 million as compared to $34.3 million for the quarter ended March 31, 2019, representing an increase of 10%. Net Loss Attributable to Common Shareholders amounted to $42.8 million or $1.04 per diluted share for the quarter ended March 31, 2020 as compared to Net Income of $5.9 million or $0.15 per diluted share for the quarter ended March 31, 2019. This decrease was due to the change in fair value of our marketable securities. During the quarter, the securities portfolio experienced an unrealized loss of $38.6 million as compared to an unrealized gain of $8.6 million in the prior year period.
Funds from Operations Attributable to Common Shareholders (“FFO”), was $6.1 million or $0.15 per diluted share for the quarter ended March 31, 2020 as compared to $6.1 million or $0.16 per diluted share for the quarter ended March 31, 2019. Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), was $6.1 million or $0.15 per diluted share for the quarter ended March 31, 2020, as compared to $6.5 million or $0.17 per diluted share for the quarter ended March 31, 2019.
A summary of significant financial information for the three months ended March 31, 2020 and 2019 is as follows (in thousands except per share amounts):
| For the Three Months Ended | |||||||
| March 31, | |||||||
| 2020 | 2019 | ||||||
| Total Income | $ | 37,573 | $ | 34,287 | |||
| Total Expenses | $ | 31,819 | $ | 29,750 | |||
| Increase (Decrease) in Fair Value of Marketable Securities | $ | (38,593 | ) | $ | 8,596 | ||
| Net Income (Loss) Attributable to Common Shareholders | $ | (42,838 | ) | $ | 5,914 | ||
| Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share | $ | (1.04 | ) | $ | 0.15 | ||
| FFO (1) | $ | 6,089 | $ | 6,090 | |||
| FFO (1) per Diluted Common Share | $ | 0.15 | $ | 0.16 | |||
| Normalized FFO (1) | $ | 6,089 | $ | 6,465 | |||
| Normalized FFO (1) per Diluted Common Share | $ | 0.15 | $ | 0.17 | |||
| Diluted Weighted Average Shares Outstanding | 41,173 | 38,895 | |||||
A summary of significant balance sheet information as of March 31, 2020 and December 31, 2019 is as follows (in thousands):
| March 31, 2020 | December 31, 2019 | ||||
| Gross Real Estate Investments | $ | 1,030,607 | $ | 1,015,281 | |
| Marketable Securities at Fair Value | $ | 78,079 | $ | 116,186 | |
| Total Assets | $ | 999,175 | $ | 1,025,453 | |
| Mortgages Payable, net | $ | 371,697 | $ | 373,658 | |
| Loans Payable, net | $ | 44,323 | $ | 83,686 | |
| Total Shareholders’ Equity | $ | 560,081 | $ | 546,339 | |
Samuel A. Landy, President and CEO, commented on the results of the first quarter of 2020.
“We are pleased to announce another solid quarter of operating results and an excellent start to 2020. During the quarter, we:
- Increased Rental and Related Income by 12%;
- Increased Community Net Operating Income (“NOI”) by 22%;
- Improved our Operating Expense ratio by 430 basis points to 45.1%;
- Increased Same Property NOI by 14%;
- Increased Same Property Occupancy by 180 basis points from 82.8% to 84.6%;
- Increased our rental home portfolio by 149 homes to approximately 7,500 total rental homes, representing an increase of 14%;
- Increased rental home occupancy by 100 basis points from 93.0% at yearend 2019 to 94.0% at quarter end;
- Reduced the weighted average interest rate on our mortgages payable from 4.3% to 4.1%;
- Reduced our Net Debt to Total Market Capitalization from 34% to 30%; and,
- Sold approximately 2.6 million shares of our Series D Preferred Stock through our Preferred Stock At-The-Market Program for net proceeds of approximately $63.1 million, after offering expenses.”
Mr. Landy stated, “The impact of the COVID-19 pandemic has been widespread. UMH took aggressive action to protect the health and well-being of our employees and residents. All the states in which we operate have issued stay at home orders and closed nonessential businesses. Although our offices were closed, our maintenance staff was deemed essential and able to maintain our communities and deliver essential services to our residents. Our community managers have been able to work with residents and potential residents remotely. Our new website allows for virtual tours of our homes for sale or rent, online execution of applications and lease agreements, online payment of rent, and other enhancements.”
“UMH continues to perform well despite the adversity that we are currently facing. Our operating results demonstrate the success of our business plan. Our rental and related income improved by 12% driving community NOI growth of 22%. Same property NOI increased by 14%. This is the second quarter in a row that same property NOI has increased double digits. Same property occupancy improved by 180 basis-points. Our strong occupancy gains have continued into the second quarter despite the disruptions caused by the pandemic.”
“As we previously disclosed, our April rent collections were very strong. We collected 94% of our April rent charges as compared to 95% last year and believe the remainder will be collected in the coming months. We have offered payment agreements to residents who were financially impacted as a result of the pandemic. We expect to have similar collection results in May.”
“Our solid balance sheet has allowed us to invest in rental homes and expansions positioning the Company for further growth in 2020. We are also lining up low cost sources of capital to redeem our 8% Series B Preferred Stock in October. Although the future impact of the COVID-19 pandemic is uncertain, we believe that the strength of our operations, our financial flexibility and our ability to reduce our overall cost of capital should allow us to execute our business plan and significantly improve FFO for our common shareholders.”
UMH Properties, Inc. will host its First Quarter 2020 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, May 8, 2020 at 10:00 a.m. Eastern Time.
The Company’s 2020 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 Friday, May 8, 2020. It will be available until August 1, 2020 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10140407. 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 122 manufactured home communities containing approximately 23,100 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland. 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 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, and the change in the fair value 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 change in the fair value of marketable securities from our FFO calculation. Prior to the adoption of the FFO White Paper – 2018 Restatement, we utilized Core Funds from Operations (Core FFO), which we defined as FFO, excluding the change in the fair value of marketable securities. 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 gains and losses realized on marketable securities investments 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 reconciliation of the Company’s U.S. GAAP net loss to the Company’s FFO and Normalized FFO for the three months ended March 31, 2020 and 2019 are calculated as follows (in thousands):
| Three Months Ended | ||||||||
| 3/31/20 | 3/31/19 | |||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | (42,838 | ) | $ | 5,914 | |||
| Depreciation Expense | 10,227 | 8,751 | ||||||
| Loss on Sales of Depreciable Assets | 107 | 21 | ||||||
| (Increase) Decrease in Fair Value of Marketable Securities(2) | 38,593 | (8,596 | ) | |||||
| FFO Attributable to Common Shareholders | 6,089 | 6,090 | ||||||
| Settlement of utility billing dispute over a prior 10-year period | -0- | 375 | ||||||
| Normalized FFO Attributable to Common Shareholders | $ | 6,089 | $ | 6,465 | ||||
The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 41.5 million shares for the three months ended March 31, 2020 and 38.9 million for the three months ended March 31, 2019. Common stock equivalents resulting from stock options in the amount of 355,000 shares for the three months ended March 31, 2020 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 250,000 shares for the three months ended March 31, 2019 are included in the diluted weighted shares outstanding.
The following are the cash flows provided (used) by operating, investing and financing activities for the three months ended March 31, 2020 and 2019 (in thousands):
| 2020 | 2019 | |||||||
| Operating Activities | $ | 17,295 | $ | 12,175 | ||||
| Investing Activities | (20,477 | ) | (14,737 | ) | ||||
| Financing Activities | 6,387 | 3,682 |
(2) Represents change in unrealized gain (loss) in marketable securities which is included in the Consolidated Statements of Income (Loss). (Increase) Decrease in Fair Value of Marketable Securities, if any, were previously recorded in Core FFO.
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Contact: Nelli Madden
732-577-9997
UMH PROPERTIES, INC.
Juniper Business Plaza
3499 Route 9 North, Suite 3-C
Freehold, NJ 07728
(732) 577-9997
Fax: (732) 577-9980