FREEHOLD, NJ, Aug. 04, 2021 (GLOBE NEWSWIRE) -- UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended June 30, 2021 of $49.0 million as compared to $40.1 million for the quarter ended June 30, 2020, representing an increase of 22%. Net Income Attributable to Common Shareholders amounted to $8.4 million or $0.18 per diluted share for the quarter ended June 30, 2021 as compared to Net Income of $10.2 million or $0.25 per diluted share for the quarter ended June 30, 2020.
Funds from Operations Attributable to Common Shareholders (“FFO”), was $9.9 million or $0.21 per diluted share for the quarter ended June 30, 2021 as compared to $7.1 million or $0.17 per diluted share for the quarter ended June 30, 2020. Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), was $10.3 million or $0.22 per diluted share for the quarter ended June 30, 2021, as compared to $7.1 million or $0.17 per diluted share for the quarter ended June 30, 2020.
A summary of significant financial information for the three and six months ended June 30, 2021 and 2020 is as follows (in thousands except per share amounts):
| For the Three Months Ended | ||||||||
| June 30, | ||||||||
| 2021 | 2020 | |||||||
| Total Income | $ | 48,959 | $ | 40,084 | ||||
| Total Expenses | $ | 39,947 | $ | 33,348 | ||||
| Increase in Fair Value of Marketable Securities | $ | 9,291 | $ | 13,411 | ||||
| Net Income Attributable to Common Shareholders | $ | 8,403 | $ | 10,235 | ||||
| Net Income Attributable to Common Shareholders per Diluted Common Share | $ | 0.18 | $ | 0.25 | ||||
| FFO (1) | $ | 9,855 | $ | 7,135 | ||||
| FFO (1) per Diluted Common Share | $ | 0.21 | $ | 0.17 | ||||
| Normalized FFO (1) | $ | 10,281 | $ | 7,135 | ||||
| Normalized FFO (1) per Diluted Common Share | $ | 0.22 | $ | 0.17 | ||||
| Diluted Weighted Average Shares Outstanding | 46,628 | 41,526 | ||||||
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2021 | 2020 | |||||||
| Total Income | $ | 92,091 | $ | 77,657 | ||||
| Total Expenses | $ | 76,135 | $ | 65,167 | ||||
| Increase (Decrease) in Fair Value of Marketable Securities | $ | 19,510 | $ | (25,182 | ) | |||
| Net Income (Loss) Attributable to Common Shareholders | $ | 15,242 | $ | (32,603 | ) | |||
| Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share | $ | 0.34 | $ | (0.79 | ) | |||
| FFO (1) | $ | 18,236 | $ | 13,224 | ||||
| FFO (1) per Diluted Common Share | $ | 0.41 | $ | 0.32 | ||||
| Normalized FFO (1) | $ | 18,982 | $ | 13,224 | ||||
| Normalized FFO (1) per Diluted Common Share | $ | 0.42 | $ | 0.32 | ||||
| Diluted Weighted Average Shares Outstanding | 45,008 | 41,195 | ||||||
A summary of significant balance sheet information as of June 30, 2021 and December 31, 2020 is as follows (in thousands):
| June 30, 2021 | December 31, 2020 | |||||||
| Gross Real Estate Investments | $ | 1,154,276 | $ | 1,108,483 | ||||
| Marketable Securities at Fair Value | $ | 115,429 | $ | 103,172 | ||||
| Total Assets | $ | 1,211,863 | $ | 1,089,413 | ||||
| Mortgages Payable, net | $ | 466,214 | $ | 471,477 | ||||
| Loans Payable, net | $ | 63,510 | $ | 87,009 | ||||
| Total Shareholders’ Equity | $ | 652,461 | $ | 501,808 | ||||
Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2021.
“UMH continues to operate on all cylinders. During the quarter, we:
- Increased Rental and Related Income by 12%;
- Increased Community Net Operating Income (“NOI”) by 14%;
- Increased Normalized Funds from Operations (“Normalized FFO”) by 44% and Normalized FFO per share by 29%;
- Improved our Operating Expense ratio by 70 basis points to 43.3%;
- Increased Same Property NOI by 15%;
- Increased Same Property Occupancy by 280 basis points from 84.3% to 87.1%;
- Increased our rental home portfolio by 352 homes from yearend 2020 to approximately 8,600 total rental homes, representing an increase of 4%;
- Increased rental home occupancy by 130 basis points from 94.6% at yearend 2020 to 95.9% at quarter end;
- Increased Sales of Manufactured Homes by 91%;
- Acquired one community containing approximately 206 homesites for a total cost of approximately $10.3 million;
- Increased our Total Market Capitalization by 41% year over year to $2.0 billion at quarter end;
- Increased our Equity Market Capitalization by 94% year over year to 1.0 billion at quarter end;
- Issued and sold approximately 3.9 million shares of Common Stock through an At-the-Market Sale Program for our Common Stock at a weighted average price of $20.37 per share, generating gross proceeds of $79.3 million and net proceeds of $78.1 million, after offering expenses;
- Issued and sold, through At-the-Market Sale Programs for our Preferred Stock, 911,000 shares of Series D Preferred Stock at a weighted average price of $24.93 per share, generating total gross proceeds of $22.7 million and total net proceeds of $22.3 million, after offering expenses;
- Reduced the weighted average interest rate on our mortgages payable from 4.1% to 3.8% year over year; and
- Reduced our Net Debt to Total Market Capitalization from 34% at yearend 2020 to 22% at quarter end.”
Mr. Landy stated, “Our portfolio of manufactured housing communities continues to benefit from the solid fundamentals exhibited by the overall housing market. These fundamentals are driving exceptional demand for sales and rentals. Year over year, same property occupancy increased 280 basis points, to 87.1%, or 658 overall units. Sales for the quarter increased 91% over last year resulting in a sales profit of approximately $1 million for the quarter. These operating metrics have resulted in same property double digit NOI growth for the 7th quarter in a row.”
“Our operating and financial performance is now translating to the bottom line. Normalized FFO for the quarter was $0.22, an increase of 10% sequentially and 29% year over year. Our success is now starting to be recognized by the investment community. During the quarter, we reached an all time high common stock price of $23.31 and surpassed an equity market capitalization of $1 billion. Achieving this milestone should result in greater investor interest which will benefit the company and all of our shareholders. Our reduced cost of capital opens the door for additional acquisitions and development opportunities that were not previously available to us.”
“We still have the ability to organically grow earnings by filling our 3,400 vacant sites, developing expansions on our 1,800 vacant acres, earning sales profits and financing home sales. While these growth opportunities are significant, we also have the opportunity to refinance our $247 million 6.75% Series C preferred stock and our $215 million 6.375% Series D perpetual preferred stock in July of 2022 and January of 2023, respectively. Refinancing with a 4% cost of capital will result in earnings growth of approximately $0.14 on the Series C and $0.11 on the Series D.”
“UMH has a 53-year history of successfully navigating business cycles and profitably providing affordable housing. We thank our dedicated team members and investors for bringing us to this milestone.”
UMH Properties, Inc. will host its Second Quarter 2021 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, August 5, 2021 at 10:00 a.m. Eastern Time.
The Company’s 2021 second 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, August 5, 2021. It will be available until November 1, 2021 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10157187. 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 127 manufactured home communities containing approximately 24,000 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama and South Carolina. 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, 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 six months ended June 30, 2021 and 2020 are calculated as follows (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| 6/30/21 | 6/30/20 | 6/30/21 | 6/30/20 | |||||||||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | 8,403 | $ | 10,235 | 15,242 | $ | (32,603 | ) | ||||||||
| Depreciation Expense | 11,184 | 10,272 | 22,192 | 20,499 | ||||||||||||
| (Gain) Loss on Sales of Depreciable Assets | (5 | ) | 39 | 18 | 146 | |||||||||||
| (Increase) Decrease in Fair Value of Marketable Securities | (9,291 | ) | (13,411 | ) | (19,510 | ) | 25,182 | |||||||||
| (Gain) Loss on Sales of Marketable Securities, net | (436 | ) | -0- | 294 | -0- | |||||||||||
| FFO Attributable to Common Shareholders | 9,855 | 7,135 | 18,236 | 13,224 | ||||||||||||
| Non- Recurring Other Expense (2) | 426 | -0- | 746 | -0- | ||||||||||||
| Normalized FFO Attributable to Common Shareholders | $ | 10,281 | $ | 7,135 | $ | 18,982 | $ | 13,224 | ||||||||
The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 46.6 million and 45.0 million shares for the three and six months ended June 30, 2021, respectively, and 41.5 million and 41.6 million shares for the three and six months ended June 30, 2020, respectively. Common stock equivalents resulting from stock options in the amount of 1.2 million and 952,000 shares for the three and six months ended June 30, 2021 and 316,000 shares for the three months ended June 30, 2020, are included in the diluted weighted shares outstanding. Common stock equivalents resulting from stock options in the amount of 356,000 shares for the six months ended June 30, 2020 were excluded from the computation of the Diluted Net Income (Loss) per Share as their effect would be anti-dilutive.
The following are the cash flows provided (used) by operating, investing and financing activities for the six months ended June 30, 2021 and 2020 (in thousands):
| 2021 | 2020 | |||||||
| Operating Activities | $ | 33,203 | $ | 30,992 | ||||
| Investing Activities | (49,573 | ) | (44,689 | ) | ||||
| Financing Activities | 90,036 | 11,938 | ||||||
(2) Consists of special bonus and restricted stock grants for the August 2020 groundbreaking Fannie Mae financing, which is being expensed over the vesting period.
Contact: Nelli Madden
732-577-9997
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