FREEHOLD, NJ, Aug. 03, 2022 (GLOBE NEWSWIRE) -- UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended June 30, 2022 of $49.2 million as compared to $49.0 million for the quarter ended June 30, 2021, representing an increase of 7%. Net Loss Attributable to Common Shareholders amounted to $22.5 million or $0.41 per diluted share for the quarter ended June 30, 2022 as compared to Net Income of $8.4 million or $0.18 per diluted share for the quarter ended June 30, 2021. Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), was $8.7 million or $0.16 per diluted share for the quarter ended June 30, 2022, as compared to $10.3 million or $0.22 per diluted share for the quarter ended June 30, 2021. These decreases were primarily due to carrying costs of the capital required to redeem all 9.9 million issued and outstanding shares of its 6.75% Series C Preferred Stock. The company also recognized a preferred share redemption charge of $8.2 million related to the original issuance costs.
A summary of significant financial information for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands except per share amounts):
| For the Three Months Ended | ||||||||
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| Total Income | $ | 49,223 | $ | 48,959 | ||||
| Total Expenses | $ | 41,258 | $ | 39,947 | ||||
| Increase (Decrease) in Fair Value of Marketable Securities | $ | (10,044 | ) | $ | 9,291 | |||
| Net Income (Loss) Attributable to Common Shareholders | $ | (22,478 | ) | $ | 8,403 | |||
| Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share | $ | (0.41 | ) | $ | 0.18 | |||
| FFO (1) | $ | (320 | ) | $ | 9,855 | |||
| FFO (1) per Diluted Common Share | $ | (0.01 | ) | $ | 0.21 | |||
| Normalized FFO (1) | $ | 8,695 | $ | 10,281 | ||||
| Normalized FFO (1) per Diluted Common Share | $ | 0.16 | $ | 0.22 | ||||
| Diluted Weighted Average Shares Outstanding | 54,215 | 46,628 | ||||||
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| Total Income | $ | 95,091 | $ | 92,091 | ||||
| Total Expenses | $ | 79,082 | $ | 76,135 | ||||
| Increase (Decrease) in Fair Value of Marketable Securities | $ | (41,794 | ) | $ | 19,510 | |||
| Net Income (Loss) Attributable to Common Shareholders | $ | (26,803 | ) | $ | 15,242 | |||
| Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share | $ | (0.50 | ) | $ | 0.34 | |||
| FFO (1) | $ | 8,224 | $ | 18,236 | ||||
| FFO (1) per Diluted Common Share | $ | 0.15 | $ | 0.41 | ||||
| Normalized FFO (1) | $ | 17,670 | $ | 18,982 | ||||
| Normalized FFO (1) per Diluted Common Share | $ | 0.33 | $ | 0.42 | ||||
| Diluted Weighted Average Shares Outstanding | 53,224 | 45,008 | ||||||
A summary of significant balance sheet information as of June 30, 2022 and December 31, 2021 is as follows (in thousands):
| June 30, 2022 | December 31, 2021 | |||||||
| Gross Real Estate Investments | $ | 1,247,182 | $ | 1,205,091 | ||||
| Marketable Securities at Fair Value | $ | 46,932 | $ | 113,748 | ||||
| Total Assets | $ | 1,423,265 | $ | 1,270,820 | ||||
| Mortgages Payable, net | $ | 468,811 | $ | 452,567 | ||||
| Loans Payable, net | $ | 58,375 | $ | 46,757 | ||||
| Bonds Payable, net | $ | 98,811 | $ | -0- | ||||
| Total Shareholders’ Equity | $ | 521,895 | $ | 742,140 | ||||
Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2022.
“UMH operations continue to meet expectations. During the quarter, we:
- Increased Rental and Related Income by 7%;
- Increased Community Net Operating Income (“NOI”) by 5%;
- Increased Same Property NOI by 5%;
- Same Property Occupancy remained steady at 86.7%;
- Increased our rental home portfolio by 151 homes from yearend 2021 to approximately 8,900 total rental homes, representing an increase of 1.7%;
- Acquired two communities containing approximately 271 homesites for a total cost of approximately $11.3 million;
- Issued and sold approximately 2.4 million shares of Common Stock through an At-the-Market Sale Program for our Common Stock at a weighted average price of $24.29 per share, generating gross proceeds of $59.3 million and net proceeds of $58.2 million, after offering expenses;
- Reduced our Net Debt to Total Market Capitalization from 21.7% to 19.4% quarter over quarter;
- Subsequent to quarter end, acquired one community containing 351 homesites for a total cost of approximately $21.1 million;
- Subsequent to quarter end, redeemed all 9.9 million issued and outstanding shares of our 6.75% Series C preferred Stock for $247.1 million; and
- Subsequent to quarter end, invested $8 million in the UMH qualified opportunity zone fund to acquire, develop and redevelop manufactured housing communities located in Qualified Opportunity Zones.”
Mr. Landy stated, “We are pleased to have completed the recapitalization of our 6.75% Series C Preferred Stock with a combination of debt and equity. This recapitalization should result in an annual increase in FFO of approximately $0.12 per share. Our normalized FFO of $0.16 per share for the quarter was impacted by the carrying costs of the capital required to redeem the outstanding preferred. Adding the preferred C dividend of $4.2 million back to normalized FFO increases it to $0.23 per share or $0.92 per share on an annual basis. This income growth does not include the expected future improvement of our operating results.”
“Our operating results are in line with the first quarter of this year. Demand for our homes for sale and for rent remains strong throughout our portfolio. We have homes arriving daily in our communities. As these homes become occupied, we should be able to drive same property operating performance comparable with our results in 2020 and 2021. The operating expense increase is in line with our expectations given the impact that inflation has had on materials and labor costs.”
“We have had a busy year on the acquisitions front. Year-to-date, we have acquired 4 communities containing 718 sites for a total purchase price of $38 million. The blended occupancy rate is 56% which gives us additional lots to drive future income growth and increase the property values. These communities are in Western Pennsylvania, Michigan and Alabama. We continue to seek additional acquisitions that meet our growth criteria.”
“Our basic business of providing quality affordable housing is in high demand and fundamentally sound. We have a business plan that has been proven to drive property level appreciation and generate excellent returns for shareholders. We have additional growth opportunities through the acquisitions of existing communities, the development of expansions and new communities, the infill of our vacant sites and additional sales profits. We look forward to exceptional performance for years to come.”
UMH Properties, Inc. will host its Second Quarter 2022 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, August 4, 2022 at 10:00 a.m. Eastern Time.
The Company’s 2022 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 4, 2022 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 6928263. 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 131 manufactured home communities containing approximately 24,800 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 six months ended June 30, 2021 and 2020 are calculated as follows (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| 6/30/22 | 6/30/21 | 6/30/22 | 6/30/21 | |||||||||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | (22,478 | ) | $ | 8,403 | $ | (26,803 | ) | $ | 15,242 | ||||||
| Depreciation Expense | 11,984 | 11,184 | 23,701 | 22,192 | ||||||||||||
| Depreciation Expense from Unconsolidated Joint Venture | 86 | -0- | 167 | -0- | ||||||||||||
| (Gain) Loss on Sales of Depreciable Assets | 44 | (5 | ) | 86 | 18 | |||||||||||
| (Increase) Decrease in Fair Value of Marketable Securities | 10,044 | (9,291 | ) | 41,794 | (19,510 | ) | ||||||||||
| (Gain) Loss on Sales of Marketable Securities, net | -0- | (436 | ) | (30,721 | ) | 294 | ||||||||||
| FFO Attributable to Common Shareholders | (320 | ) | 9,855 | 8,224 | 18,236 | |||||||||||
| Redemption of Preferred Stock | 8,190 | -0- | 8,190 | -0- | ||||||||||||
| Non- Recurring Other Expense (2) | 825 | 426 | 1,256 | 746 | ||||||||||||
| Normalized FFO Attributable to Common Shareholders | $ | 8,695 | $ | 10,281 | $ | 17,670 | $ | 18,982 | ||||||||
The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 55.2 million and 54.2 million shares for the three and six months ended June 30, 2022, respectively, and 46.6 million and 45.0 million shares for the three and six months ended June 30, 2021, respectively. Common stock equivalents resulting from stock options in the amount of 955,000 and 1.0 million shares for the three and six months ended June 30, 2022, respectively, were excluded from the computation of the Diluted Net Income (Loss) per Share as their effect would be anti-dilutive. 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, are included in the computation of the Diluted Net Income (Loss) per Share.
The following are the cash flows provided (used) by operating, investing and financing activities for the six months ended June 30, 2022 and 2021 (in thousands):
| 2022 | 2021 | |||||||
| Operating Activities | $ | 5,415 | $ | 33,203 | ||||
| Investing Activities | 871 | (49,573 | ) | |||||
| Financing Activities | 153,701 | 90,036 | ||||||
(2) For the three and six months ended June 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 $862, respectively) and non-recurring expenses for the joint venture with Nuveen ($52), early extinguishment of debt ($193) and one-time legal fees ($149). 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.
Contact: Nelli Madden
732-577-9997
