FREEHOLD, NJ, Nov. 08, 2022 (GLOBE NEWSWIRE) -- 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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