UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2016
UMH Properties, Inc.
(Exact name of registrant as specified in its charter)
Maryland | 001-12690 | 22-1890929 | ||
(State or other jurisdiction |
(Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) |
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C, Freehold, NJ | 07728 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (732) 577-9997
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 | Results of Operations and Financial Condition. |
Item 7.01 | Regulation FD Disclosure. |
On November 8, 2016, UMH Properties, Inc. issued a press release announcing the results for the third quarter ended September 30, 2016 and disclosed a supplemental information package in connection with its earnings conference call for the third quarter ended September 30, 2016. A copy of the supplemental information package and press release is furnished with this report as Exhibit 99, and is incorporated herein by reference.
The information in this report and the exhibit attached hereto is being furnished, not filed, for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to Item 2.02 and Item 7.01 of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Forward-Looking Statements
Statements contained in this report, including the document that is incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995 (the “Exchange Act”). All statements, other than statements of historical facts that address activities, events or developments where the Company uses any of the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” or similar expressions, are forward-looking statements. These forward-looking statements are not guaranteed and are based on the Company’s current intentions and on the Company’s current expectations and assumptions. These statements, intentions, expectations and assumptions involve risks and uncertainties, some of which are beyond the Company’s control that could cause actual results or events to differ materially from those that the Company anticipates or projects, such as:
● | changes in the real estate market conditions and general economic conditions; | |
● | the inherent risks associated with owning real estate, including local real estate market conditions, governing laws and regulations affecting manufactured housing communities and illiquidity of real estate investments; | |
● | increased competition in the geographic areas in which we own and operate manufactured housing communities; | |
● | our ability to continue to identify, negotiate and acquire manufactured housing communities and/or vacant land which may be developed into manufactured housing communities on terms favorable to us; | |
● | our ability to maintain rental rates and occupancy levels; | |
● | changes in market rates of interest; | |
● | our ability to repay debt financing obligations; | |
● | our ability to refinance amounts outstanding under our credit facilities at maturity on terms favorable to us; | |
● | our ability to comply with certain debt covenants; | |
● | our ability to integrate acquired properties and operations into existing operations; | |
● | the availability of other debt and equity financing alternatives; | |
● | continued ability to access the debt or equity markets; | |
● | the loss of any member of our management team; | |
● | our ability to maintain internal controls and processes to ensure all transactions are accounted for properly, all relevant disclosures and filings are timely made in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected; | |
● | the ability of manufactured home buyers to obtain financing; | |
● | the level of repossessions by manufactured home lenders; | |
● | market conditions affecting our investment securities; | |
● | changes in federal or state tax rules or regulations that could have adverse tax consequences; and | |
● | our ability to qualify as a real estate investment trust for federal income tax purposes. |
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
99 Supplemental information package for the third quarter ended September 30, 2016 and press release dated November 8, 2016.
2 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UMH Properties, Inc. | ||
Date: November 8, 2016 | By: | /s/ Anna T. Chew |
Name: Title: |
Anna T. Chew Vice President and Chief Financial Officer |
3 |
Table of Contents | |
Page | |
Financial Highlights | 3 |
Consolidated Balance Sheets | 4 |
Consolidated Statements of Income (Loss) | 5 |
Consolidated Statements of Cash Flows | 6 |
Reconciliation of Net Income to EBITDA and Net Loss Attributable to Common Shareholders to FFO, Core FFO and Normalized FFO | 7 |
Market Capitalization, Debt and Coverage Ratios | 8 |
Debt Analysis | 9 |
Debt Maturity | 10 |
Property Summary and Snapshot | 11 |
Same Property Statistics | 12 |
Acquisition Summary and Property Portfolio | 13 |
Definitions | 14 |
Press Release Dated November 8, 2016 | 15 |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 2 |
Financial Highlights | |||||||||||
(unaudited) |
Three Months Ended | Nine Months Ended | |||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | |||||||||||||
Operating Information | ||||||||||||||||
Number of Communities | 100 | 95 | ||||||||||||||
Rental and Related Income | $ | 23,103,155 | $ | 18,970,407 | $ | 67,313,211 | $ | 54,123,435 | ||||||||
Community Operating Expenses | $ | 10,719,289 | $ | 9,337,742 | $ | 31,993,965 | $ | 27,289,770 | ||||||||
Community NOI | $ | 12,383,866 | $ | 9,632,665 | $ | 35,319,246 | $ | 26,833,665 | ||||||||
Expense Ratio | 46.4% | 49.2% | 47.5% | 50.4% | ||||||||||||
Sales of Manufactured Homes | $ | 2,251,896 | $ | 2,724,592 | $ | 6,756,921 | $ | 5,469,093 | ||||||||
Number of Homes Sold | 42 | 45 | 132 | 101 | ||||||||||||
Number of Rentals Added | 305 | 415 | 715 | 712 | ||||||||||||
Net Income | $ | 3,200,013 | $ | 1,047,245 | $ | 8,157,944 | $ | 1,969,744 | ||||||||
Net Loss Attributable to Common Shareholders | $ | (589,734 | ) | $ | (841,902 | ) | $ | (2,155,741 | ) | $ | (3,697,697 | ) | ||||
EBITDA | $ | 13,006,306 | $ | 9,527,708 | $ | 37,184,878 | $ | 25,916,664 | ||||||||
FFO | $ | 5,298,505 | $ | 3,941,361 | $ | 14,960,445 | $ | 9,834,251 | ||||||||
Core FFO | $ | 5,349,865 | $ | 4,096,320 | $ | 15,011,805 | $ | 10,372,985 | ||||||||
Normalized FFO | $ | 4,465,407 | $ | 4,048,649 | $ | 13,112,969 | $ | 10,370,566 | ||||||||
Shares Outstanding and Per Share Data | ||||||||||||||||
Weighted Average Shares Outstanding Basic and Diluted | 27,891,370 | 26,388,589 | 27,450,747 | 25,600,310 | ||||||||||||
Net Loss Attributable to Common Shareholders per Share - Basic and Diluted | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.14 | ) | ||||
FFO per Share- Diluted | $ | 0.19 | $ | 0.15 | $ | 0.54 | $ | 0.38 | ||||||||
Core FFO per Share- Diluted | $ | 0.19 | $ | 0.15 | $ | 0.54 | $ | 0.40 | ||||||||
Normalized FFO per Share- Diluted | $ | 0.16 | $ | 0.15 | $ | 0.48 | $ | 0.40 | ||||||||
Dividends per Common Share | $ | 0.18 | $ | 0.18 | $ | 0.54 | $ | 0.54 | ||||||||
Balance Sheet | ||||||||||||||||
Total Assets | $ | 669,036,290 | $ | 546,896,273 | ||||||||||||
Total Liabilities | $ | 355,125,660 | $ | 342,280,646 | ||||||||||||
Market Capitalization | ||||||||||||||||
Total Debt | $ | 341,599,901 | $ | 330,884,644 | ||||||||||||
Equity Market Capitalization | $ | 337,467,585 | $ | 249,165,488 | ||||||||||||
Series A Preferred Stock | $ | 91,595,000 | $ | 91,595,000 | ||||||||||||
Series B Preferred Stock | $ | 95,030,000 | $ | -0- | ||||||||||||
Total Market Capitalization | $ | 865,692,486 | $ | 671,645,132 |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 3 |
Consolidated Balance Sheets | ||||||||
September 30, 2016 | December 31, 2015 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investment Property and Equipment | ||||||||
Land | $ | 46,246,314 | $ | 45,477,814 | ||||
Site and Land Improvements | 390,804,574 | 377,215,400 | ||||||
Buildings and Improvements | 20,780,644 | 20,307,097 | ||||||
Rental Homes and Accessories | 164,755,859 | 134,708,763 | ||||||
Total Investment Property | 622,587,391 | 577,709,074 | ||||||
Equipment and Vehicles | 14,700,145 | 13,697,460 | ||||||
Total Investment Property and Equipment | 637,287,536 | 591,406,534 | ||||||
Accumulated Depreciation | (134,409,243 | ) | (117,761,146 | ) | ||||
Net Investment Property and Equipment | 502,878,293 | 473,645,388 | ||||||
Other Assets | ||||||||
Cash and Cash Equivalents | 3,709,897 | 6,535,897 | ||||||
Securities Available for Sale at Fair Value | 111,046,262 | 75,011,260 | ||||||
Inventory of Manufactured Homes | 16,335,779 | 14,311,410 | ||||||
Notes and Other Receivables, net | 20,921,062 | 20,028,574 | ||||||
Prepaid Expenses and Other Assets | 4,938,001 | 4,062,813 | ||||||
Land Development Costs | 9,206,996 | 6,722,048 | ||||||
Total Other Assets | 166,157,997 | 126,672,002 | ||||||
TOTAL ASSETS | $ | 669,036,290 | $ | 600,317,390 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities | ||||||||
Mortgages Payable, net of Unamortized Debt Issuance Costs | $ | 285,020,565 | $ | 283,049,802 | ||||
Other Liabilities | ||||||||
Accounts Payable | 3,793,716 | 2,816,290 | ||||||
Loans Payable, net of Unamortized Debt Issuance Costs | 56,579,336 | 57,862,206 | ||||||
Accrued Liabilities and Deposits | 5,522,991 | 6,696,577 | ||||||
Tenant Security Deposits | 4,209,052 | 3,654,090 | ||||||
Total Other Liabilities | 70,105,095 | 71,029,163 | ||||||
Total Liabilities | 355,125,660 | 354,078,965 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Shareholders’ Equity: | ||||||||
Series A - 8.25% Cumulative Redeemable Preferred Stock, par value $0.10 per share: 3,663,800 shares authorized, issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 91,595,000 | 91,595,000 | ||||||
Series B - 8.0% Cumulative Redeemable Preferred Stock, par value $0.10 per share: 4,000,000 and 2,000,000 shares authorized; 3,801,200 and 1,801,200 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 95,030,000 | 45,030,000 | ||||||
Common Stock – $0.10 par value per share: 75,000,000 and 62,000,000 shares authorized; 28,311,039 and 27,086,838 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 2,831,104 | 2,708,684 | ||||||
Excess Stock – $0.10 par value per share: 3,000,000 shares authorized; no shares issued or outstanding as of September 30, 2016 and December 31, 2015, respectively | -0- | -0- | ||||||
Additional Paid-In Capital | 104,182,247 | 109,629,260 | ||||||
Accumulated Other Comprehensive Income (Loss) | 20,940,072 | (2,056,726 | ) | |||||
Accumulated Deficit | (667,793 | ) | (667,793 | ) | ||||
Total Shareholders’ Equity | 313,910,630 | 246,238,425 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 669,036,290 | $ | 600,317,390 |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 4 |
Consolidated Statements of Income (Loss) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | |||||||||||||
INCOME: | ||||||||||||||||
Rental and Related Income | $ | 23,103,155 | $ | 18,970,407 | $ | 67,313,211 | $ | 54,123,435 | ||||||||
Sales of Manufactured Homes | 2,251,896 | 2,724,592 | 6,756,921 | 5,469,093 | ||||||||||||
TOTAL INCOME | 25,355,051 | 21,694,999 | 74,070,132 | 59,592,528 | ||||||||||||
EXPENSES: | ||||||||||||||||
Community Operating Expenses | 10,719,289 | 9,337,742 | 31,993,965 | 27,289,770 | ||||||||||||
Cost of Sales of Manufactured Homes | 1,803,315 | 2,089,602 | 5,278,587 | 4,209,126 | ||||||||||||
Selling Expenses | 812,392 | 798,126 | 2,270,861 | 2,141,693 | ||||||||||||
General and Administrative Expenses | 2,293,366 | 1,799,181 | 5,933,299 | 5,264,839 | ||||||||||||
Acquisition Costs | 51,360 | 154,959 | 51,360 | 449,338 | ||||||||||||
Depreciation Expense | 5,887,667 | 4,786,090 | 17,092,676 | 13,465,559 | ||||||||||||
TOTAL EXPENSES | 21,567,389 | 18,965,700 | 62,620,748 | 52,820,325 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest Income | 400,899 | 442,600 | 1,206,858 | 1,387,062 | ||||||||||||
Dividend Income | 1,755,438 | 1,121,274 | 4,834,817 | 3,222,928 | ||||||||||||
Gain on Sales of Securities Transactions, net | 884,458 | 47,671 | 1,898,836 | 127,419 | ||||||||||||
Other Income | 146,469 | 154,488 | 395,682 | 293,044 | ||||||||||||
Interest Expense | (3,774,341 | ) | (3,450,914 | ) | (11,604,123 | ) | (9,766,523 | ) | ||||||||
TOTAL OTHER INCOME (EXPENSE) | (587,077 | ) | (1,684,881 | ) | (3,267,930 | ) | (4,736,070 | ) | ||||||||
Income before Gain (Loss) on Sales of Investment Property and Equipment | 3,200,585 | 1,044,418 | 8,181,454 | 2,036,133 | ||||||||||||
Gain (Loss) on Sales of Investment Property and Equipment | (572 | ) | 2,827 | (23,510 | ) | (66,389 | ) | |||||||||
NET INCOME | 3,200,013 | 1,047,245 | 8,157,944 | 1,969,744 | ||||||||||||
Less: Preferred Dividends | (3,789,747 | ) | (1,889,147 | ) | (10,313,685 | ) | (5,667,441 | ) | ||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (589,734 | ) | $ | (841,902 | ) | $ | (2,155,741 | ) | $ | (3,697,697 | ) |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 5 |
Consolidated Statements of Cash Flows | ||||||||
(unaudited) | Nine Months Ended | |||||||
9/30/2016 | 9/30/2015 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Income | $ | 8,157,944 | $ | 1,969,744 | ||||
Non-Cash Items Included in Net Income: | ||||||||
Depreciation | 17,092,676 | 13,465,559 | ||||||
Amortization of Financing Costs | 580,335 | 407,481 | ||||||
Stock Compensation Expense | 896,519 | 657,230 | ||||||
Provision for Uncollectible Notes and Other Receivables | 650,382 | 803,103 | ||||||
Gain on Sales of Securities Transactions, net | (1,898,836 | ) | (127,419 | ) | ||||
Loss on Sales of Investment Property and Equipment | 23,510 | 66,389 | ||||||
Changes in Operating Assets and Liabilities: | ||||||||
Inventory of Manufactured Homes | (2,024,369 | ) | (1,161,658 | ) | ||||
Notes and Other Receivables | (1,542,870 | ) | 1,054,922 | |||||
Prepaid Expenses and Other Assets | (875,188 | ) | (5,080,596 | ) | ||||
Accounts Payable | 977,426 | 901,888 | ||||||
Accrued Liabilities and Deposits | (1,189,041 | ) | 416,754 | |||||
Tenant Security Deposits | 554,962 | 635,134 | ||||||
Net Cash Provided by Operating Activities | 21,403,450 | 14,008,531 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of Manufactured Home Communities, net of Mortgages Assumed | (2,954,000 | ) | (42,826,524 | ) | ||||
Purchase of Investment Property and Equipment | (44,239,188 | ) | (37,368,231 | ) | ||||
Proceeds from Sales of Investment Property and Equipment | 844,097 | 604,687 | ||||||
Additions to Land Development Costs | (2,484,948 | ) | (425,356 | ) | ||||
Purchase of Securities Available for Sale | (23,453,933 | ) | (9,171,695 | ) | ||||
Proceeds from Sales of Securities Available for Sale | 12,330,020 | 2,257,433 | ||||||
Net Cash Used in Investing Activities | (59,957,952 | ) | (86,929,686 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from Mortgages, net of Mortgages Assumed | 15,458,000 | 100,722,000 | ||||||
Net Payments on Short Term Borrowings | (1,330,266 | ) | (8,281,398 | ) | ||||
Principal Payments of Mortgages and Loans | (13,629,215 | ) | (19,717,525 | ) | ||||
Financing Costs on Debt | (390,961 | ) | (2,417,695 | ) | ||||
Proceeds from Issuance of Preferred Stock, net | 49,120,853 | -0- | ||||||
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments | 9,267,775 | 20,347,682 | ||||||
Proceeds from Exercise of Stock Options | 1,081,380 | 151,200 | ||||||
Preferred Dividends Paid | (10,773,898 | ) | (5,667,441 | ) | ||||
Common Dividends Paid, net of Dividend Reinvestments | (13,075,166 | ) | (12,398,024 | ) | ||||
Net Cash Provided by Financing Activities | 35,728,502 | 72,738,799 | ||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (2,826,000 | ) | (182,356 | ) | ||||
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD | 6,535,897 | 8,082,792 | ||||||
CASH AND CASH EQUIVALENTS – END OF PERIOD | $ | 3,709,897 | $ | 7,900,436 |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 6 |
Reconciliation of Net Income to EBITDA and Net Loss Attributable |
to Common Shareholders to FFO, Core FFO and Normalized FFO |
(unaudited) |
Three Months Ended | Nine Months Ended | |||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | |||||||||||||
Reconciliation of Net Income To EBITDA | ||||||||||||||||
Net Income | $ | 3,200,013 | $ | 1,047,245 | $ | 8,157,944 | $ | 1,969,744 | ||||||||
Interest Expense | 3,774,341 | 3,450,914 | 11,604,123 | 9,766,523 | ||||||||||||
Franchise Taxes | 92,925 | 88,500 | 278,775 | 265,500 | ||||||||||||
Depreciation Expense | 5,887,667 | 4,786,090 | 17,092,676 | 13,465,559 | ||||||||||||
Acquisition Costs | 51,360 | 154,959 | 51,360 | 449,338 | ||||||||||||
EBITDA | $ | 13,006,306 | $ | 9,527,708 | $ | 37,184,878 | $ | 25,916,664 | ||||||||
Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations | ||||||||||||||||
Net Loss Attributable to Common Shareholders | $ | (589,734 | ) | $ | (841,902 | ) | $ | (2,155,741 | ) | $ | (3,697,697 | ) | ||||
Depreciation Expense | 5,887,667 | 4,786,090 | 17,092,676 | 13,465,559 | ||||||||||||
(Gain) Loss on Sales of Depreciable Assets | 572 | (2,827 | ) | 23,510 | 66,389 | |||||||||||
Funds from Operations (“FFO”) | 5,298,505 | 3,941,361 | 14,960,445 | 9,834,251 | ||||||||||||
Adjustments: | ||||||||||||||||
Acquisition Costs | 51,360 | 154,959 | 51,360 | 449,338 | ||||||||||||
Cost of Early Extinguishment of Debt | -0- | -0- | -0- | 89,396 | ||||||||||||
Core Funds from Operations (“Core FFO”) | 5,349,865 | 4,096,320 | 15,011,805 | 10,372,985 | ||||||||||||
Adjustments: | ||||||||||||||||
Gain on Sale of Securities Transactions, net | (884,458 | ) | (47,671 | ) | (1,898,836 | ) | (127,419 | ) | ||||||||
Settlement of Memphis Mobile City Litigation | -0- | -0- | -0- | 125,000 | ||||||||||||
Normalized Funds From Operations (“Normalized FFO”) | $ | 4,465,407 | $ | 4,048,649 | $ | 13,112,969 | $ | 10,370,566 |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 7 |
Market Capitalization, Debt and Coverage Ratios | ||||||||
(unaudited) |
Nine Months Ended | Year Ended | |||||||||||
9/30/2016 | 9/30/2015 | 12/31/2015 | ||||||||||
Shares Outstanding | 28,311,039 | 26,791,988 | 27,086,838 | |||||||||
Market Price Per Share | $ | 11.92 | $ | 9.30 | $ | 10.12 | ||||||
Equity Market Capitalization | $ | 337,467,585 | $ | 249,165,488 | $ | 274,118,801 | ||||||
Total Debt | 341,599,901 | 330,884,644 | 340,912,008 | |||||||||
Preferred | 186,625,000 | 91,595,000 | 136,625,000 | |||||||||
Total Market Capitalization | $ | 865,692,486 | $ | 671,645,132 | $ | 751,655,809 | ||||||
Total Debt | $ | 341,599,901 | $ | 330,884,644 | $ | 340,912,008 | ||||||
Less: Cash and Cash Equivalents | (3,709,897 | ) | (7,900,436 | ) | (6,535,897 | ) | ||||||
Net Debt | 337,890,004 | 322,984,208 | 334,376,111 | |||||||||
Less: Securities Available for Sale at Fair Value (“Securities”) | (111,046,262 | ) | (61,436,212 | ) | (75,011,260 | ) | ||||||
Net Debt Less Securities | $ | 226,843,742 | $ | 261,547,996 | $ | 259,364,851 | ||||||
Interest Expense | $ | 11,604,123 | $ | 9,766,523 | $ | 14,074,446 | ||||||
Capitalized Interest | 265,341 | 220,200 | 277,944 | |||||||||
Preferred Dividends | 10,313,685 | 5,667,441 | 8,267,198 | |||||||||
Total Fixed Charges | $ | 22,183,149 | $ | 15,654,441 | $ | 22,619,588 | ||||||
EBITDA | $ | 37,184,878 | $ | 25,916,664 | $ | 36,368,381 | ||||||
Debt and Coverage Ratios | ||||||||||||
Net Debt / Total Market Capitalization | 39.0 | % | 48.1 | % | 44.5 | % | ||||||
Net Debt Plus Preferred / Total Market Capitalization | 60.6 | % | 61.7 | % | 62.7 | % | ||||||
Net Debt Less Securities / Total Market Capitalization | 26.2 | % | 38.9 | % | 34.5 | % | ||||||
Net Debt Less Securities Plus Preferred / Total Market Capitalization | 47.8 | % | 52.6 | % | 52.7 | % | ||||||
Interest Coverage | 3.2 | x | 2.7 | x | 2.6 | x | ||||||
Fixed Charge Coverage | 1.7 | x | 1.7 | x | 1.6 | x | ||||||
Net Debt / EBITDA | 6.8 | x | 9.3 | x | 9.2 | x | ||||||
Net Debt Less Securities / EBITDA | 4.6 | x | 7.6 | x | 7.1 | x | ||||||
Net Debt Plus Preferred / EBITDA | 10.6 | x | 12.0 | x | 13.0 | x | ||||||
Net Debt Less Securities Plus Preferred / EBITDA | 8.3 | x | 10.2 | x | 10.9 | x |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 8 |
Debt Analysis | |||
(unaudited) |
9/30/2016 | 9/30/2015 | 12/31/2015 | ||||||||||
Debt Outstanding | ||||||||||||
Mortgages Payable: | ||||||||||||
Fixed Rate Mortgages (1) | $ | 288,028,974 | $ | 265,208,366 | $ | 285,958,808 | ||||||
Variable Rate Mortgages | 436,907 | 757,439 | 678,288 | |||||||||
Total Mortgages Before Unamortized Debt Issuance Costs | 288,465,881 | 265,965,805 | 286,637,096 | |||||||||
Unamortized Debt Issuance Costs | (3,445,316 | ) | (3,962,852 | ) | (3,587,294 | ) | ||||||
Mortgages, Net of Unamortized Debt Issuance Costs | $ | 285,020,565 | $ | 262,002,953 | $ | 283,049,802 | ||||||
Loans Payable: | ||||||||||||
Unsecured Line of Credit | $ | 20,000,000 | $ | 30,000,000 | $ | 15,000,000 | ||||||
Other Loans Payable | 36,656,238 | 39,157,832 | 42,986,503 | |||||||||
Total Loans Before Unamortized Debt Issuance Costs | 56,656,238 | 69,157,832 | 57,986,503 | |||||||||
Unamortized Debt Issuance Costs | (76,902 | ) | (276,141 | ) | (124,297 | ) | ||||||
Loans, Net of Unamortized Debt Issuance Costs | $ | 56,579,336 | $ | 68,881,691 | $ | 57,862,206 | ||||||
Total Debt | $ | 341,599,901 | $ | 330,884,644 | $ | 340,912,008 | ||||||
% Fixed/Floating | ||||||||||||
Fixed | 85.0 | % | 80.5 | % | 84.5 | % | ||||||
Floating | 15.0 | % | 19.5 | % | 15.5 | % | ||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Weighted Average Interest Rates | ||||||||||||
Mortgages Payable | 4.47 | % | 4.61 | % | 4.55 | % | ||||||
Loans Payable | 3.39 | % | 3.55 | % | 3.75 | % | ||||||
Total Average | 4.29 | % | 4.39 | % | 4.42 | % |
Notes:
(1) Includes a variable rate mortgage with a balance of $10,823,092, $11,606,663 and $11,416,309 as of September 30, 2016, September 30, 2015 and December 31, 2015, respectively, which has been effectively fixed at an interest rate of 3.89% with an interest rate swap agreement.
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 9 |
Debt Maturity
(unaudited)
As of 9/30/2016: | |||||||||||||||||
Year Ended | Mortgages | Loans | Total | % of Total | |||||||||||||
2016 | $ | -0- | $ | 11,016,363 | 11,016,363 | 3.2 | % | ||||||||||
2017 | 29,656,041 | 24,222,485 | (1) | 53,878,526 | 15.6 | % | |||||||||||
2018 | 9,289,774 | 226,786 | 9,516,560 | 2.8 | % | ||||||||||||
2019 | 2,951,805 | 4,228,618 | 7,180,423 | 2.1 | % | ||||||||||||
2020 | 12,616,159 | 224,240 | 12,840,399 | 3.7 | % | ||||||||||||
Thereafter | 233,952,102 | 16,737,746 | 250,689,848 | 72.6 | % | ||||||||||||
Total Debt Before Unamortized Debt Issuance Cost | 288,465,881 | 56,656,238 | 345,122,119 | 100.0 | % | ||||||||||||
Unamortized Financing Cost | (3,445,316 | ) | (76,902 | ) | (3,522,218 | ) | |||||||||||
Total Debt, Net of Unamortized Debt Issuance Costs | $ | 285,020,565 | $ | 56,579,336 | $ | 341,599,901 |
Notes: |
(1) Includes $20 million balance outstanding on the Company’s Line of Credit due March 2017. |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 10 |
Property Summary and Snapshot
(unaudited)
9/30/2016 | 9/30/2015 | % Change | ||||||||||
Communities | 100 | 95 | 5.3 | % | ||||||||
Developed Sites | 17,812 | 16,540 | 7.7 | % | ||||||||
Occupied | 14,422 | 13,380 | 7.8 | % | ||||||||
Occupancy % (1) | 81.1% | 81.7% | -0.6 | % | ||||||||
Monthly Rent Per Site | $ | 418 | $ | 414 | 1.0 | % | ||||||
Total Rentals | 4,447 | 3,350 | 32.7 | % | ||||||||
Occupied Rentals | 4,158 | 3,148 | 32.1 | % | ||||||||
Rental Occupancy % | 93.5% | 94.0% | -0.5 | % | ||||||||
Monthly Rent per Home Rental | $ | 701 | $ | 708 | -1.0 | % |
Region | Number | Total
Acreage | Developed Acreage | Vacant Acreage | Total
Sites | Occupied Sites | Occupancy Percentage | Monthly
Rent Per Site | Total
Rentals | Occupied Rentals | Rental Occupancy Percentage | Monthly Rent
| ||||||||||||||||||||||||||||||||||||
(2) | (2) | (1) | (3) | |||||||||||||||||||||||||||||||||||||||||||||
Indiana | 9 | 661 | 561 | 100 | 2,657 | 1,905 | 71.7 | % | $ | 395 | 816 | 767 | 94.0 | % | $ | 706 | ||||||||||||||||||||||||||||||||
Michigan | 2 | 68 | 68 | -0- | 354 | 238 | 67.2 | % | $ | 419 | 115 | 103 | 89.6 | % | $ | 700 | ||||||||||||||||||||||||||||||||
New Jersey | 4 | 348 | 187 | 161 | 1,006 | 973 | 96.7 | % | $ | 584 | 39 | 37 | 94.9 | % | $ | 770 | ||||||||||||||||||||||||||||||||
New York | 7 | 396 | 301 | 95 | 1,131 | 913 | 80.7 | % | $ | 486 | 246 | 227 | 92.3 | % | $ | 839 | ||||||||||||||||||||||||||||||||
Ohio | 29 | 1,204 | 918 | 286 | 4,468 | 3,512 | 78.6 | % | $ | 350 | 1,010 | 946 | 93.7 | % | $ | 630 | ||||||||||||||||||||||||||||||||
E. Pennsylvania | 26 | 963 | 805 | 158 | 3,591 | 3,052 | 85.0 | % | $ | 460 | 749 | 693 | 92.5 | % | $ | 728 | ||||||||||||||||||||||||||||||||
W. Pennsylvania | 16 | 904 | 723 | 181 | 2,910 | 2,265 | 77.8 | % | $ | 392 | 747 | 689 | 92.2 | % | $ | 716 | ||||||||||||||||||||||||||||||||
Tennessee | 7 | 413 | 321 | 92 | 1,695 | 1,564 | 92.3 | % | $ | 425 | 725 | 696 | 96.0 | % | $ | 703 | ||||||||||||||||||||||||||||||||
Total as of | ||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2016 | 100 | 4,957 | 3,884 | 1,073 | 17,812 | 14,422 | 81.1 | % | $ | 418 | 4,447 | 4,158 | 93.5 | % | $ | 701 |
Notes: | ||
(1) | The Vacant Sites at Memphis Blues are not included in the calculation of occupancy. | |
(2) | Total and Vacant Acreage of 220 for the Mountain View Estates property is not included in the summary since there are no current sites and approval for sites is still in process. | |
(3) | Includes home and site rent charges. |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 11 |
Same Property Statistics
(unaudited)
For Three Months Ended | For Nine Months Ended | |||||||||||||||||||||||||||||||
9/30/2016 | 9/30/2015 | Change | %
Change | 9/30/2016 | 9/30/2015 | Change | %
Change | |||||||||||||||||||||||||
Community Net Operating Income | ||||||||||||||||||||||||||||||||
Rental and Related Income | $ | 20,478,454 | $ | 18,086,493 | $ | 2,391,961 | 13.2 | % | $ | 59,815,869 | $ | 52,803,569 | $ | 7,012,300 | 13.3 | % | ||||||||||||||||
Community Operating Expenses | 8,796,151 | 8,594,193 | 201,958 | 2.3 | % | 26,809,926 | 25,399,186 | 1,410,740 | 5.6 | % | ||||||||||||||||||||||
Community NOI | $ | 11,682,303 | $ | 9,492,300 | $ | 2,190,003 | 23.1 | % | $ | 33,005,943 | $ | 27,404,383 | $ | 5,601,560 | 20.4 | % |
As of | ||||||||||||
9/30/2016 | 9/30/2015 | % Change | ||||||||||
Other Information | ||||||||||||
Total Sites | 14,828 | 14,860 | -0.2% | |||||||||
Occupied Sites | 12,594 | 12,316 | 2.3% | |||||||||
Occupancy % | 84.9% | 82.9% | 2.0% | |||||||||
Number of Properties | 88 | 88 | N/A | |||||||||
Developed Acreage | 3,223 | 3,223 | N/A | |||||||||
Vacant Acreage | 894 | 894 | N/A | |||||||||
Monthly Rent Per Site | $ | 423 | $ | 415 | 1.9% | |||||||
Total Rentals | 3,901 | 3,135 | 24.4% | |||||||||
Occupied Rentals | 3,652 | 2,964 | 23.2% | |||||||||
Rental Occupancy | 93.6% | 94.5% | -0.9% | |||||||||
Monthly Rent Per Home Rental | $ | 707 | $ | 709 | -0.3% |
Notes: |
Same Property includes all properties owned as of January 1, 2015, with the exception of Memphis Blues. |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 12 |
Acquisition Summary
At Acquisition:
Year of Acquisition | Number
of Communities | Sites | Occupied Sites | Occupancy % | Price | Total Acres | ||||||||||||||||||
2014 | 14 | 1,612 | 1,230 | 76 | % | 42,550,000 | 547 | |||||||||||||||||
2015 | 10 | 2,774 | 1,764 | 64 | % | 81,217,000 | 717 | |||||||||||||||||
2016 | 2 | 165 | 105 | 64 | % | 2,954,000 | 71 |
2016 Acquisitions
Community | Date
of Acquisition | State | Number of Sites | Purchase Price | Number
of Acres | Occupancy | ||||||||||||||
Lakeview Meadows | September 1, 2016 | OH | 81 | 1,355,000 | 53 | 53 | % | |||||||||||||
Wayside | September 1, 2016 | OH | 84 | 1,599,000 | 18 | 74 | % | |||||||||||||
Total 2016 to Date | 165 | $ | 2,954,000 | 71 | 64 | % |
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 13 |
Definitions
Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), normalized funds from operations (“Normalized FFO”), community NOI, same property NOI, and earnings before interest, taxes, depreciation and amortization (“EBITDA”), variously defined, as supplemental performance measures. While the Company believes net income available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, it considers Community NOI, Same Property NOI, EBITDA, FFO, and Core FFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of U.S. GAAP depreciation and amortization of real estate assets. Core FFO reflects the same assumptions as FFO except that is also adjusts for the effects of acquisitions costs and costs of early extinguishment of debt. Community NOI and Same Property NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. In addition, Community NOI, Same Property NOI, EBITDA, FFO, and Core FFO are commonly used in various ratios, pricing multiples, yields and returns and valuation of calculations used to measure financial position, performance and value.
As used herein, the Company calculates FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), to be equal to net income (loss) applicable to common shareholders, as defined by U.S. GAAP, excluding extraordinary items as defined by U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on securities investments.
Core FFO is calculated as FFO plus acquisition costs and costs of extinguishment of debt.
Normalized FFO is calculated as Core FFO excluding gains and losses realized on securities investments and certain one-time charges.
Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 28,091,000 and 27,601,000 shares for the three and nine months ended September 30, 2016, respectively, and 26,426,000 and 25,641,000 for the three and nine months ended September 30, 2015, respectively. Common stock equivalents resulting from stock options in the amount of 200,000 and 150,000 shares for the three and nine months ended September 30, 2016, respectively, and 37,000 and 41,000 shares for the three and nine months ended September 30, 2015, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net Loss per Share as their effect would be anti-dilutive.
Community NOI is calculated as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. Community NOI excludes realized gains (losses) on securities transactions.
Same Property NOI is calculated as Community NOI, using all properties owned as of January 1, 2015, with the exception of Memphis Blues.
EBITDA is calculated as net income plus interest expense, franchise taxes and depreciation expense.
Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO do not represent cash generated from operating activities in accordance with U.S. GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO should not be considered as substitutes for net income applicable to common shareholders (calculated in accordance with U.S. GAAP) as a measure of results of operations, or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. Community NOI, Same Property NOI, EBITDA, FFO, Core FFO and Normalized FFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 14 |
Press Release Dated November 8, 2016
FOR IMMEDIATE RELEASE | November 8, 2016 |
Contact: Nelli Madden | |
732-577-9997 |
UMH PROPERTIES, INC. REPORTS 3rd QUARTER 2016 EARNINGS
FREEHOLD, NJ, November 8, 2016........ UMH Properties, Inc. (NYSE:UMH) reported total Income of $25,355,000 for the quarter ended September 30, 2016 as compared to $21,695,000 for the quarter ended September 30, 2015, representing an increase of 17%. Net Loss Attributable to Common Shareholders amounted to $590,000 or $0.02 per diluted share for the quarter ended September 30, 2016 as compared to $842,000 or $0.03 per diluted share for the quarter ended September 30, 2015, representing an improvement of 33%.
Core Funds from Operations (“Core FFO”) was $5,350,000 or $0.19 per diluted share for the quarter ended September 30, 2016 as compared to $4,096,000 or $0.15 per diluted share for the quarter ended September 30, 2015, representing an increase in Core FFO per diluted share of 27%. Normalized Funds from Operations (“Normalized FFO”), was $4,465,000 or $0.16 per diluted share for the quarter ended September 30, 2016, as compared to $4,049,000 or $0.15 per diluted share for the quarter ended September 30, 2015, representing an increase in Normalized FFO per diluted share of 7%.
A summary of significant financial information for the three and nine months ended September 30, 2016 and 2015 is as follows:
For the Three Months Ended | ||||||||
September 30, | ||||||||
2016 | 2015 | |||||||
Total Income | $ | 25,355,000 | $ | 21,695,000 | ||||
Total Expenses | $ | 21,567,000 | $ | 18,966,000 | ||||
Gain on Securities Transactions, net | $ | 885,000 | $ | 48,000 | ||||
Net Loss Attributable to Common Shareholders | $ | (590,000 | ) | $ | (842,000 | ) | ||
Net Loss Attributable to Common Shareholders per Diluted Common Share | $ | (0.02 | ) | $ | (0.03 | ) | ||
Core FFO (1) | $ | 5,350,000 | $ | 4,096,000 | ||||
Core FFO (1) per Diluted Common Share | $ | 0.19 | $ | 0.15 | ||||
Normalized FFO (1) | $ | 4,465,000 | $ | 4,049,000 | ||||
Normalized FFO (1) per Diluted Common Share | $ | 0.16 | $ | 0.15 | ||||
Weighted Average Diluted Shares Outstanding | 27,891,000 | 26,389,000 |
(Continued on next page)
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 15 |
For the Nine Months Ended | ||||||||
September 30, | ||||||||
2016 | 2015 | |||||||
Total Income | $ | 74,070,000 | $ | 59,593,000 | ||||
Total Expenses | $ | 62,621,000 | $ | 52,820,000 | ||||
Gain on Securities Transactions, net | $ | 1,899,000 | $ | 127,000 | ||||
Net Loss Attributable to Common Shareholders | $ | (2,156,000 | ) | $ | (3,698,000 | ) | ||
Net Loss Attributable to Common Shareholders per Diluted Common Share | $ | (0.08 | ) | $ | (0.14 | ) | ||
Core FFO (1) | $ | 15,012,000 | $ | 10,373,000 | ||||
Core FFO (1) per Diluted Common Share | $ | 0.54 | $ | 0.40 | ||||
Normalized FFO (1) | $ | 13,113,000 | $ | 10,371,000 | ||||
Normalized FFO (1) per Diluted Common Share | $ | 0.48 | $ | 0.40 | ||||
Weighted Average Diluted Shares Outstanding | 27,451,000 | 25,600,000 |
A summary of significant balance sheet information as of September 30, 2016 and December 31, 2015 is as follows:
September 30, 2016 | December 31, 2015 | |||||||
Gross Real Estate Investments | $ | 622,587,000 | $ | 577,709,000 | ||||
Securities Available for Sale at Fair Value | $ | 111,046,000 | $ | 75,011,000 | ||||
Total Assets | $ | 669,036,000 | $ | 600,317,000 | ||||
Mortgages Payable, net | $ | 285,021,000 | $ | 283,050,000 | ||||
Loans Payable, net | $ | 56,579,000 | $ | 57,862,000 | ||||
Total Shareholders’ Equity | $ | 313,911,000 | $ | 246,238,000 |
Samuel A. Landy, President and CEO, commented on the results of the third quarter of 2016.
“We are pleased to announce another solid quarter of increasing financial operating results. During the quarter, we:
● | Increased Core FFO per diluted share to $0.19, representing a 27% increase over the prior year period; | |
● | Increased Normalized FFO per diluted share to $0.16, representing a 7% increase over the prior year period; | |
● | Increased Rental and Related Income by 22% over the prior year period; | |
● | Improved our Operating Expense Ratio by 280 basis points over the prior year period from 49.2% to 46.4%; | |
● | Increased Community Net Operating Income (“NOI”) by 29% over the prior year period; | |
● | Increased Same Property Occupancy by 200 basis points over the prior year period from 82.9% to 84.9%; | |
● | Increased Same Property NOI by 23% over the prior year period; | |
● | Completed the acquisition of 2 manufactured home communities, containing 165 homesites for an aggregate cost of approximately $3 million; |
(continued on next page)
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 16 |
● | Increased our rental home portfolio by 305 homes, representing an increase of 7% from the second quarter of 2016 and a 33% increase over the prior year period, to approximately 4,400 total rental homes; | |
● | Increased rental home occupancy by 60 basis points from 92.9% at yearend 2015 to 93.5% at quarter end; | |
● | Increased the unrealized gain on our REIT securities investments to $21.0 million at quarter end, in addition to the $1.9 million in realized gains generated thus far; and | |
● | Subsequent to quarter end, completed the refinancing of our Fairview Manor community. The new $16.3 million Freddie Mac mortgage is at an interest rate of 3.85% with a 10-year maturity and principal repayments based on a 30-year amortization schedule.” |
“Following an excellent first half, our third quarter delivered strong operating results, highlighted by same property NOI growth of 23% and a same property occupancy increase of 200 basis points. This is the 9th consecutive quarter that we have delivered double digit year-over-year NOI growth. Our performance has been driven by strong demand for quality affordable housing throughout our portfolio. Our business plan of acquiring communities below replacement cost, making improvements and implementing a rental home and sales program, has proven to produce excellent results. We are continuing to acquire communities in strong geographic areas, completing the acquisition of two manufactured home communities this quarter. In addition, we anticipate closing on the acquisition of three additional communities prior to yearend. Subsequent to quarter end, we completed the refinancing of our Fairview Manor community generating approximately $350,000 in annual savings, as well as demonstrating the increasing value of our communities.”
“We look forward to building on the substantial progress we have made thus far.”
UMH Properties, Inc. will host its Third Quarter 2016 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Wednesday, November 9, 2016 at 10:00 a.m. Eastern Time.
The Company’s 2016 third 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 Wednesday, November 9, 2016. It will be available until February 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10092124. 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 100 manufactured home communities containing approximately 18,000 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. In addition, the Company owns a portfolio of REIT securities.
(continued on next page)
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 17 |
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 (“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, plus certain non-cash items such as real estate asset depreciation and amortization. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Core Funds From Operations (“Core FFO”) as FFO plus acquisition costs and costs of early extinguishment of debt. |
We define Normalized Funds From Operations (“Normalized FFO”) as Core FFO excluding gains and losses realized on securities investments and certain non-recurring charges. We define Community NOI as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. Community NOI excludes realized gains (losses) on securities transactions. FFO, Core FFO and Normalized FFO, as well as Community NOI should be considered as supplemental measures of operating performance used by REITs. FFO, Core 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, Core FFO, Normalized FFO and Community NOI and, accordingly, our FFO, Core FFO, Normalized FFO and Community NOI may not be comparable to all other REITs. The items excluded from FFO, Core FFO and Normalized FFO are significant components in understanding the Company’s financial performance.
FFO, Core FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as an alternative 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, Core FFO and Normalized FFO for the three and nine months ended September 30, 2016 and 2015 are calculated as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
9/30/16 | 9/30/15 | 9/30/16 | 9/30/15 | |||||||||||||
Net Loss Attributable to Common Shareholders | $ | (590,000 | ) | $ | (842,000 | ) | $ | (2,156,000 | ) | $ | (3,698,000 | ) | ||||
Depreciation Expense | 5,888,000 | 4,786,000 | 17,093,000 | 13,466,000 | ||||||||||||
Loss on Sales of Depreciable Assets | 1,000 | (3,000 | ) | 24,000 | 66,000 | |||||||||||
FFO Attributable to Common Shareholders | 5,299,000 | 3,941,000 | 14,961,000 | 9,834,000 | ||||||||||||
Acquisition Costs | 51,000 | 155,000 | 51,000 | 449,000 | ||||||||||||
Cost of Early Extinguishment of Debt | -0- | -0- | -0- | 90,000 | ||||||||||||
Core FFO Attributable to Common Shareholders | 5,350,000 | 4,096,000 | 15,012,000 | 10,373,000 | ||||||||||||
Gain on Sale of Securities Transactions, net | (885,000 | ) | (47,000 | ) | (1,899,000 | ) | (127,000 | ) | ||||||||
Settlement of Litigation | -0- | -0- | -0- | 125,000 | ||||||||||||
Normalized FFO Attributable to Common Shareholders | $ | 4,465,000 | $ | 4,049,000 | $ | 13,113,000 | $ | 10,371,000 |
(continued on next page)
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 18 |
The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 28,091,000 and 27,601,000 shares for the three and nine months ended September 30, 2016, respectively, and 26,426,000 and 25,641,000 for the three and nine months ended September 30, 2015, respectively. Common stock equivalents resulting from stock options in the amount of 200,000 and 150,000 shares for the three and nine months ended September 30, 2016, respectively, and 37,000 and 41,000 shares for the three and nine months ended September 30, 2015, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net 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 nine months ended September 30, 2016 and 2015:
2016 | 2015 | |||||||
Operating Activities | $ | 21,403,000 | $ | 14,009,000 | ||||
Investing Activities | (59,958,000 | ) | (86,930,000 | ) | ||||
Financing Activities | 35,729,000 | 72,739,000 |
# # # #
UMH Properties, Inc. | Third Quarter FY 2016 Supplemental Information 19 |
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