EX-99 2 ex99.htm

 

 

 

 

 

 

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 (Loss) to Adjusted EBITDA and Net Income (Loss) Attributable to Common Shareholders to FFO and Normalized FFO 7
   
Market Capitalization, Debt and Coverage Ratios 8
   
Debt Analysis 9
   
Debt Maturity 10
   
Securities Portfolio Performance 11
   
Property Summary and Snapshot 12
   
Same Property Statistics 13
   
Acquisition Summary and Property Portfolio 14
   
Definitions 15
   
Press Release Dated August 8, 2019 16

 

Certain information in this Supplemental Information Package contains Non-GAAP financial measures. These Non-GAAP financial measures are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America. Please see page 15 for a definition of these Non-GAAP financial measures and page 7 for the reconciliation of certain captions in the Supplemental Information Package to the statement of operations as reported in the Company’s filings with the SEC on Form 10-Q.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information2
  

 

Financial Highlights

(unaudited)

 

  Three Months Ended   Six Months Ended 
    6/30/2019    6/30/2018    6/30/2019    6/30/2018 
Operating Information                    
Number of Communities             118    114 
Number of Sites             21,515    20,602 
Rental and Related Income  $31,388,423   $28,237,771   $62,032,140   $55,508,248 
Community Operating Expenses (1)  $14,969,705   $12,715,180   $29,738,708   $25,469,996 
Community NOI (1)  $16,418,718   $15,522,591   $32,293,432   $30,038,252 
Expense Ratio (1)   47.7%   45.0%   47.9%   45.9%
Sales of Manufactured Homes  $5,841,615   $3,860,779   $9,485,329   $6,386,266 
Number of Homes Sold   93    70    159    124 
Number of Rentals Added   183    224    336    389 
Net Income (Loss) (2)  $748,703   $20,071,984   $11,786,096   $(2,136,353)
Net Income (Loss) Attributable to Common Shareholders (2)  $(5,537,053)  $14,948,727   $377,083   $(12,205,783)
Adjusted EBITDA  $16,308,800   $15,272,489   $32,241,205   $30,230,998 
FFO Attributable to Common Shareholders  $5,671,211   $6,154,242   $11,761,868   $12,508,890 
Normalized FFO Attributable to Common Shareholders  $5,671,211   $6,679,242   $12,137,118   $13,013,783 
                     
Shares Outstanding and Per Share Data                    
Weighted Average Shares Outstanding                    
Basic   39,649,318    36,600,643    39,145,310    36,245,684 
Diluted   39,649,318    36,971,345    39,389,883    36,245,684 
Net Income (Loss) Attributable to Common Shareholders per Share (2)                    
Basic  $(0.15)  $0.41   $0.02   $(0.34)
Diluted  $(0.15)  $0.40   $0.01   $(0.34)
FFO per Share- Diluted  $0.14   $0.17   $0.30   $0.34 
Normalized FFO per Share- Diluted  $0.14   $0.18   $0.31   $0.36 
Dividends per Common Share  $0.18   $0.18   $0.36   $0.36 
                     
Balance Sheet                    
Total Assets            $915,286,843   $864,380,196 
Total Liabilities            $385,299,092   $401,854,387 
                     
Market Capitalization                    
Total Debt, Net of Unamortized Debt                    
Debt Issuance Costs            $366,331,901   $386,420,370 
Equity Market Capitalization            $498,312,617   $566,368,474 
Series B Preferred Stock            $95,030,000   $95,030,000 
Series C Preferred Stock            $243,750,000   $143,750,000 
Series D Preferred Stock            $50,000,000   $50,000,000 
Total Market Capitalization            $1,253,424,518   $1,241,568,844 

 

  (1) Excludes a one-time settlement of a utility billing dispute of $375,250 over a prior ten-year period for the six months ended June 30, 2019.
  (2) Includes increase (decrease) in fair value of marketable securities.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information3
  

 

Consolidated Balance Sheets

 

   June 30, 2019   December 31, 2018 
ASSETS   (unaudited)      
Investment Property and Equipment          
Land  $68,157,110   $68,154,110 
Site and Land Improvements   540,855,031    533,547,154 
Buildings and Improvements   25,299,420    25,156,183 
Rental Homes and Accessories   271,518,626    254,598,641 
Total Investment Property   905,830,187    881,456,088 
Equipment and Vehicles   19,686,440    18,791,688 
Total Investment Property and Equipment   925,516,627    900,247,776 
Accumulated Depreciation   (214,179,651)   (197,208,363)
Net Investment Property and Equipment   711,336,976    703,039,413 
           
Other Assets          
Cash and Cash Equivalents   3,724,627    7,433,470 
Marketable Securities at Fair Value   106,772,889    99,595,736 
Inventory of Manufactured Homes   28,289,808    23,703,322 
Notes and Other Receivables, net   35,421,826    31,493,555 
Prepaid Expenses and Other Assets   12,696,012    6,195,596 
Land Development Costs   17,044,705    9,441,025 
Total Other Assets   203,949,867    177,862,704 
           
TOTAL ASSETS  $915,286,843   $880,902,117 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Liabilities          
Mortgages Payable, net of Unamortized Debt Issuance Costs  $327,609,085   $331,093,063 
Other Liabilities          
Accounts Payable   4,332,627    3,873,445 
Loans Payable, net of Unamortized Debt Issuance Costs   38,722,816    107,985,353 
Accrued Liabilities and Deposits   8,519,431    7,410,055 
Tenant Security Deposits   6,115,133    5,842,161 
Total Other Liabilities   57,690,007    125,111,014 
Total Liabilities   385,299,092    456,204,077 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
Series B - 8.0% Cumulative Redeemable Preferred Stock, par value $0.10 per share; 4,000,000 shares authorized; 3,801,200 shares issued and outstanding as of June 30, 2019 and December 31, 2018   95,030,000    95,030,000 
Series C- 6.75% Cumulative Redeemable Preferred Stock, par value $0.10 per share; 9,750,000 and 5,750,000 shares authorized, issued and outstanding as of June 30, 2019 and December 31, 2018, respectively   243,750,000    143,750,000 
Series D - 6.375% Cumulative Redeemable Preferred Stock, par value $0.10 per share; 2,300,000 shares authorized; 2,000,000 shares issued and outstanding as of June 30, 2019 and December 31, 2018   50,000,000    50,000,000 
Common Stock – $0.10 par value per share; 123,363,800 and 111,363,800 shares authorized; 40,154,119 and 38,320,414 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively   4,015,412    3,832,041 
Excess Stock – $0.10 par value per share; 3,000,000 shares authorized; no shares issued or outstanding as of June 30, 2019 and December 31, 2018   -0-    -0- 
Additional Paid-In Capital   162,556,121    157,449,781 
Undistributed Income (Accumulated Deficit)   (25,363,782)   (25,363,782)
Total Shareholders’ Equity   529,987,751    424,698,040 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $915,286,843   $880,902,117 

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information4
  

 

Consolidated Statements of Income (Loss)

(unaudited)

 

   Three Months Ended   Six Months Ended 
    6/30/2019    6/30/2018    6/30/2019    6/30/2018 
INCOME:                    
Rental and Related Income  $31,388,423   $28,237,771   $62,032,140   $55,508,248 
Sales of Manufactured Homes   5,841,615    3,860,779    9,485,329    6,386,266 
TOTAL INCOME   37,230,038    32,098,550    71,517,469    61,894,514 
                     
EXPENSES:                    
Community Operating Expenses   14,969,705    12,715,180    30,113,958    25,469,996 
Cost of Sales of Manufactured Homes   4,256,639    2,913,825    6,845,808    4,893,996 
Selling Expenses   1,336,940    1,085,244    2,427,962    1,889,316 
General and Administrative Expenses   3,156,267    3,282,682    5,330,900    5,641,238 
Depreciation Expense   8,868,341    7,764,258    17,619,652    15,358,892 
TOTAL EXPENSES   32,587,892    27,761,189    62,338,280    53,253,438 
                     
OTHER INCOME (EXPENSE):                    
Interest Income   621,440    536,176    1,136,623    1,006,406 
Dividend Income   1,938,145    2,474,180    3,875,559    4,899,320 
Gain on Sales of Marketable Securities, net   -0-    -0-    -0-    20,107 
Increase (Decrease) in Fair Value of Marketable Securities   (2,352,185)   16,623,670    6,243,581    (9,275,149)
Other Income   133,541    132,516    253,046    199,979 
Interest Expense   (4,246,646)   (3,966,992)   (8,893,188)   (7,547,460)
TOTAL OTHER INCOME (EXPENSE)   (3,905,705)   15,799,550    2,615,621    (10,696,797)
                     
Income (Loss) before Gain (Loss) on Sales of Investment Property and Equipment   736,441    20,136,911    11,794,810    (2,055,721)
Gain (Loss) on Sales of Investment                    
Property and Equipment   12,262    (64,927)   (8,714)   (80,632)
NET INCOME (LOSS)   748,703    20,071,984    11,786,096    (2,136,353)
                     
Less: Preferred Dividends   (6,285,756)   (5,123,257)   (11,409,013)   (10,069,430)
                     
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS  $(5,537,053)  $14,948,727   $377,083   $(12,205,783)

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information5
  

 

Consolidated Statements of Cash Flows

(unaudited)

 

   Six Months Ended 
   6/30/2019   6/30/2018 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net Income (Loss)  $11,786,096   $(2,136,353)
Non-Cash Items Included in Net Income (Loss):          
Depreciation   17,619,652    15,358,892 
Amortization of Financing Costs   364,531    306,962 
Stock Compensation Expense   1,058,873    853,554 
Provision for Uncollectible Notes and Other Receivables   622,675    568,349 
Gain on Sales of Marketable Securities, net   -0-    (20,107)
(Increase) Decrease in Fair Value of Marketable Securities   (6,243,581)   9,275,149 
Loss on Sales of Investment Property and Equipment   8,714    80,632 
Changes in Operating Assets and Liabilities:          
Inventory of Manufactured Homes   (4,586,486)   (5,596,315)
Notes and Other Receivables, net of notes acquired with acquisitions   (4,550,946)   (3,061,827)
Prepaid Expenses and Other Assets   (6,272,861)   (1,965,714)
Accounts Payable   459,182    961,382 
Accrued Liabilities and Deposits   1,109,376    (577,796)
Tenant Security Deposits   272,972    398,041 
Net Cash Provided by Operating Activities   11,648,197    14,444,849 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of Manufactured Home Communities   -0-    (21,010,527)
Purchase of Investment Property and Equipment   (27,326,217)   (23,559,057)
Proceeds from Sales of Investment Property and Equipment   1,400,288    1,141,157 
Additions to Land Development Costs   (7,603,680)   (3,694,511)
Purchase of Marketable Securities   (933,572)   (14,622,458)
Proceeds from Sales of Marketable Securities   -0-    268,675 
Net Cash Used in Investing Activities   (34,463,181)   (61,476,721)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Net Payments from Short Term Borrowings   (69,330,342)   (57,229)
Principal Payments of Mortgages   (3,765,800)   (3,393,435)
Financing Costs on Debt   (14,904)   (35,532)
Proceeds from Issuance of Preferred Stock, net of Offering Costs   96,688,218    48,247,280 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   17,705,263    14,817,445 
Proceeds from Exercise of Stock Options   434,660    835,120 
Preferred Dividends Paid   (11,934,014)   (9,803,805)
Common Dividends Paid, net of Dividend Reinvestments   (10,449,385)   (11,502,896)
Net Cash Provided by Financing Activities   19,333,696    39,106,948 
           
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (3,481,288)   (7,924,924)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD   12,777,411    27,891,249 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  $9,296,123   $19,966,325 

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information6
  

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Net Income (Loss) Attributable to Common Shareholders to FFO and Normalized FFO

(unaudited)

 

   Three Months Ended   Six Months Ended 
   6/30/2019   6/30/2018   6/30/2019   6/30/2018 
Reconciliation of Net Income (Loss) to Adjusted EBITDA            
                 
Net Income (Loss)  $748,703   $20,071,984   $11,786,096   $(2,136,353)
Interest Expense   4,246,646    3,966,992    8,893,188    7,547,460 
Franchise Taxes   92,925    92,925    185,850    185,850 
Depreciation Expense   8,868,341    7,764,258    17,619,652    15,358,892 
(Increase) Decrease in Fair Value of Marketable Securities   2,352,185    (16,623,670)   (6,243,581)   9,275,149 
                     
Adjusted EBITDA  $16,308,800   $15,272,489   $32,241,205   $30,230,998 
                 
Reconciliation of Net Income (Loss) Attributable to Common Shareholders to Funds from Operations     
                 
Net Income (Loss) Attributable to Common Shareholders  $(5,537,053)  $14,948,727   $377,083   $(12,205,783)
Depreciation Expense   8,868,341    7,764,258    17,619,652    15,358,892 
(Gain) Loss on Sales of Depreciable Assets   (12,262)   64,927    8,714    80,632 
(Increase) Decrease in Fair Value of Marketable Securities (1)   2,352,185    (16,623,670)   (6,243,581)   9,275,149 
                     
Funds from Operations (“FFO”)   5,671,211    6,154,242    11,761,868    12,508,890 
                     
Adjustments:                     
Non- Recurring Other Expense (2)    -0-    525,000    -0-    525,000 
Settlement of Utility Billing Dispute Over a Prior 10-Year Period   -0-    -0-    375,250    -0- 
Gain on Sales of Marketable Securities, net   -0-    -0-    -0-    (20,107)
                    
Normalized Funds from Operations (“Normalized FFO”)   $5,671,211   $6,679,242   $12,137,118   $13,013,783 

 

  (1) (Increase) Decrease in Fair Value of Marketable Securities, if any, were previously recorded in Core FFO.
  (2) Consists of one-time payroll expenditures.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information7
  

 

Market Capitalization, Debt and Coverage Ratios

(unaudited)

 

   Six Months Ended   Year Ended 
    6/30/2019    6/30/2018    12/31/2018 
Shares Outstanding   40,154,119    36,896,969    38,320,414 
Market Price Per Share  $12.41   $15.35   $11.84 
Equity Market Capitalization  $498,312,617   $566,368,474   $453,713,702 
Total Debt   366,331,901    386,420,370    439,078,416 
Preferred   388,780,000    288,780,000    288,780,000 
Total Market Capitalization  $1,253,424,518   $1,241,568,844   $1,181,572,118 
                
Total Debt  $366,331,901   $386,420,370   $439,078,416 
Less: Cash and Cash Equivalents   (3,695,597)   (15,227,599)   (7,433,470)
Net Debt   362,636,304    371,192,771    431,644,946 
Less: Marketable Securities at Fair Value (“Securities”)   (106,772,889)   (138,063,017)   (99,595,736)
Net Debt Less Securities  $255,863,415   $233,129,754   $332,049,210 
                
Interest Expense  $8,893,188   $7,547,460   $16,038,585 
Capitalized Interest   614,467    398,852    1,036,307 
Preferred Dividends   11,409,013    10,069,430    20,315,944 
Total Fixed Charges  $20,916,668   $18,015,742   $37,390,836 
               
Adjusted EBITDA  $32,241,205   $30,230,998   $63,541,619 
                
Debt and Coverage Ratios               
                
Net Debt / Total Market Capitalization   28.9%   29.9%   36.5%
                
Net Debt Plus Preferred / Total Market Capitalization   59.9%   53.2%   61.0%
                
Net Debt Less Securities / Total Market Capitalization   20.4%   18.8%   28.1%
                
Net Debt Less Securities Plus Preferred / Total Market Capitalization   51.4%   42.0%   52.5%
                
Interest Coverage   3.4x   3.8x   3.7x
                
Fixed Charge Coverage   1.5x   1.7x   1.7x
                
Net Debt / Adjusted EBITDA   5.6x   6.1x   6.8x
                
Net Debt Less Securities / Adjusted EBITDA   4.0x   3.9x   5.2x
                
Net Debt Plus Preferred / Adjusted EBITDA   11.7x   10.9x   11.3x
                
Net Debt Less Securities Plus Preferred / Adjusted EBITDA   10.0x   8.6x   9.8x


 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information8
  

 

Debt Analysis

(unaudited)

 

   Six Months Ended    Year Ended 
    6/30/2019    6/30/2018    12/31/2018 
Debt Outstanding               
Mortgages Payable:               
Fixed Rate Mortgages  $330,645,711   $305,066,819   $334,411,425 
Unamortized Debt Issuance Costs   (3,036,626)   (3,295,243)   (3,318,362)
Mortgages, Net of Unamortized Debt Issuance Costs  $327,609,085   $301,771,576   $331,093,063 
Loans Payable:               
Unsecured Line of Credit  $-0-   $35,000,000   $50,000,000 
Other Loans Payable   39,087,052    49,709,128    58,417,479 
Total Loans Before Unamortized Debt Issuance Costs   39,087,052    84,709,128    108,417,479 
Unamortized Debt Issuance Costs   (364,236)   (60,334)   (432,126)
Loans, Net of Unamortized Debt Issuance Costs  $38,722,816   $84,648,794   $107,985,353 
                
Total Debt, Net of Unamortized Debt Issuance Costs  $366,331,901   $386,420,370   $439,078,416 
                
% Fixed/Floating               
Fixed   91.1%   80.0%   77.0%
Floating   8.9%   20.0%   23.0%
Total   100.0%   100.0%   100.0%
                
Weighted Average Interest Rates (1)               
Mortgages Payable   4.29%   4.24%   4.29%
Loans Payable   5.08%   3.73%   4.20%
Total Average   4.37%   4.13%   4.27%
                
Weighted Average Maturity (Years)               
Mortgages Payable   5.8    6.4    6.3 

 

(1) Weighted average interest rates do not include the effect of unamortized debt issuance costs.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information9
  

 

Debt Maturity

(unaudited)

 

 

As of 6/30/19:

 

Fiscal Year Ended  Mortgages   Loans   Total   % of Total 
2019  $2,289,192   $16,502,452   $18,791,644    5.1%
2020   11,524,603    10,174,091    21,698,694    5.9%
2021   2,137,836    321,918    2,459,754    0.7%
2022   20,168,507    992,338    21,160,845    5.7%
2023   60,514,626    515,299    61,029,925    16.5%
Thereafter   234,010,947    10,580,954    244,591,901    66.1%
                    
Total Debt Before Unamortized Debt Issuance Cost   330,645,711    39,087,052    369,732,763    100.0%
                     
Unamortized Debt Issuance Cost   3,036,626    364,236    3,400,862      
                    
Total Debt, Net of Unamortized Debt Issuance Costs  $327,609,085   $38,722,816   $366,331,901      

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information10
  

 

Securities Portfolio Performance

 

 

 

 

Year Ended 

Securities

Available for Sale

   Dividend Income   Net Realized Gain on Sale of Securities   Net Realized Gain on Sale of Securities & Dividend Income 
2010  $28,757,477   $1,762,609   $2,027,943   $3,790,552 
2011   43,298,214    2,512,057    2,692,649    5,204,706 
2012   57,325,440    3,243,592    4,092,585    7,336,177 
2013   59,254,942    3,481,514    4,055,812    7,537,326 
2014   63,555,961    4,065,986    1,542,589    5,608,575 
2015   75,011,260    4,399,181    204,230    4,603,411 
2016   108,755,172    6,636,126    2,285,301    8,921,427 
2017   132,964,276    8,134,898    1,747,528    9,882,426 
2018   99,595,736    10,367,155    20,107    10,387,262 
2019*   106,772,889    3,875,559    -0-    3,875,559 
                     
        $48,478,677   $18,668,744   $67,147,421 

 

*For the six months ended June 30, 2019.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information11
  

 

Property Summary and Snapshot

(unaudited)

 

   6/30/2019   6/30/2018   % Change 
             
Communities   118    114    3.5%
Developed Sites   21,515    20,602    4.4%
Occupied   17,932    16,995    5.5%
Occupancy %   83.3%   82.5%   80bps
Total Rentals   6,848    5,996    14.2%
Occupied Rentals   6,410    5,636    13.7%
Rental Occupancy %   93.6%   94.0%   -40bps
Monthly Rent Per Site  $443   $431    2.8%
Monthly Rent Per Home Rental Including Site  $754   $737    2.3%

 

State  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 Per Home Rental

 
         (1)        (1)                                      (2)
                                                             
Indiana   14    1,104    870    234    3,979    3,320    83.4%  $389    1,444    1,358    94.0% $748 
Maryland   1    77    10    67    62    57    91.9%  $495    -0-    -0-    N/A    N/A 
Michigan   2    68    68    -0-    354    272    76.8%  $459    186    179    96.2% $755 
New Jersey   4    349    187    162    1,006    944    93.8%  $622    38    33    86.8% $973 
New York   7    617    308    309    1,165    986    84.6%  $539    325    311    95.7% $910 
Ohio   35    1,680    1,214    466    5,907    4,787    81.0%  $391    1,899    1,771    93.3% $690 
Pennsylvania   48    2,087    1,728    359    7,343    5,968    81.3%  $461    2,148    1,991    92.7% $781 
Tennessee   7    413    321    92    1,699    1,598    94.1%  $472    808    767    94.9% $775 
                                                           
Total as of June 30, 2019   118    6,395    4,706    1,689    21,515    17,932    83.3%  $443    6,848    6,410    93.6% $754 
                                                            
Acquisitions (3)   3    162    159    3    1,109    594    53.6%  $415    119    68    57.1% $813 
                                                            
Grand Total   121    6,557    4,865    1,692    22,624    18,526    81.9%  $442    6,967    6,478    93.0% $755 

 

(1) Total and Vacant Acreage of 220 for the Mountain View Estates property is included in the above summary.

(2) Includes home and site rent charges.

(3) Acquisition of 1 community completed July 3, 2019 and 2 communities completed July 30, 2019.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information12
  

 

Same Property Statistics

(unaudited)

 

   For Three Months Ended   For Six Months Ended 
   6/30/2019   6/30/2018   Change   %  Change   6/30/2019   6/30/2018   Change   %  Change 
Community Net Operating Income                                        
                                        
Rental and Related Income  $29,739,113   $27,887,260   $1,851,853    6.6%  $58,779,844   $55,095,183   $3,684,661    6.7%
                                        
Community Operating Expenses   13,194,083    11,974,093    1,219,990    10.2%   26,416,855    24,080,208    2,336,647    9.7%
                                         
Community NOI  $16,545,030   $15,913,167   $631,863    4.0%  $32,362,989   $31,014,975   $1,348,014    4.3%

 

   As of     
   6/30/2019   6/30/2018   Change 
             
Total Sites   19,908    19,889   0.1%
Occupied Sites   16,649    16,348   301 sites, 1.8%
Occupancy %   83.6%   82.2%  140bps
Number of Properties   112    112   N/A 
Total Rentals   6,575    5,944   10.6%
Occupied Rentals   6,168    5,596   10.2%
Rental Occupancy   93.8%   94.1%  -30bps
Monthly Rent Per Site  $451   $437   3.2%
Monthly Rent Per Home Including Site  $759   $737   3.0%

 

Same Property includes all properties owned as of January 1, 2018, with the exception of Memphis Blues.

(1) Excludes a one-time settlement of a utility billing dispute of $375,250 over a prior ten-year period.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information13
  

 

Acquisition Summary

 

At Acquisition:                    
Year of Acquisition  Number of Communities  Sites  Occupied Sites  Occupancy %   Price   Total Acres
2016  3  289  215   74%  $7,277,000   219
2017  11  1,997  1,333   67%  $63,290,000   602
2018  6  1,615  1,271   79%  $59,093,000   494
2019  3  1,109  594   54%  $31,036,000   162

 

 

Community  Date of Acquisition  State  Number
of Sites
   Purchase Price  

Number

of Acres

   Occupancy 
Friendly Village  July 3, 2019  OH   824   $19,386,000    101    46%
Fifty-One Estates and New Colony  July 30, 2019  PA   285    11,650,000    61    76%
Total 2019 to Date         1,109   $31,036,000    162    54%

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information14
  

 

Definitions

 

Investors and analysts following the real estate industry utilize funds from operations available to common shareholders ("FFO"), normalized funds from operations available to common shareholders (“Normalized FFO”), community NOI, same property NOI, and earnings before interest, taxes, depreciation, amortization and acquisition costs ("Adjusted EBITDA"), variously defined, as supplemental performance measures. While the Company believes net loss 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, Adjusted EBITDA, FFO and Normalized 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. FFO also adjusts for the effects of the change in the fair value of marketable securities and costs associated with the redemption of preferred stock. Normalized FFO reflects the same assumptions as FFO except that it also adjusts for gains and losses realized on marketable securities investments and certain one-time charges. 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. Adjusted 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, Adjusted EBITDA, FFO and Normalized 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 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, and the change in the fair value of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the NAREIT FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of NAREIT FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation. Prior to the adoption of the FFO White Paper – 2018 Restatement, we utilized Core Funds from Operations (Core FFO), which we defined as FFO, excluding the change in the fair value of marketable securities. NAREIT created FFO as a non-GAAP supplemental measure of REIT operating performance.

 

Normalized FFO is calculated as FFO excluding gains and losses realized on marketable securities investments and certain one-time charges.

 

Normalized FFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 39,931,000 and 39,390,000 shares for the three and six months ended June 30, 2019, respectively, and 36,971,000 and 36,546,000 the three and six months ended June 30, 2018, respectively. Common stock equivalents resulting from stock options in the amount of 282,000 and 245,000 shares for the three and six months ended June 30, 2019, respectively, and 371,000 and 300,000 shares for the three and six months ended June 30, 2018, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents of 282,000 shares were excluded from the computation of the Diluted Net Loss per Share for the three months ended June 30, 2019, and 300,000 shares were excluded from the computation of Diluted Net Loss per share for the six months ended June 30, 2018, 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, 2018, with the exception of Memphis Blues.

 

Adjusted EBITDA is calculated as net income (loss) plus interest expense, franchise taxes, depreciation, and the change in the fair value of marketable securities.

 

Community NOI, Same Property NOI, Adjusted EBITDA, 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, Adjusted EBITDA, FFO and Normalized FFO should not be considered as substitutes for net loss 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, Adjusted EBITDA, 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. | Second Quarter FY 2019 Supplemental Information15
  

 

Press Release Dated August 8, 2019

 

FOR IMMEDIATE RELEASE August 8, 2019
  Contact: Nelli Madden
  732-577-9997

 

UMH PROPERTIES, INC. REPORTS RESULTS FOR THE SECOND QUARTER ENDED

JUNE 30, 2019

 

FREEHOLD, NJ, August 8, 2019........ UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended June 30, 2019 of $37,230,000 as compared to $32,099,000 for the quarter ended June 30, 2018, representing an increase of 16%. Net Loss Attributable to Common Shareholders amounted to $5,537,000 or $0.15 per diluted share for the quarter ended June 30, 2019 as compared to Net Income of $14,949,000 or $0.40 per diluted share for the quarter ended June 30, 2018. This decrease was due to the change in fair value of our marketable securities. During the second quarter of 2019, we recognized $2.4 million of unrealized losses as compared to $16.6 million of unrealized gains in the prior year period.

 

Funds from Operations Attributable to Common Shareholders (“FFO”), was $5,671,000 or $0.14 per diluted share for the quarter ended June 30, 2019 as compared to $6,154,000 or $0.17 per diluted share for the quarter ended June 30, 2018. Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), was $5,671,000 or $0.14 per diluted share for the quarter ended June 30, 2019, as compared to $6,679,000 or $0.18 per diluted share for the quarter ended June 30, 2018. These decreases were primarily attributable to the impact of our $100 million preferred issue in late April, which have not yet been fully deployed.

 

A summary of significant financial information for the three and six months ended June 30, 2019 and 2018 is as follows:

 

   For the Three Months Ended 
   June 30, 
   2019   2018 
         
Total Income  $37,230,000   $32,099,000 
Total Expenses  $32,588,000   $27,761,000 
Increase (Decrease) in Fair Value of Marketable Securities  $(2,352,000)  $16,624,000 
Net Income (Loss) Attributable to Common Shareholders  $(5,537,000)  $14,949,000 
Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share  $0.15   $0.40 
FFO (1)  $5,671,000   $6,154,000 
FFO (1) per Diluted Common Share    $0.14   $0.17 
Normalized FFO (1)  $5,671,000   $6,679,000 
Normalized FFO (1) per Diluted Common Share  $0.14   $0.18 
Diluted Weighted Average Shares Outstanding   39,649,000    36,971,000 

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information16
  

 

   For the Six Months Ended 
   June 30, 
   2019   2018 
         
Total Income  $71,517,000   $61,895,000 
Total Expenses  $62,338,000   $53,253,000 
Increase (Decrease) in Fair Value of Marketable Securities  $6,244,000   $(9,275,000)
Net Income (Loss) Attributable to Common Shareholders  $377,000   $(12,206,000)
Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share  $0.01   $(0.34)
FFO (1)  $11,762,000   $12,509,000 
FFO (1) per Diluted Common Share    $0.30   $0.34 
Normalized FFO (1)  $12,137,000   $13,014,000 
Normalized FFO (1) per Diluted Common Share  $0.31   $0.36 
Diluted Weighted Average Shares Outstanding   39,390,000    36,246,000 

 

A summary of significant balance sheet information as of June 30, 2019 and December 31, 2018 is as follows:

 

   June 30, 2019   December 31, 2018 
         
Gross Real Estate Investments  $905,830,000   $881,456,000 
Marketable Securities at Fair Value  $106,773,000   $99,596,000 
Total Assets  $915,287,000   $880,902,000 
Mortgages Payable, net  $327,609,000   $331,093,000 
Loans Payable, net  $38,723,000   $107,985,000 
Total Shareholders’ Equity  $529,988,000   $424,698,000 

 

Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2019.

 

“During the quarter, we raised $100 million of preferred equity to fund our future growth. As we deploy this capital into new acquisitions, rental homes and expansions, our earnings will rise accordingly. Subsequent to quarter end, we utilized some of the proceeds from our preferred offering and closed on the acquisition of 3 communities containing 1,100 developed homesites for a total purchase price of approximately $31 million or $28,000 per site. The blended occupancy rate for these communities was 54% at the time of acquisition. We anticipate increased occupancy and earnings as we upgrade and improve these communities.”

 

“We are pleased to announce another solid quarter of operating results. During the quarter, we:

 

  Increased Rental and Related Income by 11% over the prior year period;
  Increased Community Net Operating Income (“NOI”) by 6% over the prior year period;
    Increased Same Property NOI by 4% over the prior year period;
   

Increased Same Property Occupancy by 301 sites or 140 basis points over the prior year period from 82.2% to 83.6%;

    Increased home sales by 51%, generating a net profit of $178,000 as compared to a net loss of $288,000 over the prior year period;
    Increased our rental home portfolio by 336 homes to approximately 6,800 total rental homes, representing an increase of 5% from yearend 2018;
    Increased rental home occupancy by 130 basis points from 92.3% at yearend 2018 to 93.6% at quarter end;

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information17
  

 

  Issued 4 million shares of our 6.75% Series C Perpetual Preferred Stock resulting in net proceeds of approximately $96.7 million;
    Raised $10.7 million through our Dividend Reinvestment and Stock Purchase Plan;
  Reduced our Net Debt to Adjusted EBITDA from 6.1x to 5.6x year over year;
    Reduced our Net Debt to Total Market Capitalization from 29.9% to 28.9% year over year; and,
    Subsequent to quarter end, we completed the financing/refinancing of three of our communities for total proceeds of approximately $38.8 million, reducing the interest rate on the existing $11.6 million mortgage from 5.94% to 3.41%.”

 

Mr. Landy further stated, “Our same property results remain strong. Same property occupancy increased 140 bps to 83.6% at quarter end 2019 as compared to 82.2% in the prior year period.”

 

“Home sales have been accelerating. After delivering sales growth of 45% in 2018, and 44% in the first quarter, sales for the second quarter increased 51% year over year. A continuing national need for affordable housing coupled with UMH’s availability of vacant sites provide an opportunity for continued growth in earnings and value.”

 

UMH Properties, Inc. will host its Second Quarter 2019 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, August 9, 2019 at 10:00 a.m. Eastern Time.

 

The Company’s 2019 second quarter financial results being released herein will be available on the Company’s website at www.umh.reit in the “Financial Information and Filings” section.

 

To participate in the webcast, select the microphone icon found on the homepage www.umh.reit to access the call. Interested parties can also participate via conference call by calling toll free 877-513-1898 (domestically) or 412-902-4147 (internationally).

 

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Friday, August 9, 2019. It will be available until November 1, 2019 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10132371. 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 121 manufactured home communities containing approximately 22,600 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland. In addition, the Company owns a portfolio of REIT securities.

 

Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company’s current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company’s annual report on Form 10-K and described from time to time in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information18
  

 

Note:

 

  (1) Non-GAAP Information:  We assess and measure our overall operating results based upon an industry performance measure referred to as Funds from Operations Attributable to Common Shareholders (“FFO”), which management believes is a useful indicator of our operating performance.  FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT.  FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), represents net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in the United States of America (“U.S. GAAP”), excluding extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, and the change in the fair value of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization.  Included in the NAREIT FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of NAREIT FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities and include or exclude mark-to-market changes in the value recognized on these marketable equity securities.  In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation.  Prior to the adoption of the FFO White Paper – 2018 Restatement, we utilized Core Funds from Operations (Core FFO), which we defined as FFO, excluding the change in the fair value of marketable securities.  NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance.  We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding gains and losses realized on marketable securities investments and certain one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs.  FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis.  However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding the Company’s financial performance.

 

FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as alternatives to net income (loss) as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity.

 

The reconciliation of the Company’s U.S. GAAP net loss to the Company’s FFO and Normalized FFO for the three and six months ended June 30, 2019 and 2018 are calculated as follows:

 

   Three Months Ended   Six Months Ended 
   6/30/19   6/30/18   6/30/19   6/30/18 
Net Income (Loss) Attributable to Common Shareholders  $(5,537,000)  $14,949,000   $377,000   $(12,206,000)
Depreciation Expense   8,868,000    7,764,000    17,620,000    15,359,000 
(Gain) Loss on Sales of Depreciable Assets   (12,000)   65,000    9,000    81,000 
(Increase) Decrease in Fair Value of Marketable Securities (2)   2,352,000    (16,624,000)   (6,244,000)   9,275,000 
FFO Attributable to Common Shareholders   5,671,000    6,154,000    11,762,000    12,509,000 
Non-Recurring Other Expense (3)   -0-    525,000    -0-    525,000 
Settlement of utility billing dispute over a prior 10-year period   -0-    -0-    375,000    -0- 
Gain on Sales of Marketable Securities, net   -0-    -0-    -0-    (20,000)
Normalized FFO Attributable to Common Shareholders  $5,671,000   $6,679,000   $12,137,000   $13,014,000 

 

The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 39,931,000 and 39,390,000 shares for the three and six months ended June 30, 2019, respectively, and 36,971,000 and 36,546,000 shares for the three and six months ended June 30, 2018, respectively. Common stock equivalents resulting from stock options in the amount of 282,000 and 245,000 shares for the three and six months ended June 30, 2019, respectively, and 371,000 and 300,000 shares for the three and six months ended June 30, 2018, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents for the three months ended June 30, 2019 and for the six months June 30, 2018 were excluded from the computation of the Diluted Net Income (Loss) per Share as their effect would be anti-dilutive.

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information19
  

 

The following are the cash flows provided (used) by operating, investing and financing activities for the six months ended June 30, 2019 and 2018:

 

   2019   2018 
Operating Activities  $11,648,000   $14,445,000 
Investing Activities   (34,463,000)   (61,477,000)
Financing Activities   19,334,000    39,107,000 

 

  (2) (Increase) Decrease in Fair Value of Marketable Securities, if any, were previously recorded in Core FFO.
  (3) Consists of one-time payroll expenditures.

 

# # # #

 

 

UMH Properties, Inc. | Second Quarter FY 2019 Supplemental Information20