EX-99 2 ex99.htm

 

Exhibit 99

 

 

 
 

 

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 5, 2020 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 2020 Supplemental Information2

 

 

Financial Highlights

(dollars in thousands except per share amounts) (unaudited)

 

   Three Months Ended   Six Months Ended 
   6/30/2020   6/30/2019   6/30/2020   6/30/2019 
Operating Information                    
Number of Communities             122    118 
Number of Sites             23,100    21,515 
Rental and Related Income  $35,051   $31,388   $69,409   $62,032 
Community Operating Expenses  $15,438   $14,970   $30,946   $30,114 
Community NOI  $19,613   $16,418   $38,463   $31,918 
Expense Ratio   44.0%   47.7%   44.6%   48.5%
Sales of Manufactured Homes  $5,033   $5,842   $8,248   $9,485 
Number of Homes Sold   82    93    144    159 
Number of Rentals Added   218    183    367    336 
Net Income (Loss) (1)  $18,325   $749   $(16,423)  $11,786 
Net Income (Loss) Attributable to Common Shareholders (1)  $10,235   $(5,537)  $(32,603)  $377 
Adjusted EBITDA  $19,474   $16,309   $38,064   $32,241 
FFO Attributable to Common Shareholders  $7,135   $5,672   $13,224   $11,762 
Normalized FFO Attributable to Common Shareholders  $7,135   $5,672   $13,224   $12,137 
                     
Shares Outstanding and Per Share Data                    
Weighted Average Shares Outstanding                    
Basic   41,210    39,649    41,195    39,145 
Diluted   41,526    39,649    41,195    39,390 
Net Income (Loss) Attributable to Common Shareholders per Share (1) –                    
Basic  $0.25   $(0.15)  $(0.79)  $0.02 
Diluted  $0.25   $(0.15)  $(0.79)  $0.01 
FFO per Share – Basic and Diluted  $0.17   $0.14   $0.32   $0.30 
Normalized FFO per Share – Basic and Diluted  $0.17   $0.14   $0.32   $0.31 
Dividends per Common Share  $0.18   $0.18   $0.36   $0.36 
                     
Balance Sheet                    
Total Assets            $1,023,237   $915,287 
Total Liabilities            $458,507   $385,299 
                     
Market Capitalization                    
Total Debt, Net of Unamortized Debt Issuance Costs            $435,765   $366,332 
Equity Market Capitalization            $534,018   $498,313 
Series B Preferred Stock            $95,017   $95,030 
Series C Preferred Stock            $243,750   $243,750 
Series D Preferred Stock            $130,267   $50,000 
Total Market Capitalization            $1,438,816   $1,253,425 

 

(1) Includes increase (decrease) in fair value of marketable securities.

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information3

 

 

Consolidated Balance Sheets

(in thousands except per share amounts)

 

   June 30,   December 31, 
   2020   2019 
   (unaudited)     
ASSETS          
Investment Property and Equipment          
Land  $72,575   $72,459 
Site and Land Improvements   626,574    618,041 
Buildings and Improvements   27,403    27,380 
Rental Homes and Accessories   323,641    297,401 
Total Investment Property   1,050,193    1,015,281 
Equipment and Vehicles   21,784    21,145 
Total Investment Property and Equipment   1,071,977    1,036,426 
Accumulated Depreciation   (252,436)   (232,783)
Net Investment Property and Equipment   819,541    803,643 
           
Other Assets          
Cash and Cash Equivalents   10,970    12,902 
Marketable Securities at Fair Value   91,694    116,186 
Inventory of Manufactured Homes   27,758    31,967 
Notes and Other Receivables, net   40,614    37,995 
Prepaid Expenses and Other Assets   13,205    10,762 
Land Development Costs   19,455    11,998 
Total Other Assets   203,696    221,810 
           
TOTAL ASSETS  $1,023,237   $1,025,453 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Liabilities          
Mortgages Payable, net of Unamortized Debt Issuance Costs  $369,715   $373,658 
Other Liabilities          
Accounts Payable   4,287    4,572 
Loans Payable, net of Unamortized Debt Issuance Costs   66,050    83,686 
Accrued Liabilities and Deposits   11,396    10,575 
Tenant Security Deposits   7,059    6,623 
Total Other Liabilities   88,792    105,456 
Total Liabilities   458,507    479,114 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
Series B - 8.0% Cumulative Redeemable Preferred Stock, par value $0.10 per share, 4,000 shares authorized; 3,801 shares issued and outstanding as of June 30, 2020 and December 31, 2019   95,017    95,030 
Series C - 6.75% Cumulative Redeemable Preferred Stock, par value $0.10 per share, 13,750 shares authorized; 9,750 issued and outstanding as of June 30, 2020 and December 31, 2019   243,750    243,750 
Series D - 6.375% Cumulative Redeemable Preferred Stock, par value $0.10 per share, 6,000 shares authorized; 5,211 and 2,651 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively   130,267    66,268 
Common Stock – $0.10 par value per share, 143,664 and 123,664 shares authorized; 41,301 and 41,130 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively   4,130    4,113 
Excess Stock – $0.10 par value per share, 3,000 shares authorized; no shares issued or outstanding as of June 30, 2020 and December 31, 2019   -0-    -0- 
Additional Paid-In Capital   116,930    162,542 
Undistributed Income (Accumulated Deficit)   (25,364)   (25,364)
Total Shareholders’ Equity   564,730    546,339 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $1,023,237   $1,025,453 

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information4

 

 

Consolidated Statements of Income (Loss)

(in thousands) (unaudited)

 

   Three Months Ended   Six Months Ended 
   6/30/2020   6/30/2019   6/30/2020   6/30/2019 
INCOME:                    
Rental and Related Income  $35,051   $31,388   $69,409   $62,032 
Sales of Manufactured Homes   5,033    5,842    8,248    9,485 
TOTAL INCOME   40,084    37,230    77,657    71,517 
                     
EXPENSES:                    
Community Operating Expenses   15,438    14,970    30,946    30,114 
Cost of Sales of Manufactured Homes   3,617    4,257    6,018    6,846 
Selling Expenses   1,279    1,337    2,376    2,428 
General and Administrative Expenses   2,742    3,156    5,328    5,331 
Depreciation Expense   10,272    8,869    20,499    17,620 
TOTAL EXPENSES   33,348    32,589    65,167    62,339 
                     
OTHER INCOME (EXPENSE):                    
Interest Income   691    622    1,408    1,137 
Dividend Income   1,555    1,939    3,298    3,876 
Increase (Decrease) in Fair Value of Marketable Securities   13,411    (2,352)   (25,182)   6,244 
Other Income   166    133    329    253 
Interest Expense   (4,195)   (4,246)   (8,620)   (8,893)
TOTAL OTHER INCOME (EXPENSE)   11,628    (3,904)   (28,767)   2,617 
                     
Income (Loss) before Gain (Loss) on Sales of Investment Property and Equipment   18,364    737    (16,277)   11,795 
Gain (Loss) on Sales of Investment Property and Equipment   (39)   12    (146)   (9)
NET INCOME (LOSS)   18,325    749    (16,423)   11,786 
                     
Less: Preferred Dividends   (8,090)   (6,286)   (16,180)   (11,409)
                     
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS  $10,235   $(5,537)  $(32,603)  $377 

 


UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information5

 

 

Consolidated Statements of Cash Flows

(in thousands) (unaudited)

 

   Six Months Ended 
   6/30/2020   6/30/2019 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net Income (Loss)  $(16,423)  $11,786 
Non-Cash Items Included in Net Income (Loss):          
Depreciation   20,499    17,620 
Amortization of Financing Costs   410    365 
Stock Compensation Expense   887    1,059 
Provision for Uncollectible Notes and Other Receivables   740    623 
(Increase) Decrease in Fair Value of Marketable Securities   25,182    (6,244)
Loss on Sales of Investment Property and Equipment   146    9 
Changes in Operating Assets and Liabilities:          
Inventory of Manufactured Homes   4,209    (4,586)
Notes and Other Receivables   (3,359)   (4,551)
Prepaid Expenses and Other Assets   (2,270)   (6,273)
Accounts Payable   (285)   459 
Accrued Liabilities and Deposits   820    1,109 
Tenant Security Deposits   436    273 
Net Cash Provided by Operating Activities   30,992    11,649 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of Investment Property and Equipment   (37,666)   (27,326)
Proceeds from Sales of Investment Property and Equipment   1,124    1,400 
Additions to Land Development Costs   (7,457)   (7,604)
Purchase of Marketable Securities   (690)   (934)
Net Cash Used in Investing Activities   (44,689)   (34,464)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Net Payments from Short Term Borrowings   (17,733)   (69,330)
Principal Payments of Mortgages and Loans   (4,256)   (3,766)
Financing Costs on Debt   -0-    (15)
Proceeds from At-The-Market Preferred Equity Program, net of Offering Costs   63,132    -0- 
Proceeds from Issuance of Preferred Stock, net of offering costs   -0-    96,688 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   1,670    17,705 
Repurchase of Preferred Stock, net   (12)   -0- 
Repurchase of Common Stock, net   (1,830)   -0- 
Proceeds from Exercise of Stock Options   306    435 
Preferred Dividends Paid   (16,180)   (11,934)
Common Dividends Paid, net of Dividend Reinvestments   (13,159)   (10,449)
Net Cash Provided by Financing Activities   11,938    19,334 
           
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (1,759)   (3,481)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD   18,996    12,777 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  $17,237   $9,296 

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information6

 

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Net Income (Loss) Attributable

to Common Shareholders to FFO and Normalized FFO

(in thousands except footnotes) (unaudited)

 

   Three Months Ended   Six Months Ended 
   6/30/2020   6/30/2019   6/30/2020   6/30/2019 
Reconciliation of Net Income (Loss) to Adjusted EBITDA                
                     
Net Income (Loss)  $18,325   $749   $(16,423)  $11,786 
Interest Expense   4,195    4,246    8,620    8,893 
Franchise Taxes   93    93    186    186 
Depreciation Expense   10,272    8,869    20,499    17,620 
(Increase) Decrease in Fair Value of Marketable Securities   (13,411)   2,352    25,182    (6,244)
                     
Adjusted EBITDA  $19,474   $16,309   $38,064   $32,241 
                     
Reconciliation of Net Income (Loss) Attributable to Common Shareholders to Funds from Operations      
                     
Net Income (Loss) Attributable to   Common Shareholders  $10,235   $(5,537)  $(32,603)  $377 
Depreciation Expense   10,272    8,869    20,499    17,620 
(Gain) Loss on Sales of Property and Equipment   39    (12)   146    9 
(Increase) Decrease in Fair Value of Marketable Securities   (13,411)   2,352    25,182    (6,244)
                     
Funds from Operations (“FFO”)   7,135    5,672    13,224    11,762 
                     
Adjustments:                    
Settlement of Utility Billing Dispute Over a Prior 10-Year Period   -0-    -0-    -0-    375 
                     
Normalized Funds from Operations (“Normalized FFO”)  $7,135   $5,672   $13,224   $12,137 

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information7

 

 

Market Capitalization, Debt and Coverage Ratios

(in thousands except per share amounts) (unaudited)

 

   Six Months Ended   Year Ended 
   6/30/2020   6/30/2019   12/31/2019 
Shares Outstanding   41,301    40,154    41,130 
Market Price Per Share  $12.93   $12.41   $15.73 
Equity Market Capitalization  $534,018   $498,313   $646,976 
Total Debt   435,765    366,332    457,344 
Preferred   469,034    388,780    405,048 
Total Market Capitalization  $1,438,817   $1,253,425   $1,509,368 
                
Total Debt  $435,765   $366,332   $457,344 
Less: Cash and Cash Equivalents   (10,970)   (3,696)   (12,902)
Net Debt   424,795    362,636    444,442 
Less: Marketable Securities at Fair Value (“Securities”)   (91,694)   (106,773)   (116,186)
Net Debt Less Securities  $333,101   $255,863   $328,256 
                
Interest Expense  $8,620   $8,893   $17,805 
Capitalized Interest   547    614    1,498 
Preferred Dividends   16,180    11,409    25,184 
Total Fixed Charges  $25,347   $20,916   $44,487 
                
Adjusted EBITDA  $38,064   $32,241   $67,681 
                
Debt and Coverage Ratios               
                
Net Debt / Total Market Capitalization   29.5%   28.9%   29.4%
                
Net Debt Plus Preferred / Total Market Capitalization   62.1%   59.9%   56.3%
                
Net Debt Less Securities / Total Market Capitalization   23.2%   20.4%   21.7%
                
Net Debt Less Securities Plus Preferred / Total Market Capitalization   55.7%   51.4%   48.6%
                
Interest Coverage   4.2x   3.4x   3.5x
                
Fixed Charge Coverage   1.5x   1.5x   1.5x
                
Net Debt / Adjusted EBITDA   5.6x   5.6x   6.6x
                
Net Debt Less Securities / Adjusted EBITDA   4.4x   4.0x   4.9x
                
Net Debt Plus Preferred / Adjusted EBITDA   11.7x   11.7x   12.6x
                
Net Debt Less Securities Plus Preferred / Adjusted EBITDA   10.5x   10.0x   10.8x

 


UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information8

 

 

Debt Analysis

(in thousands) (unaudited)

 

   Six Months Ended   Year Ended 
   6/30/2020   6/30/2019   12/31/2019 
Debt Outstanding               
Mortgages Payable:               
Fixed Rate Mortgages  $372,788   $330,646   $377,045 
Unamortized Debt Issuance Costs   (3,073)   (3,037)   (3,387)
Mortgages, Net of Unamortized Debt Issuance Costs  $369,715   $327,609   $373,658 
Loans Payable:               
Unsecured Line of Credit  $15,000   $-0-   $15,000 
Other Loans Payable   51,311    39,087    69,044 
Total Loans Before Unamortized Debt Issuance Costs   66,311    39,087    84,044 
Unamortized Debt Issuance Costs   (261)   (364)   (358)
Loans, Net of Unamortized Debt Issuance Costs  $66,050   $38,723   $83,686 
                
Total Debt, Net of Unamortized Debt Issuance Costs  $435,765   $366,332   $457,344 
                
% Fixed/Floating               
Fixed   85.3%   91.1%   82.2%
Floating   14.7%   8.9%   17.8%
Total   100.0%   100.0%   100.0%
                
Weighted Average Interest Rates (1)               
Mortgages Payable   4.14%   4.29%   4.14%
Loans Payable   2.01%   5.08%   3.69%
Total Average   3.82%   4.37%   4.06%
                
Weighted Average Maturity (Years)               
Mortgages Payable   5.5    5.8    6.0 

 

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

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information9

 

 

Debt Maturity

(in thousands) (unaudited)

 

 

As of 6/30/20:                 
                 
Fiscal Year Ended  Mortgages   Loans   Total   % of Total 
2020  $-0-   $17,005   $17,005    3.9%
2021   2,098    146    2,244    0.5%
2022   19,652    15,640(1)   35,292    8.0%
2023   66,101    186    66,287    15.1%
2024   -0-    577    577    0.1%
Thereafter   284,937    32,757    317,694   72.4%
                     
Total Debt Before Unamortized Debt Issuance Cost   372,788    66,311    439,099    100.0%
                     
Unamortized Debt Issuance Cost   (3,073)   (261)   (3,334)     
                     
Total Debt, Net of Unamortized Debt Issuance Costs  $369,715   $66,050   $435,765      

 

(1) Includes $15 million balance outstanding on the Company’s Line of Credit due November 2022, with an additional one year option.

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information10

 

 

Securities Portfolio Performance

(in thousands)

 

 

 

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   $1,763   $2,028   $3,791 
2011   43,298    2,512    2,693    5,205 
2012   57,325    3,244    4,093    7,337 
2013   59,255    3,481    4,056    7,537 
2014   63,556    4,066    1,543    5,609 
2015   75,011    4,399    204    4,603 
2016   108,755    6,636    2,285    8,921 
2017   132,964    8,135    1,747    9,882 
2018   99,596    10,367    20    10,387 
2019   116,186    7,535    -0-    7,535 
  2020*   91,694    3,298    -0-    3,298 
                     
        $55,436   $18,669   $74,105 

 

*For the six months ended June 30, 2020.

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information11

 

 

Property Summary and Snapshot

(unaudited)

 

   6/30/2020   6/30/2019   % Change 
Communities   122    118    3.4%
Developed Sites   23,100    21,515    7.4%
Occupied   19,437    17,932    8.4%
Occupancy %   84.1%   83.3%   80 bps 
Total Rentals   7,761    6,848    13.3%
Occupied Rentals   7,386    6,410    15.2%
Rental Occupancy %   95.2%   93.6%   160 bps 
Monthly Rent Per Site  $454   $443    2.5%
Monthly Rent Per Home Rental Including Site  $777   $754    3.1%

 

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    3,998    3,388    84.7%  $407    1,596    1,514    94.9%  $775 
Maryland   1    77    10    67    62    59    95.2%  $514    -0-    -0-    N/A    N/A 
Michigan   3    153    153    -0-    740    612    82.7%  $443    254    226    89.0%  $772 
New Jersey   4    349    187    162    1,006    955    94.9%  $640    45    43    95.6%  $979 
New York   7    617    308    309    1,172    1,009    86.1%  $560    368    357    97.0%  $941 
Ohio   36    1,781    1,315    466    6,727    5,447    81.0%  $404    2,248    2,154    95.8%  $716 
Pennsylvania   50    2,148    1,787    361    7,635    6,313    82.7%  $474    2,411    2,285    94.8%  $799 
Tennessee   7    413    321    92    1,760    1,654    94.0%  $462    839    807    96.2%  $803 
Total as of June 30, 2020   122    6,642    4,951    1,691    23,100    19,437    84.1%  $454    7,761    7,386    95.2%  $777 
                                                             
Acquisitions (3)   1    27    27    -0-    147    82    55.8%  $310    4    1    25.0%  $315 
                                                             
Grand Total   123    6,669    4,978    1,691    23,247    19,519    84.0%  $453    7,765    7,387    95.1%  $777 

 

(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 one community completed July 24, 2020.

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information12

 

 

Same Property Statistics

(in thousands) (unaudited)

 

   For Three Months Ended   For Six Months Ended 
   6/30/2020   6/30/2019   Change  

%

Change

   6/30/2020   6/30/2019   Change  

%

Change

 
Community Net Operating Income                                        
                                         
Rental and Related Income  $33,539   $31,298   $2,241    7.2%  $66,410   $61,848   $4,562    7.4%

Community Operating

Expenses (1)

   14,073    14,256    (183)   -1.3%   28,205    28,377    (172)   -0.6%
                                         
Community NOI  $19,466   $17,042   $2,424    14.2%  $38,205   $33,471   $4,734    14.1%

 

   As of     
   6/30/2020   6/30/2019   Change 
             
Total Sites   21,506    21,476    0.1%
Occupied Sites   18,446    17,896    550 sites, 3.1% 
Occupancy %   85.8%   83.3%   250 bps 
Number of Properties   118    118    N/A 
Total Rentals   7,524    6,673    12.8%
Occupied Rentals   7,181    6,248    14.9%
Rental Occupancy   95.4%   93.6%   180 bps 
Monthly Rent Per Site  $456   $443    2.9%
Monthly Rent Per Home Including Site  $777   $757    2.6%

 

Same Property includes all properties owned as of January 1, 2019, with the exception of Memphis Blues.

 

(1) Excludes a one-time settlement of a utility billing dispute of $375,000 over a prior ten-year period for the six months ended June 30, 2019.

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information13

 

 

Acquisition Summary

(dollars in thousands)

 

At Acquisition:                        
                         
Year of Acquisition   Number of Communities    Sites    Occupied Sites    Occupancy %    

Purchase

Price

    Price Per Site    Total Acres 
2017   11    1,997    1,333    67%  $63,290   $32    602 
2018   6    1,615    1,271    79%  $59,093   $37    494 
2019   4    1,495    935    62%  $56,237   $38    247 
2020   1    147    82    56%  $3,340   $23    27 

 

 

2020 Acquisitions                        
                         
Community  Date of Acquisition   State   Number
of Sites		   Purchase Price  

Number

of Acres

   Occupancy 
Camelot Woods   July 24, 2020    PA    147   $3,340    27    56%
Total 2020 to Date             147   $3,340    27    56%

 

UMH Properties, Inc. | Second Quarter FY 2020 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 income (loss) available to common shareholders, 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 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, 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 41.5 million and 41.6 million shares for the three and six months ended June 30, 2020, respectively, and 39.9 million and 39.4 million for the three and six months ended June 30, 2019, respectively. Common stock equivalents resulting from stock options in the amount of 356,000 shares for the six months ended June 30, 2020, and 282,000 shares for the three months ended June 30, 2019, were excluded from the computation of the Diluted Net Income (Loss) per Share as their effect would be anti-dilutive. Common stock equivalents resulting from stock options in the amount of 316,000 shares for the three months ended June 30, 2020, and 245,000 shares for the six months ended June 30,2019, are included in the diluted weighted shares outstanding.

 

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, 2019, 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 2020 Supplemental Information15

 

 

Press Release Dated August 5, 2020

 

FOR IMMEDIATE RELEASE August 5, 2020
  Contact: Nelli Madden
  732-577-9997

 

UMH PROPERTIES, INC. REPORTS RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2020

 

FREEHOLD, NJ, August 5, 2020........ UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended June 30, 2020 of $40.1 million as compared to $37.2 million for the quarter ended June 30, 2019, representing an increase of 8%. Net Income Attributable to Common Shareholders amounted to $10.2 million or $0.25 per diluted share for the quarter ended June 30, 2020 as compared to a Net Loss of $5.5 million or $0.15 per diluted share for the quarter ended June 30, 2019. This increase was due to the change in fair value of our marketable securities. During the quarter, the securities portfolio experienced an unrealized gain of $13.4 million as compared to an unrealized loss of $2.4 million in the prior year period.

 

Funds from Operations Attributable to Common Shareholders (“FFO”), was $7.1 million or $0.17 per diluted share for the quarter ended June 30, 2020 as compared to $5.7 million or $0.14 per diluted share for the quarter ended June 30, 2019. Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), was $7.1 million or $0.17 per diluted share for the quarter ended June 30, 2020, as compared to $5.7 million or $0.14 per diluted share for the quarter ended June 30, 2019.

 

A summary of significant financial information for the three and six months ended June 30, 2020 and 2019 is as follows (in thousands except per share amounts):

 

   For the Three Months Ended 
   June 30, 
   2020   2019 
         
Total Income  $40,084   $37,230 
Total Expenses  $33,348   $32,589 
Increase (Decrease) in Fair Value of Marketable Securities  $13,411   $(2,352)
Net Income (Loss) Attributable to Common Shareholders  $10,235   $(5,537)
Net Income (Loss) Attributable to Common  Shareholders per Diluted Common Share  $0.25   $(0.15)
FFO (1)  $7,135   $5,672 
FFO (1) per Diluted Common Share   $0.17   $0.14 
Normalized FFO (1)  $7,135   $5,672 
Normalized FFO (1) per Diluted Common Share  $0.17   $0.14 
Diluted Weighted Average Shares Outstanding   41,526    39,649 

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information16

 

 

   For the Six Months Ended 
   June 30, 
   2020   2019 
         
Total Income  $77,657   $71,517 
Total Expenses  $65,167   $62,339 
Increase (Decrease) in Fair Value of Marketable Securities  $(25,182)  $6,244 
Net Income (Loss) Attributable to Common Shareholders  $(32,603)  $377 
Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share  $(0.79)  $0.01 
FFO (1)  $13,224   $11,762 
FFO (1) per Diluted Common Share   $0.32   $0.30 
Normalized FFO (1)  $13,224   $12,137 
Normalized FFO (1) per Diluted Common Share  $0.32   $0.31 
Diluted Weighted Average Shares Outstanding   41,195    39,390 

 

A summary of significant balance sheet information as of June 30, 2020 and December 31, 2019 is as follows (in thousands):

 

   June 30, 2020   December 31, 2019 
         
Gross Real Estate Investments  $1,050,193   $1,015,281 
Marketable Securities at Fair Value  $91,694   $116,186 
Total Assets  $1,023,237   $1,025,453 
Mortgages Payable, net  $369,715   $373,658 
Loans Payable, net  $66,050   $83,686 
Total Shareholders’ Equity  $564,730   $546,339 

 

Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2020.

 

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

 

  ● Increased Rental and Related Income by 12%;
  ● Increased Community Net Operating Income (“NOI”) by 19% ;
  ● Improved our Operating Expense ratio by 370 basis points to 44%;
  ● Increased Same Property NOI by 14%;
  ● Increased Same Property Occupancy by 550 sites from 83.3% to 85.8% or 250 basis points;
  ● Increased our rental home portfolio by 367 homes to approximately 7,800 total rental homes, representing an increase of 5%;
  ● Increased rental home occupancy by 220 basis points from 93.0% at yearend 2019 to 95.2% at quarter end;
  ● Amended and extended our revolving line of credit for the financing of homes, increasing total availability from $15 million to $20 million and reducing the interest rate by 25 basis points to prime, with a floor of 3.25%;
  ● Reduced the weighted average interest rate on our mortgages payable from 4.3% to 4.1% year over year;
  ● Reduced our Net Debt to Total Market Capitalization from 31.4% to 29.5% year over year;
  ● Reduced our Net Debt to Adjusted EBITDA from 6.6x at yearend 2019 to 5.6x at quarter end; and,
  ● Subsequent to quarter end, we completed the acquisition of one all-age community located in Pennsylvania containing 147 homesites situated on 27 acres with approximately 56% occupancy, for a purchase price of approximately $3.3 million.”

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information17

 

 

Mr. Landy further stated, “The COVID-19 crisis has had a negative impact on many businesses and industries throughout the nation. However, we are pleased to report it has not materially impacted the operations at UMH. Our team has done an exceptional job furthering the goals of UMH given the challenging circumstances. Our rent collection rates are in line with pre-pandemic levels and we continue to experience strong demand throughout our portfolio.”

 

“Our business plan of acquiring value-add communities, making the necessary improvements, and implementing a rental and sales program has proven to yield excellent results. Year over year, our same property occupancy improved by 550 sites or 3.1% resulting in revenue growth of over 7% and NOI growth of 14%. This is the third quarter in a row that we have produced double-digit same property NOI growth.”

 

“We continue to make progress on the financing front. As we have previously announced we are working to obtain approximately $100 million of GSE mortgage debt at rates below 3%. Assuming no unforeseen issues arising, we plan to call our $95 million of Series B Perpetual Preferred stock. This will add approximately $0.11 per share in FFO annually.”

 

“Our strong operating results have given us the confidence to seek acquisition opportunities in additional states. We will implement our proven business plan to further increase community value while providing affordable housing for the nation.”

 

UMH Properties, Inc. will host its Second Quarter 2020 Financial Results Webcast and Conference Call on Thursday, August 6, 2020 at 10:00 a.m. Eastern Time. Senior management will discuss the results, current market conditions and future outlook on the call.

 

The Company’s 2020 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 Thursday, August 6, 2020. It will be available until November 1, 2020 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10145442. 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 123 manufactured home communities containing approximately 23,200 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 2020 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, 2020 and 2019 are calculated as follows (in thousands):

 

   Three Months Ended   Six Months Ended 
   6/30/20   6/30/19   6/30/20   6/30/19 
Net Income (Loss) Attributable to Common Shareholders  $10,235   $(5,537)  $(32,603)  $377 
Depreciation Expense   10,272    8,869    20,499    17,620 
(Gain) Loss on Sales of Depreciable Assets   39    (12)   146    9 
(Increase) Decrease in Fair Value of Marketable Securities (2)   (13,411)   2,352    25,182    (6,244)
FFO Attributable to Common Shareholders   7,135    5,672    13,224    11,762 
Settlement of utility billing dispute over a prior 10-year period   -0-    -0-    -0-    375 
Normalized FFO Attributable to Common Shareholders  $7,135   $5,672   $13,224   $12,137 

 

The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 41.5 million and 41.6 million shares for the three and six months ended June 30, 2020, respectively, and 39.9 million and 39.4 million shares for the three and six months ended June 30, 2019, respectively. Common stock equivalents resulting from stock options in the amount of 356,000 shares for the six months ended June 30, 2020, and 282,000 shares for the three months ended June 30, 2019, were excluded from the computation of the Diluted Net Income (Loss) per Share as their effect would be anti-dilutive. Common stock equivalents resulting from stock options in the amount of 316,000 shares for the three months ended June 30, 2020, and 245,000 shares for the six months ended June 30,2019, are included in the diluted weighted shares outstanding.

 

The following are the cash flows provided (used) by operating, investing and financing activities for the six months ended June 30, 2020 and 2019 (in thousands):

 

   2020   2019 
Operating Activities  $30,992   $11,649 
Investing Activities   (44,689)   (34,464)
Financing Activities   11,938    19,334 

 

  (2) Represents change in unrealized gain (loss) in marketable securities which is included in the Consolidated Statements of Income (Loss). (Increase) Decrease in Fair Value of Marketable Securities, if any, were previously recorded in Core FFO.

 

# # # #

 

 

UMH Properties, Inc. | Second Quarter FY 2020 Supplemental Information19