UMH Properties, Inc. (NYSE:UMH) (TASE:UMH) reported Total Income
for the quarter ended June 30, 2024 of $60.3 million as compared to
$55.3 million for the quarter ended June 30, 2023, representing an
increase of 9%. Net Income Attributable to Common Shareholders
amounted to $527,000 or $0.01 per diluted share for the quarter
ended June 30, 2024 as compared to a Net Loss of $4.4 million or
$0.07 per diluted share for the quarter ended June 30, 2023.
Normalized Funds from Operations Attributable to Common
Shareholders (“Normalized FFO”), was $16.8 million or $0.23 per
diluted share for the quarter ended June 30, 2024, as compared to
$13.0 million or $0.21 per diluted share for the quarter ended June
30, 2023, representing a 10% per diluted share increase.
A summary of significant financial information
for the three and six months ended June 30, 2024 and 2023 is as
follows (in thousands except per share amounts):
|
|
Three Months
Ended |
|
|
|
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Total
Income |
|
$ |
60,328 |
|
|
$ |
55,290 |
|
Total
Expenses |
|
$ |
49,307 |
|
|
$ |
46,371 |
|
Net Income
(Loss) Attributable to Common Shareholders |
|
$ |
527 |
|
|
$ |
(4,418 |
) |
Net Income
(Loss) Attributable to Common Shareholders per Diluted Common
Share |
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
FFO (1) |
|
$ |
16,182 |
|
|
$ |
12,043 |
|
FFO (1) per
Diluted Common Share |
|
$ |
0.23 |
|
|
$ |
0.19 |
|
Normalized
FFO (1) |
|
$ |
16,807 |
|
|
$ |
13,049 |
|
Normalized
FFO (1) per Diluted Common Share |
|
$ |
0.23 |
|
|
$ |
0.21 |
|
Basic
Weighted Average Shares Outstanding |
|
|
71,418 |
|
|
|
61,236 |
|
Diluted
Weighted Average Shares Outstanding |
|
|
71,884 |
|
|
|
61,760 |
|
|
|
Six Months
Ended |
|
|
|
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Total
Income |
|
$ |
118,008 |
|
|
$ |
107,897 |
|
Total
Expenses |
|
$ |
97,715 |
|
|
$ |
91,611 |
|
Net Loss
Attributable to Common Shareholders |
|
$ |
(5,737 |
) |
|
$ |
(9,715 |
) |
Net Loss
Attributable to Common Shareholders per Diluted Common Share |
|
$ |
(0.08 |
) |
|
$ |
(0.16 |
) |
FFO (1) |
|
$ |
30,228 |
|
|
$ |
22,683 |
|
FFO (1) per
Diluted Common Share |
|
$ |
0.43 |
|
|
$ |
0.37 |
|
Normalized
FFO (1) |
|
$ |
31,824 |
|
|
$ |
24,769 |
|
Normalized
FFO (1) per Diluted Common Share |
|
$ |
0.45 |
|
|
$ |
0.41 |
|
Basic
Weighted Average Shares Outstanding |
|
|
70,291 |
|
|
|
60,186 |
|
Diluted
Weighted Average Shares Outstanding |
|
|
70,700 |
|
|
|
60,844 |
|
A summary of significant balance sheet
information as of June 30, 2024 and December 31, 2023 is as follows
(in thousands):
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
Gross Real
Estate Investments |
|
$ |
1,574,196 |
|
|
$ |
1,539,041 |
|
Marketable
Securities at Fair Value |
|
$ |
28,673 |
|
|
$ |
34,506 |
|
Total
Assets |
|
$ |
1,441,295 |
|
|
$ |
1,427,577 |
|
Mortgages
Payable, net |
|
$ |
491,030 |
|
|
$ |
496,483 |
|
Loans
Payable, net |
|
$ |
77,367 |
|
|
$ |
93,479 |
|
Bonds
Payable, net |
|
$ |
100,479 |
|
|
$ |
100,055 |
|
Total
Shareholders’ Equity |
|
$ |
743,980 |
|
|
$ |
706,794 |
|
Samuel A. Landy, President and CEO, commented on
the results of the second quarter of 2024.
“We are pleased to announce another solid
quarter of operating results. During the quarter, we:
|
● |
Increased
Rental and Related Income by 9%; |
|
● |
Increased
Sales of Manufactured Homes by 7%; |
|
● |
Increased
Community Net Operating Income (“NOI”) by 11%; |
|
● |
Increased
Same Property NOI by 11%; |
|
● |
Increased
Same Property Occupancy by 130 basis points from 86.4% to
87.7%; |
|
● |
Improved
our Same Property expense ratio by 110 basis points from 40.4% in
the second quarter of 2023 to 39.3% at quarter end; |
|
● |
Amended
our unsecured credit facility to expand available borrowings by $80
million from $180 million to $260 million syndicated with BMO
Capital Markets Corp., JPMorgan Chase Bank, NA and Wells Fargo,
N.A; |
|
● |
For the
fourth time since 2020, raised our quarterly common stock dividend
by $0.01 representing a 4.9% increase to $0.215 per share or $0.86
annually; |
|
● |
Issued
and sold approximately 2.4 million shares of Common Stock through
our At-the-Market Sale Program at a weighted average price of
$15.46 per share, generating gross proceeds of $36.9 million and
net proceeds of $36.1 million, after offering expenses; |
|
● |
Issued
and sold approximately 29,000 shares of Series D Preferred Stock
through our At-the-Market Sale Program at a weighted average price
of $23.18 per share, generating gross proceeds of $670,000 and net
proceeds of $659,000, after offering expenses; |
|
● |
Subsequent to quarter end, issued and sold approximately 765,000
shares of Common Stock through our At-the-Market Sale Program at a
weighted average price of $16.94 per share, generating net proceeds
of $12.8 million, after offering expenses; and |
|
● |
Subsequent to quarter end, issued and sold approximately 150,000
shares of Series D Preferred Stock through our At-the-Market Sale
Program at a weighted average price of $23.01 per share, generating
net proceeds of $3.4 million, after offering expenses.” |
|
|
|
Mr. Landy stated, “UMH is pleased to report that
Normalized FFO for the second quarter increased to $0.23 from $0.21
last year, representing an increase of approximately 10%.
Sequentially, Normalized FFO increased from $0.22 to $0.23,
representing an increase of approximately 5%. UMH has intentionally
acquired value-added communities with vacant sites over the past 10
years. We have been improving the communities through our capital
improvements, adding approximately 800 homes per year and selling
200 homes per year. These investments have added to the supply of
affordable housing and generated best-in-class operating
results.
“Our same property operating results continue to
demonstrate the effectiveness of our business plan. Same property
NOI increased by 11.0% for the quarter and 13.2% for the first six
months, compared to the corresponding prior year periods. UMH has
now increased same property NOI by double digits for four
consecutive quarters. This increase was driven by an increase in
rental and related income of 9.0% and 9.7% for the three and six
months, respectively, partially offset by an increase in same
property expenses of 6.1% and 4.8%, respectively. The growth in
rental and related income is primarily attributed to a strong
increase in occupancy of 380 units and rental rate increases of
4.9%.
“Our sales for the quarter increased from $8.2
million to $8.8 million, representing an increase of 7%. Notably,
our gross margin increased from 30% last year to 38% this year.
Sales demand remains strong, and we anticipate another solid
quarter of profitable home sales in the third quarter.
“We are initiating guidance for the remainder of
2024, with Normalized FFO in a range of $0.91-0.95 per diluted
share for the full year, or $0.93 at the midpoint. This represents
approximately 8% annual normalized FFO growth at the midpoint over
full year 2023 Normalized FFO of $0.86 per diluted share.
“UMH continues to execute on our long-term
business plan of acquiring communities. Our high-quality
communities continue to experience strong demand for our products,
which is translating to growing occupancy, net operating income and
property value. Our 3,300 vacant sites and 2,200 acres of vacant
land give us a runway to generate earnings growth for years to
come. We maintain a strong balance sheet to ensure that we can
execute our organic growth plan and be prepared when external
acquisition opportunities become available. This strategy has
allowed us to build a first-class portfolio of manufactured housing
communities that deliver shareholders a resilient and growing
dividend, greater scale, and improved net asset value per
share.”
UMH Properties, Inc. will host its Second
Quarter 2024 Financial Results Webcast and Conference Call. Senior
management will discuss the results, current market conditions and
future outlook on Wednesday, August 7, 2024, at 10:00 a.m. Eastern
Time.
The Company’s 2024 second quarter financial
results being released herein will be available on the Company’s
website at www.umh.reit in the “Financials” section.
To participate in the webcast, select the
webcast icon on the homepage of the Company’s website at
www.umh.reit, in the Upcoming Events section. Interested parties
can also participate via conference call by calling toll free
877-513-1898 (domestically) or 412-902-4147 (internationally).
The replay of the conference call will be
available at 12:00 p.m. Eastern Time on Wednesday, August 7, 2024,
and can be accessed by dialing toll free 877-344-7529
(domestically) and 412-317-0088 (internationally) and entering the
passcode 7242441. 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 136
manufactured home communities containing approximately 25,800
developed homesites. These communities are located in New Jersey,
New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland,
Michigan, Alabama, South Carolina and Georgia. UMH also has an
ownership interest in and operates two communities in Florida,
containing 363 sites, through its joint venture with Nuveen Real
Estate.
Certain statements included in this press
release which are not historical facts may be deemed
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any such forward-looking
statements are based on the Company’s current expectations and
involve various risks and uncertainties. Although the Company
believes the expectations reflected in any forward-looking
statements are based on reasonable assumptions, the Company can
provide no assurance those expectations will be achieved. The risks
and uncertainties that could cause actual results or events to
differ materially from expectations are contained in the Company’s
annual report on Form 10-K and described from time to time in the
Company’s other filings with the SEC. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements whether as a result of new information, future events,
or otherwise.
Note:
(1) Non-GAAP Information: We assess and measure
our overall operating results based upon an industry performance
measure referred to as Funds from Operations Attributable to Common
Shareholders (“FFO”), which management believes is a useful
indicator of our operating performance. FFO is used by industry
analysts and investors as a supplemental operating performance
measure of a REIT. FFO, as defined by The National Association of
Real Estate Investment Trusts (“NAREIT”), represents net income
(loss) attributable to common shareholders, as defined by
accounting principles generally accepted in the United States of
America (“U.S. GAAP”), excluding gains or losses from sales of
previously depreciated real estate assets, impairment charges
related to depreciable real estate assets, the change in the fair
value of marketable securities, and the gain or loss on the sale of
marketable securities plus certain non-cash items such as real
estate asset depreciation and amortization. Included in the NAREIT
FFO White Paper - 2018 Restatement, is an option pertaining to
assets incidental to our main business in the calculation of NAREIT
FFO to make an election to include or exclude gains and losses on
the sale of these assets, such as marketable equity securities, and
include or exclude mark-to-market changes in the value recognized
on these marketable equity securities. In conjunction with the
adoption of the FFO White Paper - 2018 Restatement, for all periods
presented, we have elected to exclude the gains and losses realized
on marketable securities investments and the change in the fair
value of marketable securities from our FFO calculation. NAREIT
created FFO as a non-U.S. GAAP supplemental measure of REIT
operating performance. We define Normalized Funds from Operations
Attributable to Common Shareholders (“Normalized FFO”), as FFO
excluding certain one-time charges. FFO and Normalized FFO should
be considered as supplemental measures of operating performance
used by REITs. FFO and Normalized FFO exclude historical cost
depreciation as an expense and may facilitate the comparison of
REITs which have a different cost basis. However, other REITs may
use different methodologies to calculate FFO and Normalized FFO
and, accordingly, our FFO and Normalized FFO may not be comparable
to all other REITs. The items excluded from FFO and Normalized FFO
are significant components in understanding the Company’s financial
performance.
FFO and Normalized FFO (i) do not represent Cash
Flow from Operations as defined by U.S. GAAP; (ii) should not be
considered as alternatives to net income (loss) as a measure of
operating performance or to cash flows from operating, investing
and financing activities; and (iii) are not alternatives to cash
flow as a measure of liquidity. FFO and Normalized FFO, as
calculated by the Company, may not be comparable to similarly
titled measures reported by other REITs.
The diluted weighted shares outstanding used in
the calculation of FFO per Diluted Common Share and Normalized FFO
per Diluted Common Share were 71.9 million and 70.7 million shares
for the three and six months ended June 30, 2024, respectively, and
61.8 million and 60.8 million shares for the three and six months
ended June 30, 2023, respectively. Common stock equivalents
resulting from stock options in the amount of 409,000 for the six
months ended June 30, 2024, were excluded from the computation of
the Diluted Net Loss per Share as their effect would be
anti-dilutive. Common stock equivalents resulting from employee
stock options to purchase 4.0 million shares of common stock
amounted to 466,000 shares, for the three months ended June 30,
2024, were included in the computation of Diluted Net Income per
Share. Common stock equivalents resulting from stock options in the
amount of 524,000 and 658,000 shares for the three and six months
ended June 30, 2023, respectively, were excluded from the
computation of the Diluted Net Loss per Share as their effect would
be anti-dilutive.
The reconciliation of the Company’s U.S. GAAP
net income (loss) to the Company’s FFO and Normalized FFO for the
three and six months ended June 30, 2024 and 2023 are calculated as
follows (in thousands):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Net Income
(Loss) Attributable to Common Shareholders |
|
$ |
527 |
|
|
$ |
(4,418 |
) |
|
$ |
(5,737 |
) |
|
$ |
(9,715 |
) |
Depreciation
Expense |
|
|
15,001 |
|
|
|
13,751 |
|
|
|
29,742 |
|
|
|
27,124 |
|
Depreciation
Expense from Unconsolidated Joint Venture |
|
|
204 |
|
|
|
166 |
|
|
|
401 |
|
|
|
325 |
|
(Gain) Loss
on Sales of Depreciable Assets |
|
|
10 |
|
|
|
(5 |
) |
|
|
13 |
|
|
|
(37 |
) |
(Increase)
Decrease in Fair Value of Marketable Securities |
|
|
(3,338 |
) |
|
|
2,548 |
|
|
|
2,031 |
|
|
|
4,943 |
|
Loss on
Sales of Marketable Securities, net |
|
|
3,778 |
|
|
|
1 |
|
|
|
3,778 |
|
|
|
43 |
|
FFO
Attributable to Common Shareholders |
|
|
16,182 |
|
|
|
12,043 |
|
|
|
30,228 |
|
|
|
22,683 |
|
Amortization
of Financing Costs |
|
|
607 |
|
|
|
538 |
|
|
|
1,163 |
|
|
|
1,056 |
|
Non-Recurring Other Expense (a) |
|
|
18 |
|
|
|
468 |
|
|
|
433 |
|
|
|
1,030 |
|
Normalized FFO Attributable to Common
Shareholders |
|
$ |
16,807 |
|
|
$ |
13,049 |
|
|
$ |
31,824 |
|
|
$ |
24,769 |
|
(a) Consists of non-recurring one-time legal
fees ($18 and $51, respectively), and costs associated with the
liquidation/sale of inventory in a particular sales center ($0 and
$382, respectively) for the three and six months ended June 30,
2024. Consists of special bonus and restricted stock grants for the
August 2020 groundbreaking Fannie Mae financing, which are being
expensed over the vesting period ($431 and $862, respectively) and
non-recurring expenses for the joint venture with Nuveen ($3 and
$50, respectively), one-time legal fees ($30 and $50,
respectively), fees related to the establishment of the OZ Fund ($4
and $37, respectively), and costs associated with an acquisition
that was not completed ($0 and $31, respectively) for the three and
six months ended June 30, 2023.
The following are the cash flows provided by
(used in) operating, investing and financing activities for the six
months ended June 30, 2024 and 2023 (in thousands):
|
|
2024 |
|
|
2023 |
|
Operating
Activities |
|
$ |
37,605 |
|
|
$ |
53,002 |
|
Investing
Activities |
|
|
(58,758 |
) |
|
|
(94,396 |
) |
Financing
Activities |
|
|
7,598 |
|
|
|
49,706 |
|
(2) |
The
following are the assumptions used in the 2024 Normalized FFO
guidance: |
|
- |
Rent
increases of 5%; |
|
- |
Occupancy
of 400 rental units in the second half of 2024; |
|
- |
Overall
capital needs to fund rental home purchases, notes, expansions, and
improvements of approximately $110-$120 million for the year; |
|
- |
Includes
the opportunistic sales of common and preferred stock through our
ATM programs; and |
|
- |
Excludes
any potential acquisitions, dispositions, and development
projects. |
Contact: Nelli
Madden732-577-9997
# # # #
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