UMH PROPERTIES, INC. REPORTS RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2022
UMH Properties, Inc. (NYSE:UMH) reported a Total Income of $45.9 million for Q1 2022, marking a 6% increase from $43.1 million in Q1 2021. However, the company faced a Net Loss of $4.3 million or $0.09 per diluted share, in contrast to a Net Income of $6.8 million or $0.16 per diluted share in the previous year. Funds from Operations (FFO) were slightly up at $8.5 million ($0.16 per share) compared to $8.4 million ($0.19 per share) a year earlier. Notably, the company raised its quarterly dividend by 5.3% to $0.20 per share, signaling confidence despite losses.
- Increased Total Income by 6% to $45.9 million.
- Raised quarterly common stock dividend by 5.3% to $0.20 per share.
- Achieved a 7% increase in Rental and Related Income.
- Improved Operating Expense ratio to 43.5%, a decrease of 80 basis points.
- Expanded rental home portfolio by 3% to approximately 8,800 homes.
- Reported a Net Loss of $4.3 million compared to $6.8 million Net Income in Q1 2021.
- Normalized FFO declined to $0.17 per diluted share from $0.20 per diluted share year-over-year.
- Loss on Sales of Marketable Securities totaled $30.7 million, impacting profitability.
- Increased fair value loss on marketable securities by $31.8 million compared to prior year.
FREEHOLD, NJ, May 04, 2022 (GLOBE NEWSWIRE) -- UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended March 31, 2022 of
Funds from Operations Attributable to Common Shareholders (“FFO”), was
A summary of significant financial information for the three months ended March 31, 2022 and 2021 is as follows (in thousands except per share amounts):
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2022 | 2021 | |||||||
| Total Income | $ | 45,868 | $ | 43,132 | ||||
| Total Expenses | $ | 37,824 | $ | 36,188 | ||||
| Gain (Loss) on Sales on Marketable Securities | $ | 30,721 | $ | (730 | ) | |||
| Increase (Decrease) in Fair Value of Marketable Securities | $ | (31,750 | ) | $ | 10,219 | |||
| Net Income (Loss) Attributable to Common Shareholders | $ | (4,325 | ) | $ | 6,839 | |||
| Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share | $ | (0.09 | ) | $ | 0.16 | |||
| FFO (1) | $ | 8,544 | $ | 8,381 | ||||
| FFO (1) per Diluted Common Share | $ | 0.16 | $ | 0.19 | ||||
| Normalized FFO (1) | $ | 8,975 | $ | 8,701 | ||||
| Normalized FFO (1) per Diluted Common Share | $ | 0.17 | $ | 0.20 | ||||
| Diluted Weighted Average Shares Outstanding | 52,301 | 43,275 | ||||||
A summary of significant balance sheet information as of March 31, 2022 and December 31, 2021 is as follows (in thousands):
| March 31, 2022 | December 31, 2021 | |||||||
| Gross Real Estate Investments | $ | 1,221,700 | $ | 1,205,091 | ||||
| Marketable Securities at Fair Value | $ | 56,971 | $ | 113,748 | ||||
| Total Assets | $ | 1,413,826 | $ | 1,270,820 | ||||
| Mortgages Payable, net | $ | 474,466 | $ | 452,567 | ||||
| Loans Payable, net | $ | 41,874 | $ | 46,757 | ||||
| Bonds Payable, net | $ | 98,821 | $ | -0- | ||||
| Total Shareholders’ Equity | $ | 769,614 | $ | 742,140 | ||||
Samuel A. Landy, President and CEO, commented on the results of the first quarter of 2022.
“We are pleased to announce another solid quarter of operating results and an excellent start to 2022. During the quarter, we:
- Increased Rental and Related Income by
7% ; - Increased Community Net Operating Income (“NOI”) by
9% ; - Improved our Operating Expense ratio by 80 basis points to
43.5% ; - Increased Same Property NOI by
5% ; - Increased Same Property Occupancy by 70 basis points from
86.0% to86.7% ; - Increased our rental home portfolio by 52 homes from yearend 2021 to approximately 8,800 total rental homes, representing an increase of
3% ; - Acquired one community containing 97 homesites for a total cost of approximately
$5.8 million ; - Issued
$102.7 million of4.72% Series A Bonds due 2027 in an offering to investors in Israel, for total proceeds of$98.7 million , net of offering expenses; - Completed the addition of approximately 1,100 homes to our Fannie Mae credit facility, for total proceeds of approximately
$25.6 million ; - Raised our quarterly common stock dividend by
5.3% to$0.20 per share or$0.80 annually; - Issued and sold approximately 1.6 million shares of Common Stock through At-the-Market Sale Programs for our Common Stock at a weighted average price of
$24.59 per share, generating gross proceeds of$39.0 million and net proceeds of$38.4 million , after offering expenses; - Reduced our Net Debt to Total Market Capitalization from
16% at yearend 2021 to13% at quarter end; - Subsequent to quarter end, issued and sold approximately 739,000 shares of Common Stock through an At-the-Market Sale Program for our Common Stock at a weighted average price of
$24.32 per share, generating gross proceeds of$18.0 million and net proceeds of$17.7 million , after offering expenses; and - Subsequent to quarter end, acquired one community containing 132 homesites for a total cost of approximately
$7.4 million .”
Mr. Landy stated, “UMH is well positioned for future earnings growth through reduced capital costs and improved operations. We had a busy quarter in both the debt and capital markets in anticipation of the recapitalization of our
“Over the past few years UMH has grown into a much larger company with a stable and growing income stream derived from our 24,100 manufactured home sites and our 8,800 rental units. We are proud that the strength of our company and this stable income stream has been recognized through our corporate level investment grade rating of il.A+ from S&P Global Ratings Maalot Ltd.”
“The addition of rental homes to our Fannie Mae credit facility is a major milestone for the company and for the industry. We have been working to obtain GSE acceptance of rental homes in land-lease communities for years. We have over
“Our communities continue to experience strong demand for both sales and rentals. Our biggest challenge remains the delay in procurement of homes from our manufacturers. We have over 1,300 homes on order, including 300 new homes that have been delivered and are in various stages of setup. This inventory, as well as future deliveries, will allow us to deliver strong occupancy and revenue growth throughout the remainder of the year. Our expense increases should be offset by additional revenue growth from increased occupancy and rent increases.”
“We have significant internal upside that can be realized through the infill of vacant sites, development of our vacant land and increased sales profitability. We also have a strong acquisition pipeline of both existing communities and development opportunities that will allow us to grow externally. We have a proven business plan designed to create long-term value for our shareholders.”
UMH Properties, Inc. will host its First Quarter 2022 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, May 5, 2022, at 10:00 a.m. Eastern Time.
The Company’s 2022 first 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 844-200-6205 (domestically) or 929-526-1599 (internationally) and entering the passcode 017683.
The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, May 5, 2022, and can be accessed by dialing toll free 866-813-9403 (domestically) and +44 204-525-0658 (internationally) and entering the passcode 989071. 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 129 manufactured home communities containing approximately 24,200 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama and South Carolina. UMH also has an ownership interest in and operates one community in Florida, containing 219 sites, through its joint venture with Nuveen Real Estate.
Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company’s current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company’s annual report on Form 10-K and described from time to time in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
Note:
(1) Non-GAAP Information: We assess and measure our overall operating results based upon an industry performance measure referred to as Funds from Operations Attributable to Common Shareholders (“FFO”), which management believes is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), represents net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in the United States of America (“U.S. GAAP”), excluding extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, the change in the fair value of marketable securities, and the gain or loss on the sale of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the NAREIT FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of NAREIT FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities, and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the gains and losses realized on marketable securities investments and the change in the fair value of marketable securities from our FFO calculation. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO excluding certain one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs. FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding the Company’s financial performance.
FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as alternatives to net income (loss) as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity.
The reconciliation of the Company’s U.S. GAAP net loss to the Company’s FFO and Normalized FFO for the three months ended March 31, 2022 and 2021 are calculated as follows (in thousands):
| Three Months Ended | |||||||||
| March 31, 2022 | March 31, 2021 | ||||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | (4,325 | ) | $ | 6,839 | ||||
| Depreciation Expense | 11,717 | 11,008 | |||||||
| Depreciation Expense from Unconsolidated Joint Venture | 81 | -0- | |||||||
| Loss on Sales of Depreciable Assets | 42 | 23 | |||||||
| (Increase) Decrease in Fair Value of Marketable Securities | 31,750 | (10,219 | ) | ||||||
| (Gain) Loss on Sales of Marketable Securities, net | (30,721 | ) | 730 | ||||||
| FFO Attributable to Common Shareholders | 8,544 | 8,381 | |||||||
| Non- Recurring Other Expense (2) | 431 | 320 | |||||||
| Normalized FFO Attributable to Common Shareholders | $ | 8,975 | $ | 8,701 | |||||
The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 53.7 million shares for the three months ended March 31, 2022 and 43.3 million shares for the three months ended March 31, 2021. Common stock equivalents resulting from stock options in the amount of 1.4 million shares for the three months ended March 31, 2022 were excluded from the computation of Diluted Net Loss per Share as their effect would have been anti-dilutive. Common stock equivalents resulting from stock options in the amount of 898,000 shares for the three months ended March 31, 2021 were included in the computation of Diluted Net Income per share.
The following are the cash flows provided (used) by operating, investing and financing activities for the three months ended March 31, 2022 and 2021 (in thousands):
| 2022 | 2021 | |||||||
| Operating Activities | $ | 5,608 | $ | 13,215 | ||||
| Investing Activities | 34,617 | (18,726 | ) | |||||
| Financing Activities | 138,461 | 16,971 |
(2) Consists of special bonus and restricted stock grants for the August 2020 groundbreaking Fannie Mae financing.
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| Contact: Nelli Madden |
| 732-577-9997 |
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