8-K
UMH PROPERTIES, INC. (UMH)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Dateof Report (Date of earliest event reported): November 8, 2022
UMHProperties, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 001-12690 | 22-1890929 |
|---|---|---|
| (State<br> or other jurisdiction | (Commission | (IRS<br> Employer |
| of<br> incorporation) | File<br> Number) | Identification<br> No.) |
| Juniper Business Plaza, 3499 Route 9 North, Suite 3-C, Freehold, NJ | 07728 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip<br> Code) |
Registrant’s
telephone number, including area code:(732) 577-9997
NotApplicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities<br>Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a- 12 under the Exchange<br>Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities
registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol(s) | Name<br> of exchange on which registered |
|---|---|---|
| Common<br> Stock, $.10 par value | UMH | New<br> York Stock Exchange |
| 6.375%<br> Series D Cumulative Redeemable Preferred Stock, $.10 par value | UMH<br> PRD | New<br> York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item2.02 Results of Operations and Financial Condition.
Item7.01 Regulation FD Disclosure.
On November 8, 2022, UMH Properties, Inc. issued a press release announcing the results for the third quarter September 30, 2022 and disclosed a supplemental information package in connection with its earnings conference call for the third quarter September 30, 2022. A copy of the supplemental information package and press release is furnished with this report as Exhibit 99 and is incorporated herein by reference.
The information in this report and the exhibit attached hereto is being furnished, not filed, for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to Item 2.02 and Item 7.01 of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Forward-Looking Statements
Statements contained in this report, including the document that is incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995 (the “Exchange Act”). All statements, other than statements of historical facts that address activities, events or developments where the Company uses any of the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” or similar expressions, are forward-looking statements. These forward-looking statements are not guaranteed and are based on the Company’s current intentions and on the Company’s current expectations and assumptions. These statements, intentions, expectations and assumptions involve risks and uncertainties, some of which are beyond the Company’s control that could cause actual results or events to differ materially from those that the Company anticipates or projects, such as:
| ● | changes<br> in the real estate market conditions and general economic conditions; |
|---|---|
| ● | the<br> inherent risks associated with owning real estate, including local real estate market conditions,<br> governing laws and regulations affecting manufactured housing communities and illiquidity<br> of real estate investments; |
| ● | increased<br> competition in the geographic areas in which we own and operate manufactured housing communities; |
| ● | our<br> ability to continue to identify, negotiate and acquire manufactured housing communities and/or<br> vacant land which may be developed into manufactured housing communities on terms favorable<br> to us; |
| ● | our<br> ability to maintain rental rates and occupancy levels; |
| ● | changes<br> in market rates of interest; |
| ● | inflation,<br> including increases in commodity prices and the cost of purchasing manufactured homes; |
| ● | our<br> ability to purchase manufactured homes for rental or sale; |
| ● | our<br> ability to repay debt financing obligations; |
| 2 |
| --- | | ● | our<br> ability to refinance amounts outstanding under our credit facilities at maturity on terms<br> favorable to us; | | --- | --- | | ● | our<br> ability to comply with certain debt covenants; | | ● | our<br> ability to integrate acquired properties and operations into existing operations; | | ● | the<br> availability of other debt and equity financing alternatives; | | ● | continued<br> ability to access the debt or equity markets; | | ● | the<br> loss of any member of our management team; | | ● | our<br> ability to maintain internal controls and processes to ensure all transactions are accounted<br> for properly, all relevant disclosures and filings are timely made in accordance with all<br> rules and regulations, and any potential fraud or embezzlement is thwarted or detected; | | ● | the<br> ability of manufactured home buyers to obtain financing; | | ● | the<br> level of repossessions by manufactured home lenders; | | ● | market<br> conditions affecting our investment securities; | | ● | changes<br> in federal or state tax rules or regulations that could have adverse tax consequences; and | | ● | our<br> ability to qualify as a real estate investment trust for federal income tax purposes. |
Item9.01 Financial Statements and Exhibits.
| (d) | Exhibits. |
|---|---|
| 99 | Supplemental information package for the third quarter September 30, 2022 and press release dated November 8, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline<br>XBRL document). |
| 3 |
| --- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UMH Properties, Inc. | ||
|---|---|---|
| Date:<br> November 8, 2022 | By: | /s/ Anna T. Chew |
| Name: | Anna<br> T. Chew | |
| Title: | Vice<br>President and Chief Financial Officer |
| 4 |
| --- |
Exhibit99
Tableof 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 without Non-Recurring Other Expense 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 November 8, 2022 | 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. | Third Quarter FY 2022 Supplemental Information | 2 |
| --- | --- |
FinancialHighlights
(dollarsin thousands except per share amounts) (unaudited)
| Three<br> Months Ended | Nine<br> Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30,<br> <br>2022 | September 30,<br> <br>2021 | September 30,<br> <br>2022 | September<br> 30, 2021 | |||||||||
| Operating<br> Information | ||||||||||||
| Number<br> of Communities | 132 | 127 | ||||||||||
| Number<br> of Sites | 24,975 | 23,973 | ||||||||||
| Rental<br> and Related Income | $ | 42,893 | $ | 40,248 | $ | 126,699 | $ | 118,302 | ||||
| Community<br> Operating Expenses | $ | 19,181 | $ | 16,833 | $ | 56,175 | $ | 51,015 | ||||
| Community<br> NOI | $ | 23,712 | $ | 23,415 | $ | 70,524 | $ | 67,287 | ||||
| Expense<br> Ratio | 44.7 | % | 41.8 | % | 44.3 | % | 43.1 | % | ||||
| Sales<br> of Manufactured Homes | $ | 9,044 | $ | 7,782 | $ | 20,329 | $ | 21,819 | ||||
| Number<br> of Homes Sold | 89 | 101 | 236 | 294 | ||||||||
| Number<br> of Rentals Added | 142 | 96 | 293 | 448 | ||||||||
| Net<br> Income (Loss) | $ | (5,218 | ) | $ | 4,197 | $ | (8,631 | ) | $ | 34,078 | ||
| Net<br> Income (Loss) Attributable to Common Shareholders | $ | (9,745 | ) | $ | (3,403 | ) | $ | (36,548 | ) | $ | 11,839 | |
| Adjusted<br> EBITDA without Non-Recurring Other Expense | $ | 23,242 | $ | 23,521 | $ | 68,119 | $ | 67,080 | ||||
| FFO<br> Attributable to Common Shareholders | $ | 10,292 | $ | 10,822 | $ | 18,516 | $ | 29,058 | ||||
| Normalized<br> FFO Attributable to Common Shareholders | $ | 11,678 | $ | 11,146 | $ | 29,348 | $ | 30,128 | ||||
| Shares<br> Outstanding and Per Share Data | ||||||||||||
| Weighted<br> Average Shares Outstanding | ||||||||||||
| Basic | 54,891 | 47,778 | 53,746 | 45,212 | ||||||||
| Diluted | 54,891 | 47,778 | 53,746 | 46,247 | ||||||||
| Net<br> Income (Loss) Attributable to Common | ||||||||||||
| Shareholders<br> per Share- | ||||||||||||
| Basic | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.68 | ) | $ | 0.27 | |
| Diluted | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.68 | ) | $ | 0.28 | |
| FFO<br> per Share- | ||||||||||||
| Basic and Diluted | $ | 0.19 | $ | 0.22 | $ | 0.34 | $ | 0.63 | ||||
| Normalized<br> FFO per Share- | ||||||||||||
| Basic and Diluted | $ | 0.21 | $ | 0.23 | $ | 0.54 | $ | 0.65 | ||||
| Dividends<br> per Common Share | $ | 0.20 | $ | 0.19 | $ | 0.60 | $ | 0.57 | ||||
| Balance<br> Sheet | ||||||||||||
| Total<br> Assets | $ | 1,266,900 | $ | 1,205,734 | ||||||||
| Total<br> Liabilities | $ | 755,348 | $ | 536,099 | ||||||||
| Market<br> Capitalization | ||||||||||||
| Total<br> Debt, Net of Unamortized Debt Issuance Costs | $ | 726,061 | $ | 507,336 | ||||||||
| Equity<br> Market Capitalization | $ | 890,486 | $ | 1,114,266 | ||||||||
| Series<br> C Preferred Stock | $ | -0- | $ | 247,100 | ||||||||
| Series<br> D Preferred Stock | $ | 215,407 | $ | 215,219 | ||||||||
| Total<br> Market Capitalization | $ | 1,831,954 | $ | 2,083,921 |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 3 |
| --- | --- |
ConsolidatedBalance Sheets
(in thousands except per share amounts)
| December<br> 31, | |||||
|---|---|---|---|---|---|
| 2021 | |||||
| (unaudited) | |||||
| ASSETS | |||||
| Investment<br> Property and Equipment | |||||
| Land | 81,114 | $ | 74,963 | ||
| Site<br> and Land Improvements | 772,468 | 716,211 | |||
| Buildings<br> and Improvements | 33,260 | 30,450 | |||
| Rental<br> Homes and Accessories | 410,531 | 383,467 | |||
| Total Investment Property | 1,297,373 | 1,205,091 | |||
| Equipment<br> and Vehicles | 25,916 | 24,437 | |||
| Total Investment Property and Equipment | 1,323,289 | 1,229,528 | |||
| Accumulated<br> Depreciation | (350,762 | ) | (316,073 | ) | |
| Net Investment Property and Equipment | 972,527 | 913,455 | |||
| Other<br> Assets | |||||
| Cash<br> and Cash Equivalents | 62,512 | 116,175 | |||
| Marketable<br> Securities at Fair Value | 39,217 | 113,748 | |||
| Inventory<br> of Manufactured Homes | 57,206 | 23,659 | |||
| Notes<br> and Other Receivables, net | 65,103 | 55,359 | |||
| Prepaid<br> Expenses and Other Assets | 20,628 | 17,135 | |||
| Land<br> Development Costs | 38,949 | 22,352 | |||
| Investment<br> in Joint Venture | 10,758 | 8,937 | |||
| Total Other Assets | 294,373 | 357,365 | |||
| TOTAL<br> ASSETS | 1,266,900 | $ | 1,270,820 | ||
| LIABILITIES<br> AND SHAREHOLDERS’ EQUITY | |||||
| Liabilities | |||||
| Mortgages<br> Payable, net of unamortized debt issuance costs | 499,697 | $ | 452,567 | ||
| Other<br> Liabilities | |||||
| Accounts<br> Payable | 6,768 | 4,274 | |||
| Loans<br> Payable, net of unamortized debt issuance costs | 127,342 | 46,757 | |||
| Series<br> A Bonds, net of unamortized debt issuance costs | 99,022 | -0- | |||
| Accrued<br> Liabilities and Deposits | 14,145 | 17,162 | |||
| Tenant<br> Security Deposits | 8,374 | 7,920 | |||
| Total Other Liabilities | 255,651 | 76,113 | |||
| Total Liabilities | 755,348 | 528,680 | |||
| COMMITMENTS<br> AND CONTINGENCIES | |||||
| Shareholders’<br> Equity: | |||||
| Series<br> C- 6.75% Cumulative Redeemable Preferred Stock, 0.10 par value per share; 3,866 and 13,750 shares authorized as of<br> September 30 2022 and December 31, 2021; 9,884 issued and outstanding as of December 31, 2021 | -0- | 247,100 | |||
| Series D- 6.375% Cumulative Redeemable Preferred Stock, 0.10 par value per<br> share; 9,300 shares authorized; 8,616 and 8,609 shares issued and outstanding<br> as of September 30, 2022 and December 31, 2021, respectively | 215,407 | 215,219 | |||
| Common<br> Stock- 0.10 par value per share: 154,048 and 144,164 shares authorized as of September 30, 2022 and December 31, 2021;<br> 55,138 and 51,651 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 5,514 | 5,165 | |||
| Excess<br> Stock- 0.10 par value per share: 3,000 shares authorized; no shares issued or outstanding as of September 30, 2022 and December 31,<br> 2021 | -0- | -0- | |||
| Additional<br> Paid-In Capital | 313,806 | 300,020 | |||
| Undistributed<br> Income (Accumulated Deficit) | (25,364 | ) | (25,364 | ) | |
| Total UMH Properties, Inc. Shareholders’ Equity | 509,363 | 742,140 | |||
| Non-Controlling<br> Interest in Consolidated Subsidiaries | 2,189 | -0- | |||
| Total Shareholders’ Equity | 511,552 | 742,140 | |||
| TOTAL<br> LIABILITIES AND SHAREHOLDERS’ EQUITY | 1,266,900 | $ | 1,270,820 |
All values are in US Dollars.
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 4 |
| --- | --- |
ConsolidatedStatements of Income (Loss)
(inthousands except per share amounts) (unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30,<br> <br>2022 | September 30,<br> <br>2021 | September 30,<br> <br>2022 | September 30,<br> <br>2021 | |||||||||
| INCOME: | ||||||||||||
| Rental and Related Income | $ | 42,893 | $ | 40,248 | $ | 126,699 | $ | 118,302 | ||||
| Sales of Manufactured Homes | 9,044 | 7,782 | 20,329 | 21,819 | ||||||||
| TOTAL INCOME | 51,937 | 48,030 | 147,028 | 140,121 | ||||||||
| EXPENSES: | ||||||||||||
| Community Operating Expenses | 19,181 | 16,833 | 56,175 | 51,015 | ||||||||
| Cost of Sales of Manufactured Homes | 6,330 | 5,826 | 14,150 | 16,314 | ||||||||
| Selling Expenses | 1,625 | 1,324 | 3,994 | 3,817 | ||||||||
| General and Administrative Expenses | 5,150 | 3,165 | 13,348 | 9,945 | ||||||||
| Depreciation Expense | 12,302 | 11,380 | 36,003 | 33,572 | ||||||||
| TOTAL EXPENSES | 44,588 | 38,528 | 123,670 | 114,663 | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||
| Interest Income | 1,080 | 857 | 3,058 | 2,466 | ||||||||
| Dividend Income | 699 | 1,267 | 2,200 | 3,856 | ||||||||
| Gain (Loss) on Sales of Marketable Securities, net | (6,405 | ) | 2,636 | 24,316 | 2,342 | |||||||
| Increase (Decrease) in Fair Value of Marketable Securities | (1,230 | ) | (5,390 | ) | (43,024 | ) | 14,120 | |||||
| Other Income | 366 | 189 | 782 | 488 | ||||||||
| Loss on Investment in Joint Venture | (116 | ) | -0- | (373 | ) | -0- | ||||||
| Interest Expense | (6,951 | ) | (4,773 | ) | (18,852 | ) | (14,543 | ) | ||||
| TOTAL OTHER INCOME (EXPENSE) | (12,557 | ) | (5,214 | ) | (31,893 | ) | 8,729 | |||||
| Income (Loss) before Loss on Sales of Investment Property and Equipment | (5,208 | ) | 4,288 | (8,535 | ) | 34,187 | ||||||
| Loss on Sales of Investment Property and Equipment | (10 | ) | (91 | ) | (96 | ) | (109 | ) | ||||
| NET INCOME (LOSS) | (5,218 | ) | 4,197 | (8,631 | ) | 34,078 | ||||||
| Preferred Dividends | (4,588 | ) | (7,600 | ) | (19,788 | ) | (22,239 | ) | ||||
| Redemption of Preferred Stock | -0- | -0- | (8,190 | ) | -0- | |||||||
| Loss Attributable to Non-Controlling Interest | 61 | -0- | 61 | -0- | ||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (9,745 | ) | $ | (3,403 | ) | $ | (36,548 | ) | $ | 11,839 | |
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS PER SHARE – | ||||||||||||
| Basic | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.68 | ) | $ | 0.27 | |
| Diluted | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.68 | ) | $ | 0.28 | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||
| Basic | 54,891 | 47,778 | 53,746 | 45,212 | ||||||||
| Diluted | 54,891 | 47,778 | 53,746 | 46,247 |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 5 |
| --- | --- |
ConsolidatedStatements of Cash Flows
(inthousands) (unaudited)
| Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net Income (Loss) | $ | (8,631 | ) | $ | 34,078 | |
| Non-Cash Items Included in Net Income (Loss): | ||||||
| Depreciation | 36,003 | 33,572 | ||||
| Amortization of Financing Costs | 1,445 | 725 | ||||
| Stock Compensation Expense | 3,912 | 2,259 | ||||
| Provision for Uncollectible Notes and Other Receivables | 979 | 823 | ||||
| Gain on Sales of Marketable Securities, net | (24,316 | ) | (2,342 | ) | ||
| (Increase) Decrease in Fair Value of Marketable Securities | 43,024 | (14,120 | ) | |||
| Loss on Sales of Investment Property and Equipment | 96 | 109 | ||||
| Changes in Operating Assets and Liabilities: | ||||||
| Inventory of Manufactured Homes | (33,547 | ) | 5,119 | |||
| Notes and Other Receivables, net of notes acquired with acquisitions | (10,054 | ) | (8,125 | ) | ||
| Prepaid Expenses and Other Assets | (3,759 | ) | (5,492 | ) | ||
| Accounts Payable | 2,494 | 295 | ||||
| Accrued Liabilities and Deposits | (3,017 | ) | (1,093 | ) | ||
| Tenant Security Deposits | 454 | 442 | ||||
| Net Cash Provided by Operating Activities | 5,083 | 46,250 | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Purchase of Manufactured Home Communities | (44,684 | ) | (19,195 | ) | ||
| Purchase of Investment Property and Equipment | (53,677 | ) | (46,527 | ) | ||
| Proceeds from Sales of Investment Property and Equipment | 2,522 | 2,023 | ||||
| Additions to Land Development Costs | (16,597 | ) | (17,111 | ) | ||
| Purchase of Marketable Securities | (14 | ) | (12 | ) | ||
| Proceeds from Sales of Marketable Securities | 55,836 | 16,835 | ||||
| Investment in Joint Venture | (1,821 | ) | -0- | |||
| Net Cash Used in Investing Activities | (58,435 | ) | (63,987 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Proceeds from Mortgages | 59,801 | 6,070 | ||||
| Net Proceeds (Payments) from Short-Term Borrowings | 80,437 | (47,339 | ) | |||
| Principal Payments of Mortgages | (11,855 | ) | (10,479 | ) | ||
| Proceeds from Bonds Issuance | 102,670 | -0- | ||||
| Financing Costs on Debt | (5,761 | ) | (127 | ) | ||
| Investments from Non-Controlling Interest | 2,250 | -0- | ||||
| Proceeds from At-The-Market Preferred Equity Program, net of offering costs | 110 | 53,213 | ||||
| Payments on Redemption of Preferred Stock | (247,100 | ) | -0- | |||
| Proceeds from At-The-Market Common Equity Program, net of offering costs | 62,753 | 110,521 | ||||
| Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments | 3,210 | 4,737 | ||||
| Proceeds from Exercise of Stock Options | 4,195 | 8,304 | ||||
| Preferred Dividends Paid | (21,178 | ) | (22,239 | ) | ||
| Common Dividends Paid, net of Dividend Reinvestments | (30,109 | ) | (23,047 | ) | ||
| Net Cash Provided by (Used in) Financing Activities | (577 | ) | 79,614 | |||
| NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (53,929 | ) | 61,877 | |||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF<br> PERIOD | 125,026 | 28,593 | ||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | 71,097 | $ | 90,470 |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 6 |
| --- | --- |
Reconciliationof Net Income (Loss) to Adjusted EBITDA without Non-Recurring Other Expense and Net Income (Loss) Attributable to Common Shareholdersto FFO and Normalized FFO
(inthousands except footnotes) (unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA without Non-Recurring Other Expense | ||||||||||||
| Net Income (Loss) | $ | (5,218 | ) | $ | 4,197 | $ | (8,631 | ) | $ | 34,078 | ||
| Interest Expense | 6,951 | 4,773 | 18,852 | 14,543 | ||||||||
| Franchise Taxes | 96 | 93 | 288 | 279 | ||||||||
| Depreciation Expense | 12,302 | 11,380 | 36,003 | 33,572 | ||||||||
| Depreciation Expense from Unconsolidated Joint Venture | 90 | -0- | 257 | -0- | ||||||||
| (Increase) Decrease in Fair Value of Marketable Securities | 1,230 | 5,390 | 43,024 | (14,120 | ) | |||||||
| (Gain) Loss on Sales of Marketable Securities, net | 6,405 | (2,636 | ) | (24,316 | ) | (2,342 | ) | |||||
| Adjusted EBITDA | 21,856 | 23,197 | 65,477 | 66,010 | ||||||||
| Non-Recurring Other Expense ^(1)^ | 1,386 | 324 | 2,642 | 1,070 | ||||||||
| Adjusted EBITDA without Non-Recurring<br> Other Expense | $ | 23,242 | $ | 23,521 | $ | 68,119 | $ | 67,080 | ||||
| Reconciliation of Net Income (Loss) Attributable to Common Shareholders to Funds from Operations | ||||||||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | (9,745 | ) | $ | (3,403 | ) | $ | (36,548 | ) | $ | 11,839 | |
| Depreciation Expense | 12,302 | 11,380 | 36,003 | 33,572 | ||||||||
| Depreciation Expense from Unconsolidated Joint Venture | 90 | -0- | 257 | -0- | ||||||||
| Loss on Sales of Depreciable Assets | 10 | 91 | 96 | 109 | ||||||||
| (Increase) Decrease in Fair Value of Marketable Securities | 1,230 | 5,390 | 43,024 | (14,120 | ) | |||||||
| (Gain) Loss on Sales of Marketable Securities, net | 6,405 | (2,636 | ) | (24,316 | ) | (2,342 | ) | |||||
| Funds from Operations Attributable to Common Shareholders (“FFO”) | 10,292 | 10,822 | 18,516 | 29,058 | ||||||||
| Adjustments: | ||||||||||||
| Redemption of Preferred Stock | -0- | -0- | 8,190 | -0- | ||||||||
| Non-Recurring Other Expense ^(1)^ | 1,386 | 324 | 2,642 | 1,070 | ||||||||
| Normalized Funds from Operations Attributable to Common Shareholders<br> (“Normalized FFO”) | $ | 11,678 | $ | 11,146 | $ | 29,348 | $ | 30,128 |
(1)For the three and nine months ended September 30, 2022, consists of special bonus and restricted stock grants for the August 2020 groundbreakingFannie Mae financing, which are being expensed over the vesting period ($431 and $1,293, respectively) and non-recurring expensesfor the joint venture with Nuveen ($2 and $54, respectively), early extinguishment of debt ($2 and $195, respectively), one-time legalfees ($38 and $187, respectively), fees related to the establishment of the Opportunity Zone Fund ($893) and costs associated with acquisitionnot completed ($20). For 2021, consists of special bonus and restricted stock grants for the August 2020 groundbreaking Fannie Mae financing,which are being expensed over the vesting period.
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 7 |
| --- | --- |
MarketCapitalization, Debt and Coverage Ratios
(inthousands) (unaudited)
| Nine Months Ended | Year Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | December 31, 2021 | |||||||
| Shares Outstanding | 55,138 | 48,658 | 51,651 | ||||||
| Market Price Per Share | $ | 16.15 | $ | 22.90 | $ | 27.33 | |||
| Equity Market Capitalization | $ | 890,486 | $ | 1,114,266 | $ | 1,411,624 | |||
| Total Debt | 726,061 | 507,336 | 499,324 | ||||||
| Preferred | 215,407 | 462,319 | 462,319 | ||||||
| Total Market Capitalization | $ | 1,831,954 | $ | 2,083,921 | $ | 2,373,267 | |||
| Total Debt | $ | 726,061 | $ | 507,336 | $ | 499,324 | |||
| Less: Cash and Cash Equivalents | (62,512 | ) | (82,435 | ) | (116,175 | ) | |||
| Net Debt | 663,549 | 424,901 | 383,149 | ||||||
| Less: Marketable Securities at Fair Value (“Securities”) | (39,217 | ) | (102,811 | ) | (113,748 | ) | |||
| Net Debt Less Securities | $ | 624,332 | $ | 322,090 | $ | 269,401 | |||
| Interest Expense | $ | 18,852 | $ | 14,543 | $ | 19,158 | |||
| Capitalized Interest | 1,290 | 1,051 | 1,476 | ||||||
| Preferred Dividends | 19,788 | 22,239 | 29,839 | ||||||
| Total Fixed Charges | $ | 39,930 | $ | 37,833 | $ | 50,473 | |||
| Adjusted EBITDA without Non-Recurring Other Expense | $ | 68,119 | $ | 67,080 | $ | 90,312 | |||
| Debt and Coverage Ratios | |||||||||
| Net Debt / Total Market Capitalization | 36.2 | % | 20.4 | % | 16.1 | % | |||
| Net Debt Plus Preferred / Total Market Capitalization | 48.0 | % | 42.6 | % | 35.6 | % | |||
| Net Debt Less Securities / Total Market Capitalization | 34.1 | % | 15.5 | % | 11.4 | % | |||
| Net Debt Less Securities Plus Preferred / Total Market Capitalization | 45.8 | % | 37.6 | % | 30.8 | % | |||
| Interest Coverage | 3.4 | x | 4.3 | x | 4.4 | x | |||
| Fixed Charge Coverage | 1.7 | x | 1.8 | x | 1.8 | x | |||
| Net Debt / Adjusted EBITDA without Non-Recurring Other Expense | 7.3 | x | 4.8 | x | 4.2 | x | |||
| Net Debt Less Securities / Adjusted EBITDA without Non-Recurring Other Expense | 6.9 | x | 3.6 | x | 3.0 | x | |||
| Net Debt Plus Preferred / Adjusted EBITDA without Non-Recurring Other Expense | 9.7 | x | 9.9 | x | 9.4 | x | |||
| Net Debt Less Securities Plus Preferred / Adjusted EBITDA without Non-Recurring Other Expense | 9.2 | x | 8.8 | x | 8.1 | x |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 8 |
| --- | --- |
DebtAnalysis
(inthousands) (unaudited)
| Nine Months Ended | Year Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | December 31, 2021 | |||||||
| Debt Outstanding | |||||||||
| Mortgages Payable: | |||||||||
| Fixed Rate Mortgages | $ | 504,647 | $ | 471,881 | $ | 456,702 | |||
| Unamortized Debt Issuance Costs | (4,950 | ) | (4,354 | ) | (4,135 | ) | |||
| Mortgages, Net of Unamortized Debt Issuance Costs | $ | 499,697 | $ | 467,527 | $ | 452,567 | |||
| Loans Payable: | |||||||||
| Unsecured Line of Credit | $ | 75,000 | $ | 25,000 | $ | 25,000 | |||
| Other Loans Payable | 52,382 | 15,014 | 21,945 | ||||||
| Total Loans Before Unamortized Debt Issuance Costs | 127,382 | 40,014 | 46,945 | ||||||
| Unamortized Debt Issuance Costs | (40 | ) | (205 | ) | (188 | ) | |||
| Loans, Net of Unamortized Debt Issuance Costs | $ | 127,342 | $ | 39,809 | $ | 46,757 | |||
| Bonds Payable: | |||||||||
| Series A Bonds | $ | 102,670 | $ | -0- | $ | -0- | |||
| Unamortized Debt Issuance Costs | (3,648 | ) | -0- | -0- | |||||
| Bonds, Net of Unamortized Debt Issuance Costs | $ | 99,022 | $ | -0- | $ | -0- | |||
| Total Debt, Net of Unamortized Debt Issuance Costs | $ | 726,061 | $ | 507,336 | $ | 499,324 | |||
| % Fixed/Floating | |||||||||
| Fixed | 82.7 | % | 92.2 | % | 90.7 | % | |||
| Floating | 17.3 | % | 7.8 | % | 9.3 | % | |||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | |||
| Weighted Average Interest Rates ^(1)^ | |||||||||
| Mortgages Payable | 3.87 | % | 3.79 | % | 3.75 | % | |||
| Loans Payable | 4.97 | % | 2.34 | % | 2.66 | % | |||
| Bonds Payable | 4.72 | % | N/A | N/A | |||||
| Total Average | 4.18 | % | 3.68 | % | 3.65 | % | |||
| Weighted Average Maturity (Years) Mortgages Payable | 5.1 | 5.3 | 5.2 |
| (1) | Weighted average interest rates do not include the effect of unamortized debt issuance costs. |
|---|
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 9 |
| --- | --- |
DebtMaturity
(inthousands) (unaudited)
Asof September 30, 2022:
| Fiscal Year Ended | Mortgages | Loans | Bonds | Total | % of Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | $ | 6,389 | $ 127,382 | (1) | $ | -0- | $ | 133,771 | 18.2 | % | |||||
| 2023 | 59,249 | -0- | -0- | 59,249 | 8.1 | % | |||||||||
| 2024 | -0- | -0- | -0- | -0- | 0.0 | % | |||||||||
| 2025 | 125,961 | -0- | -0- | 125,961 | 17.2 | % | |||||||||
| 2026 | 38,568 | -0- | -0- | 38,568 | 5.2 | % | |||||||||
| Thereafter | 274,480 | -0- | 102,670 | (2) | 377,150 | 51.3 | % | ||||||||
| Total Debt Before Unamortized Debt Issuance Cost | 504,647 | 127,382 | 102,670 | 734,699 | 100.0 | % | |||||||||
| Unamortized Debt Issuance Cost | (4,950 | ) | (40 | ) | (3,648 | ) | (8,638 | ) | |||||||
| Total Debt, Net of Unamortized Debt Issuance Costs | $ | 499,697 | $ | 127,342 | $ | 99,022 | $ | 726,061 | |||||||
| (1) | Includes $75.0 million balance outstanding on the Company’s Line of Credit due November 2022, with an additional one-year option. Subsequent to quarter end, the Company entered into a Second Amended and Restated Credit Agreement to expand and extend, to November 2026, it’s exiting credit agreement. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Represents $102.7 million balance outstanding of the Company’s Series A Bonds due February 28, 2027. |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 10 |
| --- | --- |
SecuritiesPortfolio Performance
(inthousands)
| Year<br> Ended | Securities<br> Available for Sale | Dividend<br> Income | Net<br> Realized Gain on Sale of Securities | Net<br> 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 | 103,172 | 5,729 | -0- | 5,729 | ||||
| 2021 | 113,748 | 5,098 | 2,342 | 7,440 | ||||
| 2022* | 39,217 | 2,200 | 24,316 | 26,516 | ||||
| $ | 65,165 | $ | 45,327 | $ | 110,492 |
*Forthe Nine Months ended September 30, 2022.
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 11 |
| --- | --- |
PropertySummary and Snapshot
(unaudited)
| September<br> 30, 2022 | September<br> 30, 2021 | %<br> Change | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Communities | 132 | 127 | 3.9 | % | ||||||||||||||||||||||
| Developed<br> Sites | 24,975 | 23,973 | 4.2 | % | ||||||||||||||||||||||
| Occupied | 21,198 | 20,655 | 2.6 | % | ||||||||||||||||||||||
| Occupancy<br> % | 84.9 | % | 86.2 | % | (130 | bps) | ||||||||||||||||||||
| Total<br> Rentals | 8,999 | 8,700 | 3.4 | % | ||||||||||||||||||||||
| Occupied<br> Rentals | 8,489 | 8,273 | 2.6 | % | ||||||||||||||||||||||
| Rental<br> Occupancy % | 94.3 | % | 95.1 | % | (80 | bps) | ||||||||||||||||||||
| Monthly<br> Rent Per Site | $ | 492 | $ | 470 | 4.7 | % | ||||||||||||||||||||
| Monthly<br> Rent Per Home Rental Including Site | $ | 854 | $ | 809 | 5.6 | % | ||||||||||||||||||||
| State | Number | Total Acreage | Developed Acreage | Vacant Acreage | Total Sites | Occupied<br> <br>Sites | Occupancy Percentage | Monthly Rent Per Site | Total Rentals | Occupied Rentals | Rental Occupancy Percentage | Monthly Rent Per Home Rental | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (1) | (1) | (2) | ||||||||||||||||||||||||
| Alabama | 2 | 69 | 62 | 7 | 331 | 77 | 23.3 | % | $ | 321 | 45 | 39 | 86.7 | % | $ | 834 | ||||||||||
| Indiana | 14 | 1,105 | 893 | 212 | 4,004 | 3,460 | 86.4 | % | $ | 456 | 1,781 | 1,666 | 93.5 | % | $ | 844 | ||||||||||
| Maryland | 1 | 77 | 10 | 67 | 62 | 62 | 100.0 | % | $ | 589 | -0- | -0- | N/A | N/A | ||||||||||||
| Michigan | 4 | 241 | 222 | 19 | 1,089 | 855 | 78.5 | % | $ | 525 | 288 | 270 | 93.8 | % | $ | 855 | ||||||||||
| New<br> Jersey | 4 | 349 | 187 | 162 | 1,006 | 965 | 95.9 | % | $ | 706 | 43 | 42 | 97.7 | % | $ | 1,070 | ||||||||||
| New<br> York | 8 | 674 | 323 | 351 | 1,352 | 1,157 | 85.6 | % | $ | 563 | 450 | 421 | 93.6 | % | $ | 980 | ||||||||||
| Ohio | 37 | 1,837 | 1,390 | 447 | 6,933 | 5,901 | 85.1 | % | $ | 457 | 2,634 | 2,511 | 95.3 | % | $ | 813 | ||||||||||
| Pennsylvania | 53 | 2,348 | 1,891 | 457 | 8,005 | 6,838 | 85.4 | % | $ | 490 | 2,860 | 2,678 | 93.6 | % | $ | 872 | ||||||||||
| South<br> Carolina | 2 | 63 | 60 | 3 | 322 | 155 | 48.1 | % | $ | 601 | 55 | 48 | 87.3 | % | $ | 752 | ||||||||||
| Tennessee | 7 | 544 | 316 | 228 | 1,871 | 1,728 | 92.4 | % | $ | 502 | 843 | 814 | 96.6 | % | $ | 865 | ||||||||||
| Total<br> as of September<br> 30, 2022 | 132 | 7,307 | 5,354 | 1,953 | 24,975 | 21,198 | 84.9 | % | $ | 492 | 8,999 | 8,489 | 94.3 | % | $ | 854 | ||||||||||
| (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. |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 12 |
| --- | --- |
SameProperty Statistics
(inthousands) (unaudited)
| For Three Months Ended | For Nine Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | Change | % Change | September 30, 2022 | September 30, 2021 | Change | % Change | |||||||||||
| Community Net Operating Income | ||||||||||||||||||
| Rental and Related Income | $ | 41,651 | $ | 39,670 | $ | 1,981 | 5.0 | % | $ | 123,906 | $ | 116,984 | $ | 6,922 | 5.9 | % | ||
| Community Operating Expenses | 17,378 | 15,858 | 1,520 | 9.6 | % | 51,553 | 47,398 | 4,155 | 8.8 | % | ||||||||
| Community NOI | $ | 24,273 | $ | 23,812 | $ | 461 | 1.9 | % | $ | 72,353 | $ | 69,586 | $ | 2,767 | 4.0 | % | ||
| September<br> 30, 2022 | September<br> 30, 2021 | Change | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| Total<br> Sites | 23,383 | 23,318 | 0.3 | % | ||||||||||||||
| Occupied<br> Sites | 20,315 | 20,276 | 39<br> sites, 0.2 | % | ||||||||||||||
| Occupancy<br> % | 86.9 | % | 87.0 | % | (10bps) | |||||||||||||
| Number<br> of Properties | 124 | 124 | N/A | |||||||||||||||
| Total<br> Rentals | 8,788 | 8,534 | 3.0 | % | ||||||||||||||
| Occupied<br> Rentals | 8,309 | 8,154 | 1.9 | % | ||||||||||||||
| Rental<br> Occupancy | 94.5 | % | 95.5 | % | (100bps) | |||||||||||||
| Monthly<br> Rent Per Site | $ | 493 | $ | 473 | 4.2 | % | ||||||||||||
| Monthly<br> Rent Per Home Including Site | $ | 853 | $ | 810 | 5.3 | % |
Same Property includes all properties owned as of January 1, 2021, with the exception of Memphis Blues and Duck River Estates.
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 13 |
| --- | --- |
AcquisitionsSummary
(dollarsin thousands)
| At<br> Acquisition: | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year of<br><br> <br>Acquisition | Number of Communities | Sites | Occupied Sites | Occupancy<br> % | Purchase<br> <br>Price | Price<br> <br>Per Site | Total Acres | ||||||||
| 2019 | 4 | 1,495 | 935 | 62 | % | $ | 56,237 | $ | 38 | 247 | |||||
| 2020 | 2 | 310 | 197 | 64 | % | $ | 7,840 | $ | 25 | 48 | |||||
| 2021 | 3 | 543 | 319 | 59 | % | $ | 18,300 | $ | 34 | 113 | |||||
| 2022 | 5 | 905 | 478 | 53 | % | $ | 44,253 | $ | 49 | 246 |
| 2022<br> Acquisitions | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Community | Date of Acquisition | State | Number<br> <br>of Sites | Purchase<br> Price | Number<br> <br>of Acres | Occupancy | |||||
| Center<br> Manor | March<br> 31, 2022 | PA | 96 | $ | 5,800 | 18 | 83 | % | |||
| Mandell<br> Trails | May<br> 3, 2022 | PA | 132 | 7,375 | 65 | 70 | % | ||||
| La<br> Vista Estates | May<br> 25, 2022 | AL | 139 | 3,878 | 36 | 6 | % | ||||
| Hidden<br> Creek | July<br> 14, 2022 | MI | 351 | 22,000 | 88 | 63 | % | ||||
| Hammond<br> Estates | August<br> 10, 2022 | SC | 187 | 5,200 | 39 | 42 | % | ||||
| Total<br> 2022 to Date | 905 | $ | 44,253 | 246 | 53 | % |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 14 |
| --- | --- |
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 without Non-Recurring Other Expense”), 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 without Non-Recurring Other Expense, 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 gains and losses realized on marketable securities. Normalized FFO reflects the same assumptions as FFO except that it also adjusts for 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 without Non-Recurring Other Expense 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 without Non-Recurring Other Expense, 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, 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 and change in the fair value of marketable securities from our FFO calculation. NAREIT created FFO as a non-GAAP supplemental measure of REIT operating performance.
NormalizedFFO is calculated as FFO excluding certain one-time charges.
NormalizedFFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 55.6 million and 54.7 million shares for the three and nine months ended September 30, 2022, respectively, and 49.1 million and 46.2 million shares for the three and nine months ended September 30, 2021, respectively. Common stock equivalents resulting from stock options in the amount of 728,000 and 956,000 shares for the three and nine months ended September 30, 2022, respectively, and 1.3 million shares for the three months ended September 30, 2021 were excluded from the computation of Diluted Net Income (Loss) per Share as their effect would have been anti-dilutive. Common stock equivalents resulting from stock options in the amount of 1.0 million shares for the nine months ended September 30, 2021 were included in the computation of Diluted Net Income (Loss) per share.
CommunityNOI 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.
SameProperty NOI is calculated as Community NOI, using all properties owned as of January 1, 2021, with the exception of Memphis Blues and Duck River Estates.
AdjustedEBITDA without Non-Recurring Other Expense is calculated as net income (loss) plus interest expense, franchise taxes, depreciation, and the change in the fair value of marketable securities.
CommunityNOI, Same Property NOI, Adjusted EBITDA without Non-Recurring Other Expense, 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 without Non-Recurring Other Expense, FFO and Normalized FFO should not be considered as substitutes for net income (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 without Non-Recurring Other Expense, FFO and Normalized FFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 15 |
| --- | --- |
PressRelease Dated November 8, 2022
| FOR IMMEDIATE RELEASE | November 8, 2022 |
|---|---|
| Contact: Nelli Madden | |
| 732-577-9997 |
UMHPROPERTIES, INC. REPORTS RESULTS FOR THE THIRD QUARTER ENDED
SEPTEMBER30, 2022
FREEHOLD,NJ, November 8, 2022........ UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended September 30, 2022 of $51.9 million as compared to $48.0 million for the quarter ended September 30, 2021, representing an increase of 8%. Net Loss Attributable to Common Shareholders amounted to $9.7 million or $0.18 per diluted share for the quarter ended September 30, 2022 as compared to $3.4 million or $0.07 per diluted share for the quarter ended September 30, 2021.
Funds from Operations Attributable to Common Shareholders (“FFO”), was $10.3 million or $0.19 per diluted share for the quarter ended September 30, 2022 as compared to $10.8 million or $0.22 per diluted share for the quarter ended September 30, 2021. Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), was $11.7 million or $0.21 per diluted share for the quarter ended September 30, 2022, as compared to $11.1 million or $0.23 per diluted share for the quarter ended September 30, 2021.
A summary of significant financial information for the three and nine months ended September 30, 2022 and 2021 is as follows (in thousandsexcept per share amounts):
| For the Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | ||||||
| 2022 | 2021 | |||||
| Total Income | $ | 51,937 | $ | 48,030 | ||
| Total Expenses | $ | 44,588 | $ | 38,528 | ||
| Net Loss Attributable to Common Shareholders | $ | (9,745 | ) | $ | (3,403 | ) |
| Net Loss Attributable to Common <br>Shareholders per Diluted Common Share | $ | (0.18 | ) | $ | (0.07 | ) |
| FFO ^(1)^ | $ | 10,292 | $ | 10,822 | ||
| FFO ^(1)^ per Diluted Common Share | $ | 0.19 | $ | 0.22 | ||
| Normalized FFO ^(1)^ | $ | 11,678 | $ | 11,146 | ||
| Normalized FFO ^(1)^ per Diluted Common Share | $ | 0.21 | $ | 0.23 | ||
| Diluted Weighted Average Shares Outstanding | 54,891 | 47,778 |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 16 |
| --- | --- | | | For the Nine Months Ended | | | | | | --- | --- | --- | --- | --- | --- | | | September 30, | | | | | | | 2022 | | | 2021 | | | Total Income | $ | 147,028 | | $ | 140,121 | | Total Expenses | $ | 123,670 | | $ | 114,663 | | Net Income (Loss) Attributable to Common Shareholders | $ | (36,548 | ) | $ | 11,839 | | Net Income (Loss) Attributable to Common <br>Shareholders per Diluted Common Share | $ | (0.68 | ) | $ | 0.28 | | FFO ^(1)^ | $ | 18,516 | | $ | 29,058 | | FFO ^(1)^ per Diluted Common Share | $ | 0.34 | | $ | 0.63 | | Normalized FFO ^(1)^ | $ | 29,348 | | $ | 30,128 | | Normalized FFO ^(1)^ per Diluted Common Share | $ | 0.54 | | $ | 0.65 | | Diluted Weighted Average Shares Outstanding | | 53,746 | | | 46,247 |
A summary of significant balance sheet information as of September 30, 2022 and December 31, 2021 is as follows (in thousands):
| September 30, 2022 | December 31, 2021 | |||
|---|---|---|---|---|
| Gross Real Estate Investments | $ | 1,297,373 | $ | 1,205,091 |
| Marketable Securities at Fair Value | $ | 39,217 | $ | 113,748 |
| Total Assets | $ | 1,266,900 | $ | 1,270,820 |
| Mortgages Payable, net | $ | 499,697 | $ | 452,567 |
| Loans Payable, net | $ | 127,342 | $ | 46,757 |
| Bonds Payable, net | $ | 99,022 | $ | -0- |
| Total Shareholders’ Equity | $ | 511,552 | $ | 742,140 |
Samuel A. Landy, President and CEO, commented on the results of the third quarter of 2022.
“UMH continues to execute on our long-term business plan and is primed for future growth. During the quarter, we:
| ● | Increased<br> Rental and Related Income by 7%; |
|---|---|
| ● | Increased<br> our rental home portfolio by 142 homes for the quarter and 293 homes from yearend 2021 to<br> approximately 9,000 total rental homes, representing an increase of 3%; |
| ● | Increased<br> Sales of Manufactured Homes by 16% year over year and 29% sequentially; |
| ● | Issued<br> and sold approximately 237,000 shares of Common Stock through an At-the-Market Sale Program<br> for our Common Stock at a weighted average price of $19.60 per share, generating gross proceeds<br> of $4.6 million and net proceeds of $4.5 million, after offering expenses; |
| ● | Acquired<br> two communities containing 538 homesites for a total cost of $27.2 million; |
| ● | Redeemed<br> all 9.9 million issued and outstanding shares of our 6.75% Series C preferred Stock for $247.1<br> million; |
| ● | Invested<br> $8.0 million in the UMH qualified opportunity zone fund to acquire, develop and redevelop<br> manufactured housing communities located in Qualified Opportunity Zones; |
| ● | Financed<br> four communities and approximately 250 rental homes within those communities for total proceeds<br> of approximately $34 million; |
| ● | Subsequent<br> to quarter end, issued and sold approximately 558,000 shares of Common Stock through an At-the-Market<br> Sale Program for our Common Stock at a weighted average price of $16.26 per share, generating<br> gross proceeds of $9.1 million and net proceeds of $8.9 million, after offering expenses;<br> and |
| ● | Subsequent<br> to quarter end, entered into a Second Amended and Restated Credit Agreement to expand available<br> borrowings from $75 million to $100 million with a $400 million accordion feature, subject<br> to certain conditions, and to extend the maturity date to November 7, 2026, with a<br> one-year extension available at our option.” |
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 17 |
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Mr. Landy stated, “We are pleased to complete the recapitalization of our $247.1 million of 6.75% Series C Preferred Stock. Our opportunistic capital raises at the end of 2021 and the beginning of 2022 would not have been possible in the current economic climate. While short-term earnings were negatively impacted, UMH always operates with long-term goals in mind. This recapitalization will allow us to grow earnings throughout the remainder of this year and perpetually into the future. The redemption was completed on July 26, so we did not receive the full benefit in this quarter. Over a full quarter, FFO for Q3 would have increased an additional $0.02 per share. Sequentially, normalized FFO increased by 31%, primarily as a result of this recapitalization.”
“We have strong demand for homes for sale and for rent at all of our locations. We anticipate that rising interest rates will result in more people needing the quality affordable housing that we provide. We are receiving inventory from our manufacturers and are in the process of setting up the homes and increasing occupancy throughout the portfolio. During the quarter, we added 142 rental homes to our portfolio as compared to 96 last year. We anticipate an acceleration in the addition of rental homes in the fourth quarter and into 2023. The availability of inventory has also resulted in an increase in sales. Sales for the quarter increased 16% from a year ago and 29% sequentially, generating sales profits of $919,000.”
“Year to date, we have acquired 5 communities containing 905 sites for a total purchase price of approximately $44 million. These communities have a blended occupancy rate of 53%. The vacant sites give us the opportunity to meaningfully grow occupancy, NOI and property values at these locations. We continue to seek acquisitions that meet our growth criteria. Over the past two years, we have deployed approximately $80 million into acquisitions, expansions and developments that are in the turnaround or infill process and will soon become accretive to earnings.”
“We have a long-term business plan that has proven to produce excellent results for our shareholders and have a positive societal impact. We are well-positioned to take this blueprint and implement it on a national level.”
UMH Properties, Inc. will host its Third Quarter 2022 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Wednesday, November 9, 2022 at 10:00 a.m. Eastern Time.
The Company’s 2022 third 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, November 9, 2022 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 6545277. 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 132 manufactured home communities (including one community acquired through the opportunity zone fund) containing approximately 25,000 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.
| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 18 |
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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<br> Information: We assess and measure our overall operating results based upon an industry performance<br> measure referred to as Funds from Operations Attributable to Common Shareholders (“FFO”),<br> which management believes is a useful indicator of our operating performance. FFO is used<br> by industry analysts and investors as a supplemental operating performance measure of a REIT.<br> FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”),<br> represents net income (loss) attributable to common shareholders, as defined by accounting<br> principles generally accepted in the United States of America (“U.S. GAAP”),<br> excluding extraordinary items, as defined under U.S. GAAP, gains or losses from sales of<br> previously depreciated real estate assets, impairment charges related to depreciable real<br> estate assets, the change in the fair value of marketable securities, and the gain or loss<br> on the sale of marketable securities plus certain non-cash items such as real estate asset<br> depreciation and amortization. Included in the NAREIT FFO White Paper - 2018 Restatement,<br> is an option pertaining to assets incidental to our main business in the calculation of NAREIT<br> FFO to make an election to include or exclude gains and losses on the sale of these assets,<br> such as marketable equity securities, and include or exclude mark-to-market changes in the<br> value recognized on these marketable equity securities. In conjunction with the adoption<br> of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to<br> exclude the gains and losses realized on marketable securities investments and the change<br> in the fair value of marketable securities from our FFO calculation. NAREIT created FFO as<br> a non-U.S. GAAP supplemental measure of REIT operating performance. We define Normalized<br> Funds from Operations Attributable to Common Shareholders (“Normalized FFO”),<br> as FFO excluding certain one-time charges. FFO and Normalized FFO should be considered as<br> supplemental measures of operating performance used by REITs. FFO and Normalized FFO exclude<br> historical cost depreciation as an expense and may facilitate the comparison of REITs which<br> have a different cost basis. However, other REITs may use different methodologies to calculate<br> FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable<br> to all other REITs. The items excluded from FFO and Normalized FFO are significant components<br> in understanding the Company’s financial performance. |
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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 nine months ended September 30, 2022 and 2021 are calculated as follows (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 9/30/22 | 9/30/21 | 9/30/22 | 9/30/21 | |||||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | (9,745 | ) | $ | (3,403 | ) | $ | (36,548 | ) | $ | 11,839 | |
| Depreciation Expense | 12,302 | 11,380 | 36,003 | 33,572 | ||||||||
| Depreciation Expense from Unconsolidated Joint Venture | 90 | -0- | 257 | -0- | ||||||||
| Loss on Sales of Depreciable Assets | 10 | 91 | 96 | 109 | ||||||||
| (Increase) Decrease in Fair Value of Marketable Securities | 1,230 | 5,390 | 43,024 | (14,120 | ) | |||||||
| (Gain) Loss on Sales of Marketable Securities, net | 6,405 | (2,636 | ) | (24,316 | ) | (2,342 | ) | |||||
| FFO Attributable to Common Shareholders | 10,292 | 10,822 | 18,516 | 29,058 | ||||||||
| Redemption of Preferred Stock | -0- | -0- | 8,190 | -0- | ||||||||
| Non- Recurring Other Expense ^(2)^ | 1,386 | 324 | 2,642 | 1,070 | ||||||||
| Normalized FFO Attributable to Common Shareholders | $ | 11,678 | $ | 11,146 | $ | 29,348 | $ | 30,128 |
The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 55.6 million and 54.7 million shares for the three and nine months ended September 30, 2022, respectively, and 49.1 million and 46.2 million shares for the three and nine months ended September 30, 2021, respectively. Common stock equivalents resulting from stock options in the amount of 728,000 million and 956,000 shares for the three and nine months ended September 30, 2022, and 1.3 million shares for the three months ended September 30, 2021 were excluded from the computation of Diluted Net Income (Loss) per Share as their effect would have been anti-dilutive. Common stock equivalents resulting from stock options in the amount of 1.0 million shares for the nine months ended September 30, 2021 were included in the computation of Diluted Net Income (Loss) per share.
| (2) | For<br> the three and nine months ended September 30, 2022, consists of special bonus and restricted<br> stock grants for the August 2020 groundbreaking Fannie Mae financing, which are being expensed<br> over the vesting period ($431 and $1,293, respectively) and non-recurring expenses for the<br> joint venture with Nuveen ($2 and $54, respectively), early extinguishment of debt ($2 and<br> $195, respectively), one-time legal fees ($38 and $187, respectively), fees related to the<br> establishment of the OZ Fund ($893) and costs associated with acquisition not completed ($20).<br> For 2021, consists of special bonus and restricted stock grants for the August 2020 groundbreaking<br> Fannie Mae financing, which are being expensed over the vesting period. |
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| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 19 |
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The following are the cash flows provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2022 and 2021 (in thousands):
| 2022 | 2021 | |||||
|---|---|---|---|---|---|---|
| Operating Activities | $ | 5,083 | $ | 46,250 | ||
| Investing Activities | (58,435 | ) | (63,987 | ) | ||
| Financing Activities | (577 | ) | 79,614 |
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| UMH Properties, Inc. | Third Quarter FY 2022 Supplemental Information | 20 |
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