Table of Contents
	Page
Financial Highlights	3
Consolidated Balance Sheets	4
Consolidated Statements of Income (Loss)	5
Consolidated Statements of Cash Flows	6
Reconciliation of Net Income to EBITDA and Net Loss Attributable to Common Shareholders to FFO, Core FFO and Normalized FFO	7
Market Capitalization, Debt and Coverage Ratios	8
Debt Analysis	9
Debt Maturity	10
Property Summary and Snapshot	11
Same Property Statistics	12
Acquisition Summary and Property Portfolio	13
Definitions	14
Press Release Dated November 8, 2016	15

 

 

Financial Highlights
(unaudited)

		Three Months Ended								Nine Months Ended
		9/30/2016				9/30/2015				9/30/2016				9/30/2015
Operating Information
Number of Communities											100				95
Rental and Related Income		$	23,103,155			$	18,970,407			$	67,313,211			$	54,123,435
Community Operating Expenses		$	10,719,289			$	9,337,742			$	31,993,965			$	27,289,770
Community NOI		$	12,383,866			$	9,632,665			$	35,319,246			$	26,833,665
Expense Ratio			46.4%				49.2%				47.5%				50.4%
Sales of Manufactured Homes		$	2,251,896			$	2,724,592			$	6,756,921			$	5,469,093
Number of Homes Sold			42				45				132				101
Number of Rentals Added			305				415				715				712
Net Income		$	3,200,013			$	1,047,245			$	8,157,944			$	1,969,744
Net Loss Attributable to Common Shareholders		$	(589,734	)		$	(841,902	)		$	(2,155,741	)		$	(3,697,697	)
EBITDA		$	13,006,306			$	9,527,708			$	37,184,878			$	25,916,664
FFO		$	5,298,505			$	3,941,361			$	14,960,445			$	9,834,251
Core FFO		$	5,349,865			$	4,096,320			$	15,011,805			$	10,372,985
Normalized FFO		$	4,465,407			$	4,048,649			$	13,112,969			$	10,370,566
Shares Outstanding and Per Share Data
Weighted Average Shares Outstanding Basic and Diluted			27,891,370				26,388,589				27,450,747				25,600,310
Net Loss Attributable to Common Shareholders per Share - Basic and Diluted		$	(0.02	)		$	(0.03	)		$	(0.08	)		$	(0.14	)
FFO per Share- Diluted		$	0.19			$	0.15			$	0.54			$	0.38
Core FFO per Share- Diluted		$	0.19			$	0.15			$	0.54			$	0.40
Normalized FFO per Share- Diluted		$	0.16			$	0.15			$	0.48			$	0.40
Dividends per Common Share		$	0.18			$	0.18			$	0.54			$	0.54
Balance Sheet
Total Assets										$	669,036,290			$	546,896,273
Total Liabilities										$	355,125,660			$	342,280,646
Market Capitalization
Total Debt										$	341,599,901			$	330,884,644
Equity Market Capitalization										$	337,467,585			$	249,165,488
Series A Preferred Stock										$	91,595,000			$	91,595,000
Series B Preferred Stock										$	95,030,000			$	-0-
Total Market Capitalization										$	865,692,486			$	671,645,132

 

 

Consolidated Balance Sheets
		September 30, 2016				December 31, 2015
		(unaudited)
ASSETS
Investment Property and Equipment
Land		$	46,246,314			$	45,477,814
Site and Land Improvements			390,804,574				377,215,400
Buildings and Improvements			20,780,644				20,307,097
Rental Homes and Accessories			164,755,859				134,708,763
Total Investment Property			622,587,391				577,709,074
Equipment and Vehicles			14,700,145				13,697,460
Total Investment Property and Equipment			637,287,536				591,406,534
Accumulated Depreciation			(134,409,243	)			(117,761,146	)
Net Investment Property and Equipment			502,878,293				473,645,388
Other Assets
Cash and Cash Equivalents			3,709,897				6,535,897
Securities Available for Sale at Fair Value			111,046,262				75,011,260
Inventory of Manufactured Homes			16,335,779				14,311,410
Notes and Other Receivables, net			20,921,062				20,028,574
Prepaid Expenses and Other Assets			4,938,001				4,062,813
Land Development Costs			9,206,996				6,722,048
Total Other Assets			166,157,997				126,672,002
TOTAL ASSETS		$	669,036,290			$	600,317,390
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages Payable, net of Unamortized Debt Issuance Costs		$	285,020,565			$	283,049,802
Other Liabilities
Accounts Payable			3,793,716				2,816,290
Loans Payable, net of Unamortized Debt Issuance Costs			56,579,336				57,862,206
Accrued Liabilities and Deposits			5,522,991				6,696,577
Tenant Security Deposits			4,209,052				3,654,090
Total Other Liabilities			70,105,095				71,029,163
Total Liabilities			355,125,660				354,078,965
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity:
Series A - 8.25% Cumulative Redeemable Preferred Stock, par value $0.10 per share: 3,663,800 shares authorized, issued and outstanding as of September 30, 2016 and December 31, 2015, respectively			91,595,000				91,595,000
Series B - 8.0% Cumulative Redeemable Preferred Stock, par value $0.10 per share: 4,000,000 and 2,000,000 shares authorized; 3,801,200 and 1,801,200 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively			95,030,000				45,030,000
Common Stock – $0.10 par value per share: 75,000,000 and 62,000,000 shares authorized; 28,311,039 and 27,086,838 shares issued and outstanding as of  September 30, 2016 and December 31, 2015, respectively			2,831,104				2,708,684
Excess Stock – $0.10 par value per share: 3,000,000 shares authorized; no shares issued or outstanding as of September 30, 2016 and December 31, 2015, respectively			-0-				-0-
Additional Paid-In Capital			104,182,247				109,629,260
Accumulated Other Comprehensive Income (Loss)			20,940,072				(2,056,726	)
Accumulated Deficit			(667,793	)			(667,793	)
Total Shareholders’ Equity			313,910,630				246,238,425
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	669,036,290			$	600,317,390

 

 

Consolidated Statements of Income (Loss)
(unaudited)
		Three Months Ended								Nine Months Ended
		9/30/2016				9/30/2015				9/30/2016				9/30/2015
INCOME:
Rental and Related Income		$	23,103,155			$	18,970,407			$	67,313,211			$	54,123,435
Sales of Manufactured Homes			2,251,896				2,724,592				6,756,921				5,469,093
TOTAL INCOME			25,355,051				21,694,999				74,070,132				59,592,528
EXPENSES:
Community Operating Expenses			10,719,289				9,337,742				31,993,965				27,289,770
Cost of Sales of Manufactured Homes			1,803,315				2,089,602				5,278,587				4,209,126
Selling Expenses			812,392				798,126				2,270,861				2,141,693
General and Administrative Expenses			2,293,366				1,799,181				5,933,299				5,264,839
Acquisition Costs			51,360				154,959				51,360				449,338
Depreciation Expense			5,887,667				4,786,090				17,092,676				13,465,559
TOTAL EXPENSES			21,567,389				18,965,700				62,620,748				52,820,325
OTHER INCOME (EXPENSE):
Interest Income			400,899				442,600				1,206,858				1,387,062
Dividend Income			1,755,438				1,121,274				4,834,817				3,222,928
Gain on Sales of Securities Transactions, net			884,458				47,671				1,898,836				127,419
Other Income			146,469				154,488				395,682				293,044
Interest Expense			(3,774,341	)			(3,450,914	)			(11,604,123	)			(9,766,523	)
TOTAL OTHER INCOME (EXPENSE)			(587,077	)			(1,684,881	)			(3,267,930	)			(4,736,070	)
Income before Gain (Loss) on Sales of  Investment Property and Equipment			3,200,585				1,044,418				8,181,454				2,036,133
Gain (Loss) on Sales of Investment Property  and Equipment			(572	)			2,827				(23,510	)			(66,389	)
NET INCOME			3,200,013				1,047,245				8,157,944				1,969,744
Less: Preferred Dividends			(3,789,747	)			(1,889,147	)			(10,313,685	)			(5,667,441	)
NET LOSS ATTRIBUTABLE TO  COMMON SHAREHOLDERS		$	(589,734	)		$	(841,902	)		$	(2,155,741	)		$	(3,697,697	)

 

 

Consolidated Statements of Cash Flows
(unaudited)		Nine Months Ended
		9/30/2016				9/30/2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$	8,157,944			$	1,969,744
Non-Cash Items Included in Net Income:
Depreciation			17,092,676				13,465,559
Amortization of Financing Costs			580,335				407,481
Stock Compensation Expense			896,519				657,230
Provision for Uncollectible Notes and Other Receivables			650,382				803,103
Gain on Sales of Securities Transactions, net			(1,898,836	)			(127,419	)
Loss on Sales of Investment Property and Equipment			23,510				66,389
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes			(2,024,369	)			(1,161,658	)
Notes and Other Receivables			(1,542,870	)			1,054,922
Prepaid Expenses and Other Assets			(875,188	)			(5,080,596	)
Accounts Payable			977,426				901,888
Accrued Liabilities and Deposits			(1,189,041	)			416,754
Tenant Security Deposits			554,962				635,134
Net Cash Provided by Operating Activities			21,403,450				14,008,531
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities, net of Mortgages Assumed			(2,954,000	)			(42,826,524	)
Purchase of Investment Property and Equipment			(44,239,188	)			(37,368,231	)
Proceeds from Sales of Investment Property and Equipment			844,097				604,687
Additions to Land Development Costs			(2,484,948	)			(425,356	)
Purchase of Securities Available for Sale			(23,453,933	)			(9,171,695	)
Proceeds from Sales of Securities Available for Sale			12,330,020				2,257,433
Net Cash Used in Investing Activities			(59,957,952	)			(86,929,686	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages, net of Mortgages Assumed			15,458,000				100,722,000
Net Payments on Short Term Borrowings			(1,330,266	)			(8,281,398	)
Principal Payments of Mortgages and Loans			(13,629,215	)			(19,717,525	)
Financing Costs on Debt			(390,961	)			(2,417,695	)
Proceeds from Issuance of Preferred Stock, net			49,120,853				-0-
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments			9,267,775				20,347,682
Proceeds from Exercise of Stock Options			1,081,380				151,200
Preferred Dividends Paid			(10,773,898	)			(5,667,441	)
Common Dividends Paid, net of Dividend Reinvestments			(13,075,166	)			(12,398,024	)
Net Cash Provided by Financing Activities			35,728,502				72,738,799
NET DECREASE IN CASH AND CASH EQUIVALENTS			(2,826,000	)			(182,356	)
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD			6,535,897				8,082,792
CASH AND CASH EQUIVALENTS – END OF PERIOD		$	3,709,897			$	7,900,436

 

 

Reconciliation of Net Income to EBITDA and Net Loss Attributable

to Common Shareholders to FFO, Core FFO and Normalized FFO

(unaudited)

 

		Three Months Ended								Nine Months Ended
		9/30/2016				9/30/2015				9/30/2016				9/30/2015
Reconciliation of Net Income To EBITDA
Net Income		$	3,200,013			$	1,047,245			$	8,157,944			$	1,969,744
Interest Expense			3,774,341				3,450,914				11,604,123				9,766,523
Franchise Taxes			92,925				88,500				278,775				265,500
Depreciation Expense			5,887,667				4,786,090				17,092,676				13,465,559
Acquisition Costs			51,360				154,959				51,360				449,338
EBITDA		$	13,006,306			$	9,527,708			$	37,184,878			$	25,916,664
Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations
Net Loss Attributable to Common Shareholders		$	(589,734	)		$	(841,902	)		$	(2,155,741	)		$	(3,697,697	)
Depreciation Expense			5,887,667				4,786,090				17,092,676				13,465,559
(Gain) Loss on Sales of  Depreciable Assets			572				(2,827	)			23,510				66,389
Funds from Operations (“FFO”)			5,298,505				3,941,361				14,960,445				9,834,251
Adjustments:
Acquisition Costs			51,360				154,959				51,360				449,338
Cost of Early Extinguishment of Debt			-0-				-0-				-0-				89,396
Core Funds from Operations (“Core FFO”)			5,349,865				4,096,320				15,011,805				10,372,985
Adjustments:
Gain on Sale of Securities Transactions, net			(884,458	)			(47,671	)			(1,898,836	)			(127,419	)
Settlement of Memphis Mobile City Litigation			-0-				-0-				-0-				125,000
Normalized Funds From Operations (“Normalized FFO”)		$	4,465,407			$	4,048,649			$	13,112,969			$	10,370,566

 

 

Market Capitalization, Debt and Coverage Ratios

(unaudited)

 

		Nine Months Ended								Year Ended
		9/30/2016				9/30/2015				12/31/2015
Shares Outstanding			28,311,039				26,791,988				27,086,838
Market Price Per Share		$	11.92			$	9.30			$	10.12
Equity Market Capitalization		$	337,467,585			$	249,165,488			$	274,118,801
Total Debt			341,599,901				330,884,644				340,912,008
Preferred			186,625,000				91,595,000				136,625,000
Total Market Capitalization		$	865,692,486			$	671,645,132			$	751,655,809
Total Debt		$	341,599,901			$	330,884,644			$	340,912,008
Less: Cash and Cash Equivalents			(3,709,897	)			(7,900,436	)			(6,535,897	)
Net Debt			337,890,004				322,984,208				334,376,111
Less: Securities Available for Sale at Fair Value (“Securities”)			(111,046,262	)			(61,436,212	)			(75,011,260	)
Net Debt Less Securities		$	226,843,742			$	261,547,996			$	259,364,851
Interest Expense		$	11,604,123			$	9,766,523			$	14,074,446
Capitalized Interest			265,341				220,200				277,944
Preferred Dividends			10,313,685				5,667,441				8,267,198
Total Fixed Charges		$	22,183,149			$	15,654,441			$	22,619,588
EBITDA		$	37,184,878			$	25,916,664			$	36,368,381
Debt and Coverage Ratios
Net Debt / Total Market Capitalization			39.0	%			48.1	%			44.5	%
Net Debt Plus Preferred / Total Market Capitalization			60.6	%			61.7	%			62.7	%
Net Debt Less Securities / Total Market Capitalization			26.2	%			38.9	%			34.5	%
Net Debt Less Securities Plus Preferred / Total Market Capitalization			47.8	%			52.6	%			52.7	%
Interest Coverage			3.2	x			2.7	x			2.6	x
Fixed Charge Coverage			1.7	x			1.7	x			1.6	x
Net Debt / EBITDA			6.8	x			9.3	x			9.2	x
Net Debt Less Securities / EBITDA			4.6	x			7.6	x			7.1	x
Net Debt Plus Preferred / EBITDA			10.6	x			12.0	x			13.0	x
Net Debt Less Securities Plus Preferred / EBITDA			8.3	x			10.2	x			10.9	x

 

 

Debt Analysis
(unaudited)

 

		9/30/2016				9/30/2015				12/31/2015
Debt Outstanding
Mortgages Payable:
Fixed Rate Mortgages (1)		$	288,028,974			$	265,208,366			$	285,958,808
Variable Rate Mortgages			436,907				757,439				678,288
Total Mortgages Before Unamortized Debt Issuance Costs			288,465,881				265,965,805				286,637,096
Unamortized Debt Issuance Costs			(3,445,316	)			(3,962,852	)			(3,587,294	)
Mortgages, Net of Unamortized Debt Issuance Costs		$	285,020,565			$	262,002,953			$	283,049,802
Loans Payable:
Unsecured Line of Credit		$	20,000,000			$	30,000,000			$	15,000,000
Other Loans Payable			36,656,238				39,157,832				42,986,503
Total Loans Before Unamortized Debt Issuance Costs			56,656,238				69,157,832				57,986,503
Unamortized Debt Issuance Costs			(76,902	)			(276,141	)			(124,297	)
Loans, Net of Unamortized Debt Issuance Costs		$	56,579,336			$	68,881,691			$	57,862,206
Total Debt		$	341,599,901			$	330,884,644			$	340,912,008
% Fixed/Floating
Fixed			85.0	%			80.5	%			84.5	%
Floating			15.0	%			19.5	%			15.5	%
Total			100.0	%			100.0	%			100.0	%
Weighted Average Interest Rates
Mortgages Payable			4.47	%			4.61	%			4.55	%
Loans Payable			3.39	%			3.55	%			3.75	%
Total Average			4.29	%			4.39	%			4.42	%

 

Notes:

(1) Includes a variable rate mortgage with a balance of $10,823,092, $11,606,663 and $11,416,309 as of September 30, 2016, September 30, 2015 and December 31, 2015, respectively, which has been effectively fixed at an interest rate of 3.89% with an interest rate swap agreement.

 

 

Debt Maturity

(unaudited)

 

 

 

As of 9/30/2016:
Year Ended			Mortgages				Loans				Total				% of Total
2016			$	-0-			$	11,016,363				11,016,363				3.2	%
2017				29,656,041				24,222,485	(1)			53,878,526				15.6	%
2018				9,289,774				226,786				9,516,560				2.8	%
2019				2,951,805				4,228,618				7,180,423				2.1	%
2020				12,616,159				224,240				12,840,399				3.7	%
Thereafter				233,952,102				16,737,746				250,689,848				72.6	%
Total Debt Before Unamortized Debt Issuance Cost				288,465,881				56,656,238				345,122,119				100.0	%
Unamortized Financing Cost				(3,445,316	)			(76,902	)			(3,522,218	)
Total Debt, Net of Unamortized Debt Issuance Costs			$	285,020,565			$	56,579,336			$	341,599,901

 

Notes:

(1) Includes $20 million balance outstanding on the Company’s Line of Credit due March 2017.

 

 

Property Summary and Snapshot

(unaudited)

 

		9/30/2016				9/30/2015				% Change
Communities			100				95				5.3	%
Developed Sites			17,812				16,540				7.7	%
Occupied			14,422				13,380				7.8	%
Occupancy % (1)			81.1%				81.7%				-0.6	%
Monthly Rent Per Site		$	418			$	414				1.0	%
Total Rentals			4,447				3,350				32.7	%
Occupied Rentals			4,158				3,148				32.1	%
Rental Occupancy %			93.5%				94.0%				-0.5	%
Monthly Rent per Home Rental		$	701			$	708				-1.0	%

 

Region		Number				Total Acreage				Developed Acreage				Vacant Acreage				Total Sites				Occupied Sites				Occupancy Percentage				Monthly Rent Per Site				Total Rentals				Occupied Rentals				Rental Occupancy Percentage				Monthly Rent Per Home Rental
						(2)								(2)												(1)																				(3)
Indiana			9				661				561				100				2,657				1,905				71.7	%		$	395				816				767				94.0	%		$	706
Michigan			2				68				68				-0-				354				238				67.2	%		$	419				115				103				89.6	%		$	700
New Jersey			4				348				187				161				1,006				973				96.7	%		$	584				39				37				94.9	%		$	770
New York			7				396				301				95				1,131				913				80.7	%		$	486				246				227				92.3	%		$	839
Ohio			29				1,204				918				286				4,468				3,512				78.6	%		$	350				1,010				946				93.7	%		$	630
E. Pennsylvania			26				963				805				158				3,591				3,052				85.0	%		$	460				749				693				92.5	%		$	728
W. Pennsylvania			16				904				723				181				2,910				2,265				77.8	%		$	392				747				689				92.2	%		$	716
Tennessee			7				413				321				92				1,695				1,564				92.3	%		$	425				725				696				96.0	%		$	703
Total as of
September 30, 2016			100				4,957				3,884				1,073				17,812				14,422				81.1	%		$	418				4,447				4,158				93.5	%		$	701

 

	Notes:
	(1)	The Vacant Sites at Memphis Blues are not included in the calculation of occupancy.
	(2)	Total and Vacant Acreage of 220 for the Mountain View Estates property is not included in the summary since there are no current sites and approval for sites is still in process.
	(3)	Includes home and site rent charges.

 

 

Same Property Statistics

(unaudited)

 

		For Three Months Ended																For Nine Months Ended
		9/30/2016				9/30/2015				Change				% Change				9/30/2016				9/30/2015				Change				% Change
Community Net Operating Income
Rental and Related Income		$	20,478,454			$	18,086,493			$	2,391,961				13.2	%		$	59,815,869			$	52,803,569			$	7,012,300				13.3	%
Community Operating Expenses			8,796,151				8,594,193				201,958				2.3	%			26,809,926				25,399,186				1,410,740				5.6	%
Community NOI		$	11,682,303			$	9,492,300			$	2,190,003				23.1	%		$	33,005,943			$	27,404,383			$	5,601,560				20.4	%

 

		As of
		9/30/2016				9/30/2015				% Change
Other Information
Total Sites			14,828				14,860				-0.2%
Occupied Sites			12,594				12,316				2.3%
Occupancy %			84.9%				82.9%				2.0%
Number of Properties			88				88				N/A
Developed Acreage			3,223				3,223				N/A
Vacant Acreage			894				894				N/A
Monthly Rent Per Site		$	423			$	415				1.9%
Total Rentals			3,901				3,135				24.4%
Occupied Rentals			3,652				2,964				23.2%
Rental Occupancy			93.6%				94.5%				-0.9%
Monthly Rent Per Home Rental		$	707			$	709				-0.3%

 

Notes:

Same Property includes all properties owned as of January 1, 2015, with the exception of Memphis Blues.

 

 

Acquisition Summary

 

At Acquisition:

 

Year of Acquisition		Number of Communities				Sites				Occupied Sites				Occupancy %				Price				Total Acres
2014			14				1,612				1,230				76	%			42,550,000				547
2015			10				2,774				1,764				64	%			81,217,000				717
2016			2				165				105				64	%			2,954,000				71

 

 

2016 Acquisitions

 

Community		Date of Acquisition		State		Number of Sites				Purchase Price				Number of Acres				Occupancy
Lakeview Meadows		September 1, 2016		OH			81				1,355,000				53				53	%
Wayside		September 1, 2016		OH			84				1,599,000				18				74	%
Total 2016 to Date							165			$	2,954,000				71				64	%

 

 

Definitions

 

Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), normalized funds from operations (“Normalized FFO”), community NOI, same property NOI, and earnings before interest, taxes, depreciation and amortization (“EBITDA”), variously defined, as supplemental performance measures. While the Company believes net income available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, it considers Community NOI, Same Property NOI, EBITDA, FFO, and Core 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. Core FFO reflects the same assumptions as FFO except that is also adjusts for the effects of acquisitions costs and costs of early extinguishment of debt. 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. EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. In addition, Community NOI, Same Property NOI, EBITDA, FFO, and Core 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, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on securities investments.

 

Core FFO is calculated as FFO plus acquisition costs and costs of extinguishment of debt.

 

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

 

Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 28,091,000 and 27,601,000 shares for the three and nine months ended September 30, 2016, respectively, and 26,426,000 and 25,641,000 for the three and nine months ended September 30, 2015, respectively. Common stock equivalents resulting from stock options in the amount of 200,000 and 150,000 shares for the three and nine months ended September 30, 2016, respectively, and 37,000 and 41,000 shares for the three and nine months ended September 30, 2015, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net Loss per Share as their effect would be anti-dilutive.

 

Community NOI is calculated as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. Community NOI excludes realized gains (losses) on securities transactions.

 

Same Property NOI is calculated as Community NOI, using all properties owned as of January 1, 2015, with the exception of Memphis Blues.

 

EBITDA is calculated as net income plus interest expense, franchise taxes and depreciation expense.

 

Community NOI, Same Property NOI, EBITDA, FFO, Core 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, EBITDA, FFO, Core FFO and Normalized FFO should not be considered as substitutes for net income 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, EBITDA, FFO, Core FFO and Normalized FFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.

 

 

Press Release Dated November 8, 2016

 

FOR IMMEDIATE RELEASE	November 8, 2016
	Contact: Nelli Madden
	732-577-9997

 

UMH PROPERTIES, INC. REPORTS 3rd QUARTER 2016 EARNINGS

 

FREEHOLD, NJ, November 8, 2016........ UMH Properties, Inc. (NYSE:UMH) reported total Income of $25,355,000 for the quarter ended September 30, 2016 as compared to $21,695,000 for the quarter ended September 30, 2015, representing an increase of 17%. Net Loss Attributable to Common Shareholders amounted to $590,000 or $0.02 per diluted share for the quarter ended September 30, 2016 as compared to $842,000 or $0.03 per diluted share for the quarter ended September 30, 2015, representing an improvement of 33%.

 

Core Funds from Operations (“Core FFO”) was $5,350,000 or $0.19 per diluted share for the quarter ended September 30, 2016 as compared to $4,096,000 or $0.15 per diluted share for the quarter ended September 30, 2015, representing an increase in Core FFO per diluted share of 27%. Normalized Funds from Operations (“Normalized FFO”), was $4,465,000 or $0.16 per diluted share for the quarter ended September 30, 2016, as compared to $4,049,000 or $0.15 per diluted share for the quarter ended September 30, 2015, representing an increase in Normalized FFO per diluted share of 7%.

 

A summary of significant financial information for the three and nine months ended September 30, 2016 and 2015 is as follows:

 

		For the Three Months Ended
		September 30,
		2016				2015
Total Income		$	25,355,000			$	21,695,000
Total Expenses		$	21,567,000			$	18,966,000
Gain on Securities Transactions, net		$	885,000			$	48,000
Net Loss Attributable to Common Shareholders		$	(590,000	)		$	(842,000	)
Net Loss Attributable to Common Shareholders per Diluted Common Share		$	(0.02	)		$	(0.03	)
Core FFO (1)		$	5,350,000			$	4,096,000
Core FFO (1) per Diluted Common Share		$	0.19			$	0.15
Normalized FFO (1)		$	4,465,000			$	4,049,000
Normalized FFO (1) per Diluted Common Share		$	0.16			$	0.15
Weighted Average Diluted Shares Outstanding			27,891,000				26,389,000

 

(Continued on next page)

 

 

		For the Nine Months Ended
		September 30,
			2016				2015
Total Income		$	74,070,000			$	59,593,000
Total Expenses		$	62,621,000			$	52,820,000
Gain on Securities Transactions, net		$	1,899,000			$	127,000
Net Loss Attributable to Common Shareholders		$	(2,156,000	)		$	(3,698,000	)
Net Loss Attributable to Common Shareholders per Diluted Common Share		$	(0.08	)		$	(0.14	)
Core FFO (1)		$	15,012,000			$	10,373,000
Core FFO (1) per Diluted Common Share		$	0.54			$	0.40
Normalized FFO (1)		$	13,113,000			$	10,371,000
Normalized FFO (1) per Diluted Common Share		$	0.48			$	0.40
Weighted Average Diluted Shares Outstanding			27,451,000				25,600,000

 

A summary of significant balance sheet information as of September 30, 2016 and December 31, 2015 is as follows:

 

		September 30, 2016				December 31, 2015
Gross Real Estate Investments		$	622,587,000			$	577,709,000
Securities Available for Sale at Fair Value		$	111,046,000			$	75,011,000
Total Assets		$	669,036,000			$	600,317,000
Mortgages Payable, net		$	285,021,000			$	283,050,000
Loans Payable, net		$	56,579,000			$	57,862,000
Total Shareholders’ Equity		$	313,911,000			$	246,238,000

 

Samuel A. Landy, President and CEO, commented on the results of the third quarter of 2016.

 

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

 

	●	Increased Core FFO per diluted share to $0.19, representing a 27% increase over the prior year period;
	●	Increased Normalized FFO per diluted share to $0.16, representing a 7% increase over the prior year period;
	●	Increased Rental and Related Income by 22% over the prior year period;
	●	Improved our Operating Expense Ratio by 280 basis points over the prior year period from 49.2% to 46.4%;
	●	Increased Community Net Operating Income (“NOI”) by 29% over the prior year period;
	●	Increased Same Property Occupancy by 200 basis points over the prior year period from 82.9% to 84.9%;
	●	Increased Same Property NOI by 23% over the prior year period;
	●	Completed the acquisition of 2 manufactured home communities, containing 165 homesites for an aggregate cost of approximately $3 million;

 

(continued on next page)

 

 

	●	Increased our rental home portfolio by 305 homes, representing an increase of 7% from the second quarter of 2016 and a 33% increase over the prior year period, to approximately 4,400 total rental homes;
	●	Increased rental home occupancy by 60 basis points from 92.9% at yearend 2015 to 93.5% at quarter end;
	●	Increased the unrealized gain on our REIT securities investments to $21.0 million at quarter end, in addition to the $1.9 million in realized gains generated thus far; and
	●	Subsequent to quarter end, completed the refinancing of our Fairview Manor community. The new $16.3 million Freddie Mac mortgage is at an interest rate of 3.85% with a 10-year maturity and principal repayments based on a 30-year amortization schedule.”

 

“Following an excellent first half, our third quarter delivered strong operating results, highlighted by same property NOI growth of 23% and a same property occupancy increase of 200 basis points. This is the 9th consecutive quarter that we have delivered double digit year-over-year NOI growth. Our performance has been driven by strong demand for quality affordable housing throughout our portfolio. Our business plan of acquiring communities below replacement cost, making improvements and implementing a rental home and sales program, has proven to produce excellent results. We are continuing to acquire communities in strong geographic areas, completing the acquisition of two manufactured home communities this quarter. In addition, we anticipate closing on the acquisition of three additional communities prior to yearend. Subsequent to quarter end, we completed the refinancing of our Fairview Manor community generating approximately $350,000 in annual savings, as well as demonstrating the increasing value of our communities.”

 

“We look forward to building on the substantial progress we have made thus far.”

 

UMH Properties, Inc. will host its Third Quarter 2016 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Wednesday, November 9, 2016 at 10:00 a.m. Eastern Time.

 

The Company’s 2016 third quarter financial results being released herein will be available on the Company’s website at www.umh.reit in the “Financial Information and Filings” section.

 

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

 

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Wednesday, November 9, 2016. It will be available until February 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10092124. 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 100 manufactured home communities containing approximately 18,000 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. In addition, the Company owns a portfolio of REIT securities.

 

(continued on next page)

 

 

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 (“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, plus certain non-cash items such as real estate asset depreciation and amortization. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Core Funds From Operations (“Core FFO”) as FFO plus acquisition costs and costs of early extinguishment of debt.

 

We define Normalized Funds From Operations (“Normalized FFO”) as Core FFO excluding gains and losses realized on securities investments and certain non-recurring charges. We define Community NOI 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. FFO, Core FFO and Normalized FFO, as well as Community NOI should be considered as supplemental measures of operating performance used by REITs. FFO, Core 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, Core FFO, Normalized FFO and Community NOI and, accordingly, our FFO, Core FFO, Normalized FFO and Community NOI may not be comparable to all other REITs. The items excluded from FFO, Core FFO and Normalized FFO are significant components in understanding the Company’s financial performance.

 

FFO, Core FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as an alternative 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, Core FFO and Normalized FFO for the three and nine months ended September 30, 2016 and 2015 are calculated as follows:

 

		Three Months Ended								Nine Months Ended
		9/30/16				9/30/15				9/30/16				9/30/15
Net Loss Attributable to Common Shareholders		$	(590,000	)		$	(842,000	)		$	(2,156,000	)		$	(3,698,000	)
Depreciation Expense			5,888,000				4,786,000				17,093,000				13,466,000
Loss on Sales of Depreciable Assets			1,000				(3,000	)			24,000				66,000
FFO Attributable to Common Shareholders			5,299,000				3,941,000				14,961,000				9,834,000
Acquisition Costs			51,000				155,000				51,000				449,000
Cost of Early Extinguishment of Debt			-0-				-0-				-0-				90,000
Core FFO Attributable to Common Shareholders			5,350,000				4,096,000				15,012,000				10,373,000
Gain on Sale of Securities Transactions, net			(885,000	)			(47,000	)			(1,899,000	)			(127,000	)
Settlement of Litigation			-0-				-0-				-0-				125,000
Normalized FFO Attributable to Common Shareholders		$	4,465,000			$	4,049,000			$	13,113,000			$	10,371,000

 

(continued on next page)

 

 

The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 28,091,000 and 27,601,000 shares for the three and nine months ended September 30, 2016, respectively, and 26,426,000 and 25,641,000 for the three and nine months ended September 30, 2015, respectively. Common stock equivalents resulting from stock options in the amount of 200,000 and 150,000 shares for the three and nine months ended September 30, 2016, respectively, and 37,000 and 41,000 shares for the three and nine months ended September 30, 2015, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net Loss per Share as their effect would be anti-dilutive.

 

The following are the cash flows provided (used) by operating, investing and financing activities for the nine months ended September 30, 2016 and 2015:

 

		2016				2015
Operating Activities		$	21,403,000			$	14,009,000
Investing Activities			(59,958,000	)			(86,930,000	)
Financing Activities			35,729,000				72,739,000

 

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