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 March 8, 2017	15

 

 

Financial Highlights
(unaudited)
		Three Months Ended								Twelve Months Ended
		12/31/2016				12/31/2015				12/31/2016				12/31/2015
Operating Information
Number of Communities											101				98
Rental and Related Income		$	23,366,346			$	20,639,113			$	90,679,557			$	74,762,548
Community Operating Expenses		$	10,644,368			$	9,759,692			$	42,638,333			$	37,049,462
Community NOI		$	12,721,978			$	10,879,421			$	48,041,224			$	37,713,086
Expense Ratio			45.6	%			47.3	%			47.0	%			49.6	%
Sales of Manufactured Homes		$	1,777,351			$	1,285,030			$	8,534,272			$	6,754,123
Number of Homes Sold			38				34				170				135
Number of Rentals Added			212				401				927				1,113
Net Income		$	3,376,615			$	174,461			$	11,534,559			$	2,144,205
Net Loss Attributable to Common Shareholders		$	(413,132	)		$	(2,425,296	)		$	(2,568,873	)		$	(6,122,993	)
EBITDA		$	13,380,376			$	10,451,717			$	50,565,254			$	36,368,381
FFO		$	5,686,945			$	3,000,535			$	20,647,390			$	12,834,786
Core FFO		$	5,719,937			$	3,894,051			$	20,731,742			$	14,267,036
Normalized FFO		$	5,333,472			$	3,817,240			$	18,446,441			$	14,187,806
Shares Outstanding and Per Share Data
Weighted Average Shares Outstanding Basic and Diluted			28,829,801				26,978,257				27,808,895				25,932,626
Net Loss Attributable to Common Shareholders per Share - Basic and Diluted		$	(0.01	)		$	(0.10	)		$	(0.09	)		$	(0.24	)
FFO per Share- Diluted		$	0.19			$	0.11			$	0.73			$	0.49
Core FFO per Share- Diluted		$	0.20			$	0.14			$	0.74			$	0.55
Normalized FFO per Share- Diluted		$	0.18			$	0.14			$	0.66			$	0.55
Dividends per Common Share		$	0.18			$	0.18			$	0.72			$	0.72
Balance Sheet
Total Assets										$	680,444,818			$	600,317,390
Total Liabilities										$	363,412,851			$	354,078,965
Market Capitalization
Total Debt, Net of Unamortized Debt Issuance Costs										$	351,310,977			$	340,912,008
Equity Market Capitalization										$	442,301,606			$	274,118,801
Series A Preferred Stock										$	91,595,000			$	91,595,000
Series B Preferred Stock										$	95,030,000			$	45,030,000
Total Market Capitalization										$	980,237,583			$	751,655,809

 

 

Consolidated Balance Sheets
		December 31, 2016			December 31, 2015
ASSETS
Investment Property and Equipment			1				1
Land		$	47,476,314			$	45,477,814
Site and Land Improvements			398,776,390				377,215,400
Buildings and Improvements			21,101,836				20,307,097
Rental Homes and Accessories			172,862,227				134,708,763
Total Investment Property			640,216,767				577,709,074
Equipment and Vehicles			14,986,196				13,697,460
Total Investment Property and Equipment			655,202,963				591,406,534
Accumulated Depreciation			(140,255,603	)			(117,761,146	)
Net Investment Property and Equipment			514,947,360				473,645,388
Other Assets
Cash and Cash Equivalents			4,216,592				6,535,897
Securities Available for Sale at Fair Value			108,755,172				75,011,260
Inventory of Manufactured Homes			17,424,574				14,311,410
Notes and Other Receivables, net			20,323,191				20,028,574
Prepaid Expenses and Other Assets			4,497,937				4,062,813
Land Development Costs			10,279,992				6,722,048
Total Other Assets			165,497,458				126,672,002
TOTAL ASSETS		$	680,444,818			$	600,317,390
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages Payable, net of Unamortized Debt Issuance Costs		$	293,025,592			$	283,049,802
Other Liabilities
Accounts Payable			2,962,037				2,816,290
Loans Payable, net of Unamortized Debt Issuance Costs			58,285,385				57,862,206
Accrued Liabilities and Deposits			4,820,142				6,696,577
Tenant Security Deposits			4,319,695				3,654,090
Total Other Liabilities			70,387,259				71,029,163
Total Liabilities			363,412,851				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 December 31, 2016 and 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  ssued and outstanding as of December 31, 2016 and 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; 29,388,811 and 27,086,838 shares issued and outstanding as of December 31, 2016 and 2015, respectively			2,938,881				2,708,684
Excess Stock – $0.10 par value per share: 3,000,000 shares authorized; no shares issued or outstanding as of December 31, 2016 and 2015, respectively			-0-				-0-
Additional Paid-In Capital			111,422,691				109,629,260
Accumulated Other Comprehensive Income (Loss)			16,713,188				(2,056,726	)
Accumulated Deficit			(667,793	)			(667,793	)
Total Shareholders’ Equity			317,031,967				246,238,425
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	680,444,818			$	600,317,390

 

 

Consolidated Statements of Income (Loss)
		(unaudited)
		Three Months Ended								Twelve Months Ended
		12/31/2016				12/31/2015				12/31/2016				12/31/2015
INCOME:
Rental and Related Income		$	23,366,346			$	20,639,113			$	90,679,557			$	74,762,548
Sales of Manufactured Homes			1,777,351				1,285,030				8,534,272				6,754,123
TOTAL INCOME			25,143,697				21,924,143				99,213,829				81,516,671
EXPENSES:
Community Operating Expenses			10,644,368				9,759,692				42,638,333				37,049,462
Cost of Sales of Manufactured Homes			1,187,933				849,224				6,466,520				5,058,350
Selling Expenses			581,544				646,667				2,852,405				2,788,360
General and Administrative Expenses			2,071,626				2,080,805				8,004,925				7,345,644
Acquisition Costs			27,871				507,881				79,231				957,219
Depreciation Expense			6,121,424				5,411,952				23,214,100				18,877,511
TOTAL EXPENSES			20,634,766				19,256,221				83,255,514				72,076,546
OTHER INCOME (EXPENSE):
Interest Income			377,727				432,505				1,584,585				1,819,567
Dividend Income			1,801,309				1,176,253				6,636,126				4,399,181
Gain on Sales of Securities, net			386,465				76,811				2,285,301				204,230
Other Income			109,077				142,772				504,759				435,816
Interest Expense			(3,828,241	)			(4,307,923	)			(15,432,364	)			(14,074,446	)
TOTAL OTHER INCOME (EXPENSE)			(1,153,663	)			(2,479,582	)			(4,421,593	)			(7,215,652	)
Income before Gain (Loss) on Sales of Investment Property and Equipment			3,355,268				188,340				11,536,722				2,224,473
Gain (Loss) on Sales of Investment Property  and Equipment			21,347				(13,879	)			(2,163	)			(80,268	)
NET INCOME			3,376,615				174,461				11,534,559				2,144,205
Less: Preferred Dividends			3,789,747				2,599,757				14,103,432				8,267,198
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	(413,132	)		$	(2,425,296	)		$	(2,568,873	)		$	(6,122,993	)

 

 

Consolidated Statements of Cash Flows
		Twelve Months Ended
		12/31/2016				12/31/2015
			1				1
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$	11,534,559			$	2,144,205
Non-Cash Items Included in Net Income:
Depreciation			23,214,100				18,877,511
Amortization of Financing Costs			733,485				829,017
Stock Compensation Expense			1,064,678				855,768
Provision for Uncollectible Notes and Other Receivables			909,397				1,123,926
Gain on Sales of Securities, net			(2,285,301	)			(204,230	)
Loss on Sales of Investment Property and Equipment			2,163				80,268
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes			(3,113,164	)			(2,004,695	)
Notes and Other Receivables			(1,204,014	)			840,066
Prepaid Expenses and Other Assets			(435,124	)			(706,779	)
Accounts Payable			145,747				991,997
Accrued Liabilities and Deposits			(1,878,719	)			1,976,958
Tenant Security Deposits			665,605				904,200
Net Cash Provided by Operating Activities			29,353,412				25,708,212
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities, net of Mortgages Assumed			(4,081,798	)			(78,926,525	)
Purchase of Investment Property and Equipment			(58,184,812	)			(51,218,338	)
Proceeds from Sales of Investment Property and Equipment			1,114,503				777,394
Additions to Land Development Costs			(3,728,869	)			(921,141	)
Purchase of Securities Available for Sale			(27,518,151	)			(23,019,035	)
Proceeds from Sales of Securities Available for Sale			14,831,737				4,633,019
Net Cash Used in Investing Activities			(77,567,390	)			(148,674,626	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages, net of Mortgages Assumed			31,804,000				139,432,000
Net Proceeds (Payments) on Short Term Borrowings			406,935				(19,452,727	)
Principal Payments of Mortgages and Loans			(25,072,315	)			(37,756,234	)
Financing Costs on Debt			(668,338	)			(2,311,829	)
Proceeds from Issuance of Preferred Stock, net			49,120,853				43,042,124
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments			20,012,393				22,593,531
Proceeds from Exercise of Stock Options			2,485,060				170,075
Preferred Dividends Paid			(14,563,645	)			(7,556,588	)
Common Dividends Paid, net of Dividend Reinvestments			(17,630,270	)			(16,740,833	)
Net Cash Provided by Financing Activities			45,894,673				121,419,519
NET DECREASE IN CASH AND CASH EQUIVALENTS			(2,319,305	)			(1,546,895	)
CASH AND CASH EQUIVALENTS – BEGINNING OF YEAR			6,535,897				8,082,792
CASH AND CASH EQUIVALENTS – END OF YEAR		$	4,216,592			$	6,535,897

 

 

Reconciliation of Net Income to EBITDA and Net Loss Attributable
to Common Shareholders to FFO, Core FFO and Normalized FFO
		(unaudited)
		Three Months Ended								Twelve Months Ended
		12/31/2016				12/31/2015				12/31/2016				12/31/2015
Reconciliation of Net Income To EBITDA
Net Income		$	3,376,615			$	174,461			$	11,534,559			$	2,144,205
Interest Expense			3,828,241				4,307,923				15,432,364				14,074,446
Franchise Taxes			26,225				49,500				305,000				315,000
Depreciation Expense			6,121,424				5,411,952				23,214,100				18,877,511
Acquisition Costs			27,871				507,881				79,231				957,219
EBITDA		$	13,380,376			$	10,451,717			$	50,565,254			$	36,368,381
Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations
Net Loss Attributable to Common Shareholders		$	(413,132	)		$	(2,425,296	)		$	(2,568,873	)		$	(6,122,993	)
Depreciation Expense			6,121,424				5,411,952				23,214,100				18,877,511
Gain (Loss) on Sales of Depreciable Assets			(21,347	)			13,879				2,163				80,268
Funds from Operations (“FFO”)			5,686,945				3,000,535				20,647,390				12,834,786
Adjustments:
Acquisition Costs			27,871				507,881				79,231				957,219
Cost of Early Extinguishment of Debt			5,121				385,635				5,121				475,031
Core Funds from Operations (“Core FFO”)			5,719,937				3,894,051				20,731,742				14,267,036
Adjustments:
Gain on Sale of Securities, net			(386,465	)			(76,811	)			(2,285,301	)			(204,230	)
Settlement of Memphis Mobile City Litigation			-0-				-0-				-0-				125,000
Normalized Funds From Operations  (“Normalized FFO”)		$	5,333,472			$	3,817,240			$	18,446,441			$	14,187,806

 

 

Market Capitalization, Debt and Coverage Ratios
(unaudited)
			Twelve Months Ended
		12/31/2016				12/31/2015
Shares Outstanding			29,388,811				27,086,838
Market Price Per Share		$	15.05			$	10.12
Equity Market Capitalization		$	442,301,606			$	274,118,801
Total Debt			351,310,977				340,912,008
Preferred			186,625,000				136,625,000
Total Market Capitalization		$	980,237,583			$	751,655,809
Total Debt		$	351,310,977			$	340,912,008
Less: Cash and Cash Equivalents			(4,216,592	)			(6,535,897	)
Net Debt			347,094,385				334,376,111
Less: Securities Available for Sale at Fair
Value (“Securities”)			(108,755,172	)			(75,011,260	)
Net Debt Less Securities		$	238,339,213			$	259,364,851
Interest Expense		$	15,432,364			$	14,074,446
Capitalized Interest			359,906				277,944
Preferred Dividends			14,103,432				8,267,198
Total Fixed Charges		$	29,895,702			$	22,619,588
EBITDA		$	50,565,254			$	36,368,381
Debt and Coverage Ratios
Net Debt / Total Market Capitalization			35.4	%			44.5	%
Net Debt Plus Preferred / Total Market Capitalization			54.4	%			62.7	%
Net Debt Less Securities / Total Market Capitalization			24.3	%			34.5	%
Net Debt Less Securities Plus Preferred / Total Market Capitalization			43.4	%			52.7	%
Interest Coverage			3.2	x			2.5	x
Fixed Charge Coverage			1.7	x			1.6	x
Net Debt / EBITDA			6.9	x			9.2	x
Net Debt Less Securities / EBITDA			4.7	x			7.1	x
Net Debt Plus Preferred / EBITDA			10.6	x			13.0	x
Net Debt Less Securities Plus Preferred / EBITDA			8.4	x			10.9	x

 

 

Debt Analysis
(unaudited)
		12/31/2016				12/31/2015
Debt Outstanding
Mortgages Payable:
Fixed Rate Mortgages (1)		$	296,209,454			$	285,958,808
Variable Rate Mortgages			354,529				678,288
Total Mortgages Before Unamortized Debt Issuance Costs			296,563,983				286,637,096
Unamortized Debt Issuance Costs			(3,538,391	)			(3,587,294	)
Mortgages, Net of Unamortized Debt Issuance Costs		$	293,025,592			$	283,049,802
Loans Payable:
Unsecured Line of Credit		$	20,000,000			$	15,000,000
Other Loans Payable			38,393,439				42,986,503
Total Loans Before Unamortized Debt Issuance Costs			58,393,439				57,986,503
Unamortized Debt Issuance Costs			(108,054	)			(124,297	)
Loans, Net of Unamortized Debt Issuance Costs		$	58,285,385			$	57,862,206
Total Debt, Net of Unamortized Debt Issuance Costs		$	351,310,977			$	340,912,008
% Fixed/Floating
Fixed			85.0	%			84.5	%
Floating			15.0	%			15.5	%
Total			100.0	%			100.0	%
Weighted Average Interest Rates
Mortgages Payable			4.40	%			4.55	%
Loans Payable			3.06	%			3.75	%
Total Average			4.18	%			4.42	%

 

Notes:

(1) Includes a variable rate mortgage with a balance of $10,625,352 and $11,416,309 as of December 31, 2016 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 12/31/2016:

 

Year Ended		Mortgages				Loans				Total				% of Total
2017		$	19,660,598				$ 30,566,256	(1)		$	50,226,854				14.1	%
2018			9,173,393				255,164				9,428,557				2.7	%
2019			2,889,970				255,955				3,145,925				0.9	%
2020			12,525,896				4,245,631				16,771,527				4.7	%
2021			2,228,629				136,771				2,365,400				0.7	%
Thereafter			250,085,497				22,933,662				273,019,159				76.9	%
Total Debt Before Unamortized Debt Issuance Cost			296,563,983				58,393,439				354,957,422				100.0	%
Unamortized Debt Issuance Cost			(3,538,391	)			(108,054	)			(3,646,445	)
Total Debt, Net of Unamortized Debt Issuance Costs		$	293,025,592			$	58,285,385			$	351,310,977

 

Notes:

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

 

 

Property Summary and Snapshot

(unaudited)

		12/31/2016				12/31/2015				% Change
Communities			101				98				3.1	%
Developed Sites			18,054				17,793				1.5	%
Occupied			14,499				14,013				3.5	%
Occupancy % (1)			81.0	%			79.5	%			1.5	%
Monthly Rent Per Site		$	422			$	411				2.7	%
Total Rentals			4,659				3,732				24.8	%
Occupied Rentals			4,261				3,466				22.9	%
Rental Occupancy %			91.5	%			92.9	%			-1.4	%
Monthly Rent per Home Rental		$	709			$	696				1.9	%

 

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				1,907				71.8	%		$	395				858				795				92.7	%		$	707
Michigan			2				68				68				-0-				354				239				67.5	%		$	421				129				112				86.8	%		$	702
New Jersey			4				348				187				161				1,006				969				96.3	%		$	592				40				38				95.0	%		$	907
New York			7				396				301				95				1,131				912				80.6	%		$	490				261				234				89.7	%		$	855
Ohio			30				1,324				961				363				4,592				3,614				78.7	%		$	354				1,083				982				90.7	%		$	645
E. Pennsylvania			26				963				805				158				3,591				3,034				84.5	%		$	463				766				689				89.9	%		$	737
W. Pennsylvania			16				904				723				181				2,910				2,252				77.4	%		$	393				767				696				90.7	%		$	715
Tennessee			7				413				321				92				1,813				1,572				86.7	%		$	430				755				715				94.7	%		$	708
Total as of December 31, 2016			101				5,077				3,927				1,150				18,054				14,499				81.0	%		$	422				4,659				4,261				91.5	%		$	709
Acquisitions (4)			5				382				288				94				1,291				860				66.6	%		$	362				110				65				59.1	%		$	691
Grand Total			106				5,459				4,215				1,244				19,345				15,359				80.0	%		$	419				4,769				4,326				90.7	%		$	708

 

Notes:

(1) The 156 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.

(4) Acquisitions of 5 communities, 2 in Indiana and 2 in Ohio on 1/20/17, and 1 in Pennsylvania on 1/24/17.

 

 

Same Property Statistics
(unaudited)
		For Three Months Ended																For Twelve Months Ended
		12/31/2016				12/31/2015				Change				% Change				12/31/2016				12/31/2015				Change				% Change
Community Net Operating Income
Rental and Related Income		$	20,644,722			$	18,463,617			$	2,181,105				11.8	%		$	80,460,591			$	71,267,186			$	9,193,405				12.9	%
Community Operating Expenses			8,770,756				8,123,572				647,184				8.0	%			35,580,682				33,522,758				2,057,924				6.1	%
Community NOI		$	11,873,966			$	10,340,045			$	1,533,921				14.8	%		$	44,879,909			$	37,744,428			$	7,135,481				18.9	%

 

		As of
		12/31/2016				12/31/2015				% Change
Other Information
Total Sites			14,829				14,856				-0.2	%
Occupied Sites			12,577				12,322				2.1	%
Occupancy %			84.8	%			82.9	%			1.9	%
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		$	427			$	414				3.1	%
Total Rentals			4,042				3,313				22.0	%
Occupied Rentals			3,721				3,117				19.4	%
Rental Occupancy			92.1	%			94.1	%			-2.0	%
Monthly Rent Per Home Rental		$	715			$	700				2.1	%

 

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
2015			10				2,774				1,764				64	%		$	81,217,000				717
2016			3				289				215				74	%		$	7,277,000				192
2017			5				1,291				860				67	%		$	36,510,000				382

 

 

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	%
Springfield Meadows		December 19, 2016		OH			124				4,323,000				121				89	%
Total 2016 to Date							289				7,277,000				192				74	%
2017 Acquisitions
Community		Date of Acquisition		State			Number of Sites				Purchase Price				Number of Acres				Occupancy
Hillcrest Estates and Marysville Estates		January 20, 2017		OH			532				9,588,000				149				57	%
Boardwalk and Parke Place		January 20, 2017		IN			559				24,437,000				155				77	%
Hillcrest Crossing		January 24, 2017		PA			200				2,485,000				78				40	%
Total 2017 to Date							1,291				36,510,000				382				67	%

 

 

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, Core 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. Core FFO reflects the same assumptions as FFO except that it also adjusts for the effects of acquisitions costs and costs of early extinguishment of debt. Normalized FFO reflects the same assumptions as Core FFO except that it also adjusts for gains and losses realized on securities investments and certain one-time charges. Community NOI and Same Property NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses. 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, Core 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, 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 29,279,000 and 28,136,000 shares for the three and twelve months ended December 31, 2016, respectively, and 27,024,000 and 25,973,000 for the three and twelve months ended December 31, 2015, respectively. Common stock equivalents resulting from stock options in the amount of 449,000 and 327,000 shares for the three and twelve months ended December 31, 2016, respectively, and 46,000 and 40,000 shares for the three and twelve months ended December 31, 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,depreciation expense and acquisition costs.

 

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 March 8, 2017

 

FOR IMMEDIATE RELEASE	March 8, 2017
	Contact: Nelli Madden
	732-577-9997

 

UMH PROPERTIES, INC. REPORTS RESULTS FOR THE YEAR ENDED AND THE FOURTH QUARTER ENDED DECEMBER 31, 2016

 

FREEHOLD, NJ, March 8, 2017........ UMH Properties, Inc. (NYSE:UMH) reported Total Income of $99,214,000 for the year ended December 31, 2016 as compared to $81,517,000 for the year ended December 31, 2015, representing an increase of 22%. Total Income for the quarter ended December 31, 2016 was $25,144,000 as compared to $21,924,000 for the quarter ended December 31, 2015, representing an increase of 15%. Net Loss Attributable to Common Shareholders amounted to $2,569,000 or $0.09 per diluted share for the year ended December 31, 2016 as compared to $6,123,000 or $0.24 per diluted share for the year ended December 31, 2015, representing an improvement of 58%. Net Loss Attributable to Common Shareholders amounted to $413,000 or $0.01 per diluted share for the quarter ended December 31, 2016 as compared to $2,425,000 or $0.10 per diluted share for the quarter ended December 31, 2015, representing an improvement of 83%.

 

Core Funds from Operations (“Core FFO”) was $20,731,000 or $0.74 per diluted share for the year ended December 31, 2016 as compared to $14,267,000 or $0.55 per diluted share for the year ended December 31, 2015, representing an increase in Core FFO per diluted share of 35%. Core FFO was $5,719,000 or $0.20 per diluted share for the quarter ended December 31, 2016 as compared to $3,894,000 or $0.14 per diluted share for the quarter ended December 31, 2015, representing an increase in Core FFO per diluted share of 43%. Normalized Funds from Operations (“Normalized FFO”), was $18,446,000 or $0.66 per diluted share for the year ended December 31, 2016, as compared to $14,188,000 or $0.55 per diluted share for the year ended December 31, 2015, representing an increase in Normalized FFO per diluted share of 20%. Normalized FFO was $5,333,000 or $0.18 per diluted share for the quarter ended December 31, 2016, as compared to $3,817,000 or $0.14 per diluted share for the quarter ended December 31, 2015, representing an increase in Normalized FFO per diluted share of 29%.

 

A summary of significant financial information for the three and twelve months ended December 31, 2016 and 2015 is as follows:

 

		For the Three Months Ended
		December 31,
		2016				2015
Total Income		$	25,144,000			$	21,924,000
Total Expenses		$	20,635,000			$	19,256,000
Gain on Sales of Securities, net		$	386,000			$	77,000
Net Loss Attributable to Common Shareholders		$	(413,000	)		$	(2,425,000	)
Net Loss Attributable to Common  Shareholders per Diluted Common Share		$	(0.01	)		$	(0.10	)
Core FFO (1)		$	5,719,000			$	3,894,000
Core FFO (1) per Diluted Common Share		$	0.20			$	0.14
Normalized FFO (1)		$	5,333,000			$	3,817,000
Normalized FFO (1) per Diluted Common Share		$	0.18			$	0.14
Weighted Average Diluted Shares Outstanding			28,830,000				26,978,000

 

(continued on next page)

 

 

		For the Twelve Months Ended
		December 31,
		2016				2015
Total Income		$	99,214,000			$	81,517,000
Total Expenses		$	83,256,000			$	72,077,000
Gain on Sales of Securities, net		$	2,285,000			$	204,000
Net Loss Attributable to Common Shareholders		$	(2,569,000	)		$	(6,123,000	)
Net Loss Attributable to Common  Shareholders per Diluted Common Share		$	(0.09	)		$	(0.24	)
Core FFO (1)		$	20,731,000			$	14,267,000
Core FFO (1) per Diluted Common Share		$	0.74			$	0.55
Normalized FFO (1)		$	18,446,000			$	14,188,000
Normalized FFO (1) per Diluted Common Share		$	0.66			$	0.55
Weighted Average Diluted Shares Outstanding			27,809,000				25,933,000

 

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

 

		December 31, 2016				December 31, 2015
Gross Real Estate Investments		$	640,217,000			$	577,709,000
Securities Available for Sale at Fair Value		$	108,755,000			$	75,011,000
Total Assets		$	680,445,000			$	600,317,000
Mortgages Payable, net		$	293,026,000			$	283,050,000
Loans Payable, net		$	58,285,000			$	57,862,000
Total Shareholders’ Equity		$	317,032,000			$	246,238,000

 

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

 

“We are pleased to announce another excellent year of increasing financial operating results and strong overall performance. Our accomplishments during the year included:

 

●	Generated an increase in Normalized FFO share growth of 20.0%, representing our fourth consecutive year of double-digit growth;
●	Increased Community Net Operating Income (“NOI”) by 27.4%;
●	Increased same property Community NOI by 18.9%;
●	Increased same property occupancy from 82.9% to 84.8%;
●	Improved our Operating Expense Ratio from 49.6% to 47.0%;
●	Generated approximately $2.3 million in net realized gains in addition to the $16.7 million in unrealized gains we held at yearend on our REIT securities investments;
●	Acquired 3 communities containing approximately 300 home sites for a total cost of $7.3 million;
●	Increased our rental home portfolio by 900 homes, representing an increase of 25% to 4,700 total rental homes;
●	Raised approximately $22 million in common equity capital through our Dividend Reinvestment and Stock Purchase Plan;
●	Issued 2 million shares of our 8.0% Series B Cumulative Redeemable Preferred Stock raising net proceeds of approximately $49 million;
●	Financed/refinanced four communities for a total of $32 million; and
●	Reduced our weighted average mortgage interest rate from 4.6% to 4.4%.”

 

(continued on next page)

 

 

Mr. Landy stated, “UMH was one of the top performing REITs in 2016, with a total shareholder return of 59%. This year also marks our fourth consecutive year of double-digit earnings per share growth, increasing Normalized FFO per diluted share by 20.0%, from $0.55 per diluted share in 2015 to $0.66 per diluted share in 2016. For the fourth quarter, our Normalized FFO was $0.18 per diluted share as compared to $0.14 per diluted share in the prior year period, representing an increase of 28.6%. We have reached the point where our dividends are once again covered by our Normalized FFO.”

 

“Our excellent results are fueled by our solid same property metrics. Year over year, same property revenue increased 12.9% while expenses only increased 6.1% resulting in an increase in same property NOI of 18.9%. These results were led by a same property occupancy gain of 190 basis points.”

 

“We have continued to acquire value-add communities and in 2016 we purchased 3 communities containing approximately 300 developed homesites for an aggregate cost of approximately $7.3 million. Subsequent to yearend, we completed the acquisition of an additional 5 communities containing approximately 1,300 developed homesites for an aggregate cost of approximately $36.5 million. These communities are located in regions where we are seeing increased demand and should provide us with an opportunity to significantly improve community operating results.”

 

“Our securities portfolio delivered exceptional results this year. We are very pleased with our current holdings which had $16.7 million in net unrealized gains at yearend, in addition to the $6.6 million in dividend income and $2.3 million in net realized gains generated during the year.”

 

“With respect to our capital markets activity, during 2016 we raised approximately $49 million through the issuance of 2 million shares of our 8% Series B Cumulative Redeemable Perpetual Preferred Stock. This offering further strengthens our balance sheet and positions the Company to continue to deliver these positive results.”

 

“Our 2016 results reflect consistent strong performance across our portfolio and positions us for continued success in 2017.”

 

UMH Properties, Inc. will host its Fourth Quarter and Year End 2016 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, March 9, 2017 at 10:00 a.m. Eastern Time.

 

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

 

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

 

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, March 9, 2017. It will be available until May 1, 2017, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10100433. 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 106 manufactured home communities containing approximately 19,300 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. 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 twelve months ended December 31, 2016 and 2015 are calculated as follows:

 

		Three Months Ended								Twelve Months Ended
		12/31/16				12/31/15				12/31/16				12/31/15
Net Loss Attributable to Common Shareholders		$	(413,000	)		$	(2,425,000	)		$	(2,569,000	)		$	(6,123,000	)
Depreciation Expense			6,121,000				5,412,000				23,214,000				18,878,000
(Gain) Loss on Sales of  Depreciable Assets			(22,000	)			14,000				2,000				80,000
FFO Attributable to Common Shareholders			5,686,000				3,001,000				20,647,000				12,835,000
Acquisition Costs			28,000				508,000				79,000				957,000
Cost of Early Extinguishment of Debt			5,000				385,000				5,000				475,000
Core FFO Attributable to Common Shareholders			5,719,000				3,894,000				20,731,000				14,267,000
Gain on Sales of Securities, net			(386,000	)			(77,000	)			(2,285,000	)			(204,000	)
Settlement of Litigation			-0-				-0-				-0-				125,000
Normalized FFO Attributable to Common Shareholders		$	5,333,000			$	3,817,000			$	18,446,000			$	14,188,000

 

The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 29,279,000 and 28,136,000 shares for the three and twelve months ended December 31, 2016, respectively, and 27,024,000 and 25,973,000 for the three and twelve months ended December 31, 2015, respectively. Common stock equivalents resulting from stock options in the amount of 449,000 and 327,000 shares for the three and twelve months ended December 31, 2016, respectively, and 46,000 and 40,000 shares for the three and twelve months ended December 31, 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.

 

(continued on next page)

 

 

The following are the cash flows provided (used) by operating, investing and financing activities for the twelve months ended December 31, 2016 and 2015:

 

		2016				2015
Operating Activities		$	29,353,000			$	25,708,000
Investing Activities			(77,567,000	)			(148,675,000	)
Financing Activities			45,895,000				121,420,000

 

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