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 (Loss) to Adjusted 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
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 1, 2018	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.

 

 

Financial Highlights
(unaudited)		Three Months Ended								Nine Months Ended
		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Operating Information
Number of Communities											115				107
Number of Sites											20,684				19,374
Rental and Related Income		$	28,728,078			$	25,854,623			$	84,236,326			$	75,678,939
Community Operating Expenses		$	13,288,715			$	12,317,856			$	38,758,711			$	35,669,793
Community NOI		$	15,439,363			$	13,536,767			$	45,477,615			$	40,009,146
Expense Ratio			46.3	%			47.6	%			46.0	%			47.1	%
Sales of Manufactured Homes		$	4,719,036			$	2,830,314			$	11,105,302			$	8,272,395
Number of Homes Sold			80				61				204				169
Number of Rentals Added			219				257				608				690
Net Income (Loss)		$	(6,349,343	)		$	3,262,001			$	(8,485,696	)		$	9,137,418
Net Loss Attributable to Common Shareholders		$	(11,472,600	)		$	(5,179,423	)		$	(23,678,383	)		$	(6,883,500	)
Adjusted EBITDA		$	16,530,494			$	14,206,085			$	46,761,492			$	41,717,739
FFO		$	(3,393,494	)		$	1,819,588			$	(159,753	)		$	13,406,596
Core FFO		$	7,093,936			$	5,322,075			$	19,602,826			$	16,909,083
Normalized FFO		$	7,093,936			$	4,855,554			$	20,107,719			$	15,390,794
Shares Outstanding and Per Share Data
Weighted Average Shares Outstanding
Basic and Diluted			37,151,432				34,102,231				36,542,855				31,918,211
Net Loss Attributable to
Common Shareholder per share
Basic and Diluted		$	(0.31	)		$	(0.15	)		$	(0.65	)		$	(0.21	)
FFO per Share- Diluted		$	(0.09	)		$	0.05			$	0.00			$	0.41
Core FFO per Share- Diluted		$	0.19			$	0.15			$	0.53			$	0.52
Normalized FFO per Share- Diluted		$	0.19			$	0.14			$	0.55			$	0.48
Dividends per Common Share		$	0.18			$	0.18			$	0.54			$	0.54
Balance Sheet
Total Assets										$	868,504,952			$	785,795,154
Total Liabilities										$	415,391,383			$	368,055,835
Market Capitalization
Total Debt, Net of Unamortized
Debt Issuance Costs										$	400,450,562			$	354,297,319
Equity Market Capitalization										$	585,968,866			$	539,373,955
Series B Preferred Stock										$	95,030,000			$	95,030,000
Series C Preferred Stock										$	143,750,000			$	143,750,000
Series D Preferred Stock										$	50,000,000			$	-0-
Total Market Capitalization										$	1,275,199,428			$	1,132,451,274

 

 

Consolidated Balance Sheets
		September 30				December 31,
		2018				2017
		(unaudited)
ASSETS
Investment Property and Equipment
Land		$	64,395,495			$	61,239,644
Site and Land Improvements			491,396,361				463,242,075
Buildings and Improvements			23,506,934				22,963,926
Rental Homes and Accessories			244,196,899				216,992,988
Total Investment Property			823,495,689				764,438,633
Equipment and Vehicles			18,265,581				16,874,760
Total Investment Property and Equipment			841,761,270				781,313,393
Accumulated Depreciation			(189,256,132	)			(166,444,512	)
Net Investment Property and Equipment			652,505,138				614,868,881
Other Assets
Cash and Cash Equivalents			8,879,883				23,242,090
Marketable Securities at Fair Value			130,931,844				132,964,276
Inventory of Manufactured Homes			25,091,168				17,569,365
Notes and Other Receivables, net			29,567,036				25,451,053
Prepaid Expenses and Other Assets			6,696,881				3,457,083
Land Development Costs			14,833,002				6,328,578
Total Other Assets			215,999,814				209,012,445
TOTAL ASSETS		$	868,504,952			$	823,881,326
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages Payable, net of Unamortized Debt Issuance Costs		$	313,419,440			$	304,895,117
Other Liabilities
Accounts Payable			3,683,083				2,960,739
Loans Payable, net of Unamortized Debt Issuance Costs			87,031,122				84,704,487
Accrued Liabilities and Deposits			5,644,399				4,977,886
Tenant Security Deposits			5,613,339				5,127,633
Total Other Liabilities			101,971,943				97,770,745
Total Liabilities			415,391,383				402,665,862
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity:
Series B - 8.0% Cumulative Redeemable Preferred Stock, par value $0.10
per share: 4,000,000 shares authorized; 3,801,200 shares issued and
outstanding as of September 30, 2018 and December 31, 2017			95,030,000				95,030,000
Series C- 6.75% Cumulative Redeemable Preferred Stock, par value $0.10
per share; 5,750,000 shares authorized, issued and outstanding as of
September 30, 2018 and December 31, 2017			143,750,000				143,750,000
Series D - 6.375% Cumulative Redeemable Preferred Stock, par value $0.10
per share, 2,300,000 shares authorized; 2,000,000 and -0- shares issued
and outstanding as of September 30, 2018 and December 31, 2017, respectively			50,000,000				-0-
Common Stock – $0.10 par value per share: 111,363,800 and 113,663,800
shares authorized; 37,466,040 and 35,488,068 shares issued and
outstanding as of September 30, 2018 and December 31, 2017, respectively			3,746,604				3,548,807
Excess Stock – $0.10 par value per share: 3,000,000 shares authorized; no
shares issued or outstanding as of September 30, 2018 and December 31, 2017			-0-				-0-
Additional Paid-In Capital			161,254,758				168,034,868
Accumulated Other Comprehensive Income			-0-				11,519,582
Accumulated Deficit			(667,793	)			(667,793	)
Total Shareholders’ Equity			453,113,569				421,215,464
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	868,504,952			$	823,881,326

 

 

 

Consolidated Statements of Income (Loss)
(unaudited)
		Three Months Ended								Nine Months Ended
		9/30/2018				9/30/2017				9/30/2018				9/30/2017
INCOME:
Rental and Related Income		$	28,728,078			$	25,854,623			$	84,236,326			$	75,678,939
Sales of Manufactured Homes			4,719,036				2,830,314				11,105,302				8,272,395
TOTAL INCOME			33,447,114				28,684,937				95,341,628				83,951,334
EXPENSES:
Community Operating Expenses			13,288,715				12,317,856				38,758,711				35,669,793
Cost of Sales of Manufactured Homes			3,512,705				2,215,767				8,406,701				6,465,665
Selling Expenses			1,024,188				836,939				2,913,504				2,461,780
General and Administrative Expenses			2,559,023				2,354,054				8,200,261				7,190,665
Depreciation Expense			8,051,627				6,980,113				23,410,519				20,260,556
TOTAL EXPENSES			28,436,258				24,704,729				81,689,696				72,048,459
OTHER INCOME (EXPENSE):
Interest Income			563,549				510,358				1,569,955				1,479,495
Dividend Income			2,704,255				2,068,198				7,603,575				5,715,038
Other Investment Income (Loss), net			(10,487,430	)			466,521				(19,742,472	)			1,518,289
Other Income			134,761				126,660				334,740				592,251
Interest Expense			(4,247,855	)			(3,871,046	)			(11,795,315	)			(12,040,990	)
TOTAL OTHER INCOME (EXPENSE)			(11,332,720	)			(699,309	)			(22,029,517	)			(2,735,917	)
Income (Loss) before Loss on Sales
of Investment Property and Equipment			(6,321,864	)			3,280,899				(8,377,585	)			9,166,958
Loss on Sales of Investment Property
and Equipment			(27,479	)			(18,898	)			(108,111	)			(29,540	)
NET INCOME (LOSS)			(6,349,343	)			3,262,001				(8,485,696	)			9,137,418
Less: Preferred Dividends			(5,123,257	)			(4,938,937	)			(15,192,687	)			(12,518,431	)
Less: Redemption of Preferred Stock			-0-				(3,502,487	)			-0-				(3,502,487	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	(11,472,600	)		$	(5,179,423	)		$	(23,678,383	)		$	(6,883,500	)

 

 

Consolidated Statements of Cash Flows
(unaudited)		Nine Months Ended
		9/30/2018				9/30/2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)		$	(8,485,696	)		$	9,137,418
Non-Cash Items Included in Net Income (Loss):
Depreciation			23,410,519				20,260,556
Amortization of Financing Costs			462,604				496,225
Stock Compensation Expense			1,247,722				998,059
Benefit for Uncollectible Notes and Other Receivables			(835,102	)			(934,794	)
Gain on Sales of Marketable Securities, net			(20,107	)			(1,518,289	)
Decrease in Fair Value of Marketable Securities			19,762,579				-0-
Loss on Sales of Investment Property and Equipment			108,111				29,540
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes			(7,521,803	)			(68,599	)
Notes and Other Receivables, net of Notes Acquired with Acquisitions			(3,280,881	)			167,229
Prepaid Expenses and Other Assets			(1,995,025	)			(1,044,954	)
Accounts Payable			722,344				747,791
Accrued Liabilities and Deposits			666,513				262,499
Tenant Security Deposits			485,706				650,335
Net Cash Provided by Operating Activities			24,727,484				29,183,016
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities			(24,549,398	)			(40,877,655	)
Purchase of Investment Property and Equipment			(38,562,274	)			(48,095,917	)
Proceeds from Sales of Investment Property and Equipment			1,956,785				1,651,685
Additions to Land Development Costs			(8,504,424	)			(2,263,009	)
Purchase of Marketable Securities			(17,978,715	)			(38,002,778	)
Proceeds from Sales of Marketable Securities			268,675				12,178,413
Net Cash Used in Investing Activities			(87,369,351	)			(115,409,261	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages			13,442,000				44,420,000
Net Proceeds (Payments) on Short Term Borrowings			2,331,831				(16,791,278	)
Principal Payments of Mortgages			(5,094,625	)			(24,543,481	)
Financing Costs on Debt			(290,852	)			(595,124	)
Proceeds from Issuance of Preferred Stock, net of Offering Costs			48,247,280				138,983,808
Redemption of 8.25% Series A Preferred Stock			-0-				(91,595,000	)
Proceeds from Registered Direct Placement of Common Stock, net of Offering Costs			-0-				22,527,507
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments			21,292,003				46,565,672
Proceeds from Exercise of Stock Options			1,385,000				5,435,634
Preferred Dividends Paid			(14,927,062	)			(12,339,553	)
Common Dividends Paid, net of Reinvestments			(16,861,142	)			(15,124,760	)
Net Cash Provided by Financing Activities			49,524,433				96,943,425
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			(13,117,434	)			10,717,180
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – BEGINNING OF PERIOD			27,891,249				9,349,489
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – END OF PERIOD		$	14,773,815			$	20,066,669

 

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Net Loss Attributable to Common Shareholders to FFO, Core FFO and Normalized FFO
(unaudited)
		Three Months Ended								Nine Months Ended
		9/30/2018				9/30/2017				9/30/2018				9/30/2017
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net Income (Loss)		$	(6,349,343	)		$	3,262,001			$	(8,485,696	)		$	9,137,418
Interest Expense			4,247,855				3,871,046				11,795,315				12,040,990
Franchise Taxes			92,925				92,925				278,775				278,775
Depreciation Expense			8,051,627				6,980,113				23,410,519				20,260,556
Decrease in Fair Value of Marketable Securities			10,487,430				-0-				19,762,579				-0-
Adjusted EBITDA		$	16,530,494			$	14,206,085			$	46,761,492			$	41,717,739
Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations
Net Loss Attributable to Common Shareholders		$	(11,472,600	)		$	(5,179,423	)		$	(23,678,383	)		$	(6,883,500	)
Depreciation Expense			8,051,627				6,980,113				23,410,519				20,260,556
Loss on Sales of Depreciable Assets			27,479				18,898				108,111				29,540
Funds from Operations (“FFO”)			(3,393,494	)			1,819,588				(159,753	)			13,406,596
Adjustments:
Decrease in Fair Value of Marketable Securities			10,487,430				-0-				19,762,579				-0-
Redemption of Preferred Stock			-0-				3,502,487				-0-				3,502,487
Core Funds from Operations (“Core FFO”)			7,093,936				5,322,075				19,602,826				16,909,083
Adjustments:
Non- Recurring Other Expense (1)			-0-				-0-				525,000				-0-
Gain on Sales of Marketable Securities, net			-0-				(466,521	)			(20,107	)			(1,518,289	)
Normalized Funds from Operations
(“Normalized FFO”)		$	7,093,936			$	4,855,554			$	20,107,719			$	15,390,794

 

(1) Consists of one-time payroll expenditures

 

 

Market Capitalization, Debt and Coverage Ratios
(unaudited)
		Nine Months Ended								Year Ended
		9/30/2018				9/30/2017				12/31/2017
Shares Outstanding			37,466,040				34,686,428				35,488,068
Market Price Per Share		$	15.64			$	15.55			$	14.90
Equity Market Capitalization		$	585,968,866			$	539,373,955			$	528,772,213
Total Debt			400,450,562				354,297,319				389,599,604
Preferred			288,780,000				238,780,000				238,780,000
Total Market Capitalization		$	1,275,199,428			$	1,132,451,274			$	1,157,151,817
Total Debt		$	400,450,562			$	354,297,319			$	389,599,604
Less: Cash and Cash Equivalents			(8,879,883	)			(14,840,944	)			(23,242,090	)
Net Debt			391,570,679				339,456,375				366,357,514
Less: Marketable Securities at Fair Value (“Securities”)			(130,931,844	)			(132,212,410	)			(132,964,276	)
Net Debt Less Securities		$	260,638,835			$	207,243,965			$	233,393,238
Interest Expense		$	11,795,315			$	12,040,990			$	15,876,972
Capitalized Interest			532,640				368,967				500,859
Preferred Dividends			15,192,687				12,518,431				16,844,812
Total Fixed Charges		$	27,520,642			$	24,928,388			$	33,222,643
Adjusted EBITDA		$	46,761,492			$	41,717,739			$	56,347,752
Debt and Coverage Ratios
Net Debt / Total Market Capitalization			30.7	%			30.0	%			31.7	%
Net Debt Plus Preferred / Total Market Capitalization			53.4	%			51.1	%			52.3	%
Net Debt Less Securities / Total Market Capitalization			20.4	%			18.3	%			20.2	%
Net Debt Less Securities Plus Preferred / Total Market Capitalization			43.1	%			39.4	%			40.8	%
Interest Coverage			3.8	x			3.4	x			3.4	x
Fixed Charge Coverage			1.7	x			1.7	x			1.7	x
Net Debt / Adjusted EBITDA			6.3	x			6.1	x			6.5	x
Net Debt Less Securities / Adjusted EBITDA			4.2	x			3.7	x			4.1	x
Net Debt Plus Preferred / Adjusted EBITDA			10.9	x			10.4	x			10.7	x
Net Debt Less Securities Plus Preferred / Adjusted EBITDA			8.8	x			8.0	x			8.4	x

 

 

Debt Analysis
(unaudited)		Nine Months Ended								Year Ended
		9/30/2018				9/30/2017				12/31/2017
Debt Outstanding
Mortgages Payable:
Fixed Rate Mortgages		$	316,808,161			$	316,337,850			$	308,444,180
Variable Rate Mortgages			-0-				102,651				16,606
Total Mortgages Before Unamortized Debt Issuance Costs			316,808,161				316,440,501				308,460,786
Unamortized Debt Issuance Costs			(3,388,721	)			(3,632,321	)			(3,565,669	)
Mortgages, Net of Unamortized Debt Issuance Costs		$	313,419,440			$	312,808,180			$	304,895,117
Loans Payable:
Unsecured Line of Credit		$	35,000,000			$	-0-			$	35,000,000
Other Loans Payable			52,097,655				41,602,161				49,765,824
Total Loans Before Unamortized Debt Issuance Costs			87,097,655				41,602,161				84,765,824
Unamortized Debt Issuance Costs			(66,533	)			(113,022	)			(61,337	)
Loans, Net of Unamortized Debt Issuance Costs		$	87,031,122			$	41,489,139			$	84,704,487
Total Debt, Net of Unamortized Debt Issuance Costs		$	400,450,562			$	354,297,319			$	389,599,604
% Fixed/Floating
Fixed			80.0	%			90.1	%			80.1	%
Floating			20.0	%			9.9	%			19.9	%
Total			100.0	%			100.0	%			100.0	%
Weighted Average Interest Rates (1)
Mortgages Payable			4.24	%			4.31	%			4.24	%
Loans Payable			4.11	%			2.72	%			3.14	%
Total Average			4.21	%			4.12	%			4.00	%
Weighted Average Maturity (Years)
Mortgages Payable			6.3				6.7				6.9

 

	Notes:
	(1) Weighted average interest rates do not include the effect of unamortized debt issuance costs.

 

 

Debt Maturity

(unaudited)

 

 

As of 09/30/18:
Fiscal Year Ended		Mortgages				Loans				Total				% of Total
2018		$	-0-			$	15,799,825			$	15,799,825				3.9	%
2019			2,432,793				3,838,220				6,271,013				1.6	%
2020			11,841,412				39,181,440	(1)			51,022,852				12.6	%
2021			2,166,757				346,692				2,513,449				0.6	%
2022			20,542,424				1,137,104				21,679,528				5.4	%
Thereafter			279,824,775				26,794,374				306,619,149				75.9	%
Total Debt Before Unamortized Debt Issuance Cost			316,808,161				87,097,655				403,905,816				100.0	%
Unamortized Debt Issuance Cost			3,388,721				66,533				3,455,254
Total Debt, Net of Unamortized Debt Issuance Costs		$	313,419,440			$	87,031,122			$	400,450,562

 

Notes:

(1) Includes $35 million balance outstanding on the Company’s Line of Credit due March 2020, with an additional one year option.

 

 

Securities Portfolio Performance

 

 

 

Year Ended		Securities Available for Sale				Dividend Income				Net Realized Gain on Sale of Securities				Net Realized Gain on Sale of Securities & Dividend Income
2010		$	28,757,477			$	1,762,609			$	2,027,943			$	3,790,552
2011			43,298,214				2,512,057				2,692,649				5,204,706
2012			57,325,440				3,243,592				4,092,585				7,336,177
2013			59,254,942				3,481,514				4,055,812				7,537,326
2014			63,555,961				4,065,986				1,542,589				5,608,575
2015			75,011,260				4,399,181				204,230				4,603,411
2016			108,755,172				6,636,126				2,285,301				8,921,427
2017			132,964,276				8,134,898				1,747,528				9,882,426
2018*			130,931,844				7,603,575				20,107				7,623,682
						$	41,839,538			$	18,668,744			$	60,508,282

 

* For the nine months ended September 30, 2018.

 

 

Property Summary and Snapshot

(unaudited)

 

		9/30/2018				9/30/2017				% Change
Communities			115				107				7.5	%
Developed Sites			20,684				19,374				6.8	%
Occupied			17,089				15,753				8.5	%
Occupancy %			82.6	%			81.9	%			70	bps
Total Rentals			6,215				5,349				16.2	%
Occupied Rentals			5,796				5,040				15.0	%
Rental Occupancy %			93.3	%			94.2	%			-90	bps
Monthly Rent Per Site		$	432			$	427				1.2	%
Monthly Rent Per Home Rental Including Site		$	737			$	719				2.5	%

 

State		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
						(1)								(1)																																(2)
Indiana			14				1,104				872				232				3,980				3,268				82.1	%		$	378				1,338				1,252				93.6	%		$	724
Maryland			1				77				10				67				58				57				98.3	%		$	495				-0-				-0-				N/A				N/A
Michigan			2				68				68				-0-				354				259				73.2	%		$	446				178				160				89.9	%		$	742
New Jersey			4				349				187				162				1,006				963				95.7	%		$	615				40				39				97.5	%		$	934
New York			7				617				308				309				1,156				955				82.6	%		$	523				306				287				93.8	%		$	873
Ohio			32				1,475				1,065				410				5,099				4,073				79.9	%		$	373				1,541				1,429				92.7	%		$	674
Pennsylvania			48				2,087				1,728				359				7,332				5,903				80.5	%		$	449				1,999				1,848				92.4	%		$	763
Tennessee			7				413				321				92				1,699				1,611				94.8	%		$	458				813				781				96.1	%		$	754
Total as of September 30, 2018			115				6,190				4,559				1,631				20,684				17,089				82.6	%		$	432				6,215				5,796				93.3	%		$	737

 

Notes:

(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.

 

 

Same Property Statistics

(unaudited)

 

		For Three Months Ended																For Nine Months Ended
		9/30/2018				9/30/2017				Change				%  Change				9/30/2018				9/30/2017				Change				%  Change
Community Net Operating Income
Rental and Related Income		$	25,988,053			$	24,472,089			$	1,515,964				6.2	%		$	76,913,124			$	72,216,423			$	4,696,701				6.5	%
Community Operating Expenses			11,354,966				10,926,950				428,016				3.9	%			33,514,638				31,859,669				1,654,969				5.2	%
Community NOI		$	14,633,087			$	13,545,139			$	1,087,948				8.0	%		$	43,398,486			$	40,356,754			$	3,041,732				7.5	%

 

		As of
		9/30/2018				9/30/2017				Change
Total Sites			17,915				17,869				0.3	%
Occupied Sites			14,907				14,804				0.7	%
Occupancy %			83.2	%			82.8	%			40	bps
Number of Properties			101				101				N/A
Total Rentals			5,758				5,184				11.1	%
Occupied Rentals			5,379				4,888				10.0	%
Rental Occupancy			93.4	%			94.3	%			-90	bps
Monthly Rent Per Site		$	446			$	431				3.5	%
Monthly Rent Per Home Rental Including Site		$	737			$	719				2.5	%

 

Notes:

Same Property includes all properties owned as of January 1, 2017, with the exception of Memphis Blues.

 

 

Acquisition Summary

 

At Acquisition:
Year of Acquisition		Number of Communities				Sites				Occupied Sites				Occupancy %				Price				Total Acres
2016			3				289				215				74	%		$	7,277,000				219
2017			11				1,997				1,333				67	%		$	63,290,000				602
2018			3				803				688				86	%		$	24,000,000				289

 

 

 

2018 Acquisitions
Community		Date of Acquisition		State		Number of Sites				Purchase Price				Number of Acres				Occupancy
Redbud Village and Camelot Estates		May 30, 2018		IN			669			$	20,500,000				231				91	%
Summit Village		August 31, 2018		IN			134				3,500,000				58				60	%
Total 2018 to Date							803			$	24,000,000				289				86	%

 

 

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, amortization and acquisition costs (“Adjusted EBITDA”), variously defined, as supplemental performance measures. While the Company believes net loss 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, Adjusted 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, costs of early extinguishment of debt, change in the fair value of marketable securities and costs associated with the redemption of preferred stock. Normalized FFO reflects the same assumptions as Core FFO except that it also adjusts for gains and losses realized on marketable 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. Adjusted 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, Adjusted 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 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 costs of extinguishment of debt, change in the fair value of marketable securities and costs associated with the redemption of preferred stock.

 

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

 

FFO per Diluted Common Share, Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 37,674,000 and 36,894,000 shares for the three and nine months ended September 30, 2018, respectively, and 34,572,000 and 32,388,000 the three and nine months ended September 30, 2017, respectively. Common stock equivalents resulting from stock options in the amount of 523,000 and 352,000 shares for the three and nine months ended September 30, 2018, respectively, and 470,000 shares for both the three and nine months ended September 30, 2017, 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, 2017, with the exception of Memphis Blues.

 

Adjusted EBITDA is calculated as net income (loss) plus interest expense, franchise taxes, depreciation, amortization and the change in the fair value of marketable securities.

 

Community NOI, Same Property NOI, Adjusted 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, Adjusted EBITDA, FFO, Core FFO and Normalized FFO should not be considered as substitutes for net 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, 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 1, 2018

 

FOR IMMEDIATE RELEASE	November 1, 2018
	Contact: Nelli Madden
	732-577-9997

 

UMH PROPERTIES, INC. REPORTS RESULTS FOR THE THIRD QUARTER ENDED

SEPTEMBER 30, 2018

 

FREEHOLD, NJ, November 1, 2018........ UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended September 30, 2018 of $33,447,000 as compared to $28,685,000 for the quarter ended September 30, 2017, representing an increase of 17%. Net Loss Attributable to Common Shareholders amounted to $11,473,000 or $0.31 per diluted share for the quarter ended September 30, 2018 as compared to $5,179,000 or $0.15 per diluted share for the quarter ended September 30, 2017. This increase was due to the change in fair value of our marketable securities, which are now included in our operating numbers.

 

Core Funds from Operations (“Core FFO”), was $7,094,000 or $0.19 per diluted share for the quarter ended September 30, 2018 as compared to $5,322,000 or $0.15 per diluted share for the quarter ended September 30, 2017, representing an increase in Core FFO per diluted share of 27%. Normalized Funds from Operations (“Normalized FFO”) was $7,094,000 or $0.19 per diluted share for the quarter ended September 30, 2018, as compared to $4,856,000 or $0.14 per diluted share for the quarter ended September 30, 2017, representing an increase in Normalized FFO per diluted share of 36%.

 

A summary of significant financial information for the three and nine months ended September 30, 2018 and 2017 is as follows:

 

		For the Three Months Ended
		September 30,
		2018				2017
Total Income		$	33,447,000			$	28,685,000
Total Expenses		$	28,436,000			$	24,705,000
Other Investment Income (Loss), net		$	(10,487,000	)		$	466,000
Net Loss Attributable to Common Shareholders		$	(11,473,000	)		$	(5,179,000	)
Net Loss Attributable to Common Shareholders per Diluted Common Share		$	(0.31	)		$	(0.15	)
Core FFO (1)		$	7,094,000			$	5,322,000
Core FFO (1) per Diluted Common Share		$	0.19			$	0.15
Normalized FFO (1)		$	7,094,000			$	4,856,000
Normalized FFO (1) per Diluted Common Share		$	0.19			$	0.14
Weighted Average Shares Outstanding			37,151,000				34,102,000

 

 

		For the Nine Months Ended
		September 30,
		2018				2017
Total Income		$	95,342,000			$	83,951,000
Total Expenses		$	81,690,000			$	72,048,000
Other Investment Income (Loss), net		$	(19,742,000	)		$	1,518,000
Net Loss Attributable to Common Shareholders		$	(23,678,000	)		$	(6,883,000	)
Net Loss Attributable to Common Shareholders per Diluted Common Share		$	(0.65	)		$	(0.21	)
Core FFO (1)		$	19,603,000			$	16,909,000
Core FFO (1) per Diluted Common Share		$	0.53			$	0.52
Normalized FFO (1)		$	20,108,000			$	15,391,000
Normalized FFO (1) per Diluted Common Share		$	0.55			$	0.48
Weighted Average Shares Outstanding			36,543,000				31,918,000

 

A summary of significant balance sheet information as of September 30, 2018 and December 31, 2017 is as follows:

 

		September 30, 2018				December 31, 2017
Gross Real Estate Investments		$	823,496,000			$	764,439,000
Marketable Securities at Fair Value		$	130,932,000			$	132,964,000
Total Assets		$	868,505,000			$	823,881,000
Mortgages Payable, net		$	313,419,000			$	304,895,000
Loans Payable, net		$	87,031,000			$	84,704,000
Total Shareholders’ Equity		$	453,114,000			$	421,215,000

 

Samuel A. Landy, President and CEO, commented on the results of the third quarter of 2018.

 

“We are pleased to announce that we have made substantial progress on multiple fronts. During the quarter, we:

 

	●	Increased our per share Core FFO to $0.19, representing a 27% increase over the prior year period;
	●	Increased our per share Normalized FFO to $0.19, representing a 36% increase over the prior year period;
	●	Increased Rental and Related Income by 11% over the prior year period;
	●	Increased Community Net Operating Income (“NOI”) by 14% over the prior year period;
	●	Improved our Operating Expense ratio by 130 basis points over the prior year period from 47.6% to 46.3%;
	●	Increased Same Property NOI by 8% over the prior year period;
	●	Increased Same Property Occupancy by 40 basis points over the prior year period from 82.8% to 83.2%;
	●	Increased home sales by 67% over the prior year period;
	●	Increased our rental home portfolio by 608 homes to approximately 6,200 total rental homes, representing an increase of 11% from yearend 2017;

 

 

	●	Acquired one community in Indiana containing 134 homesites for a total cost of $3,500,000;
	●	Obtained a $13.4 million, 4.27% mortgage;
	●	Reduced our weighted average interest rate quarter over quarter on our mortgage debt from 4.3% to 4.2%;
	●	Raised $24.2 million year to date through our Dividend Reinvestment and Stock Purchase Plan;
	●	Increased our total market capitalization to $1.3 billion, representing an increase of 13% over the prior year period.”

 

Mr. Landy further stated, “UMH is on its way to an excellent 2018. Our income growth and overall operating metrics have improved. Demand for housing, especially affordable housing, continues to increase. Improving demographics, low unemployment rates and rising wages have created additional demand for both sales and rentals. These factors have contributed to our above industry average same property income and NOI growth. We are very well positioned for the future. Our business plan of acquiring communities with vacancy has provided us with a runway to further improve upon our operating numbers We have the ability to grow the company by filling our vacant sites, developing expansion sites and acquiring additional properties.”

 

“During the quarter, we closed on the acquisition of one all-age community located in Indiana for a total purchase price of $3.5 million. This community contains 134 developed home sites of which 60% are currently occupied. This community is a high-quality asset developed in the year 2000 with additional land for expansion and below market rents. We continue to execute our growth strategy and currently have an acquisition pipeline totaling $78 million, consisting of 5 properties containing 2,000 sites.”

 

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

 

UMH Properties, Inc. will host its Third Quarter 2018 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, November 2, 2018 at 10:00 a.m. Eastern Time.

 

The Company’s 2018 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 Friday, November 2, 2018. It will be available until February 1, 2019 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10124151. 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 115 manufactured home communities containing approximately 20,700 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland. In addition, the Company owns a portfolio of REIT securities.

 

 

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 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 costs of early extinguishment of debt, change in the fair value of marketable securities and costs associated with the redemption of preferred stock. We define Normalized Funds from Operations (“Normalized FFO”) as Core FFO excluding gains and losses realized on marketable 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 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, 2018 and 2017 are calculated as follows:

 

		Three Months Ended								Nine Months Ended
		9/30/18				9/30/17				9/30/18				9/30/17
Net Loss Attributable to Common Shareholders		$	(11,473,000	)		$	(5,179,000	)		$	(23,678,000	)		$	(6,883,000	)
Depreciation Expense			8,052,000				6,980,000				23,410,000				20,260,000
Loss on Sales of Depreciable Assets			28,000				19,000				108,000				30,000
FFO Attributable to Common Shareholders			(3,393,000	)			1,820,000				(160,000	)			13,407,000
Decrease in Fair Value of Marketable Securities			10,487,000				-0-				19,763,000				-0-
Redemption of Preferred Stock			-0-				3,502,000				-0-				3,502,000
Core FFO Attributable to Common Shareholders			7,094,000				5,322,000				19,603,000				16,909,000
Non-Recurring Other Expense (1)			-0-				-0-				525,000				-0-
Gain on Sales of Marketable Securities, net			-0-				(466,000	)			(20,000	)			(1,518,000	)
Normalized FFO Attributable to Common Shareholders		$	7,094,000			$	4,856,000			$	20,108,000			$	15,391,000

 

Consists of one-time payroll expenditures.

 

The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 37,674,000 and 36,894,000 shares for the three and nine months ended September 30, 2018, respectively, and 34,572,000 and 32,388,000 for the three and nine months ended September 30, 2017, respectively. Common stock equivalents resulting from stock options in the amount of 523,000 and 352,000 shares for the three and nine months ended September 30, 2018, respectively, and 470,000 shares for both the three and nine months ended September 30, 2017, 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, 2018 and 2017:

 

		Nine Months Ended
		2018				2017
Operating Activities		$	24,727,000			$	29,183,000
Investing Activities			(87,369,000	)			(115,409,000	)
Financing Activities			49,524,000				96,943,000

 

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