UNITED STATES | ||||||
SECURITIES AND EXCHANGE COMMISSION | ||||||
Washington, D.C. 20549 | ||||||
FORM 10-Q | ||||||
( x ) | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2024 | ||||||
( ) | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from __________ to ___________ | ||||||
Commission File Number 001-12690 | ||||||
UMH PROPERTIES, INC. | ||||||
(Exact name of registrant as specified in its charter) | ||||||
Maryland | 22-1890929 | |||||
(State or other jurisdiction of | (I.R.S. Employer | |||||
incorporation or organization) | identification number) | |||||
Juniper Business Plaza, 3499 Route 9 North, Suite 3-C, Freehold, NJ 07728 | ||||||
(Address of Principal Executive 0ffices) | (Zip Code) | |||||
Registrant's telephone number, including area code | (732) 577-9997 | |||||
__________________________________________________________________________________________ | ||||||
(Former name, former address and former fiscal year, if changed since last report.) | ||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||
Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||
Common Stock, $0.10 par value | UMH | New York Stock Exchange | ||||
6.375% Series D Cumulative Redeemable Preferred Stock, $0.10 par value | UMH PRD | New York Stock Exchange | ||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes X | No | ||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ____X__ | Accelerated filer |
Non-accelerated filer | _______ | Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. _______
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes | No X | ||
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
Class | Outstanding Common Shares as of May 1, 2024 | |
Common Stock, $0.10 par value per share | 70,404,159 |
1
UMH PROPERTIES, INC. AND SUBSIDIARIES | ||
FORM 10-Q | ||
FOR THE QUARTER ENDED MARCH 31, 2024 | ||
Table of Contents | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
6 | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 27 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 37 |
Item 4. | Controls and Procedures | 38 |
PART II - OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 39 |
Item 1A. | Risk Factors | 39 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 39 |
Item 3. | Defaults Upon Senior Securities | 39 |
Item 4. | Mine Safety Disclosures | 39 |
Item 5. | Other Information | 39 |
Item 6. | Exhibits | 39 |
SIGNATURES | 41 |
2
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2024 AND DECEMBER 31, 2023
(in thousands except per share amounts)
March 31, 2024 | December 31, 2023 | ||
- ASSETS - | (Unaudited) | ||
Investment Property and Equipment | |||
Land | $ 86,497 | $ 86,497 | |
Site and Land Improvements | 900,966 | 896,568 | |
Buildings and Improvements | 39,709 | 39,506 | |
Rental Homes and Accessories | 527,229 | 516,470 | |
Total Investment Property | 1,554,401 | 1,539,041 | |
Equipment and Vehicles | 29,560 | 29,126 | |
Total Investment Property and Equipment | 1,583,961 | 1,568,167 | |
Accumulated Depreciation | (430,020) | (416,309) | |
Net Investment Property and Equipment | 1,153,941 | 1,151,858 | |
Other Assets | |||
Cash and Cash Equivalents | 39,865 | 57,320 | |
Marketable Securities at Fair Value | 29,143 | 34,506 | |
Inventory of Manufactured Homes | 29,219 | 32,940 | |
Notes and Other Receivables, net | 82,772 | 81,071 | |
Prepaid Expenses and Other Assets | 14,508 | 11,729 | |
Land Development Costs | 42,075 | 33,302 | |
Investment in Joint Venture | 24,916 | 24,851 | |
Total Other Assets | 262,498 | 275,719 | |
TOTAL ASSETS | $ 1,416,439 | $ 1,427,577 |
See Accompanying Notes to Consolidated Financial Statements
3
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED AS OF MARCH 31, 2024 AND DECEMBER 31, 2023 (in thousands except per share amounts)
March 31, 2024 | December 31, 2023 | |||
- LIABILITIES AND SHAREHOLDERS' EQUITY - | (Unaudited) | |||
LIABILITIES: | ||||
Mortgages Payable, net of unamortized debt issuance costs | $ 493,767 | $ 496,483 | ||
Other Liabilities: | ||||
Accounts Payable | 5,754 | 6,106 | ||
Loans Payable, net of unamortized debt issuance costs | 77,547 | 93,479 | ||
Series A Bonds, net of unamortized debt issuance costs | 100,267 | 100,055 | ||
Accrued Liabilities and Deposits | 12,221 | 15,117 | ||
Tenant Security Deposits | 9,726 | 9,543 | ||
Total Other Liabilities | 205,515 | 224,300 | ||
Total Liabilities | 699,282 | 720,783 | ||
Commitments and Contingencies | ||||
Shareholders' Equity: | ||||
Series D - 6.375% Cumulative Redeemable Preferred | ||||
Stock, $0.10 par value per share, 13,700 shares authorized as | ||||
of March 31, 2024 and December 31, 2023; 11,801 and | ||||
11,607 shares issued and outstanding as of March 31, 2024 | ||||
and December 31, 2023, respectively | 295,035 | 290,180 | ||
Common Stock - $0.10 par value per share, 153,714 shares | ||||
authorized as of March 31, 2024 and December 31, 2023; | ||||
70,153 and 67,978 shares issued and outstanding as of March | ||||
31, 2024 and December 31, 2023, respectively | 7,015 | 6,798 | ||
Excess Stock - $0.10 par value per share, 3,000 shares | ||||
authorized; no shares issued or outstanding as of March 31, | ||||
2024 and December 31, 2023 | -0- | -0- | ||
Additional Paid-In Capital | 438,431 | 433,106 | ||
Accumulated Deficit | (25,364) | (25,364) | ||
Total UMH Properties, Inc. Shareholders' Equity | 715,117 | 704,720 | ||
Non-Controlling Interest in Consolidated Subsidiaries | 2,040 | 2,074 | ||
Total Shareholders' Equity | 717,157 | 706,794 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,416,439 | $ 1,427,577 |
See Accompanying Notes to Consolidated Financial Statements
4
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, 2024 AND 2023
(in thousands except per share amounts)
THREE MONTHS ENDED | ||||||||
March 31, 2024 | March 31, 2023 | |||||||
INCOME: | ||||||||
Rental and Related Income | $50,329 | $45,305 | ||||||
Sales of Manufactured Homes | 7,351 | 7,302 | ||||||
Total Income | 57,680 | 52,607 | ||||||
EXPENSES: | ||||||||
Community Operating Expenses | 21,097 | 20,088 | ||||||
Cost of Sales of Manufactured Homes | 5,556 | 4,985 | ||||||
Selling Expenses | 1,646 | 1,812 | ||||||
General and Administrative Expenses | 5,368 | 4,982 | ||||||
Depreciation Expense | 14,741 | 13,373 | ||||||
Total Expenses | 48,408 | 45,240 | ||||||
OTHER INCOME (EXPENSE): | ||||||||
Interest Income | 1,567 | 1,138 | ||||||
Dividend Income | 360 | 706 | ||||||
Loss on Sales of Marketable Securities, net | -0- | (42) | ||||||
Decrease in Fair Value of Marketable Securities | (5,369) | (2,395) | ||||||
Other Income | 159 | 328 | ||||||
Loss on Investment in Joint Venture | (137) | (305) | ||||||
Interest Expense | (7,474) | (8,330) | ||||||
Total Other Income (Expense) | (10,894) | (8,900) | ||||||
Loss before Gain (Loss) on Sales of Investment Property and | ||||||||
Equipment | (1,622) | (1,533) | ||||||
Gain (Loss) on Sales of Investment Property and Equipment | (3) | 32 | ||||||
Net Loss | (1,625) | (1,501) | ||||||
Preferred Dividends | (4,673) | (3,836) | ||||||
Loss Attributable to Non-Controlling Interest | 34 | 40 | ||||||
Net Loss Attributable to Common Shareholders | $(6,264) | $(5,297) | ||||||
Net Loss Attributable to Common Shareholders | ||||||||
Per Share - Basic and Diluted | $(0.09) | $(0.09) | ||||||
Weighted Average Common Shares Outstanding: | ||||||||
Basic and Diluted | 69,130 | 59,085 |
See Accompanying Notes to Consolidated Financial Statements
5
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, 2024 AND 2023
(in thousands)
Common Stock | Preferred | ||||
Issued and Outstanding | Stock | ||||
Number | Amount | Series D | |||
Balance December 31, 2023 | 67,978 | $6,798 | $290,180 | ||
Common Stock Issued with the DRIP | 168 | 16 | -0- | ||
Common Stock Issued through Restricted Stock Awards | 481 | 48 | -0- | ||
Common Stock Issued through Stock Options | 179 | 18 | -0- | ||
Common Stock Issued in connection with At-The-Market Offerings, net | 1,347 | 135 | -0- | ||
Preferred Stock Issued in connection with At-The-Market Offerings, net | -0- | -0- | 4,855 | ||
Distributions | -0- | -0- | -0- | ||
Stock Compensation | -0- | -0- | -0- | ||
Net Loss | -0- | -0- | -0- | ||
Balance March 31, 2024 | 70,153 | $7,015 | $295,035 | ||
Balance December 31, 2022 | 57,595 | $5,760 | $225,379 | ||
Common Stock Issued with the DRIP | 164 | 15 | -0- | ||
Common Stock Issued through Restricted Stock Awards | 140 | 14 | -0- | ||
Common Stock Issued through Stock Options | 14 | 1 | -0- | ||
Common Stock Issued in connection with At-The-Market Offerings, net | 2,071 | 208 | -0- | ||
Preferred Stock Issued in connection with At-The-Market Offerings, net | -0- | -0- | 21,858 | ||
Distributions | -0- | -0- | -0- | ||
Stock Compensation | -0- | -0- | -0- | ||
Net Loss | -0- | -0- | -0- | ||
Balance March 31, 2023 | 59,984 | $5,998 | $247,237 |
See Accompanying Notes to Consolidated Financial Statements
6
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, 2024 AND 2023
(in thousands)
Undistributed | Non-Controlling | ||||||
Additional | Income | Interest in | Total | ||||
Paid-In | (Accumulated | Consolidated | Shareholders' | ||||
Capital | Deficit) | Subsidiary | Equity | ||||
Balance December 31, 2023 | $433,106 | $(25,364) | $2,074 | $706,794 | |||
Common Stock Issued with the DRIP | 2,455 | -0- | -0- | 2,471 | |||
Common Stock Issued through Restricted Stock Awards | (48) | -0- | -0- | -0- | |||
Common Stock Issued through Stock Options | 1,748 | -0- | -0- | 1,766 | |||
Common Stock Issued in connection with At-The-Market | |||||||
Offerings, net | 20,260 | -0- | -0- | 20,395 | |||
Preferred Stock Issued in connection with At-The-Market | |||||||
Offerings, net | (456) | -0- | -0- | 4,399 | |||
Distributions | (20,479) | 1,591 | -0- | (18,888) | |||
Stock Compensation | 1,845 | -0- | -0- | 1,845 | |||
Net Loss | -0- | (1,591) | (34) | (1,625) | |||
Balance March 31, 2024 | $438,431 | $(25,364) | $2,040 | $717,157 |
Balance December 31, 2022 | $343,189 | $(25,364) | $2,232 | $551,196 | |||
Common Stock Issued with the DRIP | 2,502 | -0- | -0- | 2,517 | |||
Common Stock Issued through Restricted Stock Awards | (14) | -0- | -0- | -0- | |||
Common Stock Issued through Stock Options | 136 | -0- | -0- | 137 | |||
Common Stock Issued in connection with At-The-Market | |||||||
Offerings, net | 34,080 | -0- | -0- | 34,288 | |||
Preferred Stock Issued in connection with At-The-Market | |||||||
Offerings, net | (2,567) | -0- | -0- | 19,291 | |||
Distributions | (17,523) | 1,461 | -0- | (16,062) | |||
Stock Compensation | 1,528 | -0- | -0- | 1,528 | |||
Net Loss | -0- | (1,461) | (40) | (1,501) | |||
Balance March 31, 2023 | $361,331 | $(25,364) | $2,192 | $591,394 |
See Accompanying Notes to Consolidated Financial Statements
7
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, 2024 AND 2023
(in thousands)
THREE MONTHS ENDED | ||||
March 31, 2024 | March 31, 2023 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net Loss | $(1,625) | $(1,501) | ||
Non-Cash items included in Net Loss: | ||||
Depreciation | 14,741 | 13,373 | ||
Amortization of Financing Costs | 556 | 518 | ||
Stock Compensation Expense | 1,354 | 1,528 | ||
Provision for Uncollectible Notes and Other Receivables | 463 | 358 | ||
Loss on Sales of Marketable Securities, net | -0- | 42 | ||
Decrease in Fair Value of Marketable Securities | 5,369 | 2,395 | ||
(Gain) Loss on Sales of Investment Property and Equipment | 3 | (32) | ||
Loss on Investment in Joint Venture | 244 | 349 | ||
Changes in Operating Assets and Liabilities: | ||||
Inventory of Manufactured Homes | 3,721 | 126 | ||
Notes and Other Receivables, net of notes acquired with acquisitions | (2,164) | (3,232) | ||
Prepaid Expenses and Other Assets | (549) | 3,606 | ||
Accounts Payable | (352) | (367) | ||
Accrued Liabilities and Deposits | (2,896) | (4,111) | ||
Tenant Security Deposits | 183 | 237 | ||
Net Cash Provided by Operating Activities | 19,048 | 13,289 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchase of Manufactured Home Communities | -0- | (3,679) | ||
Purchase of Investment Property and Equipment | (17,861) | (26,767) | ||
Proceeds from Sales of Investment Property and Equipment | 1,034 | 632 | ||
Additions to Land Development Costs | (8,282) | (5,493) | ||
Purchase of Marketable Securities | (6) | (6) | ||
Proceeds from Sales of Marketable Securities | -0- | 462 | ||
Investment in Joint Venture | (309) | (5,693) | ||
Net Cash Used in Investing Activities | (25,424) | (40,544) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Net Proceeds (Payments) from Short-Term Borrowings | (16,044) | 37,984 | ||
Principal Payments of Mortgages and Loans | (2,946) | (48,214) | ||
Financing Costs on Debt | (2) | (501) | ||
Proceeds from At-The-Market Preferred Equity Program, net of offering costs | 4,399 | 19,291 | ||
Proceeds from At-The-Market Common Equity Program, net of offering costs | 20,395 | 34,288 | ||
Proceeds from Issuance of Common Stock in the DRIP, | 1,759 | 1,862 | ||
net of dividend reinvestments | ||||
Proceeds from Exercise of Stock Options | 1,766 | 137 | ||
Preferred Dividends Paid | (4,673) | (3,836) | ||
Common Dividends Paid, net of dividend reinvestments | (13,503) | (11,571) | ||
Net Cash Provided by (Used in) Financing Activities | (8,849) | 29,440 | ||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (15,225) | 2,185 | ||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 64,437 | 40,876 | ||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF | $49,212 | $43,061 | ||
PERIOD |
See Accompanying Notes to Consolidated Financial Statements
8
UMH PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2024 (UNAUDITED)
NOTE 1 - ORGANIZATION AND ACCOUNTING POLICIES
UMH Properties, Inc., a Maryland corporation, and its subsidiaries ("we", "our", "us" or "the Company") operates as a real estate investment trust ("REIT") deriving its income primarily from real estate rental operations. The Company owns and operates 136 manufactured home communities containing approximately 25,800 developed homesites, including the Countryside Village expansion (Duck River Estates) in Tennessee, which is now considered a separate community, and two communities acquired through the Company's qualified opportunity zone fund (See Note 5). These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Alabama, South Carolina and Georgia. The Company also has an ownership interest in and operates two communities in Florida through its joint venture with Nuveen Real Estate. In November 2023, the Company expanded its joint venture relationship with Nuveen Real Estate and formed a new joint venture entity for the development of a new manufactured housing community located in Honey Brook, Pennsylvania. The community, once complete, will contain 113 manufactured home sites situated on approximately 61 acres. The Company, through its wholly-owned taxable subsidiary, UMH Sales and Finance, Inc. ("S&F"), sells manufactured homes to residents and prospective residents in our communities. Inherent in the operations of manufactured home communities are site vacancies. S&F was established to fill these vacancies and enhance the value of the communities. The Company holds a 77% controlling interest in an opportunity zone fund which it created to acquire, develop and redevelop manufactured housing communities located in areas designated as Qualified Opportunity Zones by the U.S. Treasury Department to encourage long- term investment in economically distressed areas. The consolidated financial statements of the Company include S&F and all of its other wholly-owned subsidiaries and its qualified opportunity zone fund. All intercompany transactions and balances have been eliminated in consolidation.
The Company has elected to be taxed as a REIT under Sections 856-860 of the Internal Revenue Code (the "Code") and intends to maintain its qualification as a REIT in the future. As a qualified REIT, with limited exceptions, the Company will not be taxed under federal and certain state income tax laws at the corporate level on taxable income that it distributes to its shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code. The Company is subject to franchise taxes in some of the states in which the Company owns property.
The interim consolidated financial statements furnished herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") applicable to interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not
9
necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2023.
Use of Estimates
In preparing the consolidated financial statements in accordance with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as contingent assets and liabilities as of the dates of the consolidated balance sheets and revenue and expenses for the years then ended. These estimates and assumptions include the allowance for doubtful accounts, valuation of inventory, depreciation, valuation of securities, accounting for land development, reserves and accruals, and stock compensation expense. Actual results could differ from these estimates and assumptions.
Reclassifications
Certain amounts in the financial statements for the prior periods have been reclassified to conform to the statement presentation for the current periods.
Investment in Joint Venture
The Company accounts for its investment in entities formed under its joint venture with Nuveen Real Estate under the equity method of accounting in accordance with ASC 323, Investments - Equity Method and Joint Ventures. The Company has the ability to exercise significant influence, but not control, over the operating and financial decisions of the joint venture entities. Under the equity method of accounting, the cost of an investment is adjusted for the Company's share of the equity in net income or loss from the date of acquisition, reduced by distributions received and increased by contributions made. The income or loss is allocated in accordance with the provisions of the operating agreement. The carrying value of the investment in the joint venture is reviewed for other than temporary impairment whenever events or changes in circumstances indicate a possible impairment. Financial condition, operational performance, and other economic trends are among the factors that are considered in evaluation of the existence of impairment indicators (See Note 4).
Leases
The Company accounts for its leases under ASC 842, "Leases." Our primary source of revenue is generated from lease agreements for our sites and homes, where we are the lessor. These leases are generally for one-year or month-to-month terms and renewable by mutual agreement from us and the resident, or in some cases, as provided by jurisdictional statute.
The Company is the lessee in other arrangements, primarily for our corporate office and a ground lease at one community. As of March 31, 2024, the right-of-use assets and corresponding lease liabilities of $3.2 million are included in prepaid expenses and other assets and accrued liabilities and deposits on the consolidated balance sheets.
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UMH Properties Inc. published this content on 04 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 May 2024 19:28:07 UTC.