UMH Properties Inc. (NYSE:UMH) Q3 2019 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 10:00 am ET

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UMH Properties Inc. (NYSE:UMH) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Samuel A. Landy

we own these communities and integrate them into our platform the better they will perform. When visiting our communities it is clear to see how well we have executed our business plan. We have acquired many value-add communities that required significant capital improvements and add a lot of deferred maintenance. The work has been completed and we are rapidly filling sites to our rental and sales programs. The appreciation of our properties is a fundamental component of our long-term business plan. Many of our encumbered properties exhibit strong appreciation that will be realized when mortgages come due and they are refinanced.

As a case in point during the quarter we've refinanced a community that we acquired in 2012 for $4.4 million with a loan for $2.8 million at an interest rate of 5.75%. This community appraised for $8.1 million and we refinanced for $6.1 million at an interest rate of 3.37%. This represents an 86% increase in value over the seven year period that we have owned the property. This refinancing demonstrates the appreciation created by our business plan. Our same-property results continue to validate our business plan. During the quarter same-property revenue was up 7.8% over the prior year period and expenses were up 10.1% resulting in same-property NOI growth of 6%. While we are happy with these results as we continue to execute our business plan we expect these numbers to improve further. Same-property occupancy was up 357 sites over the prior year period increasing occupancy 170 basis points to 84% from 82.3% in the prior year period. We added 688 rentals to our same property portfolio an increase of 11.3% over the prior year period.

Same-property pool contains several recent acquisitions that are now starting to generate strong income gains and are beginning to see a reduction in overall expenses. Although sales for the quarter were down 7% over the prior year period we are pleased with our year-to-date sales growth of 25% over the prior year period. This quarter we sold 71 homes as compared to 80 homes in the prior year period. Our average sales price during the quarter was approximately $62000 as compared to $59000 in the prior year period. This represents an increase of approximately 4.6%. Our gross profit percentage for the quarter was 25% versus 26% in the prior year period. The gross profit percentage year-to-date was 27% versus 24% in the prior year period. Year-to-date we have sold 230 homes as compared to 204 homes in the prior year period. Our average sales price year-to-date was approximately $60000 versus $54000 in the prior year period representing an increase of 10.8%. Our sales operation continues to meet our expectations. Sales demand is strong throughout the portfolio.

We expect our sales operation to generate meaningful returns in the future. We continue to make progress with our expansions. This year we expect to deliver 170 newly developed homesites at 3 locations. 2020 we expect obtain to approvals for 680 homesites at 16 locations. These