UMH Properties(US:UMH)2022-11-09 19:42Financial Data and Key Metrics Changes - Normalized FFO for Q3 2022 was $0.21 per share, a 31% increase sequentially from $0.16 in Q2 2022, but a 9% decrease year-over-year from $0.23 in Q3 2021 [8][29] - Rental and related income for the quarter increased by 7% to $42.9 million compared to $40.2 million a year ago [32] - Community NOI increased by 1% for the quarter from $23.4 million in 2021 to $23.7 million in 2022 [32] Business Line Data and Key Metrics Changes - Same property rental and related income increased by 5% in Q3 2022, while expenses increased by 10%, resulting in a 2% growth in NOI [12] - Sales income from manufactured homes increased by 16% year-over-year, reaching $9 million, with an average sales price of $102,000 compared to $77,000 last year [15][33] - The company added 142 new rental homes to its portfolio in Q3 2022, a 48% increase compared to 96 last year [13] Market Data and Key Metrics Changes - Same property rental home occupancy rates remained strong at 94.5% [15] - The company has approximately 400 sites under construction across 8 communities, which are expected to drive additional sales income and growth [18] Company Strategy and Development Direction - The company aims to opportunistically acquire communities to provide more affordable housing and deliver strong returns for shareholders [48] - A development pipeline of over 1,000 sites is in place, with expectations to deliver 400 newly developed expansion sites annually [49] - The company is focused on environmental initiatives, including solar energy and natural gas generation, to benefit residents and shareholders [50][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for manufactured homes despite economic challenges, citing a shortage of affordable housing as a driving factor [45][46] - The company anticipates that the full impact of its recapitalization will be realized in the upcoming quarters, contributing to future earnings growth [30][31] - Management believes that the operational challenges faced this year are being addressed, positioning the company for growth in 2023 [43][44] Other Important Information - The company has a total of $726 million in debt, with 83% being fixed-rate [34] - A new credit agreement was established, increasing the credit facility to $100 million with a $400 million accordion feature [38][39] Q&A Session Summary Question: How much of the strong home sales in Q3 was driven by Q2 demand delays? - Management indicated that some sales were indeed delayed from Q2, but demand remains strong and is expected to continue growing [54] Question: How are Q4 sales trending compared to last year? - Management noted it is too early to determine Q4 trends, but they expect sales to continue increasing due to improved staff experience and community expansions [56] Question: What is the outlook for same-store expense growth? - Management acknowledged elevated expense growth but expects it to normalize in 2023, projecting a shift from 4% to 5% rent increases to offset rising costs [68][71] Question: What are the current financing trends for new home sales? - The company reported 62% of sales were financed, with competitive interest rates slightly below conventional mortgage rates [73][74] Question: What is the status of the acquisition pipeline? - Management detailed ongoing acquisitions, including two properties in New Jersey and Ohio, with significant upside potential from rent increases [84][86] Question: How is the company addressing electric vehicle charging infrastructure? - The company is exploring options for providing electric vehicle hookups, recognizing the growing need for such facilities in communities [121][122]