MHC Reports First Quarter Results
Continues Solid Performance
CHICAGO, April 23 /PRNewswire-FirstCall/ -- Manufactured Home Communities, Inc. (NYSE: MHC) today announced results for the first quarter ended March 31, 2002. Funds from operations (FFO) were $17.9 million or $.65 per share on a fully diluted basis compared to $16.5 million or $.62 per fully diluted share in the same period in 2001. First quarter property operating revenues were $58.1 million compared to $56.6 million in the first quarter of 2001. For the first quarter of 2002, average occupancy was 93.8 percent and average monthly base rent per site for the Core Portfolio was $393.38 up from $374.05 in the same period last year. As of January 1, 2002, MHC completed the restructuring of its home sales affiliate, Realty Systems, Inc. (RSI). As a result of this restructuring, RSI is a wholly owned subsidiary of MHC and is now consolidated with MHC financial results.
MHC's management projects that 2002 core property performance will continue in line with fundamentals. Through March 31, 2002, the average rental rate increase has been approximately 5.0 percent. Core expense growth is expected to be in line with CPI except for higher property payroll costs due to employment related insurance increases and substantially higher costs related to property level insurance. MHC expects to fill between 200 and 250 expansion sites in 2002, while maintaining relatively stable occupancy levels. Based upon these factors, core net operating income is expected to increase by approximately 4.0 to 4.5 percent.
2002 results will be impacted by 1) the October 2001 sale of a single property for $10.8 million; 2) an interest rate swap entered into in the fourth quarter of 2001 which effectively fixed the interest rate on MHC's $100 million variable rate term loan at 5.0 percent and 3) the variability in home sales. In MHC's senior communities, home sales results could be impacted by the ability of potential homebuyers to sell their existing residence as well as by volatility in financial markets. In MHC's family communities, home sales results will be impacted by local economic conditions as well as by the underwriting and availability of homebuyer financing. Based upon the factors set forth above, MHC projects that 2002 FFO per share growth will be between 5.0 and 8.0 percent.
The forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, the Company's ability to maintain rental rates and occupancy; the Company's assumptions about rental and home sales markets continuing at their current strong levels; the effect of interest rates as well as other risks indicated from time to time in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward- looking statements that become untrue because of subsequent events.
Manufactured Home Communities, Inc. owns or has a controlling interest in 149 quality communities in 23 states consisting of 51,196 sites. MHC is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.
A live web cast of the Company's conference call discussing these results
will be available via the Company's website in the Investor Data section at
www.mhchomes.com at 10:00 a.m. Central today.
Manufactured Home Communities, Inc.
Selected Financial Data
(Unaudited)
(Amounts in thousands except for per share data)
Quarters Ended
March 31, March 31,
2002 2001
(Proforma)
Property Operations:
Base rental income $50,384 $49,013
RV base rental income 2,437 1,850
Utility and other income 5,301 5,755
Property operating revenues 58,122 56,618
Property operating and maintenance 16,172 15,993
Real estate taxes 4,621 4,601
Property management 2,407 2,248
Property operating expenses 23,200 22,842
Income from property operations 34,922 33,776
Home Sales Operations:
Gross revenues from inventory home sales 4,726 5,942
Cost of inventory home sales (3,735) (4,553)
Gross profit from inventory home sales 991 1,389
Brokered resale revenues, net 431 390
Home selling expenses (2,118) (2,276)
Ancillary services revenues, net 557 675
Income from home sales and other (139) 178
Other Income and Expenses:
Interest income 262 351
Other corporate income 375 677
General and administrative (1,880) (1,655)
Operating income (EBITDA) 33,540 33,327
Interest and related amortization (12,550) (13,698)
Depreciation on corporate assets (326) (304)
Income allocated to Preferred OP Units (2,813) (2,813)
Funds from operations (FFO) $17,851 $16,512
Depreciation on real estate and other costs (8,971) (8,679)
Gain on sale of properties and other --- 8,093
Income allocated to Common OP Units (1,781) (3,282)
Net Income $7,099 $12,644
Net income per Common Share - Basic $.33 $.61
Net income per Common Share - Fully Diluted $.32 $.59
FFO per Common Share - Basic $.66 $.63
FFO per Common Share - Fully Diluted $.65 $.62
Average Common Shares - Basic 21,433 20,793
Average Common Shares and OP Units
- Basic 26,856 26,299
Average Common Shares and OP Units
- Fully Diluted 27,508 26,771
Funds From Operations:
The Company believes that Funds From Operations provide an indicator of its financial performance and is influenced by both the operations of the properties and the capital structure of the Company. FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as net income (computed in accordance with generally accepted accounting principles ["GAAP"]), before allocation to minority interests, excluding gains (or losses) from sales of property, plus real estate depreciation. The Company computes FFO in accordance with the NAREIT definition, which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs.
Manufactured Home Communities, Inc.
(Unaudited)
As Of As Of
Selected Balance Sheet Data: March 31, December 31,
2002 2001
(amounts in 000's)
Total real estate, net $1,030,302 $1,026,260
Cash and cash equivalents $4,607 $1,354
Total assets $1,126,311 $1,099,963
Mortgage notes payable $600,442 $590,371
Unsecured debt $127,486 $118,486
Total liabilities $781,162 $753,666
Minority interest $170,706 $171,147
Total shareholder's equity $174,443 $175,150
As Of As Of
March 31, December 31,
Total Shares and OP Units Outstanding: 2002 2001
Total Common Shares Outstanding 21,742,948 21,562,343
Total Common OP Units Outstanding 5,423,108 5,426,374
As Of As Of
March 31, December 31,
Site Totals: 2002 2001
Manufactured Home Sites Owned and Operated 45,728 45,743
Manufactured Home Sites in Joint Ventures 1,521 1,521
Total RV Sites 3,947 3,497
Total Sites 51,196 50,761
Quarters Ended
Manufactured Home Site and March 31, March 31,
Occupancy Averages: 2002 2001
Total Sites 45,735 46,626
Occupied Sites 42,896 44,216
Occupancy % 93.8% 94.8%
Monthly Base Rent Per Site $391.52 $369.49
Core* Monthly Base Rent Per Site $393.38 $374.05
(*) Represents rent per site for properties owned in both periods of
comparison
Quarters Ended
March 31, March 31,
Home Sales: 2002 2001
New Home Sales Volume 57 78
New Home Sales Gross Revenues $4,309 $5,265
Used Home Sales Volume 37 58
Used Home Sales Gross Revenues $417 $677
Brokered Home Resale Volume 231 270
Brokered Home Resale Gross Revenues $570 $530
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SOURCE Manufactured Home Communities, Inc.
Web site: http: //www.mhchomes.com
CONTACT: Marty McKenna of Manufactured Home Communities, Inc., +1-312-928-1901