MHC Reports First Quarter Results;
Continues Solid Performance
Continues Solid Performance
CHICAGO, April 22 /PRNewswire-FirstCall/ -- Manufactured Home Communities, Inc. (NYSE: MHC) today announced results for the quarter ended March 31, 2003.
For the first quarter of 2003, Funds From Operations (FFO) were $18.6 million or $.67 per share on a fully diluted basis compared to $17.9 million or $.65 per fully diluted share in the same period in 2002. First quarter property operating revenues were $59.6 million compared to $57.7 million in the first quarter of 2002. For the first quarter of 2003, average occupancy was 92.3 percent and average monthly base rent per site for the Core Portfolio was $417.51, up 5.3 percent from $396.60 in the same period last year. First quarter results reflect a seasonal increase in FFO from Resort Properties (park model / recreational vehicle properties).
MHC's management projects continued growth in 2003 core property performance. Through March 31, 2003, Core Portfolio average base rent rate growth has been approximately 5 percent. Assuming current economic conditions continue to impact occupancies, overall revenue growth will be approximately 3 percent. Core portfolio operating expenses are expected to grow in excess of CPI due to continued increases in insurance, real estate taxes and utility expenses. These projections would result in core NOI growth of approximately 2 to 2.5 percent.
Results for 2003 will continue to be impacted by 1) the 2002 sales of primarily all-age communities in Michigan, Florida, Minnesota and Ohio coupled with the 2002 purchases of age-qualified communities in Florida, Arizona, and Texas, 2) continued competitive housing options impacting occupancy levels at certain communities and 3) variability in income from home sales operations. In the age-qualified communities, home sales results could be impacted by the ability of potential homebuyers to sell their existing residences as well as by financial markets volatility. In the all-age communities, results from home sales and occupancy will continue to be impacted by local economic conditions, lack of affordable manufactured home financing and competition from alternative housing options including site-built single family housing. Based upon these factors, MHC projects that growth in FFO per share should be between 0 and 3 percent for the full year of 2003 compared to the full year of 2002.
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; 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 142 quality communities in 21 states consisting of 51,537 sites. MHC is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.
A live webcast of the Company's conference call discussing these results
will be available via the Company's website in the Investor Info 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
Mar. 31, Mar. 31,
2003 2002
Property Operations:
Community base rental income $50,167 $49,986
Resort base rental income 4,077 2,437
Utility and other income 5,338 5,242
Property operating revenues 59,582 57,665
Property operating and maintenance 16,937 16,057
Real estate taxes 4,752 4,577
Property management 2,352 2,407
Property operating expenses 24,041 23,041
Income from property operations 35,541 34,624
Home Sales Operations:
Gross revenues from inventory home sales 4,115 4,726
Cost of inventory home sales (3,470) (3,735)
Gross profit from inventory home sales 645 991
Brokered resale revenues, net 376 431
Home selling expenses (1,894) (2,118)
Ancillary services revenues, net 482 557
Income from home sales and other (391) (139)
Other Income and Expenses:
Interest income 261 264
Income from unconsolidated joint ventures 589 375
General and administrative (1,932) (1,880)
Operating income (EBITDA) 34,068 33,244
Interest and related amortization (12,393) (12,550)
Income from discontinued operations -- 298
Depreciation on corporate assets (310) (326)
Income allocated to Preferred OP Units (2,813) (2,813)
Funds from operations (FFO) $18,552 $17,853
Depreciation on real estate and other costs (9,033) (8,971)
Gain on sale of properties and other -- --
Income allocated to Common OP Units (1,847) (1,767)
Net Income $7,672 $7,115
Net income per Common Share - Basic $.35 $.33
Net income per Common Share - Fully Diluted $.34 $.32
FFO per Common Share - Basic $.68 $.66
FFO per Common Share - Fully Diluted $.67 $.65
Average Common Shares - Basic 21,918 21,433
Average Common Shares and OP Units - Basic 27,276 26,856
Average Common Shares and OP Units - Fully
Diluted 27,740 27,508
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,
2003 2002
(amounts in 000's)(amounts in 000's)
Total real estate, net $1,053,343 $1,057,909
Cash and cash equivalents $12,745 $7,270
Total assets $1,166,513 $1,162,850
Mortgage notes payable $574,140 $575,370
Unsecured debt $186,863 $184,863
Total liabilities $820,246 $816,730
Minority interest $168,229 $168,501
Total shareholder's equity $178,038 $177,619
As Of As Of
March 31, December 31,
Total Shares and OP Units Outstanding: 2003 2002
Total Common Shares Outstanding 22,228,183 22,093,240
Total Common OP Units Outstanding 5,355,658 5,359,927
Manufactured Home ("Community") and As Of As Of
Park Model / Recreational Vehicle ("Resort") March 31, December 31,
Site Totals: 2003 2002
Community Sites Owned and Operated 43,861 43,906
Community Sites Owned in Joint Ventures 1,521 1,521
Resort Sites Owned and Operated 6,155 6,155
Total Sites 51,537 51,582
Quarters Ended
Manufactured Home Site and Mar. 31, Mar. 31,
Occupancy Averages: 2003 2002
Total Sites 43,861 45,496
Occupied Sites 40,473 42,577
Occupancy % 92.3% 93.6%
Monthly Base Rent Per Site $413.17 $393.42
Core* Monthly Base Rent Per Site $417.51 $396.60
(*) Represents rent per site for properties owned in both periods of
comparison.
Quarters Ended
Mar. 31, Mar. 31,
Home Sales: 2003 2002
New Home Sales Volume 52 57
New Home Sales Gross Revenues $3,609 $4,309
Used Home Sales Volume 35 37
Used Home Sales Gross Revenues $506 $417
Brokered Home Resale Volume 260 231
Brokered Home Resale Revenues, net $376 $431
SOURCE Manufactured Home Communities, Inc.