MHC Reports Third Quarter Results
Projects Growth in 2003
CHICAGO, Oct. 22 /PRNewswire-FirstCall/ -- Manufactured Home Communities, Inc. (NYSE: MHC) today announced results for the quarter and nine months ended September 30, 2002.
For the third quarter of 2002, Funds From Operations (FFO) were
$16.0 million or $.58 per share on a fully diluted basis compared to
$16.4 million or $.61 per fully diluted share in the same period in 2001.
Third quarter property operating revenues were $54.6 million compared to
$51.5 million in the third quarter of 2001. For the third quarter of 2002,
average occupancy was 92.7 percent and average monthly base rent per site for
the Core Portfolio was $404.83, up 5.5 percent from $383.56 in the same period
last year.
For the nine months ended September 30, 2002, FFO were $51.0 million or $1.85 per share on a fully diluted basis compared to $49.2 million or $1.83 per fully diluted share in the same period in 2001. Property operating revenues for the nine months ended September 30, 2002 were $163.4 million compared to $157.3 million for the same period of 2001. Average occupancy was 93.3 percent and average monthly base rent per site for the Core Portfolio was $401.73, up 5.2 percent from $381.70 in the same period last year.
As of October 31, 2002, approximately 60 percent of MHC's residents will have received their rent increase notices for 2003. The average rental rate increase will be approximately 4 percent. Core expense growth is expected to be approximately 4 to 4.5 percent due to anticipated increases in excess of CPI for insurance costs, utility expenses and real estate taxes. MHC expects to fill approximately 175 expansion sites in 2003, while projecting moderate overall occupancy decreases. Based on these factors, core net operating income is expected to increase by approximately 3 percent.
Overall 2003 results will be impacted by 1) the sale of 17 properties in the College Heights joint venture, 2) the purchase of 7 properties, and 3) the 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, home sales results 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 on the factors set forth above, MHC projects that 2003 FFO per share growth will be between 1 and 2 percent on the low end and 4 to 5 percent on the high end. In addition MHC affirms that projected FFO per share for the full year 2002 will range from $2.48 to $2.52 per share.
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 139 quality communities in 22 states consisting of 50,909 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 Nine Months Ended
Sep. 30, Sep. 30, Sep. 30, Sep. 30,
2002 2001 2002 2001
(Pro forma) (Pro forma)
Property Operations:
Base rental income $48,121 $46,173 $143,155 $138,527
RV base rental income 1,771 721 5,426 3,207
Utility and other income 4,667 4,627 14,848 15,547
Property operating
revenues 54,559 51,521 163,429 157,281
Property operating
and maintenance 15,452 14,381 45,406 43,605
Real estate taxes 4,201 3,840 12,884 12,182
Property management 2,241 2,089 6,664 6,356
Property operating
expenses 21,894 20,310 64,954 62,143
Income from property
operations 32,665 31,211 98,475 95,138
Home Sales Operations:
Gross revenues from inventory
home sales 9,120 10,960 21,775 25,640
Cost of inventory
home sales (7,404) (8,695) (17,059) (20,012)
Gross profit from
inventory home sales 1,716 2,265 4,716 5,628
Brokered resale
revenues, net 348 431 1,234 1,330
Home selling expenses (1,934) (2,058) (6,061) (6,114)
Ancillary services
revenues, net (62) 185 604 960
Income from home sales
and other 68 823 493 1,804
Other Income and Expenses:
Interest income 239 236 693 889
Other corporate income 213 103 878 1,243
General and administrative (1,972) (1,558) (5,915) (5,070)
Operating income
(EBITDA) 31,213 30,815 94,624 94,004
Interest and related
amortization (12,361) (11,755) (35,530) (36,482)
Income from discontinued
operations 305 469 1,293 1,045
Depreciation on corporate
assets (320) (332) (956) (945)
Income allocated to
Preferred OP Units (2,813) (2,813) (8,439) (8,439)
Funds from operations
(FFO) $16,024 $16,384 $50,992 $49,183
Depreciation on real estate
and other costs (8,937) (8,729) (26,994) (25,996)
Gain on sale of properties
and other 1,270 --- 1,270 8,093
Income allocated to Common
OP Units (1,645) (1,558) (4,973) (6,404)
Net Income $6,712 $6,097 $20,295 $24,876
Net income per Common
Share - Basic $0.31 $.29 $0.94 $1.19
Net income per Common
Share - Fully Diluted $0.30 $.28 $0.91 $1.16
FFO per Common Share - Basic $0.59 $.62 $1.89 $1.86
FFO per Common Share - Fully
Diluted $0.58 $.61 $1.85 $1.83
Average Common Shares - Basic 21,676 21,108 21,558 20,958
Average Common Shares
and OP Units - Basic 27,076 26,548 26,972 26,433
Average Common Shares
and OP Units - Fully Diluted 27,693 27,071 27,622 26,914
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.
The pro forma amounts shown for the quarter and nine months ended September 30, 2001 have no effect on previously reported FFO or Net Income. The 2001 amounts have been reclassified to conform to the 2002 financial presentation for comparison purposes.
Manufactured Home Communities, Inc.
(Unaudited)
As Of As Of
Selected Balance Sheet Data: September 30, December 31,
2002 2001
(amounts in 000's) (amounts in 000's)
Total real estate, net $1,031,345 $1,026,260
Cash and cash equivalents $13,075 $1,354
Total assets $1,138,009 $1,099,963
Mortgage notes payable $560,345 $590,371
Unsecured debt $174,362 $118,486
Total liabilities $799,627 $753,666
Minority interest $167,342 $171,147
Total shareholder's equity $171,040 $175,150
As Of As Of
September 30, December 31,
Total Shares and OP Units Outstanding: 2002 2001
Total Common Shares Outstanding 21,756,176 21,562,343
Total Common OP Units Outstanding 5,396,691 5,426,374
As Of As Of
September 30, December 31,
Site Totals: 2002 2001
Manufactured Home Sites
Owned and Operated 43,317 42,523
Manufactured Home Sites in
Joint Ventures 1,521 1,521
Total RV Sites 6,071 3,497
Total Sites - Continuing Operations 50,909 47,541
Manufactured Home Sites - Discontinued
Operations --- 3,220
Total Sites 50,909 50,761
Quarters Ended Nine Months Ended
Manufactured Home Site and Sep. 30, Sep. 30, Sep. 30, Sep. 30,
Occupancy Averages: 2002 2001 2002 2001
Total Sites 43,218 43,093 42,760 43,192
Occupied Sites 40,079 40,610 39,883 40,830
Occupancy % 92.7% 94.2% 93.3% 94.5%
Monthly Base Rent Per Site $400.22 $378.99 $398.82 $376.97
Core* Monthly Base Rent
Per Site $404.83 $383.56 $401.73 $381.70
(*) Represents rent per site for properties owned in both periods of
comparison
All numbers exclude site and occupancy information for the properties
classified as held-for-sale.
Quarters Ended Nine Months Ended
Sep. 30, Sep. 30, Sep. 30, Sep. 30,
Home Sales: 2002 2001 2002 2001
New Home Sales Volume 112 142 273 339
New Home Sales Gross
Revenues $8,328 $9,624 $20,056 $22,650
Used Home Sales Volume 48 71 126 209
Used Home Sales Gross
Revenues $792 $1,336 $1,719 $2,990
Brokered Home Resale Volume 216 267 759 863
Brokered Home Resale Gross
Revenues $348 $431 $1,234 $1,330
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SOURCE Manufactured Home Communities, Inc.
-0- 10/22/2002
/CONTACT: Marty McKenna of Manufactured Home Communities, +1-312-928-1901/
/Web site: http://www.mhchomes.com /
(MHC)
CO: Manufactured Home Communities, Inc.
ST: Illinois, California
IN: RLT FIN
SU: ERN
AJ-CM
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8039 10/22/2002 08:37 EDT http://www.prnewswire.com