SOUTHFIELD, Mich. -- Sun Communities, a real estate investment trust ("REIT") that owns and operates manufactured housing and recreational vehicle communities, today reported second quarter results.
For the three months ended June 30, total revenues were $66.3 million, up $3.0 million or 4.8 percent. Funds from Operations (FFO) was $0.66 per diluted share, an increase of 6.5 percent. Same site net operating income (NOI) increased by 3.4 percent. Home sales increased 50.7 percent, from 270 units to 407 units.
"Our second quarter results continue to illustrate strong performance from our same site portfolio, home sales and revenue producing site metrics. Together these items produced a quarter over quarter increase in FFO of $0.04 per share which would have been even higher absent additional one-time expenses of $0.02 per share and dilution of $0.01 per share from the issuance of common stock," said Gary A. Shiffman, chairman and chief executive officer.
"The performance of our Midwest portfolio continues to improve as our communities in Michigan, Ohio and Indiana gained over a hundred sites for the second quarter in a row and produced over 200 of the home sales we recorded during the quarter; an improvement of nearly 67 percent from the same quarter last year," he added
Funds from Operations
FFO increased to $13.1 million, or $0.62 per diluted share, in the second quarter of 2010 as compared to $12.5 million, or $0.60 per share, in the second quarter of 2009. Excluding certain items delineated in the Reconciliation of Net Loss to FFO table accompanying this release, FFO was $14.0 million, or $0.66 per share, for the second quarter of 2010 as compared to $13.0 million, or $0.62 per share, in the second quarter of 2009.
FFO increased to $30.8 million, or $1.46 per share, for the six months ended June 30, 2010 as compared to $28.8 million, or $1.39 per share, for the six months ended June 30, 2009. Excluding certain items delineated in the Reconciliation of Net Loss to FFO table accompanying this release, FFO was $31.7 million, or $1.50 per share for the six months ended June 30, 2010 as compared to $29.2 million, or $1.40 per share, for the six months ended June 30, 2009.
Community Occupancy
During the second quarter of 2010, revenue producing sites increased by 192 sites, compared to an increase of 123 sites during the second quarter of 2009. For the six months ended June 30, 2010, revenue producing sites increased by 434 sites, compared to an increase of 289 sites for the six months ended June 30, 2009, an improvement of 145 sites period over period.
Revenue producing sites were 38,369 at June 30, 2010 compared to 38,000 at June 30, 2009, an increase of 369 sites. Occupancy was 84.3 percent at June 30, 2010 compared to 83.6 percent at June 30, 2009.
The company rented an additional 206 homes during the six months ended June 30, 2010, bringing the total number of occupied rentals to 5,953.
Same Site Results
For 136 communities owned throughout 2010 and 2009, second quarter 2010 total revenues increased 2.6 percent and total expenses increased 0.7 percent, resulting in an increase in NOI of 3.4 percent over the second quarter of 2009. For the six months ended June 30, 2010, total revenues increased 2.0 percent and total expenses increased 0.8 percent resulting in an increase in NOI of 2.5 percent over the six months ended June 30, 2009.
During the second quarter of 2010, 407 homes were sold, an increase of 50.7 percent from the 270 homes sold during the second quarter of 2009. During the six months ended June 30, 2010, 732 homes were sold, an increase of 41.3 percent from the 518 homes sold during the six months ended June 30, 2009.
Rental home sales, included in total home sales above, totaled 214 and 392 for the three and six months ended June 30, 2010, as compared to 178 and 346 for the same periods in 2009.
Net loss attributable to common stockholders for the second quarter of 2010 was $(2.4) million, or $(0.13) per diluted common share, compared with $(2.3) million, or $(0.12) per diluted common share, for the second quarter of 2009. Net loss attributable to common stockholders for the six months ended June 30, 2010 was $(1.1) million, or $(0.06) per diluted common share, compared with $(1.4) million, or $(0.07) per diluted common share, for the six months ended June 30, 2009.
Other Events
The company sold more than five-hundred thousand shares of common stock during the six months ended June 30, 2010, issued at a weighted average price of $28.69 per share, resulting in additional net capital of $14.1 million.
During the quarter the company completed a sale of $6.3 million involving our installment notes. This transaction was recorded as a transfer of financial assets.
In May 2010, the company entered into a $20.0 million secured line of credit agreement collateralized by a portion of the company's rental home portfolio. The current balance drawn is $9.0 million. The agreement has a maximum 10-year term that can be prepaid partially or in full at the company's option any time before the maturity date without penalty.
"We are pleased with the strong momentum of our financial and operating metrics and are looking forward to further positive results. These efforts are supported by the additional financial flexibility which we achieved in the quarter," said Shiffman.
As previously disclosed, the company settled a long-standing lawsuit for a cash payment of $0.4 million. This charge, along with a separation payment of $0.2 million, increased general and administrative - real property expenses during the quarter.
Earnings Guidance
Taking into effect the anticipated annual dilution of $0.04 per share related to equity and $0.02 per share of other one time incurred expenses, the company reaffirms guidance of $2.89 to $2.98 per share.
A conference call to discuss second quarter operating results will be held on July 27, 2010, at 11:00 A.M. EDT. To participate, call toll-free 877-941-2333 and reference conference ID number 4326132. Callers outside the U.S. or Canada can access the call at 408-629-9692. A replay will be available following the call through August 10, 2010, and can be accessed by dialing 800-406-7325 from the U.S. or 303-590-3030. The Conference ID number for the replay is 4326132. The conference call will be available live on Sun Communities website www.suncommunities.com. Replay will also be available on the website.
Sun Communities, Inc. is a REIT that currently owns and operates a portfolio of 136 communities comprising approximately 47,600 developed sites.
For more information about Sun Communities, Inc., visit www.suncommunities.com.
SOURCE: Sun Communities press release