UMH Properties, Inc. (UMH) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for UMH Properties, Inc. Our host for today's call is Nelli Madden. [Operator Instructions] I will now turn the call over to your host, Nelli Madden. You may begin.

Hello, everyone. I am Nelli Madden, Director of Investor Relations, and I would like to welcome you to the 2020 Annual Meeting of Shareholders for UMH Properties, Inc. This is our first virtual Annual Shareholders' Meeting. Today, we wish we could be together with you in person, and we appreciate everyone's flexibility during the COVID-19 pandemic to make this a virtual meeting. Our thoughts and best wishes are with everyone affected by this pandemic. Before we get started, I would like to go over a few items. As is our custom, we will conduct the business portion of our meeting first. [Operator Instructions] Please note, today's meeting is being recorded. However, no one attending the meeting is permitted to record the meeting. I would now like to introduce our Founder and Chairman of the Board, Mr. Eugene Landy.

The Annual Meeting of Shareholders of UMH Properties, Inc. is now called to order. I am the Chairman of the Board of the company, and in accordance with the company's bylaws, I will be the Chairman of the meeting. And Craig Koster, the company's Secretary, will serve as Secretary of the meeting. We will conduct the meeting in accordance with the rules of conduct, which were available on the virtual meeting site. Mr. Koster, will you please present the certificate of the Secretary, certifying the proper mailing of the notice of annual meeting and proxies.

I am Secretary of UMH Properties, Inc. a Maryland corporation. And I call as to notice of the Annual Meeting of Shareholders of the company for the meeting to be held on June 11, 2020 to be deposited in the United States mail on or about the 27th day of March, 2020, in a sealed envelope, postage prepaid and duly addressed to each shareholder of record of the company as it appeared on the company's books. A copy of the said notice of meeting is attached here too and the certificate of Secretary has been filed with the records of the meeting.

Mr. Koster, will you please present the full, true and complete list of all stockholders entitled to vote at this annual meeting.

I certify that I have a full, true and complete copy of the list of stockholders, which will be filed in the company's books and records.

I hereby appoint Nelli Madden as inspector of election and request that she present the Inspector's Oath.

I, Nelli Madden, do promise and swear that I will faithfully, honestly and impartially perform the duties of inspector of election at the 2020 Annual Meeting of Shareholders of UMH Properties, Inc., a Maryland corporation to be held on June 11, 2020 and any adjournment or postponement thereof.

The first order of business at this meeting is to determine whether the shares of common stock represented at the meeting, either in person or by proxy, are sufficient to constitute a quorum for the purpose of transacting business. There are present, in person and by proxy, holders of at least 36,670,112 shares of common stock of UMH Properties, Inc. out of a total of 41,165,982 shares of common stock, representing 89.07% of the total votes entitled to be cast at the meeting. I declare that a quorum is present. Next, we will do a reading of the minutes of the last meeting of shareholders. I recognize Mr. Samuel Landy to make a motion before the meeting.

I move that the reading of the minutes of the last meeting of shareholders be dispensed with and the minutes be approved.

I, Anna Chew, second the motion.

Motion is carried, and I hereby declare the minutes approved. The remaining matters entitled to be presented to the meeting are: one, the election of 3 Class II Directors, each to hold office until the company's Annual Meeting of Shareholders in 2023 and until their respective successors are duly elected and qualified; two, the ratification of the appointment of PKF O’Connor Davies, LLP as the company's independent registered public accounting firm for the year ending December 31, 2020; and three, an advisory resolution to approve the compensation of the company's executive officers for the year ending December 31, 2019. The first matter that would be considered by the shareholders at the meeting is the election of 3 Directors, each to hold office until the company's Annual Meeting of Shareholders in 2023 and until their respective successors are duly elected and qualified. The 3 nominees for election are Jeffrey A. Carus, Matthew I. Hirsch and Kenneth K. Quigley, Jr.

I, Samuel Landy, move that the 3 nominees be elected as Directors.

I, Anna Chew, second the motion.

The next matter to be considered by the shareholders at the meeting is the ratification of the selection of PKF O’Connor Davies, LLP as the company's independent registered public accounting firm for the year ending December 31, 2020. Mr. Ronald Martinez, representing PKF O’Connor Davies, LLP, is present and available to answer appropriate questions during the question-and-answer period.

I, Samuel Landy, move that the appointment of PKF O’Connor Davies, LLP as the company's independent registered public accounting firm for the year ending December 31, 2020 be ratified.

I, Anna Chew, second the motion.

The third item of business is for the shareholders to vote on our advisory resolution to approve the compensation of the company's executive officers for the year ending December 31, 2019.

I, Samuel Landy, move that the compensation of the company's executive officers for the year ended December 31, 2019 be approved.

I, Anna Chew, second the motion.

Because no further business is scheduled to come before the meeting, I declare the polls open for each matter to be voted on at this meeting. It is now 4:05 -- yes, 4:05. It is now 4:05 p.m., for those of you who have not yet voted or wish to change your vote, you may do so now. I will pause for 2 minutes to allow for voting. If you have already submitted a proxy and do not want to change your vote now, it is not necessary for you to vote again. [Voting]

It is now 4:09 p.m., and the polls have closed. Mr. Madden, will you please tally the votes and present the preliminary results of the voting.

I have received the proxy tabulation report from Broadridge Financial Solutions, Inc., which includes all votes submitted through 11:59 p.m. on June 10, 2020. I certify that there is sufficient amount of votes to approve all proposals.

I declare that the shareholders have elected the 3 nominees as Directors of UMH Properties, Inc., each to hold office until the company's Annual Meeting of Shareholders in 2023 and until their respective successors are duly elected and qualified; two, ratified the selection of PKF O’Connor Davies, LLP as the company's independent registered public accounting firm for the year ending December 31, 2020; and three, approved the compensation of the company's executive officers for the year ending December 31, 2019. I will now turn the meeting back over to Ms. Nelli Madden.

Thank you, Mr. Landy. Before turning the meeting over to Samuel Landy, our President and CEO, for his remarks on our results for the year 2019 followed by any questions or discussion from the floor, I would like to remind everyone that certain statements made during his remarks and within the discussion and question-and-answer period, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this virtual -- during this virtual Annual Meeting of Shareholders are based on our current expectations and involve various risks and uncertainties. Although, the company believes expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's first quarter 2020 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. I will now turn the meeting over to Samuel Landy.

Thank you, Nelli, and welcome to all of our shareholders attending the meeting. UMH, prior to the commencement of the COVID crisis, was having a very strong year. Our income is very predictable, we add our 800 rental homes per year and raise rents 4% per year and hope to increase our sales revenue and sales profits. The COVID crisis began and has been going on now for approximately 3, 4 months, and UMH has had remarkable results through that period. We've maintained 95% rental home occupancy and collected 98% of the rent. Sales are not quite as strong as a year ago, but they are strong considering what's going on. All of this is a testament to the UMH's staff, our policies, our business plan and our product, the manufactured home, that we've turned into the manufactured rental home, and we use these homes to fill communities. We remain optimistic about our prospects. We look forward to getting through the COVID crisis. And now we'll take any questions from shareholders.

[Operator Instructions]

So I'll read the first question. The first question is, your written reports on website is informative and well organized, I also appreciate your high standards. What is your view on what is driving the volatile swings in share price? Well, share price, a lot of it is the COVID crisis. Share prices don't necessarily reflect the value of a corporation's assets or its prospects. Just the other day, there was an article somewhere that said that falling oil prices are very bad for the Marcellus and Utica Shale area, and our stock price fell a little. And to me, that's a misunderstanding of what we're doing. We have many properties located in the Marcellus and Utica Shale area. And that area is very important to us, but it's not so much the drilling that drives our occupancy or even the pipeline projects. What drives the occupancies in these areas is that lower cost energy brings back domestic manufacturing. So whether the energy is created right there in the Marcellus and Utica Shale area or it's just the fact that Marcellus and Utica Shale is a competitive element forcing others to lower the price of oil. When energy prices decline, there's more domestic manufacturing which increases business in these areas. The cracker plants continue. Shell will complete the cracker plant in 2025. That plant in Pittsburgh converts natural gas into plastics. Lots of businesses, manufacturers want to locate as close to that plant as possible to have direct access to the plastic pellets and create their products, which then could be shipped to 90% of North America from Pittsburgh. Another cracker plant will be built in Eastern Ohio. And the various businesses we've watched grow in these regions will continue to grow and continue to draw people, and those people fill our communities, which is why our occupancy continues to increase and these are good jobs, which are why we have 98% of the rent collected. So share prices, there's just so many factors that affect them, but the fact is our company is performing extremely well even through this period.

If I can comment on share prices, for over 50 years, management has always been concerned why stocks go up or down. When we first started the REIT industry, they used to do an appraisal. And every 3 years, they did the appraisal and reported what the appraised value of the company was, and it turned out, nobody was interested. Then there was another period when there was -- what they would call the magic page, they published what the yield was, so that was considered the main determinant of price. And then people were so sick of prices going one way or another without any rationale that they invented a thing called the non-traded REIT as you invested in a REIT that didn't trade, so you didn't have to worry about market price, so that was supposedly advantage. But if I knew what made markets go up and down, I wouldn't have to work for a living, so thanks for the question. There’ll be no further business to come before the meeting. The meeting is now adjourned.

This concludes this shareholder meeting. Thank you to all shareholders for attending today's meeting. Enjoy the rest of your day, and please stay safe.

This now concludes the meeting. Thank you for joining, and have a pleasant day.