Apex Trader Funding (ATF) - News
Sun Communities, Inc. Reports 2024 First Quarter Results
Total Revenue Increased by 3.1%
Net Loss per Diluted Share of $0.22
Core FFO per Share of $1.19
Total North America Same Property NOI Increased by 7.9%
North America Same Property Adjusted Blended Occupancy for MH and RVIncreased by 180 Basis Points, Year-over-Year
Revenue Producing Site Gains of 233, Including 176 Transient-to-Annual RV Site Conversions
Full-Year Core FFO per Share Guidance for 2024 of $7.06 - $7.22
Guidance Range for Full-Year North America Same Property NOI Growth of 4.6% - 5.8%
Southfield, April 29, 2024 (GLOBE NEWSWIRE) -- Sun Communities, Inc. (NYSE:SUI) (the "Company" or "SUI"), a real estate investment trust ("REIT") that owns and operates, or has an interest in, manufactured housing ("MH") and recreational vehicle ("RV") communities, marinas, and communities in the United Kingdom ("UK") (collectively, the "properties"), today reported its first quarter results for 2024.
Financial Results for the Quarter Ended March 31, 2024
For the quarter ended March 31, 2024, net loss attributable to common shareholders was $27.4 million, or $0.22 per diluted share, compared to net loss attributable to common shareholders of $44.9 million, or $0.36 per diluted share for the same period in 2023.
Non-GAAP Financial Measures
Core Funds from Operations ("Core FFO") for the quarter ended March 31, 2024, was $1.19 per common share and dilutive convertible securities ("Share"), as compared to $1.23 for the same period in 2023.
Same Property Net Operating Income ("NOI")
North American, Same Property NOI increased by 7.9% for the quarter ended March 31, 2024, as compared to the corresponding period in 2023.
UK Same Property NOI increased $3.3 million, or 44.5%, for the quarter ended March 31, 2024, as compared to the corresponding period in 2023.
"The first quarter results demonstrated a strong start to the year as we achieved solid same property NOI growth in the quarter, showcasing the resiliency of our portfolio," said Gary A. Shiffman, Chairman, President and CEO. "Our performance highlights the quality of the portfolio and the favorable fundamentals underpinning our asset classes, driven by consistent demand in a supply constrained environment. We are intently focused on realizing the dependable growth embedded in our portfolio and confident that we are positioned to drive reliable earnings growth and value creation over the long-term."
OPERATING HIGHLIGHTS
North America Portfolio Occupancy
MH and annual RV sites were 97.5% occupied at March 31, 2024, as compared to 96.9% at March 31, 2023.
Transient-to-annual RV site conversions totaled 176 sites during the first quarter of 2024 and accounted for 75.5% of revenue producing site gains.
Same Property Results
For the properties owned and operated by the Company since at least January 1, 2023, the following table reflects the percentage changes for the quarter ended March 31, 2024:
Quarter Ended March 31, 2024
North America
MH
RV
Marina
Total
UK
Revenue
6.8
%
3.1
%
7.1
%
6.0
%
12.3
%
Expense
3.4
%
(1.8) %
6.5
%
2.2
%
(1.7) %
NOI
8.0
%
8.1
%
7.5
%
7.9
%
44.5
%
Number of Properties
291
165
127
583
53
Same Property adjusted blended occupancy for MH and RV increased by 180 basis points to 98.9% at March 31, 2024, from 97.1% at March 31, 2023.
INVESTMENT ACTIVITY
During the quarter ended March 31, 2024, the Company:
Sold two operating communities located in Florida and Arizona with 533 developed sites in aggregate for total cash consideration of approximately $51.7 million. The gain from the sale of the properties was $6.2 million.
Expanded one existing community by approximately 30 sites and delivered 70 sites at one ground-up development property.
Acquired two land parcels located in the U.S. for an aggregate purchase price of $12.9 million. In conjunction with one of the acquisitions, the Company issued 4,452 common OP units valued at $0.6 million.
Subsequent to the quarter, the Company acquired three marina properties for total consideration of $12.0 million. In conjunction with one of the acquisitions, the Company issued 19,326 common OP units valued at $2.5 million.
BALANCE SHEET, CAPITAL MARKETS ACTIVITY AND OTHER ITEMS
As of March 31, 2024, the Company had $7.9 billion in debt outstanding with a weighted average interest rate of 4.2% and a weighted average maturity of 6.8 years. At March 31, 2024, the Company's net debt to trailing twelve-month Recurring EBITDA ratio was 6.1 times.
During the quarter, the Company:
Issued $500.0 million of senior unsecured notes with an interest rate of 5.5%, due January 15, 2029, and received net proceeds of $495.4 million, after deducting underwriters' discounts and estimated offering expenses. The majority of the net proceeds were used to reduce floating-rate debt.
2024 GUIDANCE
The Company is updating full year, and establishing second quarter, 2024 guidance for diluted EPS and Core FFO per Share as follows:
Full Year Ending December 31, 2024
Second Quarter Ending June 30, 2024
Prior FY Guidance
Revised FY Range
Reconciliation of Diluted EPS to Core FFO per Share
Low
High
Low
High
Low
High
Diluted EPS
$
2.08
$
2.28
$
1.89
$
2.05
$
0.61
$
0.69
Depreciation and amortization
5.35
5.35
5.45
5.45
1.33
1.33
Gain on sale of assets
(0.30
)
(0.30
)
(0.34
)
(0.34
)
(0.10
)
(0.10
)
Distributions on preferred OP units
0.10
0.10
0.10
0.10
0.02
0.02
Noncontrolling interest
0.10
0.10
0.09
0.09
0.03
0.03
Transaction costs and other non-recurring G&A expenses
0.07
0.07
0.14
0.14
0.02
0.02
Deferred tax benefit
(0.18
)
(0.18
)
(0.18
)
(0.18
)
(0.05
)
(0.05
)
Difference in weighted average share count attributed to dilutive convertible securities
(0.11
)
(0.11
)
(0.09
)
(0.09
)
(0.03
)
(0.03
)
Other adjustments(a)
(0.07
)
(0.07
)
—
—
—
—
Core FFO(b)(c) per Share
$
7.04
$
7.24
$
7.06
$
7.22
$
1.83
$
1.91
(a) Other adjustments consist primarily of remeasurement (gains) / losses, contingent legal and insurance gains and other items presented in the table that reconciles Net loss attributable to SUI common shareholders to Core FFO on page 6.
(b) The diluted share counts for the quarter ending June 30, 2024 and the year ending December 31, 2024 are estimated to be 129.6 million.
(c) The Company's updated guidance translates forecasted results from operations in the UK using the relevant exchange rate in effect provided in the table presented below. The impact of fluctuations in Canadian and Australian foreign currency rates on revised and initial guidance are not material.
Exchange Rates in Effect at:
December 31, 2023
March 31, 2024
U.S. Dollar ("USD") / Pound Sterling ("GBP")
1.27
1.26
USD / Canadian Dollar ("CAD")
0.75
0.74
USD / Australian Dollar ("AUS")
0.68
0.65
The Company's updated guidance for the full year ending December 31, 2024 is reflected below. Note that certain prior period amounts have been reclassified to conform with current period presentation, with no effect on net income / (loss) and Core FFO. The reclassifications more precisely align certain indirect expenses with underlying activity drivers.
Same Property Portfolio (in millions and %)(a)
FY 2023 Actual Results
Expected Change in 2024
Prior FY Range
April 29, 2024 Update
North America
Revenues from real property
$
1,734.6
6.4% - 6.8%
5.4% - 5.8%
Total property operating expenses
$
582.3
8.1% - 9.1%
6.0% - 7.0%
Total North America Same Property NOI(b)(c)
$
1,152.3
5.0% - 6.2%
4.6% - 5.8%
MH NOI (291 properties)
$
607.9
6.0% - 7.0%
6.2% - 7.1%
RV NOI (165 properties)
$
291.7
2.1% - 3.5%
(0.3)% - 1.3%
Marina NOI (127 properties)
$
252.7
6.1% - 7.5%
6.4% - 7.6%
UK (53 properties)
Revenues from real property
$
137.9
4.8% - 5.4%
6.4% - 7.0%
Total property operating expenses
$
68.7
7.4% - 8.4%
6.0% - 6.9%
Total UK Same Property NOI(b)
$
69.2
1.3% - 3.3%
6.0% - 8.0%
For the second quarter ending June 30, 2024, the Company's guidance range assumes North America Same Property NOI growth of 3.4% - 4.9% and UK Same Property NOI growth of 2.5% - 5.0%.
Consolidated Portfolio Guidance For 2024 (in millions and %)
FY 2023 Actual Results
Expected Change / Range in 2024
Prior FY Range
April 29, 2024 Update
Revenues from real property
$
2,059.8
7.1% - 7.6%
6.3% - 6.6%
Total property operating expenses
$
810.4
8.1% - 8.4%
5.7% - 6.0%
Total Real Property NOI
$
1,249.4
6.3% - 7.3%
6.5% - 7.3%
Service, retail, dining and entertainment NOI
$
68.5
$58.4 - $63.2
$63.0 - $67.0
Interest income
$
45.4
$17.6 - $18.6
$17.8 - $18.8
Brokerage commissions and other, net(d)(e)
$
60.6
$44.8 - $47.2
$37.6 - $39.6
FFO contribution from North American home sales
$
17.0
$14.4 - $15.9
$13.0 - $13.9
FFO contribution from UK home sales(f)
$
59.2
$62.3 - $69.9
$55.4 - $62.4
Income from nonconsolidated affiliates
$
16.0
$13.7 - $14.7
$11.1 - $11.9
General and administrative expenses(g)
$
272.1
$262.2 - $267.4
$269.7 - $274.7
Interest expense
$
325.8
$356.3 - $362.7
$355.6 - $361.1
Current tax expense
$
14.5
$14.6 - $16.8
$13.2 - $14.8
Expected Range in FY 2024
Seasonality
1Q24
2Q24
3Q24
4Q24
North America Same Property NOI:
MH
25
%
25
%
25
%
25
%
RV
17
%
25
%
41
%
17
%
Marina
19
%
26
%
31
%
24
%
Total
22
%
25
%
30
%
23
%
UK Same Property NOI
14
%
25
%
40
%
21
%
Home Sales FFO
North America
11
%
40
%
29
%
20
%
UK
17
%
31
%
33
%
19
%
Consolidated Service, Retail, Dining and Entertainment NOI
3
%
37
%
46
%
14
%
Consolidated EBITDA
18
%
27
%
33
%
22
%
Core FFO per Share
17
%
26
%
35
%
22
%
Footnotes to 2024 Guidance Assumptions
(a)
The amounts in the Same Property Portfolio table reflect constant currency, as Canadian and Pound Sterling currency figures included within the 2023 amounts have been translated at the assumed exchange rates used for 2024 guidance.
(b)
Total North America Same Property results net $112.2 million and $115.0 million of utility revenue against the related utility expense in property operating expenses for 2023 results and 2024 guidance, respectively. Total UK Same Property results net $16.8 million and $17.7 million of utility revenue against the related utility expense in property operating expenses for 2023 results and 2024 guidance, respectively.
(c)
2023 North America Same Property actual results exclude $0.4 million of expenses incurred at recently acquired properties to bring them up to the Company's standards. The improvements included items such as tree trimming and painting costs that do not meet the Company's capitalization policy.
(d)
Brokerage commissions and other, net includes $23.4 million of business interruption income for the full year in 2023 and $15.7 million in 2024 for the second through fourth quarters. Expected business interruption recovery for the first quarter of 2024 in the amount of $5.3 million was recorded as an adjustment to Core FFO in the loss of earnings - Catastrophic event-related charges, net line item.
(e)
Brokerage commissions and other, net included approximately $8.5 million of lease income in 2023 that will be recognized in total real property NOI in 2024.
(f)
Includes UK home sales from Park Holidays and Sandy Bay.
(g)
General and administrative in Consolidated Statements of Operations includes $29.6 million and $18.4 million of non-recurring expenses for 2023 results and 2024 updated guidance, respectively.
The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. These estimates include contributions from all acquisitions, dispositions and capital markets activity completed through April 29, 2024. These estimates exclude all other prospective acquisitions, dispositions and capital markets activity. The estimates and assumptions are forward-looking based on the Company's current assessment of economic and market conditions and are subject to the other risks outlined below under the caption Cautionary Statement Regarding Forward-Looking Statements.
EARNINGS CONFERENCE CALL
A conference call to discuss first quarter results will be held on Tuesday, April 30, 2024 at 2:00 P.M. (ET). To participate, call toll-free at (877) 407-9039. Callers outside the U.S. or Canada can access the call at (201) 689-8470. A replay will be available following the call through May 14, 2024 and can be accessed toll-free by calling (844) 512-2921 or (412) 317-6671. The Conference ID number for the call and the replay is 13745022. The conference call will be available live on the Company's website located at www.suninc.com. The replay will also be available on the website.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this document that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as "forecasts," "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projected," "projections," "plans," "predicts," "potential," "seeks," "anticipates," "anticipated," "should," "could," "may," "will," "designed to," "foreseeable future," "believe," "believes," "scheduled," "guidance," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements reflect the Company's current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this document, some of which are beyond the Company's control. These risks and uncertainties and other factors may cause the Company's actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks described under "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in the Company's other filings with the Securities and Exchange Commission, from time to time, such risks, uncertainties and other factors include, but are not limited to:
∙
Changes in general economic conditions, including inflation, deflation, energy costs, the real estate industry and the markets within which the Company operates;
∙
Difficulties in the Company's ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully;
∙
The Company's liquidity and refinancing demands;
∙
The Company's ability to obtain or refinance maturing debt;
∙
The Company's ability to maintain compliance with covenants contained in its debt facilities and its unsecured notes;
∙
Availability of capital;
∙
Outbreaks of disease and related restrictions on business operations;
∙
Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and Pound sterling;
∙
The Company's ability to maintain rental rates and occupancy levels;
∙
The Company's ability to maintain effective internal control over financial reporting and disclosure controls and procedures;
∙
The Company's remediation plan and its ability to remediate the material weakness in its internal control over financial reporting;
∙
Expectations regarding the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;
∙
Increases in interest rates and operating costs, including insurance premiums and real estate taxes;
∙
Risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;
∙
General volatility of the capital markets and the market price of shares of the Company's capital stock;
∙
The Company's ability to maintain its status as a REIT;
∙
Changes in real estate and zoning laws and regulations;
∙
Legislative or regulatory changes, including changes to laws governing the taxation of REITs;
∙
Litigation, judgments or settlements, including costs associated with prosecuting or defending claims and any adverse outcomes;
∙
Competitive market forces;
∙
The ability of purchasers of manufactured homes and boats to obtain financing; and
∙
The level of repossessions by manufactured home and boat lenders;
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this document, whether as a result of new information, future events, changes in the Company's expectations or otherwise, except as required by law.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to the Company or persons acting on the Company's behalf are qualified in their entirety by these cautionary statements.
Company Overview and Investor Information
The Company
Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of March 31, 2024, the Company owned, operated, or had an interest in a portfolio of 665 developed MH, RV, Marina, and UK properties comprising approximately 180,110 developed sites and approximately 48,040 wet slips and dry storage spaces in the U.S., Canada and the UK.
For more information about the Company, please visit www.suninc.com.
Company Contacts
Investor Relations
Sara Ismail, Vice President
(248) 208-2500
Corporate Debt Ratings
Moody's
S&P
Baa3 | Stable
BBB | Stable
Equity Research Coverage
Bank of America Merrill Lynch
Joshua Dennerlein
Barclays
Anthony Powell
BMO Capital Markets
John Kim
Citi Research
Eric Wolfe
Nicholas Joseph
Deutsche Bank
Conor Peaks
Omotayo Okusanya
Evercore ISI
Samir Khanal
Steve Sakwa
Green Street Advisors
John Pawlowski
JMP Securities
Aaron Hecht
RBC Capital Markets
Brad Heffern
Robert W. Baird & Co.
Wesley Golladay
Truist Securities
Anthony Hau
UBS
Michael Goldsmith
Wells Fargo
James Feldman
Wolfe Research
Andrew Rosivach
Keegan Carl
Financial and Operating Highlights($ in millions, except Per Share amounts)
Quarters Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Financial Information
Basic earnings / (loss) per share(a)
$
(0.22
)
$
(0.65
)
$
0.97
$
(1.67
)
$
(0.36
)
Diluted earnings / (loss) per share(a)
$
(0.22
)
$
(0.65
)
$
0.97
$
(1.68
)
$
(0.36
)
Cash distributions declared per common share
$
0.94
$
0.93
$
0.93
$
0.93
$
0.93
FFO per Share(a)(b)
$
1.12
$
1.41
$
2.55
$
1.96
$
1.14
Core FFO per Share(b)
$
1.19
$
1.34
$
2.57
$
1.96
$
1.23
Real Property NOI
MH
$
162.5
$
155.6
$
153.1
$
151.3
$
150.6
RV
51.2
50.4
128.2
75.6
45.1
Marina
56.9
65.3
83.1
72.2
52.2
UK
15.3
14.0
29.0
17.3
6.4
Total
$
285.9
$
285.3
$
393.4
$
316.4
$
254.3
Recurring EBITDA
$
234.0
$
256.0
$
433.0
$
339.7
$
237.4
TTM Recurring EBITDA / Interest
3.7 x
3.9 x
4.0 x
4.3 x
4.6 x
Net Debt / TTM Recurring EBITDA
6.1 x
6.1 x
6.1 x
6.2 x
6.1 x
Balance Sheet
Total assets(a)
$
17,113.3
$
16,940.7
$
17,246.6
$
17,234.9
$
17,348.1
Total debt
$
7,872.0
$
7,777.3
$
7,665.0
$
7,614.0
$
7,462.0
Total liabilities
$
9,830.0
$
9,506.8
$
9,465.0
$
9,474.8
$
9,294.8
Operating Information
Properties
MH
296
298
298
299
299
RV
179
179
182
182
182
Marina
136
135
135
135
135
UK
54
55
55
55
55
Total
665
667
670
671
671
Sites, Wet Slips and Dry Storage Spaces
MH
99,930
100,320
100,200
100,220
100,120
Annual RV
33,290
32,390
32,150
31,620
30,860
UK
18,110
18,110
18,050
17,950
17,850
Transient
28,780
28,490
29,770
30,270
30,870
Total sites
180,110
179,310
180,170
180,060
179,700
Marina wet slips and dry storage spaces(c)
48,040
48,030
48,030
48,180
47,990
Occupancy
MH
96.7
%
96.6
%
96.3
%
96.2
%
96.0
%
Annual RV
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Blended MH and annual RV
97.5
%
97.4
%
97.2
%
97.1
%
96.9
%
UK
88.9
%
89.5
%
90.6
%
90.1
%
90.1
%
MH and RV Revenue Producing Site Net Gains(d)
MH leased sites, net
57
387
207
285
278
RV leased sites, net
176
296
537
754
524
Total leased sites, net
233
683
744
1,039
802
(a) As adjusted for Park Holidays non-cash goodwill impairment. Refer to Definitions and Notes for additional information.
(b) Excludes the effect of certain anti-dilutive convertible securities.
(c) Total wet slips and dry storage spaces are adjusted each quarter based on site configuration and usability.
(d) Revenue producing site net gains do not include occupied sites acquired during the year.
Portfolio Overview as of March 31, 2024
MH & RV Properties
Properties
MH & Annual RV
Transient RV Sites
Total Sites
Sites for Development
Location
Sites
Occupancy %
North America
Florida
128
41,180
97.7
%
3,950
45,130
2,950
Michigan
85
32,950
96.9
%
580
33,530
1,290
California
37
6,920
98.8
%
1,870
8,790
850
Texas
29
9,020
96.5
%
1,800
10,820
3,850
Ontario, Canada
16
4,610
100.0
%
590
5,200
1,450
Connecticut
16
1,910
95.0
%
90
2,000
—
Maine
15
2,490
96.1
%
1,050
3,540
200
Arizona
12
4,480
97.4
%
830
5,310
1,120
Indiana
12
3,140
98.2
%
1,030
4,170
180
New Jersey
11
2,950
100.0
%
1,040
3,990
260
Colorado
11
2,900
87.7
%
980
3,880
1,420
Virginia
10
1,610
99.9
%
2,070
3,680
750
New York
10
1,510
99.2
%
1,430
2,940
780
Other
83
17,550
98.8
%
8,250
25,800
1,000
Total
475
133,220
97.5
%
25,560
158,780
16,100
Properties
UK Properties
Transient Sites
Total Sites
Sites for Development
Location
Sites
Occupancy %
United Kingdom
54
18,110
88.9
%
3,220
21,330
2,410
Marina
Properties
Wet Slips and Dry Storage Spaces
Location
Florida
21
5,150
Rhode Island
12
3,460
California
11
5,710
Connecticut
11
3,330
New York
9
3,020
Massachusetts
9
2,560
Maryland
9
2,480
Other
54
22,330
Total
136
48,040
Properties
Sites, Wet Slips and Dry Storage Spaces
Total Portfolio
665
228,150
Consolidated Balance Sheets(amounts in millions)
March 31, 2024
December 31, 2023
Assets
Land
$
4,551.7
$
4,278.2
Land improvements and buildings
11,529.5
11,682.2
Rental homes and improvements
755.9
744.4
Furniture, fixtures and equipment
1,031.3
1,011.7
Investment property
17,868.4
17,716.5
Accumulated depreciation
(3,410.5
)
(3,272.9
)
Investment property, net
14,457.9
14,443.6
Cash, cash equivalents and restricted cash
132.5
42.7
Inventory of manufactured homes
191.0
205.6
Notes and other receivables, net
469.1
421.6
Collateralized receivables, net(a)
56.5
56.2
Goodwill
731.4
733.0
