• Core NOI Growth: 7.1% increase compared to last year.

• Dividend Growth: 14% average increase over a 10-year period.

• Debt Maturity: Average term to maturity of 9 years, with 18% fully amortizing.

• Occupancy Rate: MH properties 95% occupied; 96% occupied by homeowners.

• Social Media Growth: 19% annual growth in fans and followers over the past 10 years.

• Rent Increase: Average rent increase of 5.6% to renewing residents.

• Delinquency Rate: Very low, typically 40 to 45 basis points of revenue.

• Q1 New Home Sales: 8.5% increase year-over-year.

• Normalized FFO: $0.78 per share for Q1 2024, in line with guidance.

• Insurance Recovery Revenue: $14.8 million, deducted from normalized FFO.

• Core Community-Based Rental Income Growth: 6.4% increase for the quarter.

• Core Resort and Marina-Based Rental Income Growth: 5.8% increase for the quarter.

• Membership Business Net Contribution: $14.9 million, up 3% from the previous year.

• 2024 Full Year Normalized FFO Guidance: $2.89 per share at the midpoint.

• Core Property Operating Income Growth Guidance for 2024: 5.8% at the midpoint.

• Warning! GuruFocus has detected 7 Warning Signs with ELS.

Release Date: April 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: Can you elaborate on the guidance update, particularly the lowered RV and marina revenue range? A: Paul Seavey, EVP and CFO, explained that the guidance update for Q2 and the full year uses the same methodology as the budget, focusing on reservation pacing for rent expected in Q2 without changing assumptions for Q3 and Q4. The update reflects some softness due to weather in April, particularly in California where precipitation was significantly above average.

Q: What's driving the decline in the Thousand Trails membership this quarter? A: CEO Marguerite Nader noted the decline is due to a reduction in free trials and sales activity at the property level, typical of Q1 in other years. Despite fluctuations, the company has successfully grown dues revenue through rate increases and additional product offerings.

Q: Could you discuss the insurance renewal at only a 9% increase compared to the industry trend? A: CFO Paul Seavey expressed satisfaction with the 9% increase, which was favorable compared to initial expectations. The company's detailed insurance program and positive claim experience contributed to the favorable renewal terms.

Q: Are there any updates on acquisition opportunities given the current market conditions? A: CEO Marguerite Nader mentioned ongoing discussions with property owners, though the market has been slow with little distress. The company remains ready to act when opportunities align with their strategic goals.

Q: How is the company handling the variability in transient demand and matching expenses accordingly? A: COO Patrick Waite highlighted the focus on aligning resources with customer flow, especially for transient customers. The company adapts its staffing and services based on actual and anticipated customer presence to manage costs effectively.

Q: What impact do you foresee from the recent changes to the increase of the loan limits of Title 1 manufactured housing? A: CFO Paul Seavey acknowledged it's too early to see a direct impact, noting that over 95% of their customers are cash buyers, which minimizes the reliance on financing options in their customer base.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.