-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lc7s7cwWzeBXu+JAAzQ5Eq6JQFySnuZF4b8RUgLqUm4UUhsJFsI+IKNJXb60kk6b p46Ycj/lQwlbFfNJ9foOdw== 0000752642-01-500005.txt : 20010814 0000752642-01-500005.hdr.sgml : 20010814 ACCESSION NUMBER: 0000752642-01-500005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED MOBILE HOMES INC CENTRAL INDEX KEY: 0000752642 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 221890929 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12690 FILM NUMBER: 1707042 BUSINESS ADDRESS: STREET 1: 3499 ROUTE 9 N, SUITE 3-C STREET 2: JUNIPER BUSINESS PLAZA CITY: FREEHOLD STATE: NJ ZIP: 07728 BUSINESS PHONE: 7325779997 MAIL ADDRESS: STREET 1: 3499 ROUTE 9 N, SUITE 3-C STREET 2: JUNIPER BUSINESS PLAZA CITY: FREEHOLD STATE: NJ ZIP: 07728 10-Q 1 umhq2.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ( x ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period ended _________________________ For Quarter Ended Commission File Number June 30, 2001 0-13130 UNITED MOBILE HOMES, INC. (Exact name of registrant as specified in its charter) New Jersey 22-1890929 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification number) Juniper Business Plaza, 3499 Route 9 North, Suite 3-C, Freehold, NJ 07728 Registrant's telephone number, including area code (732) 577-9997 (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ___X___ No ________ The number of shares outstanding of issuer's common stock as of August 10, 2001 was 7,469,930 shares. UNITED MOBILE HOMES, INC. for the QUARTER ENDED JUNE 30, 2001 PART I - FINANCIAL INFORMATION Page No. Item 1 - Financial Statements Consolidated Balance Sheets................... 3 Consolidated Statements of Income............. 4 Consolidated Statements of Cash Flows......... 5 Notes to Consolidated Financial Statements.... 6-8 Item 2 - Management Discussion and Analysis of Financial Conditions and Results of Operations. 9-10 Item 3 - Quantitative and Qualitative Disclosures About Market Risk There have been no material changes to information required regarding quantitative and qualitative disclosures about market risk from the end of the preceding year to the date of this Form 10-Q. PART II OTHER INFORMATION............................. 11 SIGNATURES.................................... 12
UNITED MOBILE HOMES, INC. CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2001 and DECEMBER 31, 2000 June 30, December 31, 2001 2000 - -ASSETS- INVESTMENT PROPERTY AND EQUIPMENT Land $6,779,335 $6,779,335 Site and Land Improvements 51,131,024 50,707,021 Buildings and Improvements 2,737,664 2,705,636 Rental Homes and Accessories 8,493,197 8,088,015 __________ __________ Total Investment Property 69,141,220 68,280,007 Equipment and Vehicles 3,436,143 3,282,681 __________ __________ Total Investment Property and Equipment 72,577,363 71,562,688 Accumulated Depreciation (31,071,248) (29,862,276) __________ __________ Net Investment Property and Equipment 41,506,115 41,700,412 __________ __________ OTHER ASSETS Cash and Cash Equivalents 242,179 1,399,259 Securities Available for Sale 21,396,130 15,494,918 Inventory of Manufactured Homes 2,164,994 -0- Notes and Other Receivables 2,346,794 1,914,446 Unamortized Financing Costs 241,727 280,727 Prepaid Expenses 101,668 115,633 Land Development Costs 2,391,840 2,040,202 __________ __________ Total Other Assets 28,885,332 21,245,185 __________ __________ TOTAL ASSETS 70,391,447 62,945,597 ========== ========== - - LIABILITIES AND SHAREHOLDERS' EQUITY - MORTGAGES PAYABLE 31,599,781 32,055,839 __________ __________ OTHER LIABILITIES Accounts Payable 288,231 339,174 Loans Payable 9,141,520 5,639,470 Accrued Liabilities and Deposits 1,853,583 1,622,272 Tenant Security Deposits 456,317 449,416 __________ __________ Total Other Liabilities 11,739,651 8,050,332 __________ __________ TOTAL LIABILITIES 43,339,432 40,106,171 __________ __________ SHAREHOLDERS' EQUITY Common Stock - $.10 par value per share 10,000,000 shares authorized, 7,815,230 and 7,711,141 shares issued and 7,469,930 and 7,394,241 shares outstanding, respectively 781,523 771,114 Additional Paid-In Capital 27,059,373 26,026,006 Accumulated Other Comprehensive Income 2,873,339 (490,795) (Loss) Accumulated Deficit (566,383) (667,793) Treasury Stock, at cost (345,300 and 316,900 shares, respectively) (3,095,837) (2,799,106) __________ __________ Total Shareholders' Equity 27,052,015 22,839,426 __________ __________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 70,391,447 62,945,597 ========== ========== -UNAUDITED- See Notes to Consolidated Financial Statements -3-
UNITED MOBILE HOMES, INC. CONSOLIDATED STATEMENTS OF INCOME For the THREE AND SIX MONTHS ended JUNE 30, 2001 THREE SIX MONTHS MONTHS 6/30/01 6/30/00 6/30/01 6/30/00 REVENUES: Rental and Related Income $4,784,766 $4,630,873 $9,550,754 $9,242,455 Sales of Manufactured Homes 1,714,722 -0- 1,714,722 -0- Interest and Dividend Income 467,836 380,277 991,475 782,607 Gain on Securities Available for Sales Transactions,net 368,948 -0- 330,774 144,414 Other Income 40,247 -0- 40,247 -0- ___________ __________ __________ __________ Total Revenues 7,376,519 5,011,150 12,627,972 10,169,476 __________ _________ _________ _________ Community Operating Expenses 2,239,563 1,995,382 4,228,281 3,967,900 Cost of Sales of Manufactured Homes 1,445,610 -0- 1,445,610 -0- Selling Expenses 197,048 -0- 197,048 -0- General and Administrative Expenses 493,645 493,422 1,032,200 947,637 Interest Expense 698,076 652,320 1,350,624 1,289,206 Depreciation Expense 659,167 619,512 1,325,606 1,232,643 Other Expenses 19,500 21,900 39,000 43,800 _________ _________ _________ __________ Total Expenses 5,752,609 3,782,536 9,618,369 7,481,186 _________ _________ _________ __________ Income Before Gains 1,623,910 1,228,614 3,009,603 2,688,290 Gain (Loss) on Sale of Assets (9,336) (8,157) 981 16,261 __________ __________ __________ __________ Net Income $1,614,574 $1,220,457 $3,010,584 $2,704,551 ========== ========== ========== ========== Net Income per Share- Basic $0.22 $0.17 $0.41 $0.37 ========== ========== ========== ========== Diluted $0.21 $0.17 $0.40 $0.37 ========== ========== ========== ========== Weighted Average Shares - Basic 7,440,720 7,343,622 7,420,800 7,330,368 ========== ========== ========== ========== Diluted 7,475,853 7,343,622 7,458,535 7,330,368 ========== ========== ========== ========== -UNAUDITED- See Notes to Consolidated Financial Statements -4-
UNITED MOBILE HOMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS for the SIX MONTHS ended June 30, 2001 and 2000 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income 3,010,584 2,704,551 Non-Cash Adjustments: Depreciation 1,325,606 1,232,643 Amortization 39,000 43,800 Gain on Securities Available for Sale Transactions (330,774) (143,414) Gain on Sales of Investment Property and (981) (16,261) Equipment Changes in Operating Assets and Liabilities Inventory of Manufactured Homes (2,164,994) -0- Notes and Other Receivables (432,348) (372,845) Prepaid Expenses 13,965 (35,452) Accounts Payable (50,943) 185,744 Accrued Liabilities and Deposits 231,311 118,137 Tenant Security Deposits 6,901 26,984 _________ _________ Net Cash Provided by Operating Activities 1,647,327 3,743,887 _________ _________ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Investment Property and Equipment (1,166,281) (673,955) Proceeds from Sales of Assets 35,953 51,233 Additions to Land Development (351,638) (1,148,045) Purchase of Securities Available for Sale (5,331,992) (1,576,152) Proceeds from Sales of Securities Available for Sale 3,125,688 501,600 _________ _________ Net Cash Used by Investing Activities (3,688,270) (2,845,319) ___________ ___________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Mortgages and Loans 3,502,050 2,018,113 Principal Payments of Mortgages and Loans (456,058) (406,862) Financing Costs on Debt -0- (15,000) Proceeds from Exercise of Stock Options 107,500 -0- Dividends Paid (1,972,898)(1,858,178) Purchase of Treasury Stock (296,731) (594,806) _________ _________ Net Cash Provided (Used) by Financing 883,863 (856,733) Activities _________ _________ NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,157,080) 41,835 CASH & CASH EQUIVALENTS - BEGINNING 1,399,259 724,650 _________ _________ CASH & CASH EQUIVALENTS - ENDING $242,179 $ 766,485 ========= ========= -UNAUDITED- See Notes to Consolidated Financial Statements -5-
UNITED MOBILE HOMES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2001 (UNAUDITED) NOTE 1 - ACCOUNTING POLICY The interim consolidated financial statements furnished herein reflect all adjustments which were, in the opinion of management, necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2001 and for all periods presented. All adjustments made in the interim period were of a normal recurring nature. Certain footnote disclosures which would substantially duplicate the disclosures contained in the audited consolidated financial statements and notes thereto included in the annual report of United Mobile Homes, Inc. (the Company) for the year ended December 31, 2000 have been omitted. Effective April 1, 2001, the Company, through its wholly-owned taxable subsidiary, UMH Sales and Finance, Inc. (S&F), began to conduct manufactured home sales in its communities. This company was established to enhance the occupancy of the communities. The consolidated financial statements of the Company include S&F and all of its other wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. NOTE 2 - NET INCOME PER SHARE AND COMPREHENSIVE INCOME Basic net income per share is calculated by dividing net income by the weighted average shares outstanding for the period. Diluted net income per share is calculated by dividing net income by the weighted average number of common shares outstanding plus the weighted average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. Options in the amounts of 35,133 and 37,735 for the three and six months ended June 30, 2001, are included in the diluted weighted average shares outstanding. Total comprehensive income, including unrealized gains (losses) on securities available for sale, amounted to $2,844,917 and $6,374,718, for the three and six months ended June 30, 2001, respectively and $2,151,948 and $3,728,691 for the three and six months ended June 30, 2000, respectively. NOTE 3 - SECURITIES AVAILABLE FOR SALE During the six months ended June 30, 2001, the Company realized a loss of $132,949 due to a writedown to fair value of Securities Available for Sale which was considered other than temporarily impaired. This loss is included in the Gain on Securities for Sale Transactions, net. NOTE 4 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN On June 15, 2001, the Company paid $1,466,787 as a dividend of $.1975 per share to shareholders of record as of May 15, 2001. The total dividends paid for the six months ended June 30, 2001 amounted to $2,909,174. -6- On June 15, 2001, the Company received $476,479 from the Dividend Reinvestment and Stock Purchase Plan. There were 44,847 new shares issued under the Plan. The total amount received from the Dividend Reinvestment and Stock Purchase Plan for the six months ended June 30, 2001 amounted to $936,276. NOTE 5 - TREASURY STOCK During the six months ended June 30, 2001, the Company purchased 28,400 shares of its own stock for a total cost of $296,731. These shares are accounted for under the cost method and are included as Treasury Stock in the Consolidated Financial Statements. NOTE 6 - EMPLOYEE STOCK OPTIONS During the six months ended June 30, 2001, the following stock options were granted: Date of Number of Number of Option Expiration Grant Employees Shares Price Date 1/2/01 1 25,000 $10.3125 1/2/2006 During the six months ended June 30, 2001, one employee exercised a stock option and purchased 10,000 shares for total proceeds of $107,500. Options to purchase 42,000 shares expired and were added back to the "pool" of shares available for grant. As of June 30, 2001, there were options outstanding to purchase 423,500 shares and 252,500 shares available for grant under the Company's Stock Option Plans. NOTE 7 - SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the six months ended June 30, 2001 and 2000 for interest was $1,430,924 and $1,366,206, respectively. Interest cost capitalized to Land Development was $80,300 and $77,000 for the six months ended June 30, 2001 and 2000, respectively. During the six months ended June 30, 2001 and 2000, the Company had dividend reinvestments of $936,276 and $889,047, respectively, which required no cash transfers. NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS On July 20, 2001, the Financial Accounting Standards Board (FASB) issued Statement No. 141, Business Combinations, and Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. Statement 141 also -7- specifies the criteria acquired intangible assets must meet to be recognized and reported apart from goodwill. Statement 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of Statement 142. Statement 142 will also require that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long- Lived Assets and for Long-Lived Assets to Be Disposed Of. Statement 142 requires that goodwill and any intangible asset determined to have an indefinite useful life acquired after June 30, 2001 will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-Statement 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of Statement 142. The Company is required to adopt the provisions of Statement 141 immediately. The initial adoption of Statement 141 had no impact on the Company's consolidated financial statements. The Company is required to adopt Statement 142 effective January 1, 2002. The Company currently has no recorded goodwill or intangible assets and does not anticipate that the initial adoption of Statement 142 will have a significant impact on the Company's consolidated financial statements. -8- MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS MATERIAL CHANGES IN FINANCIAL CONDITION United Mobile Homes, Inc. (the Company) owns and operates twenty-four manufactured home communities. These manufactured home communities have been generating increased gross revenues and increased operating income. The Company generated $1,647,327 net cash provided by operating activities. The Company received new capital of $1,043,776 through its Dividend Reinvestment and Stock Purchase Plan (DRIP). The Company repurchased 28,400 shares of its own stock at a cost of $296,731. The Company purchased $5,331,992 of securities of other real estate investment trusts. The Company had an increase in inventory of manufactured homes of $2,164,994. Effective April 1, 2001, the Company through its wholly-owned taxable subsidiary, UMH Sales and Finance, Inc. (S&F) began to conduct manufactured home sales in its communities. Mortgages Payable decreased by $456,058 as a result of principal repayments. Loans payable increased by $3,502,050 primarily as a result of additional borrowings to purchase Securities Available for Sale and Inventory. MATERIAL CHANGES IN RESULTS OF OPERATIONS Rental and related income increased from $4,630,873 for the quarter ended June 30, 2000 to $4,784,766 for the quarter ended June 30, 2001. Rental and related income increased from $9,242,455 for the six months ended June 30, 2000 to $9,550,754 for the six months ended June 30, 2001. This was the result of higher rents. The Company has been raising rental rates by approximately 3% to 4% annually. Sales of manufactured homes amounted to $1,714,722 for the quarter and six months ended June 30, 2001. Effective April 1, 2001, the Company began to conduct manufactured home sales in its communities. Interest and dividend income rose from $380,277 for the quarter ended June 30, 2000 to $467,836 for the quarter ended June 30, 2001. Interest and dividend income rose from $782,607 for the six months ended June 30, 2000 to $991,475 for the six months ended June 30, 2001. This was due primarily to purchases of Securities available for sale during 2000 and 2001. Gain on securities available for sale transactions amounted to $368,947 and $330,773 for the three and six months ended June 30, 2001, respectively as compared to $-0- and $144,414 for the three and six months ended June 30, 2000, respectively. Included in the Gain on securities available for sale transactions for the quarter and six months ended June 30, 2001 was a writedown of $31,130 and $132,949, respectively, of Securities available for sale which was considered other than temporarily impaired. Other income amounted to $40,248 for the quarter and six months ended June 30, 2001. This represents miscellaneous income generated by S&F. Community operating expenses increased from $1,995,382 for the quarter ended June 30, 2000 to $2,239,563 for the quarter ended June 30, 2001. Community operating expenses increased from $3,967,900 for the six months ended June 30, 2000 to $4,228,281 for the six months ended June 30, 2001. This was primarily due to an increase in personnel costs and advertising costs. The Company is increasing its efforts to gain occupancy, -9- especially in its recently expanded communities. Cost of sales of manufactured homes and selling expenses amounted to $1,445,610 and $197,048, respectively for the quarter and six months ended June 30, 2001. General and administrative expenses remained relatively stable for the quarter ended June 30, 2001 as compared to the quarter ended June 30, 2000. General and administrative expenses increased from $947,637 for the six months ended June 30, 2000 to $1,032,200 for the six months ended June 30, 2001. This was primarily as due to an increase in occupancy and personnel costs. Interest expense increased from $652,320 for the quarter ended June 30, 2000 to $698,076 for the quarter ended June 30, 2001. Interest expense increased from $1,289,206 for the six months ended June 30, 2000 to $1,350,624 for the six months ended June 30, 2001. This was primarily as a result of a higher average principal balance outstanding of loans payable. Depreciation expense increased from $619,512 for the quarter ended June 30, 2000 to $659,167 for the quarter ended June 30, 2001. Depreciation expense increased from $1,232,643 for the six months ended June 30, 2000 to $1,325,606 for the six months ended June 30, 2001. This was primarily due to land development costs which were transferred to investment property and equipment and placed in service at the end of 2000. Other expenses remained relatively stable for the quarter and six months ended June 30, 2001 as compared to the quarter and six months ended June 30, 2000. Funds from operations (FFO), defined as net income, excluding gains (or losses) from sales of depreciable assets, plus depreciation increased from $1,848,126 for the quarter ended June 30, 2000 to $2,283,077 for the quarter ended June 30, 2001. FFO increased from $3,920,933 for the six months ended June 30, 2000 to $4,335,209 for the six months ended June 30, 2001. FFO does not replace net income (determined in accordance with generally accepted accounting principles) as a measure of performance or net cash flows as a measure of liquidity. FFO should be considered as a supplemental measure of operating performance used by real estate investment trusts. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities decreased from $3,743,887 for the six months ended June 30, 2000 to $1,647,327 for the six months ended June 30, 2001 primarily due to the new inventory for S&F. The Company believes that funds generated from operations together with the financing and refinancing of its properties will be sufficient to meet its needs over the next several years. -10- PART II OTHER INFORMATION Item 1 - Legal Proceedings - none Item 2 - Changes in Securities - none Item 3 - Defaults Upon Senior Securities - none Item 4 - Submission of Matters to a Vote of Security Holders- The annual meeting of shareholders was held on May 31, 2001 to elect a Board of Directors for the ensuing year and to approve the selection of independent auditors. Proxies for the meeting were solicited pursuant to Regulation 14 under the Securities and Exchange Act of 1934. Item 5 - Other Information - none Item 6 - Exhibits and Reports on Form 8-K - (a) Exhibits - none (b) Reports on Form 8-K - none -11- SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATE: August 10, 2001 By:/s/Samuel A. Landy Samuel A. Landy, President DATE: August 10, 2001 By:/s/Anna T. Chew Anna T. Chew, Vice President and Chief Financial Officer -12- -----END PRIVACY-ENHANCED MESSAGE-----