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 March 31, 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 March 31, 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 May 7, 2001 was 7,430,983 shares.
UNITED MOBILE HOMES, INC. for the QUARTER ENDED MARCH 31, 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.......... 6-7 Item 2 - Management Discussion and Analysis of Financial Conditions and Results of Operations...... 8-9 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................................... 10 SIGNATURES.......................................... 11 -2-
<TABLE> <CAPTION> UNITED MOBILE HOMES, INC. CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2001 and DECEMBER 31, 2000 March 31, December 31, 2001 2000 - -ASSETS- INVESTMENT PROPERTY AND EQUIPMENT <S> <C> <C> Land $ 6,779,335 $ 6,779,335 Site and Land Improvements 50,823,776 50,707,021 Buildings and Improvements 2,705,636 2,705,636 Rental Homes and Accessories 8,128,468 8,088,015 ____________ ____________ Total Investment Property 68,437,215 68,280,007 Equipment and Vehicles 3,336,797 3,282,681 ____________ ____________ Total Investment Property and Equipment 71,774,012 71,562,688 Accumulated Depreciation (30,462,439) (29,862,276) ____________ ____________ Net Investment Property and Equipment 41,311,573 41,700,412 ____________ ____________ OTHER ASSETS Cash and Cash Equivalents 17,611 1,399,259 Securities Available for Sale 19,455,317 15,494,918 Notes and Other Receivables 2,383,438 1,914,446 Unamortized Financing Costs 261,227 280,727 Prepaid Expenses 240,013 115,633 Land Development Costs 2,079,219 2,040,202 ____________ ____________ Total Other Assets 24,436,825 21,245,185 ____________ ____________ TOTAL ASSETS $ 65,748,398 $ 62,945,597 ============ ============ - - LIABILITIES AND SHAREHOLDERS' EQUITY - MORTGAGES PAYABLE $ 31,826,885 $ 32,055,839 ____________ ____________ OTHER LIABILITIES Accounts Payable 101,437 339,174 Loans Payable 6,440,428 5,639,470 Accrued Liabilities and Deposits 1,656,232 1,622,272 Tenant Security Deposits 459,069 449,416 ____________ ____________ Total Other Liabilities 8,657,166 8,050,332 ____________ ____________ TOTAL LIABILITIES 40,484,051 40,106,171 ____________ ____________ SHAREHOLDERS' EQUITY Common Stock - $.10 par value per share 10,000,000 shares authorized, 7,760,383 and 7,711,141 shares issued and 7,430,983 and 7,394,241 shares outstanding, respectively 776,038 771,114 Additional Paid-In Capital 26,480,879 26,026,006 Accumulated Other Comprehensive Income 1,642,996 (490,795) (Loss) Accumulated Deficit (714,170) (667,793) Treasury Stock, at cost (329,400 and 316,900 shares, respectively) (2,921,396) (2,799,106) ____________ ____________ Total Shareholders' Equity 25,264,347 22,839,426 ____________ ____________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 65,748,398 $ 62,945,597 ============ ============ -UNAUDITED- See Notes to Consolidated Financial Statements </TABLE> -3-
<TABLE> <CAPTION> UNITED MOBILE HOMES, INC. CONSOLIDATED STATEMENTS OF INCOME For the THREE MONTHS ended MARCH 31, 2001 2001 2000 <S> <C> <C> Rental and Related Income $4,765,988 $4,611,582 Community Operating Expense 1,988,718 1,972,518 __________ __________ Income from Community Operations 2,777,270 2,639,064 General and Administrative 538,555 454,215 Interest Expense 652,548 636,886 Interest and Dividend Income (523,639) (402,330) Loss (Gain) on Securities Available for Sale Transactions 38,174 (144,414) Depreciation 666,439 613,131 Other Expenses 19,500 21,900 __________ __________ Income before Gains on Sales of Assets 1,385,693 1,459,676 Gains on Sales of Assets 10,317 24,418 __________ __________ Net Income $1,396,010 $1,484,094 ========== ========== Net Income Per Share - Basic and Diluted $.19 $.20 ========== ========== Weighted Average Shares - Basic 7,403,426 7,325,088 ========== ========== Diluted 7,440,511 7,325,088 ========== ========== -UNAUDITED- See Notes to Consolidated Financial Statements -4- </TABLE>
<TABLE> <CAPTION> UNITED MOBILE HOMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS for the THREE MONTHS ended March 31, 2001 and 2000 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES: <S> <C> <C> Net Income $1,396,010 $1,484,094 Non-Cash Adjustments: Depreciation 666,439 613,131 Amortization 19,500 21,900 Loss (Gain) on Securities Available for 38,174 (143,414) Sale Transactions Gain on Sales of Investment Property and (10,317) (24,418) Equipment Changes in Operating Assets And Liabilities - Notes and Other Receivables (468,992) (328,226) Prepaid Expenses (124,380) (133,484) Accounts Payable (237,737) 436,538 Accrued Liabilities and Deposits 33,960 64,141 Tenant Security Deposits 9,653 9,129 __________ __________ Net Cash Provided by Operating Activities 1,322,310 1,999,391 __________ __________ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Investment Property and Equipment (324,073) (288,063) Proceeds from Sales of Assets 56,790 24,418 Additions to Land Development (39,017) (609,556) Purchase of Securities Available for Sale (2,257,792) (493,838) Proceeds from Sales of Securities Available for Sale 393,010 501,600 __________ __________ Net Cash Used by Investing Activities (2,171,082) (865,439) __________ __________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Mortgages and Loans 800,958 735,915 Principal Payments of Mortgages and Loans (228,954) (198,917) Dividends Paid (982,590) (949,663) Purchase of Treasury Stock (122,290) (49,440) __________ __________ Net Used Provided by Financing Activities (532,876) (462,105) __________ __________ NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,381,648) 671,847 CASH & CASH EQUIVALENTS - BEGINNING 1,399,259 724,650 __________ __________ CASH & CASH EQUIVALENTS - ENDING $17,611 $1,396,497 ========== ========== -UNAUDITED- See Notes to Consolidated Financial Statements -5- </TABLE>
UNITED MOBILE HOMES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 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 March 31, 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. 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 amount of 37,085 for the three months ended March 31, 2001 are included in the diluted weighted average shares outstanding. Total comprehensive income, including unrealized gains (losses) on securities available for sale, amounted to $3,529,801 and $1,576,743 for the three months ended March 31, 2001 and 2000, respectively. NOTE 3 - SECURITIES AVAILABLE FOR SALE During the three months ended March 31, 2001, the Company realized a loss of $101,819 due to a writedown to fair value of Securities Available for Sale which was considered other than temporarily impaired. NOTE 4 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN On March 15, 2001, the Company paid $1,442,387 as a dividend of $.195 per share to shareholders of record as of February 15, 2001. -6-
On March 15, 2001, the Company received $459,797 from the Dividend Reinvestment and Stock Purchase Plan. There were 49,242 new shares issued under the Plan. NOTE 5 - TREASURY STOCK During the three months ended March 31, 2001, the Company purchased 12,500 shares of its own stock for a total cost of $122,290. 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 three months ended March 31, 2001, the following stock options were granted: Date of Number of Number of Option Expiration Grant Employees Shares Price Date 1/2/2001 1 25,000 $10.3125 1/2/2006 As of March 31, 2001, there were options outstanding to purchase 433,500 shares and 415,500 shares available for grant under the Company's Stock Option Plans. NOTE 7 - SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the three months ended March 31, 2001 and 2000 for interest was $691,348 and $668,886 respectively. Interest cost capitalized to Land Development was $38,800 and $32,000 for the three months ended March 31, 2001 and 2000, respectively. During the three months ended March 31, 2001 and 2000, the Company had dividend reinvestments of $459,797 and $421,467, respectively, which required no cash transfers. -7-
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 $1,322,310 net cash provided by operating activities. The Company received new capital of $459,797 through its Dividend Reinvestment and Stock Purchase Plan (DRIP). The Company repurchased 12,500 shares of its own stock at a cost of $122,290. The Company purchased $2,257,792 of securities of other real estate investment trusts. Mortgages Payable decreased by $228,954 as a result of principal repayments. Loans payable increased by $800,958 primarily as a result of additional borrowings to purchase Securities Available for Sale. MATERIAL CHANGES IN RESULTS OF OPERATIONS Income from community operations increased by $138,206 to $2,777,270 for the quarter ended March 31, 2001 as compared to $2,639,064 for the quarter ended March 31, 2000. This represents a continuing trend of rising income from community operations. The Company has been raising rental rates by approximately 4% annually. Rental and related income rose from $4,611,582 for the quarter ended March 31, 2000 to $4,765,988 for the quarter ended March 31, 2001. This was the result of higher rents and increased occupancy. Community operating expenses remained relatively stable for the quarter ended March 31, 2001 as compared to the quarter ended March 31, 2000. General and administrative expenses increased from $454,215 for the quarter ended March 31, 2000 to $538,555 for the quarter ended March 31, 2001. This was due to an increase in occupancy and personnel costs. Interest expense remained relatively stable for the quarter ended March 31, 2001 as compared to the quarter ended March 31, 2000. Interest and dividend income increased from $402,330 for the quarter ended March 31, 2000 to $523,639 for the quarter ended March 31, 2001. This was due primarily to purchases of Securities Available for Sale during 2000 and 2001. Loss (Gain) on Securities Available for Sale transactions decreased from a gain of $144,414 for the quarter ended March 31, 2000 to a loss of $38,174 for the quarter ended March 31, 2001. This was due primarily to a writedown of $101,819 of Securities Available for Sale which was considered other than temporarily impaired. -8-
Funds from operations (FFO), defined as net income, excluding gains (or losses) from sales of depreciable assets, plus depreciation decreased from $2,072,807 for the quarter ended March 31, 2000 to $2,052,132 for the quarter ended March 31, 2001. This was due primarily to the writedown of $101,819 of Securities Available for Sale which was considered other than temporarily impaired. 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 $1,999,391 for the three months ended March 31, 2000 to $1,322,310 for the three months ended March 31, 2001 primarily due to an increase in Notes and Other Receivables and a decrease in Accounts Payable. 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. -9-
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 - none Item 5 - Other Information - none Item 6 - Exhibits and Reports on Form 8-K - (a) Exhibits - none (b) Reports on Form 8-K - none -10-
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: May 7, 2001 By:/s/Samuel A. Landy Samuel A. Landy, President DATE: May 7, 2001 By:/s/Anna T. Chew Anna T. Chew, Vice President and Chief Financial Officer -11-