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, 2002 ( ) 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, 2002 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 April 30, 2002 was 7,577,650 shares.
UNITED MOBILE HOMES, INC. for the QUARTER ENDED MARCH 31, 2002 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
UNITED MOBILE HOMES, INC CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2002 AND DECEMBER 31, 2001 <TABLE> <CAPTION> <S> <C> <C> ASSETS March 31, December 31, 2002 2001 _____________ _____________ INVESTMENT PROPERTY AND EQUIPMENT Land $ 7,212,035 $ 7,212,035 Site and Land Improvements 54,742,599 54,640,298 Buildings and Improvements 2,745,194 2,745,194 Rental Homes and Accessories 8,536,763 8,432,068 ___________ ___________ Total Investment Property 73,236,591 73,029,595 Equipment and Vehicles 3,739,700 3,611,353 ___________ ___________ Total Investment Property and Equipment 76,976,291 76,640,948 Accumulated Depreciation (33,042,020) (32,349,006) ___________ ___________ Net Investment Property and Equipment 43,934,271 44,291,942 ___________ ___________ OTHER ASSETS Cash and Cash Equivalents 5,558,504 1,567,831 Securities Available for Sale 27,910,770 25,917,748 Inventory of Manufactured Homes 2,593,075 2,782,665 Notes and Other Receivables 3,538,881 3,291,355 Unamortized Financing Costs 476,713 467,107 Prepaid Expenses 680,743 113,680 Land Development Costs 2,059,852 1,902,516 ___________ ___________ Total Other Assets 42,818,538 36,042,902 ___________ ___________ TOTAL ASSETS $86,752,809 $80,334,844 =========== =========== - LIABILITIES AND SHAREHOLDERS' EQUITY - LIABILITIES: MORTGAGES PAYABLE $43,748,209 $38,652,025 ___________ ___________ OTHER LIABILITIES Accounts Payable 517,054 836,588 Loans Payable 10,904,906 10,692,683 Accrued Liabilities and Deposits 1,983,713 1,711,232 Tenant Security Deposits 493,382 477,782 ___________ ___________ Total Other Liabilities 13,899,055 13,718,285 ___________ ___________ Total Liabilities 57,647,264 52,370,310 ___________ ___________ SHAREHOLDERS' EQUITY: Common Stock - $.10 par value per share, 10,000,000 shares authorized, 7,923,950 and 7,888,632 shares issued and 7,577,650 and 7,542,332 shares outstanding as of March 31, 2002 and December 31, 2001, respectively 792,395 788,863 Additional Paid-In Capital 27,816,381 27,409,361 Accumulated Other Comprehensive Income 4,022,462 3,541,001 Accumulated Deficit (418,795) (667,793) Treasury Stock at Cost (346,300 shares at March 31, 2002 and December 31, 2001) (3,106,898) (3,106,898) ___________ ___________ Total Shareholders' Equity 29,105,545 27,964,534 ___________ ___________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $86,752,809 $80,334,844 =========== =========== </TABLE> -UNAUDITED- See Accompanying Notes to Consolidated Financial Statements 3
UNITED MOBILE HOMES, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 <TABLE> <CAPTION> <S> <C> <C> 2002 2001 ___________ ___________ REVENUES: Rental and Related Income $5,052,813 $4,765,988 Sales of Manufactured Homes 913,518 -0- Interest and Dividend Income 618,115 523,639 Gain (Loss) on Securities Available for Sales Transactions, net 532,819 (38,174) Other Income 17,917 -0- ___________ ___________ Total Revenues 7,135,182 5,251,453 ___________ ___________ EXPENSES: Community Operating Expenses 2,194,242 1,988,718 Cost of Sales of Manufactured Homes 810,750 -0- Selling Expenses 242,767 -0- General and Administrative Expenses 536,398 538,555 Interest Expense 773,903 652,548 Depreciation Expense 702,005 666,439 Amortization of Financing Costs 26,700 19,500 ___________ ___________ Total Expenses 5,286,765 3,865,760 ___________ ___________ Income before Gain on Sales of Investment Property and Equipment 1,848,417 1,385,693 Gain on Sales of Investment Property and Equipment 3,327 10,317 ___________ ___________ Net Income $1,851,744 $1,396,010 =========== =========== Net Income per Share - Basic $.25 $.19 =========== =========== Diluted $.24 $.19 =========== =========== Weighted Average Shares Outstanding - Basic 7,551,161 7,403,426 =========== =========== Diluted 7,620,477 7,440,511 =========== =========== </TABLE> -UNAUDITED- See Accompanying Notes to Consolidated Financial Statements 4
UNITED MOBILE HOMES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 <TABLE> <CAPTION> <S> <C> <C> 2002 2001 ___________ ___________ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $1,851,744 $1,396,010 Non-Cash Adjustments: Depreciation 702,005 666,439 Amortization 26,700 19,500 (Gain) Loss on Securities Available for (532,819) 38,174 Sale Transactions Gain on Sales of Investment Property and (3,327) (10,317) Equipment Changes in Operating Assets and Liabilities: Inventory of Manufactured Homes 189,590 -0- Notes and Other Receivables (247,526) (468,992) Prepaid Expenses (567,063) (124,380) Accounts Payable (319,534) (237,737) Accrued Liabilities and Deposits 272,481 33,960 Tenant Security Deposits 15,600 9,653 ___________ ___________ Net Cash Provided by Operating Activities 1,387,851 1,322,310 ___________ ___________ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Investment Property and Equipment (427,021) (324,073) Proceeds from Sales of Assets 86,014 56,790 Additions to Land Development (157,336) (39,017) Purchase of Securities Available for Sale (3,031,002) (2,257,792) Proceeds from Sales of Securities Available for Sale 2,052,260 393,010 ___________ ___________ Net Cash Used by Investing Activities (1,477,085) (2,171,082) ___________ ___________ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Mortgages and Loans 5,574,723 800,958 Principal Payments of Mortgages and Loans (266,316) (228,954) Financing Costs on Debt (36,306) -0- Dividends Paid (1,192,194) (982,590) Purchase of Treasury Stock -0- (122,290) ___________ ___________ Net Cash Provided (Used) by Financing Activities 4,079,907 (532,876) ___________ ___________ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,990,673 (1,381,648) CASH & CASH EQUIVALENTS - BEGINNING 1,567,831 1,399,259 ___________ ___________ CASH & CASH EQUIVALENTS - ENDING $5,558,504 $17,611 =========== =========== </TABLE> -UNAUDITED- See Accompanying Notes to Consolidated Financial Statements 5
UNITED MOBILE HOMES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2002 (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, 2002 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, 2001 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. Certain reclassifications have been made to the financial statements for prior periods to conform to the current period presentation. 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 69,316 and 37,085 shares for the three months ended March 31, 2002 and 2001, respectively, are included in the diluted weighted average shares outstanding. Total comprehensive income, including unrealized gains (losses) on securities available for sale, amounted to $2,333,205 and $3,529,801, for the three months ended March 31, 2002 and 2001, respectively. NOTE 3 - MORTGAGES PAYABLE On March 28, 2002, the Company obtained a $5,362,500 mortgage with Prudential Mortgage Capital Company. This mortgage is at an interest rate of 7.36% for a ten-year term with a thirty year amortization schedule. This loan is secured by Port Royal Village in Belle Vernon, Pennsylvania. NOTE 4 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN On March 15, 2002, the Company paid $1,602,746 as a dividend of $.2125 per share to shareholders of record as of February 15, 2002. On March 15, 2002, the Company received $410,552 from the Dividend Reinvestment and Stock Purchase Plan. There were 35,318 new shares issued under the Plan. 6
NOTE 5 - EMPLOYEE STOCK OPTIONS During the three months ended March 31, 2002, the following stock option was granted: Date of Number of Number of Option Expiration Grant Employees Shares Price Date 1/4/02 1 25,000 $12.95 1/4/2010 As of March 31, 2002, there were options outstanding to purchase 465,200 shares and 189,800 shares available for grant under the Company's Stock Option Plans. NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the three months ended March 31, 2002 and 2001 for interest was $805,603 and $691,348, respectively. Interest cost capitalized to Land Development was $31,700 and $38,800 for the three months ended March 31, 2002 and 2001, respectively. During the three months ended March 31, 2002 and 2001, the Company had dividend reinvestments of $410,552 and $459,797, 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- five manufactured home communities. These manufactured home communities have been generating increased gross revenues and increased operating income. The Company generated $1,387,851 net cash provided by operating activities. The Company received new capital of $410,552 through its Dividend Reinvestment and Stock Purchase Plan (DRIP). The Company purchased $3,031,002 of securities of other real estate investment trusts. The Company had a decrease in inventory of manufactured homes of $189,590. 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 increased by $5,096,184 as a result of a new mortgage loan of $5,362,500 partially offset by principal repayments of $266,316. MATERIAL CHANGES IN RESULTS OF OPERATIONS Rental and related income increased from $4,765,988 for the quarter ended March 31, 2001 to $5,052,813 for the quarter ended March 31, 2002. This was primarily due to the acquisition of a new community in September, 2001 and the rental increases to residents. The Company has been raising rental rates by approximately 3% to 4% annually. Sales of manufactured homes amounted to $913,518 for the quarter ended March 31, 2002. Effective April 1, 2001, the Company began to conduct manufactured home sales in its communities. Interest and dividend income rose from $523,639 for the quarter ended March 31, 2001 to $618,115 for the quarter ended March 31, 2002. This was due primarily to purchases of Securities available for sale during 2002 and 2001. Gain on securities available for sale transactions amounted to $532,819 for the quarter ended March 31, 2002, as compared to a loss of $38,174 for the quarter ended March 31, 2001. Included in the Gain (Loss) on securities available for sale transactions for the quarter ended March 31, 2001 was a writedown of $101,819, of Securities available for sale which was considered other than temporarily impaired. Other income amounted to $17,917 for the quarter ended March 31, 2002, respectively. This represents miscellaneous income generated by S&F. Community operating expenses increased from $1,988,718 for the quarter ended March 31, 2001 to $2,194,242 for the quarter ended March 31, 2002. This was primarily due to the acquisition of a new community and increased insurance expense and personnel costs. Cost of sales of manufactured homes amounted to $810,750 for the quarter ended March 31, 2002. Selling expenses amounted to $242,767 for the quarter ended March 31, 2002. General and administrative expenses remained relatively stable for the quarter ended March 31, 2002 as compared to the quarter ended March 31, 2001. Interest expense increased from $652,548 for the quarter ended March 31, 2001 to $773,903 for the quarter ended March 31, 2002 primarily due to increased borrowings. Depreciation expense increased from $666,439 for the quarter ended March 31, 2001 to $702,005 for the quarter ended March 31, 2002. This was primarily due to the acquisition of a new community. Amortization of financing costs remained relatively stable for the quarter ended March 31, 2002 as compared to the quarter ended March 31, 2001. 8
Funds from operations (FFO), defined as net income, excluding gains (or losses) from sales of depreciable assets, plus depreciation increased from $2,052,132 for the quarter ended March 31, 2001 to $2,550,422 for the quarter ended March 31, 2002. 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 increased from $1,322,310 for the quarter ended March 31, 2001 to $1,387,851 for the quarter ended March 31, 2002. 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 3, 2002 By /s/ Samuel A. Landy, President DATE: May 3, 2002 By /s/ Anna T. Chew, Vice President and Chief Financial Officer 11