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 September 30, 1997
( ) 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
September 30, 1997 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)
125 Wyckoff Road, Eatontown, New Jersey 07724
Registrant's telephone number, including area code (732) 389-3890
______________________________________________________________________
(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 ________
Indicate by check mark whether the financial statements required by
instruction H have been reviewed by an independent public accountant.
Yes No X
The number of shares outstanding of issuer's common stock as of
November 5, 1997 was 6,757,883 shares.
<PAGE>
UNITED MOBILE HOMES, INC.
for the QUARTER ENDED
SEPTEMBER 30, 1997
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 for Operations. 9-10
PART II - OTHER INFORMATION 11
SIGNATURES 12
2
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<TABLE>
UNITED MOBILE HOMES, INC.
CONSOLIDATED BALANCE SHEETS
As of SEPTEMBER 30, 1997 and DECEMBER 31, 1996
September 30, December 31,
-ASSETS- 1997 1996
<S> <C> <C>
INVESTMENT PROPERTY AND EQUIPMENT
Land $ 5,927,506 $ 5,927,136
Site and Land Improvements 37,046,209 35,983,165
Buildings and Improvements 1,952,408 1,930,345
Rental Homes and Accessories 5,267,402 4,907,832
__________ __________
Total Investment Property 50,193,525 48,748,478
Equipment and Vehicles 2,294,300 2,163,179
__________ __________
Total Investment Property and
Equipment 52,487,825 50,911,657
Accumulated Depreciation (22,388,299) (21,024,163)
__________ __________
Net Investment Property and
Equipment 30,099,526 29,887,494
__________ __________
OTHER ASSETS
Cash and Cash Equivalents 370,153 1,195,095
Securities Available for Sale 3,514,462 1,441,037
Notes and Other Receivables 587,508 507,199
Unamortized Financing Costs 129,244 160,744
Prepaid Expenses 150,606 284,993
Land Development Costs 4,092,887 2,398,644
__________ __________
Total Other Assets 8,844,860 5,987,712
__________ __________
TOTAL ASSETS $ 38,944,386 $ 35,875,206
========== ==========
- -LIABILITIES AND SHAREHOLDERS' EQUITY-
MORTGAGES PAYABLE $ 17,059,104 $ 17,351,030
__________ __________
OTHER LIABILITIES
Accounts Payable 87,363 206,426
Loans Payable 500,000 -0-
Accrued Liabilities and Deposits 1,381,119 1,520,641
Tenant Security Deposits 383,177 370,964
__________ __________
Total Other Liabilities 2,351,659 2,098,031
__________ __________
TOTAL LIABILITIES 19,410,763 19,449,061
__________ __________
SHAREHOLDERS' EQUITY
Common Stock - $.10 par value per
share 10,000,000 shares authorized,
6,757,883 and 6,433,676 issued and
outstanding, respectively 675,788 643,368
Additional Paid-In Capital 19,685,927 16,275,434
Unrealized Holding Gains on
Securities Availabe for Sale 241,352 76,501
Accumulated Deficit (1,069,444) (569,158)
__________ __________
Total Shareholders' Equity 19,533,623 16,426,145
__________ __________
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 38,944,386 $ 35,875,206
========== ==========
</TABLE>
3
<PAGE>
<TABLE>
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the THREE AND NINE MONTHS ended
SEPTEMBER 30, 1997 and 1996
THREE MONTHS NINE MONTHS
9/30/97 9/30/96 9/30/97 9/30/96
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Rental and Related Income $3,862,240 $3,671,970 $11,432,333 $10,816,169
Community Operating Expense 1,800,308 1,703,102 5,023,954 4,737,457
_________ _________ _________ _________
Income from Community 2,061,932 1,968,868 6,408,379 6,078,712
Operations
General and Administrative 359,150 372,628 1,032,075 1,125,084
Interest Expense 343,925 346,211 1,016,955 1,061,548
Interest Income ( 90,087) ( 25,054) ( 182,897) ( 66,035)
Depreciation 517,171 497,357 1,563,256 1,487,449
Other Expenses 10,500 13,800 31,500 38,880
_________ _________ _________ _________
Income before (Loss) Gain
On Sales of Assets 921,273 763,926 2,947,490 2,431,786
(Loss) Gain on Sales
of Assets ( 32,141) 20,208 ( 10,110) 332,411
_________ _________ _________ _________
Net Income $ 889,132 $ 784,134 $2,937,380 $2,764,197
========= ========= ========= =========
Net Income Per Share .13 .12 .44 .45
========= ========= ========= =========
Weighted Average Shares 6,741,506 6,251,609 6,631,084 6,114,750
========= ========= ========= =========
-UNAUDITED-
See Notes to Consolidated Financial Statements
</TABLE>
4
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<TABLE>
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the NINE MONTHS ended
SEPTEMBER 30, 1997 and 1996
1997 1996
____ ____
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,937,380 $ 2,764,197
Non-Cash Adjustments
Depreciation 1,563,256 1,487,449
Amortization 31,500 38,880
Loss (Gain) on Sales of Assets 10,110 ( 332,411)
Changes in Operating Assets
And Liabilities -
Notes and Other Receivables ( 80,309) ( 68,275)
Prepaid Expenses 134,387 ( 77,683)
Accounts Payable ( 119,063) ( 23,005)
Accrued Liabilities & Deposits ( 139,522) 292,896
Tenant Security Deposits 12,213 35,386
_________ _________
Net Cash Provided by Operating Activities 4,349,952 4,117,434
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities -0- (3,435,506)
Purchase of Investment Property
And Equipment (1,520,077) (1,416,000)
Proceeds from Sales of Assets 307,327 564,646
Additions to Land Development (2,266,891) (1,610,619)
Purchase of Securities Available for Sale (1,908,574) ( 778,861)
_________ _________
Net Cash Used by Investing Activities (5,388,215) (6,676,340)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages and Loans 500,000 1,300,000
Principal Payments of Mortgages and Loans ( 291,926) (1,265,764)
Financing Costs on Debt -0- ( 15,862)
Proceeds from Dividend Reinvestment
And Stock Purchase Plan 1,773,418 3,016,568
Proceeds from Exercise of Stock Options 317,250 -0-
Dividends Paid (2,085,421) (1,606,351)
_________ _________
Net Cash Provided by Financing Activities 213,321 1,428,591
_________ _________
NET DECREASE IN CASH AND CASH EQUIVALENTS ( 824,942) (1,130,315)
CASH & CASH EQUIVALENTS - BEGINNING 1,195,095 2,043,282
_________ _________
CASH & CASH EQUIVALENTS - ENDING $ 370,153 $ 912,967
========= =========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
5
<PAGE>
UNITED MOBILE HOMES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(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
September 30, 1997 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, 1996 have been omitted. Certain amounts in the
consolidated financial statements for the prior period have been
reclassified to conform to the statement presentation for the current
period.
NOTE 2 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
On September 15, 1997, the Company paid $1,163,882 as a dividend of $.175
per share to shareholders of record as of August 15, 1997. The total
dividends paid for the nine months ended September 30, 1997 amounted to
$3,437,666.
On September 15, 1997, the Company received $1,158,079 from the Dividend
Reinvestment and Stock Purchase Plan (DRIP). There were 103,128 new shares
issued resulting in 6,757,883 shares outstanding. The total amount received
from the DRIP for the nine months ended September 30, 1997 amounted to
$3,125,663.
NOTE 3 - EMPLOYEE STOCK OPTIONS
During the nine months ended September 30, 1997, the following stock
options were granted:
Date of Number of Number of Option Expiration
Grant Employees Shares Price Date
1/03/97 1 25,000 $13.125 1/03/2002
6/25/97 8 32,500 11.500 6/25/2002
During the nine months ended September 30, 1997, eight employees exercised
their stock options and purchased 49,000 shares for total proceeds of
$317,250.
As of September 30, 1997, there were options outstanding to purchase
286,500 shares and 455,500 shares available for grant under the Company's
Stock Option Plans.
6
<PAGE>
NOTE 4 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
(Statement 128). Statement 128 supersedes APB Opinion No. 15 "Earnings Per
Share" and specifies the computation, presentation, and disclosure
requirements for earnings per share (EPS) for entities with publicly held
common stock or potential common stock. Statement 128 replaces Primary EPS
and Fully Diluted EPS with Basic EPS and Diluted EPS, respectively.
Statement 128 also requires dual presentation of Basic and Diluted EPS on
the face of the income statement for entities with complex capital
structures and a reconciliation of the information utilized to calculate
Basic EPS to that used to calculate Diluted EPS.
Statement 128 is effective for financial statements periods ending after
December 15, 1997. Earlier application is not permitted. After adoption,
all prior period EPS is required to be restated to conform with Statement
128. The Company expects that the adoption of Statement 128 will result in
Basic EPS being higher than Primary EPS and Diluted EPS will be
approximately the same as Fully Diluted EPS.
Statement of Financial Accounting Standards No. 129, "Disclosure of
Information about Capital Structure" (Statement 129) was issued in February
1997. Statement 129 is effective for periods ending after December 15,
1997. Statement 129 lists required disclosures about capital structure
that had been included in a number of separate statements and opinions of
authoritative accounting literature. As such, the adoption of Statement
129 is not expected to have a significant impact on the disclosures in
financial statements of the Company.
In June 1997, FASB issued Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income"(Statement 130). Statement 130
establishes standards for reporting and display of comprehensive income and
its components in a full set of general purpose financial statements.
Under Statement 130, comprehensive income is divided into net income and
other comprehensive income. Other comprehensive income includes items
previously recorded directly in equity, such as unrealized gains or losses
on securities available for sale. Statement 130 is effective for interim
and annual periods beginning after December 15, 1997. Comparative
financial statements provided for earlier periods are required to be
reclassified to reflect application of the provisions of the Statement.
In June 1997, FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information"
(Statement 131). Statement 131 establishes standards for the way public
business enterprises are to report information about operating segments in
annual financial statements and requires those enterprises to report
selected financial information about operating segments in interim
financial reports to shareholders. Statement 131 is effective for
financial statements for periods beginning after December 15, 1997.
7
<PAGE>
NOTE 5 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the nine months ended September 30, 1997 and 1996 for
interest was $1,016,955 and $1,061,548, respectively.
During the nine months ended September 30, 1997 and 1996, land development
costs of $572,648 and $88,478, respectively, were transferred to investment
property and equipment and placed in service.
During the nine months ended September 30, 1997 and 1996, the Company had
dividend reinvestments of $1,352,245 and $1,082,341, respectively, which
required no cash transfers.
8
<PAGE>
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-three
manufactured home communities. These manufactured home communities have
been generating increased gross revenues and increased operating income.
The Company generated $4,349,952 net cash provided by operating activities.
The Company received new capital of $3,125,663 through its Dividend
Reinvestment and Stock Purchase Plan (DRIP). The Company purchased
$1,908,574 of Securities Available for Sale. Mortgages Payable decreased
by $291,926 as a result of principal repayments. Loans payable increased
by $500,000.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Income from community operations increased by $93,064 to $2,061,932 for the
quarter ended September 30, 1997 as compared to $1,968,868 for the quarter
ended September 30, 1996. Income from community operations increased by
$329,667 to $6,408,379 for the nine months ended September 30, 1997
compared to $6,078,712 for the nine months ended September 30, 1996. This
represents a continuing trend of rising income from community operations.
The Company has been raising rental rates by approximately 5% annually.
Rental and related income rose from $3,671,970 for the quarter ended
September 30, 1996 to $3,862,240 for the quarter ended September 30, 1997.
Rental and related income rose from $10,816,169 for the nine months ended
September 30, 1996 to $11,432,333 for the nine months ended September 30,
1997. This was a result of higher rents and the purchases of Wood Valley
and Spreading Oaks Village during 1996. Community operating expenses
increased from $1,703,102 for the quarter ended September 30, 1996 to
$1,800,308 for the quarter ended September 30, 1997. Community operating
expenses rose from $4,737,457 for the nine months ended September 30, 1996
to $5,023,954 for the nine months ended September 30, 1997. Community
operating expenses increased due to the operating expenses of the purchases
of Wood Valley and Spreading Oaks. Interest expense remained relatively
stable for the quarter ended September 30, 1997 compared to the quarter
ended September 30, 1996. Interest expense decreased from $1,061,548 for
the nine months ended September 30, 1996 to $1,016,955 for the nine months
ended September 30, 1997. This was primarily a result of principal
repayments.
(Loss> Gain on Sales of Assets decreased from a gain of $332,411 for the
nine months ended September 30, 1996 to a loss of $10,110 for the nine
months ended September 30, 1997. This was primarily due to the sale of 5.5
acres of excess vacant land at a gain of $290,303 in 1996.
Funds from operations (FFO), defined as net income, excluding gains (or
losses) from sales of depreciable assets, plus depreciation increased from
$1,261,283 for the quarter ended September 30, 1996 to $1,438,444 for the
quarter ended September 30, 1997 and from $4,209,538 for the nine months
ended September 30, 1996 to $4,510,746 for the nine months ended September
30, 1997. FFO does not replace net income (determined in accordance with
generally accepted accounting principles) as a measure of performance or
9
<PAGE>
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 $4,117,434 for the
nine months ended September 30, 1996 to $4,349,952 for the nine months
ended September 30, 1997. The Company believes that funds generated from
operations and the Dividend Reinvestment and Stock Purchase Plan, together
with the financing and refinancing of its properties will be sufficient to
meet its need over the next several years.
10
<PAGE>
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
11
<PAGE>
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: November 5, 1997 By:/s/ Samuel A. Landy
Samuel A. Landy,
President
DATE: November 5, 1997 By:/s/ Anna T. Chew
Anna T. Chew,
Vice President and
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF UNITED MOBILE HOMES, INC. AS OF AND FOR THE PERIOD
ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 370,153
<SECURITIES> 3,514,462
<RECEIVABLES> 744,352
<ALLOWANCES> 156,844
<INVENTORY> 0
<CURRENT-ASSETS> 4,622,729
<PP&E> 52,487,825
<DEPRECIATION> 22,388,299
<TOTAL-ASSETS> 38,944,386
<CURRENT-LIABILITIES> 2,351,659
<BONDS> 17,059,104
<COMMON> 675,788
0
0
<OTHER-SE> 18,857,835
<TOTAL-LIABILITY-AND-EQUITY> 38,944,386
<SALES> 0
<TOTAL-REVENUES> 11,605,120
<CGS> 0
<TOTAL-COSTS> 5,023,954
<OTHER-EXPENSES> 2,626,831
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,016,955
<INCOME-PRETAX> 2,937,380
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,937,380
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,937,380
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
