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, 1998
( ) 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, 1998 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 ________
The number of shares outstanding of issuer's common stock as of
July 24, 1998 was 7,137,887 shares.
<PAGE>
UNITED MOBILE HOMES, INC.
for the QUARTER ENDED
JUNE 30, 1998
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 for Operations. 8-9
PART II - OTHER INFORMATION 10
SIGNATURES 11
<PAGE>
<TABLE>
<CAPTION>
UNITED MOBILE HOMES, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1998 and DECEMBER 31, 1997
June 30, December 31,
1998 1997
<S> <C> <C>
- -ASSETS-
INVESTMENT PROPERTY AND EQUIPMENT
Land $ 6,351,506 $ 6,351,506
Site and Land Improvements 44,317,269 43,927,856
Buildings and Improvements 2,661,587 2,592,125
Rental Homes and Accessories 5,606,722 5,339,857
---------- ----------
Total Investment Property 58,937,084 58,211,344
Equipment and Vehicles 2,480,151 2,416,402
---------- ----------
Total Investment Property and Equipment 61,417,235 60,627,746
Accumulated Depreciation (23,983,659) (22,918,677)
---------- ----------
Net Investment Property and Equipment 37,433,576 37,709,069
---------- ----------
OTHER ASSETS
Cash and Cash Equivalents 1,342,408 191,319
Securities Available for Sale 5,423,119 3,547,236
Notes and Other Receivables 766,711 678,280
Unamortized Financing Costs 214,498 172,694
Prepaid Expenses -0- 109,415
Land Development Costs 1,908,296 1,191,246
---------- ----------
Total Other Assets 9,655,032 5,890,190
---------- ----------
TOTAL ASSETS $ 47,088,608 $ 43,599,259
========== ==========
- LIABILITIES AND SHAREHOLDERS' EQUITY -
MORTGAGES PAYABLE $ 21,677,592 $ 20,111,023
---------- ----------
OTHER LIABILITIES
Accounts Payable 103,192 222,474
Loans Payable 126,072 578,973
Accrued Liabilities and Deposits 1,481,523 1,477,855
Tenant Security Deposits 405,301 378,393
---------- ----------
Total Other Liabilities 2,116,088 2,657,695
---------- ----------
TOTAL LIABILITIES 23,793,680 22,768,718
---------- ----------
SHAREHOLDERS' EQUITY
Common Stock - $.10 par value per share 713,789 686,531
10,000,000 shares authorized,
7,137,887 and 6,865,312 issued and
outstanding, respectively
Additional Paid-In Capital 23,438,922 20,572,786
Accumulated Other Comprehensive Income 206,457 239,017
Accumulated Deficit ( 1,064,240) ( 667,793)
---------- ----------
Total Shareholders' Equity 23,294,928 21,830,541
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 47,088,608 $ 43,599,259
========== ==========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
-3-
<PAGE>
<TABLE>
<CAPTION>
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the THREE AND SIX MONTHS ended
JUNE 30, 1998 and 1997
THREE MONTHS SIX MONTHS
6/30/98 6/30/97 6/30/98 6/30/97
<S> <C> <C> <C> <C>
Rental and Related Income $4,179,675 $3,804,373 $ 8,298,510 $ 7,570,093
Community Operating Expense 1,830,858 1,693,851 3,647,194 3,223,646
--------- --------- --------- ---------
Income from Community 2,348,817 2,110,522 4,651,316 4,346,447
Operations
General and Administrative 363,504 328,821 719,678 672,925
Interest Expense 382,008 337,604 754,129 673,030
Interest Income ( 82,213) ( 53,785) ( 174,108) ( 92,810)
Depreciation 601,063 526,365 1,201,735 1,046,085
Other Expenses 28,770 10,500 41,970 21,000
--------- --------- --------- ---------
Income before Gains
On Sales of Assets 1,055,685 961,017 2,107,912 2,026,217
Gains on Sales of Assets 11,052 14,277 9,928 22,031
--------- --------- --------- ---------
Net Income $1,066,737 $ 975,294 $2,117,840 $2,048,248
========= ========= ========= =========
Net Income Per Share -
Basic $ .16 .15 .31 .31
========= ========= ========= =========
Diluted $ .15 .15 .30 .31
========= ========= ========= =========
Weighted Average Shares -
Basic 7,029,651 6,565,181 6,918,006 6,512,536
========= ========= ========= =========
Diluted 7,058,715 6,636,365 6,955,017 6,583,720
========= ========= ========= =========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
-4-
<PAGE>
<TABLE>
<CAPTION>
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the SIX MONTHS ended
JUNE 30, 1998 and 1997
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,117,840 $ 2,408,248
Non-Cash Adjustments
Depreciation 1,201,735 1,046,085
Amortization 41,970 21,000
Gain on Sales of Assets ( 9,928) ( 22,031)
Changes in Operating Assets
And Liabilities -
Notes and Other Receivables ( 88,431) ( 107,385)
Prepaid Expenses 109,415 212,451
Accounts Payable ( 119,282) ( 108,425)
Accrued Liabilities & Deposits 3,668 ( 190,054
Tenant Security Deposits 26,908 13,450
--------- ---------
Net Cash Provided by Operating Activities 3,283,895 2,913,339
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Investment Property
And Equipment ( 811,083) (1,125,556)
Proceeds from Sales of Assets 144,769 228,002
Additions to Land Development ( 967,050) (1,490,117)
Purchase of Securities Available for Sale (1,908,443) (1,531,396)
--------- ---------
Net Cash Used by Investing Activities (3,541,807) (3,919,067)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages and Loans 3,600,000 300,000
Principal Payments of Mortgages and Loans (2,486,332) ( 195,733)
Financing Costs on Debt ( 83,774) -0-
Proceeds from Dividend Reinvestment
And Stock Purchase Plan 1,870,075 1,072,796
Proceeds from Exercise of Stock Options 75,688 215,750
Dividends Paid (1,566,656) (1,378,996)
--------- ---------
Net Cash Provided by Financing Activities 1,409,001 13,817
--------- ---------
NET INCREASE (DECREASE) IN CASH 1,151,089 ( 991,911)
AND CASH EQUIVALENTS
CASH & CASH EQUIVALENTS - BEGINNING 191,319 1,195,095
--------- ---------
CASH & CASH EQUIVALENTS - ENDING $ 1,342,408 $ 203,184
========= =========
</TABLE>
-UNAUDITED-
See Notes to Consolidated Financial Statements
-5-
<PAGE>
UNITED MOBILE HOMES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(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, 1998 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, 1997 have been omitted.
Effective January 1, 1998, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
(SFAS 130). SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements. Under SFAS 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. Comparative financial
statements provided for earlier periods have been reclassified to reflect
application of the provisions of SFAS 130.
SFAS 130 requires total comprehensive income and its components to be
displayed on the face of a financial statement for annual financial
statements. For interim financial statements, SFAS 130 requires only total
comprehensive income to be reported and allows such disclosure to be
presented in the notes to the interim financial statements.
Total comprehensive income, including unrealized gains on securities
available for sale, amounted to $726,514 and $2,085,280, for the three and
six months ended June 30, 1998, respectively, and $978,772 and $1,997,323,
for the three and six months ended June 30, 1997, respectively.
NOTE 2 - NET INCOME PER SHARE
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
29,064 and 37,011 for the three and six months ended June 30, 1998,
respectively, and 71,184 for both the three and six months ended June 30,
1997, are included in the diluted weighted average shares outstanding.
NOTE 3 - MORTGAGES PAYABLE
On April 28, 1998, the Company entered into a $3,600,000 mortgage payable
to Summit Bank. The interest rate on this mortgage is fixed at 7.5%. This
mortgage loan is due on May 1, 2003. Proceeds of this mortgage were used
to retire existing debt and to purchase securities available for sale.
-6-
<PAGE>
NOTE 4 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
On June 15, 1998, the Company paid $1,311,297 as a dividend of $.1875 per
share to shareholders of record as of May 15, 1998. The total dividends
paid for the six months ended June 30, 1998 amounted to $2,514,287.
On June 15, 1998, the Company received $1,609,025 from the Dividend
Reinvestment and Stock Purchase Plan. There were 144,314 new shares issued
resulting in 7,137,887 shares outstanding. The total amount received from
the Dividend Reinvestment Plan for the six months ended June 30, 1998
amounted to $2,893,394.
Effective June 24, 1998, the Company amended the Dividend Reinvestment and
Stock Purchase Plan. Shareholders may no longer purchase additional shares
by making optional cash payments. The dividend reinvestment feature of the
Plan remains unchanged.
NOTE 5 - EMPLOYEE STOCK OPTIONS
During the six months ended June 30, 1998, the following stock option was
granted:
Date of Number of Number of Option Expiration
Grant Employees Shares Price Date
1/08/98 1 25,000 $12.75 1/08/2003
During the six months ended June 30, 1998, two employees exercised their
stock options and purchased 11,500 shares for total proceeds of $75,688.
One option for 1,000 shares expired and was added back to the "pool"of
shares available for grant.
As of June 30, 1998, there were options outstanding to purchase 349,000
shares and 381,000 shares available for grant under the Company's Stock
Option Plans.
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the six months ended June 30, 1998 and 1997 for interest
was $814,729 and $673,030, respectively.
During the six months ended June 30, 1998 and 1997, land development costs
of $250,000 and $572,648, respectively, were transferred to investment
property and equipment and placed in service.
During the six months ended June 30, 1998 and 1997, the Company had
dividend reinvestments of $947,631 and $894,788, respectively, which
required no cash transfers.
-7-
<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-four
manufactured home communities. These manufactured home communities have
been generating increased gross revenues and increased operating income.
The Company generated $3,283,895 net cash provided by operating activities.
The Company received new capital of $2,817,706 through its Dividend
Reinvestment and Stock Purchase Plan (DRIP). The Company purchased
$1,908,443 of Securities Available for Sale. Mortgages Payable increased
by $1,566,569 as a result of a new mortgage of $3,600,000 offset by
principal repayments. Loans payable decreased by $452,901 as a result of
principal repayments.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Income from community operations increased by $238,295 to $2,348,817 for
the quarter ended June 30, 1998 as compared to $2,110,522 for the quarter
ended June 30, 1997. Income from community operations increased by
$304,869 to $4,651,316 for the six months ended June 30, 1998 as compared
to $4,346,447 for the six months ended June 30, 1997. 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 $3,804,373 for the quarter ended June 30, 1997 to
$4,179,675 for the quarter ended June 30, 1998. Rental and related income
rose from $7,570,093 for the six months ended June 30, 1997 to $8,298,510
for the six months ended June 30, 1998. This was the result of higher
rents, an increase in occupancy, and the purchase of Waterfalls Village
during the fourth quarter of 1997. Community operating expenses increased
from $1,693,851 for the quarter ended June 30, 1997 to $1,830,858 for the
quarter ended June 30, 1998. Community operating expenses increased from
$3,223,646 for the six months ended June 30, 1997 to $3,647,194 for the six
months ended June 30, 1998. Community operating expenses increased due to
the purchase of Waterfalls Village and an increase in certain expenses
associated with filling vacant expansion sites (i.e. advertising,
personnel, etc.). Interest expense increased by $44,404 for the quarter
ended June 30, 1998 compared to the quarter ended June 30, 1997 and by
$81,099 for the six months ended June 30, 1998 compared to the six months
ended June 30, 1997. This was primarily a result of an increase in the
average principal balance on borrowings outstanding. The balance
outstanding at June 30, 1998 was $21,677,592 as compared to $17,155,297 at
June 30, 1997.
Funds from operations (FFO), defined as net income, excluding gains (or
losses) from sales of depreciable assets, plus depreciation increased from
$1,487,382 for the quarter ended June 30, 1997 to $1,656,748 for the
quarter ended June 30, 1998 and from $3,072,302 for the six months ended
June 30, 1997 to $3,309,647 for the six months ended June 30, 1998. 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.
-8-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased from $2,913,339 for the
six months ended June 30, 1997 to $3,283,895 for the six months ended June
30, 1998. The Company believes that funds generated from operations
together with the financing and refinancing of its properties will be
sufficient to meet its need over the next several years.
-9-
<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 -
The annual meeting of shareholders was held on May 28, 1998 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
-10-
<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: August 6, 1998 By:/s/Samuel A. Landy
Samuel A. Landy,
President
DATE: August 6, 1998 By:/s/Anna T. Chew
Anna T. Chew,
Vice President and
Chief Financial Officer
-11-
<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 JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,342,408
<SECURITIES> 5,423,119
<RECEIVABLES> 864,704
<ALLOWANCES> 97,993
<INVENTORY> 0
<CURRENT-ASSETS> 7,532,237
<PP&E> 61,417,235
<DEPRECIATION> 23,983,659
<TOTAL-ASSETS> 47,088,608
<CURRENT-LIABILITIES> 2,116,088
<BONDS> 21,677,592
<COMMON> 713,789
0
0
<OTHER-SE> 22,581,139
<TOTAL-LIABILITY-AND-EQUITY> 47,088,608
<SALES> 0
<TOTAL-REVENUES> 8,482,546
<CGS> 0
<TOTAL-COSTS> 3,647,194
<OTHER-EXPENSES> 1,963,383
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 754,129
<INCOME-PRETAX> 2,117,840
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,117,840
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,117,840
<EPS-PRIMARY> .31
<EPS-DILUTED> .30
</TABLE>
