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UMH Properties Inc Reports Operating Results (10-Q)

August 09, 2011 | About:
Barel Karsan

10qk

18 followers
UMH Properties Inc (UMH) filed Quarterly Report for the period ended 2011-06-30.

Umh Properties has a market cap of $137 million; its shares were traded at around $9.57 with a P/E ratio of 11 and P/S ratio of 4. The dividend yield of Umh Properties stocks is 7.5%.

Highlight of Business Operations:

Net income decreased from $1,472,638 for the quarter ended June 30, 2010 to $235,976 for the quarter ended June 30, 2011. Net income decreased from $3,357,636 for the six months ended June 30, 2010 to $2,360,840 for the six months ended June 30, 2011. Funds from operations decreased from $2,551,774 for the quarter ended June 30, 2010 to $1,613,377 for the quarter ended June 30, 2011. Funds from operations decreased from $5,440,315 for the six months ended June 30, 2010 to $5,125,311 for the six months ended June 30, 2011. Income from community operations increased from $3,121,250 for the quarter ended June 30, 2010 to $3,683,061 for the quarter ended June 30, 2011. Income from community operations increased from $6,390,870 for the six months ended June 30, 2010 to $7,378,295 for the six months ended June 30, 2011.

As of June 30, 2011, the Company had approximately $8 million in cash and cash equivalents, $37 million in securities encumbered by $3 million in margin loans, $5 million available on its unsecured line of credit and $10 million available on its revolving line of credit. The Company also has facilities totaling $5 million to finance inventory purchases, of which $672,000 was utilized.

Sales of manufactured homes amounted to $1,557,701 and $1,091,480 for the quarters ended June 30, 2011 and 2010, respectively, an increase of 43%. Sales of manufactured homes amounted to $2,643,945 and $2,548,431 for the six months ended June 30, 2011 and 2010, respectively, an increase of 4%. Cost of sales of manufactured homes amounted to $1,473,634 and $1,057,946 for the quarters ended June 30, 2011 and 2010, respectively. Cost of sales of manufactured homes amounted to $2,458,005 and $2,431,979 for the six months ended June 30, 2011 and 2010, respectively. Selling expenses amounted to $490,671 and $397,512 for the quarters ended June 30, 2011 and 2010, respectively. Selling expenses amounted to $875,767 and $796,230 for the six months ended June 30, 2011 and 2010, respectively. Loss from the sales operations (defined as sales of manufactured homes less cost of sales of manufactured homes less selling expenses) amounted to $406,604, or 26% of total sales, for the quarter ended June 30, 2011 as compared to $363,978, or 33% of total sales, for the quarter ended June 30, 2010. Loss from sales operations amounted to $689,827, or 26% of total sales, for the six months ended June 30, 2011 as compared to $679,778, or 27% of total sales, for the six months ended June 30, 2010. The Company believes that sales of new homes produces new rental revenue and is an investment in the upgrading of the communities.

maintenance. General and administrative expenses increased 38% from $743,564 for the quarter ended June 30, 2010 to $1,025,912 for the quarter ended June 30, 2011. General and administrative expenses increased 24% from $1,610,292 for the six months ended June 30, 2010 to $1,991,965 for the six months ended June 30, 2011. This was primarily due to an increase in compensation costs. Acquisition costs relating to transaction and due diligence costs associated with the acquisition of the communities in 2010 and 2011 amounted to $135,626 and $160,058 for the quarter and six months ended June 30, 2011 and 2010, respectively. These costs would have previously been capitalized. Depreciation expense increased 30% from $1,070,226 for the quarter ended June 30, 2010 to $1,394,901 for the quarter ended June 30, 2011. Depreciation expense increased 34% from $2,088,874 for the six months ended June 30, 2010 to $2,790,535 for the six months ended June 30, 2011. This was primarily due to the acquisition of seven communities during 2010. Amortization expense increased 45% from $57,369 for the quarter ended June 30, 2010 to $83,283 for the quarter ended June 30, 2011. Amortization expense increased 48% from $108,489 for the six months ended June 30, 2010 to $160,566 for the six months ended June 30, 2011. This was primarily due to the new mortgages in 2010 and 2011.

Gain on securities transactions, net amounted to $-0- for the quarter ended June 30, 2011, as compared to $702,169 for the quarter ended June 30, 2010 and $1,541,856 for the six months ended June 30, 2011, as compared to $1,684,084 for the six months ended June 30, 2010. The market for REIT securities has continued to be strong. At June 30, 2011, the Company had unrealized gains of $5,739,444 in its REIT securities portfolio. The dividends received from our securities investments continue to meet our expectations. It is our intent to hold these securities long-term.

As of June 30, 2011, the Company had approximately $8 million in cash, $37 million in securities encumbered by $3 million in margin loans, $5 million available on its unsecured line of credit and $10 million available on its revolving line of credit, and facilities totaling $5 million to finance inventory purchases, of which $672,000 was utilized. The Company also owns 38 properties, of which 17 are unencumbered. These marketable securities, non-mortgaged properties, and lines of credit provide the Company with additional liquidity. The Company has been raising capital by accessing the capital markets and through its DRIP. The Company believes that funds generated from operations, the capital markets, the DRIP, the funds available on the lines of credit, together with the ability to finance and refinance its properties, will provide sufficient funds to adequately meet its obligations over the next several years.

Read the The complete Report

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