UMH Properties Inc Reports Operating Results (10-K/A)
Umh Properties has a market cap of $152.6 million; its shares were traded at around $10.17 with a P/E ratio of 14.6 and P/S ratio of 4.5. The dividend yield of Umh Properties stocks is 7%.
Highlight of Business Operations:The Companys income primarily consists of rental and related income from the operation of its manufactured home communities. Income also includes sales of manufactured homes. Total income and income from community operations has increased approximately 16% and 17%, respectively, primarily due to the acquisitions in 2010 and 2011. Sales of manufactured homes have stabilized but continue to be disappointing due to weaknesses in the overall economy. Our customers still face difficulties in selling their existing homes. Despite historically low interest rates, tight underwriting standards have kept a number of potential buyers out of the site-built market. This coupled with continued high unemployment rates, has negatively impacted our sales and our gross profit percentage.
Sales of manufactured homes increased from $6,133,494 for the year ended December 31, 2010 to $6,323,135 for the year ended December 31, 2011, or 3%. Cost of sales of manufactured homes remained stable at $5,747,963 and $5,721,977 for the years ended December 31, 2011 and 2010, respectively. Selling expenses increased from $1,718,719 for the year ended December 31, 2010 to $2,104,077 for the year ended December 31, 2011, or 22%. Loss from the sales operations (defined as sales of manufactured homes less cost of sales of manufactured homes less selling expenses) increased from $1,307,202 for the year ended December 31, 2010 to $1,528,905 for the year ended December 31, 2011. The losses on sales include selling expenses of approximately $2,100,000 for the year ended December 31, 2011. Many of these costs, such as rent, salaries, and to an extent, advertising and promotion, are fixed. Adverse conditions have continued to plague the manufactured housing industry and the broader housing market in the U.S. The turmoil in the economy and the financial markets, the inability of our customers to sell their current homes and the decline in consumer confidence have negatively impacted our sales and our gross profit percentage. New licensing laws, including the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act), has also increased costs. The gross profit percentage increased from 7% for the year ended December 31, 2010 to 9% for the year ended December 31, 2011. However, because conventional home ownership rates continue to decline, the Company is optimistic about future sales and rental prospects. The Company believes that sales of new homes produces new rental revenue and is an investment in the upgrading of our communities.
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