UMH Properties Inc (UMH, Financial) filed Quarterly Report for the period ended 2009-06-30.
United Mobile Home\'s primary business is the ownership and operation of manufactured home communities - leasing manufactured home spaces on a month-to-month basis to private manufactured home owners. The company also leases homes to residents. A manufactured home community is designed to accommodate detached single family manufactured housing units which are produced off-site by manufacturers and delivered by truck tothe site. UMH Properties Inc has a market cap of $95.7 million; its shares were traded at around $8.54 with a P/E ratio of 19.3 and P/S ratio of 2.6. The dividend yield of UMH Properties Inc stocks is 8.5%.
financial markets have negatively impacted our home sales. Loss on securities transactions, net amounted to $169,480 and $1,893,314 for the quarter and six months ended June 30, 2009, respectively, as compared to the quarter and six months ended June 30, 2008, primarily due to non-cash impairment charges relating to securities which were considered other than temporarily impaired. The Company had unrealized losses of $4,308,842 in its securities portfolio as of June 30, 2009. During the three months ended June 30, 2009, the REIT market has improved and as a result, our unrealized losses have been reduced by $681,134. Without including our investments in Monmouth Real Estate Investment Corporation, a related company, our securities portfolio had unrealized losses of $580,977 at June 30, 2009 as compared to unrealized losses of $2,415,643 at March 31, 2009, an improvement of $1,834,666 for the quarter. The fair value of our securities portfolio continued to improve in July. Historically, REIT share prices were not volatile. Over the past two years, they have been highly volatile with price swings of 5% or more occurring frequently. REIT securities have always represented less than 10% of the market value of our total assets. The dividends received from our securities investments continue to meet our expectations and we anticipate realizing satisfactory returns. It is our intent to hold these securities long-term.
Community operating expenses decreased 5% from $3,396,383 for the quarter ended June 30, 2008 to $3,232,626 for the quarter ended June 30, 2009. Community operating expenses decreased 2% from $6,578,559 for the six months ended June 30, 2008 to $6,443,312 for the six months ended June 30, 2009. General and administrative expenses decreased 10% from $911,541 for the quarter ended June 30, 2008 to $817,175 for the quarter ended June 30, 2009. General and administrative expenses decreased 16% from $1,897,428 for the six months ended June 30, 2008 to $1,598,813 for the six months ended June 30, 2009. The Company has been focusing on reducing costs, including operating expenses, salaries, employee benefits, professional fees and travel. Interest expense increased 28% from $886,201 for the quarter ended June 30, 2008 to $1,135,033 for the quarter ended June 30, 2009. This was primarily due to an increase in the average balance of mortgages and loans payable partially offset by the change in fair value of the Companys interest rate swaps which decreased interest expense by $214,199 for the six months ended June 30, 2008 but only decreased interest expense by $95,623 for the six months ended June 30, 2009. Interest expense decreased 7% from $2,386,859 for the six months ended June 30, 2008 to $2,230,294 for the six months ended June 30, 2009. This was primarily due to an increase in the average balance of mortgages and loans payable and the change in fair value of the Companys interest rate swaps which increased interest expense by $134,341 for the six months ended June 30, 2008 but decreased interest expense by $172,744 for the six months ended June 30, 2009. Cash paid for interest during the three and six months ended June 30, 2009 amounted to $1,297,378 and $2,283,981, respectively. Cash paid for interest during the three and six months ended June 30, 2008 amounted to $1,175,400 and $2,416,548, respectively. Depreciation expense remained relatively stable for the three and six months ended June 30, 2009 as compared to the three and six months ended June 30, 2008. Amortization of financing costs increased 43% from $38,371 for the quarter ended June 30, 2008 to $54,970 for the quarter ended June 30, 2009. Amortization of financing costs increased 33% from $77,815 for the six months ended June 30, 2008 to $103,840 for the six months ended June 30, 2009. This was primarily due to amortization of costs associated with the new Weatherly Estates mortgage and the extension of our Sandy Valley mortgage.
Sales of manufactured homes amounted to $1,494,118 and $2,881,014 for the quarters ended June 30, 2009 and 2008, respectively, a decrease of 48%. Sales of manufactured homes amounted to $2,579,918 and $4,665,057 for the six months ended June 30, 2009 and 2008, respectively, a decrease of 45%. Cost of sales of manufactured homes amounted to $1,426,536 and $2,419,512 for the quarters ended June 30, 2009 and 2008, respectively. Cost of sales of manufactured homes amounted to $2,428,775 and $3,904,477 for the six months ended June 30, 2009 and 2008, respectively. Selling expenses amounted to $292,629 and $302,732 for the quarters
ended June 30, 2009 and 2008, respectively. Selling expenses amounted to $616,259 and $711,177 for the six months ended June 30, 2009 and 2008, respectively. These decreases are directly attributable to the decrease in sales. Loss from the sales operations (defined as sales of manufactured homes less cost of sales of manufactured homes less selling expenses) amounted to $225,047, or 15% of total sales, for the quarter ended June 30, 2009 as compared to income of $158,770, or 6% of total sales, for the quarter ended June 30, 2008. Loss from sales operations amounted to $465,116, or 18% of total sales, for the six months ended June 30, 2009 as compared to income of $49,403, or 1% of total sales, for the six months ended June 30, 2008. The Company believes that sales of new homes produces new rental revenue and is an investment in the upgrading of the communities.
As of June 30, 2009, the Company has a $5,000,000 unsecured line of credit, of which $3,535,841 was utilized. The Company also has a $10,000,000 revolving line of credit for the financing of home sales, of which $8,690,000 was outstanding. The Company owns 28 properties, of which 16 carried mortgages totaling approximately $69,000,000. The Company has one mortgage secured by four properties with a balance of approximately $12,500,000 maturing in November 2009. We are currently in the process of refinancing/extending this mortgage and are optimistic that we will be successful.
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United Mobile Home\'s primary business is the ownership and operation of manufactured home communities - leasing manufactured home spaces on a month-to-month basis to private manufactured home owners. The company also leases homes to residents. A manufactured home community is designed to accommodate detached single family manufactured housing units which are produced off-site by manufacturers and delivered by truck tothe site. UMH Properties Inc has a market cap of $95.7 million; its shares were traded at around $8.54 with a P/E ratio of 19.3 and P/S ratio of 2.6. The dividend yield of UMH Properties Inc stocks is 8.5%.
Highlight of Business Operations:
The Companys revenue primarily consists of rental and related income from the operation of its manufactured home communities. Revenues also include sales of manufactured homes, interest and dividend income and gain on securities transactions, net. Total revenues decreased by approximately 12% from $10,458,996 for the quarter ended June 30, 2008 to $9,169,362 for the quarter ended June 30, 2009. Total revenues decreased by approximately 17% from $18,774,536 for the six months ended June 30, 2008 to $15,575,227 for the six months ended June 30, 2009. These decreases were primarily due to an increase in the loss on securities transactions of $224,503 and $1,854,528 for the quarter and six months ended June 30, 2009, respectively, and a decrease in sales of manufactured homes of $1,386,896 and $2,085,139 for the quarter and six months ended June 30, 2009, partially offset by an increase in rental and related income and interest and dividend income. Sales of manufactured homes decreased by approximately 48% and 45% for the quarter and six months ended June 30, 2009, respectively, as compared to the quarter and six months ended June 30, 2008. Over the past several years, the availability of liberal lending terms for conventional housing created a difficult competitive market for sales of manufactured homes. This resulted in a loss of occupancy from approximately 86% in 2005 to approximately 80% currently. Although the conventional home lending environment has returned to more disciplined lending practices, the return to affordability and the recovery of manufactured home communities have been slow. We believe that the general economic issues, rising unemployment rate, the decline in consumer confidence, the inability of our customers to sell their current homes, and the turmoil in the credit andfinancial markets have negatively impacted our home sales. Loss on securities transactions, net amounted to $169,480 and $1,893,314 for the quarter and six months ended June 30, 2009, respectively, as compared to the quarter and six months ended June 30, 2008, primarily due to non-cash impairment charges relating to securities which were considered other than temporarily impaired. The Company had unrealized losses of $4,308,842 in its securities portfolio as of June 30, 2009. During the three months ended June 30, 2009, the REIT market has improved and as a result, our unrealized losses have been reduced by $681,134. Without including our investments in Monmouth Real Estate Investment Corporation, a related company, our securities portfolio had unrealized losses of $580,977 at June 30, 2009 as compared to unrealized losses of $2,415,643 at March 31, 2009, an improvement of $1,834,666 for the quarter. The fair value of our securities portfolio continued to improve in July. Historically, REIT share prices were not volatile. Over the past two years, they have been highly volatile with price swings of 5% or more occurring frequently. REIT securities have always represented less than 10% of the market value of our total assets. The dividends received from our securities investments continue to meet our expectations and we anticipate realizing satisfactory returns. It is our intent to hold these securities long-term.
Community operating expenses decreased 5% from $3,396,383 for the quarter ended June 30, 2008 to $3,232,626 for the quarter ended June 30, 2009. Community operating expenses decreased 2% from $6,578,559 for the six months ended June 30, 2008 to $6,443,312 for the six months ended June 30, 2009. General and administrative expenses decreased 10% from $911,541 for the quarter ended June 30, 2008 to $817,175 for the quarter ended June 30, 2009. General and administrative expenses decreased 16% from $1,897,428 for the six months ended June 30, 2008 to $1,598,813 for the six months ended June 30, 2009. The Company has been focusing on reducing costs, including operating expenses, salaries, employee benefits, professional fees and travel. Interest expense increased 28% from $886,201 for the quarter ended June 30, 2008 to $1,135,033 for the quarter ended June 30, 2009. This was primarily due to an increase in the average balance of mortgages and loans payable partially offset by the change in fair value of the Companys interest rate swaps which decreased interest expense by $214,199 for the six months ended June 30, 2008 but only decreased interest expense by $95,623 for the six months ended June 30, 2009. Interest expense decreased 7% from $2,386,859 for the six months ended June 30, 2008 to $2,230,294 for the six months ended June 30, 2009. This was primarily due to an increase in the average balance of mortgages and loans payable and the change in fair value of the Companys interest rate swaps which increased interest expense by $134,341 for the six months ended June 30, 2008 but decreased interest expense by $172,744 for the six months ended June 30, 2009. Cash paid for interest during the three and six months ended June 30, 2009 amounted to $1,297,378 and $2,283,981, respectively. Cash paid for interest during the three and six months ended June 30, 2008 amounted to $1,175,400 and $2,416,548, respectively. Depreciation expense remained relatively stable for the three and six months ended June 30, 2009 as compared to the three and six months ended June 30, 2008. Amortization of financing costs increased 43% from $38,371 for the quarter ended June 30, 2008 to $54,970 for the quarter ended June 30, 2009. Amortization of financing costs increased 33% from $77,815 for the six months ended June 30, 2008 to $103,840 for the six months ended June 30, 2009. This was primarily due to amortization of costs associated with the new Weatherly Estates mortgage and the extension of our Sandy Valley mortgage.
Sales of manufactured homes amounted to $1,494,118 and $2,881,014 for the quarters ended June 30, 2009 and 2008, respectively, a decrease of 48%. Sales of manufactured homes amounted to $2,579,918 and $4,665,057 for the six months ended June 30, 2009 and 2008, respectively, a decrease of 45%. Cost of sales of manufactured homes amounted to $1,426,536 and $2,419,512 for the quarters ended June 30, 2009 and 2008, respectively. Cost of sales of manufactured homes amounted to $2,428,775 and $3,904,477 for the six months ended June 30, 2009 and 2008, respectively. Selling expenses amounted to $292,629 and $302,732 for the quarters
ended June 30, 2009 and 2008, respectively. Selling expenses amounted to $616,259 and $711,177 for the six months ended June 30, 2009 and 2008, respectively. These decreases are directly attributable to the decrease in sales. Loss from the sales operations (defined as sales of manufactured homes less cost of sales of manufactured homes less selling expenses) amounted to $225,047, or 15% of total sales, for the quarter ended June 30, 2009 as compared to income of $158,770, or 6% of total sales, for the quarter ended June 30, 2008. Loss from sales operations amounted to $465,116, or 18% of total sales, for the six months ended June 30, 2009 as compared to income of $49,403, or 1% of total sales, for the six months ended June 30, 2008. The Company believes that sales of new homes produces new rental revenue and is an investment in the upgrading of the communities.
As of June 30, 2009, the Company has a $5,000,000 unsecured line of credit, of which $3,535,841 was utilized. The Company also has a $10,000,000 revolving line of credit for the financing of home sales, of which $8,690,000 was outstanding. The Company owns 28 properties, of which 16 carried mortgages totaling approximately $69,000,000. The Company has one mortgage secured by four properties with a balance of approximately $12,500,000 maturing in November 2009. We are currently in the process of refinancing/extending this mortgage and are optimistic that we will be successful.
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