Form 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ___________________
to _____________________
Commission File Number 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)
3499 Route 9, Suite 3C, Freehold, New Jersey 07728
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code
(732) 577-9997
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.10 par value
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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K X .
Based upon the assumption that directors and executive officers
of the registrant are not affiliates of the registrant, the
aggregate market value of the voting stock of the registrant held
by nonaffiliates of the registrant at March 14, 2002 was
$92,016,450. Presuming that such directors and executive
officers are affiliates of the registrant, the aggregate market
value of the voting stock of the registrant held by nonaffiliates
of the registrant at March 14, 2002 was $64,529,936.
The number of shares outstanding of issuer's common stock as of
March 14, 2002 was 7,542,332 shares.
Documents Incorporated by Reference:
- Exhibits incorporated by reference are listed in Part IV,
Item (a)(3).
PART I
ITEM I - BUSINESS
General Development of Business
United Mobile Homes, Inc. (the Company) owns and operates
twenty-five manufactured home communities containing 5,979 sites.
The communities are located in New Jersey, New York, Ohio,
Pennsylvania and Tennessee.
The Company was incorporated in the State of New Jersey in
1968. Its executive offices are located at 3499 Route 9, Suite
3C, Freehold, New Jersey 07728. Its telephone number is (732)
577-9997.
Effective January 1, 1992, the Company elected to be taxed
as a real estate investment trust (REIT) under Sections 856-858
of the Internal Revenue Code. The company received from the
Internal Revenue Service a favorable revenue ruling that it
qualified as a REIT. The Company will not be taxed on the
portion of its income which is distributed to shareholders,
provided it distributes at least 95% of its taxable income (90%
effective for the year ended December 31, 2001), has at least 75%
of its assets in real estate investments and meets certain other
requirements for qualification as a REIT.
Background
Monmouth Capital Corporation, a publicly-owned Small
Business Investment Corporation, that had owned approximately 66%
of the Company's stock, spun off to its shareholders in a
registered distribution three shares of United Mobile Homes, Inc.
for each share of Monmouth Capital Corporation. The Company in
1984 and 1985 issued additional shares through rights offerings.
The Company has been in operation for thirty-two years, the last
sixteen of which have been as a publicly-owned corporation.
Narrative Description of Business
The Company'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 to the
site. Such dwellings, referred to as manufactured homes (which
should be distinguished from travel trailers), are manufactured
in a variety of styles and sizes. Manufactured homes, once
located, are rarely transported to another site; typically, a
manufactured home remains on site and is sold by its owner to a
subsequent occupant. This transaction is commonly handled
through a broker in the same manner that a more traditional
single-family residence is sold. Each owner of a manufactured
home leases the site on which the home is located from the
Company.
Page 2
Manufactured homes are being accepted by the public as a
viable and economically attractive alternative to common stick-
built single-family housing. During the past five years,
approximately one-fifth of all single-family homes built and sold
in the nation have been manufactured homes.
The size of a modern manufactured home community is limited,
as are other residential communities, by factors such as
geography, topography, and funds available for development.
Generally, modern manufactured home communities contain buildings
for recreation, green areas, and other common area facilities,
which, as distinguished from resident owned manufactured homes,
are the property of the community owner. In addition to such
general improvements, certain manufactured home communities
include recreational improvements such as swimming pools, tennis
courts and playgrounds. Municipal water and sewer services are
available to some manufactured home communities, while other
communities supply these facilities on site. The housing
provided by the manufactured home community, therefore, includes
not only the manufactured dwelling unit (owned by the resident),
but also the physical community framework and services provided
by the manufactured home community.
The community manager interviews prospective residents,
ensures compliance with community regulations, maintains public
areas and community facilities and is responsible for the overall
appearance of the community. The manufactured home community,
once fully occupied, tends to achieve a stable rate of occupancy.
The cost and effort in moving a home once it is located in a
community encourages the owner of the manufactured home to resell
the manufactured home rather than to remove it from the
community. This ability to produce relatively predictable
income, together with the location of the community, its
condition and its appearance, are factors in the long-term
appreciation of the community.
Effective April 1, 2001, the Company, through its wholly-
owned taxable subsidiary, UMH Sales and Finance, Inc. (S&F),
began to conduct manufactured home sales in its communities.
This company was established to enhance the occupancy of the
communities.
Investment and Other Policies of the Company
The Company may invest in improved and unimproved real
property and may develop unimproved real property. Such
properties may be located throughout the United States. In the
past, it has concentrated on the northeast.
The Company has no restrictions on how it finances new
manufactured home communities. It may finance communities by
purchase money mortgages or other financing, including first
liens, wraparound mortgages or subordinated indebtedness. In
connection with its ongoing activities, the Company may issue
notes, mortgages or other senior securities. The Company intends
to use both secured and unsecured lines of credit.
The Company may issue securities for property, however, this
has not occurred to date, and it may repurchase or reacquire its
shares from time to time if, in the opinion of the Board of
Directors, such acquisition is advantageous to the Company.
During 2001, the Company purchased 29,400 shares of its own stock
at a total cost of $307,792.
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The Company also invests in both debt and equity securities
of other REITs. The Company from time to time may purchase these
securities on margin when the interest and dividend yields exceed
the cost of funds. At December 31, 2001 and 2000, the Company
had $25,917,748 and $15,494,918, respectively, of securities
available for sale. Included in these securities are Preferred
Stock and Debt securities of $15,219,657 and $1,452,413,
respectively, at December 31, 2001 and $6,946,426 and $1,393,400,
respectively, at December 31, 2000. The unrealized gain (loss)
on securities available for sale at December 31, 2001 and 2000
amounted to $3,541,001 and $(490,795), respectively.
Property Maintenance and Improvement Policies
It is the policy of the Company to properly maintain,
modernize, expand and make improvements to its properties when
required. The Company anticipates that renovation expenditures
with respect to its present properties during 2002 will be
consistent with 2001 expenditures. It is the policy of the
Company to maintain adequate insurance coverage on all of its
properties; and, in the opinion of the Company, all of its
properties are adequately insured.
Risk Factors
Real Estate Industry and Competition Risks
The Company's investments will be subject to the risks
generally associated with the ownership of real property,
including the uncertainty of cash flow to meet fixed obligations,
adverse changes in national economic conditions, changes in the
relative popularity (and thus the relative price) of the
Company's real estate investments when compared to other
investments, adverse local market conditions due to changes in
general or local economic conditions or neighborhood values,
changes in interest rates and in the availability of mortgage
funds, costs and terms of mortgage funds, the financial
conditions of residents and sellers of properties, changes in
real estate tax rates and other operating expenses (including
corrections of potential environmental issues as well as more
stringent governmental regulations regarding the environment),
governmental rules and fiscal policies including possible
proposals for rent controls, as well as expenses resulting from
acts of God, uninsured losses and other factors which are beyond
the control of the Company. The Company's investments are
primarily in rental properties and are subject to the risk or
inability to attract or retain residents with a consequent
decline in rental income as a result of adverse changes in local
real estate markets or other factors.
The Company will be competing for manufactured home
community investments with numerous other real estate entities,
such as individuals, corporations, REITs and other enterprises
engaged in real estate activities, possibly including certain
affiliates of the Company. In many cases, the competing concerns
may be larger and better financed than the Company, making it
difficult for the Company to secure new manufactured home
community investments. Competition among private and
institutional purchasers of manufactured home community
investments has increased substantially in recent years, with
resulting increases in the purchase price paid for manufactured
home communities and consequent higher fixed costs.
Page 4
Governmental Regulations
Local zoning and use laws, environmental statutes and other
governmental requirements may restrict expansion, rehabilitation
and reconstruction activities. These regulations may prevent the
Company from taking advantage of economic opportunities.
Legislation such as the Americans with Disabilities Act may
require the Company to modify its properties. Future legislation
may impose additional requirements. No prediction can be made as
to what requirements may be enacted or what changes may be
implemented to existing legislation.
Rent control affects only two of the Company's manufactured
home communities which are in New Jersey and has resulted in a
slower growth of earnings from these properties.
Environmental Liability Risks
Current and former real estate owners and operators may be
required by law to investigate and clean up hazardous substances
released at the properties they own or operate or have owned or
operated. They may be liable to the government or to third
parties for property damage, investigation costs and cleanup
costs. Contamination may adversely affect the owner's ability to
sell or lease real estate or to borrow using the real estate as
collateral. There is no way of determining at this time the
magnitude of any potential liability to which the Company may be
subject arising out of unknown environmental conditions or
violations with respect to the properties it owns. Environmental
laws today can impose liability on a previous owner or operator
of a property that owned or operated the property at a time when
hazardous or toxic substances were disposed of, or released from,
the property. A conveyance of the property, therefore, does not
relieve the owner or operator from liability. The Company is not
aware of any environmental liabilities relating to its properties
which would have a material adverse effect on its business,
assets, or results of operations. However, no assurance can be
given that environmental liabilities will not arise in the
future.
The Company owns and operates 11 manufactured home
communities which either have their own wastewater treatment
facility, water distribution system, or both. At these
locations, the Company is subject to compliance of monthly,
quarterly and yearly testing for contaminants as outlined by the
individual state's Department of Environmental Protection
Agencies.
The Company must also comply with certain Federal
Environmental Protection Agency Regulations which may be more
stringent than the state and local governmental regulations. The
costs of such testing are included in the Company's operating
expenses. As of the date of this report, there are no
enforcement actions pending by any federal, state or local
environmental agencies and management believes that the Company
is in compliance with all such regulations.
Currently, the Company is not subject to radon or asbestos
monitoring requirements.
Page 5
Insurance Considerations
The Company generally maintains insurance policies related
to its business, including casualty, general liability and other
policies covering business operations, employees and assets. The
Company may be required to bear all losses that are not
adequately covered by insurance. Although management believes
that the Company's insurance programs are adequate, no assurance
can be given that the Company will not incur losses in excess of
its insurance coverage, or that the Company will be able to
obtain insurance in the future at acceptable levels and
reasonable cost.
Financing Risks
The Company finances a portion of its investments through
debt. This debt creates risks, including a) rising interest
rates on floating rate debt; b) failure to repay or refinance
existing debt as it matures, which may result in forced
disposition of assets on disadvantageous terms; c) refinancing
terms less favorable than the terms of the existing debt; and d)
failure to meet required payments of principal and/or interest.
Amendment of Business Policies
The Board of Directors determines the growth, investment,
financing, capitalization, borrowing, REIT status, operating and
distribution policies. Although the Board of Directors has no
present intention to amend or revise any of these policies, these
policies may be amended or revised without notice to
shareholders. Accordingly, shareholders may not have control
over changes in Company policies.
Qualification as a REIT
The Company intends to qualify as a REIT. If it fails to do
so, it will not be allowed to deduct distributions to
shareholders in computing taxable income and will be subject to
Federal and state income taxes, including any applicable
alternative minimum tax, at regular corporate rates. In
addition, the Company may be barred from qualification as a REIT
for the four years following disqualification. The additional
tax incurred at regular corporate rates would reduce
significantly the cash flow available for distribution to
shareholders and for debt service. Furthermore, the Company
would no longer be required to make any distributions to
shareholders as a condition to REIT qualification. Any
distributions to shareholders that otherwise would have been
subject to tax as a capital gain dividend would be taxable as
ordinary income to the extent of the Company's current and
accumulated earnings and profits. Corporate distributees,
however, may be eligible for the dividends received deduction on
the distributions, subject to limitations under the Internal
Revenue Code.
To qualify as a REIT, the Company must comply with certain
highly technical and complex requirements. Management cannot be
certain that the Company has complied with these requirements
since there are few judicial and administrative interpretations
of these provisions. In addition, facts and circumstances that
may be beyond the Company's control may
Page 6
affect the Company's ability to qualify as a REIT. No assurance
can be given that new legislation, regulations, administrative
interpretations or court decisions will not change the tax laws
significantly with respect to qualification as a REIT or with
respect to the Federal Income tax consequences of qualification.
The company intends to qualify as a REIT. However, no assurance
can be given that the Company qualifies as a REIT or will remain
qualified as a REIT.
Notwithstanding the Company's status as a REIT, the Company
is subject to various Federal, state and local taxes on income
and property. The Company will be taxed at regular corporate
rates on any undistributed taxable income, including
undistributed net capital gains, provided, however, that properly
designated undistributed capital gains will effectively avoid
taxation at the stockholder level. The Company may also have to
pay some state income or franchise taxes because not all states
treat REITS in the same manner as they are treated for Federal
income tax purposes.
Number of Employees
On March 14, 2001, the Company had approximately 100
employees, including Officers. During the year, the Company
hires approximately 20 part-time and full-time temporary
employees as lifeguards, grounds keepers and for emergency
repairs.
Page 7
ITEM 2 - PROPERTIES
United Mobile Homes, Inc. is engaged in the ownership and
operation of manufactured home communities located in New Jersey,
New York, Ohio, Pennsylvania and Tennessee. The Company owns
twenty-five manufactured home communities containing 5,979 sites.
The following is a brief description of the properties owned by
the Company:
Number of 2001 Current Rent
Average Per
Name of Community Sites Occupancy Month Per
Site
Allentown 414 89% $257
4912 Raleigh-Millington Road
Memphis, TN 38128
Brookview Village 133 84% $310
Route 9N
Greenfield Center, NY 12833
Cedarcrest 283 98% $373
1976 North East Avenue
Vineland, NJ 08360
Cranberry Village 201 92% $345
201 North Court
Cranberry Township, PA
16066
Cross Keys Village 133 92% $232
Old Sixth Avenue Road, RD #1
Duncansville, PA 16635
D & R Village 244 94% $359
Route 146, RD 13
Clifton Park, NY 12065
Fairview Manor 276 79% $363
2110 Mays Landing Road
Millville, NJ 08332
Forest Park Village 252 93% $297
724 Slate Avenue
Cranberry Township, PA
16066
Heather Highlands 457 66% $225
109 S. Main Street
Pittston, PA 18640
Highland Estates 269 87% $359
60 Old Route 22
Kutztown, PA 19530
Kinnebrook 212 88% $364
201 Route 17B
Monticello, NY 12701
Page 8
Number of 2001 Current Rent
Average Per
Name of Community Sites Occupancy Month Per
Site
Lake Sherman Village 210 97% $276
7227 Beth Avenue, SW
Navarre, OH 44662
Laurel Woods 220 73% $200
1943 St. Joseph Street
Cresson, PA 16630
Memphis Mobile City 168 83% $224
3894 N. Thomas Street
Memphis, TN 38127
Oxford Village 224 100% $396
2 Dolinger Drive
West Grove, PA 19390
Pine Ridge Village 137 93% $330
147 Amy Drive
Carlisle, PA 17013
Pine Valley Estates 218 82% $230
700 Pine Valley Estates
Apollo, PA 15613
Port Royal Village 427 82% $257
400 Patterson Lane
Belle Vernon, PA 15012
River Valley Estates 214 92% $207
2066 Victory Road
Marion, OH 43302
Sandy Valley Estates 364 95% $251
801 First, Route #2
Magnolia, OH 44643
Southwind Village 250 97% $271
435 E. Veterans Highway
Jackson, NJ 08527
Spreading Oaks Village 153 93% $182
7140-29 Selby Road
Athens, OH 45701
Waterfalls Village 202 98% $344
3450 Howard Road
Hamburg, NY 14075
Woodlawn Village 157 99% $465
Route 35
Eatontown, NJ 07724
Wood Valley 161 96% $208
1493 N. Whetstone River Road
Caledonia, OH 43314
Page 9
Occupancy rates are very stable with little year-to-year
changes once the community is filled (generally 90% or greater
occupancy). It is the Company's experience that, once a home is
set up in the community, it is seldom moved. The home if sold,
is sold on-site to a new owner.
Residents generally rent on a month-to-month basis. Some
residents have one-year leases. Southwind Village and Woodlawn
Village (both in New Jersey) are the only communities subject to
local rent control laws.
There are 14 sites at Sandy Valley which are under a consent
order with the Federal Government. This order provides that, as
these sites become vacant, they cannot be reused. As of December
31, 2001, 12 of these sites were vacant. The restrictions on use
were known at the time of purchase, and the item is not material
to the operation of Sandy Valley Estates.
In connection with the operation of its 5,979 sites, the
Company operates approximately 470 rental units. These are homes
owned by the Company and rented to residents. The Company
engages in the rental of manufactured homes primarily in areas
where the communities have existing vacancies. The rental homes
produce income on both the home and for the site which might
otherwise be non-income producing. The Company sells the older
rental homes when the opportunity arises.
The Company has approximately 700 sites in various stages of
engineering/construction. Due to the difficulties involved in
the approval and construction process, it is difficult to predict
the number of sites which will be completed in a given year.
Significant Properties
The Company operates approximately $73,000,000 (at original
cost) in manufactured home properties. These consist of 25
separate manufactured home communities and related equipment and
improvements. There are 5,979 sites in the 25 communities. No
one community constitutes more than 10% of the total assets of
the Company. Port Royal Village with 427 sites, Sandy Valley
Estates with 364 sites, Cedarcrest with 283 sites, Fairview Manor
with 276 sites, Highland Estates with 269 sites, Allentown with
414 sites and Heather Highlands with 457 sites are the larger
properties.
Mortgages on Properties
The Company has mortgages on various properties. The
maturity dates of these mortgages range from the year 2003 to
2011. Interest varies from fixed rates of 6.36% to 7.86% with
one mortgage at a variable rate of LIBOR plus 155 basis points.
The aggregate balances of these mortgages total $38,652,025 at
December 31, 2001. (For additional information, see Part IV,
Item 14(a)(1)(vi), Note 5 of the Notes to Consolidated Financial
Statements - Notes and Mortgages Payable).
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ITEM 3 - LEGAL PROCEEDINGS
Legal proceedings are incorporated herein by reference and
filed as Part IV, Item 14(a)(1)(vi), Note 13 of the Notes to
Consolidated Financial Statements - Legal Matters.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of 2001
to a vote of security holders through the solicitation of proxies
or otherwise.
Page 11
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's shares are traded on the American Stock
Exchange (symbol UMH). The per share range of high and low
quotes for the Company's stock for each quarterly period is as
follows:
2001 2000 1999
HIGH LOW HIGH LOW HIGH LOW
First
Quarter 12.75 9.63 8-7/8 7 10-15/16 9-3/16
Second
Quarter 12.35 10.65 8-1/2 7-3/8 10 8-1/4
Third
Quarter 11.95 10.50 9-1/2 8-1/8 9-1/2 8-5/8
Fourth
Quarter 12.50 10.25 9-3/4 8-3/8 9 8
On March 14, 2002, the closing price of the Company's stock
was $12.20.
As of December 31, 2001, there were approximately 1,000
shareholders of the Company's common stock based on the number of
record owners.
For the years ended December 31, 2001, 2000 and 1999, total
dividends paid by the Company amounted to $5,980,540 or $.8025,
$5,555,941 or $.7575 per share and $5,441,904 or $.75 per share,
respectively.
On January 16, 2002, the Company declared a dividend of
$.2125 per share to be paid on March 15, 2002 to shareholders of
record February 15, 2002.
Future dividend policy will depend on the Company's
earnings, capital requirements, financial condition, availability
and cost of bank financing and other factors considered relevant
by the Board of Directors. The Company elected REIT status
beginning in 1992. As a REIT, the Company must pay out at least
95% of its taxable income (90% effective for the year ended
December 31, 2001) in the form of a cash distribution to
shareholders.
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ITEM 6 - SELECTED FINANCIAL DATA
December 31,
2001 2000 1999 1998 1997
Income Statement
Data:
Total Revenues $26,882,399 $20,644,731 $18,807,085 $17,193,278 $15,663,811
Total Expenses 21,303,647 15,418,042 14,248,985 13,004,682 11,456,007
(Loss) Gain on
Sales
Of Investment
Property and
Equipment (28,264) (37,318) (1,964) 13,095 (10,546)
Net Income 5,550,488 5,189,371 4,556,136 4,201,691 4,197,258
Net Income Per
Share-
Basic and
Diluted .74 .71 .63 .60 .63
..............................................................................
Balance Sheet Data:
Total Assets $80,334,844 $62,945,597 $58,575,312 $50,046,649 $43,599,259
Mortgages
Payable 38,652,025 32,055,839 30,419,153 21,411,576 20,111,023
Shareholders'
Equity 27,964,534 22,839,426 21,391,307 23,212,813 20,830,541
..............................................................................
Average Number
of Shares
Outstanding 7,457,636 7,339,684 7,252,774 7,042,701 6,617,479
Funds from
Operations * $ 8,263,308 $7,845,529 $ 7,010,633 6,591,995 $ 6,324,536
Cash Dividends
Per Share .8025 .7575 .75 .7375 .70
* Defined as net income, excluding gains (or losses) from sales
of depreciable assets, plus depreciation. Funds from
Operations do not replace net income determined in accordance
with generally accepted accounting principles (GAAP) as a measure
of performance or net cash flows as a measure of liquidity.
Funds from Operations is not a GAAP measure of operating
performance and should be considered as a supplemental measure of
operating performance used by real estate investment trusts.
Page 13
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Revenue and Expense
2001 vs. 2000
Rental and related income increased from $18,640,335 for the
year ended December 31, 2000 to $19,291,611 for the year ended
December 31, 2001 primarily due to the acquisition of a new
community and rental increases to residents. During 2001, the
Company was able to obtain an average rent increase of
approximately 3.5%.
Overall occupancy rates are satisfactory with ten
manufactured home communities experiencing vacancies over ten
percent. Some of these vacancies are the result of expansions.
The Company is also evaluating further expansion at selected
communities in order to increase the number of available sites.
Some of these communities are in various stages of expansion.
Effective April 1, 2001, the Company, through its wholly-
owned taxable subsidiary, UMH Sales and Finance, Inc. (S&F),
began to conduct manufactured home sales in its communities.
This company was established to enhance the occupancy of the
communities. Sales of manufactured homes, other income, cost of
sales of manufactured homes and selling expenses are directly
related to this operation.
Interest and dividend income increased from $1,747,254 in
2000 to $2,188,430 in 2001 due to purchases of securities
available for sale during 2000 and 2001.
Gains on sales of securities available for sale increased
from $257,142 in 2000 to $530,324 in 2001.
Community operating expenses increased from $8,233,356 for
the year ended December 31, 2000 to $9,004,164 for the year ended
December 31, 2001 primarily as a result of the acquisition of a
new community and increased insurance expense and personnel
costs. Management anticipates that the increase in insurance
costs will continue into 2002.
General and administrative expenses increased from
$1,852,309 in 2000 to $2,015,685 in 2001 primarily as a result of
an increase in personnel and occupancy costs.
Interest expense increased from $2,624,801 in 2000 to
$2,825,894 in 2001. This was primarily as a result of a higher
average principal balance outstanding. Interest capitalized on
construction in progress amounted to $146,000 and $180,600 for
2001 and 2000, respectively.
Depreciation expense increased from $2,618,839 for the year
ended December 31, 2000 to $2,684,556 for the year ended December
31, 2001 primarily as a result of the acquisition of a new
community and the completion of the expansions.
Amortization of financing costs remained relatively stable
in 2001 and 2000.
For the year ended December 31, 2001, the Company reported
net income of $5,550,488 as compared to net income of $5,189,371
for the year ended December 31, 2000. The Company is currently
Page 14
experiencing modest inflation. Modest inflation is believed to
have a favorable impact on the Company's financial performance.
With modest inflation, the Company believes that it can increase
rents sufficiently to match increases in operating expenses.
High rates of inflation (more than 10%) could result in an
inability to raise rents to meet rising costs and could create
political problems such as the imposition of rent controls. The
Company anticipates continuing profits in 2002.
2000 vs. 1999
Rental and related income increased from $17,752,823 for the
year ended December 31, 1999 to $18,640,335 for the year ended
December 31, 2000 primarily due to rental increases to residents
and increased occupancy. During 2000, the Company was able to
obtain an average rent increase of approximately 3.3%.
Overall occupancy rates are satisfactory with only ten
manufactured home communities experiencing vacancies over ten
percent. Some of these vacancies are the result of expansions
completed toward the end of 1999. The Company has completed a 79
site expansion at Fairview Manor, a 40 site expansion at Highland
Estates, and a 25 site expansion at Port Royal Village. The
Company is also evaluating further expansion at selected
communities in order to increase the number of available sites.
Some of these communities are in various stages of expansion.
Community operating expenses increased from $7,992,273 for
the year ended December 31, 1999 to $8,233,356 for the year ended
December 31, 2000 primarily as a result of increased expenses,
such as advertising, associated with the expansions.
General and administrative expenses increased from
$1,621,479 in 1999 to $1,852,309 in 2000 primarily as a result of
an increase in personnel and occupancy costs.
Interest expense increased from $2,105,546 in 1999 to
$2,624,801 in 2000. This was primarily as a result of a higher
average principal balance outstanding. Interest capitalized on
construction in progress amounted to $180,600 and $179,000 for
2000 and 1999, respectively.
Interest and dividend income increased from $1,000,789 in
1999 to $1,747,254 in 2000 due to purchases of securities
available for sale during 1999 and 2000.
Gains on sales of securities available for sale increased
from $53,473 in 1999 to $257,142 in 2000 due to increased sales.
Depreciation expense increased from $2,452,533 for the year
ended December 31, 1999 to $2,618,839 for the year ended December
31, 2000 primarily as a result of the completion of the
expansions.
Amortization of financing costs remained relatively stable
in 2000 and 1999.
Loss on sales of investment property and equipment increased
from a loss of $1,964 for the year ended December 31, 1999 to a
loss of $37,318 for the year ended December 31, 2000 primarily as
a result of the sale of certain older rental units.
Page 15
For the year ended December 31, 2000, the Company reported
net income of $5,189,371 as compared to net income of $4,556,136
for the year ended December 31, 1999.
Liquidity and Capital Resources
The Company uses funds for real estate acquisitions, real
property improvements, amortization of debt incurred in
connection with such acquisitions and improvements, purchase of
inventory of manufactured homes and investment in debt and equity
securities of other REITs. The Company generates funds through
cash flow from properties, sales of manufactured homes and its
securities portfolio, mortgages on properties and increases in
shareholder investments. The Company has liquidity available
from a combination of short and long-term sources. The Company
currently has mortgages payable totaling $38,652,025 secured by
twelve communities and loans payable totaling $10,692,683
primarily secured by investment securities and inventory of
manufactured homes. The Company has a $2,000,000 line of credit
with Fleet Bank, all of which was available at December 31,
2001. The Company believes that its 25 communities have market
values in excess of historical cost. Management believes that
this provides significant additional borrowing capacity.
Net cash provided by operating activities increased from
$6,770,625 in 1999 to $7,171,086 in 2000 and decreased to
$4,277,851 in 2001. Cash flow was primarily used for capital
improvements, payment of dividends, purchases of securities
available for sale, purchase of inventory of manufactured homes,
purchase of a manufactured home community and expansion of
existing communities. The Company meets maturing mortgage
obligations by using a combination of cash flow and refinancing.
The dividend payments were primarily made from cash flow from
operations.
In addition to normal operating expenses, the Company
requires cash for additional investments in manufactured home
communities, capital improvements, purchase of manufactured homes
for rent, scheduled mortgage amortization and dividend
distributions.
The Company also invests in debt and equity securities of
other REITs. During 2001, the Company purchased approximately
$9,900,000 in these securities. The securities portfolio at
December 31, 2001 has experienced an approximate 16% increase in
value from cost.
The Company estimates that in 2002 it will purchase
approximately 25 manufactured homes to be used as rentals for a
total cost of $500,000. Management believes that these
manufactured homes will each generate approximately $300 per
month in rental income in addition to lot rent. Once rental
homes reach 10 years old, the Company generally sells them.
Capital improvements include amounts needed to meet
environmental and regulatory requirements in connection with the
manufactured home communities that provide water or sewer
service. Excluding expansions, the Company is budgeting
approximately $1,000,000 in capital improvements for 2002.
The Company has a Dividend Reinvestment and Stock Purchase
Plan (Plan). Dividends reinvested is a significant additional
source of liquidity and capital resources. During 2001, the
Company paid $5,980,540 in dividends. Amounts received under the
Page 16
Plan amounted to $1,686,031. The success of the Plan resulted in
a substantial improvement in the Company's liquidity and capital
resources in 2001.
The Company has undeveloped land which it could develop over
the next several years. The Company is also exploring the
utilization of vacant land for town houses. The Company
continues to analyze the highest and best use of its vacant land,
and uses it accordingly.
The Company believes that funds generated from operations,
together with the financing and refinancing of its properties,
will be adequate to meet its needs over the next several years.
The Company's most critical accounting policies relate to
the evaluation of impairment of real estate and investment
securities. The Company evaluates the need for an impairment
loss on its real estate assets when indicators of impairment are
present and the undiscounted cash flows are not sufficient to
recover the asset's carrying amount. The impairment loss is
measured by comparing the fair value of the asset to its carrying
amount. In addition, estimates are used when accounting for the
allowance for doubtful accounts, potentially excess and obsolete
inventory and contingent liabilities, among others. These
estimates are susceptible to change and actual results could
differ from these estimates. The effects of changes in these
estimates are recognized in the period they are determined.
The Company evaluates other than temporary impairment on
individual securities in its investment portfolio when a security
has experienced a sustained decline in fair value below amortized
cost. Management considers several factors, including the length
of time such security has experienced a decline, the relationship
to peer group stock performance and the financial condition and
near-term prospects of the issuer. These evaluations are
subjective in nature. Other than temporary declines in value
result in a charge to net income reducing the carrying value of
the security.
Safe Harbor Statement
This Form 10-K contains various "forward-looking statements"
within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934, and the Company intends that
such forward-looking statements be subject to the safe harbors
created thereby. The words "may", "will", "expect", "believe",
"anticipate", "should", "estimate", and similar expressions
identify forward-looking statements. These forward-looking
statements reflect the Company's current views with respect to
future events and finance performance, but are based upon current
assumptions regarding the Company's operations, future results
and prospects, and are subject to many uncertainties and factors
relating to the Company's operations and business environment
which may cause the actual results of the Company to be
materially different from any future results expressed or implied
by such forward-looking statements.
Such factors include, but are not limited to, the following:
(i) changes in the general economic climate; (ii) increased
competition in the geographic areas in which the Company owns and
operates manufactured housing communities; (iii) changes in
government laws and regulations affecting manufactured housing
communities; and (iv) the ability of the Company to continue to
identify, negotiate and acquire manufactured housing communities
and/or vacant land which may be developed into manufactured
housing communities on terms favorable to the Company. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements whether as a result of new
information, future events, or otherwise.
Page 17
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Company is exposed to interest rate changes primarily as
a result of its line of credit and long-term debt used to
maintain liquidity and fund capital expenditures and expansion of
the Company's real estate investment portfolio and operations.
The Company's interest rate risk management objectives are to
limit the impact of interest rate changes on earnings and cash
flows and to lower its overall borrowing costs. To achieve its
objectives, the Company borrows primarily at fixed rates.
The following table sets forth information as of December
31, 2001, concerning the Company's debt obligations, including
principal cash flow by scheduled maturity, weighted average
interest rates and estimated fair value.
For the year ending December 31,
________________________________ Fair
2002 2003 2004 Thereafter Total Value
Long-term Debt:
Fixed rate 6,141,833 9,890,281 20,119,911 36,152,025 36,219,558
Average
interest
rate 7.6% 7.5% 7.1% 7.3%
Variable
rate 2,500,000 2,500,000 2,500,000
Average
interest
rate 3.4% 3.4%
Total Long-
term Debt 2,500,000 6,141,833 9,890,281 20,119,911 38,652,025 38,719,558
The Company has assessed the market risk for its variable
rate and believes that a 1% increase in LIBOR rates would result
in an approximate $25,000 increase in interest expense based on
$2.5 million of variable rate debt outstanding at December 31,
2001.
The Company also has approximately $10.7 million in variable
rate debt due on demand. This debt is primarily a margin loan
secured by marketable securities. The interest rate on this
margin loan was 3.875% at December 31, 2001. The carrying value
of the Company's variable rate debt approximates fair value at
December 31, 2001.
The Company also invests in both debt and equity securities
of other REITs and is primarily exposed to equity price risk from
adverse changes in market rates and conditions. All securities
are classified as available for sale and are carried at fair
value. The Company has no significant interest rate risk
relating to debt securities as they are short-term in nature.
Page 18
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data listed in
Part IV, Item 14(a)(1) are incorporated herein by reference.
The following is the Unaudited Selected Quarterly Financial
Data:
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED
2001 March 31 June 30 September 30 December 31
Total Revenues $5,251,453 $7,376,519 $7,772,824 $6,481,603
Total Expenses 3,865,760 5,752,609 6,006,204 5,679,074
Net Income 1,396,010 1,614,574 1,750,748 789,156 (1)
Net Income per
Share-
Basic and
Diluted .19 .22 .23 .10
2000 March 31 June 30 September 30 December 31
Total Revenues $5,158,326 $5,011,150 $5,153,950 $5,321,305
Total Expenses 3,698,650 3,782,536 3,805,600 4,131,256
Net Income 1,484,094 1,220,457 1,347,702 1,137,119
Net Income per
Share -
Basic .20 .17 .18 .16
1999 March 31 June 30 September 30 December 31
Total Revenues $4,488,593 $4,616,134 $4,754,991 $4,947,367
Total Expenses 3,393,363 3,561,010 3,614,445 3,680,167
Net Income 1,083,153 1,071,653 1,119,211 1,282,119
Net Income per
Share -
Basic and
Diluted .15 .15 .15 .18
(1) Decrease due primarily to a decrease in sales activity and security
transactions and an increase in insurance costs and property taxes.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Page 19
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name, Age & Principal Occupation Director Shares Owned Percent
Office Held During the Past Five Since Beneficially Of
Years Stock
Ernest V. Financial 1969 33,013 (1) 0.44%
Bencivenga Consultant;(1976 to
Age: 84 present); Treasurer
Secretary/ and Director (1961 to
Treasurer present)and Secretary
and Director (1967 to present)of
Monmouth Capital
Corporation; Treasurer
and Director (1968 to
present) of Monmouth
Real Estate Investment
Corporation.
Anna T. Chew Certified Public 1995 55,622(2) 0.74%
Age: 43 Accountant; Controller
Vice President (1991 to present) and
and Chief Director (1993 to
Financial present) of Monmouth
Office and Real Estate Investment
Director Corporation;
Controller (1991 to
present), Vice
President (2001 to
present) and Director
(1994 to present ) of
Monmouth Capital
Corporation.
Charles P. Investor; Director 1969 62,317 (3) 0.83%
Kaempffer (1970 to present) of
Age: 64 Monmouth Capital
Director Corporation; Director
(1974 to present) of
Monmouth Real Estate
Investment
Corporation; Vice
Chairman and Director
(1996 to present) of
Community Bank of New
Jersey;
Eugene W. Landy Attorney at Law; 1969 974,661 (4) 12.92%
Age: 68 President and
Chairman of Director (1961 to
the Board and present) of Monmouth
Director Capital Corporation;
President and Director
(1968 to present) of
Monmouth Real Estate
Investment Corporation
Samuel A. Landy Attorney at Law; 1992 313,987 (5) 4.16%
Age: 41 Director (1989 to
President and present) of Monmouth
Director Real Estate Investment
Corporation; Director
(1994 to present) of
Monmouth Capital
Corporation.
Page 20
Name, Age & Principal Occupation Director Shares Owned Percent
Office Held During the Past Five Since Beneficially Of
Years Stock
James Mitchell Attorney at Law; 2001 170,126 (6) 2.25%
Age: 61 General Partner,
Director Mitchell Partners,
L.P.; President,
Mitchell Capital
Mgmt., Inc.
Richard H. Vice President (1984 1986 430,636(7) 5.71%
Molke to present) of Remsco
Age: 75 Associates, Inc., a
Director construction firm.
Eugene Investor; Director 1977 81,163 (8) 1.08%
Rothenberg (2001 to present) of
Age: 69 Monmouth Capital
Director Corporation
Robert G. Investor; Director 1969 131,468 (9) 1.74%
Sampson (1963 to present) of
Age: 76 Monmouth Capital
Director Corporation; Director
(1968 to present) of
Monmouth Real Estate
Investment
Corporation; General
Partner (1983 to
present) of Sampco,
Ltd., an investment
group.
TOTALS............ 2,252,993 29.87%
1) Includes 9,029 shares held by Mr. Bencivenga's wife and 6,999
shares held in the United Mobile Homes, Inc. 401(k) Plan.
2) Includes 51,201 shares held jointly with Ms. Chew's husband and
4,421 shares held in the United Mobile Homes, Inc. 401(k) Plan.
3) Includes (a) 60,317 shares held as Trustee for Defined Benefit
Pension Plan for which Mr. Kaempffer has power to vote and (b)
2,000 shares held by Mr. Kaempffer's wife.
4) Includes (a) 74,857 shares held by Mr. Landy's wife, (b) 172,608
shares held by Landy Investments, Ltd. In which Mr. Landy has a
beneficial interest, (c) 69,961 shares held in the Landy & Landy,
Employee's Pension Plan, of which Mr. Landy is a Trustee with
power to vote, and (d) 128,212 shares held in the Landy & Landy,
Employees' Profit Sharing Plan, of which Mr. Landy is a Trustee
with power to vote. Excludes 236,743 shares held by Mr. Landy's
adult children in which he disclaims any beneficial interest.
5) Includes (a) 27,941 shares held jointly with Mr. Samuel A.
Landy's wife, (b) 24,779 in a custodial account for his sons, (c)
5,916 shares in the Samuel Landy Limited Partnership and (d)
8,028 shares held in the United Mobile Homes, Inc. 401 (k) Plan.
6) Includes 135,158 shares held by Mitchell Partners in which Mr.
Mitchell has a beneficial interest.
7) Includes (a) 45,005 shares owned by Mr. Molke's wife, (b) 166,518
shares in the Richard H. Molke Grantor Retained Annuity Trust
dated December 21, 1992, and (c) 166,517 shares in the Louise G.
Molke Grantor Retained Annuity Trust dated December 21, 1992.
8) Includes (a) 56,878 shares held by Rothenberg Investment, Ltd. In
which Dr. Rothenberg has a beneficial interest.
9) Includes 48,492 shares held by Sampco, Ltd. In which he has a
beneficial interest.
Page 21
ITEM 11 - EXECUTIVE COMPENSATION
Summary Compensation Table.
The following Summary Compensation Table shows compensation
paid by the Company for services rendered during 2001, 2000 and
1999 to the Chairman of the Board, President and Vice President.
There were no other executive officers whose aggregate cash
compensation exceeded $100,000:
Name and Annual Compensation
Principal Year Salary Bonus All Other Options
Position
Eugene W.
Landy 2001 $150,000 $ - $15,076 (1) -
Chairman of 2000 150,000 - 53,876 (1) -
the Board 1990 150,000 - 52,876 (1) -
Samuel A.
Landy 2001 $224,615 $25,704 $21,028 (2) 25,000
President 2000 $214,615 8,269 18,432 (2) 25,000
1999 $205,000 7,885 15,410 (2) 25,000
Anna T. Chew 2001 $145,898 $15,631 $17,646 (3) 10,000
Vice 2000 132,635 14,119 16,003 (3) 10,000
President 1999 120,577 13,654 13,650 (3) 10,000
(1) Represents base compensation of $75,000 in 1999, as well as
Directors' fees, fringe benefits and legal fees. Also includes
an accrual of $-0-, $40,000 and $40,000 for 2001, 2000 and 1999,
respectively for pension and other benefits in accordance with
Eugene W. Landy's employment contract.
(2) Represents Directors' fees, fringe benefits and
discretionary contributions by the Company to the Company's
401(k) Plan allocated to an account of the named executive
officer.
(3) Represents Directors' fees and discretionary contributions
by the Company to the Company's 401(k) Plan allocated to an
account of the named executive officer.
Page 22
Stock Option Plan.
The following table sets forth, for the executive officers
named in the Summary Compensation Table, information regarding
individual grants of stock options made during the year ended
December 31, 2001:
Potential Realized
Value at Assume
Annual
Granted Price Expiration Rates for Option
Options to Per Terms
Name Granted Employees Share Date 5% 10%
Samuel
A.Landy 25,000 40% $10.3125 01/02/06 $41,316 $119,651
Anna T.
Chew 10,000 16% $10.60 10/04/09 $50,610 $121,220
The following table sets forth for the executive officers
named in the Summary Compensation Table, information regarding
stock options outstanding at December 31, 2001:
Number of
Unexercised Value of
Options at Year- Unexercised Options
End At Year-End
Shares Value Exercisable/ Exercisable/
Name Exercised Realized Unexercisable Unexercisable
Eugene W. Landy -0- N/A 125,000/ -0- $226,000 $ -0-
Samuel A. Landy -0- N/A 125,000/ 25,000 $191,624 $ 46,687
Anna T. Chew -0- N/A 38,000/ 10,000 $ 97,715 $ 15,800
Compensation of Directors.
The Directors receive a fee of $1,000 for each Board meeting
attended, and an additional fixed annual fee of $7,600, payable
$1,900 quarterly. Effective April 1, 2001, the fixed fee was
increased to $10,000. Directors appointed to house committees
receive $150 for each meeting attended. Those specific
committees are Compensation Committee, Audit Committee and Stock
Option Committee.
Employment Contracts.
On December 14, 1993, the Company and Eugene W. Landy
entered into an Employment Agreement under which Mr. Eugene Landy
receives an annual base compensation of $150,000 plus bonuses and
customary fringe benefits, including health insurance,
participation in the Company's 401(k) Plan, stock options, five
weeks vacation and use of an automobile. In lieu of annual
increases in compensation, there will be additional bonuses voted
by the Board of Directors. On severance of employment for any
reason, Mr. Eugene Landy will receive severance pay of $450,000
payable $150,000 on severance and $150,000 on the first and
second anniversaries of severance. If employment is terminated
following a change in control of the Company, Mr. Eugene Landy
will be entitled to severance pay only if actually severed
either at
Page 23
the time of merger or subsequently. In the event of disability,
Mr. Eugene Landy's compensation shall continue for a period of
three years, payable monthly. On retirement, Mr. Eugene Landy
shall receive a pension of $50,000 a year for ten years, payable
in monthly installments. In the event of death, Mr. Eugene
Landy's designated beneficiary shall receive $450,000, $100,000
thirty days after death and the balance one year after death.
The Employment Agreement terminated December 31, 1999 but was
automatically renewed and extended for successive one-year
periods.
Effective January 1, 1999, the Company and Samuel A. Landy
entered into a three-year Employment Agreement under which Mr.
Samuel Landy receives an annual base salary of $205,000 for 1999,
$215,000 for 2000 and $225,000 for 2001 plus bonuses and
customary fringe benefits. Bonuses shall be at the discretion of
the Board of Directors and shall be based on certain guidelines.
Mr. Samuel Landy will also receive four weeks vacation, use of an
automobile, and stock options for 25,000 shares in each year of
the contract. On severance or disability, Mr. Samuel Landy is
entitled to one year's pay. The Company also agrees to loan to
Mr. Samuel Landy $100,000 at the Company's corporate borrowing
rate with a 5-year maturity and a 15-year principal amortization.
Additional amounts, secured by Company stock, may be borrowed at
the same terms for the exercise of stock options.
Effective January 1, 2000, the Company extended Anna T.
Chew's Employment Agreement for an additional three years. Ms.
Chew receives an annual base salary of $133,100 for 2000,
$146,400 for 2001 and $161,000 for 2002 plus bonuses and
customary fringe benefits. On severance for any reason, Ms. Chew
is entitled to an additional one year's pay. In the event of
disability, her salary shall continue for a period of two years.
Report of Board of Directors.
Overview and Philosophy
The Company has a Compensation Committee consisting of two
independent outside Directors. This Committee is responsible for
making recommendations to the Board of Directors concerning
executive compensation. The Compensation Committee takes into
consideration three major factors in setting compensation.
The first consideration is the overall performance of the
Company. The Board believes that the financial interests of the
executive officers should be aligned with the success of the
Company and the financial interests of its shareholders.
Increases in funds from operations, the enhancement of the
Company's equity portfolio, and the success of the Dividend
Reinvestment and Stock Purchase Plan all contribute to increases
in stock prices thereby maximizing shareholders' return.
The second consideration is the individual achievements made
by each officer. The Company is a small real estate investment
trust (REIT). The Board of Directors is aware of the
contributions made by each officer and makes an evaluation of
individual performance based on their own familiarity with the
officer.
Page 24
The final criteria in setting compensation is comparable
wages in the industry. In this regard, the REIT industry
maintains excellent statistics.
Evaluation
Mr. Eugene Landy is under an employment agreement with the
Company. His base compensation under this contract is $150,000
per year. (The Summary Compensation Table for Mr. Eugene Landy
shows a salary of $150,000 and $15,076 in director's fees, fringe
benefits and legal fees).
The Committee also reviewed the progress made by Mr. Samuel
A. Landy, President. Funds from operations increased by
approximately 5%. Mr. Samuel Landy is under an employment
agreement with the Company. His base compensation under this
contract is $225,000 for 2001.
COMPARATIVE STOCK PERFORMANCE.
The line graph compares the total return of the Company's
common stock for the last five years to the NAREIT ALL REIT Total
Return Index published by the National Association of Real Estate
Investment Trust (NAREIT) and to the S&P 500 Index for the same
period. The total return reflects stock price appreciation and
dividend reinvestment for all three comparative indices. The
information herein has been obtained from sources believed to be
reliable, but neither its accuracy nor its completeness is
guaranteed.
1996 1997 1998 1999 2000 2001
United Mobile
Homes, Inc. 100 110 106 89 112 155
NAREIT All REIT 100 119 96 90 114 131
S & P 500 100 133 171 208 189 166
Page 25
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
On March 14, 2002, no person owned of record, or was known
by the Company to own beneficially more than five percent (5%) of
the shares of the Company, except the following:
Name and Address Shares Owned Percent
Title of Class Of Beneficial Owner Beneficially Of Class
Common Stock Eugene W. Landy
20 Tuxedo Road
Rumson, NJ 07760 974,661 12.92%
Common Stock Richard H. Molke
8 Ivins Place
Rumson, NJ 07760 430,636 5.71%
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Certain relationships and related party transactions are
incorporated herein by reference to Part IV, Item 14(a)(1)(vi),
Note 9 of the Notes to Consolidated Financial Statements -
Related Party Transactions.
Page 26
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON
FORM 8-K
The following Financial Statements are filed as part
(a)(1) of this report.
Page(s)
(i) Independent Auditors' Report 29
Consolidated Balance Sheets as of December 31, 2001 30
(ii) and 2000
Consolidated Statements of Income for the years
(iii) ended December 31, 2001, 2000, and 1999 31
Consolidated Statements of Shareholders' Equity for
(iv) the years ended December 31, 2001, 2000 and 1999 32-33
Consolidated Statements of Cash Flows for the years
(v) ended December 31, 2001, 2000 and 1999 34
(vi) Notes to Consolidated Financial Statements 35-46
(a) The following Financial Statement Schedule for the
(2) years ended December 31, 2001, 2000 and 1999 is
filed as part of this report
(i) Schedule III - Real Estate and Accumulated 47
Depreciation
All other schedules are omitted for the reason that they are
not required, are not applicable, or the required information is
set forth in the financial statements or notes thereto.
Page 27
(a) (3) The Exhibits set forth in the following index of
Exhibits are filed as part of this Report.
Exhibit Description
No.
Articles of Incorporation and By-Laws: Articles of
Incorporation and By-Laws, Certificate of Incorporation
and Amendments thereto are incorporated by reference to
the Company's Registration Statement No. 2-92896-NY, and
Amendments thereto, filed with the SEC on August 22,
(3) 1984.
Material Contracts:
(a) Stock Option Plan is incorporated by reference to
the Company's Proxy Statement dated April 25, 1994 filed
with the SEC April 27, 1994.
(b) 401(k) Plan Document and Adoption Agreement
effective April 1, 1992 is incorporated by reference to
that filed with the Company's 1992 Form 10-K filed with
the SEC on March 9, 1993.
(c) Employment contract with Mr. Eugene W. Landy dated
December 14, 1993 is incorporated by reference to that
filed with the Company's 1993 Form 10-K filed with the
SEC on March 28, 1994.
(d) Employment contract with Mr. Ernest V. Bencivenga
dated November 9, 1993 is incorporated by reference to
that filed with the Company's 1993 Form 10-K filed with
the SEC on March 28, 1994.
(e) Employment contract with Mr. Samuel A. Landy
effective January 1, 1997 is incorporated by reference
to that filed with the Company's 1996 Form 10-K filed
with the SEC on March 28, 1996.
(f) Employment contract with Ms. Anna T. Chew effective
January 1, 1998 is incorporated by reference to that
filed with the Company's 1997 Form 10-K filed with the
SEC on March 27, 1997.
(21) Subsidiaries of the Registrant:
The Company operates through nine wholly-owned multiple
Subsidiaries carrying on the same line of business. The
parent company of these subsidiaries is the Registrant.
The line of business is the operation of manufactured
home communities.
(23) Consent of KPMG LLP
(a)(3)(b) Reports of Form 8-K
None
Page 28
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
United Mobile Homes, Inc.:
We have audited the consolidated financial statements of United
Mobile Homes, Inc. as listed in the accompanying index. In
connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedule
as listed in the accompanying index. These consolidated
financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of United Mobile Homes, Inc. as of December 31, 2001 and
2000, and the results of its operations and its cash flows for
each of the years in the three-year period ended December 31,
2001 in conformity with accounting principles generally accepted
in the United States of America. Also in our opinion, the
related financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set
forth therein.
Short Hills, New Jersey /s/ KPMG LLP
March 22, 2002
Page 29
UNITED MOBILE HOMES, INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2001 AND 2000
ASSETS 2001 2000
INVESTMENT PROPERTY AND EQUIPMENT
Land $ 7,212,035 $ 6,779,335
Site and Land Improvements 54,640,298 50,707,021
Buildings and Improvements 2,745,194 2,705,636
Rental Homes and Accessories 8,432,068 8,088,015
__________ __________
Total Investment Property 73,029,595 68,280,007
Equipment and Vehicles 3,611,353 3,282,681
__________ __________
Total Investment Property and 76,640,948 71,562,688
Equipment
Accumulated Depreciation (32,349,006) (29,862,276)
__________ __________
Net Investment Property and
Equipment 44,291,942 41,700,412
__________ __________
OTHER ASSETS
Cash and Cash Equivalents 1,567,831 1,399,259
Securities Available for Sale 25,917,748 15,494,918
Inventory of Manufactured Homes 2,782,665 -0-
Notes and Other Receivables 3,291,355 1,914,446
Unamortized Financing Costs 467,107 280,727
Prepaid Expenses 113,680 115,633
Land Development Costs 1,902,516 2,040,202
__________ ___________
Total Other Assets 36,042,902 21,245,185
__________ __________
TOTAL ASSETS 80,334,844 $62,945,597
========== ==========
- LIABILITIES AND SHAREHOLDERS' EQUITY -
LIABILITIES:
MORTGAGES PAYABLE $38,652,025 $32,055,839
___________ ___________
OTHER LIABILITIES
Accounts Payable 836,588 339,174
Loans Payable 10,692,683 5,639,470
Accrued Liabilities and Deposits 1,711,232 1,622,272
Tenant Security Deposits 477,782 449,416
__________ __________
Total Other Liabilities 13,718,285 8,050,332
__________ __________
Total Liabilities 52,370,310 40,106,171
__________ __________
SHAREHOLDERS' EQUITY:
Common Stock - $.10 par value per
share,
10,000,000 shares authorized,
7,888,632 and 7,711,141
Shares issued and 7,542,332 and
7,394,241 shares
Outstanding as of December 31,
2001 and 2000, respectively 788,863 771,114
Additional Paid-In Capital 27,409,361 26,026,006
Accumulated Other
Comprehensive Income (Loss) 3,541,001 (490,795)
Accumulated Deficit (667,793) (667,793)
Treasury Stock at Cost (346,300
and 316,900 shares at
December 31, 2001 and 2000,
respectively) (3,106,898) (2,799,106)
__________ __________
Total Shareholders' Equity 27,964,534 22,839,426
__________ __________
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $80,334,844 $62,945,597
========== ==========
See Accompanying Notes to
Consolidated Financial Statements
Page 30
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
2001 2000 1999
REVENUES:
Rental and Related Income $ 19,291,611 $18,640,335 $17,752,823
Sales of Manufactured Homes 4,766,189 -0- -0-
Interest and Dividend
Income 2,188,430 1,747,254 1,000,789
Gain on Sale of Securities
Available for Sale 530,324 257,142 53,473
Other Income 105,845 -0- -0-
_________ _________ _________
Total Revenues 26,882,399 20,644,731 18,807,085
_________ _________ _________
EXPENSES:
Community Operating
Expenses 9,004,164 8,233,356 7,992,273
Cost of Sales of
Manufactured Homes 3,930,666 -0- -0-
Selling Expenses 754,934 -0- -0-
General and
Administrative 2,015,685 1,852,309 1,621,479
Interest Expense 2,825,894 2,624,801 2,105,546
Depreciation Expense 2,684,556 2,618,839 2,452,533
Amortization of Financing
Costs 87,748 88,737 77,154
_________ _________ _________
Total Expenses 21,303,647 15,418,042 14,248,985
__________ __________ _________
Income Before Loss on Sales
of Investment Property
and Equipment 5,578,752 5,226,689 4,558,100
Loss on Sales of
Investment Property and
Equipment (28,264) (37,318) (1,964)
_________ _________ _________
Net Income $ 5,550,488 $ 5,189,371 $ 4,556,136
=========== =========== ===========
Net Income Per Share -
Basic and Diluted $ .74 $ .71 $ .63
=========== ============ ============
Weighted Average Shares
Outstanding:
Basic 7,457,636 7,339,684 7,252,774
========= ========= =========
Diluted 7,496,371 7,341,078 7,267,695
========= ========= =========
See Accompanying Notes to
Consolidated Financial Statements
Page 31
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
Additional
Common Stock Issued Paid-In
Number Amount Capital
Balance December 31, 1998 7,246,580 $724,658 $23,427,783
Common Stock Issued with
the DRIP* 187,616 18,762 1,613,027
Common Stock Issued
Through the Exercise
of Stock Options 49,000 4,900 394,225
Distributions -0- -0- (885,768)
Net Income -0- -0- -0-
Unrealized Net Holding
Losses on Securities
Available for Sale
Net of Reclassification
Adjustment -0- -0- -0-
Purchase of Treasury Stock -0- -0- -0-
_________ ________ _________
Balance December 31, 1999 7,483,196 748,320 24,549,267
Common Stock Issued with 227,945 22,794 1,843,309
the DRIP*
Distributions -0- -0- (366,570)
Net Income -0- -0- -0-
Unrealized Net Holding
Gains on Securities
Available for Sale
Net of Reclassification
Adjustment -0- -0- -0-
Purchase of Treasury Stock -0- -0- -0-
_________ ________ _________
Balance December 31, 2000 7,711,141 771,114 26,026,006
Common Stock Issued with
the DRIP* 163,491 16,349 1,669,682
Common Stock Issued
Through the Exercise of
Stock Options 14,000 1,400 143,725
Distributions -0- -0- (430,052)
Net Income -0- -0- -0-
Unrealized Net Holding
Gains on Securities
Available for Sale
Net of Reclassification
Adjustment -0- -0- -0-
Purchase of Treasury Stock -0- -0- -0-
_________ ________ _________
Balance December 31, 2001 7,888,632 $788,863 $27,409,361
========= ========= ===========
*Dividend Reinvestment and Stock Purchase Plan
See Accompanying Notes to Consolidated Financial Statements
Page 32
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
Accumulated
Other
Comprehensive Accumulated Treasury Comprehensive
Income/(Loss) Deficit Stock Income
Balance December 31,
1998 $ (271,835) $(667,793) -0-
Common Stock Issued
with the DRIP* -0- -0- -0-
Common Stock Issued
through the
Exercise of Stock
Options -0- -0- -0-
Distributions -0- (4,556,136) -0-
Net Income -0- 4,556,136 -0- $4,556,136
Unrealized Net Holding
Losses on Securities
Available for Sale
Net of Reclassification
Adjustment (1,390,343) -0- -0- (1,390,343)
Purchase of Treasury
Stock -0- -0- (1,576,309)
___________ ___________ __________ ___________
Balance December 31,
1999 (1,662,178) (667,793) (1,576,309) $3,165,793
==========
Common Stock Issued
with the DRIP* -0- -0- -0-
Distributions -0- (5,189,371) -0-
Net Income -0- 5,189,371 -0- $5,189,371
Unrealized Net Holding
Gains on Securities
Available for Sale
Net of Reclassification
Adjustment 1,171,383 -0- -0- 1,171,383
Purchase of Treasury
Stock -0- -0- (1,222,797)
_________ _________ _________ _________
Balance December 31,
2000 (490,795) (667,793) (2,799,106) $6,360,754
==========
Common Stock Issued
with the DRIP* -0- -0- -0-
Common Stock Issued
through the
Exercise of Stock -0- -0- -0-
Options
Distributions -0- (5,550,488) -0-
Net Income -0- 5,550,488 -0- $5,550,488
Unrealized Net Holding
Gains on Securities
Available for Sale
Net of Reclassification
Adjustment 4,031,796 -0- -0- 4,031,796
Purchase of Treasury
Stock -0- -0- (307,792)
_________ _________ _________ ________
Balance December 31,
2001 $3,541,001 $(667,793) $(3,106,898) $9,582,284
========== ========== ============ ==========
*Dividend Reinvestment and Stock Purchase Plan.
See Accompanying Notes to Consolidated Financial Statements
Page 33
UNITED MOBILE HOMES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
2001 2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $5,550,488 $5,189,371 $4,556,136
Depreciation 2,684,556 2,618,839 2,452,533
Amortization of Financing Costs 87,748 88,737 77,154
Gain on Sales of Securities
Available for Sale Transactions (530,324) (257,142) (53,473)
Loss on Sales of Investment
Property & Equipment 28,264 37,318 1,964
Changes in Operating Assets and
Liabilities -
Inventory of Manufactured Homes (2,782,665) -0- -0-
Notes and Other Receivables (1,376,909) (832,320) (347,402)
Prepaid Expenses 1,953 5,888 46,994
Accounts Payable 497,414 233,959 (46,796)
Accrued Liabilities and Deposits 88,960 128,375 (1,756)
Tenant Security Deposits 28,366 (41,939) 85,271
_________ _________ _________
Net Cash Provided by Operating
Activities 4,277,851 7,171,086 6,770,625
_________ _________ _________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home
Community (2,503,126) -0- -0-
Purchase of Investment Property
and Equipment (2,199,133) (1,382,130) (3,792,004)
Proceeds from Sales of Investment
Property and Equipment 352,494 250,923 344,173
Additions to Land Development
Costs (816,899) (1,665,711) (2,206,010)
Purchase of Securities Available
for Sale (9,858,324) (4,282,988) (6,796,742)
Proceeds from Sales of Securities
Available for Sale 3,997,614 3,011,109 417,923
_________ __________ __________
Net Cash Used by Investing Activities (11,027,374) (4,068,797) (12,032,660)
___________ __________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages and Loans 7,525,000 2,500,000 10,500,000
Net Proceeds from Short-Term
Borrowings 5,053,213 965,085 1,305,873
Principal Payments of Mortgages
and Loans (928,814) (863,314) (1,492,423)
Financing Costs on Debt (274,128) (116,816) (171,874)
Proceeds from Exercise of Stock
Options 145,125 -0- 399,125
Dividends Paid (4,294,509) (3,689,838) (3,810,115)
Purchase of Treasury Stock (307,792) (1,222,797) (1,576,309)
_________ __________ __________
Net Cash Provided (Used) by
Financing Activities 6,918,095 (2,427,680) 5,154,277
_________ __________ _________
NET INCREASE (DECREASE) IN CASH 168,572 674,609 (107,758)
CASH & CASH EQUIVALENTS - BEGINNING 1,399,259 724,650 832,408
_________ _________ _________
CASH & CASH EQUIVALENTS - END $ 1,567,831 $ 1,399,259 $ 724,650
========= ========= =========
See Accompanying Notes to Consolidated Financial Statements
Page 34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ELECTION TO BE TAXED AS A REAL ESTATE INVESTMENT TRUST
United Mobile Homes, Inc. (the Company) has elected to be
taxed as a Real Estate Investment Trust (REIT) under Sections 856-
858 of the Internal Revenue Code. The Company will not be taxed
on the portion of its income which is distributed to
shareholders, provided it distributes at least 95% (90% effective
for the year ended December 31, 2001) of its taxable income, has
at least 75% of its assets in real estate investments and meets
certain other requirements for qualification as a REIT.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF THE BUSINESS - The Company owns and operates
twenty-five manufactured home communities containing 5,979 sites.
The communities are located in New Jersey, New York, Ohio,
Pennsylvania and Tennessee.
These manufactured home communities are listed by trade names as
follows:
MANUFACTURED HOME COMMUNITY LOCATION
Allentown Memphis, Tennessee
Brookview Village Greenfield Center, New York
Cedarcrest Vineland, New Jersey
Cranberry Village Cranberry Township, Pennsylvania
Cross Keys Village Duncansville, Pennsylvania
D& R Village Clifton Park, New York
Fairview Manor Millville, New Jersey
Forest Park Village Cranberry Township, Pennsylvania
Heather Highlands Inkerman, Pennsylvania
Highland Estates Kutztown, Pennsylvania
Kinnebrook Monticello, New York
Lake Sherman Village Navarre, Ohio
Laurel Woods Cresson, Pennsylvania
Memphis Mobile City Memphis, Tennessee
Oxford Village West Grove, Pennsylvania
Pine Ridge Village Carlisle, Pennsylvania
Pine Valley Estates Apollo, Pennsylvania
Port Royal Village Belle Vernon, Pennsylvania
River Valley Estates Marion, Ohio
Sandy Valley Estates Magnolia, Ohio
Southwind Village Jackson, New Jersey
Spreading Oaks Village Athens, Ohio
Waterfalls Village Hamburg, New York
Woodlawn Village Eatontown, New Jersey
Wood Valley Caledonia, Ohio
Page 35
Effective April 1, 2001, the Company, through its wholly-
owned taxable subsidiary, UMH Sales and Finance, Inc., (S&F),
began to conduct manufactured home sales in its communities.
This company was established to enhance the occupancy of the
communities.
BASIS OF PRESENTATION - The consolidated financial statements of
the Company include all of its wholly-owned subsidiaries. All
intercompany transactions and balances have been eliminated in
consolidation.
USE OF ESTIMATES - In preparing the consolidated financial
statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and
liabilities, as well as contingent assets and liabilities as of
the dates of the consolidated balance sheets and revenue and
expenses for the years then ended. Actual results could differ
significantly from these estimates and assumptions.
INVESTMENT PROPERTY AND EQUIPMENT AND DEPRECIATION - Property and
equipment are carried at cost. Depreciation for Sites and
Building (15 to 27.5 years) is computed principally on the
straight-line method over the estimated useful lives of the
assets. Depreciation of Improvements to Sites and Buildings,
Rental Homes and Equipment and Vehicles (3 to 27.5 years) is
computed principally on the straight-line method. Land
Development Costs are not depreciated until they are put in use,
at which time they are capitalized as Sites or Site Improvements.
Interest Expense pertaining to Land Development Costs are
capitalized. Maintenance and Repairs are charged to income as
incurred and improvements are capitalized. The costs and related
accumulated depreciation of property sold or otherwise disposed
of are removed from the accounts and any gain or loss is
reflected in the current year's results of operations. If there
is an event or change in circumstances that indicates that the
basis of an investment property may not be recoverable,
management assesses the possible impairment of value through
evaluation of the estimated future cash flows of the property, on
an undiscounted basis, as compared to the property's current
carrying value. If a property is determined to be impaired, it
will be recorded at fair value.
UNAMORTIZED FINANCING COSTS - Legal fees and loan processing fees
for mortgages are being amortized over the life of the related
debt.
CASH AND CASH EQUIVALENTS - Cash and cash equivalents include
certificates of deposit and bank repurchase agreements with
maturities of 90 days or less.
SECURITIES AVAILABLE FOR SALE - The Company's securities are
classified as available-for-sale and are carried at fair value.
Gains or losses on the sale of securities are based on
identifiable cost and are accounted for on a trade date basis.
Unrealized holding gains and losses are excluded from earnings
and reported as a separate component of Shareholders' Equity
until realized. A decline in the market value of any security
below cost that is deemed to be other than temporary results in a
reduction in the carrying amount to fair value. Any impairment
is charged to earnings and a new cost basis for the security
established.
Page 36
INVENTORY OF MANUFACTURED HOMES - Inventory of manufactured
homes is valued at the lower of cost or market value and is
determined by the specific identification method. All inventory
is considered finished goods.
REVENUE RECOGNITION - The Company derives its income primarily
from the rental of manufactured home sites. The Company also
owns approximately 470 rental units which are rented to
residents. Rental and related income is recognized on the
accrual basis.
Sale of manufactured homes is recognized on the full accrual
basis when certain criteria are met. These criteria include the
following: (a) initial and continuing payment by the buyer must
be adequate: (b) the receivable, if any, is not subject to
future subordination; (c) the benefits and risks of ownership are
substantially transferred to the buyer; and (d) the Company does
not have a substantial continued involvement with the home after
the sale. Alternatively, when the foregoing criteria are not
met, the Company recognizes gains by the installment method.
Interest income on loans receivable is not accrued when, in the
opinion of management, the collection of such interest appears
doubtful.
NET INCOME PER SHARE - Basic net income per share is calculated
by dividing net income by the weighted-average number of common
shares outstanding during the period (7,457,636, 7,339,684 and
7,252,774 in 2001, 2000 and 1999, respectively). 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
(7,496,371, 7,341,078 and 7,267,695 in 2001, 2000 and 1999,
respectively) (See Note 6). Options in the amount of 38,735,
1,394 and 14,921 for 2001, 2000, and 1999, respectively, are
included in the diluted weighted average shares outstanding.
STOCK OPTION PLANS - Stock option plans are accounted for under
the intrinsic value based method as prescribed by Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees". As such, compensation expense would be
recorded on the date of grant only if the current market price on
the underlying stock exceeds the exercise price. Included in
these Notes to Consolidated Financial Statements are the pro
forma disclosures required by SFAS No. 123, "Accounting for Stock-
Based Compensation," which assumes the fair value based method of
accounting had been adopted.
TREASURY STOCK - Treasury stock is accounted for under the cost
method.
OTHER COMPREHENSIVE INCOME - Comprehensive income consists of net
income and net unrealized gains or losses on securities available
for sale and is presented in the consolidated statements of
shareholders' equity.
RECLASSIFICATION - Certain amounts in the financial statements
for the prior years have been reclassified to conform to the
statement presentation for the current year.
Page 37
NOTE 3 - INVESTMENT PROPERTY AND EQUIPMENT
The following is a summary of accumulated depreciation by
major classes of assets:
December 31, 2001 December 31, 2000
Site and Land Improvements $26,083,752 $24,241,316
Buildings and Improvements 1,511,066 1,418,939
Rental Homes and Accessories 2,182,822 1,880,685
Equipment and Vehicles 2,571,366 2,321,336
__________ __________
Total Accumulated $32,349,006 $29,862,276
Depreciation
========== ==========
NOTE 4 - SECURITIES AVAILABLE FOR SALE
The following is a summary of securities available for sale
at December 31, 2001 and 2000:
2001 2000
Market Market
Cost Value Cost Value
Equity Securities:
Monmouth Real Estate
Investment Corporation
(548,501 and 378,369
shares at December 31,
2001 and 2000,
respectively $3,134,889 $3,537,834 $2,165,069 $1,844,550
Monmouth Capital
Corporation *
(24,206 and 22,267 shares
at December 31, 2001 and
2000, respectively) 62,076 65,839 56,986 55,666
Preferred Stock 12,623,026 15,219,657 6,653,648 6,946,426
Other Equity Securities 5,155,709 5,642,005 5,637,713 5,254,876
Debt Securities
(maturing in 2003) 1,401,047 1,452,413 1,472,297 1,393,400
_________ _________ __________ __________
$22,376,747 $25,917,748 $15,985,713 $15,494,918
========== ========== ========== ==========
* Related entity - See Note 9.
Page 38
Gross unrealized gains on debt securities amounted to
$51,366 and $3,375 as of December 31, 2001 and 2000,
respectively. Gross unrealized losses on debt securities
amounted to $-0- and $82,272 at December 31, 2001 and 2000,
respectively. Gross unrealized gains on equity securities
amounted to $3,578,486 and $734,652 as of December 31, 2001 and
2000, respectively. Gross unrealized losses on equity securities
amounted to $88,851 and $1,146,550 as of December 31, 2001 and
2000, respectively.
During the years ended December 31, 2001, 2000 and 1999,
gross gains on sales of securities amounted to $737,417, $257,142
and $53,473, respectively. During the year ended December 31,
2001, gross losses on sales of securities amounted to $74,144.
During the year ended December 31, 2001, the Company also
realized a loss of $132,949 due to a writedown to fair value of
securities available for sale which was considered other than
temporarily impaired. Dividend income for the years ended
December 31, 2001, 2000 and 1999 amounted to $1,910,909,
$1,397,849 and $734,623, respectively. Interest income for the
years ended December 31, 2001, 2000 and 1999 amounted to
$277,521, $349,405 and $266,166, respectively.
NOTE 5 - LOANS AND MORTGAGES PAYABLE
LOANS PAYABLE
During 2001 and 2000, the Company purchased securities on
margin. The margin loan interest rate at December 31, 2001 and
2000 was 3.875% and 8%, respectively and is due on demand. At
December 31, 2001 and 2000, the margin loan amounted to
$8,411,421 and $5,619,980, respectively and is secured by
investment securities with a market value of $25,917,748 and
$15,494,918, respectively.
The Company has a $2,500,000 agreement with Conseco Finance
Servicing Corp. to finance inventory purchases. The interest
rates ranged from prime for each advance to prime plus 2.75%
after one year. Advances under this line of credit were secured
by the manufactured homes for which the advances were made. As
of December 31, 2001, the amount outstanding for inventory
financing was $2,270,492.
UNSECURED LINE OF CREDIT
The Company has a $2,000,000 unsecured line of credit with
Fleet Bank, all of which was available at December 31, 2001.
The interest rate on this line of credit is prime. This line of
credit expires on June 15, 2002.
Page 39
MORTGAGES PAYABLE
The following is a summary of mortgages payable at December
31, 2001 and 2000:
Interest
Property Due Date Rate 2001 2000
Allentown 12-01-11 6.36% $5,767,117 $ -0-
Cranberry Village 08-02-04 7.86% 2,370,693 2,427,667
D & R Village 05-01-03 7.5% 3,289,479 3,383,438
Fairview Manor 07-27-02 LIBOR +155 2,500,000 2,500,000
Forest Park
Village 08-02-04 7.86% 3,793,109 3,884,268
Laurel Woods 10-10-06 6.38% 1,739,711 -0-
Sandy Valley 03-01-04 7% 3,726,479 3,830,118
Water Falls
Village 01-01-03 7.625% 2,852,354 2,935,721
Various
(4properties) 12-01-05 7.5% 12,613,083 13,094,627
_________ __________
TOTAL MORTGAGES PAYABLE $38,652,025 $ 32,055,839
========= =========
At December 31, 2001 and 2000, mortgages are collateralized
by real property with a carrying value of $34,704,950 and
$32,743,695, respectively, before accumulated depreciation and
amortization. Interest costs amounting to $146,000, $180,600 and
$179,000 were capitalized during 2001, 2000 and 1999,
respectively, in connection with the Company's expansion program.
RECENT FINANCING
On July 27, 2000, the Company entered into a $4,000,000
mortgage commitment with First Union Bank, of which $2,500,000
was taken down. This mortgage is secured by Fairview Manor and
bears interest at LIBOR plus 155 points. This mortgage matures
on August 1, 2002 but may be converted to a fixed rate mortgage
loan for an additional five years.
On December 1, 2000, the Company extended the Fleet Bank
mortgage on five properties for an additional five years. The
interest rate remains fixed at 7.5%
On September 24, 2001, the Company obtained a $1,750,000
mortgage with First Union Bank for the acquisition of Laurel
Woods. This mortgage payable is at an effective interest rate of
6.38% and is due October 10, 2006.
On November 6, 2001 the Company obtained a $5,775,000 Fannie
Mae mortgage at an interest rate of 6.36% for a ten-year term
with a twenty-five year amortization schedule. This loan is
secured by Allentown Mobile Home Community in Memphis, Tennessee.
Page 40
The aggregate principal payments of all mortgages payable are
scheduled as follows:
2002 $ 3,624,502
2003 6,951,513
2004 10,088,781
2005 11,103,993
2006 1,674,108
Thereafter 5,209,128
__________
Total $38,652,025
==========
NOTE 6 - EMPLOYEE STOCK OPTIONS
The Company maintains Stock Option Plans for officers and
key employees to purchase up to 750,000 shares of common stock.
Options may be granted any time up to December 31, 2003. No
option shall be available for exercise beyond ten years. All
options are exercisable after one year from the date of grant.
The option price shall not be below the fair market value at date
of grant. Cancelled or expired options are added back to the
"pool" of shares available under the plan.
A summary of the status of the Company's stock option plans
as of December 31, 2001, 2000 and 1999 and changes during the
years then ended are as follows:
2001 2000 1999
Weighted- Weighted Weighted
- -
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding
at beginning
of year 433,500 $10.45 396,500 $10.59 384,500 $10.38
Granted 62,700 10.49 61,000 8.73 61,000 9.94
Exercised (14,000) 10.37 -0- -0- (49,000) 8.15
Expired (42,000) 10.68 (24,000) 8.38 -0- -0-
________ ________ _______
Outstanding
at end of
year 440,200 10.44 433,500 10.45 396,500 10.59
======== ======= =======
Options
exercisable
at end of
year 377,500 372,500 335,500
======== ======== ========
Weighted-
average
fair value
of options
granted
during the
year 1.18 1.00 1.10
Page 41
The Company has elected to continue to follow APB Opinion
No. 25 in accounting for its stock option plans and, accordingly,
no compensation cost has been recognized. Had compensation cost
been determined consistent with SFAS No. 123, the Company's net
income and earnings per share would have been reduced to the pro
forma amounts as follows:
2001 2000 1999
Net Income As Reported $5,550,488 $5,189,371 $4,556,136
Pro Forma 5,486,627 5,117,781 4,475,560
Net Income
per Share
- Basic As Reported .74 .71 .63
Pro Forma .74 .70 .62
- Diluted As Reported .74 .71 .63
Pro Forma .73 .70 .62
The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for grants in 2001,
2000 and 1999: dividend yield of 8 percent for 2001, 2000 and
1999; expected volatility of 25 percent; risk-free interest rates
of 4.29 percent, 6.50 percent and 6.25 percent in 2001, 2000 and
1999, respectively; and expected lives of five years.
The following is a summary of stock options outstanding as
of December 31, 2001:
Number of Option Expiration
Date of Grant Number of Shares Price Date
01/05/95 2 75,000 8.25 01/05/05
01/03/97 1 25,000 13.125 01/03/02
03/17/97 1 25,000 13.375 03/17/02
06/25/97 6 26,500 11.50 06/25/02
12/15/97 1 25,000 13.0625 12/15/02
01/08/98 1 25,000 12.75 01/08/03
08/05/98 7 31,000 10.00 08/05/03
08/05/98 1 25,000 11.00 08/05/03
01/05/99 1 25,000 11.5625 01/05/04
09/28/99 7 34,000 8.8125 09/28/04
01/06/00 1 25,000 9.0625 01/06/05
07/17/00 8 36,000 8.50 07/17/05
01/02/01 1 25,000* 10.3125 01/02/06
10/04/01 10 37,700* 10.60 10/04/09
________
440,200
=======
* Unexercisable
As of December 31, 2001, there were 214,800 shares available
for grant under these plans.
Page 42
NOTE 7 - TREASURY STOCK
During the years ended December 31, 2001 and 2000, the
Company purchased 29,400 and 146,400 shares, respectively, of its
own stock for a total cost of $307,792 and $1,222,797,
respectively.
NOTE 8 - 401(K) PLAN
Any full-time employees who are over 21 years old and have
completed one year of service (as defined) are eligible for the
Company's 401(k) Plan (Plan). Under this Plan, an employee may
elect to defer his/her compensation (up to a maximum of 15%) and
have it contributed to the Plan. Employer contributions to the
Plan are at the discretion of the Company. During 2001, 2000 and
1999, the Company made matching contributions to the Plan of up
to 50% of the first 6% of employee salary. This amounted to
$48,243, $41,194 and $31,967 for 2001, 2000 and 1999,
respectively.
NOTE 9 - RELATED PARTY TRANSACTIONS AND OTHER MATTERS
TRANSACTIONS WITH MONMOUTH REAL ESTATE INVESTMENT CORPORATION
During 2001, 2000 and 1999, the Company purchased shares of
Monmouth Real Estate Investment Corporation (MREIC) common stock
primarily through its Dividend Reinvestment and Stock Purchase
Plan (See Note 4). There are five Directors of the Company who
are also Directors and shareholders of MREIC.
TRANSACTIONS WITH MONMOUTH CAPITAL CORPORATION AND THE MOBILE
HOME STORE, INC.
During 2001, 2000 and 1999, the Company purchased shares of
Monmouth Capital Corporation (MCC) common stock primarily through
its Dividend Reinvestment and Stock Purchase Plan (See Note 4).
Seven directors of the Company are also directors and
shareholders of MCC.
The Company received rental income from The Mobile Home
Store, Inc. (MHS), a wholly-owned subsidiary of MCC. MHS sold
and financed the sales of manufactured homes.
MHS paid the Company market rent on sites where MHS had a
home for sale. Total site rental income from MHS amounted to
$33,370, $109,550 and $159,065, respectively for the years ended
December 31, 2001, 2000 and 1999.
Effective April 1, 1996, the Company and MHS entered into an
agreement whereby MHS leases space from the Company to be used as
sales lots, at market rates, at most of the Company's
communities. Total rental income relating to these leases
amounted to $38,370, $153,480 and $142,680 for the years ended
December 31, 2001, 2000 and 1999, respectively.
During 2001, 2000 and 1999, the Company had approximately
$49,000, $52,000 and $62,000 respectively, of rental homes that
were sold to MHS at book value.
Page 43
During 2001, 2000 and 1999, the Company purchased from MHS
at its cost, 3, 11 and 24 new homes, respectively totaling
$47,953, $201,399 and $530,520, respectively to be used as rental
homes. On March 30, 2001, the Company also purchased at carrying
value all of the remaining inventory of MHS. This amounted to
$2,261,624. The Company also assumed the inventory financing of
$1,833,871.
SALARY, DIRECTORS', MANAGEMENT AND LEGAL FEES
During the years ended December 31, 2001, 2000 and 1999,
salary, Directors', management and legal fees to Mr. Eugene W.
Landy and the law firm of Landy & Landy amounted to $162,800,
$161,600 and $160,600, respectively.
OTHER MATTERS
The Company has a three-year employment agreement and a five-
year employment agreement with two of its executive officers.
The agreements provide for base compensation, bonuses and fringe
benefits, in addition to specified severance and retirement
benefits. The Company is accruing these benefits over the terms
of the agreements. Included in general and administrative
expense for the years ended December 31, 2001, 2000 and 1999 were
$-0-, $40,000 and $41,875, respectively, relating to these
agreements.
In August, 1999, the Company entered into a lease for its
corporate offices. The lease is for a five-year term at market
rates with monthly lease payments of $12,000. The lessor of the
property is owned by certain officers and directors of the
Company. The lease payments and the resultant lease term
commenced on May 1, 2000. Approximately 50% of the monthly lease
payment is reimbursed by other related entities utilizing the
leased space (MCC and MREIC).
NOTE 10 - DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company has a Dividend Reinvestment and Stock Purchase
Plan (DRIP). Under the terms of the DRIP, shareholders who
participate may reinvest all or part of their dividends in
additional shares of the Company at approximately 95% of the
market price. Shareholders may also purchase additional shares
at approximately 95% of their market price by making optional
cash payments. Generally, dividend reinvestments and purchases
of shares are made quarterly on March 15, June 15, September 15
and December 15.
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.
Amounts received and shares issued in connection with the
DRIP for the years ended December 31, 2001, 2000 and 1999 were as
follows:
2001 2000 1999
Amounts Received/
Dividends
Reinvested $1,686,031 $1,866,103 $1,631,789
Number of Share
Issued 163,491 227,945 187,616
Page 44
NOTE 11 - DISTRIBUTIONS
The following dividends were paid to shareholders during the
three years ended December 31, 2001, 2000 and 1999:
2001 2000 1999
Quarter Ended Amount Per Amount Per Amount Per
Share Share Share
March 31 $1,442,387 $.1950 $1,371,130 $.1875 $1,358,734 $.1875
June 30 1,466,787 .1975 1,376,095 .1875 1,352,118 .1875
September 30 1,494,309 .2000 1,396,844 .1900 1,359,730 .1875
December 31 1,577,057 .2100 1,411,872 .1925 1,371,322 .1875
_________ ______ _________ _____ _________ ______
__
$5,980,540 $.8025 $5,555,941 $.7575 $5,441,904 $ .75
========= ===== ======== ===== ======== ======
Total distributions to shareholders for 2001 amounted to
$5,980,540, or $.8025 per share, all of which was taxed as
ordinary income. This amount does not include the dividend
resulting from the discount on shares purchased through the
Company's Dividend Reinvestment and Stock Purchase Plan.
On January 16, 2002, the Company declared a dividend of
$.2125 per share to be paid on March 15, 2002 to shareholders of
record February 15, 2002.
NOTE 12 - FEDERAL INCOME TAXES
The Company elected to be taxed as a REIT. As the Company
has distributed all of its income currently, no provision has
been made for Federal income or excise taxes for the years ended
December 31, 2001, 2000 and 1999.
NOTE 13 - LEGAL MATTERS
There are no lawsuits pending against the Company
that management believes will have a material effect on the
financial condition or results of operations of the Company.
In the normal course of business, the Company is a
Defendant in various legal cases, all of which are being defended
by the Company's insurance carrier.
NOTE 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company is required to disclose certain information
about fair values of financial instruments, as defined in SFAS
No. 107, "Disclosures About Fair Value of Financial Instruments".
Page 45
Limitations
Estimates of fair value are made at a specific point in
time, based upon, where available, relevant market prices and
information about the financial instrument. Such estimates do
not include any premium or discount that could result from
offering for sale at one time the Company's entire holdings of a
particular financial instrument. For a portion of the Company's
financial instruments, no quoted market value exists. Therefore,
estimates of fair value are necessarily based on a number of
significant assumptions (many of which involve events outside the
control of management). Such assumptions include assessments of
current economic conditions, perceived risks associated with
these financial instruments and their counterparties, future
expected loss experience and other factors. Given the
uncertainties surrounding these assumptions, the reported fair
values represent estimates only and, therefore, cannot be
compared to the historical accounting model. Use of different
assumptions or methodologies is likely to result in significantly
different fair value estimates.
The fair value of cash and cash equivalents and notes
receivables approximates their current carrying amounts since all
such items are short-term in nature. The fair value of
securities available for sale is based upon quoted market values.
The fair value of mortgages payable in 1999 approximated their
carrying amounts since such amounts payable were at approximately
a weighted-average current market rate of interest. For 2001,
the fair and carrying values of mortgages payable amounted to
$38,719,558 and $38,652,025, respectively. The fair value of
mortgages payable is based upon discounted cash flows at current
market rates for instruments with similar remaining terms.
NOTE 15 - SUPPLEMENTAL CASH FLOW AND COMPREHENSIVE INCOME
INFORMATION
Cash paid during the years ended December 31, 2001, 2000 and
1999 for interest was $2,971,894, $2,805,401 and $2,120,268,
respectively.
During the years ended December 31, 2001, 2000 and 1999,
land development costs of $954,585, $1,063,099 and $2,284,546,
respectively were transferred to investment property and
equipment and placed in service.
During the years ended December 31, 2001, 2000 and 1999, the
Company had dividend reinvestments of $1,686,031, $1,866,103 and
$1,631,789, respectively which required no cash transfers.
The following are the reclassification adjustments related
to securities available for sale included in Other Comprehensive
Income:
2001 2000 1999
Unrealized holding gains
(losses)arising during
the year $4,562,120 $ 1,428,525 $(1,336,870)
Less: reclassification
adjustment for gains
realized in income (530,324) (257,142) (53,473)
_________ __________ __________
Net unrealized gains
(losses) $4,031,796 $ 1,171,383 $(1,390,343)
======== ========= =========
Page 46
UNITED MOBILE HOMES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001
Column A Column B Column C Column D
Initial Cost
Site, Land & Capitalization
Building Subsequent to
Description Encumbrances Land Improvements Acquisition
Memphis, TN $ 5,767,117 $ 50,000 $ 2,569,101 $1,316,117
Greenfield
Center, NY -0- 37,500 232,547 1,964,894
Vineland, NJ (3) 320,000 1,866,323 730,248
Duncansville, PA -0- 60,774 378,093 412,929
Cranberry
Township, PA 2,370,693 181,930 1,922,931 248,955
Clifton Park, NY 3,289,479 391,724 704,021 982,645
Apollo, PA -0- 670,000 1,336,600 737,491
Cranberry 3,793,109 75,000 977,225 1,085,080
Township, PA
Millville, NJ 2,500,000 216,000 1,166,517 4,172,482
Kutztown, PA -0- 145,000 1,695,041 3,626,923
Inkerman, PA -0- 572,500 2,151,569 2,258,579
Monticello, NY -0- 235,600 1,402,572 1,748,724
Navarre, OH -0- 290,000 1,457,673 695,172
Cresson, PA 1,739,711 432,700 2,070,426 38,091
Memphis, TN -0- 78,435 810,477 1,479,120
West Grove, PA (3) 175,000 990,515 1,216,307
Carlisle, PA -0- 37,540 198,321 904,335
Belle Vernon, PA -0- 150,000 2,491,796 2,631,293
Marion, OH -0- 236,000 785,293 2,183,966
Athens, OH -0- 67,000 1,326,800 215,272
Magnolia, OH 3,726,479 270,000 1,941,430 1,632,316
Jackson, NJ (3) 100,095 602,820 1,293,853
Hamburg, NY 2,852,354 424,000 3,812,000 -0-
Eatontown, NJ (3) 157,421 280,749 165,315
Caledonia, OH -0- 260,000 1,753,206 402,052
_________ _________ _________ _________
$26,038,942 $5,834,219 $34,924,046 $32,142,159
========= ========= =========
Various 12,613,083 (3)
_________
$38,652,025
=========
Page 47a
UNITED MOBILE HOMES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001
Column A Column E (1) (2) Column F (1)
Gross Amount at Which Carried at
12/31/01
Site, Land &
Building Accumulated
Description Land Improvements Total Depreciation
Memphis, TN $250,000 $3,885,218 $4,135,218 $ 2,543,660
Greenfield
Center, NY 122,865 2,112,076 2,234,941 1,028,366
Vineland, NJ 408,206 2,508,365 2,916,571 1,730,405
Duncansville,PA 60,774 791,022 851,796 566,020
Cranberry
Township, PA 181,930 2,171,886 2,353,816 1,598,422
Clifton Park, NY 391,724 1,686,666 2,078,390 969,510
Apollo, PA 670,000 2,074,091 2,744,091 477,997
Cranberry
Township, PA 75,000 2,062,305 2,137,305 1,631,036
Millville, NJ 631,137 4,923,862 5,554,999 1,503,038
Kutztown, PA 404,239 5,062,725 5,466,964 1,352,277
Inkerman, PA 572,500 4,410,148 4,982,648 1,229,340
Monticello, NY 318,472 3,068,424 3,386,896 1,227,481
Navarre, OH 290,000 2,152,845 2,442,845 1,075,603
Cresson, PA 432,700 2,108,517 2,541,217 19,168
Memphis, TN 78,435 2,289,597 2,368,032 1,212,468
West Grove, PA 536,064 1,845,758 2,381,822 1,433,801
Carlisle, PA 145,473 994,723 1,140,196 686,283
Belle Vernon, PA 150,000 5,123,089 5,273,089 3,163,905
Marion, OH 236,000 2,969,259 3,205,259 1,077,503
Athens, OH 67,000 1,542,072 1,609,072 293,960
Magnolia, OH 270,000 3,573,746 3,843,746 2,088,707
Jackson, NJ 100,095 1,896,673 1,996,768 1,478,755
Hamburg, NY 424,000 3,927,023 4,351,023 577,209
Eatontown, NJ 135,421 468,064 603,485 364,787
Caledonia, OH 260,000 2,155,258 2,415,258 433,791
_________ _________ _________ __________
$7,212,035 $65,803,412 $73,015,447 $29,763,492
========== =========== =========== ===========
Page 47b
UNITED MOBILE HOMES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001
Column A Column G Column H Column I
Date of Date Depreciable
Description Construction Acquired Life
Memphis, TN Prior to 1980 1986 3 to 27.5
Greenfield Center, NY Prior to 1970 1977 3 to 27.5
Vineland, NJ 1973 1986 3 to 27.5
Duncansville, PA 1961 1979 3 to 27.5
Cranberry Township, PA 1974 1986 5 to 27.5
Clifton Park, NY 1972 1978 3 to 27.5
Apollo, PA Prior to 1980 1995 5 to 27.5
Cranberry Township, PA Prior to 1980 1982 3 to 27.5
Millville, NJ Prior to 1980 1985 3 to 27.5
Kutztown, PA 1971 1979 5 to 27.5
Inkerman, PA 1970 1992 5 to 27.5
Monticello, NY 1972 1988 5 to 27.5
Navarre, OH Prior to 1980 1987 5 to 27.5
Cresson, PA Prior to 1980 2001 27.5
Memphis, TN 1955 1985 3 to 27.5
West Grove, PA 1971 1974 5 to 27.5
Carlisle, PA 1961 1969 3 to 27.5
Belle Vernon, PA 1973 1983 3 to 27.5
Marion, OH 1950 1986 3 to 27.5
Athens, OH Prior to 1980 1996 5 to 27.5
Magnolia, OH Prior to 1980 1985 5 to 27.5
Jackson, NJ 1969 1969 3 to 27.5
Hamburg, NY Prior to 1980 1997 27.5
Eatontown, NJ 1964 1978 3 to 27.5
Caledonia, OH Prior to 1980 1996 5 to 27.5
Page 47c
/----------FIXED ASSETS-----------/
(1) Reconciliation: 12/31/01 12/31/00 12/31/99
Balance - Beginning $68,265,859 $66,608,020 $61,329,910
of Year
_________ __________ __________
Additions:
Acquisitions 2,503,126 -0- -0-
Improvements 2,710,384 2,017,051 5,739,997
Depreciation -0- -0-
-0-
_________ __________ __________
Total Additions 5,213,510 2,017,051 5,739,997
_________ __________ __________
Deletions 463,922 359,212 461,887
Balance - End of _________ __________ __________
Year $73,015,447 $68,265,859 $66,608,020
========= ========= ==========
/-----ACCUMULATED DEPRECIATION-----/
Reconciliation: 12/31/01 12/31/00 12/31/99
Balance - Beginning
of Year $27,526,792 $25,357,748 $23,335,294
_________ __________ __________
Additions:
Acquisitions -0- -0- -0-
Improvements -0- -0- -0-
Depreciation 2,360,623 2,260,130 2,128,474
_________ _________ _________
Total Additions 2,360,623 2,260,130 2,128,474
_________ _________ _________
Deletions 123,923 91,086 106,020
_________ _________ __________
Balance - End of Year $ 29,763,492 $ 27,526,792 $ 25,357,748
========= ========= ==========
(2) The aggregate cost for Federal tax purposes approximates
historical cost.
(3) Represents one mortgage note payable secured by five
properties.
Page 47d
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors
United Mobile Homes, Inc.
We consent to incorporation by reference in the Registration
Statement (No. 333-13053) on Form S-8 of our report dated March
22, 2002, relating to the consolidated balance sheets of United
Mobile Homes, Inc., as of December 31, 2001 and 2000 and the
related consolidated statements of income, shareholders' equity,
and cash flows for each of the years in the three-year period
ended December 31, 2001, and the related schedule, which report
appears in the December 31, 2001 annual report on Form 10-K of
United Mobile Homes, Inc.
/s/ KPMG LLP
Short Hills, New Jersey
March 22, 2002
Page 48
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
UNITED MOBILE HOMES, INC.
BY: /s/Eugene W. Landy
EUGENE W. LANDY
Chairman of the Board
Dated: March 15, 2002
Pursuant to the requirements of the Securities and Exchange Act
of 1934, this report has been duly signed below by the following
persons on behalf of the registrant and in the capacities and on
the date indicated.
Title Date
/s/Eugene W. Landy Chairman of the March 15, 2002
EUGENE W. LANDY Board and
Director
/s/Samuel A. Landy President and March 15, 2002
SAMUEL A. LANDY Director
/s/Anna T. Chew Vice President and March 15, 2002
ANNA T. CHEW Chief Financial
Officer
and Director
/s/Ernest V. Secretary/Treasurer March 15, 2002
Bencivenga and
ERNEST V. BENCIVENGA Director
/s/Charles P. Director March 15, 2002
Kaempffer
CHARLES P. KAEMPFFER
/s/James Mitchell Director March 15, 2002
JAMES MITCHELL
/s/Richard H. Molke Director March 15, 2002
RICHARD H. MOLKE
/s/Eugene Rothenberg Director March 15, 2002
EUGENE ROTHENBERG
/s/Robert G. Sampson Director March 15, 2002
ROBERT G. SAMPSON
Page 49