Let me take a moment to explain our approach to investor relations. We're reinstituting a quarterly earnings call, which I'll provide brief comments and then I'll have pre-qualified analysts to ask questions. We're running with a lean management team here, so to save time and make it easier to comply with Regulation FD, we're no longer meeting with analysts and investors between the third quarterly earnings announcements.These quarterly earnings calls, like this one today, will be your main opportunity to ask questions. I will prepare, ten days after the call, to take phone calls to clarify statements made on today's call, but I won't be answering additional questions or adding information to what was said on today's call. Let's move on to second quarter results. Compared to the second quarter of last year our situation has certainly improved. Revenue was higher in the second quarter this year compared to the second quarter of last and we generated positive cash flow in the second quarter just ended. We are encouraged by the trends that we see developing in our businesses. Revenue in the second quarter increased to $30.4 million compared to $25.3 million in the second quarter of 2011, which is about a 20% increase. For the six month ended June 30, 2012, the company reported $60.9 million of revenue compared to about $98.7 million for the first six months of last year. If we adjust for a one-time timber deed, it was executed in the first half of last year for the amount of $54.5 million, then I can tell you that on pro forma basis revenue increased for the first half of the year by $44.2 million to $60.9 million. Several things have contributed to the improvement in revenues in the second quarter. The sale of residential units increased 68% quarter-over-quarter. In the associated revenue grew 50% for the same period. Sales of home sites increased in all of our communitities and sales in primary communities, such Rivertown and Breakfast Point grew at a faster pace than sales in the resort communities, such as WaterColor.
Price points in our primary communities are lower than our price points in our resort communities, which is why the percentage increase in home sites sold is greater than the percentage of revenue growth.While we're on the topic of real estate sales, let me also note that the sale of real estate and the company's commercial and rural land businesses was relatively unchanged in this quarter compared to the second quarter of last year. Our forestry business was also contributive to the improvement in the revenue in the second quarter. We harvested 23% more tons of timber in the second quarter of 2012 compared to the second quarter of 2011. We were able to do this for several reasons. First, land that had been previously restricted for residential and commercial development was opened to timber operations. Second, we stepped up investment in basic infrastructure, things like roads and bridges, which gave us better and more consistent access to our timber. Third, we removed restrictions on our harvest operations such the ban on harvesting up to roadsides, which has allowed us to reap more tons per acre. Fourth, we invested new forest management software that allows us to plan with more clarity. All these things made us more efficient and productive, which in turn increased in tons of timber harvest in this quarter. The contributor to higher revenue in the second quarter is our resorts and clubs business, which includes the WaterColor Inn, vacation rentals, golf clubs and marinas. All those businesses showed improvement compared to the second quarter of last year, but (inaudible) vacation rentals business, in particular, showed strength this year and both were experiencing a strong summer season. Both occupancy and rates have improved compared to the second quarter of last year. Net income for the second quarter of 2012 was $0.2 million compared to a net loss of $13.3 million for the second quarter of 2011. The revenue increases that I just spoke about were part of the improvement in net income. But the majority of improvements came from lower overhead cost in form of reduced construction costs, lower professional fees, lower pension expense and less rent costs compared to last year's second quarter. Read the rest of this transcript for free on seekingalpha.com