UNITED STATES
 SECURITIES AND EXCHANGE
COMMISSION
 Washington, D.C.
20549
 
 FORM 10-Q
 
 (Mark
One)
 
 xQUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the
quarterly period ended March
31, 2008
 
 or
 
  ̈TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the
transition period from 
to
 
 Commission
File Number: 1-10104
 
 UNITED CAPITAL
      CORP.(Exact
      name of registrant as specified in its
charter)
 
 Delaware
              04-2294493(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)
 
 9 Park Place, Great Neck,
      NY
              11021(Address
      of principal executive offices)
              (Zip
      Code)
 
 516-466-6464(Registrant’s
      telephone number, including area code)N/A(Former
      name, former address and former fiscal year, if changed since last
      report)
 
 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 mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 
(Check one):
  Large
      accelerated filer  ̈
                Accelerated
      filer  ̈Non-accelerated
      filer  ̈ (Do
      not check if a smaller reporting company)
                Smaller
      reporting company x
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).     Yes  ̈     No
x
 
 The
registrant had 8,264,786 shares of common stock, $.10 par value, outstanding as
of May 5, 2008.
  Index
  UNITED
CAPITAL CORP. AND SUBSIDIARIES
 
 INDEX
 
  PAGEPART I – FINANCIAL
INFORMATIONITEM 1.
              FINANCIAL STATEMENTSCondensed Consolidated Balance Sheets as
      ofMarch 31, 2008 (Unaudited) and December 31,
      2007
              3Condensed Consolidated Statements of Income for
      theThree Months Ended March 31, 2008 and 2007
      (Unaudited)
              4Condensed Consolidated Statements of Cash Flows for
      theThree Months Ended March 31, 2008 and 2007
      (Unaudited)
              5-6Notes to Condensed Consolidated Financial
      Statements (Unaudited)
              7-12ITEM 2.
              MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
              12-17ITEM 3.
              QUANTITATIVE AND QUALITATIVE DISCLOSURE
    OFMARKET RISK
              17ITEM 4T.
              CONTROLS AND PROCEDURES
              17PART II – OTHER INFORMATIONITEM 1A.
              RISK FACTORS
              18ITEM 2
              UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
              18ITEM 6.
              EXHIBITS
              19SIGNATURES
              
              19






2
 Index




UNITEDCAPITAL CORP. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 (In
thousands, except per share data)
 
 March
      31,
                  2008
              
              
              December
      31, 2007(Unaudited)AssetsCurrent
      assets:Cash
      and cash equivalents
              
              $
              125,122
              
              
              $
              129,003Marketable
      securities
              
              
              31,793
              
              
              
              27,191Notes
      and accounts receivable, net
              
              
              9,837
              
              
              
              24,209Inventories
              
              
              5,033
              
              
              
              5,458Prepaid
      expenses and other current assets
              
              
              1,667
              
              
              
              1,787Deferred
      income taxes
              
              
              2,604
              
              
              
              1,143Total
      current assets
              
              
              176,056
              
              
              
              188,791Property,
      plant and equipment, net
              
              
              5,971
              
              
              
              6,249Real
      property held for rental, net
              
              
              79,897
              
              
              
              66,494Investment
      in joint venture
              
              
              5,952
              
              
              
              6,125Noncurrent
      notes receivable
              
              
              341
              
              
              
              352Other
      assets
              
              
              4,024
              
              
              
              4,059Total
      assets
              
              $
              272,241
              
              
              $
              272,070Liabilities
      and Stockholders’ EquityCurrent
      liabilities:Current
      maturities of long-term debt
              
              $
              1,031
              
              
              $
              1,002Accounts
      payable and accrued liabilities
              
              
              10,876
              
              
              
              10,934Income
      taxes payable
              
              
              5,228
              
              
              
              4,343Total
      current liabilities
              
              
              17,135
              
              
              
              16,279Long-term
      debt
              
              
              32,068
              
              
              
              32,334Other
      long-term liabilities
              
              
              15,314
              
              
              
              15,233Deferred
      income taxes
              
              
              9,554
              
              
              
              9,615Total
      liabilities
              
              
              74,071
              
              
              
              73,461Commitments
      and contingenciesStockholders’
      equity:Common
      stock, $.10 par value, authorized 17,500 shares;issued
      and outstanding 8,270 and 8,286 shares, respectively
              
              
              827
              
              
              
              829Retained
      earnings
              
              
              199,118
              
              
              
              196,817Accumulated
      other comprehensive (loss) income, net of tax
              
              
              (1,775
              )
              
              
              963Total
      stockholders’ equity
              
              
              198,170
              
              
              
              198,609Total
      liabilities and stockholders’ equity
              
              $
              272,241
              
              
              $
              272,070
 
 
 The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
   3
 Index




UNITEDCAPITAL CORP. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 (In
thousands, except per share data)
 
 Three
      Months Ended
                  March
      31,2008
              
              
              2007Revenues:Net sales
              
              $
              9,899
              
              
              $
              9,928Revenues from real estate
      operations
              
              
              8,843
              
              
              
              6,917Total revenues
              
              
              18,742
              
              
              
              16,845Costs
      and expenses:Cost of sales
              
              
              7,534
              
              
              
              7,420Real estate
      operations:Mortgage interest
      expense
              
              
              514
              
              
              
              195Depreciation
      expense
              
              
              948
              
              
              
              712Other operating
      expenses
              
              
              4,366
              
              
              
              3,189General and administrative
      expenses
              
              
              1,790
              
              
              
              1,619Selling
expenses
              
              
              934
              
              
              
              909Total costs and
      expenses
              
              
              16,086
              
              
              
              14,044Operating
income
              
              
              2,656
              
              
              
              2,801Other
      income (expense):Interest and dividend
      income
              
              
              1,554
              
              
              
              1,808Other income and expense,
      net
              
              
              23
              
              
              
              5,711Total other
    income
              
              
              1,577
              
              
              
              7,519Income
      from continuing operations before income taxes
              
              
              4,233
              
              
              
              10,320Provision
      for income taxes
              
              
              1,545
              
              
              
              3,670Income
      from continuing operations
              
              
              2,688
              
              
              
              6,650Discontinued
      operations:Loss
      from discontinued operations, net of tax benefit of $6
              
              
              —
              
              
              
              (9
              )Net
      gain on disposal of discontinued operations, net of tax provision of
      $632
              
              
              —
              
              
              
              947Income
      from discontinued operations
              
              
              —
              
              
              
              938Net
      income
              
              $
              2,688
              
              
              $
              7,588Basic
      earnings per share:Income from continuing
      operations
              
              $
              .32
              
              
              $
              .81Income from discontinued
      operations
              
              
              —
              
              
              
              .11Net income per
      share
              
              $
              .32
              
              
              $
              .92Diluted
      earnings per share:Income from continuing
      operations
              
              $
              .27
              
              
              $
              .63Income from discontinued
      operations
              
              
              —
              
              
              
              .09Net income per share assuming
      dilution
              
              $
              .27
              
              
              $
              .72
 
  
 The
accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
  
 4
 Index




UNITEDCAPITAL CORP. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In
thousands)
 
 Three
      Months Ended
                March
      31,2008
              
              
              2007Cash flows from operating
      activities:Net income
              
              $
              2,688
              
              
              $
              7,588Adjustments to reconcile net
      income to net cash provided by (used in) operating
    activities:Depreciation
      and amortization
              
              
              1,063
              
              
              
              831Gain
      on disposal of discontinued operations, net of tax
              
              
              —
              
              
              
              (947
              )Litigation
      award from prior condemnation
              
              
              —
              
              
              
              (5,665
              )Net
      loss on sale of available-for-sale securities
              
              
              —
              
              
              
              25Net
      realized and unrealized gain on derivative instruments
              
              
              (30
              )
              
              
              (71
              )Income
      from equity investment
              
              
              (22
              )
              
              
              (48
              )Deferred
      income taxes
              
              
              (48
              )
              
              
              1,687Other,
      net
              
              
              37
              
              
              
              31Changes
      in assets and liabilities:Notes
      and accounts receivable, net
              
              
              (629
              )
              
              
              (8,032
              )Inventories
              
              
              425
              
              
              
              (47
              )Prepaid
      expenses and other current assets
              
              
              120
              
              
              
              —Other
      assets
              
              
              (13
              )
              
              
              (1,022
              )Accounts
      payable and accrued liabilities
              
              
              (44
              )
              
              
              (7
              )Income
      taxes payable
              
              
              885
              
              
              
              502Other
      long-term liabilities
              
              
              81
              
              
              
              (102
              )Net
      cash provided by (used in) operating activities of continuing
      operations
              
              
              4,513
              
              
              
              (5,277
              )Operating
      activities of discontinued operations
              
              
              —
              
              
              
              (46
              )Net
      cash provided by (used in) operating activities
              
              
              4,513
              
              
              
              (5,323
              )Cash flows from investing
      activities:Purchase of available-for-sale securities
              
              
              (9,564
              )
              
              
              (10,978
              )Proceeds/maturities
      from sale of available-for-sale securities
              
              
              754
              
              
              
              15,334Proceeds
      from sale of real estate assets
              
              
              —
              
              
              
              2,646Use
      of proceeds held in escrow
              
              
              15,000
              
              
              
              —Net
      proceeds from litigation award from prior condemnation
              
              
              —
              
              
              
              5,665Proceeds
      from sale of derivative instruments
              
              
              16
              
              
              
              51Principal
      payments on notes receivable
              
              
              12
              
              
              
              38Acquisition
      of property, plant and equipment
              
              
              (46
              )
              
              
              (70
              )Acquisition
      of/additions to real estate assets
              
              
              (14,135
              )
              
              
              (533
              )Distributions
      from joint venture
              
              
              195
              
              
              
              196Net
      cash (used in) provided by investing activities
              
              
              (7,768
              )
              
              
              12,349
 
 
 5
 Index




UNITED
CAPITAL CORP. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
 (Unaudited)
 
 Three
      Months Ended
                March
      31,2008
              
              
              2007Cash flows from financing
      activities:Principal
      payments on mortgage obligations
              
              
              (237
              )
              
              
              (115
              )Purchase
      and retirement of common stock
              
              
              (389
              )
              
              
              (2,511
              )Proceeds
      from exercise of stock options
              
              
              —
              
              
              
              733Tax
      benefit from exercise of employee stock options
              
              
              —
              
              
              
              622Net
      cash used in financing activities
              
              
              (626
              )
              
              
              (1,271
              )Net
      (decrease) increase in cash and cash equivalents
              
              
              (3,881
              )
              
              
              5,755Cash
      and cash equivalents, beginning of period
              
              
              129,003
              
              
              
              76,688Cash
      and cash equivalents, end of period
              
              $
              125,122
              
              
              $
              82,443Supplemental
      disclosures of cash flow information:Cash paid during the period
      for:Interest
              
              $
              514
              
              
              $
              195Taxes
              
              $
              589
              
              
              $
              842
 
 6
 Index




UNITED
CAPITAL CORP. AND SUBSIDIARIES
 NOTESTO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
 (In
thousands, except per share data)
 (Unaudited)
 
 1.        
Basis of Presentation
 
 The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X, as promulgated by
the Securities and Exchange Commission (“SEC”).  Accordingly, they do
not include all information and footnotes required by GAAP for complete
financial statements.
 
 In the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for the interim
periods presented have been recorded.  These financial statements have
been prepared in conformity with the accounting principles, and methods of
applying those accounting principles, as reflected in the audited financial
statements and notes thereto included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2007 and should be read in conjunction
therewith.  The results of operations for the periods presented are
not necessarily indicative of the results to be expected for the full
year.
 
 2.        
Stockholders’ Equity
 
 Previous
purchases of the Company’s common stock have reduced the Company’s additional
paid-in-capital to zero and have also reduced retained earnings by amounts in
excess of par value.  Any future purchases in excess of par value will
also reduce retained earnings.
 
 Repurchases
of the Company’s common stock may be made from time to time in the open market
at prevailing market prices and may be made in privately negotiated
transactions, subject to available resources.  Future proceeds from
the issuance of common stock in excess of par value will be credited to retained
earnings until such time that previously recorded reductions have been
recovered.  During the three months ended March 31, 2007, the Company
received proceeds of $733 from the exercise of 73 stock
options.  During the three months ended March 31, 2007, the Company
recorded a tax benefit of $622 to retained earnings related to the exercise of
stock options.  No stock options were exercised during the three
months ended March 31, 2008.
 
 During
the three months ended March 31, 2008 and 2007, the Company purchased and
retired 16 and 73 shares of common stock for an aggregate purchase price of $389
and $2,511, respectively.
 
 3.        
Earnings Per Share
 
 The
following table sets forth the computation of basic and diluted earnings per
share from continuing operations:
 
 Three
      Months Ended
                  March
      31,2008
              
              
              2007Numerator:Income from continuing
      operations
              
              $
              2,688
              
              
              $
              6,650Denominator:Basic – weighted-average shares
      outstanding
              
              
              8,279
              
              
              
              8,279Dilutive effect of employee
      stock options
              
              
              1,536
              
              
              
              2,203Diluted – weighted-average
      shares outstanding
              
              
              9,815
              
              
              
              10,482Basic
      earnings per share – continuing operations
              
              $
              .32
              
              
              $
              .81Diluted
      earnings per share – continuing operations
              
              $
              .27
              
              
              $
              .63
  7
 Index
  4.        
Stock-Based Compensation
 
 The
Company has two stock option plans, the Incentive and Non-Qualified Stock Option
Plan and the 1988 Joint Incentive and Non-Qualified Stock Option Plan, under
which qualified and non-qualified options may be granted to key employees to
purchase the Company’s common stock at the fair market value on the date of
grant.  Under both plans, the options typically become exercisable in
three equal installments, beginning one year from the date of
grant.  Stock options generally expire ten years from the date of
grant.  Currently, there are no options available for grant under
these plans.
 
 The
Company accounts for all stock-based compensation in accordance with Statement
of Financial Accounting Standards No. 123 (Revised 2004) – “Share-Based
Payment” (“SFAS No. 123R”).  SFAS No. 123R requires the Company
to measure all employee stock-based compensation awards using a fair value
method and record the related expense in the financial statements.
 
 As of
March 31, 2008 and December 31, 2007, the Company had 4,749 stock options
outstanding with a weighted-average exercise price of $11.91 per
share.  No stock options were exercised during the three months ended
March 31, 2008.  As of March 31, 2008, these stock options had a
weighted-average remaining contractual term of 2.7 years and an aggregate
intrinsic value of $45,825.  The aggregate intrinsic value represents
the difference between the Company’s closing stock price on March 31, 2008
($21.51) and the exercise price of each stock option, multiplied by the number
of “in-the-money” options.  This amount changes based upon the fair
market value of the Company’s common stock.
 
 5.        
Marketable Securities
 
 The cost,
gross unrealized gains, gross unrealized losses and fair market value of
available-for-sale securities are as follows:
  Cost
              
              
              Gross
                Unrealized
                Gains
              
              
              Gross
                Unrealized
                Losses
              
              
              Fair
                Market
                ValueMarch
      31, 2008:Equity
    securities
              
              $
              34,125
              
              
              $
              744
              
              
              $
              (4,553
              )
              
              $
              30,316Bonds
              
              
              1,493
              
              
              
              4
              
              
              
              (20
              )
              
              
              1,477$
              35,618
              
              
              $
              748
              
              
              $
              (4,573
              )
              
              $
              31,793December
      31, 2007:Equity
    securities
              
              $
              24,900
              
              
              $
              1,988
              
              
              $
              (1,577
              )
              
              $
              25,311Bonds
              
              
              1,904
              
              
              
              1
              
              
              
              (25
              )
              
              
              1,880$
              26,804
              
              
              $
              1,989
              
              
              $
              (1,602
              )
              
              $
              27,191
 
 Proceeds/maturities
from the sale of available-for-sale securities and the resulting gross realized
gains and losses included in the determination of net income are as
follows:
  Three
      Months Ended
                  March
      31,2008
              
              
              2007Proceeds/maturities
              
              $
              754
              
              
              $
              15,334Gross
      realized gains
              
              $
              —
              
              
              $
              1,214Gross
      realized losses
              
              $
              —
              
              
              $
              (1,239
              )
 
 6.        
Inventories
 
 The
components of inventories are as follows:
 March
      31,
                  2008
              
              
              December
      31, 2007Raw
      materials
              
              $
              2,429
              
              
              $
              2,446Work
      in process
              
              
              497
              
              
              
              542Finished
      goods
              
              
              2,107
              
              
              
              2,470$
              5,033
              
              
              $
              5,458
   8
 Index
  7.        
Real Estate
  Property
acquisitions
  During
January 2008, the Company purchased two commercial properties located in
Michigan for approximately $13,600.  These properties were purchased
using funds available from a property sold during 2007 in connection with a
Section 1031 tax-deferred exchange.
 
 Property
sales
 
 During
the three months ended March 31, 2007, the Company divested itself of four
commercial properties and one other property which had a net book value of
$1,067 from its real estate investment and management segment.  The
aggregate proceeds from these transactions were $2,646 resulting in a gain of
$947, on a net of tax basis.
 
 The
results of operations of properties sold prior to March 31, 2008 have been
reclassified to discontinued operations, on a net of tax basis, for the three
months ended March 31, 2007.  Summarized financial information of
these properties for the three months ended March 31, 2007 is as
follows:
 
 Revenues
      from real estate operations
              
              $
              29Depreciation
      expense
              
              
              3Other
      operating expenses
              
              
              41Loss
      from operations
              
              $
              (15
              )
 
 Properties
held for sale
 
 As of
March 31, 2008, there were no properties considered by the Company to be held
for sale.
 
 8.        
Derivative Financial Instruments
 
 Management
maintains a diversified portfolio of cash equivalents and investments in a
variety of securities, primarily U.S. investments in common and preferred equity
issues, as well as corporate bonds, and participates on a limited basis in
transactions involving derivative financial instruments, including short stock
sales and put and/or call options.  At March 31, 2008 and December 31,
2007, the fair value of such derivatives was ($1) and ($15), respectively, which
is recorded as a component of accounts payable and accrued liabilities in the
Condensed Consolidated Balance Sheets.  These instruments do not
qualify for hedge accounting and therefore changes in the derivatives’ fair
value are recognized in earnings.  The Company recognized $30 and $71
in net realized and unrealized gains from derivative instruments for the three
months ended March 31, 2008 and 2007, respectively, which are included in other
income and expense, net in the Condensed Consolidated Statements of
Income.
 
 9.        Fair
Value Measurements
 
 The
Company adopted Statement of Financial Accounting Standards No. 157, “Fair
Value Measurements” (“SFAS No. 157”), on January 1, 2008.  SFAS
No. 157 applies to all assets and liabilities that are being measured and
reported on a fair value basis.  As defined in SFAS No. 157, fair
value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date.  SFAS No. 157 also establishes a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value.  The statement requires that assets and liabilities
carried at fair value be classified and disclosed in one of the following three
categories:
 
 Level 1:  Quoted
market prices in active markets for identical assets or
liabilities.
 Level 2:  Observable
market based inputs or unobservable inputs that are corroborated by market
data.
 Level
3:  Unobservable inputs reflecting the reporting entity’s own
assumptions.
 
 SFAS No.
157 establishes a hierarchy which requires an entity to maximize the use of
quoted market prices and minimize the use of unobservable inputs.  An
asset or liability’s level is based on the lowest level of input that is
significant to the fair value measurement.
   9
 Index
 
 The
following table sets forth the Company’s financial assets and liabilities that
were measured at fair value on a recurring basis during the period, by level
within the fair value hierarchy:
 
 Fair
      Value Measurements as of March 31, 2008Total
              
              
              Level
      1
              
              
              Level
      2
              
              
              Level
      3Marketable
      securities
              
              $
              31,793
              
              
              $
              26,065
              
              
              $
              5,728
              
              
              $
              —Derivative
      financial instruments
              
              $
              (1
              )
              
              $
              (1
              )
              
              $
              —
              
              
              $
              —
 
 In
February 2008, the Financial Accounting Standards Board (“FASB”) issued Staff
Position No. 157-2, which delays the effective date of SFAS No. 157 for one year
for all nonfinancial assets and liabilities, except those that are recognized or
disclosed at fair value in the financial statements on a recurring
basis.  Based on this guidance, the Company expects to adopt the
provisions of SFAS No. 157 as they relate to long-lived assets effective January
1, 2009 and it is not expected to have a material impact on the Company’s
financial statements.
 
 On
January 1, 2008, the Company adopted Statement of Financial Accounting Standards
No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities –
Including an Amendment of FASB Statement No. 115” (“SFAS No.
159”).  The Statement permits entities to choose to measure many
financial instruments and certain other items at fair value.  The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions.  This Statement is expected to expand the use
of fair value measurement, which is consistent with the FASB’s long-term
measurement objectives for accounting for financial instruments.  SFAS
159 became effective for fiscal years beginning after November 15,
2007.  The Company has elected not to implement the fair value option
with respect to any additional financial instruments (other than those
previously required under other GAAP rules or standards); therefore, the
adoption of SFAS 159 had no impact on the Company’s financial position or
results of operations.
 
 10.     
Pension Plan
 
 The
Company has a noncontributory defined benefit pension plan that covers
substantially all full-time employees and the former employees of one of the
Company’s discontinued manufacturing segments.  The plan provides
defined benefits based on years of service and compensation level.
 
 Net
periodic pension cost consists of the following:
 Three
      Months Ended
                March
      31,2008
              
              
              2007Service
      cost
              
              $
              (75
              )
              
              $
              (70
              )Interest
      cost
              
              
              (170
              )
              
              
              (165
              )Expected
      return on plan assets
              
              
              204
              
              
              
              187Net
      periodic pension cost
              
              $
              (41
              )
              
              $
              (48
              )
 
 11.     
Comprehensive Income
 
 The
components of comprehensive income are as follows:
 Three
      Months Ended
                March
      31,2008
              
              
              2007Net
      income
              
              $
              2,688
              
              
              $
              7,588Other
      comprehensive (loss) income, net of tax:Change
      in net unrealized loss on available-for-sale securities, net of tax effect
      of $1,474, and $137, respectively
              
              
              (2,738
              )
              
              
              (252
              )Reclassification
      adjustment for net gains realized in net income, net of tax effect of
      ($9)
              
              
              —
              
              
              
              16Amortization
      of unrecognized net gains from pension plan, net of tax effect of
      $18
              
              
              —
              
              
              
              (34
              )Comprehensive
      (loss) income
              
              $
              (50
              )
              
              $
              7,318
 
 10
 Index
  The
components of accumulated other comprehensive (loss) income, net of tax are as
follows:
  March
      31,
                  2008
              
              
              December
      31,
                  2007Net
      unrealized (loss) gain on available-for-sale securities, net of tax effect
      of ($1,338) and $136, respectively
              
              $
              (2,487
              )
              
              $
              251Unrecognized
      net gains from pension plan, net of tax effect of $383
              
              
              712
              
              
              
              712Accumulated
      other comprehensive (loss) income, net of tax
              
              $
              (1,775
              )
              
              $
              963
 
 12.     
Business Segments
 
 The
Company operates through three business segments: real estate investment and
management, hotel operations and engineered products.  The real estate
investment and management segment is engaged in the business of investing in and
managing real estate properties located throughout the United
States.  The hotel operations segment owns and operates three hotels
located in the United States.  Engineered products are manufactured
through wholly-owned subsidiaries of the Company and primarily consist of
knitted wire products and components and transformer products sold
worldwide.
 
 The
accounting policies of the Company’s segments are the same as those described in
the Summary of Significant Accounting Policies included in the Notes to
Consolidated Financial Statements in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2007.
 
 Operating
results of the Company's business segments are as follows:
  Three
      Months Ended
                  March
      31,2008
              
              
              2007Net
      revenues and sales:Real estate investment and
      management
              
              $
              5,173
              
              
              $
              4,824Hotel
operations
              
              
              3,670
              
              
              
              2,093Engineered
    products
              
              
              9,899
              
              
              
              9,928$
              18,742
              
              
              $
              16,845Operating
      income (loss):Real estate investment and
      management
              
              $
              3,119
              
              
              $
              2,944Hotel
operations
              
              
              (104
              )
              
              
              (123
              )Engineered
    products
              
              
              549
              
              
              
              756General corporate
      expenses
              
              
              (908
              )
              
              
              (776
              )2,656
              
              
              
              2,801Other
      income, net
              
              
              1,577
              
              
              
              7,519Income
      from continuing operations before income taxes
              
              $
              4,233
              
              
              $
              10,320
 
 13.     
Commitments and Contingencies
 
 The
Company has undertaken the completion of environmental studies and/or remedial
action at Metex’ (as hereafter defined) two New Jersey facilities and has
recorded a liability for the estimated investigation, remediation and
administrative costs associated therewith.
 
 The
process of remediation has begun at one facility pursuant to a plan filed with
the New Jersey Department of Environmental Protection
(“NJDEP”).  Environmental experts engaged by the Company estimate that
under the most probable scenario, the remediation of this site is anticipated to
require initial expenditures of $860, including the cost of capital equipment,
and $86 in annual operating and maintenance costs over a 15 year
period.
 
 Environmental
studies at the second facility indicate that remediation may be
necessary.  Based upon the facts presently available, environmental
experts have advised the Company that under the most probable remediation
scenario, the estimated cost to remediate this site is anticipated to require
$2,300 in initial costs, including capital equipment expenditures, and $258 in
annual operating and maintenance costs over a 10 year period.  These
estimated costs of future expenses for environmental remediation obligations are
not discounted to their present value.  The Company may revise such
estimates in the future due to the uncertainty regarding the nature, timing and
extent of any remediation efforts that may be required at this site, should an
appropriate regulatory agency deem such efforts to be necessary.
   11
 Index
 
 The
foregoing estimates may also be revised by the Company as new or additional
information in these matters become available or should the NJDEP or other
regulatory agencies require additional or alternative remediation efforts in the
future.  Although such events are not expected to change these
estimates, adverse decisions or events, particularly as to the merits of the
Company’s factual and legal basis, could cause the Company to change its
estimate of liability with respect to such matters in the future.  The
Company had approximately $9,500 recorded in accounts payable and accrued
liabilities and other long-term liabilities at both March 31, 2008 and December
31, 2007 to cover such matters.
 
 The
Company has an employment agreement with its Chairman, President and Chief
Executive Officer (the “Officer”) which provides for a base salary of $800 per
annum plus a discretionary bonus as determined by the Compensation and Stock
Option Committee of the Board of Directors.  In the event of
termination or a change in control, as defined in the employment agreement, the
Company is required to pay the Officer a lump sum severance payment equal to
three years salary and purchase outstanding options.  The employment
agreement provides for successive one-year terms, unless either the Company or
the Officer gives the other written notice that the employment agreement is
terminated, and also provides a death benefit which the Company secures through
an insurance policy.
 
 The
Company is subject to various other litigation, legal and regulatory matters
that arise in the ordinary course of business activities.  When
management believes it is probable that a liability has been incurred and such
amounts are reasonably estimable, the Company provides for amounts that include
judgments and penalties that may be assessed.  These liabilities are
usually included in accounts payable and accrued liabilities or other long-term
liabilities in the Condensed Consolidated Financial Statements, depending on the
anticipated payment date.  None of these matters are expected to
result in a material adverse effect on the Company’s consolidated financial
position or results of operations.
 
 14.      Use
of Estimates
 
 The
preparation of consolidated financial statements in conformity with GAAP
requires management to use judgment in making estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses and
related disclosure of contingent assets and liabilities.  Certain of
the estimates and assumptions required to be made relate to matters that are
inherently uncertain as they pertain to future events.  While
management believes that the estimates and assumptions used were the most
appropriate, actual results could differ significantly from those estimates
under different assumptions and conditions.
 
 15.     
Reclassifications
 
 Certain
prior year amounts have been reclassified to present them on a basis consistent
with the current year.
 
 
 ITEM2.          MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL
 CONDITION AND RESULTS OF
OPERATIONS
 (In thousands, except per share data or
as otherwise noted)
 
 The
following discussion should be read in conjunction with the Condensed
Consolidated Financial Statements of United Capital Corp. (the “Company”) and
related notes thereto.
 
 Results
of Operations:  Three Months Ended March 31, 2008 and
2007
 
 Total
revenues for the quarter ended March 31, 2008 increased 11% to $18,742, from
$16,845 for the comparable quarter in 2007, primarily due to the acquisition of
a hotel in May 2007.  Net income for the three months ended March 31,
2008 was $2,688 or $.32 per basic share compared to net income of $7,588 or $.92
per basic share for the same period in 2007.  The results of the three
months ended March 31, 2007 includes a $5,665 litigation award from a property
condemned by the City of New York in 2001.
   12
 Index
 
 Real
Estate Operations
 
 The
Company’s real estate operations consist of the real estate investment and
management and hotel operations segments.  The operating results for
these segments are as follows:
 
 Three
      Months Ended
                  March
      31, 2008
              
              
              Three
      Months Ended
                  March
      31, 2007Real
                  Estate
              
              
              Hotel
      Operations
              
              
              Total
              
              
              Real
      Estate
              
              
              Hotel
      Operations
              
              
              TotalRevenues
              
              $
              5,173
              
              
              $
              3,670
              
              
              $
              8,843
              
              
              $
              4,824
              
              
              $
              2,093
              
              
              $
              6,917Mortgage
      interest expense
              
              
              59
              
              
              
              455
              
              
              
              514
              
              
              
              64
              
              
              
              131
              
              
              
              195Depreciation
      expense
              
              
              590
              
              
              
              358
              
              
              
              948
              
              
              
              419
              
              
              
              293
              
              
              
              712Other
      operating expenses
              
              
              1,405
              
              
              
              2,961
              
              
              
              4,366
              
              
              
              1,397
              
              
              
              1,792
              
              
              
              3,189Income
      (loss) from operations
              
              $
              3,119
              
              
              $
              (104
              )
              
              $
              3,015
              
              
              $
              2,944
              
              
              $
              (123
              )
              
              $
              2,821
 
 Real
Estate Investment and Management
 
 Revenues
from the real estate investment and management segment increased $349 or 7.2% to
$5,173 for the first quarter of 2008, compared to the corresponding quarter in
2007, primarily due to additional revenues ($238) from two properties purchased
in January 2008.  The addition of these two properties should provide
the Company with an additional $1,000 in revenues during the current
year.  In general, rental revenues from the Company’s real estate
properties do not fluctuate significantly due to the long-term nature of the
Company’s leases.  However, future rental revenues could be affected
by lease renewals, terminations, step-ups and escalations and by the purchase or
sale of additional properties.
 
 Mortgage
interest expense amounted to $59 for the quarter ended March 31, 2008, a
decrease of $5 or 7.8%, compared to the corresponding 2007 quarter, as a result
of continuing mortgage amortization.  At March 31, 2008, the
outstanding mortgage balance on the Company’s real estate investment properties
was below $3,900.  Mortgage interest expense on existing obligations
of the Company’s real estate investment and management segment will continue to
decline with scheduled principal reductions.
 
 Depreciation
expense associated with real properties held for rental increased $171 for the
first quarter of 2008, compared to the corresponding 2007 quarter, primarily
attributable to depreciation expense ($175) related to additions to real estate
assets over the past twelve months.  Due to the purchase of two
commercial properties during the current quarter and other expenditures for
capital improvements incurred during the current and prior year, depreciation
expense on the Company’s properties for each of the quarters and full year of
2008 should be higher than that reported in the corresponding 2007
periods.
 
 Other
operating expenses associated with the management of real properties increased
less than one percent for the current quarter ended March 31, 2008, compared to
the corresponding 2007 quarter.  Fluctuations within this category did
occur however:  a decrease in property maintenance expenses ($106)
partially offset by an increase in professional fees ($72) and compensation
expense ($29).  Due to the extent of property age, location and
vacancies, certain operating expenses, such as property maintenance and utility
costs, could fluctuate in the future from those previously
incurred.
 
 Hotel
Operations
 
 Hotel
revenues increased 75.3% to $3,670 for the three months ended March 31, 2008,
compared to the corresponding period of 2007, primarily as the result of
additional hotel revenues ($1,624) received as a result of the May 2007
acquisition of a hotel located in Utica, New York (the “Utica
Hotel”).  In addition, revenues from the Company’s Connecticut and
Georgia hotels increased in the 2008 quarter primarily due to stronger demand
related to recent renovations and improvements to these properties which allowed
the Company to increase average room rates.
   13
 Index
 
 Mortgage
interest expense related to the Company’s hotel properties increased $324 for
the first quarter of 2008, compared to the first quarter of 2007, as a result of
mortgages secured on two of the Company’s hotels during 2007.  As a
result of these additional mortgages, interest expense for the full year of 2008
should be higher than that of 2007.
 
 Depreciation
expense associated with the Company’s hotel operations increased $65 for the
quarter ended March 31, 2008, compared to the corresponding quarter in
2007.  This increase is primarily attributable to depreciation expense
($131) related to the Utica Hotel acquired in May 2007, partially offset by a
decrease in depreciation expense on the Company’s other two
hotels.  Depreciation expense of the Company’s hotel operations for
the full 2008 year should increase over that reported in 2007 due to the
acquisition of the Utica Hotel.
 
 Other
operating expenses related to the management of the Company’s hotels increased
$1,169 to $2,961 for the first quarter of 2008, compared to the corresponding
quarter of 2007, primarily due to the additional operating expenses of the Utica
Hotel ($1,287).
 
 Future
hotel revenues and expenses will vary based on demand and desirability of these
properties compared to others in their immediate proximity and may be influenced
by local and other economic conditions, including the room rate of the
hotels.
 
 Engineered
Products
 
 The
Company’s engineered products segment includes Metex Mfg. Corporation (“Metex”)
and AFP Transformers, LLC (“AFP Transformers”).  The operating results
of the engineered products segment are as follows:
 
 Three
      Months Ended
                  March
      31,2008
              
              
              2007Net
      sales
              
              $
              9,899
              
              
              $
              9,928Cost
      of sales
              
              
              7,534
              
              
              
              7,420Selling,
      general and administrative expenses
              
              
              1,816
              
              
              
              1,752Operating
      income
              
              $
              549
              
              
              $
              756
 
 Net sales
of the engineered products segment decreased less than 1% for the quarter ended
March 31, 2008, compared with the results of the corresponding 2007
period.  This decrease is primarily related to a decrease in demand
for the Company’s automotive products line, which is a result of the ongoing
strike at American Axle and its impact on General Motors.  This
decrease is partially offset by an increase in demand for the Company’s
engineered products line.  Due to the continued rise in oil prices and
softening automotive sales, together with the American Axle strike, the Company
expects a decline in 2008 sales of its automotive product line as compared to
such sales in 2007.  Although management believes that sales of its
engineered products segment are directly influenced by general economic
conditions, worldwide automotive demand and industrial capital spending, future
sales of this segment could also be affected by changes in technology,
competitive forces or challenges to its intellectual property.
 
 Cost of
sales as a percentage of sales increased 1.4% in the three months ended March
31, 2008, compared to the corresponding quarter in 2007, primarily related to an
increase in the cost of raw materials, primarily copper and steel components,
which, where possible, has been passed along to customers.  Continued
increases in the price of raw materials could affect the future gross margin and
operating profits of this segment.
 
 Selling,
general and administrative expenses of the engineered products segment increased
$64 or 3.7% for the first quarter of 2008, compared to the corresponding period
of 2007, primarily due to increases in payroll and payroll related expenses
($45).
 
 General
and Administrative Expenses
 
 General
and administrative expenses not associated with the manufacturing operations
increased $132 or 17.0% for the three months ended March 31, 2008, compared to
such expenses incurred for the comparable 2007 period, primarily related to
non-recurring transactions ($119) in 2007.
  14
 Index
  Other
Income and Expense, Net
 
 The
components of other income and expense, net in the Condensed Consolidated
Statements of Income are as follows:
  Three
      Months Ended
                  March
      31,2008
              
              
              2007Litigation
      award from prior condemnation
              
              $
              —
              
              
              $
              5,665Net
      realized and unrealized gain on derivative instruments
              
              
              30
              
              
              
              71Net
      loss on sale of available-for-sale securities
              
              
              —
              
              
              
              (25
              )Other,
      net
              
              
              (7
              )
              
              
              —$
              23
              
              
              $
              5,711
 
 Included
in other income and expense, net during the three months ended March 31, 2007 is
a $5,665 litigation award from a property condemned by the City of New York in
2001.
 
 Discontinued
Operations
 
 Loss from
operations on properties sold and accounted for as discontinued operations was
$9, on a net of tax basis, for the three months ended March 31,
2007.  Net gains on the disposal of real estate assets accounted for
as discontinued operations were $947, on a net of tax basis, for the three
months ended March 31, 2007 (see Note 7 of Notes to Condensed Consolidated
Financial Statements). Prior year amounts have been reclassified to reflect
results of operations of real properties sold during 2007 as discontinued
operations.  The Company did not consider any of its properties to be
held for sale as of March 31, 2008 and no properties have been sold during the
three months ended March 31, 2008.
 
 Liquidity
and Capital Resources
 
 Net cash
provided by operating activities was $4,513 for the three months ended March 31,
2008, compared to net cash used in operating activities of $5,323 for the same
period in 2007.  This change in operating cash flows results
principally from a decrease in notes and accounts receivables, net ($7,403), due
to the timing of cash receipts of certain items including the proceeds received
from the sale of marketable securities ($6,684), and a decrease in other assets
($1,009).
 
 Net cash
used in investing activities was $7,768 for the three months ended March 31,
2008 versus net cash provided by investing activities of $12,349 for the three
months ended March 31, 2007.  This change primarily results from the
timing of the purchase or sale of available-for-sale securities ($13,166) and a
litigation award received from a property condemnation ($5,665) in
2007.
 
 Net cash
used in financing activities was $626 and $1,271 for the three months ended
March 31, 2008 and 2007, respectively.  The decrease in cash used for
financing activities primarily results from a decrease in the purchase and
retirement of common stock during the first quarter of 2008 ($2,122) versus that
purchased during the first quarter of 2007.  This decrease is
partially offset from the exercise of stock options ($733) and the additional
tax benefits related to such exercises ($622) during the three months ended
March 31, 2007.
 
 Previous
purchases of the Company’s common stock have reduced the Company’s additional
paid-in capital to zero and have also reduced retained earnings by amounts in
excess of par value.  Any future purchases in excess of par value will
also reduce retained earnings.  Repurchases of the Company’s common
stock may be made from time to time in the open market at prevailing market
prices and may be made in privately negotiated transactions, subject to
available resources.  Future proceeds from the issuance of common
stock in excess of par value will be credited to retained earnings until such
time that previously recorded reductions have been recovered.
 
 At March
31, 2008, the Company’s cash and marketable securities totaled $156.9 million
and working capital was $158.9 million compared to cash and marketable
securities of $156.2 million and working capital of $172.5 million at December
31, 2007.  Management continues to believe that while there has been a
decline in the values of certain real estate properties, the overall real estate
market in the United States continues to be overvalued and accordingly
acquisitions have been limited to those select properties that meet the
Company's stringent financial requirements.  Management believes that
the available working capital puts the Company in an opportune position to fund
acquisitions and grow its portfolio, if and when attractive long-term
opportunities become available.
   15
 Index
 
 The
equity method of accounting is used for investments in 20% to 50% owned joint
ventures in which the Company has the ability to exercise significant influence,
but not control.  These investments are recorded initially at cost and
subsequently adjusted for equity in earnings and cash contributions and
distributions.  The debt of the joint venture in which the Company
currently has an ownership interest is a non-recourse obligation and is
collateralized by the entity’s real property.  The Company believes
that the value of the underlying property and its operating cash flows are
sufficient to satisfy its obligations.  The Company isnot obligated for the
debts of the joint venture, but could decide to satisfy them in order to protect
its investment.  In such event, the Company’s capital resources and
financial condition would be reduced and, in certain instances, the carrying
value of the Company’s investment and its results of operations would be
negatively impacted.
 
 The cash
needs of the Company have been satisfied from funds generated by current
operations.  It is expected that future operational cash needs will
also be satisfied from existing cash balances, marketable securities, ongoing
operations or borrowings.  The primary source of capital to fund
additional real estate acquisitions and to make additional high-yield mortgage
loans may come from existing funds, the sale, financing and refinancing of the
Company’s properties and from third party mortgages and purchase money notes
obtained in connection with specific acquisitions.
 
 In
addition to the acquisition of properties for consideration consisting of cash
and mortgage financing proceeds, the Company may acquire real properties in
exchange for the issuance of the Company’s equity securities.  The
Company may also finance acquisitions of other companies in the future with
borrowings from institutional lenders and/or the public or private offerings of
debt or equity securities.  The Company currently has no agreements,
commitments or understandings with respect to the acquisition of real properties
or other companies in exchange for its equity or debt securities.
 
 Funds of
the Company in excess of that needed for working capital, purchasing real estate
and arranging financing for real estate acquisitions are invested by the Company
in corporate equity securities, corporate notes, certificates of deposit,
government securities and other financial instruments.  Changes in
U.S. interest rates affect the interest earned on the Company’s cash and cash
equivalent balances and other interest bearing investments.  Given the
level of cash and other interest bearing investments held by the Company,
changes in U.S. interest rates could impact the Company’s earnings.
 
 In
strategies designed to hedge overall market risk, the Company may sell common
stock short and participate in put and/or call options.  These
instruments do not qualify for hedge accounting and therefore changes in such
derivatives fair value are recognized in earnings.  These derivatives
are recorded as a component of accounts payable and accrued liabilities in the
Condensed Consolidated Balance Sheets.
 
 The
Company manufactures its products in the United States and Mexico and sells its
products in those markets as well as in Europe, South America and
Asia.  As a result, the Company’s operating results could be affected
by factors such as changes in foreign currency exchange rates or weak economic
conditions in the foreign markets in which the Company distributes its
products.  Most of the Company’s sales are denominated in U.S.
dollars.  Net sales of the Company’s engineered products segment
denominated in Euros were 9.3% and 8.7% for the three months ended March 31,
2008 and 2007, respectively.  As such, a portion of the Company’s
receivables are exposed to fluctuations with the U.S.
dollar.  However, the Company does not believe this risk to be
material to its overall financial position.  Even with the recent
strength of the Euro in relation to the U.S. dollar, the Company’s historical
results have not been significantly impacted by foreign exchange gains or
losses.  Accordingly, the Company has not entered into forward
exchange contracts to hedge this exposure.  If such exposure increased
in the future, the Company may reexamine this practice to minimize the
associated risks.
 
 The
Company has undertaken the completion of environmental studies and/or remedial
action at Metex’ two New Jersey facilities and has recorded a liability for the
estimated investigation, remediation and administrative costs associated
therewith.  See Note 13 of Notes to Condensed Consolidated Financial
Statements for further discussion of this matter.
   16
 Index
 
 The
Company is subject to various other litigation, legal and regulatory matters
that arise in the ordinary course of business activities.  When
management believes it is probable that liabilities have been incurred and such
amounts are reasonably estimable, the Company provides for amounts that include
judgments and penalties that may be assessed.  These liabilities are
usually included in accounts payable and accrued liabilities or other long-term
liabilities in the Condensed Consolidated Financial Statements, depending on the
anticipated payment date.  None of these matters are expected to
result in a material adverse effect on the Company’s consolidated financial
position or results of operations.
 
 Critical
Accounting Policies and Management Estimates
 
 The
preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to use judgment in making estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities.  Certain of the
estimates and assumptions required to be made relate to matters that are
inherently uncertain as they pertain to future events.  While
management believes that the estimates and assumptions used were the most
appropriate, actual results could differ significantly from those estimates
under different assumptions and conditions.
 
 Refer to
the Company’s 2007 Annual Report on Form 10-K for a discussion of the Company’s
critical accounting policies, which include revenue recognition and accounts
receivable, marketable securities, inventories, real estate, discontinued
operations, long-lived assets and pension plans.  There were no
material changes to the Company’s critical accounting policies during the three
months ended March 31, 2008.
 
 
 ITEM3.          QUANTITATIVE
AND QUALITATIVE DISCLOSURE OF MARKET RISK
 
 Not
applicable, as the Company is a smaller reporting Company.
 
 
 ITEM4T.        CONTROLS
AND PROCEDURES
 
 As of the
end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of the Company’s management,
including the Company’s Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of the Company’s disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15(e) and
15d-15(e).  Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company’s disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Company’s periodic reports.
 
 The
Company’s internal control over financial reporting is a process designed by, or
under the supervision of, the Chief Executive Officer and Chief Financial
Officer and effected by the Company’s Board of Directors, management and other
personnel, to provide reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of the Company’s financial
statements for external purposes in accordance with generally accepted
accounting principles (United States).  Internal control over
financial reporting includes policies and procedures that pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the Company’s assets, provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
the Company’s financial statements in accordance with generally accepted
accounting principles (United States), and that the Company’s receipts and
expenditures are being made only in accordance with the authorization of the
Company’s Board of Directors and management, and provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the
Company’s financial statements.
 
 There
have been no significant changes in the Company’s internal controls over
financial reporting or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.
   17
 Index
 
 
 PARTII – OTHER INFORMATION
 
 ITEM1A.       RISK
FACTORS
 
 The
significant factors known to the Company that could materially effect the
Company’s business, financial position or results of operations are set forth
under Item 1A of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007, which are incorporated herein by reference.
 
 Forward-Looking
Statements
 
 Certain
statements in this Report on Form 10-Q and other statements made by the Company
or its representatives that are not strictly historical facts are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that should be considered as subject to the many
risks and uncertainties that exist in the Company's operations and business
environment.  The forward-looking statements are based on current
expectations and involve a number of known and unknown risks and uncertainties
that could cause the actual results, performance and/or achievements of the
Company to differ materially from any future results, performance or
achievements, expressed or implied, by the forward-looking
statements.  Readers are cautioned not to place undue reliance on
these forward-looking statements, and that in light of the significant
uncertainties inherent in forward-looking statements, the inclusion of such
statements should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be
achieved.  The Company also assumes no obligation to publicly update
or revise its forward-looking statements or to advise of changes in the
assumptions and factors on which they are based.  See the Company’s
2007 Annual Report on Form 10-K for a discussion of risk factors that could
impact the Company’s future financial performance and/or cause actual results to
differ significantly from those expressed or implied by such
statements.
 
 
 ITEM2           UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 The
following table details the Company’s repurchases of common stock during the
three months ended March 31, 2008:
  Issuer
Purchases of Equity Securities
 (In
thousands, except per share data)
 
 Period
              
              Total
      Number of Shares Purchased
              
              
              Average
      Price Paid per Share
              
              
              Total
      Number of Shares Purchased as Part of Publicly Announced Plans or
      Programs
              
              
              Approximate
      Dollar Value that May Yet Be Purchased Under the Plans or
      ProgramsJanuary
      1, 2008 — January 31, 2008
              
              
              6
              
              
              $
              23.57
              
              
              
              6
              
              
              $
              3,297February
      1, 2008 — February 29, 2008
              
              
              1
              
              
              $
              23.65
              
              
              
              1
              
              
              $
              3,259March
      1, 2008 — March 31, 2008
              
              
              9
              
              
              $
              23.24
              
              
              
              9
              
              
              $
              3,054Total
              
              
              16
              
              
              $
              23.40
              
              
              
              16
 
 As
previously announced, the Board of Directors have approved repurchase plans for
the Company’s common stock, which may be made from time to time in the open
market at prevailing market prices or in privately negotiated
transactions.  At March 31, 2008, $3,054 remains to be purchased under
such plans.  These authorizations are ongoing and do not have an
expiration date.
   18
 Index
 
 
 ITEM6.           EXHIBITS
 
 31.1
              Certification
      of the Chief Executive Officer pursuant to Rule 13a-15(e) and
      15d-15(e).
 31.2
              Certification
      of the Chief Financial Officer pursuant  to Rule 13a-15(e) and
      15d-15(e).
 32.1
              Certification
      of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.
 32.2
              Certification
      of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.
 
  
 
 SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 UNITED
      CAPITAL CORP.Date:  May
      5, 2008By:
                /s/
      Anthony J. MiceliAnthony
      J. MiceliVice
      President, Chief Financial Officerand
      Secretary of the Company
 
 19