-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SygNC56SmLNCdO8S7gzKvzU4XSlHkDqjvgkzzjLHRG+n2t+eRJU0JFcnsVp/EBrj X6pscsRCOj6t07fRCmmScQ== 0000892569-99-003106.txt : 19991117 0000892569-99-003106.hdr.sgml : 19991117 ACCESSION NUMBER: 0000892569-99-003106 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19991115 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRESLEY COMPANIES/NEW CENTRAL INDEX KEY: 0001095996 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 330864902 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-88569 FILM NUMBER: 99756435 BUSINESS ADDRESS: STREET 1: 19 CORPORATE PLAZA CITY: NEWPORT BEACH STATE: CA ZIP: 92660 BUSINESS PHONE: 9496406400 MAIL ADDRESS: STREET 1: 19 CORPORATE PLAZA CITY: NEWPORT BEACH STATE: CA ZIP: 92660 FORMER COMPANY: FORMER CONFORMED NAME: PRESLEY MERGER SUB INC DATE OF NAME CHANGE: 19990929 8-K 1 FORM 8-K DATED NOVEMBER 15, 1999 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ---------------------------------- November 15, 1999 (November 5, 1999) ------------------------------------------------ Date of Report (Date of earliest event reported) THE PRESLEY COMPANIES* ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 0-18001 33-0864902 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification Number) 19 Corporate Plaza, Newport Beach, California 92660 --------------------------------------------------- (Address of principal executive offices) (zip code) (949) 640-6400 -------------------------------------------------- Registrant's telephone number, including area code - ---------------- * The Presley Companies, a Delaware corporation ("Old Presley"), on November 11, 1999 merged with and into its wholly owned subsidiary, Presley Merger Sub, Inc., a Delaware corporation ("New Presley") with New Presley being the surviving corporation and changing its name to "The Presley Companies." On that date, New Presley became the successor registrant to Old Presley. This current report on Form 8-K is filed by New Presley, pursuant to a letter from the office of the Chief Counsel, Division of Corporation Finance, of the Securities and Exchange Commission (the "SEC") dated October 8, 1999 (the "SEC Letter") in response to an interpretative request of Old Presley. In accordance with the SEC Letter, this Form 8-K is filed, in lieu of filing a registration statement on Form 8-A, to evidence that status of New Presley as successor registrant to Old Presley under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), upon the consummation of the merger (the "Merger"), which occurred on November 11, 1999, and to register the common stock, par value $.01 per share of New Presley ("New Presley Common Stock") as the successor equity security of the Series A Common Stock, par value $.01 per share of Old Presley, under Section 12(b). 2 Item 1. Not Applicable. Item 2. Acquisition or Disposition of Assets. On November 5, 1999, The Presley Companies ("Presley") through its subsidiaries and limited liability companies Presley Homes, WLPC, Inc. and PH Institutional Ventures purchased substantially all of the real estate and related assets of William Lyon Homes, pursuant to the Purchase Agreement and Escrow Instructions, dated as of October 7, 1999, with William Lyon Homes, William Lyon and William H. Lyon. The real estate assets purchased from William Lyon Homes consist of 9 properties located in Northern California and 9 properties located in Southern California. The properties are all entitled. Generally, "entitled" land has a development agreement and/or vesting tentative map, or a final recorded plat or map from the appropriate county or city government. Development agreements and vesting tentative maps generally provide for the right to develop the land in accordance with the provisions of the development agreement or vesting tentative map unless an issue arises concerning health, safety or welfare. The non real estate assets consist of machinery, land deposits, receivables, cash, equipment, computers, furniture, work force in place, corporate names, customer base, information base, housing plans, prepaid office rents and club memberships. The total purchase price consisted of approximately $43 million in cash and the assumption of substantially all of the liabilities of William Lyon Homes. The purchase price was determined based on the value as of December 31, 1998 of the real property and related assets acquired. The parties intended that these assets, together with all income, receivables, escrow and other proceeds, purchase deposits, cash and other assets earned or received from any sale of any of these assets, including any assets acquired with sales proceeds, in the ordinary course of business since January 1, 1999 and through November 5, 1999 would inure to the buyers. These amounts are to be net of any amounts that have been used to pay or satisfy land acquisition or development costs, capital expenditures, principal or interest on indebtedness, accounts payable, accrued liabilities, employee wages and benefits, taxes, and other liabilities and operating expenses existing on December 31, 1998 and incurred in the ordinary course of business. The cash portion of the purchase price is subject to adjustment. Ernst & Young LLP will complete a review and deliver to the parties its final determination of any adjustment to the purchase price on or before December 4, 1999. Presley funded the asset purchase through borrowings from its existing working capital facility and the assumption of existing indebtedness on certain real estate projects that were acquired. The purchase of the assets was negotiated by a Special Committee of independent directors of Presley. William Lyon Homes is owned by William Lyon and William H. Lyon. William Lyon is the Chairman of the Board of The Presley Companies. William Lyon and his affiliate own approximately 49.9% of the outstanding common stock of The Presley Companies. Items 3 and 4. Not Applicable. Item 5. Other Events. On November 5, 1999, The Presley Companies issued a press release, a copy of which is attached hereto as Exhibit 99.1 announcing the closing of the asset purchase and the approval by a majority of the outstanding Series A Common Stock and Series B Common Stock, voting together as a class, of the Certificate of Ownership and Merger, pursuant to which The Presley Companies merged with and into its wholly-owned subsidiary Presley Merger Sub, Inc. On November 11, 1999, The Presley Companies issued a Press Release, a copy of which is attached hereto as Exhibit 99.2 announcing the consummation of the merger effective as of 12:01 a.m. on November 11, 1999 and the release of earnings for the quarter ended September 30, 1999 of $10,720,000 or $1.03 per share compared to $3,299,000 or $0.32 per share for the quarter ended September 30, 1998. On November 11, 1999, The Presley Companies issued a Press Release, a copy of which is attached hereto as Exhibit 99.3 announcing the consummation of the merger and the conversion of the shares of Series A Common Stock and Series B Common Stock on a 1 for 5 exchange ratio into the new shares of Common Stock of the surviving corporation. Effective as of the effective time of the Merger on November 11, 1999, New Presley Common Stock is deemed registered pursuant to Section 12(b) of the 1934 Act. - 2 - 3 Item 6. Not Applicable. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. Pro forma financial information required by Article 11 of Regulation S-X and the financial statements of William Lyon Homes will be filed by amendment not later than 60 days after the date of the initial report. Exhibit 10.2 -- Purchase Agreement and Escrow Instructions, dated as of October 7, 1999, by and among The Presley Companies, Presley Homes, William Lyon Homes, William Lyon and William H. Lyon (previously filed as Exhibit 10.2 to the Registration Statement on Form S-4 filed on October 7, 1999 and incorporated herein by this reference). Exhibit 99.1 -- Press Release dated November 5, 1999. Exhibit 99.2 -- Press Release dated November 11, 1999. Exhibit 99.3 -- Press Release dated November 11, 1999. Item 8. Not Applicable. SIGNATURE Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: November 15, 1999 THE PRESLEY COMPANIES, a Delaware corporation By: /s/ David M. Siegel ------------------------------ Name: David M. Siegel Title: Senior Vice President, Chief Financial Officer and Treasurer - 3 - 4 EXHIBIT INDEX
Exhibit Description - ------- ----------- 10.2 Purchase Agreement and Escrow Instructions, dated as of October 7, 1999, by and among The Presley Companies, Presley Homes, William Lyon Homes, William Lyon and William H. Lyon (previously filed as Exhibit 10.2 to the Registration Statement on Form S-4 filed on October 7, 1999 and incorporated herein by this reference). 99.1 Press Release Dated November 5, 1999. 99.2 Press Release Dated November 11, 1999. 99.3 Press Release Dated November 11, 1999.
- 4 - EX-99.1 2 PRESS RELEASE DATED NOVEMBER 5, 1999 1 EXHIBIT 99.1 THE PRESLEY COMPANIES CLOSES PURCHASE OF SUBSTANTIALLY ALL OF THE ASSETS OF WILLIAM LYON HOMES, INC. A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE PRESLEY COMPANIES VOTES IN FAVOR OF THE MERGER NEWPORT BEACH, CA -- November 5, 1999 -- The Presley Companies ("Presley") (NYSE: PDC) announced today that it has closed the asset purchase pursuant to the Purchase Agreement, dated as of October 7, 1999, with William Lyon Homes, Inc. ("William Lyon Homes"), William Lyon and his son, William H. Lyon (collectively, the "Lyons"). Pursuant to the Purchase Agreement, Presley through its subsidiaries and limited liability companies purchased substantially all of the assets of William Lyon Homes for a cash purchase price of approximately $43 million and the assumption of substantially all of the liabilities of William Lyon Homes. At a Special Meeting of stockholders held today, Presley's stockholders voted to approve the merger of Presley with and into a wholly-owned subsidiary. In the merger, the subsidiary will be the surviving corporation and will be renamed "The Presley Companies". Subject to the satisfaction of certain conditions, the merger is expected to be effective on November 11, 1999. At the effective time of the merger, each outstanding share of Series A Common Stock and Series B Common Stock of Presley will be converted into 0.2 share of the surviving corporation. Shares of the surviving corporation will be listed on the New York Stock Exchange under the symbol "PDC". Shares issued in the merger will be subject to certain transfer restrictions. These restrictions are similar to those adopted by several other public companies and are intended to help preserve Presley's substantial net operating loss carryforwards for use in offsetting future taxable income. In general, these restrictions will prohibit, without the prior approval of the board of directors, the direct or indirect disposition or acquisition of any stock of the surviving corporation by or to any holder who owns or would so own upon the acquisition (either directly or through the tax attribution rules) 5% or more of the surviving corporation's stock. This press release (as well as oral statements or other written statements made or to be made by Presley) may be deemed to contain certain forward-looking statements with respect to the financial condition of Presley, which involve risks and uncertainties including but not limited to the matters disclosed in Presley's periodic and other reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. 2 William Lyon Homes is a California-based homebuilder and real estate developer with 15 sales locations in Northern and Southern California. William Lyon is the current Chairman of the Board of Presley. The Presley Companies is one of the oldest and largest homebuilders in the Southwest with development communities in California, Arizona, New Mexico and Nevada. Founded in 1956, The Presley Companies has built and sold more than 48,000 homes and currently has 38 sales locations. Presley's corporate headquarters are located in Newport Beach, California. - 2 - EX-99.2 3 PRESS RELEASE DATED NOVEMBER 11, 1999 1 EXHIBIT 99.2 Contact: Investor Relations Media Relations W. Douglass Harris Steven D. Stern The Presley Companies Pondel/Wilkinson Group (949) 640-6400 (310) 207-9300 THE PRESLEY COMPANIES REPORTS COMPLETION OF MERGER WITH AND INTO WHOLLY-OWNED SUBSIDIARY THE PRESLEY COMPANIES REPORTS THIRD QUARTER NET INCOME OF $10,720,000, OR $1.03 PER SHARE NEWPORT BEACH, CA---November 11, 1999---The Presley Companies ("Presley" or the "Company") (NYSE: PDC) today announced that effective at 12:01 a.m. (New York Time) on Thursday, November 11, 1999, the merger of its former parent, The Presley Companies ("Old Presley") with and into Presley Merger Sub, Inc. was completed. In the merger, Presley Merger Sub, Inc. was the surviving corporation and was renamed "The Presley Companies" at the effective time. Also, at the effective time, each share of Old Presley's Series A Common Stock and Series B Common Stock was converted into the right to receive 0.2 share of the Common Stock, par value $.01 per share, of the surviving corporation, The Presley Companies (formerly named "Presley Merger Sub, Inc."). Beginning on November 11, 1999, the Common Stock of the surviving corporation commenced trading on the New York Stock Exchange under the symbol "PDC". Shares issued in the merger are subject to certain transfer restrictions. These restrictions are similar to those adopted by several other public companies and are intended to help preserve Presley's substantial net operating loss carryforwards for use in offsetting future taxable income. In general, these restrictions will prohibit, without the prior approval of the Board of Directors, the direct or indirect disposition or acquisition of any stock of the surviving corporation by or to any holder who owns or would so own upon the acquisition (either directly or through the tax attribution rules) 5% or more of the surviving corporation's stock. The transfer restrictions are contained in Article VIII of the Certificate of Incorporation and all stock certificates issued by Presley will contain a legend that summarizes the transfer restrictions. The merger was completed after the November 5, 1999 acquisition of substantially all of the assets and the assumption of substantially all of the liabilities of William Lyon Homes, Inc. The merger will not otherwise result in any change in the consolidated financial condition, business or assets of the Company. 2 Presley will shortly be mailing to all of its stockholders instructions regarding the surrender of their stock certificates representing shares of Old Presley by means of a letter of transmittal. Until those stock certificates are surrendered in accordance with the prescribed procedure, Presley will not issue replacement certificates representing the shares of Presley into which a stockholder's shares of Old Presley have been converted in the merger. Further, no transfer will be effected on the transfer books of Presley unless and until the stock certificates of Old Presley that previously represented the shares presented for transfer have been surrendered in accordance with the prescribed procedure. In addition, although Presley has no immediate plans for any dividends or distributions on its stock, if it declares any dividends or distributions in the future, a stockholder will not receive any amount with respect to such stockholder's shares prior to the surrender, in accordance with the prescribed procedure, of the applicable parent corporation stock certificates. Further, no interest will accrue or be payable with respect to any such dividends or distributions retained in respect of those shares. The common stock and earnings per share information included herein reflects adjustments for all periods presented for the retroactive effect of the merger as described above and the conversion of each share of previously outstanding Series A Common Stock and Series B Common Stock into 0.2 shares of Common Stock of the surviving corporation. Presley today reported net income for the third quarter ended September 30, 1999 of $10,720,000, or $1.03 per share, on sales of $88,363,000, as compared with net income of $3,299,000, or $0.32 per share, on sales of $89,509,000 for the comparable period a year ago. Sales of homes were $87,630,000 for the quarter ended September 30, 1999, down 2 percent from $89,319,000 for the comparable period a year ago. Sales of lots and land were $733,000 for the quarter ended September 30, 1999, as compared with $190,000 for the quarter ended September 30, 1998. For the nine months ended September 30, 1999, the Company reported net income of $25,593,000, or $2.45 per share, on sales of $266,375,000, as compared with a net income of $1,214,000, or $0.12 per share, on sales of $236,517,000 for the comparable period a year ago. Sales of homes were $261,686,000 for the nine months ended September 30, 1999, up 16 percent from $225,592,000 for the comparable period a year ago. Sales of lots and land were $4,689,000 for the nine months ended September 30, 1999, as compared with $10,925,000 for the nine months ended September 30, 1998. The results for the nine months ended September 30, 1999 included an extraordinary gain from the retirement of debt of $1,789,000, or $0.17 per share, after applicable income taxes, as compared with $522,000, or $0.05 per share, after applicable income taxes, for the comparable period a year ago. 2 3 Homes sold, closed and in backlog for the Company and its unconsolidated joint ventures as of and for the periods presented are as follows:
As of and for As of and for the Three Months the Nine Months Ended September 30, Ended September 30, -------------------------------------------- 1999 1998 1999 1998 ------ ------ -------- -------- Number of homes sold Company 337 507 1,275 1,587 Unconsolidated joint ventures 110 42 431 123 ------ ------ -------- -------- Combined total 447 549 1,706 1,710 ====== ====== ======== ======== Number of homes closed Company 441 474 1,280 1,206 Unconsolidated joint ventures 144 20 356 22 ------ ------ -------- -------- Combined total 585 494 1,636 1,228 ====== ====== ======== ======== Backlog of homes sold but not closed at end of period Company 484 777 484 777 Unconsolidated joint ventures 203 108 203 108 ------ ------ -------- -------- Combined total 687 885 687 885 ====== ====== ======== ======== Dollar amount of backlog of homes sold but not closed at end of period (in millions): Company $ 97.7 $168.2 $ 97.7 $ 168.2 Unconsolidated joint ventures 81.8 54.6 81.8 54.6 ------ ------ -------- -------- Combined total $179.5 $222.8 $ 179.5 $ 222.8 ====== ====== ======== ========
Net new home orders for the quarter ended September 30, 1999 decreased 19 percent to 447 units from 549 units a year ago. For the third quarter of 1999, net new home orders decreased 26 percent to 447 units from 605 units in the second quarter of 1999. The number of homes closed in the third quarter of 1999 was up 18 percent to 585 from 494 in the third quarter of 1998. The backlog of homes sold as of September 30, 1999 was 687, down 22 percent from 885 units a year earlier, and down 17 percent from 825 units at June 30, 1999. The dollar amount of backlog of homes sold but not closed as of September 30, 1999 was $179,500,000, as compared with $222,800,000 as of September 30, 1998 and $215,700,000 as of June 30, 1999. The decrease in net new home orders for the three months ended September 30, 1999 as compared to the three months ended September 30, 1998 is primarily the result of a decrease in the number of sales locations to 38 at September 30, 1999 from 47 at September 30, 1998. The increase in number of homes closed for the three and nine month periods of 1999 as compared with 1998 is primarily the result of improved market conditions in substantially all of the Company's markets. 3 4 As previously announced, on November 5, 1999, the Company completed the acquisition of substantially all of the assets of William Lyon Homes, Inc. If the acquisition had been completed as of September 30, 1999, pro forma backlog information as of September 30, 1999 would have been as follows: Backlog of homes sold but not closed at September 30, 1999 Presley combined total 687 William Lyon Homes, Inc. 354 -------- Combined pro forma total 1,041 ======== Dollar amount of backlog of homes sold but not closed at September 30, 1999 (in millions): Presley combined total $ 179.5 William Lyon Homes, Inc. 91.7 -------- $ 271.2 ========
Wade Cable, President and Chief Executive Officer, stated "As we look to the exciting future combining the Presley and William Lyon Homes operations, I am gratified to report the remarkable improvement in Presley's operations in the last eighteen months. Presley has now reported profits for six consecutive quarters; debt levels have been reduced from approximately $225 million at September 30, 1998 to approximately $155 million at September 30, 1999 and stockholders' equity has improved from a deficit of approximately $4 million at September 30, 1998 to a positive balance of approximately $36 million at September 30, 1999." The Company also reported that for purposes of the Indenture governing its Senior Notes, EBITDA (earnings before interest, taxes, depreciation and amortization) was $33,922,000 for the third quarter of 1999 as compared to $32,963,000 for the third quarter of 1998. EBITDA coverage of interest incurred for the three months ended September 30, 1999 was 5.75, as compared to 4.31 for the three months ended September 30, 1998. EBITDA after development expenditures amounted to $37,563,000 for the third quarter of 1999 as compared to $6,557,000 for the third quarter of 1998. The Presley Companies is one of California's oldest and largest homebuilders in the Southwest with development communities in California, Arizona, New Mexico and Nevada. Founded in 1956, The Presley Companies has built and sold more than 48,000 homes and as of September 30, 1999 has 38 sales locations. William Lyon Homes, Inc. has 15 sales locations as of September 30, 1999. Presley's corporate headquarters are located in Newport Beach, California. Certain statements contained in this release that are not historical information contain forward-looking statements. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among others, changes in general economic conditions and in the markets in which the Company competes, changes in interest rates and competition, as well as the other factors discussed in the Company's reports filed with the Securities and Exchange Commission. 4 5 ' THE PRESLEY COMPANIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT PER COMMON SHARE AMOUNTS) (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------ 1999 1998 1999 1998 -------- --------- --------- --------- Sales Homes $ 87,630 $ 89,319 $ 261,686 $ 225,592 Lots, land and other 733 190 4,689 10,925 -------- --------- --------- --------- 88,363 89,509 266,375 236,517 -------- --------- --------- --------- Operating costs Cost of sales - homes (72,071) (75,197) (216,188) (194,194) Cost of sales - lots, land and other (1,072) (1,227) (4,813) (11,378) Sales and marketing (4,198) (5,385) (12,658) (15,180) General and administrative (4,944) (3,188) (12,817) (10,144) -------- --------- --------- --------- (82,285) (84,997) (246,476) (230,896) -------- --------- --------- --------- Equity in income of unconsolidated joint ventures 7,414 501 12,278 346 -------- --------- --------- --------- Operating income 13,492 5,013 32,177 5,967 Interest expense, net of amounts capitalized (883) (2,180) (4,554) (7,073) Financial advisory expenses (917) -- (2,197) -- Other income (expense), net 825 669 2,366 1,638 -------- --------- --------- --------- Income before income taxes and extraordinary item 12,517 3,502 27,792 532 (Provision) credit for income taxes (1,797) (203) (3,988) 160 -------- --------- --------- --------- Income before extraordinary item 10,720 3,299 23,804 692 Extraordinary item - gain from retirement of debt, net of applicable income taxes -- -- 1,789 522 -------- --------- --------- --------- Net income $ 10,720 $ 3,299 $ 25,593 $ 1,214 ======== ========= ========= ========= Basic and diluted earnings per common share (1) Before extraordinary item $ 1.03 $ 0.32 $ 2.28 $ 0.07 Extraordinary item -- -- 0.17 0.05 -------- --------- --------- --------- After extraordinary item $ 1.03 $ 0.32 $ 2.45 $ 0.12 ======== ========= ========= =========
(1) Reflects adjustment for all periods presented for the retroactive effect of the merger with a wholly-owned subsidiary and the conversion of each share of previously outstanding Series A and Series B Common Stock into 0.2 common shares of the surviving company. 5 6 THE PRESLEY COMPANIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT NUMBER OF SHARES AND PAR VALUE PER SHARE)
September 30, December 31, 1999 1998 ------------- ------------ (unaudited) ASSETS Cash and cash equivalents $ 7,223 $ 23,955 Receivables 17,087 8,613 Real estate inventories 164,777 174,502 Investments in and advances to unconsolidated joint ventures 36,632 30,462 Property and equipment, less accumulated depreciation of $4,023 and $3,156 at September 30, 1999 and December 31, 1998, respectively 2,259 2,912 Deferred loan costs 2,204 3,381 Other assets 5,325 2,579 --------- --------- $ 235,507 $ 246,404 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 20,692 $ 17,364 Accrued expenses 23,839 27,823 Notes payable 35,271 55,393 12-1/2% Senior Notes due 2001 120,000 140,000 --------- --------- 199,802 240,580 --------- --------- Stockholders' equity (1) Common stock, par value $.01 per share; 30,000,000 shares authorized; 10,439,135 shares issued and outstanding at September 30, 1999 and December 31, 1998, respectively 104 104 Additional paid-in capital 120,955 116,667 Accumulated deficit from January 1, 1994 (85,354) (110,947) --------- --------- 35,705 5,824 --------- --------- $ 235,507 $ 246,404 ========= =========
(1) Reflects adjustment for all periods presented for the retroactive effect of the merger with a wholly-owned subsidiary and the conversion of each share of previously outstanding Series A and Series B Common Stock into 0.2 common shares of the surviving company. 6 7 THE PRESLEY COMPANIES SUPPLEMENTAL FINANCIAL INFORMATION (dollars in thousands) (unaudited) The following table sets forth certain selected unaudited financial data regarding the Company's cash flow for the purposes of the Indenture governing the Company's Senior Notes:
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------ 1999 1998 1999 1998 -------- -------- --------- -------- EBIT $ 11,297 $ 11,472 $ 40,468 $ 26,121 Amortization of Non-Cash Costs to Cost of Sales, excluding interest amortized to cost of sales 22,294 21,202 67,826 65,698 Depreciation and amortization 331 289 879 811 -------- -------- --------- -------- EBITDA $ 33,922 $ 32,963 $ 109,172 $ 92,630 ======== ======== ========= ======== Development expenditures: Lot and amenity development $ (8,974) $(14,383) $ (28,293) $(35,186) Land acquisitions 897 (8,837) (38,219) (23,181) Net change in housing inventory 5,936 (3,161) 3,277 (30,300) Investment in unconsolidated joint ventures 5,783 (25) 6,196 15,571 -------- -------- --------- -------- Total development expenditures 3,642 (26,406) (57,039) (73,096) -------- -------- --------- -------- EBITDA after development expenditures $ 37,563 $ 6,557 $ 52,133 $ 19,534 ======== ======== ========= ======== Interest expensed and amortized to cost of sales: Interest incurred $ 5,899 $ 7,652 $ 17,645 $ 24,308 Less capitalized interest (5,016) (5,472) (13,091) (17,235) -------- -------- --------- -------- Interest expensed 883 2,180 4,554 7,073 Amortization of capitalized interest included in cost of sales 5,384 6,392 18,536 18,196 -------- -------- --------- -------- Total interest expensed and amortized to cost of sales $ 6,267 $ 8,572 $ 23,090 $ 25,269 ======== ======== ========= ======== Interest incurred $ 5,899 $ 7,652 $ 17,645 $ 24,308 ======== ======== ========= ======== EBITDA/Interest incurred 5.75x 4.31x 6.19x 3.81x ======== ======== ========= ========
7 EX-99.3 4 PRESS RELEASE DATED NOVEMBER 11, 1999 1 EXHIBIT 99.3 Contact: Investor Relations Media Relations W. Douglass Harris Steven D. Stern The Presley Companies Pondel/Wilkinson Group (949) 640-6400 (310) 207-9300 THE PRESLEY COMPANIES COMPLETES MERGER RESULTING IN 1 FOR 5 EXCHANGE OF SHARES NEWPORT BEACH, CA---November 11, 1999---The Presley Companies (formerly known as Presley Merger Sub, Inc.) (NYSE: PDC) announced today that it has completed a merger with its parent corporation. In the merger, Presley Merger Sub, Inc. was the surviving corporation and was renamed "The Presley Companies" which had been the name of its parent prior to the merger. As a result, the subsidiary is the successor entity and assumed all of the assets, liabilities and business of its parent. The merger had a 1 for 5 exchange ratio and as a result of the merger, each 5 shares of Series A Common Stock and Series B Common Stock of the parent was converted into 1 share of the surviving corporation. As a result of the exchange ratio in the merger, the 52,195,678 shares of Series A Common Stock and the Series B Common Stock of The Presley Companies that were outstanding on the close of business on November 10, 1999 were converted into 10,439,135 shares of Common Stock of the surviving corporation at the effective time, 12:01 a.m. on November 11, 1999. Shares of the new common stock are listed on the New York Stock Exchange under the symbol "PDC". This press release (as well as oral statements or other written statements made or to be made by Presley) may be deemed to contain certain forward-looking statements with respect to the financial condition of Presley, which involve risks and uncertainties including but not limited to the matters disclosed in Presley=s periodic and other reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. The Presley Companies is one of the oldest and largest homebuilders in the Southwest with development communities in California, Arizona, New Mexico and Nevada. Founded in 1956, The Presley Companies has built and sold more than 48,000 homes and currently has 38 sales locations. Presley's corporate headquarters are located in Newport Beach, California. -----END PRIVACY-ENHANCED MESSAGE-----