-----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, BA31oVL1twm4cZZWH/Y2Y1ScUPrFY3ANG1ZKFPk8eR49X15d0h4/CIzpK5rftI8P K7YXYqEpMicINPenVIFJ1w== 0000898430-97-002109.txt : 19970515 0000898430-97-002109.hdr.sgml : 19970515 ACCESSION NUMBER: 0000898430-97-002109 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALPROP CORP CENTRAL INDEX KEY: 0000016496 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 954044835 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06844 FILM NUMBER: 97605410 BUSINESS ADDRESS: STREET 1: 13160 MINDANAO WAY STREET 2: STE 180 CITY: MARINA DEL REY STATE: CA ZIP: 90292 BUSINESS PHONE: 3103064314 MAIL ADDRESS: STREET 1: 13160 MINDANAO WAY STREET 2: STE 180 CITY: MARINA DEL REY STATE: CA ZIP: 90292 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 (Mark One) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1997 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 1-6844 ------------ CALPROP CORPORATION (Exact name of registrant as specified in its charter) California 95-4044835 - ------------------------------ ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13160 Mindanao Way, Marina Del Rey, California 90292 - -------------------------------------------------- ------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (310) 306-4314 ------------------ Not Applicable (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 --- --- Number of shares outstanding of each of Registrant's classes of common stock, as of April 1, 1997:
Number of Shares Title of Each Class Outstanding - ------------------------------ ---------------- Common Stock, no par value per share 9,224,585
CALPROP CORPORATION ------------------- Part I ------ ITEM I - FINANCIAL INFORMATION ------------------------------ Set forth is the unaudited quarterly report for the three months ended March 31, 1997 and 1996, for Calprop Corporation. The information set forth reflects all adjustments that were, in the opinion of management, necessary for a fair presentation. 2 CALPROP CORPORATION ------------------- CONSOLIDATED BALANCE SHEETS --------------------------- ASSETS ------ (Unaudited)
March 31, December 31, 1997 1996 -------------- ------------ Real estate development (note 4) 22,162,102 21,908,164 Investment in land 4,037,187 4,037,187 ---------- ---------- Total investment in real estate 26,199,289 25,945,351 Other assets: Cash and cash equivalents 949,604 1,224,780 Prepaid expenses 19,293 29,587 Deferred and other assets 351,701 333,660 ---------- ---------- Total other assets 1,320,598 1,588,027 ---------- ---------- Total assets 27,519,887 27,533,378 ========== ==========
The accompanying notes are an integral part of these financial statements. 3 CALPROP CORPORATION -------------------- CONSOLIDATED BALANCE SHEETS --------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ (Unaudited)
March 31, December 31, 1997 1996 ------------ ----------- Trust deeds and notes payable 4,836,934 5,011,866 Related party notes 12,190,310 12,528,550 ------------ ----------- Total trust deeds and notes payable 17,027,244 17,540,416 Community facilities district special tax bonds 2,336,544 2,336,544 Accounts payable and accrued liabilities 3,621,000 3,025,783 Warranty reserves 250,611 261,401 ------------ ----------- Total liabilities 23,235,399 23,164,144 Minority interest (note 4) 417,980 10,000 Stockholders' equity: Common stock, no par value Authorized - 20,000,000 shares Issued and outstanding - 9,224,585 shares at March 31, 1997 and December 31, 1996 9,224,585 9,224,585 Additional paid-in capital 25,911,579 25,911,579 Deferred compensation (68,655) (68,655) Accumulated deficit (31,201,001) (30,708,275) ------------ ----------- Total stockholders' equity 3,866,508 4,359,234 ------------ ----------- Total liabilities and stockholders' equity 27,519,887 27,533,378 ============ ===========
The accompanying notes are an integral part of these financial statements. 4 CALPROP CORPORATION ------------------- CONSOLIDATED STATEMENTS OF OPERATIONS -------------------------------------- (Unaudited)
Three Months Ended March 31, --------------------------- 1997 1996 ----------- ----------- Development operations: Real estate sales 5,144,495 1,844,278 Cost of real estate sales 5,143,288 1,903,789 ----------- ----------- Income (loss) from development operations 1,207 (59,511) Other income 7,386 9,896 ----------- ----------- Other expenses: General and administrative expenses 338,543 644,916 Interest Expense 87,176 -- Investment property holding costs 75,600 75,600 ----------- ----------- Total other expenses 501,319 720,516 ----------- ----------- Net loss $ (492,726) $ (770,131) ----------- ----------- Net loss per share (note 3) $ (0.05) $ (0.18) =========== ===========
The accompanying notes are an integral part of these financial statements. 5 CALPROP CORPORATION ------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Unaudited)
THREE MONTHS ENDED MARCH 31, ----------------------- 1997 1996 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (492,726) $(770,131) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 7,932 5,701 Provision for warranty reserves 47,389 68,319 Change in assets and liabilities: Increase in deferred and other assets (21,874) (23,588) Increase in investment in land -- (1,873) Decrease in prepaid expenses 10,294 185,040 Increase (decrease) in accounts payable and accrued liabilities 537,038 (364,983) Additions to real estate development in process (5,397,226) (2,681,615) Cost of real estate sales 5,143,288 1,903,789 --------- --------- Net cash used in operating activities (165,885) (1,679,341) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (4,099) (50,694) --------- --------- Net cash used in investing activities (4,099) (50,694) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings under construction loans-related parties 520,818 1,065,000 Payments under construction loans-related parties (739,058) (756,087) Borrowings under construction loans 3,594,816 1,881,169 Payments under construction loans (3,769,748) (1,012,533) Contributions from limited liability company member 287,980 -- --------- --------- Net cash (used in) provided by financing activities (105,192) 1,177,549 --------- --------- Net decrease in cash and cash equivalents (275,176) (552,486) Cash and cash equivalents at beginning of periods 1,224,780 758,324 --------- --------- Cash and cash equivalents at end of periods $ 949,604 $ 205,838 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the periods for: Interest (net of amount capitalized) 87,176 2,094 NON-CASH INVESTING AND FINANCING ACTIVITIES: Exchange of loan from related party for minority interest in limited liability company 120,000 -- Accrual of preferred dividend -- 115,752
The accompanying notes are an integral part of these financial statements 6 CALPROP CORPORATION ------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- PERIODS ENDED MARCH 31, 1997 and 1996 -------------------------------------- (Unaudited) Note 1: Basis of presentation and significant accounting policies --------------------------------------------------------- The unaudited, condensed, financial statements included herein have been prepared by the registrant pursuant to the instructions to Quarterly Report on Form 10-Q required to be filed with the Securities and Exchange Commission and do not include all information and footnote disclosure required by generally accepted accounting principles. The accompanying financial statements have not been examined by independent accountants in accordance with generally accepted auditing standards, but in the opinion of management, such financial statements include all adjustments, consisting only of normal recurring adjustments necessary to summarize fairly the Company's financial position and results of operations. The condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the registrant's latest Annual Report on Form 10-K, particularly with regard to disclosures relating to major accounting policies. The results of operations for the three months ended March 31, 1997, may not be indicative of the operating results for the year ending December 31, 1997. Note 2: Income taxes ------------ As of March 31, 1997, the Company had net operating carryforwards for federal and state tax purposes of approximately $12,600,000 and $16,600,000, respectively. For federal and state tax purposes the net operating loss carryforwards expire from 2007 through 2011, and from 1998 through 2007, respectively. Note 3: Net income per share -------------------- Net income per share has been computed based upon the weighted average number of shares outstanding.
Three Months Ended March 31, -------------------------------- 1997 1996 -------------------------------- Weighted average number of common shares and common stock equivalents adjusted for stock dividends 9,224,585 4,899,030 Net loss (492,726) (770,131) Loss per share (after giving effect of preferred stock dividend in 1996) $ (0.05) $ (0.18) ========= ==========
7 Note 4: Minority Interest ----------------- The Company has consolidated the financial statements of DMM Development, LLC ("DMM") and Montserrat Development Co., LLC ("MDC"). Calprop Corporation is entitled to receive two-thirds of profits of DMM, and the other owner, RGC Courthomes, Inc. ("RGC"), is entitled to receive the remaining one-third of profits. On February 10, 1997, the Company and an officer of the Company formed MDC. As part of the formation, the Company contributed 24 partially developed lots of its Montserrat project, in Murrieta, California, for a basis of $550,000, and the officer exchanged a $120,000 note due from the Company for a basis of $120,000. Additionally, on March 27, 1997, the officer contributed $287,980 in cash to MDC. Ninety-nine percent of profits of MDC is to be received by Calprop Corporation, and the remaining 1 percent of profits is to be received by the officer. As of March 31, 1997, RGC's ownership percentage in DMM was 24 percent, and the officer's ownership percentage in MDC was 41 percent. As a result of the consolidations, the Company has recorded minority interest of $417,980 and $10,000 as of March 31, 1997, and December 31, 1996, respectively. 8 Item 2 Management's Discussion and Analysis of Financial Condition and Results - ------ ----------------------------------------------------------------------- of Operations ------------- The Company's sales revenue during the first quarter of the last two years increased from $1,844,278 in 1996 to $5,144,495 in 1997. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- As of March 31, 1997, the Company had remaining loan commitments from banks and a related party of approximately $4,490,000 and $1,300,000, respectively, which may be drawn down by the Company upon the satisfaction of certain conditions. The Company continues to seek joint venture partners and additional financing to fund its operations. In February of 1997, Imperial Bank made a $1,538,250 and a $2,121,770 construction loan to the Company for the construction of 10 units and 14 units, respectively, in the Montserrat project in Murrieta, California. The notes provide for interest at the prime rate plus 1.5% and a loan service charge of 1.5 points. The loan provides for paydowns with each closing, however, all principal and interest is due no later than February 7, 1998. Per the terms of each loan, a sixth month extension is available should it be required. As of March 31, 1997, the outstanding balances on these loans totaled $168,008. In March of 1997, the Company repaid a $500,000 unsecured loan from the Curci-Turner Company, a related party. As of March 31, 1997, the Company had six projects in various stages of development, with four producing revenues from completed homes: Cypress Cove, Summertree Park, Pleasant Oaks Estates and Montserrat. The remaining two projects, Cierra Del Lago and Antares, formerly Montana Del Lago and Elysian 2, respectively, are in the initial stages of development. As of March 31, 1997, the Company has 73 homes under construction, of which 44 are in escrow and 29 are unsold, and 15 homes completed, of which 5 are in escrow, three are unsold and 7 are models not yet released for sale. Additionally, the Company has an inventory of 241 improved lots and 548 unimproved mapped lots. The Company believes that, based on its agreements with its existing institutional lenders, and the Curci-Turner Company, even with the continued slowdown in certain of its marketplaces, it will have sufficient liquidity to finance its construction projects in 1997 through funds generated from operations and funds available under its existing loan commitments. In addition, the Company believes that if necessary, additional funds could be obtained by using its internally financed real estate development in process as collateral for additional loans. RESULTS OF OPERATIONS - --------------------- Net loss changed from $770,131 in the first quarter of 1996 to $492,726 in the first quarter of 1997. This decrease in loss is primarily due to a decrease in general and administrative expenses as a result of reduced payroll and legal costs. Gross profit/loss increased from a loss of $59,511 for the first quarter of 1996 to a profit of $1,207 for the first quarter of 1997. The increase in gross profit is primarily due to an increase in sales. During the first quarter of the last two years, gross revenues increased from $1,844,278 in 1996 to $5,144,495 in 1997. In the first quarter of 1996 the Company sold 10 homes with an average sales price of $184,428, and in the first quarter of 1997 the Company sold 23 homes with an average sales price of 223,674. The increase in gross revenue between the first quarters of 1996 and 1997, is primarily due to an increase in the availability of homes between the first quarters of 1996 and 1997. 9 Item 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits - 27 Financial data schedule SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CALPROP CORPORATION By: /s/ Mark F. Spiro . --------------------------------------------- Mark F. Spiro Vice President/Secretary/Treasurer (Chief Financial and Accounting Officer) May 12, 1997 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1996 JAN-01-1997 MAR-31-1997 949,604 0 0 0 26,199,289 949,604 0 0 27,519,887 3,871,611 0 0 0 9,224,585 (5,358,077) 27,519,887 5,144,495 5,151,881 5,143,288 5,644,607 501,319 0 87,176 (492,726) 0 (492,726) 0 0 0 (492,726) (0.05) (0.05)
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