10-Q 1 g72699e10-q.txt ORIOLE HOMES CORP SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended: September 30, 2001 Commission File No. 1-6963 ORIOLE HOMES CORP. -------------------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 59-1228702 ----------------------------------------------------- ---------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1690 S. Congress Ave., Suite 200 Delray Beach, Fl. 33445 ----------------------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 274-2000 -------------------------------------------------------------- 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report.
Class Outstanding at October 18, 2001 ----------------------------------------- ------------------------------- Common Stock, Class A, par value $.10 1,863,649 Common Stock, Class B, par value $.10 2,761,875
PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
September 30, December 31, 2001 2000 (Unaudited) (Audited) -------------- -------------- Cash and cash equivalents $ 9,736,104 $ 21,707,756 -------------- -------------- Inventories Land 52,181,365 62,346,437 Homes completed or under construction 36,640,084 34,445,028 Model homes 2,206,289 4,310,488 -------------- -------------- 91,027,738 101,101,953 Less estimated costs of completion included in inventories 13,487,870 16,242,461 -------------- -------------- 77,539,868 84,859,492 -------------- -------------- Property and equipment, at cost Land 80,885 81,379 Buildings 457,216 664,065 Furniture, fixtures and equipment 2,323,884 3,044,175 -------------- -------------- 2,861,985 3,789,619 Less accumulated depreciation 1,909,347 2,127,155 -------------- -------------- 952,638 1,662,464 -------------- -------------- Land held for investment, at cost 1,898,185 1,857,300 Other Prepaid expenses 1,688,176 1,713,099 Investment in unconsolidated joint venture 5,000,000 -- Unamortized financing costs 1,119,999 392,752 Other assets 2,513,725 2,384,853 -------------- -------------- 10,321,900 4,490,704 -------------- -------------- Total assets $ 100,448,695 $ 114,577,716 ============== ==============
The accompanying notes are an integral part of these statements -1- ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, December 31, 2001 2000 (Unaudited) (Audited) -------------- -------------- Liabilities Line of credit $ -- $ 10,000 Mortgage notes payable 42,595,263 20,415,730 Accounts payable and accrued liabilities 6,835,607 10,022,048 Customer deposits 14,112,409 10,190,140 Senior notes -- 34,584,277 -------------- -------------- Total liabilities 63,543,279 75,222,195 Shareholders' equity Class A common stock, $.10 par value Authorized - 10,000,000 shares, issued and outstanding - 1,863,649 in 2001 and 2000, respectively 186,365 186,365 Class B common stock, $.10 par value Authorized - 10,000,000 shares, issued and outstanding - 2,761,875 in 2001 and 2000, respectively 276,188 276,188 Additional paid-in capital 19,267,327 19,267,327 Retained earnings 17,175,536 19,625,641 -------------- -------------- Total shareholders' equity 36,905,416 39,355,521 -------------- -------------- Total liabilities and shareholders' equity $ 100,448,695 $ 114,577,716 ============== ==============
The accompanying notes are an integral part of these statements -2- ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, -------------------------------- -------------------------------- 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Revenues Sales of homes $ 91,939,967 49,422,164 39,898,216 20,889,618 Sales of land 168,000 9,000 168,000 9,000 Other operating revenues -- 68,525 -- 11,746 Gain (loss) on sale of land held for investment and other assets, net 105,469 794,034 9,901 119,294 Interest, rentals and other income 1,763,763 1,788,882 660,844 637,604 ------------ ------------ ------------ ------------ 93,977,199 52,082,605 40,736,961 21,667,262 ------------ ------------ ------------ ------------ Costs and expenses Cost of homes sold 83,299,743 44,877,568 36,114,505 19,173,127 Cost of land sold -- 10,058 -- 10,058 Costs relating to other operating revenues 9,587 162,777 5,085 32,415 Selling, general and administrative expenses 12,545,966 10,872,438 4,504,822 3,956,978 Interest costs incurred 4,369,559 4,002,372 942,130 1,258,103 Interest capitalized (deduct) (4,369,559) (3,962,142) (942,130) (1,258,103) ------------ ------------ ------------ ------------ 95,855,296 55,963,071 40,624,412 23,172,578 ------------ ------------ ------------ ------------ Net income (loss) before extraordinary item $ (1,878,097) $ (3,880,466) $ 112,549 $ (1,505,316) Extraordinary loss on early extinguishment of debt 572,008 -- 572,008 -- ------------ ------------ ------------ ------------ Net loss $ (2,450,105) $ (3,880,466) $ (459,459) $ (1,505,316) ============ ============ ============ ============ Basic and Diluted earnings (loss) per Class A and B common share available for common stockholders - Net income (loss) before extraordinary item $ (.41) $ (.84) $ .02 $ (.33) Extraordinary item $ (.12) -- (.12) -- ------------ ------------ ------------ ------------ Net loss (.53) $ (.84) $ (.10) $ (.33) ============ ============ ============ ============ Weighted average number of common shares outstanding - Basic and Diluted 4,625,524 4,625,524 4,625,524 4,625,524 ============ ============ ============ ============
The accompanying notes are an integral part of these statements -3- ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, -------------------------------------- 2001 2000 -------------- -------------- Cash flows from operating activities Net loss $ (2,450,105) $ (3,880,466) Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities Depreciation 337,057 363,678 Extraordinary item 572,008 -- Amortization 471,987 390,005 (Gain) loss on sales of property and equipment and land held for investment, net (105,469) (794,034) (Increase) decrease in operating assets Receivables -- 262,240 Inventories 7,623,620 (69,959) Other assets (103,949) 323,814 Increase (decrease) in operating liabilities Accounts payable and accrued liabilities (3,186,441) 329,866 Customer deposits 3,922,269 5,155,546 -------------- -------------- Total adjustments 9,531,082 5,961,156 -------------- -------------- Net cash provided by operating activities 7,080,977 2,080,690 -------------- -------------- Cash flows from investing activities Acquisition of project, net of cash acquired -- (22,672,617) Capital expenditures (104,278) (879,284) Investment in unconsolidated joint venture (5,000,000) -- Return on investment in Regency joint venture -- 1,242,240 Proceeds from the sale of property and equipment and land held for investment 237,635 1,767,864 -------------- -------------- Net cash used in investing activities (4,866,643) (20,541,797) -------------- -------------- Cash flows from financing activities Proceeds from bank borrowings 63,048,164 22,305,497 Principal payments of bank borrowings (40,868,631) (5,110,532) Financing costs (1,491,519) -- Repayment of line of credit (10,000) -- Repurchase of senior notes (34,864,000) (6,823,000) -------------- -------------- Net cash (used in) provided by financing activities (14,185,986) 10,371,965 -------------- -------------- Net decrease in cash and cash equivalents (11,971,652) (8,089,142) Cash and cash equivalents at beginning of period 21,707,756 18,708,081 -------------- -------------- Cash and cash equivalents at end of period $ 9,736,104 $ 10,618,939 ============== ============== Supplemental disclosures of cash flow information Cash paid during the period for: Interest (net of amount capitalized) $ 660,017 $ 1,175,872 Income taxes $ -- $ --
The accompanying notes are an integral part of these statements -4- ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated balance sheet as of September 30, 2001 and the related statements of operations and cash flows for the three months and nine months ended September 30, 2001 and 2000 of Oriole Homes Corp. (together with its consolidated subsidiaries, the "Company") have been prepared by the Company without audit. In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the unaudited interim periods have been reflected herein. Certain footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2000 annual report on Form 10K. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 2. The results of operations for the three months and the nine months ended September 30, 2001 are not necessarily indicative of the results for the entire year. The Company allocates certain costs to units delivered based upon estimates of the number of units projected to be delivered and the associated timing of the deliveries. When it becomes apparent that the number of deliveries in a project will vary significantly from the estimates, the Company will revise these cost allocations, which will affect results of operations. The Company's consolidated statements of operations for the nine month period ended September 30, 2001 include revenues and expenses of the Vizcaya Project, which was acquired in August 2000. Accordingly, the results of operations for the nine month period ended September 30, 2001 are not directly comparable to the results of operations for the nine month period ended September 30, 2000. 3. Backlog of contracts for sales of homes:
September 30, 2001 December 31, 2000 -------------------------- ------------------------- Units Amounts Units Amounts ----- -------------- ----- ------------- Single-family 372 $ 87,824,901 294 $ 63,914,626 Multi-family 192 29,819,631 166 23,047,090 ---- -------------- ---- ------------- Total 564 $ 117,644,532 460 $ 87,961,716 ==== ============== ==== =============
-5- ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Senior notes On July 16, 2001, the Company effected an optional redemption of all of its outstanding 12 1/2% Senior Notes due 2003. The total redemption price, including accrued interest of $2,112,688, was $35,915,688. Of this amount, $33,313,737 was provided by the financing arrangement for $49,878,136 described at Note 6. below and $2,601,951 from available cash. Prior to this transaction, Senior Notes had been purchased in the open market at varying prices. The Company's consolidated statements of operations for the three and nine month periods ended September 30, 2001 includes an extraordinary loss on the early extinguishment of this debt of $572,008. The extraordinary loss principally represents discount and debt issuance cost. 5. Line of credit At June 30, 2001, the Company did not renew its $10.0 million Revolving Line of Credit facility and decided to rely, instead, on its available cash and new credit facilities discussed at Note 6. 6. Mortgage notes On August 8, 2000, in connection with the Vizcaya project, a wholly owned subsidiary of the Company entered into an agreement providing for borrowing an aggregate principal amount of $26,787,200, of which $9,580,430 was for future construction costs (the "Vizcaya Loan"). The Vizcaya Loan is evidenced by a mortgage note, which is due on February 8, 2003 and bears interest at a floating rate equal to the Prime Rate, currently 5.00% per annum. The Vizcaya Loan is secured by real property and other assets acquired in connection with the acquisition of the Vizcaya project. The Company has agreed to guarantee up to an aggregate of $2.0 million of the Vizcaya Loan. Certain individual guarantors, not related to the Company, have agreed to jointly and severally guarantee the Vizcaya Loan. On July 16, 2001, the Company entered into agreements providing for borrowing an aggregate principal amount of $49,878,136, of which $15,451,742 was for future construction costs (the "Loans"). The Loans are secured by four separate mortgage notes encumbering different parcels of real property (land and related improvements). Interest is at the specified prime rate of the bank plus 0.50%, currently 5.50% per annum. Interest is to be paid monthly and partial payments of principal are to be made upon delivery of homes. The principal must be paid in full at various maturities ranging from 18 to 24 months from the date of the agreements. On August 23, 2001, the Company entered into an agreement providing for borrowing an aggregate principal amount of $1,375,000 for purchase of land (the "Land Loan"). The Land Loan is secured by a mortgage note encumbering a parcel of real property. Interest is at the specified prime rate of the bank plus 0.50%, currently 5.50% per annum. Interest is to be paid monthly and the principal must be paid in full at maturity in 12 months. -6- ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7. Income taxes At September 30, 2001, the Company has no deferred tax benefit related to its net loss as the Company's ability to realize these benefits is not "more likely than not" as defined by SFAS Statement No. 109 "Accounting for Income Taxes". 8. Segment information The Company has the following two reportable segments: home building and rental operations. The home building segment develops and sells residential properties and planned communities. The rental operations segment consists of no units at September 30, 2001 and 23 units at September 30, 2000. Selected segment information is set forth below (in thousands):
Nine Months Ended Three Months Ended September 30, September 30, ---------------------- ---------------------- 2001 2000 2001 2000 $ $ $ $ ------- ------- ------- ------- Revenues Home Building 93,494 51,676 40,492 21,520 Rental Operations -- 69 -- 12 Other 483 338 245 135 ------- ------- ------- ------- Total 93,977 52,083 40,737 21,667 ======= ======= ======= ======= Segment net income (loss) Home Building (2,840) (3,958) (664) (1,562) Rental Operations -- (94) -- (21) Other 390 172 205 78 ------- ------- ------- ------- Total (2,450) (3,880) (459) (1,505) ======= ======= ======= =======
9. Investment in unconsolidated joint venture On September 14, 2001, the Company contributed capital of $5,000,000 to a special purpose limited liability company formed to operate a joint venture between the Company and another builder to construct and sell homes. Under the terms of the joint venture, the Company is entitled to a preferential distribution equal to the greater of (a) the first $7,841,000 of Available Cash (as defined in the operating agreement) or (b) a return of all of its capital contributions plus an internal rate of return equal to 25% on its contributions to the venture. Under the terms of the joint venture, the Company is not obligated to make any further capital contributions, to make any loan to the joint venture or to guarantee any of the joint venture's obligations. The Company's interest in the joint venture is accounted for using the equity method of accounting. The Company received no distribution from its interest in the joint venture during the period ended September 30, 2001 and there was no undistributed profit or loss at September 30, 2001. -7- ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. New accounting pronouncements In June 2001 the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and requires acquired intangible assets to be recognized as assets apart from goodwill if certain criteria are met. Implementation of SFAS No. 141 did not have an effect on the financial statements of the Company. SFAS No. 142 is effective for fiscal years beginning December 15, 2001 and provides guidance on accounting for intangible assets and eliminates the amortization of goodwill and certain identifiable intangible assets. Under the provisions of SFAS No. 142, intangible assets, including goodwill, that are not subject to amortization will be tested for impairment annually. Impairment testing must be performed more frequently if events or changes in circumstances indicate that the asset might be impaired. Management is in the process of evaluating the effect the adoption of SFAS No. 142 will have on the Company's financial statements. 11. Commitments and contingencies The Company is involved, from time to time, in litigation arising in the ordinary course of business, none of which is expected to have a material adverse effect on the Company's consolidated financial position or results of operations. The Company is also subject to the normal obligations associated with entering into contracts for the purchase, development and sale of real estate in the routine conduct of its business. -8- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW GENERAL The results of operations for interim periods during the year are not necessarily indicative of results of operations for the fiscal year. The Company allocates certain costs to units delivered based upon estimates of the number of annual units projected to be delivered and the associated timing of the deliveries. In past years, the Company has experienced inventory valuation adjustments reducing net income when expected deliveries fell significantly short of expectations. These included adjustments of $13.9 million in 1995, $21.6 million in 1997 and $4.9 million in 1999. RESULTS OF OPERATIONS The Company's consolidated statements of operations for the nine month period ended September 30, 2001 includes the results of operations of the Vizcaya project acquired on August 8, 2000. Accordingly, the results of operations for the nine month period ended September 30, 2001 is not directly comparable to the results of operations for the nine month period ended September 30, 2000. Among other things, this acquisition contributed the delivery of 31 homes producing aggregate revenue of $6.8 million and net income of $587,565 for the three month period ended September 30, 2001 and the delivery of 126 homes producing aggregate revenue of $26.0 million and net income of $1,390,968 for the nine month period ended September 30, 2001. The Company's backlog at September 30, 2001 related to the Vizcaya project is 170 homes representing aggregate revenue of $33.5 million. THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2000 The Company's revenues from home sales increased $19.0 million (91.0%) to $39.9 million during the third quarter of 2001 as compared to the comparable quarter of 2000 as a result of an increase in the number of homes delivered and an increase in the average selling price. Oriole delivered 189 homes in the 2001 third quarter compared to 122 in the same period in 2000. The average selling price of homes delivered increased from $171,226 per home to $211,102, primarily as a result of an increase in deliveries of typically higher priced single-family homes relative to condominium units. The number of contracts signed at 130 and the aggregate dollar value of those contracts at $24.3 million decreased in the 2001 third quarter from 318 and $60.2 million, respectively, from the same period in 2000, primarily due to the significant number of contracts relating to the Vizcaya project signed in the third quarter of 2000. Non-homebuilding revenues remained substantially unchanged in the quarter ended September 30, 2001 as compared to September 30, 2000. Cost of home sales increased to $36.1 million (88.4%) from $19.2 million in 2000 primarily as a result of an increase in the number of homes delivered. As a percentage of home sales, cost of sales decreased to 90.5% from 91.8% in the third quarter of 2001 due to the increased deliveries of homes. Selling, general and administrative expenses increased $547,844 in dollar value and decreased as a percentage of revenues to 11.1% from 18.3% as compared to the same period in 2000 due to the fixed portions of these expenses remaining relatively constant despite the $19.0 million increase in revenues. Net income before extraordinary item for the quarter ended September 30, 2001 was $112,549, or $.02 per share, compared to a net loss before extraordinary item of $1.5 million, or $0.33 per share, during the same period in 2000. The Company incurred a net loss for the quarter ended September 30, 2001 of $459,459 or $.10 per share compared to a net loss of $1,505,316 or $0.33 per share during the same period of 2000. The 2001 net loss resulted from a non-cash extraordinary loss of $572,008 ($.12 per share) representing the writeoff of remaining deferred debt issuance costs and other financing expenses due to the early extinguishment of debt during the third quarter of 2001. Earnings before -9- interest, taxes, depreciation and amortization (EBITDA) increased $3.2 million to $3.6 million in the third quarter of 2001 as compared to the same period in 2000. NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2000 The Company's revenues from home sales increased $42.5 million (86.0%) to $91.9 million during the nine month period of 2001 as compared to 2000 as a result of an increase in the number of homes delivered and an increase in the average selling price. Oriole delivered 474 homes in the first nine months of 2001 compared to 301 in the same period in 2000. The average selling price of homes delivered increased from $164,200 per home to $193,966 primarily as a result of an increase in deliveries of typically higher priced single-family homes relative to condominium units. The number of contracts signed at 578 decreased in the first nine months of 2001 from 654 but the dollar value of 2001 contracts signed at $121.6 million increased from $113.0 million due to an average unit selling price increase of about $40,000 resulting from the more favorable product mix. Non-homebuilding revenues decreased $623,209 in the nine month period ended September 30, 2001 as compared to September 30, 2000 primarily due to gains associated with the sale of certain properties in 2000. Cost of home sales increased to $83.3 million (85.6%) in 2001 from $44.9 million in 2000 primarily as a result of the increase in the number of homes delivered and, to a lesser degree, the more favorable product mix. As a percentage of home sales, cost of sales decreased to 90.6% from 90.8% in the first nine months of 2001. Selling, general and administrative expenses increased $1.7 million in the first nine months of 2001 when compared to the same period in 2000. These expenses decreased as a percentage of revenues, however, to 13.4% from 20.9% for the same period in 2000 primarily due to the fixed portions of these expenses remaining relatively constant despite the $41.9 million increase in revenues. The Company incurred a net loss before extraordinary item for the first nine months of 2001 of $1.9 million, or $.41 per share, compared to a net loss before extraordinary item of $3.9 million, or $0.84 per share in the same period of 2000. The Company incurred a net loss for the nine month period ended September 30, 2001 of $2.5 million or $.53 per share compared to a net loss of $3.9 million or $.84 per share in the same period of 2000. The 2001 net loss includes an extraordinary non-cash loss of $572,008 ($.12 per share) representing the writeoff of remaining deferred debt issuance costs and other financing expenses due to the early extinguishment of debt during the third quarter of 2001. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased $4.3 million to $5.1 million in the first nine months of 2001 as compared to the same period in 2000. LIQUIDITY AND CAPITAL RESOURCES The Company's cash requirements vary from period to period depending upon changes in inventory, land acquisition and development requirements, construction in progress and, to a lesser extent, current net income. The Company obtains funds for its cash requirements from operations, the sale of investment property and borrowings. In connection with land acquisitions and development, the Company may borrow money secured by land and improvements. The $7.1 million net cash provided by operating activities primarily reflected a reduction in inventory as a result of increased sales. Net cash used in investing activities of $4.9 million during the first nine months of 2001 consisted primarily of a $5.0 million capital contribution in an unconsolidated joint venture. The cash used in financing activities of about $14.2 million reflected the net reduction in total debt levels resulting from various financing activities discussed below and associated repayments. On July 16, 2001, the Company entered into agreements providing for borrowing an aggregate principal amount of $49,878,136 secured by four separate mortgage notes encumbering different parcels of real property (land and related improvements). Interest is at the specified prime rate of the bank plus 0.50% and is adjusted with the prime rate. At November 7, 2001 the interest rate was 5.5%. Interest is to -10- be paid monthly and partial payments of principal are to be made upon delivery of homes. The principal must be paid in full at various maturities ranging from 18 to 24 months from the date of the agreements. On July 16, 2001, the Company effected an optional redemption of all of its outstanding 12 1/2% Senior Notes due 2003. The total redemption price was $35,915,688 including accrued interest, $33,313,737 of which was provided by the credit facility described above and $2,601,951 from available cash. On August 23, 2001, the Company entered into an agreement providing for borrowing an aggregate principal amount of $1,375,000 for purchase of land (the "Land Loan"). The Land Loan is secured by a mortgage note encumbering the parcel of real property. Interest is at the specified prime rate of the bank plus 0.50%, currently 5.50% per annum. Interest is to be paid monthly and the principal must be paid in full at maturity in 12 months. The Company has no material commitments or material off-balance sheet obligations that would affect future liquidity. Management anticipates that funds from operations, available cash and cash available under existing credit facilities are sufficient for reasonably anticipated current and near-term capital requirements. If the Company does not have sufficient capital resources to acquire capital assets and land, develop land improvements, and meet other needs of its business, projects may be delayed and additional financing may be required, resulting in possible adverse effects on the Company's results of operations. No assurance can be given as to the terms, availability or cost of any future financing the Company may need. If the Company is at any time unable to service its debt, financing may not be available or available on terms acceptable to the Company. At September 30, 2001, the Company had approximately $9.7 million in cash and cash equivalents. FORWARD LOOKING STATEMENTS Certain statements made in this document, including certain statements made in Management's Discussion and Analysis, are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," or similar expressions, or which involve hypothetical events. In addition, any statements concerning future financial performance (including future revenues, earnings, or growth rates), ongoing business strategies or prospects, and possible future Company actions, which may be provided by management, are also forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon current expectations and projections about future events and are subject to risks, uncertainties, and assumptions about the Company, economic and market factors and the industry in which the Company does business, among other things. These statements are not guaranties of future performance and the Company has no specific intention to update these statements. Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The principal important risk factors that could cause the Company's actual performance and future events and actions to differ materially from such forward-looking statements, include but are not limited to the following: changes in consumer preferences, changes in interest rates, a reduction in labor availability, increases in the cost of labor and materials, changes in the regulatory environment particularly as relates to zoning and land use, competitive pricing -11- pressures, changes in federal income tax laws, the general state of the economy, both nationally and in the Company's market and unseasonable weather trends. In addition, the forward looking statements contained in this report may be impacted by the terrorist attacks on the World Trade Center and on the Pentagon on September 11, 2001 and the related military action, as well as wide-spread concerns about anthrax outbreaks and about the possibility of further incidents of terrorism. The effect of these events on the business of the Company, if any, is currently unclear. However, any adverse effect on general economic conditions and consumer confidence resulting from these events may adversely affect the business of the Company. ITEM 3. NOT APPLICABLE PART II - OTHER INFORMATION ITEMS 1 TO 3. NOT APPLICABLE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At its annual meeting of stockholders held on May 10, 2001, holders of the Company's Class A Common Stock and Class B Common Stock voted on the election of directors and a shareholder proposal. (1) Election of Directors Under the Articles of Incorporation of the Company, the holders of the Class B Common Stock are entitled to elect a minimum of 25% of the directors of the Company. Since the number of directors of the Company is set at 5, the holders of the Class B Common Stock are entitled to elect two directors. At the meeting the following directors were elected:
By the Holders of Class A Common Stock -------------------------------------- Votes For Votes Withheld --------- -------------- Richard D. Levy 1,632,881 86,526 Harry A. Levy 1,632,881 86,526 Mark Levy 1,489,981 229,426
By the Holders of Class B Common Stock -------------------------------------- Votes For Votes Withheld --------- -------------- Paul R. Lehrer 1,239,820 890,191 George R. Richards 1,239,820 890,191
(2) Shareholders Proposal "It is proposed that the Board of Directors of Oriole Homes engage a recognized investment banking concern to initiate actions designed to maximize the remaining equity of Oriole Homes for the benefit of all shareholders. Such actions are to include the sale or merger of the company or its orderly liquidation." -12-
Votes For Votes Against Votes Abstaining Broker Non-Votes --------- ------------- ---------------- ---------------- Class A Common Stock* 353,600 1,245,912 300 900 Class B Common Stock* 70,540 100,938 66 430 Total Votes* 424,140 1,346,850 366 1330
*The Class A Common Stock has one vote per share and votes together with the Class B Common Stock which has one tenth of a vote per share. ITEM 5. NOT APPLICABLE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits
Exhibit Number -------------- 10.39 Promissory Note (Non-Revolver) with Ocean Bank in amount of $3,120,000 dated July 16, 2001 10.40 Promissory Note (Revolver) with Ocean Bank in amount of $9,840,000 dated July 16, 2001 10.41 Mortgage Deed with Ocean Bank in amount of $12,960,000 dated July 16, 2001 10.42 Construction Loan Agreement between Ocean Bank and Oriole Homes Corp. dated July 16, 2001 10.43 Promissory Note (Non-Revolver) with Ocean Bank in amount of $2,296,586 dated July 16, 2001 10.44 Promissory Note (Revolver) with Ocean Bank in amount of $4,950,000 dated July 16, 2001 10.45 Mortgage Deed with Ocean Bank in amount of $7,246,586 dated July 16, 2001 10.46 Construction Loan Agreement between Ocean Bank and Oriole Homes Corp. dated July 16, 2001 10.47 Promissory Note (Non-Revolver) with Ocean Bank in amount of $10,809,668 dated July 16, 2001 10.48 Promissory Note (Revolver) with Ocean Bank in amount of $9,135,000 dated July 16, 2001 10.49 Mortgage Deed with Ocean Bank in amount of $19,944,668 dated July 16, 2001 10.50 Construction Loan Agreement between Ocean Bank and Oriole Homes Corp. dated July 16, 2001 10.51 Promissory Note with Ocean Bank in amount of $12,176,882 dated July 16, 2001 10.52 Mortgage Deed with Ocean Bank in amount of $12,176,882 dated July 16, 2001 10.53 Construction Loan Agreement between Ocean Bank and Oriole Homes Corp. in amount of $12,176,882 dated July 16, 2001
-13- 10.54 Mortgage Deed and Security Agreement with Ocean Bank in amount of $1,375,000 dated August 23, 2001 10.55 Promissory Note with Ocean Bank in amount of $1,375,000 dated August 23, 2001 10.56 Amended and Restated Operating Agreement of Brighton at Wellington, L.C. dated September 14, 2001 between OH INVESTMENTS II, INC., a Florida corporation ("Oriole"), and CENTERLINE HOMES AT THE EQUESTRIAN CLUB, INC., a Florida corporation ("Centerline"). 10.57 Stock Option Agreement with Maurice E. Levenson dated August 8, 2001.
(b) Forms 8-K The Company filed no reports on Form 8-K for the three months ended September 30, 2001 SIGNATURES Pursuant to the requirements of Section 13 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. ORIOLE HOMES CORP. (Registrant) Date: November 9, 2001 s/ R.D. Levy ------------------------- ---------------------------------------- R.D. Levy, Chairman of the Board, Chief Executive Officer, Director Date: November 9, 2001 s/ J. Pivinski ------------------------- ---------------------------------------- J. Pivinski, Vice President - Finance, Treasurer, Chief Financial Officer -14-