-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, cX4DojELiWxq4ENvEgrSETIwtwt67GTLEvkPQufOKCBxZ2S5rUL0B7H+bWoD9NPo jAB1Ga/fukI3EfBY8P2UFw== 0000950144-94-001383.txt : 19940802 0000950144-94-001383.hdr.sgml : 19940802 ACCESSION NUMBER: 0000950144-94-001383 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORIOLE HOMES CORP CENTRAL INDEX KEY: 0000074928 STANDARD INDUSTRIAL CLASSIFICATION: 1531 IRS NUMBER: 591228702 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06963 FILM NUMBER: 94540837 BUSINESS ADDRESS: STREET 1: 1690 S CONGRESS AVE STE 200 CITY: DELRAY BEACH STATE: FL ZIP: 33445 BUSINESS PHONE: 4072742000 FORMER COMPANY: FORMER CONFORMED NAME: ORIOLE LAND & DEVELOPMENT CORP DATE OF NAME CHANGE: 19720615 10-Q 1 ORIOLE HOMES 10-Q 6-30-94 1 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: June 30, 1994 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: (407) 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 issuers classes of common stock, as of the close of the period covered by this report. Class Outstanding at June 30, 1994 - - ------------------------------------- ---------------------------- Common Stock, Class A, par value $.10 1,895,549 Common Stock, Class B, par value $.10 2,729,975 2 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET ASSETS
June 30, December 31, 1994 1993 (Unaudited) (Audited) -------------- ------------ Cash and cash equivalents $ 4,634,418 $ 14,650,532 -------------- ------------ Receivables: Mortgage notes 1,965,527 1,618,659 Other - 4,000 -------------- ------------ 1,965,527 1,622,659 -------------- ------------ Inventories: Land 112,139,094 111,959,716 Houses and condominiums completed or under construction 51,212,974 38,057,470 Model houses and condominiums 2,502,014 2,416,948 -------------- ------------ 165,854,082 152,434,134 Less: Estimated costs of completion included in inventories 27,346,758 24,031,951 -------------- ------------ 138,507,324 128,402,183 -------------- ------------ Property and equipment (at cost): Land 7,171,220 7,172,279 Buildings 22,898,188 23,130,421 Furniture, fixtures and equipment 5,404,222 5,357,097 -------------- ------------ 35,473,630 35,659,797 Less: Accumulated depreciation 10,190,034 9,920,818 -------------- ------------ 25,283,596 25,738,979 -------------- ------------ Other: Prepaid expenses 2,797,120 1,812,081 Unamortized debt issuance costs 2,457,143 2,497,438 Investment in and advances to joint venture 7,000,000 3,500,000 Land held for investment (at cost) 2,791,450 2,791,450 Other assets 1,579,077 727,271 -------------- ------------ 16,624,790 11,328,240 -------------- ------------ Total Assets $ 187,015,655 $181,742,593 ============== ============
See notes to consolidated financial statements -1- 3 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, December 31, 1994 1993 (Unaudited) (Audited) -------------- -------------- Liabilities: Notes payable - banks $ 10,000 $ 96,317 Mortgage notes payable 14,611,711 14,399,479 Accounts payable 6,258,184 6,507,891 Dividends payable - 762,078 Customer deposits 11,974,916 6,091,570 Income taxes payable - 647,326 Accrued expenses and other liabilities 7,844,774 7,157,750 Deferred income taxes 753,844 850,908 12 1/2% Senior Notes due January 15, 2003, net of $1,747,322 discount in 1994 and $1,812,306 discount in 1993 68,252,678 68,187,694 ------------- -------------- Total Liabilities 109,706,107 104,701,013 Shareholders' Equity: Class A common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 1,895,549 in 1994 and in 1993 189,555 189,555 Class B common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 2,729,975 in 1994 and in 1993 272,998 272,998 Additional paid-in capital 19,267,327 19,267,327 Retained earnings 57,579,668 57,311,700 ------------- -------------- Total Shareholders' Equity 77,309,548 77,041,580 ------------- -------------- Total Liabilities and Shareholders' Equity $ 187,015,655 $ 181,742,593 ============= ==============
See notes to consolidated financial statements -2- 4 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Six Months Ended Three Months Ended June 30, June 30, --------------------------- --------------------------- 1994 1993 1994 1993 ------------ ------------- -------------- ------------ Revenues: Sale of houses and condominiums $ 36,762,606 $ 35,819,322 $ 16,247,023 $ 17,835,520 Sale of land 872,483 418,444 686,473 418,444 Other operating revenues 1,731,133 1,871,952 849,386 846,378 Interest, rentals and other income 1,670,114 1,551,625 930,688 668,861 Gain on sale of property and land held for investment, net 56,177 16,486 35,219 9,234 ------------- ------------- -------------- ------------ 41,092,513 39,677,829 18,748,789 19,778,437 ------------- ------------- -------------- ------------ Costs and Expenses: Cost of houses and condominiums sold 31,419,697 29,166,448 13,934,218 14,530,267 Cost of land sold 770,714 362,462 610,976 361,992 Costs relating to other operating revenues 1,307,996 1,182,168 660,061 584,067 Selling, general and administrative expenses 7,164,842 7,338,086 3,394,438 3,652,950 Interest costs incurred 5,110,893 5,019,709 2,555,125 2,544,946 Interest capitalized (deduct) (5,110,893) (4,862,878) (2,555,125) (2,544,946) ------------- ------------- -------------- ------------ 40,663,249 38,205,995 18,599,693 19,129,276 ------------- ------------- -------------- ------------ Income before provision for income taxes and extraordinary item 429,264 1,471,834 149,096 649,161 Provision for income taxes 161,296 581,361 56,068 272,032 ------------- ------------- -------------- ------------ Income before extraordinary item 267,968 890,473 93,028 377,129 Extraordinary Item-Loss on repurchase of debt (less applicable income taxes of $602,906) - (999,288) - - ------------- ------------- -------------- ------------ Net Income $ 267,968 $ (108,815) $ 93,028 $ 377,129 ============= ============= ============== ============ Earnings per Class A and Class B Common Share: Net income before extraordinary item $ .06 $ .20 $ .02 $ .09 Extraordinary item - (.22) - - ------------- ------------- -------------- ------------ Total Net Income $ .06 $ (.02) $ .02 $ .09 ============= ============= ============== ============ Average Number of Class A and Class B Common Shares Outstanding 4,625,524 4,625,524 4,625,524 4,625,524 ============= ============= ============== ============ Dividends per Class A Common Share $ - $ .40 $ - $ - ============= ============= ============== ============ Dividends per Class B Common Share $ - $ .425 $ - $ - ============= ============= ============== ============
See notes to consolidated financial statements -3- 5 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS INCREASE (DECREASE) IN CASH (Unaudited)
June 30, --------------------------------- 1994 1993 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ 267,968 $ (108,815) -------------- -------------- Adjustments to reconcile net income to net cash (used in) operating activities Depreciation 613,388 619,127 Amortization 180,279 1,762,441 Deferred income taxes (97,064) (69,678) Gain on sale of property and equipment and other assets (56,177) (16,486) Changes in assets and liabilities (Increase) in investments - (2,933,140) (Increase) in receivables (342,868) (582,719) (Increase) in inventories (10,105,141) (11,326,781) (Increase) in other assets (1,836,845) (1,090,842) (Decrease) increase in accounts payable (249,707) 283,653 Increase in customer deposits 5,883,346 4,348,154 (Decrease) in income taxes payable (647,326) (415,704) Increase in accrued expenses and other liabilities 686,938 3,652,997 Total adjustments (5,971,177) (5,768,978) -------------- -------------- Net cash (used in) operating activities (5,703,209) (5,877,793) -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES Investment in joint venture (3,500,000) - Capital expenditures (332,812) (254,458) Proceeds from the sale of property and equipment and other assets 230,984 50,040 -------------- -------------- Net cash (used in) investing activities (3,601,828) (204,418) -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from mortgage notes 212,318 - Repayments under line of credit agreements (86,317) (13,000,000) Payment of term loan - (22,000,000) Repurchase of debentures - (18,563,000) Proceeds of Senior Notes (net) - 68,069,400 Senior notes issuance cost (75,000) (2,453,038) Dividends paid (762,078) (1,918,459) -------------- -------------- Net cash (used in) provided by financing activities (711,077) 10,134,903 -------------- -------------- NET (DECREASE) INCREASE IN CASH (10,016,114) 4,052,692 CASH AT BEGINNING OF PERIOD 14,650,532 6,942,103 -------------- -------------- CASH AT END OF PERIOD $ 4,634,418 $ 10,994,795 ============== ============== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the year for: Interest (net of amount capitalized) $ - $ - Income taxes $ 1,042,331 $ 579,200
See notes to consolidated financial statements -4- 6 FORM 10Q ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated balance sheet as of June 30, 1994, the related statements of income and cash flows for the three and six months ended June 30, 1994 and 1993 have been prepared by the Company without audit. In the opinion of the 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, 1993 annual report to shareholders. Certain balances have been reclassified to conform to the current year presentation. 2. The results of operations for the three and six months ended June 30, 1994 are not necessarily indicative of the results for the entire year. 3. Affiliated Companies. The Company does not have investments in affiliated companies. - 5 - 7 ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 4. Backlog of Contracts for Sales of Houses and Condominiums
June 30, 1994 December 31, 1993 ------------------------ --------------------------- Units Amounts Units Amounts ----- ----------- ----- ----------- Single-Family Homes 115 $21,091,358 81 $14,068,923 Multi-Family 314 49,449,528 176 25,286,538 ----- ----------- ----- ----------- Total 429 $70,540,886 257 $39,355,461 ===== =========== ===== ===========
5. Following is a computation of earnings per share:
Three Months Ended Six Months Ended ----------------------------- ------------------------------- June 30, 1994 June 30, 1993 June 30, 1994 June 30, 1993 ------------- ----------- ------------- ----------- Income before extraordinary item $ 93,028 $ 377,129 $ 267,968 $ 890,473 Extraordinary item - - - (999,288) ----------- ----------- ------------- ----------- Net Income (Loss) $ 93,028 $ 377,129 $ 267,968 $ (108,815) =========== =========== ============= =========== Weighted average number of common shares outstanding 4,625,524 4,625,524 4,625,524 4,625,524 =========== =========== ============= =========== Earnings per share before extraordinary item $ .02 $ .09 $ .06 $ .20 Extraordinary item - - - (.22) ----------- ----------- ------------- ----------- Total earnings (loss) per share $ .02 $ .09 $ .06 $ (.02) =========== =========== ============= ===========
6. Credit Commitments On January 13, 1993, the Company issued its 12 1/2% Senior Notes ("Notes"), due January 15, 2003. The Notes have a face value of $70,000,000 and were issued at a discount of $1,930,600. The Notes are senior unsecured obligations of the Company subject to redemption at the Company's option on or after January 15, 1998, at 105% of the principal amount and thereafter at prices declining annually to 100% of the principal amount on or after January 15, 2001. The indenture under which the Notes were issued requires sinking fund payments of $17,500,000 on January 15, 2001 and January 15, 2002. The indenture contains certain covenants that, among other things, limit the ability of the Company to incur additional indebtedness, pay dividends or make certain other distributions, repurchases or issuances of capital stock or subordinated indebtedness. A portion of the proceeds of the Notes offering was used to repay all debt outstanding under the Company's bank credit agreement, and the redemption at par of the Company's outstanding 12 7/8% Subordinated Debentures due July 15, 2000. The balance of the proceeds were added to the Company's working capital. On July 13, 1993, the Company entered into a secured revolving loan agreement with a bank which provides up to $10,000,000 in short-term financing at an interest rate of prime plus 1 1/2%. As of June 30, 1994, the outstanding loan balance was $10,000. -6- 8 Suite 1100 Broward Financial Centre 500 East Broward Boulevard Ft. Lauderdale, FL 33394-3095 305-764-1235 FAX 305-764-1293 Grant Thornton (LOGO) Accountants and Management Consultants Board of Directors The U.S. Member Firm of Oriole Homes Corp. Grant Thornton International We have reviewed the accompanying consolidated balance sheet of Oriole Homes Corp. and Subsidiaries as of June 30, 1994, and the related consolidated statements of income and cash flows for the three-month and six-month periods then ended. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data, and making inquires of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1993, and the related consolidated statements of income, shareholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated February 4, 1994, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1993, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ Grant Thornton Miami, Florida July 22, 1994 - 7 - 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1994, COMPARED TO THREE MONTHS ENDED JUNE 30, 1993 The Company's revenues from home sales decreased $1.6 million (or 8.9%) during the second quarter of 1994 as compared to the same period in 1993. The Company delivered 123 homes in the 1994 quarter compared to 150 in the same period of 1993. The average selling price of homes delivered increased 11.1% (from $118,903 to $132,090). The Company entered into 198 new contracts with an aggregate dollar value of $29.7 million in the second quarter of 1994 compared to 221 new contracts with an aggregate dollar amount of $30.0 million in the 1993 period The Company attributes its drop in revenues largely to the preference of its customers to take delivery of their homes closer to the end of the calendar year. Therefore, the Company anticipates sales will rebound in the third and fourth quarters of this year. Interest, rentals and other income increased from $.9 million from $.7 million in the same period of 1993 mainly due to interest generated from the Company's investment in a joint venture. Cost of home sales decreased to $13.9 million in 1994 from $14.5 million in 1993 mainly as a result of the decrease in the number and dollar amount of homes delivered. As a percentage of home sales, cost of homes sold increased to 85.8% from 81.5%. Gross margins during the second quarter of 1994 were adversely affected due to increases in construction costs and the inability of the Company, due to market conditions, to immediately pass those increases on to customers. Selling, general and administrative expenses decreased to $3.4 million in 1994 from $3.7 million in 1993, but as a percentage of total revenues, these expenses remained at approximately the same level. Net income in the 1994 second quarter decreased to $.09 million from $.4 million in the comparable period of 1993. The decrease is attributed mainly to lower margins on sales of houses and condominiums. SIX MONTHS ENDED JUNE 30, 1994, COMPARED TO SIX MONTHS ENDED JUNE 30, 1993 The Company's revenues from home sales increased $.9 million (or 2.6%). The Company delivered 277 homes in the first six months of 1994 as compared to 295 homes in 1993. The average selling price of homes delivered increased 9% from $121,421 to $132,717. New contracts signed (449) in 1994 and the amount of these new contracts ($67.9 million) increased from 465 new contracts representing $60.4 million in 1993. Other operating revenues decreased from $1.9 million in 1993 to $1.7 million in 1994 as a result of a refund in 1993 of previously paid real estate taxes. Interest, rentals and other income increased from $1.6 million in 1993 to $1.7 million in 1994 mainly due to interest generated from the Company's investment in a joint venture. Cost of sales increased from $29.2 million in 1993 to $31.4 million in 1994. As a percentage of sales, cost of sales increased from 81.4% in 1993 to 85.5% in 1994. Selling, general and administrative expenses decreased from $7.3 million in 1993 to $7.2 million in 1994, and as a percentage of total revenues, decreased to 17.4% in 1994 from 18.5% in 1993. Net income increased from a loss of $0.1 million in the first six months of 1993 to a gain of $0.3 million in the comparable period of 1994. Net income for the first six months of 1993 was affected by a nonrecurring - 8 - 10 extraordinary expense in the amount of $999,288 net of income taxes, or $.22 per share in connection with the early redemption of the Company's Subordinated Debentures and the early repayment of a bank credit agreement. The dollar amount of the Company's backlog, which reflects new sales contracts that have yet to close, increased 30% to $70,540,886 (representing 429 units) as of June 30, 1994 from $54,094,315 (representing 410 units) as of June 30, 1993. The average per unit value of the Company's backlog now stands at $164,431, representing an increase of 25% over the $131,937 recorded at the end of 1993's second quarter. Included in this year's backlog are 29 units from the upscale project Fairway Point valued at a total of $14,129,340, or an average of $487,219 per unit. If the Fairway Point units are eliminated, the backlog as of June 30, 1994 would have consisted of 400 units with a value of $56,411,546, or an average of $141,029 per unit as compared to 245 units with a value of $33,965,511, or $138,635 per unit as of December 31, 1993. FINANCIAL CONDITION AND LIQUIDITY The Company's financing needs depend primarily upon sales volume, asset turnover, land acquisition and inventory balances. The Company has historically financed its working capital needs through funds generated from operations, borrowings and the issuance of common stock. As of June 30, 1994, the Company had outstanding borrowings of approximately $82.8 million, including $68.3 of Senior Notes due 2003 (the "Senior Notes") and available cash and short term investments of approximately $4.6 million. At June 30, 1994 the Company also had available funds of approximately $10 million pursuant to available but unused credit facilities. The Company believes that the funds generated from operations and its borrowing availability under credit facilities will be sufficient to fund the Company's foreseeable working capital requirements, with the possible exception of land acquisitions. As of June 30, 1994, the Company had invested $7 million in two Joint Ventures with a reputable South Florida building company. The joint venture agreements provide that the Company is to receive (1) a 10% return plus $4,000 as each of 112 units are sold; (2) a 15% return, plus $2,800 as each developed lot or dwelling unit is sold and 5% of the gross sales price on land sales. The Company's investment and its return are guaranteed by the other Joint Venturer and by the principal shareholder of the Joint Venturer. - 9 - 11 PART II - OTHER INFORMATION ITEM 4 - RESULTS OF VOTES OF SHAREHOLDERS (a) On May 9, 1994, a regular Annual Shareholders Meeting was held at the Company's headquarters located at 1690 South Congress Avenue, Delray Beach, FL 33445. (b) Not applicable. (c) The following matters were submitted to Shareholders: (1) ELECTION OF DIRECTORS, CLASS A
BROKERS FOR AGAINST ABSTENTION NON-VOTE --- ------- ---------- -------- R. D. Levy 1,404,878 - 0 - 10,523 283,417 H. A. Levy 1,404,778 100 10,523 283,417 E. E. Hubshman 1,404,878 - 0 - 10,523 283,417 A. Nunez 1,404,878 - 0 - 10,523 283,417 E. H. Berns 1,404,878 - 0 - 10,523 283,417 ELECTION OF DIRECTORS, CLASS B BROKERS FOR AGAINST ABSTENTION NON-VOTE --- ------- ---------- -------- R. E. Deems 1,548,796 - 0 - 5,249 413,524 D. C. McClosky 1,548,796 - 0 - 5,249 413,524 P. R. Lehrer 1,548,796 - 0 - 5,249 413,524 (2) ADOPTION OF THE COMPANY'S 1994 STOCK OPTION PLAN FOR EMPLOYEES BROKERS FOR AGAINST ABSTENTION NON-VOTE --- ------- ---------- -------- 1,290,715 36,140 19,134 516,356 (3) ADOPTION OF THE COMPANY'S 1994 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS BROKERS FOR AGAINST ABSTENTION NON-VOTE --- ------- ---------- -------- 1,323,030 30,524 19,234 492,356
- 10 - 12 ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K The June 30, 1994 unaudited Financial Statements included in this Form 10-Q have been reviewed by Grant Thornton in accordance with established professional standards and procedures for such a review. There were no reports on Form 8-K for the six months ended June 30, 1994. - 11 - 13 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: July 29, 1994 - - -------------------------- /s/ R. D. Levy ------------------------- R. D. Levy, Chief Executive Officer, Date: July 29, 1994 - - -------------------------- /s/ A. Nunez ------------------------- A. Nunez Chief Financial Officer, - 12 - -----END PRIVACY-ENHANCED MESSAGE-----