-----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, P+oh8E7uUkomSJDNBARHdCXw2Zz3ARBypJxf44yPwtHVX9GcLIT4YiQUBfzjEZhb nJMKIE8silnkctadDJRRGg== 0000950144-96-007791.txt : 19961111 0000950144-96-007791.hdr.sgml : 19961111 ACCESSION NUMBER: 0000950144-96-007791 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19961108 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORIOLE HOMES CORP CENTRAL INDEX KEY: 0000074928 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 591228702 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-06963 FILM NUMBER: 96657642 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-K405/A 1 ORIOLE HOMES CORP. FORM 10-K/A #1 12-31-95 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________ FORM 10-K/A-1 Annual Report pursuant to Section 13 of The Securities Exchange Act of 1934 For the fiscal year ended December 31, 1995 File No. 1-6963 ORIOLE HOMES CORP. 1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445 (407) 274-2000 Florida 59-1228702 - --------------------------------------- -------------------------------- (State of Incorporation) (I.R.S. Employer I.D.) Securities registered pursuant of Section 12(b) of the act: Name of Each Exchange on Title of Each Class Which Registered ------------------------------------ -------------------------------- Class A Common Stock, $.10 par Value American Stock Exchange Class B Common Stock, $.10 par Value American Stock Exchange 12 1/2% Senior Notes due 2003 ____________________________________ The Registrant (1) HAS filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding twelve months; and (2) HAS been subject to the filing requirements for at least the past 90 days. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or any amendment to this Form 10-K/A [ X ]. As of March 11, 1996, the Company had outstanding 1,891,249 shares of its Class A Common Stock and 2,734,275 shares of its Class B Common Stock. The aggregate market value of voting stock held by non-affiliates of the Registrant is $24,173,243 as of March 11, 1996. Part II is partially incorporated by reference from the Registrant's Annual Report to Shareholders for the year ended December 31, 1995, and Part III is incorporated by reference from the Registrant's Proxy statement for the 1996 Annual Meeting. 2 ITEM 6. SELECTED FINANCIAL DATA Information required by this item is incorporated by reference to the Registrant's 1995 Annual Report to Shareholders. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 7 is hereby amended and restated in its entirety as follows: OVERVIEW General. The following table sets forth for the periods indicated certain items of the Company's Consolidated Financial Statements expressed as a percentage of the Company's total revenues:
Percentage of Total Revenues Years Ended December 31, ---------------------------- 1993 1994 1995 ---- ---- ---- Sale of houses and condominiums 92.7% 91.8% 89.3% Sale of land 0.8 1.6 2.0 Other operating revenues 3.4 2.8 3.7 Interest, rentals and other income 3.1 3.6 4.8 Gain on sale of property and land held for investment, net - 0.2 0.2 Selling, general and administrative expenses 15.1 13.6 18.9 Net income (loss) 2.5 3.4 (14.3)
Backlog. The following table sets forth the Company's backlog at December 31, 1993, 1994 and 1995.
December 31, Number of Units Aggregate Dollar Value - ----------- --------------- ---------------------- 1993 257 $39,355,000 1994 143 $29,348,000 1995 193 $35,349,000
The Company's backlog generally represents units under contract for which a full deposit has been received, any statutory rescission right has expired, and in the case of a borrower, such borrower has been qualified for a mortgage loan. The Company generally fills all backlog within twelve months. The Company estimates that the period between receipt of a sales contract and delivery of the completed home to the purchaser is four to eight months. The Company's backlog historically tends to increase between January and May. Trends in the Company's backlog are subject to change from period to period for a number of economic conditions including consumer confidence levels, interest rates and the availability of mortgages. 3 RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994 The Company's revenues from home sales decreased $36.7 million (or 33.3%) during the calendar year 1995 as compared to the same period in 1994. The Company delivered 433 homes in 1995 compared to 775 in 1994, with an increase of 19.3% in the average selling price of homes delivered (from $142,100 to $169,500). The increase in the average selling price per home is primarily the result of the Company's entry into an upscale condominium community where the average selling price is $565,000 and a single family home community where the average selling price is $272,000. The decrease in home sales is believed to be the result of resistance to higher home prices that were precipitated by increases in material costs and by new building codes requiring greater hurricane protection. Also, resales were weak throughout the country which negatively affected the ability of the Company's prime customers, active adults, to sell their present homes and use those funds to purchase retirement homes in Florida. The number of new contracts signed (483) and the aggregate dollar value of these new contracts ($79.4 million) decreased in 1995 from 661 and $100.1 million in 1994. The Company's backlog has increased from $29.3 million at December 31, 1994 to $35.3 million as of December 31, 1995. A decrease in interest rates in the second half of 1995 contributed to a larger number of new sales contracts received by the Company and this trend has continued in early 1996 and is expected to remain through 1996. Other operating revenues decreased to $3.1 million during 1995 from $3.4 million in 1994 primarily as a result of higher vacancies in the rental units project. The occupancy rate and revenues were higher in 1994 as a consequence of hurricane "Andrew". Interest, rentals and other income decreased to $4.0 million from $4.3 million in 1994. Costs relating to other operating revenues increased in 1995, notwithstanding lower revenues, due to increased maintenance and additional advertising costs needed due to the higher vacancy rate. In 1995, other operating revenues decreased as compared to 1994 due to a lower rate of occupancy at the Company's residential rental project. The occupancy rate and revenues were higher in 1994 as a consequence of hurricane "Andrew". Costs relating to other operating revenues increased in 1995, notwithstanding lower revenues, due to increased maintenance and additional advertising costs needed due to the higher vacancy rate. Cost of home sales decreased to $62.2 million in 1995 from $91.8 million in 1994 as a result of a decrease in the dollar volume of homes delivered. As a percentage of home sales, cost of home sales increased to 84.8% from 83.4% due to increased competition, the absorption of higher construction costs and the impact of higher previously capitalized interest. 4 Selling, General and Administrative Expenses ("SG&A") decreased to $15.5 million in 1995 from $16.3 million in 1994, but as a percentage of total revenues, these expenses increased to 18.9% from 13.6% in the same period of 1994. Interest costs incurred in 1995 increased to $10.7 million from $10.4 million in 1994. The Company incurred a net loss for the year ended December 31, 1995 of $11.8 million or $2.54 per share, after a non-cash pre-tax write down of $13.9 million as of December 31, 1995, pertaining to the carrying cost of certain land inventory. In 1994 the Company had a net income of $4.1 million or $.89 per share. The write-down affects the carrying cost of land inventory for approximately 360 unsold housing units located in three developments originally purchased in 1989 and 1991. Land inventories are carried at cost, plus accumulated development and construction costs, including capitalized interest and real estate taxes. As these developments are among the Company's oldest and slower selling projects, they have been materially affected by the accumulated cost allocations. As a result, the accumulated cost of this inventory was in excess of its net realizable value. Results for 1995 also include a reduction of $686,744 in the Company's reserve for construction defects, which reflects unused warranty reserve related to finished projects. RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993 The Company's revenues from home sales increased $11.8 million (or 12.0%) during the calendar year 1994 as compared to the same period in 1993. The Company delivered 775 homes in 1994 compared to 771 in 1993, with an increase of 11.5% in the average selling price of homes delivered (from $127,500 to $142,100). The number of new contracts signed (661) and the aggregate dollar value of those new contracts ($100.1 million) decreased in 1994 from 788 and $108.2 million in 1993. Other operating revenues decreased to $3.4 million during 1994 from $3.6 million in 1993 due to a larger vacancy rate on our rental apartments. Interest, rentals and other income increased to $4.3 million in 1994 from $3.3 million in 1993 due to the return on investment in joint ventures. Cost of home sales increased to $91.8 million in 1994 from $80.7 million in 1993 as a result of an increase in the number of homes delivered. As a percentage of home sales, cost of home sales increased to 83.4% from 82.1%. Selling, General and Administrative expenses ("SG&A") increased to $16.3 million in 1994 from $16.0 million in 1993, but as a percentage of total revenues, these expenses decreased to 13.6% from 15.1% in the same period of 1993. The Company's interest cost incurred in 1994 was $10.4 million as compared to $10.2 million the same period in 1993. 5 Net income increased $1.5 million in 1994 or 56.6% over 1993. As a percentage of total revenues, the 1994 net income increased to 3.4% as compared to 2.5% in 1993, which reflected an extraordinary item in 1993 of $999,288 net of taxes, from the write-off of unamortized debentures and loan costs. LIQUIDITY AND CAPITAL RESOURCES The Company's financing needs depend primarily upon sales volume, asset turnover, land acquisition and inventory balances. The Company has financed its working capital needs through funds generated by operations, borrowings and the periodic issuance of common stock. On January 13, 1993, the Company issued $70.0 million of its 12 1/2% Senior Notes ("Notes") due January 15, 2003. 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% on or after January 15, 2001. The indenture under which the Notes were issued requires sinking fund payments of $17.5 million on January 15, 2001 and January 15, 2002. The indenture contains provisions restricting the amount and type of indebtedness the Company may incur, the purchase by the Company of its stock and the payment of dividends. At December 31, 1995, dividend payments are restricted and will be restricted until the Company posts cumulative net income in excess of $20.5 million. The Company had, as of December 31, 1995, a $15.0 million revolving line of credit of which $6.5 million was available at a rate of prime plus 1.5%, which expires July 1, 1997. On January 12, 1996 this line was increased to $20.0 million. This line is secured by assets aggregating not less than 2 times the amount of the line and in addition to typical restrictions and covenants the Company must: a) maintain a consolidated tangible net worth of not less than $60.0 million. b) The issuance of additional debt is restricted by covenants in the agreement. This line can be used to finance ongoing development, construction of residential real estate and other short-term capital needs. The Company had outstanding an aggregate balance of approximately $15.0 million of purchase money mortgages at interest rates from 8.875% - 11.75% which are collateralized by land and buildings. Of these mortgages, $.7 million is due in 1996 and $14.3 million are payable in 2003. 6 The Company as of February 29, 1996 has borrowed the maximum amounts allowed under its line of credit ($20.0 million). While the Company does not have any current commitments for capital expenditures, it may be necessary in 1996 to sell certain of the Company's assets to provide adequate cash flow to finance its home building activities and meet its debt service. The Company has entered into negotiations for the sale of certain assets which, if closed, may result in aggregate sales of approximately $10.0 million on or prior to June 30, 1996. The Company is also anticipating the receipt of an income tax refund of $1.4 million. The consummation of these transactions will alleviate the current cash flow situation. Additional asset sales may occur in the second half of 1996 which would also improve cash flow. INFLATION The Company, as well as the home building industry in general, may be adversely affected during periods of high inflation, primarily because of higher land and construction costs. In addition, higher mortgage interest rates may significantly affect the affordability and availability of permanent mortgage financing to prospective purchasers. Inflation also increases the Company's cost of labor and materials. The Company attempts to pass through to its customers any increases in its costs through increased selling prices. During the last three years, the Company has experienced a reduction in gross margins on the sale of homes. In some part, these reduced margins are the result of the Company being unable to raise selling prices and pass on increased construction costs. There is no assurance that inflation will not have a material adverse impact on the Company's future results of operations. ACCOUNTING METHODS The Company will be required to apply the provisions of Statement of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." SFAS 121 establishes guidance for when to recognize and how to measure impairment losses of long-lived assets and certain identifiable intangible assets. The Company will be required to implement this standard in its fiscal year 1996. Management does not expect the implementation of SFAS 121 to have a material effect on the Company's financial position or results of operations. The Company will also be required to apply the provisions of Statement of Financial Accounting Standards No.123 ("SFAS No.123"), "Accounting for Stock-Based Compensation." The Company will be required to present additional disclosures regarding the fair value of stock options. The Company will be required to implement this standard in fiscal year 1996. The Company does not expect the implementation of SFAS No.123 to have a material effect on the Company's financial position or results of operations. 7 Item 8 is hereby amended by deleting the Consolidated Statements of Operations Table contained in the Company's 1995 Form 10-K and substituting the following table in lieu thereof: ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31,
1995 1994 1993 ------------ ------------ ------------ Revenues Sales of houses and condominiums $ 73,409,093 $110,116,572 $ 98,302,003 Sales of land 1,610,441 1,959,779 891,041 Other operating revenues 3,070,455 3,365,024 3,600,196 Gain on sales of property and land held for investment, net 173,619 202,374 42,258 Interest, rentals and other income (Note O) 3,972,662 4,333,548 3,260,305 ------------ ------------ ------------ 82,236,270 119,977,297 106,095,803 ------------ ------------ ------------ Costs and expenses Cost of houses and condominiums sold 62,232,488 91,778,577 80,682,884 Non-recurring write-down of inventory (Note C) 13,917,025 - - Cost of land sold 1,384,516 1,726,119 772,020 Costs relating to other operating revenues 3,180,214 2,804,767 2,517,756 Selling, general and administrative expenses 15,532,512 16,313,685 16,001,923 Interest costs incurred 10,653,413 10,430,616 10,154,739 Interest capitalized (deduct) (9,898,999) (9,736,452) (9,997,908) ------------ ------------ ------------ 97,001,169 113,317,312 100,131,414 ------------ ------------ ------------ Income (loss) before provision for (benefit from) income taxes and extraordinary charge (14,764,899) 6,659,985 5,964,389 Provision for (benefit from) income taxes (Note I) (3,003,335) 2,523,065 2,324,023 ------------ ------------ ------------ Income (loss) before extra- ordinary charge (11,761,564) 4,136,920 3,640,366 Extraordinary charge - loss on early retire- ment of debt, net of income taxes - - (999,288) ------------- ------------ ------------ Net income (loss) $ (11,761,564) $ 4,136,920 $ 2,641,078 ============= ============ ============ Net income (loss) per common share before extraordinary charge $ (2.54) $ .89 $ .79 Extraordinary charge - - (.22) ------------- ------------ ------------ Net income (loss) per Class A and Class B common share $ (2.54) $ .89 $ .57 ============= ============ ============
The accompanying notes are an integral part of these statements. 8 SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment to the Annual Report to be Signed on its behalf by the undersigned, thereunto duly authorized. ORIOLE HOMES CORP. DATE 11-7-96 s/ R.D. Levy ------------------------------ ---------------------------------- R.D. Levy, Chairman of the Board Chief Executive Officer, Director DATE 11-7-96 s/ A. Nunez ------------------------------ ---------------------------------- A. Nunez, Senior Vice President, Treasurer, Chief Financial Officer, Chief Accounting Officer, Director Pursuant to the requirements of the Securities Exchange Act of 1934 this Amendment to the Annual Report has also been signed by the following persons on behalf of the Registrant in the capacities indicated. MEMBER OF THE BOARD OF DIRECTORS DATE 11-7-96 s/ Harry A. Levy ---------------------- ---------------------------------- Harry A. Levy, Director DATE 11-7-96 s/ E. E. Hubshman ---------------------- ---------------------------------- E.E. Hubshman, Director DATE 11-7-96 s/Mark A. Levy ---------------------- ---------------------------------- Mark A. Levy, Director DATE 11-7-96 s/ Eugene H. Berns ---------------------- ---------------------------------- Eugene H. Berns, Director DATE 11-7-96 s/ Donald C. McClosky ---------------------- ---------------------------------- Donald C. McClosky, Director DATE 11-7-96 s/ Paul R. Lehrer ---------------------- ---------------------------------- Paul R. Lehrer, Director -----END PRIVACY-ENHANCED MESSAGE-----