-----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, P5WR5kafJrPGwKHKH4pz3rL9OdTA6Gt4Hi84FWki8lJQhg5Skm3cuKNhegzAfbCF XG0iJO37nOaZrsjLlGLXqg== 0000950144-96-007908.txt : 19961113 0000950144-96-007908.hdr.sgml : 19961113 ACCESSION NUMBER: 0000950144-96-007908 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06963 FILM NUMBER: 96659621 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 FORM 10-Q 09/30/96 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: September 30, 1996 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 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 September 30, 1996 - ------------------------------------- --------------------------------- Common Stock, Class A, par value $.10 1,879,849 Common Stock, Class B, par value $.10 2,745,675 2 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET ASSETS
September 30, December 31, 1996 1995 (Unaudited) (Audited) ---------------- ---------------- Cash and cash equivalents $ 1,644,402 $ 3,275,615 ---------------- ---------------- Receivables: Mortgage notes 278,104 280,562 Due at closing - 114,700 Income taxes - 1,660,846 ---------------- ---------------- 278,104 2,056,108 Inventories: Land 97,985,213 103,435,218 Houses and condominiums completed or under construction 57,339,953 48,306,006 Model houses and condominiums 5,559,459 3,386,194 ---------------- ---------------- 160,884,625 155,127,418 Less: Estimated costs of completion included in inventories 16,860,435 23,699,916 ---------------- ---------------- 144,024,190 131,427,502 ---------------- ---------------- Property and equipment (at cost): Land 7,046,759 7,168,046 Buildings 20,936,315 22,283,655 Furniture, fixtures and equipment 5,358,407 5,445,387 ---------------- ---------------- 33,341,481 34,897,088 Less: Accumulated depreciation 10,034,515 10,892,078 ---------------- ---------------- 23,306,966 24,005,010 ---------------- ---------------- Other: Prepaid expenses 3,429,406 2,378,932 Unamortized debt issuance costs 1,909,819 2,098,760 Investment in and advances to joint ventures 5,613,000 5,625,000 Land held for investment (at cost) 2,346,569 3,001,783 Other assets 3,135,390 5,609,607 ---------------- ---------------- 16,434,184 18,714,082 ---------------- ---------------- Total Assets $ 185,687,846 $ 179,478,317 ================ ================
See notes to consolidated financial statements -1- 3 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, December 31, 1996 1995 (Unaudited) (Audited) --------------- --------------- Liabilities: Line of credit $ 11,500,000 $ 8,500,000 Mortgage notes payable 12,690,043 15,041,573 Accounts payable 9,289,650 7,328,804 Customer deposits 11,570,787 6,072,046 Accrued expenses and other liabilities 6,023,370 8,393,132 12 1/2% Senior Notes due January 15, 2003, net of $1,354,256 discount in 1996 and $1,482,687 discount in 1995 66,359,744 66,481,313 --------------- --------------- Total Liabilities 117,433,594 111,816,868 Shareholders' Equity: Class A common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 1,879,849 in 1996 and 1,891,249 in 1995 187,985 189,125 Class B common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 2,745,675 in 1996 and 2,734,275 in 1995 274,568 273,428 Additional paid-in capital 19,267,327 19,267,327 Retained earnings 48,524,372 47,931,569 --------------- --------------- Total Shareholders' Equity 68,254,252 67,661,449 --------------- --------------- Total Liabilities and Shareholders' Equity $ 185,687,846 $ 179,478,317 =============== ===============
See notes to consolidated financial statements -2- 4 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, --------------------------------- ------------------------------- 1996 1995 1996 1995 --------------- -------------- -------------- -------------- Revenues: Sale of houses and condominiums $ 62,107,681 $ 49,032,659 $ 21,702,274 $ 21,603,572 Sale of land 1,634,356 1,316,329 12,000 21,100 Other operating revenues 2,398,508 2,315,089 806,459 763,645 Interest, rentals and other income 2,884,309 2,902,818 994,255 943,684 Gain on sale of property and land held for investment, net 2,329,426 144,142 1,662,302 29,690 --------------- -------------- -------------- -------------- 71,354,280 55,711,037 25,177,290 23,361,691 --------------- -------------- -------------- -------------- Costs and Expenses: Cost of houses and condominiums sold 53,485,976 41,538,240 19,295,657 17,712,326 Cost of land sold 1,691,998 1,129,854 8,928 19,762 Costs relating to other operating revenues 2,251,531 2,294,850 749,302 782,614 Selling, general and administrative expenses 12,459,815 11,075,540 3,920,049 4,012,108 Interest costs incurred 8,366,544 7,899,547 2,690,646 2,749,522 Interest capitalized (deduct) (7,851,753) (7,313,929) (2,522,318) (2,573,387) --------------- -------------- -------------- -------------- 70,404,111 56,624,102 24,142,264 22,702,945 --------------- -------------- -------------- -------------- Income (loss) before provision for (benefit from) income taxes 950,169 (913,065) 1,035,026 658,746 Provision for (benefit from) income taxes 357,366 (343,722) 389,298 247,885 --------------- -------------- -------------- -------------- Net Income (Loss) $ 592,803 $ (569,343) $ 645,728 $ 410,861 =============== ============== ============== ============== Earnings per Class A and Class B Common Share: Net Income (Loss) $ 0.13 $ (0.12) $ 0.14 $ 0.09 =============== ============== ============== ============== 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 $ - $ - $ - $ - =============== ============== ============== ============== Dividends per Class B Common Share $ - $ - $ - $ - =============== ============== ============== ==============
See notes to consolidated financial statements -3- 5 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS INCREASE (DECREASE) IN CASH (Unaudited)
Nine Months Ended September 30, -------------------------------------- 1996 1995 --------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ 592,803 $ (569,343) Adjustments to reconcile net income to net cash used in operating activities Depreciation 1,014,300 926,611 Amortization 413,608 337,934 Deferred income taxes 458,375 106,095 Gain on sale of property and equipment and other assets (2,329,426) (144,142) (Increase) decrease in operating assets Receivables 1,778,004 914,927 Inventories (14,932,317) (16,012,371) Other assets 965,368 (3,017,522) Increase (decrease) in operating liabilities Accounts payable 1,960,846 (797,705) Customer deposits 5,498,741 1,819,597 Accrued expenses and other liabilities (2,369,762) (1,228,204) --------------- ---------------- Total adjustments (7,542,263) (17,094,780) --------------- ---------------- Net cash used in operating activities (6,949,460) (17,664,123) --------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES Return on investment in joint venture 12,000 1,210,000 Land held for investment (13,327) (4,882) Capital expenditures (1,545,907) (1,033,293) Proceeds from the sale of property and equipment and other assets 6,563,247 616,526 --------------- ---------------- Net cash provided by investing activities 5,016,013 788,351 --------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from mortgage notes 12,800,000 149,875 Payment of mortgage notes (15,151,530) (2,507,229) Borrowings under line of credit agreements 27,100,000 14,500,000 Repayments under line of credit agreements (24,100,000) (6,000,000) Repurchase of senior notes (250,000) (126,000) Issuance costs (96,236) (90,331) Dividends paid - (993,409) --------------- ---------------- Net cash provided by financing activities 302,234 4,932,906 --------------- ---------------- NET DECREASE IN CASH (1,631,213) (11,942,866) CASH AT BEGINNING OF PERIOD 3,275,615 14,609,489 --------------- ---------------- CASH AT END OF PERIOD $ 1,644,402 $ 2,666,623 =============== ================ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest (net of amount capitalized) $ 2,516,832 $ 2,603,664 Income taxes $ 619 $ 643,049
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 September 30, 1996, the related statements of operations and cash flows for the three and nine months ended September 30, 1996 and 1995 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, 1995 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 nine months ended September 30, 1996 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
September 30, 1996 December 31, 1995 ---------------------------- -------------------------- Units Amounts Units Amounts --------- -------------- --------- -------------- Single-Family Homes 225 $ 40,993,369 115 $ 23,225,708 Multi-Family 168 23,697,733 78 12,123,361 ------- -------------- ------- -------------- Total 393 $ 64,691,102 193 $ 35,349,069 ======= ============== ======= ==============
5. Following is a computation of earnings per share:
Three Months Ended Nine Months Ended 9/30/96 9/30/95 9/30/96 9/30/95 ------------- ------------ ---------- ------------ Net Income (Loss) $ 645,728 $ 410,861 $ 592,803 $ (569,343) ============= ============ =========== ============ Weighted average number of common shares outstanding 4,625,524 4,625,524 4,625,524 4,625,524 ============= ============ =========== ============ Earnings (loss) per share $ .14 $ .09 $ .13 $ (.12) ============= ============ =========== ============
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, 1995, at 105% of the principal amount of 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. 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%. This agreement was amended August 23, 1995 to increase the line of credit to $15,000,000 and January 12, 1996 to increase the line of credit to $20,000,000. As of September 30, 1996, the outstanding loan balance was $11,500,000. -6- 8 GRANT THORNTON Board of Directors Oriole Homes Corp. We have reviewed the accompanying consolidated balance sheet of Oriole Homes Corp. and Subsidiaries as of September 30, 1996, and the related consolidated statements of operations and cash flows for the three-month and nine-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 inquiries 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, 1995, and the related consolidated statements of operations, shareholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated February 16, 1996, 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, 1995, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Grant Thornton Miami, Florida November 5, 1996 -7- 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1996, COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1995 The Company's revenues from home sales remained at the same level during the third quarter of 1996 as compared to the same period in 1995. The Company delivered 127 homes in the 1996 quarter compared to 98 homes in the same period of 1995. The average selling price of homes delivered decreased 22.5% (from $220,445 to $170,884) due to the absence in the third quarter of 1996, of units closed in an upscale condominium project completed early in 1996. The Company entered into 146 new contracts with an aggregate value of $24.3 million in the third quarter of 1996 compared to 113 new contracts with an aggregate dollar value of $19.0 million in the 1995 period. Interest, rentals and other income remained at the same level in the third quarter of 1996 when compared to the same period of 1995. During the 1996 third quarter Gain on Sale of Property reflects the closing of two nonresidential properties in West Boca Raton. Cost of Home Sales increased to $19.3 million in the third quarter of 1996 from $17.7 million in the same period of 1995 related to a larger volume of sale of houses and condominiums. As a percentage of home sales, cost of homes sold increased to 88.9% from 82.0%. Gross margins during the third quarter of 1996 were adversely affected by rising construction costs, amortization of previously capitalized interest, and the Company's effort to spur sales of its older inventory by lowering prices on these housing units. Selling, general and administrative expenses decreased to $3.9 million in 1996 from $4.0 million in 1995, and as a percentage of total revenues, decreased to 15.6% in the third quarter of 1996 as compared to 17.2% in the same period of 1995. Net income in the third quarter of 1996 amounted to $0.6 million ($0.14 per share) as compared to $0.4 million ($0.09 per share) for the same period of 1995, but net results for the third quarter of 1996 would have shown a loss of $391,050 ($0.08 per share) but for a net profit of $1,036,778 ($0.22 per share) resulting from the sale of nonresidential properties located in West Boca Raton. NINE MONTHS ENDED SEPTEMBER 30, 1996, COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1995 The Company's revenues from home sales increased 26.7% to $62.1 million in the nine month period of 1996 as compared to $49.0 million in the same period of 1995. The company delivered 350 units in the first nine months of 1996 as compared to 280 units in 1995. The average selling price of homes delivered increased to $177,451 from $175,117. The Company entered into 550 new contracts with an aggregate value of $91.4 million during the 1996 nine month period compared to 377 new contracts with an aggregate value of $62.1 million in the 1995 period. Other operating revenues increased from $2.3 million in 1995 to $2.4 million in 1996. Interest, rentals and other income remains at the same level in 1996 when compared to the same period of 1995. -8- 10 Gain on Sale of Property and land held for investment increased to $2.3 million in 1996 from $0.1 million in 1995, reflecting the gross profit of $1.7 million resulting from the sale of nonresidential properties located in West Boca Raton and $0.5 million from the sale of recreation leases. Cost of Sales increased from $41.5 million in 1995 to $53.5 million in 1996 related to a larger volume of sale of houses and condominiums. As a percentage of home sales, cost of sales increased from 84.7% in 1995 to 86.1% in 1996 mainly due to rising construction costs, amortization of previously capitalized interest and the Company's effort to spur sales of its older inventory by lowering prices. Selling, general and administrative expenses increased from $11.1 million in 1995 to $12.5 million in 1996, but as a percentage of total revenues decreased from 19.9% in 1995 to 17.5% in 1996. Net income for the first nine months of 1996 reflected a profit of $0.6 million ($0.13 per share) as compared to a loss of $0.6 million ($0.12 per share) in 1995. Net income for the 1996 period included $1.5 million ($0.31 per share) from the sale of nonresidential properties and recreation leases. If these sales were excluded, the operating results for the nine months of 1996 would have reflected a loss of $0.9 million ($0.18 per share). The dollar amount of the company's backlog which reflects new sales contracts that have yet to close increased 52% to $64,691,102 (representing 393 units) as of September 30, 1996 from $42,435,043 (representing 240 units) as of September 30, 1995. The average per unit value of the Company's backlog now stands at $164,608, representing a decrease of 7% over $176,813 reported at the end of the 1995 third quarter. 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 from funds generated through operations, borrowings and the issuance of common stock. As of September 30, 1996, the Company has outstanding borrowings of approximately $90.5 million, including $66.4 million in Senior Notes due 2003. It had available cash and short term investments of approximately $1.7 million. At September 30, 1996, the Company also had available funds of approximately $8.5 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 requirements, with the possible exception of land acquisitions. As of September 30, 1996, the Company has invested $5,613,000 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 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 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 8, 1996 s/ R. D. Levy --------------------------------- R. D. Levy, Chairman of the Board Chief Executive Officer, Director Date: November 8, 1996 s/ A. Nunez --------------------------------- A. Nunez, Senior Vice President Treasurer, Chief Financial Officer, Chief Accounting Officer, Director -10- 12 EXHIBITS 27 Financial Data Schedule (for SEC use only) -11- EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF ORIOLE HOMES CORPORATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 1,644,402 0 278,104 0 144,024,190 0 33,341,481 (10,034,515) 185,687,846 0 90,549,787 0 0 462,553 67,791,699 185,687,846 63,742,037 71,354,280 55,177,974 57,429,505 12,459,815 0 514,791 950,169 357,366 592,803 0 0 0 592,803 .13 .13 COMPANY REPORTS ON A NON-CLASSIFIED BALANCE SHEET.
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