-----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, T6RsALZ2vOTMKZMfl0SoIvwI2D1GIjWtrusr6fpKOhTLnZw0AFUXo1rQpdbRxEfi B4hTLg7rzgUSERayLe+QWQ== 0000950144-97-005946.txt : 19970520 0000950144-97-005946.hdr.sgml : 19970520 ACCESSION NUMBER: 0000950144-97-005946 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 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: 97607736 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 CORP. 10-Q 3/31/97 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: March 31, 1997 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 issuers classes of common stock, as of the close of the period covered by this report. Class Outstanding at March 31, 1997 - ------------------------------------------ --------------------------------- Common Stock, Class A, par value $.10 1,874,949 Common Stock, Class B, par value $.10 2,750,575 2 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET ASSETS
March 31, December 31, 1997 1996 (Unaudited) (Audited) ----------- ------------ Cash and cash equivalents $ 2,515,724 $ 2,409,376 ------------ ------------ Receivables: Mortgage notes 276,237 277,205 Due at closing -- -- Income taxes 2,398,914 2,398,914 ------------ ------------ 2,675,151 2,676,119 Inventories: Land 81,021,965 90,105,428 Houses and condominiums completed or under construction 51,883,306 51,080,872 Model houses and condominiums 5,745,996 4,776,274 ------------ ------------ 138,651,267 145,962,574 Less: Estimated costs of completion included in inventories 11,931,033 14,184,967 ------------ ------------ 126,720,234 131,777,607 ------------ ------------ Property and equipment (at cost): Land 7,046,758 7,046,758 Buildings 20,655,113 20,728,053 Furniture, fixtures and equipment 4,869,546 4,724,882 ------------ ------------ 32,571,417 32,499,693 Less: Accumulated depreciation 9,957,166 9,648,463 ------------ ------------ 22,614,251 22,851,230 ------------ ------------ Other: Prepaid expenses 3,228,419 2,709,076 Unamortized debt issuance costs 1,717,278 1,810,237 Investment in and advances to joint ventures 6,265,000 6,531,000 Land held for investment (at cost) 2,346,772 2,346,772 Other assets 3,893,867 2,434,473 ------------ ------------ 17,451,336 15,831,558 ------------ ------------ Total Assets $171,976,696 $175,545,890 ============ ============
See notes to consolidated financial statements -1- 3 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, December 31, 1997 1996 (Unaudited) (Audited) ----------- ------------ Liabilities: Line of credit $ 7,300,000 $ 2,700,000 Mortgage notes payable 12,592,086 12,641,501 Accounts payable 10,221,467 10,742,182 Customer deposits 11,057,970 7,583,571 Accrued expenses and other liabilities 4,667,879 6,588,489 Deferred income taxes 1,888,345 1,387,473 12 1/2% Senior Notes due January 15, 2003, net of $1,266,873 discount in 1997 and $1,308,064 discount in 1996 66,197,127 66,155,936 ------------ ------------ Total Liabilities 113,924,874 107,799,152 Shareholders' Equity: Class A common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 1,874,949 in 1997 and in 1996 187,495 187,495 Class B common stock, $.10 par value Authorized - 10,000,000 shares Issued and outstanding - 2,750,575 in 1997 and in 1996 275,058 275,058 Additional paid-in capital 19,267,327 19,267,327 Retained earnings 38,321,942 48,016,858 ------------ ------------ Total Shareholders' Equity 58,051,822 67,746,738 ------------ ------------ Total Liabilities and Shareholders' Equity $171,976,696 $175,545,890 ============ ============
See notes to consolidated financial statements -2- 4 ORIOLE HOMES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended March 31, ------------------------------- 1997 1996 ------------ ------------ Revenues: Sale of houses and condominiums $ 19,778,548 $ 16,700,443 Sale of land 5,500 712,356 Other operating revenues 735,378 776,822 Interest, rentals and other income 903,505 848,573 Gain on sale of property and land held for investment, net 113 20,360 ------------ ------------ 21,423,044 19,058,554 ------------ ------------ Costs and Expenses: Cost of houses and condominiums sold 17,798,157 14,305,086 Inventory valuation adjustment 8,700,000 -- Cost of land sold 3,246 652,459 Costs relating to other operating revenues 713,423 731,080 Selling, general and administrative expenses 4,365,101 4,240,219 Interest costs incurred 2,587,415 2,865,659 Interest capitalized (deduct) (2,399,802) (2,679,940) ------------ ------------ 31,767,540 20,114,563 ------------ ------------ Loss before benefit from income taxes (10,344,496) (1,056,009) Benefit from income taxes (649,580) (397,557) ------------ ------------ Net Loss $ (9,694,916) $ (658,452) ============ ============ Loss per Class A and B Common Share: Net Loss $ (2.10) $ (.14) ============ ============ Average Number of Class A and Class B Common Shares Outstanding 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)
Three Months Ended March 31, -------------------------------- 1997 1996 ------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ (9,694,916) $ (658,452) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 345,571 322,294 Amortization 134,150 131,955 Deferred income taxes 500,872 448,942 Gain on sale of property and equipment and other assets (113) (20,360) (Increase) decrease in operating assets Receivables 968 303,679 Inventories (3,575,586) (8,184,120) Inventory valuation adjustment 8,700,000 -- Other assets (1,978,737) (1,315,023) Increase (decrease) in operating liabilities Accounts payable (520,715) 3,058,791 Customer deposits 3,474,399 2,386,400 Accrued expenses and other liabilities (1,920,610) (3,414,366) ------------ ------------ Total adjustments 5,160,199 (6,281,808) ------------ ------------ Net cash used in operating activities (4,534,717) (6,940,260) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Return on investment in joint venture 266,000 -- Capital expenditures (245,345) (755,304) Proceeds from the sale of property and equipment and other assets 69,825 170,835 ------------ ------------ Net cash provided by (used in) investing activities 90,480 (584,469) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from mortgage notes -- 12,800,000 Payment of mortgage notes (49,415) (14,361,494) Borrowings under line of credit agreements 8,100,000 11,500,000 Repayments under line of credit agreements (3,500,000) (2,500,000) Issuance costs -- (96,236) ------------ ------------ Net cash provided by financing activities 4,550,585 7,342,270 ------------ ------------ NET INCREASE (DECREASE) IN CASH 106,348 (182,459) CASH AT BEGINNING OF PERIOD 2,409,376 3,275,615 ------------ ------------ CASH AT END OF PERIOD $ 2,515,724 $ 3,093,156 ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest (net of amount capitalized) $ 2,254,672 $ 2,269,324 Income taxes $ -- $ 349
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 March 31, 1997, the related statements of operations and cash flows for the three months ended March 31, 1997 and 1996 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, 1996 annual report to shareholders. Certain balances have been reclassified to conform to the current year presentation. 2. The results of operations for the three months ended March 31, 1997 are not necessarily indicative of the results for the entire year. 3. Affiliated Companies. The Company does not have investments in affiliated companies. 4. Inventory Valuation Adjustment. The Company recorded, in the first quarter 1997, an inventory valuation adjustment of $8,700,000 or $1.88 per common share related to the write-down of certain land inventory to its estimated net realizable value. The write-down pertains to land inventory for approximately 1,000 unsold housing units located in five developments -5- 7 ORIOLE HOMES CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 5. Backlog of Contracts for Sales of Houses and Condominiums
March 31, 1997 December 31, 1996 ---------------------------- ----------------------------- Units Amounts Units Amounts ----------- ----------- ----------- ------------ Single-Family Homes 219 $40,519,857 173 $32,115,231 Multi-Family 189 24,737,313 93 12,695,047 ----------- ----------- ----------- ----------- Total 408 $65,257,170 266 $44,810,278 =========== =========== =========== ===========
6. Following is a computation of earnings per share:
Three Months Ended -------------------------------- 3/31/97 3/31/96 -------------- ----------- Net Loss $ (9,694,916) $ (658,452) ============== =========== Weighted average number of common shares outstanding 4,625,524 4,625,524 ============== =========== Loss per share $ (2.10) $ (.14) ============== ===========
7. 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. 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. On May 9,1997, the agreement was amended to reduce the line of credit to $10,000,000 and also to reduce the consolidated tangible net worth requirement to $58,000,000 as of March 31, 1997. As of March 31, 1997, the outstanding loan balance was $7,300,000. -6- 8 Grant Thornton LLP Certified Public Accountants 777 Brickell Avenue Suite 1200 Miami, FL 33131-2867 Board of Directors Oriole Homes Corp. We have reviewed the accompanying consolidated balance sheet of Oriole Homes Corp. and Subsidiaries as of March 31, 1997, and the related consolidated statements of operations and cash flows for the three-month period 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 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, 1996, 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 March 7, 1997, 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, 1996, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Grant Thornton LLP Miami, Florida May 8, 1997 -7- 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION RESULTS OF OPERATIONS. THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996 The Company's revenues from home sales increased to $19.8 million (18.4%) during the first quarter of 1997 as compared to the same period of 1996. The Company delivered 120 homes in the 1997 first quarter compared to 98 in the same period of 1996. The average selling price of homes delivered decreased 3.3% (from $170,413 to $164,821). The Company entered into 262 new contracts with an aggregate value of $40.2 million in the first quarter of 1997 compared to 220 new contracts with an aggregate value of $36.7 million in the 1996 period. The Company's backlog has increased from $55.3 million as of March 31, 1996 to $65.3 million as of March 31, 1997. Favorable interest rates and a more aggressive merchandising program contributed to a larger number of new contracts. Other operating revenues and interest, rentals and other income remained at the same level of the 1996 period. As a percentage of home sales, cost of homes sold increased to 90.0% from 85.7%. Gross margins during the first quarter of 1997 were adversely affected by increases in construction costs, accumulated capitalized interest and the reduction of selling prices caused by market conditions. Selling, general and administrative expenses reflected a small increase in the 1997 period as compared to the 1996 first quarter, but as a percentage of total revenues, these expenses decreased to 20.4% from 22.2% in the same period of 1996. The Company incurred a net loss for the quarter ended March 31, 1997 of $9.7 million or $2.10 per share compared to a net loss of $658,452 or $.14 per share during the same period in 1996. Included in the 1997 period is a noncash pretax writedown of $8.7 million representing an inventory valuation adjustment affecting the carrying cost of land inventory for approximately 1,000 unsold housing units located in five developments. The Company determined that this inventory valuation adjustment was appropriate because it would have to continue selling homes in these developments at prices lower than originally anticipated in order to meet market conditions, while construction cost increases and accumulated capitalized interest adversely affect the cost of goods sold. 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 March 31, 1997 the Company has a $20.0 million revolving line of credit which expires July 1, 1997, of which $12.7 million was available at a rate of prime plus 1.5%. PART II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K The March 31, 1997 unaudited Financial Statements included in this form 10-Q have been reviewed by Grant Thornton LLP in accordance with established professional standards and procedures for such a review. (a) There were no reports on Form 8-K for the three months ended March 31, 1997. -8- 10 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: May 13, 1997 s/ R.D. Levy - -------------------------------- ----------------------------------- R.D. Levy, Chairman of the Board, Chief Executive Officer, Director Date: May 13, 1997 s/ A. Nunez - -------------------------------- ----------------------------------- A. Nunez, Senior Vice President Treasurer, Chief Financial Officer, Chief Accounting Officer, Director -9- EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 2,515,724 0 2,675,151 0 126,720,234 0 32,571,417 (9,957,166) 171,976,696 0 86,089,213 0 0 462,553 57,589,269 171,976,696 19,784,048 21,423,044 17,801,403 27,214,826 4,365,101 0 187,613 (10,344,496) (649,580) (9,694,916) 0 0 0 (9,694,916) (2.10) (2.10)
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