-----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, RyGsuFCmP6lcxNW7v6eYnGiVFOT6wm3UU9KEcCwvrwk9PLdSmiofMYmH4+McwIES CuMItK4B6UonPY+lDp0QZg== 0000950147-98-000273.txt : 19980417 0000950147-98-000273.hdr.sgml : 19980417 ACCESSION NUMBER: 0000950147-98-000273 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980409 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL HOMES HOLDING CORP CENTRAL INDEX KEY: 0000796122 STANDARD INDUSTRIAL CLASSIFICATION: 1531 IRS NUMBER: 860554624 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10700 FILM NUMBER: 98590131 BUSINESS ADDRESS: STREET 1: 7001 N SCOTTSDALE RD STE 2050 CITY: SCOTTSDALE STATE: AZ ZIP: 85253 BUSINESS PHONE: 6024830006 MAIL ADDRESS: STREET 1: 7001 N SCOTTSDALE ROAD STREET 2: SUITE 2050 CITY: SCOTTSDALE STATE: AZ ZIP: 85253 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q -------------------------------------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 10 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-14830 CONTINENTAL HOMES HOLDING CORP. (Exact name of registrant as specified in its charter) Delaware 86-0554624 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 7001 N. Scottsdale Road, Suite 2050 85253 Scottsdale, Arizona (Zip Code) (Address of principal executive offices) (602) 483-0006 (Registrant's telephone number, including area code) Not Applicable (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 (or for such shorter period that the registrant was required to file such reports), 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 latest practicable date. Outstanding at Class of Common Stock April 1, 1998 --------------------- ------------- $.01 par value 6,868,900 - - -------------------------------------------------------------------------------- CONTINENTAL HOMES HOLDING CORP. FORM 10-Q FOR THE QUARTER ENDED FEBRUARY 28, 1998 TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements: Consolidated Balance Sheets as of February 28, 1998 and May 31, 1997......................................................................... 3 Consolidated Statements of Income for the three and nine months ended February 28, 1998 and 1997........................................................... 4 Consolidated Statements of Cash Flows for the nine months ended February 28, 1998 and 1997........................................................... 5 Notes to unaudited Consolidated Financial Statements................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................................................. 8 PART II. OTHER INFORMATION Item 4. Submission of matters to a vote of Security Holders.................................. 13 Item 6. Exhibits and Reports on Form 8-K..................................................... 13
2 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
February 28, May 31, 1998 1997 ---- ---- ASSETS (In thousands) Homebuilding: Cash and cash equivalents $ 27,099 $ 23,759 Receivables 16,586 27,894 Homes, lots and improvements in production 450,487 392,540 Property and equipment, net 4,031 3,656 Prepaid expenses and other assets 21,176 20,868 Excess of cost over related net assets acquired 8,575 9,565 Deferred income tax asset 4,961 2,471 --------- --------- 532,915 480,753 --------- --------- Mortgage banking: Mortgage loans held for sale 35,174 27,229 Other assets 498 274 --------- --------- 35,672 27,503 --------- --------- Total assets $ 568,587 $ 508,256 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Homebuilding: Accounts payable and other liabilities $ 61,106 $ 62,163 Notes payable, senior and convertible subordinated debt 310,192 270,763 --------- --------- 371,298 332,926 --------- --------- Mortgage banking: Notes payable 16,522 15,662 Other 389 560 --------- --------- 16,911 16,222 --------- --------- Total liabilities 388,209 349,148 --------- --------- Minority interest 3,597 4,209 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, $.01 par value: Authorized - 2,000,000 shares, Issued none -- -- Common stock, $.01 par value: Authorized - 20,000,000 shares, Issued - 7,085,109 shares 71 71 Treasury stock, at cost - 217,345 and 228,320 shares (2,887) (2,973) Capital in excess of par value 61,048 60,878 Retained earnings 118,549 96,923 --------- --------- Total stockholders' equity 176,781 154,899 --------- --------- Total liabilities and stockholders' equity $ 568,587 $ 508,256 ========= =========
The accompanying notes to consolidated financial statements are an integral part of these unaudited consolidated balance sheets. 3 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share data)
Three months ended Nine months ended February 28, February 28, ------------ ------------ 1998 1997 1998 1997 ---- ---- ---- ---- REVENUES Home sales $ 169,467 $ 169,986 $ 540,101 $ 516,533 Land sales 311 424 2,577 15,548 Mortgage banking and title operations 3,331 2,396 10,129 8,226 Other income, net (139) (129) (974) (112) ----------- ----------- ----------- ----------- Total revenues 172,970 172,677 551,833 540,195 ----------- ----------- ----------- ----------- COSTS AND EXPENSES Homebuilding: Cost of home sales 139,468 140,783 445,594 423,433 Cost of land sales 190 102 2,506 14,594 Selling, general and administrative expenses 18,231 17,942 56,754 53,587 Interest, net 855 847 2,311 3,593 Minority interest (158) (255) (612) (557) Mortgage banking and title operations: Selling, general and administrative expenses 2,056 1,879 7,043 6,017 Interest, net (206) (178) (580) (577) ----------- ----------- ----------- ----------- Total costs and expenses 160,436 161,120 513,016 500,090 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES AND EXTRAORDINARY LOSS 12,534 11,557 38,817 40,105 Income taxes 5,134 4,799 15,840 16,319 ----------- ----------- ----------- ----------- INCOME FROM OPERATIONS 7,400 6,758 22,977 23,786 Extraordinary loss: Loss on extinguishment of debt, net of income taxes of $233 -- -- (322) -- ----------- ----------- ----------- ----------- NET INCOME $ 7,400 $ 6,758 $ 22,655 $ 23,786 =========== =========== =========== =========== BASIC EARNINGS PER COMMON SHARE Income from operations $ 1.08 $ .98 $ 3.35 $ 3.42 Net income 1.08 .98 3.30 3.42 DILUTED EARNINGS PER COMMON SHARE Income from operations $ .78 $ .72 $ 2.41 $ 2.48 Net income .78 .72 2.38 2.48 CASH DIVIDENDS PER SHARE $ .05 $ .05 $ .15 $ .15 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 6,865,905 6,897,402 6,860,308 6,960,023 =========== =========== =========== ===========
The accompanying notes to consolidated financial statements are an integral part of these unaudited consolidated statements. 4 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended February 28, ------------ 1998 1997 ---- ---- Cash flows from operating activities: (In thousands) Net income $ 22,655 $ 23,786 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 2,644 2,424 Minority interest (612) (557) Deferred income taxes (2,490) 1,292 Decrease (increase) in assets: Homes, lots and improvements in production (57,947) (40,281) Receivables 3,363 (7,845) Prepaid expenses and other assets (1,195) (4,544) Increase (decrease) in liabilities: Accounts payable and other liabilities (1,228) 9,664 -------- -------- Net cash used by operating activities (34,810) (16,061) -------- -------- Cash flows from investing activities: Additions of property and equipment (1,237) (2,094) Cash paid for acquisitions, net of cash acquired -- (1,205) Adjustment to purchase price -- 1,700 -------- -------- Net cash used by investing activities (1,237) (1,599) -------- -------- Cash flows from financing activities: Increase in notes payable to financial institutions 51,817 12,173 Retirement of bonds payable -- (168) Retirement of 12% Senior Notes (11,557) -- Issuance of Senior Notes -- 20,175 Repurchase of stock -- (1,922) Stock options exercised 156 236 Dividends paid (1,029) (1,043) -------- -------- Net cash provided by financing activities 39,387 29,451 -------- -------- Net increase in cash 3,340 11,791 Cash at beginning of period 23,759 25,236 -------- -------- Cash at end of period $ 27,099 $ 37,027 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest, net of amounts capitalized $ 4,553 $ 4,680 Income taxes $ 14,560 $ 12,987 The accompanying notes to consolidated financial statements are an integral part of these unaudited consolidated statements. 5 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Basis of Presentation The consolidated financial statements include the accounts of Continental Homes Holding Corp. and its subsidiaries (the "Company"). In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's financial position, results of operations and cash flows for the periods presented. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related disclosures contained in the Company's annual report on Form 10-K for the year ended May 31, 1997, filed with the Securities and Exchange Commission. The results of operations for the three and nine months ended February 28, 1998 are not necessarily indicative of the results to be expected for the full year. Note 2. Interest Capitalization The Company follows the practice of capitalizing for its homebuilding operations certain interest costs incurred on land under development and homes under construction. Such capitalized interest is included in cost of home sales when the units are delivered. The Company capitalized such interest in the amount of $16,815,000 and $14,755,000 and expensed as a component of cost of home sales $13,222,000 and $13,352,000 in the nine months ended February 28, 1998 and 1997, respectively. Note 3. Notes payable, Senior and Convertible Subordinated Debt Notes payable, senior and convertible subordinated debt for homebuilding consist of:
February 28, May 31, 1998 1997 ---- ---- (In thousands) 10% senior notes, due 2006, net of discount of $1,462 and $1,599 $148,538 $148,401 12% Senior notes, due 1999, net of premium of $65 -0- 11,565 6-7/8% convertible subordinated notes, due 2002 86,150 86,250 Notes payable 75,504 24,547 -------- -------- $310,192 $270,763 ======== ========
6 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 4. Interest, net The summary of the components of interest, net is as follows: Three months ended Nine months ended February 28, February 28, ------------ ------------ 1998 1997 1998 1997 ---- ---- ---- ---- Homebuilding: (In thousands) Interest expense $ 1,272 $ 1,300 $ 3,657 $ 4,285 Interest income (417) (453) (1,346) (692) ------- ------- ------- ------- $ 855 $ 847 $ 2,311 $ 3,593 ======= ======= ======= ======= Mortgage Banking: Interest expense $ 311 $ 135 $ 896 $ 395 Interest income (517) (313) (1,476) (972) ------- ------- ------- ------- $ (206) $ (178) $ (580) $ (577) ======= ======= ======= ======= Note 5. Subsequent Event In December 1997, the Company entered into a definitive agreement and plan of merger with D.R. Horton, Inc. ("Horton") pursuant to which the Company would be merged into Horton. Stockholders of record as of February 23, 1998 are entitled to vote on the merger at stockholders' meetings for each corporation to be held on Monday, April 20, 1998. If approved, the Company expects that the merger will be effective that day. 7 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES ITEM 2. ------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - - --------------------- Homebuilding ------------ The following table sets forth, for the periods indicated, unit activity, average sales price and revenue from home sales for the Company:
Quarters ended Nine months ended February 28, February 28, ------------ ------------ 1998 1997 1998 1997 ----- ---- ---- ---- Units delivered 1,264 1,208 4,027 3,721 Average sales price $134,072 $140,717 $134,120 $138,816 Revenue from home sales (000's) $169,467 $169,986 $540,101 $516,533 Percentage increase (decrease) from prior year (.3)% 23.9% 4.6% 27.4% Change due to volume 4.6% 16.0% 8.2% 20.1% Change due to average sales price (4.9)% 7.9% (3.6)% 7.3%
The volume increase in the quarter and nine months ended February 28, 1998 compared to the same periods during fiscal 1997 resulted from improved deliveries in Phoenix, Southern California, San Antonio and Dallas. The decrease in average sales price in the quarter and nine months ended February 28, 1998 compared to the same periods during fiscal 1997 resulted primarily from a decrease in average sales price in Phoenix, Denver, Southern California, Dallas and South Florida due to product mix and a decrease in average sales price in Austin due to competitive pricing pressures. The following table summarizes information related to the Company's backlog at the dates indicated: February 28, ------------ (Dollars in thousands) 1998 1997 ---- ---- Units Dollars Units Dollars ----- ------- ----- ------- Phoenix 802 $104,261 713 $ 95,417 Texas 808 91,845 499 54,804 South Florida 413 56,425 163 19,903 Denver 359 65,991 211 41,685 Southern California 164 43,866 50 15,867 ----- -------- ----- -------- Total backlog 2,546 $362,388 1,636 $227,676 ===== ======== ===== ======== Average price per unit $142 $139 ==== ==== The increase in backlog at February 28, 1998 resulted from an increase in sales in all markets during the prior six months compared to the same period last year. The aggregate sales value of new contracts signed increased 45% in the nine months ended February 28, 1998 to $627,072,000 8 representing 4,558 homes as compared with $432,426,000 representing 3,208 homes for the nine months ended February 28, 1997. The following table summarizes information related to cost of home sales, selling, general and administrative ("SG&A") expenses and interest, net for homebuilding (dollars in thousands):
Quarters ended February 28, Nine months ended February 28, --------------------------- ------------------------------ 1998 1997 1998 1997 ---- ---- ---- ---- Dollars % Dollars % Dollars % Dollars % ------- - ------- - ------- - ------- - Revenue from home sales $169,467 100.0% $169,986 100.0% $540,101 100.0% $516,533 100.0% Cost of home sales 139,468 82.3 140,783 82.8 445,594 82.5 423,433 82.0 -------- ----- -------- ------ -------- ----- -------- ----- Gross profit 29,999 17.7 29,203 17.2 94,507 17.5 93,100 18.0 SG&A expenses 18,231 10.8 17,942 10.6 56,754 10.5 53,587 10.4 -------- ----- -------- ----- -------- ----- -------- ----- Operating income from homebuilding 11,768 6.9 11,261 6.6 37,753 7.0 39,513 7.6 Interest, net 855 .5 847 .5 2,311 .4 3,593 .7 -------- ----- -------- ----- -------- ----- -------- ----- Pre-tax profit from homebuilding $ 10.913 6.4% $ 10,414 6.1% $ 35,442 6.6% $ 35,920 6.9% ======== ===== ======== ===== ======== ===== ======== =====
The increase in gross profit margin from home sales for the quarter ended February 28, 1998 as compared to the prior quarter was primarily due to an increase in margins in Phoenix, Southern California and San Antonio. The decrease in gross margins for the nine months ended February 28, 1998 as compared to the same period a year ago was primarily due to a decline in margins in all markets except Phoenix and San Antonio. The increase in total SG&A expense for the quarter and nine months ended February 28, 1998 compared to the quarter and nine months ended February 28, 1997 was principally due to the increased volume which increased variable marketing costs (sales commissions, advertising and model furniture amortization) and an increase in plans and blueprint expenses and professional fees. SG&A expenses for each home delivered were $14,423 and $14,853 in the third quarter of fiscal 1998 and 1997, respectively and $14,093 and $14,401 in the first nine months of fiscal 1998 and 1997, respectively. The Company capitalizes certain SG&A expenses for homebuilding. Accordingly, total SG&A costs incurred for homebuilding were $21,711,000 and $66,553,000 for the three and nine months ended February 28, 1998 compared to $20,941,000 and $62,262,000 for the corresponding fiscal 1997 periods. The Company capitalizes certain interest costs for its homebuilding operations and includes such capitalized interest in cost of home sales when the related units are delivered. Accordingly, total interest incurred by the Company was $6,949,000 and $20,472,000 for the three and nine months ended February 28, 1998, respectively compared to $6,832,000 and $19,040,000 for the three and nine months ended February 28, 1997, respectively. The increase in interest incurred during the quarter and nine months ended February 28, 1998 compared to the same periods a year ago was primarily due to an increase in debt as a result of the 15% increase in inventory from February 28, 1997 to February 28, 1998. For the nine month period ended February 28, 1998, interest, net for homebuilding was $2,311,000 compared with $3,593,000 for the nine months ended February 28, 1997. The decrease in interest, net was due to the capitalization of interest on the Company's Carlsbad, California project which began development in October 1996, as well as additional interest income. 9 The Company's pre-tax profit from homebuilding for the nine months ended February 28, 1998 was $35,442,000 compared to $35,920,000 for the corresponding period ended February 28, 1997. Mortgage Banking and Title Operations - - ------------------------------------- The Company's mortgage banking operations are conducted through its wholly-owned subsidiary CH Mortgage Company ("CHMC"). The Company also conducts title operations in Austin, Texas through its wholly-owned subsidiary, Travis County Title Company. The following table summarizes operating information for the Company's mortgage banking and title operations:
Quarters ended Nine months ended February 28, February 28, ------------ ------------ 1998 1997 1998 1997 ---- ---- ---- ---- (Dollars in thousands) Number of loans originated 948 677 2,869 2,234 Loan origination fees $ 922 $ 677 $ 2,882 $ 2,157 Sale of servicing and marketing gains 1,571 1,010 4,589 3,705 Title policy premiums, net 402 352 1,350 1,233 Other revenue 436 357 1,308 1,131 ------- ------- ------- ------- Total revenues 3,331 2,396 10,129 8,226 General and administrative expenses 2,056 1,879 7,043 6,017 ------- ------- ------- ------- Operating income from mortgage banking and title 1,275 517 3,086 2,209 Interest, net 206 178 580 577 ------- ------- ------- ------- Pre-tax profit from mortgage banking and title $ 1,481 $ 695 $ 3,666 $ 2,786 ======= ======= ======= =======
Revenues and general and administrative expenses from mortgage banking increased in the quarter and nine months ended February 28, 1998 primarily as a result of a 40% and 28% increase in originations, respectively. Consolidated operations - - ----------------------- Net income was $22,655,000 ($3.30 basic earnings per share, $2.38 diluted earnings per share) for the nine months ended February 28, 1998 compared to $23,786,000 ($3.42 basic earnings per share, $2.48 diluted earnings per share) for the period ended February 28, 1997. 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, and expects to continue to finance, its working capital needs through funds generated by operations and borrowings. Funds for future land acquisitions and construction costs are expected to be provided primarily by cash flows from operations and future borrowings as permitted under the Company's loan agreements. On June 27, 1996, the Company entered into a credit agreement ("Credit Agreement") with a group of banks which provides for a $140 million unsecured revolving line of credit. Borrowings under the Credit Agreement bear interest at LIBOR plus 1.35% or prime plus .10% at the Company's election and subject to the rating on its senior debt. Available borrowings under the Credit Agreement are limited to certain percentages of housing unit costs, finished lots, land under development and receivables 10 as defined in the Credit Agreement. As a result of this formula, the borrowing base at February 28, 1998 was $140,000,000 of which $58,500,000 was outstanding. The Company believes that amounts generated from operations and such additional borrowings will provide funds adequate to finance its existing homebuilding activities and meet its debt service requirements. In order to provide funds for the origination of mortgage loans, CHMC has a warehouse line of credit for $25,000,000 which is guaranteed by the Company. Pursuant to the warehouse line of credit, the Company issues drafts to fund its mortgage loans. The amount represented by a draft is drawn on the warehouse line of credit when the draft is presented for payment. At February 28, 1998, the amount outstanding under the warehouse line of credit and the amount of funding drafts that had not been presented for payment was $16,522,000. The Company believes that this line is sufficient for its mortgage banking operations. On November 10, 1995, the Company completed the sale of $75,000,000 principal amount of its 6-7/8% Convertible Subordinated Notes due November 2002. On December 5, 1995, the Company sold an additional $11,250,000 of such notes. The net proceeds were used to redeem the Company's 6-7/8% Convertible Subordinated Notes due March 2002 and to reduce temporarily outstanding amounts under certain of the Company's revolving lines of credit (including the warehouse line of credit). The Convertible Notes are immediately convertible into shares of the Company's common stock at a rate of 42.105 shares for each $1,000 principal amount of Convertible Notes. On April 18, 1996 the Company completed the sale of $130,000,000 principal amount of its 10% Senior Notes due April 2006. The Company used approximately $107,542,000 of the net proceeds to repurchase $98,500,000 aggregate principal amount of its 12% Senior Notes due 1999. The remaining proceeds were used to reduce temporarily outstanding amounts under certain of the Company's revolving lines of credit. On January 30, 1997, the Company issued an additional $20,000,000 principal amount of its 10% Senior Notes due April 2006. The net proceeds were used to reduce temporarily outstanding amounts under the Company's revolving line of credit. On August 1, 1997, the Company redeemed the remaining $11,500,000 principal amount outstanding of its 12% Senior Notes due 1999, at a redemption price of 104%. Pursuant to a stock repurchase plan approved by the Board of Directors on December 22, 1994, the Company repurchased 162,000 shares of its common stock during fiscal 1997 at an average price of $16.22. In December 1997, the Company entered into a definitive agreement and plan of merger with D.R. Horton, Inc. ("Horton") pursuant to which the Company would be merged into Horton. Stockholders of record as of February 23, 1998 are entitled to vote on the merger at stockholders' meetings for each corporation to be held on Monday, April 20, 1998. If approved, the Company expects that the merger will be effective that day. This merger would constitute a change in control under the Company's 10% Senior Notes due April 2006 whereby the holders would have the right to require the Company to repurchase the Notes at a price equal to 101% of the principal amount. Cautionary disclosure regarding forward-looking statements - - ---------------------------------------------------------- The Company desires to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and is including this disclosure in order to do so. Certain 11 statements in this report that are not historical facts are, or may be considered to be, forward-looking statements. Given the risks, uncertainties and contingencies of the Company's business, the actual results may differ materially from those expressed or implied by such forward-looking statements. Further, certain forward-looking statements are based on assumptions concerning future events which may not prove to be accurate. Forward-looking statements by the Company regarding results of operations and, ultimately, financial condition, are subject to numerous risks and assumptions, including but not limited to, changes in general economic conditions, fluctuations in interest rates or labor and material costs, consumer confidence, competition, government regulations, financing availability, geographic concentration and risks associated with new and future communities. 12 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES PART II OTHER INFORMATION Item 4. Submission of matters to a vote of Security Holders --------------------------------------------------- None. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) 11 Statement of Computation of Earnings Per Share. 27 Financial Data Schedule. (b) Reports on Form 8-K: The Company filed reports on Form 8-K dated October 2, 1997 and December 18, 1997. 13 CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES SIGNATURES ---------- Pursuant to the requirements 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. CONTINENTAL HOMES HOLDING CORP. Date: April 9, 1998 By: /s/Julie E. Collins ------------------------------- JULIE E. COLLINS Chief Financial Officer Date: April 9, 1998 By: /s/ W. Thomas Hickcox ------------------------------- W. Thomas Hickcox Chief Executive Officer 14 EX-11 2 COMPUTATION OF EARNINGS PER SHARE Exhibit 11 Continental Homes Holding Corp. Computation of Earnings Per Share (In thousands, except per share data)
Three months ended Nine months ended February 28, February 28, ------------ ------------ Diluted earnings per share: 1998 1997 1998 1997 ---- ---- ---- ---- Net income $ 7,400 $ 6,758 $22,655 $23,786 Interest expense on convertible subordinated notes, net of income taxes 874 875 2,623 2,624 ------- ------- ------- ------- $ 8,274 $ 7,633 $25,278 $26,410 ======= ======= ======= ======= Weighted average number of shares outstanding 6,866 6,897 6,860 6,960 Conversion of convertible subordinated notes (42.105 shares per $1,000 principal amount of notes) 3,627 3,632 3,630 3,632 Incremental shares relating to stock options exercisable 177 64 131 56 ------- ------- ------- ------- Weighted average number of shares outstanding assuming full dilution 10,670 10,593 10,621 10,648 ======= ======= ======= ======= Diluted earnings per share $ .78 $ .72 $ 2.38 $ 2.48 ======= ======= ======= =======
EX-27 3 ARTICLE 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 U.S. Dollars 9-MOS MAY-31-1998 JUN-01-1997 FEB-28-1998 1 27,099 0 51,760 0 450,487 0 4,031 0 568,587 0 326,714 71 0 0 176,710 568,587 540,101 551,833 445,594 0 0 0 1,731 38,817 15,840 22,977 0 (322) 0 22,655 3.30 2.38
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