-----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, OIduWjgpdCZEGhx1gN71cxabGBxpbDpGk/uGTCb1PEXXHQEZ/pkNyrLHLs2h6ZXo 2MM59NIV9jwGJAM3rzE3tw== 0000915350-97-000002.txt : 19970318 0000915350-97-000002.hdr.sgml : 19970318 ACCESSION NUMBER: 0000915350-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970317 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORECAST GROUP LP CENTRAL INDEX KEY: 0000915350 STANDARD INDUSTRIAL CLASSIFICATION: GEN BUILDING CONTRACTORS - RESIDENTIAL BUILDINGS [1520] IRS NUMBER: 330582072 STATE OF INCORPORATION: CA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-72106 FILM NUMBER: 97557438 BUSINESS ADDRESS: STREET 1: 10670 CIVIC CENTER DR CITY: RANCHO CUCAMONGA STATE: CA ZIP: 91730 BUSINESS PHONE: 9099877788 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended January 31, 1997 OR [] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OR 1934 For the transition period from N/A Commission File Number 33-72106 THE FORECAST GROUP "Registered Tradename", L.P. FORECAST "Registered Tradename" CAPITAL CORPORATION (Exact Name of Registrant as specified in its charter) California 33-0582072 California 33-0582077 (State of Organization) (IRS Employer Identification Number) 10670 Civic Center Drive, Rancho Cucamonga, California 91730 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (909) 987-7788 Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered 11 3/8% Senior Notes Due 2000 None Securities Registered Pursuant to Section 12(g) of the Act: None Indicated by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 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___ There was no voting stock held by non-affiliates of the Registrant at March 14, 1997. At March 14, 1997, Forecast "Registered Tradename" Capital Corporation had 2,500 shares of Common stock outstanding. THE FORECAST GROUP "Registered Tradename", L.P. CONSOLIDATED BALANCE SHEETS (Amounts in 000's) January 31, October 31, 1997 1996 (unaudited) -------- -------- Assets: - ------- Cash and Cash Equivalents $5,883 $12,350 Accounts Receivable 375 466 Accounts and Notes Receivable, Related Parties 3,583 5,239 Real Estate Inventory 73,992 80,760 Property and Equipment, Net 1,115 1,171 Other Assets 1,924 2,200 ------- -------- Total Assets $86,872 $102,186 ======= ======== Liabilities & Partners' Equity: - ------------------------------- Accounts Payable $7,320 $11,443 Accrued Expenses 1,721 3,624 Notes Payable: Senior Notes at 11 3/8% due December 2000 29,075 34,475 Collateralized by Real Estate Inventory 27,046 25,720 Other Notes Payable 1,700 -- ------ ------ Total Notes Payable 57,821 60,195 ------ ------ Total Liabilities 66,862 75,262 Partners' Equity 20,774 27,688 Less: Capital Notes Receivable from Partners (764) (764) ------ ------ Net Partners' Equity 20,010 26,924 ====== ====== Total Liabilities and Partners' Equity $86,872 $102,186 ======= ========
[FN] See notes to consolidated financial statements. THE FORECAST GROUP "Registered Tradename", L.P. CONSOLIDATED STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY (Unaudited) (Amounts in 000's) For the Three Months Ended January 31 1997 1996 ------ ------ Homebuilding Revenues $24,843 $26,510 Cost of Homes Sold 21,618 22,191 ------- ------- Gross Profit 3,225 4,319 ======= ======= Operating Expenses: Selling & Marketing Expenses 3,176 3,039 General & Administrative Expenses 2,132 1,751 Non-Cash Charge for Impairment of Real Estate Inventory 6,635 -- ------ ------ Total Operating Expenses 11,943 4,790 ------ ------ Operating Loss (8,718) (471) Other Income (Expenses): Interest Income 131 65 Other Income and Expenses 39 64 ------ ------ Total Other Income (Expenses) 170 129 ------ ------ Income (Loss) before Extraordinary Gain (8,548) (342) Extraordinary Gain on Extinguishment of Senior Notes 1,634 1,384 ------ ------ Net Income (Loss) ($6,914) $1,042 ====== ====== Partners' Equity at Beginning of Period 27,688 23,998 Net Income (Loss) this Period (6,914) 1,042 ------ ------ Subtotal 20,744 25,040 Less: Capital Notes Receivable from Partners (764) (764) ------ ------ Net Partners' Equity at End of Period $20,010 $24,276 ======= =======
[FN] See notes to consolidated financial statements. THE FORECAST GROUP "Registered Tradename", L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in 000's) For the Three Months Ended January 31 -------------------- 1997 1996 -------------------- Operating Activities: - --------------------- Net Income (Loss) ($6,914) $1,042 Adjustments to Reconcile Net Income (Loss) to Net Cash Generated from (Used for) Operating Activities: Non-Cash Charge for Impairment of Real Estate Inventory 6,635 -- Extraordinary Gain on Extinguishment of Senior Notes (1,634) (1,384) Depreciation and Amortization on Property and Equipment 72 62 Loss (Gain) on Sale of Property and Equipment -- 7 Decrease in Accounts Receivable 91 95 Decrease (Increase) in Real Estate Inventory 133 (3,089) Decrease (Increase) in Other Assets 122 (439) Increase (Decrease) in Accounts Payable and Accrued Expenses (6,026) (1,643) ------- ------- Net Cash Generated from (Used for) Operating Activities (7,521) (5,349) ------- ------- Investing Activities: - --------------------- Additions to Property and Equipment (16) (32) ------- ------- Net Cash Generated from (Used for) Investing Activities (16) (32) ------- ------- Financing Activities: - --------------------- Retirement of Senior Notes at 11 3/8% due December 2000 (3,612) (2,293) Decrease (Increase) in Accounts and Notes Receivable, Related Parties 1,656 (784) Proceeds from Notes Payable 13,569 15,628 Proceeds from Notes Payable, Related Parties -- 2,221 Proceeds from Notes Payable, Other 1,700 -- Principal Payments on Notes Payable (12,243) (9,507) Principal Payments on Notes Payable, Related Parties -- (2,221) ------- ------- Net Cash Generated from (Used for) Financing Activities 1,070 3,044 ------- ------- Increase (Decrease) in Cash and Cash Equivalents (6,467) (2,337) Cash and Cash Equivalents at Beginning of Period 12,350 8,090 ------- ------- Cash and Cash Equivalents at End of Period $5,883 $5,753 ======= =======
[FN] See notes to consolidated financial statements. THE FORECAST GROUP "Registered Tradename", L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures contained in the Form 10-K for the year ended October 31, 1996 (File No. 33-72106) as filed with the Securities and Exchange Commission. The results of operations for the three months ended January 31, 1997 do not necessarily indicate the results that can be expected for the full fiscal year. The results of operations for the three months ended January 31, 1997, and this Form 10-Q, also may be interpreted as, or actually contain, "forward looking" information, as that term is defined by the Securities and Exchange Commission. To the extent such forward looking information is contained in this filing, the company intends to use these disclosures to take advantage of the "Safe Harbor" provisions set out in the rules and regulations of the Securities and Exchange Commission, and thus strongly recommends that prior to making an investment decision a prospective investor should carefully consider the factors mentioned in Form 10-K for the year ended October 31, 1996 in relation to that "forward looking" information, as well as other financial and business information that may be available from a variety of sources regarding the home building industry as a whole, including, but not limited to: - -- Changes in national economic conditions such as interest rates, consumer confidence and job loss or formation statistics - -- Change in economic conditions in the markets in which the Company operates - -- Fluctuations in mortgage interest rates - -- Cost increases resulting from adverse weather conditions, shortages of labor and construction materials - -- Changes in governmental regulations which may delay new home development or impose additional costs or fees. 2. Real Estate Held for Development and Sale and Related Notes Payable Real estate held for development and sale and related notes payable consist of the following: (Amounts in 000's) January 31, 1997 ----------------------------- Real Estate Notes Payable Inventory ----------------------------- Land Held for Development $15,267 $0 Residential Projects in Process 50,749 22,156 Model Homes 7,976 4,890 ------- ------- Total $73,992 $27,046 ======= ======= October 31, 1996 ----------------------------- Real Estate Notes Payable Inventory ----------------------------- Land Held for Development $15,067 $0 Residential Projects in Process 57,442 20,449 Model Homes 8,251 5,271 ------- ------- Total $80,760 $25,720 ======= =======
3. Interest Expense The following summarizes the components of interest expense incurred, capitalized, expensed and paid: FOR THREE MONTHS ENDED JANUARY 31, ---------------------- 1997 1996 ---------------------- Interest incurred and capitalized $1,919 $1,911 Capitalized interest amortized to cost of homes sold $1,470 $1,237 Interest paid $2,974 $3,095
4. Transactions With Affiliates In December of 1994, Mr. Previti did, on his own account, purchase $550,000 of the Company's Senior Notes at a favorable discount from their face value. In January 1995, the Board of Directors of Forecast "Registered Tradename" Homes, Inc., resolved that it would be in the Company's best long-term interests to seek the assistance of Mr. James Previti, the Company's President and Chief Executive Officer, in acquiring the Company's Senior Notes on the open market, if he could acquire them at a favorable discount from their stated face value. At the same time, the Board of Directors agreed that the Company would repurchase the notes from Mr. Previti at his cost basis, plus interest, at such time as the Company had sufficient financial resources. Acting upon this authorization, Mr. Previti did acquire another $19,800,000 of Senior Notes of which $14,950,000 were repurchased and retired prior to October 31, 1996. In January 1997, Mr. Previti assigned his interest in the aggregate remaining $5,400,000 of Senior Notes to the Company, in exchange for the Company's assumption of margin debt of $1,700,000 owing by Mr. Previti, and forgiveness of two notes held by and owing to the Company in the total amount of $1,699,000 that were secured by Mr. Previti's interest in the Senior Notes. This transaction resulted in an extraordinary gain of $1,634,000 in the first quarter of fiscal 1997. The Company believes that the transactions discussed above were on terms at least as favorable to the Company as a comparable transaction made on an arms length basis between unaffiliated parties. 5. 11 3/8% Senior Notes Due December 2000 In February 1994, the Company issued $50,000,000 in 11 3/8% Senior Notes through a public debt offering. The notes are joint and several obligations of the Company and Forecast Capital Corporation, with interest only payments due semi- annually on June 15 and December 15 of each year. The notes are unsecured obligations of the Company and rank pari passu in right of payment with all senior indebtedness of the Company. As of January 31, 1997, the Company had retired a total of $20,925,000 of the Senior Notes, leaving $29,075,000 of Senior Notes still outstanding. The Indenture governing the Senior Notes requires the Company to maintain a minimum net worth of $25 million. If the Company's net worth at the end of any two consecutive fiscal quarters (the last day of such second consecutive fiscal quarter being referred to as the "Trigger Date" is less than $25 million , then the Company is required to make an offer to all Senior Note holders to acquire on a pro rata basis, Senior Notes in the aggregate principal amount of $5 million (the "Net Worth Offer") at a purchase price equal to 100% of the principal amount thereof, plus accrued interest to the date of repurchase. Notwithstanding this requirement to offer to, and then, repurchase Senior Notes, the Indenture allows the Company to credit against the Net Worth Offer, the principal amount of any Senior Notes acquired by the Company prior to the Trigger Date, through repurchase or optional redemption. The Company may not, however, use any specific Senior Note repurchase in any more than one Net Worth Offer. In no event shall the failure to meet the minimum net worth requirement at the end of any fiscal quarter be counted toward the making of more than one Net Worth Offer. For the fiscal quarters ended October 31, 1995 and January 31, 1996, the Company was not in compliance with the minimum net worth requirement. Therefore, under the terms of the Company's Indenture, January 31, 1996 became a Trigger Date for the Company, requiring a Net Worth Offer. However, despite this event, the Company had already repurchased or redeemed a sufficient amount of Senior Notes to meet any repurchase obligations resulting from the first Trigger Date. As of April 30, 1996, July 31, 1996, and October 31, 1996, the Company's net worth was again above the $25 million threshold, preventing the occurrence of a second Trigger Date at any time prior to January 31, 1997. As of January 31, 1997, as a result of the Company's decision to record a non- cash charge for the impairment of real estate inventory the Company's net worth went below the $25 million threshold. Further, the Company anticipates its net worth will be below the $25 million threshold at April 30, 1997, at which time a Trigger Date would occur. Notwithstanding the occurrence of this Trigger Date, the Company has acquired and retired over $20 million of Senior Notes and, accordingly will not be required to make a Net Worth Offer. 6. Real Estate Inventory In March 1995, The Financial Accounting Standards Board (FASB) issued Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (Statement 121). Under Statement 121, when events or circumstances indicate that an impairment to an assets to be held and used might exist, the expected future undiscounted cash flows from the affected asset or group of assets must be estimated and compared to the carrying value of the asset or group of assets. If the sum of the estimated undiscounted cash flows is less than the carrying value of the assets, an impairment loss must be recorded. The impairment loss is measured by comparing the estimated fair value of the assets with their carrying amount. Statement 121 also requires that long-lived assets that are held for disposal be reported at the lower of the assets' carrying amount or fair value less costs of disposal. In the first quarter of fiscal 1997, management performed evaluations of its real estate inventory and analyzed future undiscounted cash flows for all real estate projects where impairment indicators were present. The evaluations largely considered the competitive nature of homebuilding operations in the Company's principal markets, including decreased sales prices, increased sales incentives and future costs of development and holding costs during development based on current absorption estimates. Based on these evaluations, a non- cash charge for the impairment of certain real estate assets amounting to $6,635,000 was recorded for the three months ending January 31, 1997. FORECAST "Registered Tradename" CAPITAL CORPORATION BALANCE SHEET (Unaudited) January 31, October 31, 1997 1996 ------------------------ Assets: - ------- Cash $300 $300 ------ ------ Total Assets $300 $300 ====== ====== Liabilities & Shareholders' Deficit: - ------------------------------------- Accounts Payable $400 $400 Accounts Payable, Related Parties 2,300 2,300 ------ ------ Total Liabilities 2,700 2,700 ------ ------ Common Stock, $1.00 par value: Authorized 10,000 shares Issued and Outstanding 2,500 shares 2,500 2,500 Accumulated Deficit (4,900) (4,900) ------ ------ Total Shareholders' Deficit (2,400) (2,400) ------ ------ Total Liabilities & Shareholders' Deficit $300 $300 ====== ======
[FN] See notes to consolidated financial statements. FORECAST "Registered Tradename" CAPITAL CORPORATION STATEMENTS OF OPERATIONS AND SHAREHOLDERS' EQUITY (Unaudited) For the Three months Ended January 31 -------------------- 1997 1996 -------------------- General & Administrative Expenses $0 $0 Income Tax Expense -- -- ----- ----- Net Income (Loss) $0 $0 ===== ===== Shareholders' Equity at Beginning of Period (2,400) (600) Net Income (Loss) this Period 0 0 ------ ------ Shareholders' Equity at End of Period ($2,400) ($600) ====== ======
[FN] See notes to consolidated financial statements. FORECAST "Registered Tradename" CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation Forecast "Registered Tradename" Capital Corporation was incorporated in California on September 20, 1993. The Company is a whollyowned subsidiary of The Forecast Group "Registered Tradename", L.P., a California limited partnership that is engaged in the residential real estate development business. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures contained in the Form 10K for the year ended October 31, 1996 (File No. 33-72106) as filed with the Securities and Exchange Commission. The results of operations for the three months ended January 31, 1997 do not necessarily indicate the results that can be expected for the full fiscal year. 2. Income Taxes The Company is a "C" Corporation for federal and state income tax reporting purposes and accounts for income taxes in accordance with Financial Accounting Standards Board Statement No. 109 "Accounting for Income Taxes". THE FORECAST GROUP "Registered Tradename", L.P. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Part I. Item 2. Results of Operations The following table sets forth, for the period indicated, certain income statement items as percentages of total home building sales and certain other data: Percent of Housing Sales For the Three Months ended January 31 ------------------------ 1997 1996 ------------------------ Homebuilding Revenues 100.0% 100.0% Cost of Homes Sold 87.0% 83.7% ------ ------ Gross Profit 13.0% 16.3% Operating Expenses: Selling & Marketing Expenses 12.8% 11.5% General & Administrative Expenses 8.6% 6.6% Non-Cash Charge for Impairment of Real Estate Inventory 26.7% 0.0% ------ ------ Total Operating Expenses 48.1% 18.1% Operating Income (Loss) -35.1% -1.8% ====== ====== Number of homes closed 175 194 Number of homes sold 137 197 Number of sold homes in backlog 125 203 Aggregate value of backlog, in millions $18.1 $26.6
Results of Operations for the Three Months ended January 31, 1997 and January 31, 1996: Housing revenues for the three months ended January 31, 1997 were $24.8 million, a decrease of $1.7 million or 6.3% from the three months ended January 31, 1996. The revenues in fiscal 1997 represent 175 closings at an average sales price of $141,960 while the revenues in fiscal 1996 represent 194 unit closings at an average sales price of $136,600. Changes in the average selling price of homes delivered may vary from period to period based on product mix and pricing of specific communities. The decrease in closings is attributable to fewer sold homes in backlog at the beginning of the 1997 fiscal quarter largely due to competitive conditions in the Company's Southern California market and the delay in opening new communities in Northern California. Gross margin from housing sales decreased by $1.1 million, or 25.3%, for the three months ended January 31, 1997, as compared to the three months ended January 31, 1996, as a result of decreased home closings and a 3.3% increase in the cost of homes sold. This increase in the cost of homes sold is attributable to increased land costs in relation to the sales price of the Company's homes. This tightening of margins was itself the result of competitive conditions which have limited the Company's ability to pass on price increases to its customers, as well as higher financing costs which were created by the Company carrying its inventories for longer periods. Selling and marketing expenses were $3.2 million during the three months ended January 31, 1997, an increase of $137,000 over the same period during fiscal 1996. This increase was realized as an outgrowth of the Company's increased advertising costs which were incurred in an effort to keep sales absorption at similar levels to those reported in the three month period ended January 31, 1996. General and administrative expenses were $2.1 million and $1.7 million during the three months ended January 31, 1997 and 1996, respectively. The $381,000 increase can be largely attributed to accrued legal costs resulting from the settlement of various land related issues. A net loss of $6.9 million was recognized in the first quarter of fiscal 1997 compared to net income of $1.0 million in the first quarter of fiscal 1996 as a result of decreased gross profit from homebuilding and a non-cash charge for impairment of real estate inventory of $6.6 million. The Company had new home sales, net of cancellations, of 137 homes in the three months ended January 31, 1997, a decrease of 60 homes or 31% from the comparable prior year period. The decrease is attributable to an unusually large number of cancellations in the Company's Phoenix market and delays in opening new communities in Northern California. Liquidity and Capital Resources: The residential real estate development business is inherently capital intensive. Significant cash expenditures are typically needed to acquire and develop land, construct homes and establish marketing programs for lengthy periods of time in advance of revenue realization. The Company generally finances its operations with secured borrowings from commercial banks, financial institutions and private investors, unsecured borrowings in the public market, and with available cash flow from operations. The Company has commitments for $25.5 million under several revolving credit facilities with commercial banks and financial institutions of which $9.9 million was outstanding at January 31, 1997. In addition, the Company has community specific facilities to provide aggregate funding of $23.9 million of which $12.2 million was outstanding and $11.7 million is available to build out the respective communities. The Company also benefits from a line of credit which is secured by some of its model homes for an amount not to exceed $5.8 million of which $4.9 million was outstanding as of January 31, 1997. Borrowings under the credit facilities are secured by liens on specific real property owned by the Company. The aggregate outstanding principal balance under the Company's credit facilities was $27.0 million as of January 31, 1997. In February 1994, the Company issued $50 million in Senior Notes through a public debt offering, of which $29,075,000 were still outstanding on January 31, 1997. The notes are due in December 2000 with interest at the rate of 11 3/8% per annum payable semi-annually on June 15 and December 15 of each year. The Indenture governing the Senior Notes limits total outstanding recourse debt to $15 million unless, at the time the recourse debt is incurred and after giving effect to the proceeds therefrom, certain threshold tests are met for interest coverage and debt to equity ratios, as defined in the Indenture. At January 31, 1997, the Company's outstanding recourse debt was approximately $5.5 million, thus approximately $9.5 million in additional "recourse" debt could have been incurred. As of January 31, 1997, the Company did not meet the threshold tests for interest coverage or debt-to-equity ratios. However, the Company is not precluded from incurring debt on a non-recourse basis, and believes the financing currently in place is sufficient to meet the Company's business objectives for the foreseeable future. The Indenture governing the Senior Notes requires the Company to maintain a minimum net worth of $25 million. If the Company's net worth at the end of any two consecutive fiscal quarters (the last day of such second consecutive fiscal quarter being referred to as the "Trigger Date" is less than $25 million , then the Company is required to make an offer to all Senior Note holders to acquire on a pro rata basis, Senior Notes in the aggregate principal amount of $5 million (the "Net Worth Offer") at a purchase price equal to 100% of the principal amount thereof, plus accrued interest to the date of repurchase. Notwithstanding this requirement to offer to, and then, repurchase Senior Notes, the Indenture allows the Company to credit against the Net Worth Offer, the principal amount of any Senior Notes acquired by the Company prior to the Trigger Date, through repurchase or optional redemption. The Company may not, however, use any specific Senior Note repurchase in any more than one Net Worth Offer. In no event shall the failure to meet the minimum net worth requirement at the end of any fiscal quarter be counted toward the making of more than one Net Worth Offer. For the fiscal quarter ended January 31, 1997, the Company is not in compliance with its minimum net worth covenant. In addition, management believes it is unlikely that the minimum net worth will be met as of April 30, 1997, which date would represent the Trigger Date for a net worth offer. However, the Company has purchased or redeemed a sufficient amount of Senior Notes believed necessary to meet repurchase obligations resulting from the first Trigger Date. While there are no assurances, management believes that future income from operations and gains from the extinguishment of Senior Notes will be sufficient to restore minimum net worth before any future Trigger Dates. There can be no assurance that the impact of market conditions affecting the demand for homes or the availability of debt financing will not adversely affect the Company's future need for capital. However, the Company expects that available capital resources will be sufficient to meet its normal operating requirements over the near term. PART II. OTHER INFORMATION Item 1. Legal Proceedings ----------------- (a) None Item 2. Changes in Securities --------------------- (a) None Item 3. Defaults upon Senior Securities ------------------------------- (a) Refer to note 5 of Notes to Consolidated Financial Statements. Item 4. Submission of Matters to a Vote of Security Holders ---------------------------------------------------- (a) None Item 5. Other Information ----------------- (a) None Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) There are no exhibits attached to this report. (b) The Company did not file any reports on Form 8-K during the period. 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. THE FORECAST GROUP "Registered Tradename", L.P. By: FORECAST "Registered Tradename" HOMES, INC. --------------------------------------------- A California Corporation its General Partner March 14, 1997 By: /s/ James P. Previti - --------------- ------------------------ Date James P.Previti President By: /s/ Thomas Connelly --------------------- Thomas Connelly Senior Vice President Principal Financial and Accounting Officer By: FORECAST "Registered Tradename" CAPITAL CORPORATION --------------------------------------------------- March 14, 1997 By: /s/ James P. Previti - -------------- ---------------------- Date James P. Previti President By: /s/ Thomas Connelly --------------------- Thomas Connelly Senior Vice President Principal Financial and Accounting Officer EX-27 2
5 3-MOS OCT-31-1997 JAN-31-1997 5883000 0 3958000 0 73992000 86872000 1115000 72000 86872000 66862000 29075000 0 0 0 0 86872000 24843000 24843000 21618000 26926000 (39000) (6635000) 0 (8548000) (8548000) (8548000) 0 1634000 0 (6914000) 0 0
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