<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-23347
UNITED HOMES, INC.
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(Exact name of Registrant as specified in its charter)
Illinois 36-3978181
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2100 Golf Road, Rolling Meadows, IL 60008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (847) 427-2450
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
11% Mandatory Redemption Debentures
Due March 15, 2005
(Title of Class)
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 .
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TABLE OF CONTENTS
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PAGE
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PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 1998
(unaudited) and September 30, 1997 (audited). . . . . . . . . . .1
Condensed Consolidated Statements of Income for the six months
ended March 31, 1998 and 1997 (unaudited) . . . . . . . . . . . .2
Condensed Consolidated Statements of Income for the three months
ended March 31, 1998 and March 31, 1997 . . . . . . . . . . . . .3
Condensed Consolidated Statements of Stockholder's Equity for the
six months ended March 31, 1998 (unaudited) and the year
ended September 30, 1997 (audited). . . . . . . . . . . . . . . .4
Consolidated Statements of Cash Flows for the six months ended
March 31, 1998 and 1997 (unaudited) . . . . . . . . . . . . . . .5
Notes to the Condensed Consolidated Interim Financial Statements
(unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . .8
Item 3. Quantitative and Qualitative Disclosure About Market Risk . . . . . . 13
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . 13
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . 13
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of March 31, 1998 (unaudited)
and September 30, 1997 (audited)
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<CAPTION>
March 31, September 30,
1998 1997
(unaudited) (audited)
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ASSETS
Cash and cash equivalents $ 1,404,129 $ 1,105,368
Housing inventories 79,943,784 71,232,760
Land held for future development 7,436,556 2,352,502
Investment in real estate partnership 541,243 541,243
Due from Parent 2,784,394 4,159,383
Notes receivable 4,181,206 3,902,000
Other 3,092,282 1,817,366
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Total assets 99,383,594 85,110,622
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LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued liabilities 17,788,472 19,300,714
Deferred income --- 1,264,371
Deposits from home buyers 877,716 963,233
Development loans and other notes payable 60,294,302 52,360,936
Mandatory redemption debentures 7,106,000
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Total liabilities 86,066,490 73,889,254
Investors' equity in majority-owned land
development and housing partnerships 1,275,973 1,435,379
Stockholder's equity 12,041,131 9,785,989
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Total liabilities and stockholder's equity $99,383,594 $85,110,622
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SEE ACCOMPANYING NOTES.
1
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Condensed Consolidated Statements of Income for the six months
ended March 31, 1998 and 1997 (unaudited)
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Six Months Ended
March 31
1998 1997
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REVENUES
Housing and land sales (324 units in 1998 and
168 units in 1997) $53,654,721 $27,797,148
Recognition of deferred income 1,264,371 ---
Other 23,879 25,528
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54,942,971 27,822,676
COST OF SALES
Housing costs, including amortization of capitalized
interest and real estate taxes of $1,672,193 in
1998 and $ 747,340 in 1997 45,224,337 22,815,212
Amortization of capitalized project costs 5,916,721 3,815,935
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Profit 3,801,913 1,191,529
Other costs and expenses 2,001,406 904,424
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Income before investors share of income in majority-
owned land development and housing partnerships 1,800,507 287,105
Investors' share of income in majority-owned
land development and housing partnerships 42,365 77,876
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Income before income taxes 1,758,142 209,229
Income taxes 703,000 68,853
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Net income $ 1,055,142 $ 140,376
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See accompanying notes.
2
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Condensed Consolidated Statements of Income for the
three months ended March 31, 1998 and March 31, 1997
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Three Months Ended
March 31
1998 1997
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REVENUES
Housing and land sales (152 units in 1998 and 97
units in 1997) $30,827,045 $15,981,030
Other 17,786 6,377
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30,844,831 15,987,407
COST OF SALES
Housing costs, including amortization of
capitalized interest and real estate taxes
of $737,077 in 1998 and $498,763 in 1997 25,560,537 13,347,624
Amortization of capitalized project costs 3,772,536 2,247,421
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Profit 1,511,758 392,362
Other costs and expenses 1,318,822 456,438
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Income before investors share of income in
majority-owned land development and housing
partnerships 192,936 (64,076)
Investors' share of income in majority-owned
land development and housing partnerships (16,270) 11,495
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Income before income taxes 209,206 (52,581)
Income taxes 95,984 41,062
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Net income $ 113,222 $ (11,519)
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SEE ACCOMPANYING NOTES.
3
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Condensed Consolidated Statements of Stockholder's Equity
for the six months ended March 31, 1998 (unaudited) and
the year ended September 30, 1997 (audited)
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Additional
Common Paid-in Retained
Stock Capital Earnings
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Balance at September 30, 1996 $100 $ 3,900 $ 9,063,386
Net income 718,603
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Balance at September 30, 1997 100 3,900 9,781,989
Net income 1,055,142
Capital contribution 1,200,000
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Balance at March 31, 1998 $100 $1,203,900 $10,837,131
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SEE ACCOMPANYING NOTES.
4
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Consolidated Statements of Cash Flows for the six months
ended March 31, 1998 and 1997 (unaudited)
<TABLE>
<CAPTION>
Six Months Ended March 31,
1998 1997
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CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 1,055,142 $ 140,376
Adjustments to reconcile net income to net cash
used in operating activities:
Investors' share of equity in majority-owned
land development and housing partnerships 42,365 77,876
Changes in operating assets and liabilities:
(Increase) in housing inventories (8,711,024) (14,848,416)
(Increase) decrease in land held for future
development (5,084,054) (2,389,942)
Decrease in due from Parent 1,374,989 2,020,111
(Increase) in notes receivables (279,206)
(Increase) in other assets (26,564) (1,285,796)
(Decrease) increase in accounts payable and
accrued liabilities (1,512,242) (271,244)
Decrease in deferred income (1,264,371) (1,066,107)
(Decrease) increase in deposits from home buyers (85,517) 434,330
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Net cash used in operating activities (14,490,482) (17,188,812)
CASH FLOW FROM INVESTING ACTIVITIES
(Increase) decrease in due from managed properties (6,128) 51,008
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Net cash provided by investing activities (6,128) 51,008
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from development loans and other notes
payable 72,820,321 43,265,524
Repayments of development loans and other notes
payable (64,886,895) (28,413,280)
Net proceeds from mandatory redemption debentures 5,863,716
Contributions from investors in majority-owned
land development and housing partnerships 295,600
Distributions to investors in majority-owned land
development and housing partnerships (497,371) (633,059)
Change in capitalization 1,200,000
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Net cash provided by financing activities 14,795,371 16,219,185
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Increase (decrease) in cash and cash equivalents 298,761 (918,619)
Cash and cash equivalents at beginning of year 1,105,368 1,146,443
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Cash and cash equivalents at end of period $ 1,404,129 $ 227,824
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SEE ACCOMPANYING NOTES.
5
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Notes to the Condensed Consolidated Interim Financial Statements (unaudited)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated interim financial statements do
not include all information and footnotes necessary for a fair presentation
of financial position, results of operations and cash flows in conformity
with generally accepted accounting principles. These interim statements
should be read in conjunction with the Company's audited financial statements
incorporated by reference to the Company's September 30, 1997 financial
statements filed on Form 10-K as certain footnote disclosures which
substantially duplicate those contained in such audited financial statements
have been omitted from these condensed interim financial statements. In the
opinion of management, the interim financial statements contain all
adjustments (which are normal and recurring) necessary for a fair statement
of financial results for the interim periods.
2. HOUSING INVENTORIES
Housing inventories consisted of the following:
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March 31, September 30,
1998 1997
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Land under development, including site
development costs $34,375,007 $32,509,293
Direct construction costs 20,220,340 17,573,716
Capitalized project costs 21,645,004 16,993,716
Land held for sale 3,703,433 4,156,035
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$79,943,784 $71,232,760
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6
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Notes to the Condensed Consolidated Interim Financial Statements (continued)
3. NOTES RECEIVABLE
During the quarter ended December 31, 1997, the affiliated interests in
22 model homes were sold to non-affiliated parties. The deferred gain
relating to these transactions was recognized in the quarter.
4. MANDATORY REDEMPTION DEBENTURES
During the first quarter of fiscal 1998, the Company sold 1,015
mandatory redemption debentures with a par value of $1,000 per debenture at a
price of $985 per debenture. The gross proceeds from the offering totaled
$6,999,410. Offering expenses totaled $1,135,694. The debentures are due
March 15, 2005 and bear interest at 11%. Interest is payable quarterly
commencing in March, 1998. The debentures are to be redeemed semi-annually
commencing in September, 1999 in amounts of $592,164.
5. ADDITIONAL PAID-IN CAPITAL
In December, 1997, the Parent Company, United Development Management Company,
contributed commercial and residential real property with a fair value of
$1,200,000. This property is currently classified as inventory and is held
for sale at values in excess of the amounts contributed.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
Certain statements in this Report that are not historical facts
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act
of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Discussions
containing such forward-looking statements may be found in the material set
forth hereunder as well as within this Report generally. In addition, when
used in this Report, the words "believes," "intends," "anticipates,"
"expects" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to a number of risks and
uncertainties described in more detail under "Factors Affecting the Company's
Business." Actual results could differ materially from those projected in
the forward-looking statements as a result of the factors set forth in this
Report. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements that may be made to
reflect any future events or circumstances.
The following analysis of the Company's consolidated financial condition
and results of operations as of March 31, 1998 and September 30, 1997 and for
the six months ended March 31, 1998 and 1997 should be read in conjunction
with the Company's Consolidated Financial Statements, including the notes
thereto, and other information included elsewhere in this Report.
GENERAL
The Company generates revenue from the interrelated activities of land
acquisition, development and homebuilding. The Company generally enters into
a purchase agreement with a potential home buyer prior to commencing
construction, except where the home is being constructed on a speculative
basis or to be used as a model home. As of March 31, 1998, the Company had
391 homes built or under construction (including winter foundations), of
which 297 were under contract for sale. The number of homes under
construction prior to execution of sales contracts tends to vary by season
reflecting the fact that weather conditions in the Chicago and western
Michigan markets necessitate starting foundation construction in the fall and
early winter months prior to executing purchase agreements to ensure
available inventory for winter sales and spring closings. The Company does
not recognize a sale for accounting purposes until the sale of a home or lot
is closed. The time period from execution of a purchase agreement to the
closing of the sale of a home generally ranges from six to nine months.
RESULTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1998 AND 1997. Revenues from housing and
land sales increased approximately $25.8 million or 93% for the six months
ended March 31, 1998 from approximately $27.7 million to approximately $53.6
million. The increase in revenue resulted from an increase in the volume of
homes and lots closed during the period.
8
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During the six months ended March 31, 1998, the Company closed on the sale of
263 homes and 61 lots at an average selling price for homes of $165,600
compared to 162 homes and 6 lots at an average selling price for homes of
$165,459 in the same period ended March 31, 1997. The Company believes that
the volume increase reflected an increase in demand for the Company's homes
and lots and an increase in the number of housing starts. The Company also
recognized income totaling approximately $1.2 million during the six-month
period ended March 31, 1998. Recognition of this income had been deferred
from previous quarters since it was generated from a sale transaction with
affiliates.
Housing costs, including amortization of capitalized interest and real
estate taxes, increased during the six-month period ended March 31, 1998 from
approximately $22.8 million to approximately $45.2 million as compared to the
same period ended March 31, 1997. The increase in these costs resulted
mainly from increases in the number of homes constructed, sold and closed
during the period as compared to the same period ended March 31, 1997 and a
corresponding increase in expense incurred related to interest and real
estate taxes previously capitalized. As a percentage of housing and land
sales revenue, however, housing costs increased from 82.0% during the six
months ended March 31, 1997 to 84.3% during the six months ended March 31,
1998. This increase was also caused by the change in the mix of homes
(lower-priced) sold during the six-month period ended March 31, 1998 as
compared to the six-month period ended March 31, 1997. Other costs and
expenses also increased from approximately $.9 million for the six months
ended March 31, 1997 to approximately $2.0 million for the six months ended
March 31, 1998. The increase in these costs and expenses was due to the
increase in the number of homes closed between the two periods which resulted
in additional selling and general administrative costs. Income after
adjusting for minority interests in Company-controlled land development and
housing partnership, and income taxes increased from approximately $.3
million for the six months ended March 31, 1997 to approximately $1.8 million
for the six months ended March 31, 1998. Total earnings, which reflects net
income after minority interests and income taxes increased to $.1 million for
the six months ended March 31, 1997 from $1.1 million for the six months
ended March 31, 1997.
THREE MONTHS ENDED MARCH 31, 1998 AND 1997. Revenues from housing and
land sales increased approximately $14.8 million or 93% for the three months
ended March 31, 1998 from approximately $16.0 million to approximately $30.8
million. The increase in revenue resulted from an increase in the volume of
homes and lots closed during the period. During the three months ended March
31, 1998, the Company closed on the sale of 130 homes and 22 lots at an
average selling price for homes of $202,810 compared to 94 homes and three
lots at an average selling price for homes of $164,750 in the same period
ended March 31, 1997. The Company believes that the volume increase reflected
an increase in demand for the Company's homes and lots and an increase in the
number of housing starts. Further, the average home price increased as a
result of a change in the mix of homes closed in the three-month period ended
March 31, 1998 compared to the three-month period ended March 31, 1997.
Housing costs, including amortization of capitalized interest and real
estate taxes, increased during the three-month period ended March 31, 1998 from
approximately $13.3 million to approximately $25.5 million as compared to the
same period ended March 31,
9
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1997. The increase in these costs resulted mainly from increases in the number
of homes constructed, sold and closed during the period as compared to the same
period ended March 31, 1997 and a corresponding increase in expense incurred
related to interest and real estate taxes previously capitalized. Other costs
and expenses also increased from approximately $2.2 million for the three
months ended March 31, 1997 to approximately $3.7 million for the three months
ended March 31, 1998. The increase in these costs and expenses was due to the
increase in the number of homes closed between the two periods which resulted
in additional selling and general administrative costs. Income after adjusting
for minority interests in Company-controlled land development and housing
partnership and income taxes increased from a loss of approximately $52,000 for
the three months ended Mach 31, 1997 to approximately $210,000 for the three
months ended March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents balance at March 31, 1998 and
September 30, 1997 was approximately $1.4 million and 1.1 million,
respectively. The Company typically finances the acquisition of land parcels
and the costs associated with initial development of the parcels (such as
entitlement activities and construction of streets and sewers) by drawing on
various acquisition and development lines of credit (the "A&D Lines"),
including a $25 million line of credit from Residential Funding Corp. which
can be used solely to fund acquisition and development activity, such as
sewer and roadway construction (the "Residential Line II"). Under the
agreements governing the A&D Lines, the Company may generally draw up to
75-80% of the value of the land and improvements (based on an as-built
appraisal) to fund acquisition and development costs. Based on the
outstanding balance of the A&D Lines at the end of each month, an interest
charge is either paid by the Company if the particular loan does not have an
interest reserve or is funded through an additional draw on the loan. As of
March 31, 1998, and September 30, 1997, the Company had total indebtedness of
approximately $27.1 million and $19.3 million, respectively, outstanding on
its A&D Lines, including $15.7 million and $10.7 million, respectively, on
the Residential Line II.
Once construction of a home commences, the Company is able to draw on
two lines of credit, a $25 million facility with Heller Financial (the
"Heller Line") and a second line in the amount of $25 million from
Residential Funding Corp. (the "Residential Line I," collectively with the
"Residential Line II," the "Residential Lines") to finance the costs
associated with constructing a home and preparing a lot for delivery and the
home for sale to the end purchaser. As noted herein, the Company typically
does not commence construction of a home until a buyer executes a purchase
contract. As of March 31, 1998 and September 30, 1997, the Company had total
indebtedness of approximately $32.8 million and $29.6 million, respectively,
outstanding on these two lines.
The amount of indebtedness incurred with respect to any particular
project is based on the purchase price of the land, the estimated costs of
infrastructure activities and the costs of constructing and selling homes on
the land. These estimated costs are based on, among other things, demand for
housing in the Company's market areas which the Company then factors into its
analysis of the number of homes that it believes may be constructed and the
10
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rate at which these homes may be sold to end-purchasers. However, from time
to time the Company will sell improved lots without constructing a home
thereon.
Upon closing of a home sale, the Company utilizes all of the net closing
proceeds (including the Company's profit) from the sale of the home to reduce
the indebtedness under the relevant A&D Line as well as the Heller Line or
Residential Line I, as the case may be. Thus, the amount of indebtedness
outstanding on these lines fluctuates based on the number of parcels and
homes under development or construction at any one time and the rate at which
the Company closes on homes under contract for sale. During the six months
ended March 31, 1998 and 1997, the Company made principal reductions of
approximately $41.6 million and $22.4 million, respectively, on these lines.
As of May 11, 1998, the Company had approximately $3.6 million available for
borrowing under its credit facilities. Draws on the Heller Line bear interest
at a variable rate equal to the General Electric Capital Corporation
Composite Commercial Paper Rate plus 3.75% per annum (9.3% as of May 11,
1998). Draws on the Heller Line which are outstanding on May 31, 1998
automatically convert to a term loan maturing on May 31, 1999. The Company
is analyzing its need to replace the Heller Line. If the Company decides
that such a line is desirable, the Company will then review its options for a
replacement facility. Draws under the Residential Lines bear interest at a
variable rate equal to prime plus 1.25% per annum (9.75% as of May 11, 1998).
The Residential Lines each mature on March 14, 2001.
From time to time, the Company also incurs indebtedness secured by
specific projects for specific acquisition and development activities. As of
March 31, 1998 and September 30, 1997, the Company had approximately $11.4
million and $7.8 million, respectively, of this indebtedness outstanding, all
of which was secured by certain of the Company's assets. The indebtedness
outstanding as of March 31, 1998 generally matures between 1998 and 2001 and
bears interest at a rate of approximately 9.50% per annum.
On December 22, 1997 the Company completed the sale of approximately
$7.1 million of Debentures which bear interest at the rate of 11% per annum.
The Company realized net proceeds of approximately $5.9 million after paying
underwriting discounts and expenses of the offering. The net proceeds were
utilized to repay indebtedness aggregating approximately $2.6 million with
the remainder applied to reduce indebtedness under the Heller Line (defined
below). For additional information about the offering, see item (c) of
"Changes in Securities" on the Company's Quarterly Report on Form 10-Q for
the quarterly period ended December 31, 1997.
The Company believes that the capital available under the lines of
credit described herein, project specific indebtedness and cash flow from the
sale of model homes and internally generated funds will be sufficient to meet
the Company's reasonably anticipated needs for working capital and liquidity
for the foreseeable future. If these amounts prove insufficient, however,
the Company would likely have to raise additional capital (debt or equity or
both) from third parties. There can be no assurance that additional capital,
either in the form of equity or debt, will be available on terms and
conditions acceptable to the Company, if at all.
11
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CASH FLOWS FROM OPERATING ACTIVITIES. The Company's operating
activities utilized cash during the six-month periods ended March 31, 1998
and 1997 of approximately $14.5 million and $17.2 million, respectively. The
Company utilized cash flow generated during the six-month periods ended March
31, 1998 and 1997 to increase the Company's housing inventories ($8.7 million
and $14.9 million, respectively), and to increase land held for future
development (approximately $5.1 million and $24 million) offset by a
(decrease ) in the Company's accounts payable (approximately $1.5 million and
$1.1 million). For the six months ended March 31, 1998, the decrease in the
Company's accounts payable reflects a decrease in amounts owed to vendors and
other subcontractors offset by an increase in the number of homes being
constructed by the Company.
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES. The Company's financing
activities provided the bulk of the Company's cashflow during the six months
ended March 31, 1998 and 1997. Net cash provided by financing activities
during these periods was approximately $14.7 million and $16.2 million. In
each case, the bulk of the proceeds were comprised almost entirely of
proceeds from development loans and other notes payable of approximately
$72.8 million and $43.2 million, respectively, offset by repayments on
development loans and other notes payable of approximately $64.9 million and
$28.4 million, respectively. The increase in borrowing activity in each time
period reflects increases in the amount of funds necessary to finance the
Company's construction and development activities as reflected by increases
in the number of homes constructed and sold by the Company in each period
when compared to the prior comparable period. These borrowings are typically
repaid from the proceeds of housing or lot sales and then reborrowed by the
Company to fund construction costs. Thus, borrowings on the Company's lines
of credit (described above) fluctuate significantly based on the level of the
Company's activities. In addition, during the six months ended March 31,
1998, the Company also received net proceeds of approximately $5.8 million
from sale of the debentures.
CASH FLOWS FROM INVESTING ACTIVITIES. Net cash provided by or used for
investing activities was not significant for the six months ended March 31,
1998 and 1997.
INFLATION AND SEASONALITY. Real estate and residential housing prices
are affected by inflation, which can cause increases in the price of land,
raw materials and subcontracted labor. Historically, the Company has been
able to increase the price of its housing products to cover these costs.
Interest rate fluctuations also affect gross profit margins by increasing or
decreasing financing costs for land, construction and operations. The Company
believes that product demand and sales are impacted by mortgage interest
rates. The Company benefited from low mortgage interest rates in early 1995
and then again from mid-year 1995 through 1997. If rates increase, potential
customers may be discouraged from purchasing a home due to the increased
cost, decrease in buying power and possible difficulty in qualifying for a
mortgage. Seasonality is generally not a significant factor in the Company's
operations, in part because homes can be constructed and sold year-round,
particularly in the Phoenix Area and, in part, due to the Company's winter
foundation program which allows it to maintain available inventory for winter
sales and spring closings. A particularly harsh winter in the Midwest could,
however, limit the Company's winter foundation program, thus impacting sales
and closings the following spring in an adverse manner..
12
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YEAR 2000. In the year 2000, many existing computer programs that use
only two digits (rather than four) to identify a year in the date field could
fail or create erroneous results if not corrected. This computer program
flaw is expected to affect virtually all companies and organizations. The
Company cannot quantify the potential costs and uncertainties associated with
this computer program flaw at this time, but does not anticipate that the
effect of this computer program flaw on the operations of the Company will be
significant. However, the Company may be required to spend time and monetary
resources addressing any necessary computer program changes.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
The Company does not engage in trading currencies or in any hedging
activities.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is currently not subject to any environmental litigation or
administrative proceedings. The Company is not currently involved in any
legal proceedings other than those arising in the ordinary course of business.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit Index
(b) No reports on Form 8-K were filed during the quarter
13
<PAGE>
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.
UNITED HOMES, INC.
By: /s/ Edward Havlik Date: May 14, 1998
-----------------------------------
Edward Havlik
President
By: /s/ William J. Crock, Jr. Date: May 14, 1998
-----------------------------------
William J. Crock, Jr.
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
(Principal Financial Officer
and Principal Accounting
Officer).
14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<C> <S>
3.1 - Articles of Incorporation of United Homes, Inc.(1)
3.2 - Bylaws of United Homes, Inc.(1)
27.1 - Financial Data Schedule*
</TABLE>
- ----------------------------
* Filed herewith
(1) Incorporated by reference from the Registrant's Registration Statement on
Form S-1, File No. 333-33965, filed August 19, 1997.
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,404
<SECURITIES> 0
<RECEIVABLES> 9,966
<ALLOWANCES> 0
<INVENTORY> 79,944
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 99,384
<CURRENT-LIABILITIES> 17,788
<BONDS> 67,400
0
0
<COMMON> 1,204
<OTHER-SE> 10,837
<TOTAL-LIABILITY-AND-EQUITY> 99,384
<SALES> 30,827
<TOTAL-REVENUES> 30,845
<CGS> 29,333
<TOTAL-COSTS> 29,333
<OTHER-EXPENSES> 1,319
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 209
<INCOME-TAX> 96
<INCOME-CONTINUING> 113
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 113
<EPS-PRIMARY> 113.22
<EPS-DILUTED> 113.22
</TABLE>
