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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 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: 0-22299
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SAXTON INCORPORATED
(Exact name of registrant as specified in its charter)
NEVADA 88-0223654
(State, or other Jurisdiction of (IRS Employer Identification
Incorporation, or Organization) Number)
5440 WEST SAHARA AVENUE, THIRD FLOOR, LAS VEGAS, NEVADA 89146
(702) 221-1111
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.001 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act 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. /X/
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
As of March 12, 1999, 7,732,922 shares of the registrant's common stock were
outstanding. The aggregate market value of common stock held by non-affiliates
of the registrant as of March 12, 1999 was approximately $14,199,245 based on a
closing price of $6.188 for the common stock as reported on the Nasdaq Stock
Market on such date. For purposes of the foregoing computation, all executive
officers, directors and five percent beneficial owners of the registrant are
deemed to be affiliates. Such determination should not be deemed to be an
admission that such executive officers, directors or five percent beneficial
owners are, in fact, affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Exhibit index in Item 14.
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PART II
ITEM 6. SELECTED FINANCIAL DATA
The following tables set forth selected financial and operating information
for the Company on a historical consolidated basis. The historical consolidated
financial and operating information is comprised of the operations, assets and
liabilities of the Company and certain properties, which were owned and operated
by entities affiliated with and controlled by the Company during the periods
presented. These operations and properties were acquired by the Company in
connection with the consummation of the Reorganization and the Offering. The
following information should be read in conjunction with all of the financial
statements and notes thereto included elsewhere herein.
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This table should be read in conjunction with Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements, the notes thereto and other financial
information appearing elsewhere herein.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------- PRO FORMA
1994(3) 1995(3) 1996 1997 1998 1998(4)
--------- --------- --------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA (1) (2):
Revenue:
Construction revenue.................... $ 10,863 $ 22,090 $ 41,875 $ 31,707 $ 51,524 $ 51,524
Sales of homes.......................... -- -- 12,963 11,058 27,634 70,443
Sales of commercial properties.......... 8,072 9,850 4,772 11,540 7,823 7,823
Rental revenue.......................... 3,288 3,531 3,922 3,583 3,515 3,515
Other................................... 137 99 536 1,508 1,676 2,595
--------- --------- --------- ---------- ---------- ----------
Total revenue......................... 22,360 35,570 64,068 59,396 92,172 135,900
--------- --------- --------- ---------- ---------- ----------
Cost of revenue:
Cost of construction.................... 10,713 18,194 33,078 26,981 40,863 40,863
Cost of homes sold...................... -- -- 10,967 10,139 23,754 61,521
Cost of commercial properties sold...... 6,027 9,373 3,444 7,127 7,710 7,710
Rental operating cost................... 635 631 784 724 815 815
--------- --------- --------- ---------- ---------- ----------
Total cost of revenue................. 17,375 28,198 48,273 44,971 73,142 110,909
--------- --------- --------- ---------- ---------- ----------
Gross profit........................ 4,985 7,372 15,795 14,425 19,030 24,991
--------- --------- --------- ---------- ---------- ----------
General and administrative expenses....... 1,736 1,957 3,425 2,746 5,042 7,732
Depreciation and amortization............. 745 722 1,079 1,393 1,687 2,079
--------- --------- --------- ---------- ---------- ----------
Operating income.......................... 2,504 4,693 11,291 10,286 12,301 15,180
Other income (expense):
Joint venture earnings (loss)........... 6 1,131 (43) 16 (25) (25)
Interest expense........................ (1,972) (2,393) (2,820) (3,086) (2,337) (2,371)
Interest income......................... 497 266 72 985 1,105 1,147
Gain on sale of residential building
lots.................................. -- -- -- -- -- 793
--------- --------- --------- ---------- ---------- ----------
Total other expense................... (1,469) (996) (2,791) (2,085) (1,257) (456)
--------- --------- --------- ---------- ---------- ----------
Income before provision for income
taxes................................... 1,035 3,697 8,500 8,201 11,044 14,724
Income taxes (3).......................... -- 67 2,517 2,350 3,313 4,553
--------- --------- --------- ---------- ---------- ----------
Net income................................ $ 1,035 $ 3,630 $ 5,983 $ 5,851 $ 7,731 $ 10,171
--------- --------- --------- ---------- ---------- ----------
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Earnings per share (5):
Basic:
Net income................................................................. $ 0.92 $ 1.01 $ 1.33
---------- ---------- ----------
---------- ---------- ----------
Weighted-average number of common shares outstanding....................... 6,341,879 7,656,189 7,656,189
---------- ---------- ----------
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Diluted:
Net income................................................................. $ 0.92 $ 1.01 $ 1.33
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Weighted-average number of common shares outstanding assuming dilution.....
6,363,219 7,674,119 7,674,119
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</TABLE>
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<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------- PRO FORMA
1994 1995 1996 1997 1998 1998(4)
--------- --------- --------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS,
EXCEPT AVERAGE SALES PRICE PER HOME CLOSED)
OPERATING DATA (2):
<S> <C> <C> <C> <C> <C> <C>
EBITDA (6)................................ $ 3,752 $ 6,812 $ 13,884 $ 13,945 $ 16,658 $ 21,186
Interest capitalized.................... $ 455 $ 355 $ 1,271 $ 1,159 $ 4,859 $ 7,165
Interest included as a component of cost
of sales and construction............. N/A N/A $ 1,485 $ 1,265 $ 1,590 $ 2,805
Interest expense incurred............... $ 2,427 $ 2,748 $ 4,091 $ 4,245 $ 7,196 $ 9,536
EBITDA to interest expense incurred....... 1.55 2.48 3.39 3.29 2.31 2.22
Cash flows:
Used in operating activities............ $ (1,552) $ (1,465) $ (3,708) $ (12,470) $ (35,874) N/A
Provided by (used in) investing
activities............................ $ (1,420) $ (3,317) $ 818 $ (964) $ (19,020) N/A
Provided by financing activities........ $ 2,680 $ 5,221 $ 3,988 $ 12,954 $ 55,115 N/A
Single-family homes:
Closings................................ -- -- 173 134 251 634
Backlog (at year end) (7)............... -- -- 37 -- 184 184
Homes remaining for sale (at year
end).................................. -- -- 9 2 1,365 1,365
Aggregate sales value of backlog........ $ -- $ -- $ 2,970 $ -- $ 19,730 $ 19,730
Average sales price per home closed..... $ -- $ -- $ 74,930 $ 82,521 $ 110,096 $ 111,109
Design-build projects:
Number of contracts awarded............. 10 4 6 2 3 3
Backlog (at year end) (8)............... $ 31,464 $ 52,075 $ 21,130 $ 36,420 $ 20,338 $ 20,338
Portfolio properties:
Number of properties developed.......... 5 3 5 1 4 4
Number of properties sold............... 7 3 3 3 4 4
Number of properties owned (at year
end).................................. 14 14 16 14 14 14
<CAPTION>
PRO FORMA
1994 1995 1996 1997 1998 1998(4)
--------- --------- --------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (2):
Cash and cash equivalents............... $ 53 $ 492 $ 1,590 $ 1,110 $ 1,331 $ 1,331
Real estate properties, net............. 25,154 31,966 38,808 51,298 103,884 103,884
Total assets............................ 35,682 49,580 67,957 90,120 170,995 170,995
Total debt.............................. 31,952 39,969 49,710 44,449 101,440 101,440
Stockholders' equity.................... 908 3,693 6,291 29,644 38,187 38,187
</TABLE>
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(1) In accordance with Generally Accepted Accounting Principles ("GAAP"), the
income statement does not include construction revenue and costs incurred in
connection with portfolio construction, but does include construction
revenue and costs incurred in connection with the construction for entities
which the Company does not control. Costs of portfolio construction are
capitalized as improvements on the Company's Consolidated Balance Sheets and
profit, if any, in connection with such activities is recognized only upon
sale of the property.
(2) See Note 1 to the Company's consolidated financial statements regarding the
Company's organization and basis of presentation prior to the Offering.
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(3) Prior to October 1, 1995, the Company's predecessor operated as an S
corporation for income tax purposes and was, therefore, subject to no income
taxes until October 1, 1995, at which time the Company was taxable as a C
corporation. In addition, certain of the consolidated entities were
partnerships for federal income tax purposes until consummation of the
Offering and were, therefore, not subject to income taxes. The income taxes
for 1994 and 1995 computed at a marginal effective rate of 34% would have
been $352,000 and $1,257,000, respectively.
(4) Represents certain summary unaudited pro forma information for the year
ended December 31, 1998, as if the acquisition of Diamond Key
("Acquisition") had occurred as of January 1, 1998. The information
presented reflects increased amortization of goodwill, increased interest
expense and certain income tax adjustments related to the Acquisition that
would have been incurred had the Acquisition occurred on such date. The
unaudited summary pro forma information is not necessarily indicative of the
results of operations of the Company had the Acquisition occurred on such
date, nor is it necessarily indicative of future results.
(5) On June 24, 1997, the Company completed its initial public offering and
became a public entity; therefore no earnings per share prior to 1997 are
presented.
(6) Earnings Before Interest Expense, Income Taxes, Depreciation and
Amortization ("EBITDA") is a supplemental financial measurement used by the
Company in the evaluation of its business. EBITDA is calculated by adding
interest expense, interest included as a component of cost of sales and
construction for such period, income taxes, depreciation and amortization
expense to net income. EBITDA excludes the gain on sale of residential
building lots and other non-recurring items. EBITDA should not be construed
as an alternative to income from operations or cash flows from operating
activities (as determined in accordance with GAAP). EBITDA as calculated by
the Company may not be comparable to similarly captioned measures used by
other companies.
(7) Represents the number of homes subject to pending sales contracts which have
not closed.
(8) Represents the uncompleted portion of design-build construction under signed
fixed-price contracts.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be on its behalf by the undersigned, there unto duly authorized as of April 30,
1999.
<TABLE>
<S> <C> <C>
SAXTON INCORPORATED
(REGISTRANT)
By: /s/ JAMES C. SAXTON
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James C. Saxton
CHAIRMAN OF THE BOARD OF DIRECTORS,
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
DIRECTOR
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------- ------------------------------- -------------------
<C> <S> <C>
Chairman of the Board of
/s/ JAMES C. SAXTON Directors, President, Chief
- ------------------------- Executive Officer and April 30, 1999
James C. Saxton Director (Principal Executive
Officer)
/s/ DOUGLAS W. HENSLEY Executive Vice President of
- ------------------------- Corporate Development and April 30, 1999
Douglas W. Hensley Services and Director
Executive Vice President of
/s/ KIRK SCHERER Finance, Chief Financial
- ------------------------- Officer (Principal Financial April 30, 1999
Kirk Scherer Officer)
/s/ MARC S. HECHTER
- ------------------------- Senior Vice President of April 30, 1999
Marc S. Hechter Business Affairs and Director
/s/ TIMOTHY J. ADAMS
- ------------------------- General Counsel and Director April 30, 1999
Timothy J. Adams
/s/ MICHELE SAXTON-PORI
- ------------------------- Executive Vice President and April 30, 1999
Michele Saxton-Pori Director
</TABLE>
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<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------- ------------------------------- -------------------
<C> <S> <C>
/s/ MELODY J. SULLIVAN Vice President, Chief
- ------------------------- Accounting Officer (Principal April 30, 1999
Melody J. Sullivan Accounting Officer)
/s/ PAUL EISENBERG
- ------------------------- Director April 30, 1999
Paul Eisenberg
/s/ BERNARD J. MIKELL,
JR.
- ------------------------- Director April 30, 1999
Bernard J. Mikell, Jr.
/s/ ROBERT L. SEALE
- ------------------------- Director April 30, 1999
Robert L. Seale
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