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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 quarter ended: MARCH 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 1-13477
HOMEUSA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0546715
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NO.)
ORGANIZATION)
THREE RIVERWAY
SUITE 555
HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES) (ZIP CODE)
(713) 331-2200
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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 [ ]
The number of shares outstanding of the registrant's common stock, as of
May 13, 1998, was 15,441,887.
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<PAGE>
HOMEUSA, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
PAGE
----
ITEM 1. Financial Statements
HOMEUSA, INC. AND SUBSIDIARIES
Consolidated Balance
Sheets --
March 31, 1998
(unaudited) and December
31, 1997................... 1
Consolidated Statements of
Operations (unaudited) --
Three Months Ended March
31, 1998 and 1997.......... 2
Consolidated Statements of
Cash Flows (unaudited) --
Three Months Ended March
31, 1998 and 1997.......... 3
Condensed Notes to
Consolidated Financial
Statements (unaudited)..... 4
ITEM 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations.... 7
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings........... 10
ITEM 6. Exhibits and Reports on Form
8-K.................................. 10
Signature............................ 11
i
<PAGE>
HOMEUSA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents.......... $ 11,655 $ 16,758
Accounts receivable, net........... 9,910 7,421
Related party receivables.......... 823 1,140
Inventories........................ 45,840 45,481
Other current assets............... 1,606 1,268
----------- ------------
Total current assets.......... 69,834 72,068
Property and Equipment, net............. 7,148 6,624
Goodwill, net........................... 61,238 60,323
Other Assets............................ 2,272 829
----------- ------------
Total Assets............................ $ 140,492 $139,844
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued
expenses.......................... $ 10,134 $ 9,116
Related party payables............. 4,421 4,601
Floor plan payable................. 46,001 45,007
Current maturities of long-term
debt.............................. 215 2,110
Deferred tax liability............. 95 85
----------- ------------
Total current liabilities..... 60,866 60,919
----------- ------------
Deferred Tax Liability.................. 1,415 1,419
----------- ------------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $.01 par value,
5,000,000 shares authorized,
none issued...................... -- --
Common stock, $.01 par value,
105,000,000 shares authorized,
15,441,887 shares issued and
outstanding....................... 154 154
Additional paid-in capital......... 73,900 73,900
Retained earnings.................. 4,157 3,452
----------- ------------
Total stockholders' equity.... 78,211 77,506
----------- ------------
Total Liabilities and Stockholders'
Equity................................ $ 140,492 $139,844
=========== ============
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
HOMEUSA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
--------- ---------
(NOTE 1)
Revenue:
Home sales......................... $ 48,852 $ 9,625
Other revenue...................... 1,511 18
--------- ---------
Total revenue.............. 50,363 9,643
Cost of sales........................ 38,703 7,601
--------- ---------
Gross profit......................... 11,660 2,042
Selling, general and administrative
expenses........................... 9,438 1,499
--------- ---------
Income from operations............... 2,222 543
Other income (expense):
Interest expense................ (1,189) (151)
Other income, net............... 187 88
--------- ---------
Income before income taxes........... 1,220 480
Provision for income taxes........... 515 37
--------- ---------
Net income........................... $ 705 $ 443
========= =========
Earnings per share --
Basic........................... $ .05 $ .19
Diluted......................... .05 .19
Shares used in computing earnings per
share --
Basic........................... 15,442 2,299
Diluted......................... 15,572 2,299
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
HOMEUSA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
--------- ---------
(NOTE 1)
Cash Flows from Operating Activities
Net income......................... $ 705 $ 443
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities --
Depreciation and
amortization.................... 686 40
Gain on sale of assets........ (3) (3)
Deferred tax provision........ -- 1
Changes in assets and
liabilities --
Accounts receivable........... (2,172) (60)
Inventories................... (359) (395)
Other current assets.......... (338) (104)
Other noncurrent assets....... (2,539) 1
Accounts payable and accrued
expenses........................ 845 50
Floor plan payable............ 994 386
--------- ---------
Net cash provided by
(used in) operating
activities............ (2,181) 359
--------- ---------
Cash Flows from Investing Activities
Purchases of property and
equipment.......................... (1,040) (27)
Proceeds from sale of equipment.... 13 3
--------- ---------
Net cash used in
investing
activities............ (1,027) (24)
--------- ---------
Cash Flows from Financing Activities
Payments on debt................... (1,895) --
Distributions to stockholders...... -- (3,000)
--------- ---------
Net cash used in
financing
activities............ (1,895) (3,000)
--------- ---------
Decrease in Cash and Cash Equivalents... (5,103) (2,665)
Cash and Cash Equivalents, Beginning of
Period.................................. 16,758 8,031
--------- ---------
Cash and Cash Equivalents, End of
Period.................................. $ 11,655 $ 5,366
========= =========
Supplemental Cash Flow Information
Cash paid during the period for --
Interest...................... $ 1,179 $ 94
Taxes......................... 371 --
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
HOMEUSA, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
HomeUSA, Inc. a Delaware corporation ("HomeUSA" or the "Company") was
founded in July 1996 to become the leading independent national retailer of
manufactured homes and accessories, and in November 1997, completed an initial
public offering (the "IPO"). The Company acquired simultaneously with the
closing of the IPO, (the "Initial Acquisitions"), nine existing independent
retailers of manufactured homes (the "Founding Companies"). Since the IPO, the
Founding Companies have operated as subsidiaries of the Company as a single
national retailer of manufactured homes.
For financial statement presentation purposes, Universal Housing Group
("Universal"), one of the Founding Companies, has been identified as the
accounting acquiror. The acquisition of the remaining Founding Companies was
accounted for using the purchase method of accounting. The Consolidated
Statements of Operations reflect Universal for the three months ended March 31,
1997 and the Founding Companies and HomeUSA for the three months ended March 31,
1998.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions by
management in determining the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The unaudited consolidated financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission (the
"SEC"). Certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to those rules and
regulations, although the Company believes that the disclosures made are
adequate to make the information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary to fairly present the financial position, results of operations and
cash flows with respect to the interim consolidated financial statements, have
been included. The results of operations for the interim periods are not
necessarily indicative of the results for the entire fiscal year. These
consolidated financial statements should be read in conjunction with the audited
financial statements and notes thereto in the Company's Annual Report on Form
10-K for the year ended December 31, 1997 filed with the SEC.
On February 17, 1998, the Company announced it had entered into a
definitive agreement to be acquired by Fleetwood Enterprises, Inc. (see Note 6).
2. BUSINESS COMBINATION AND UNAUDITED PRO FORMA INFORMATION
The Founding Companies were merged with HomeUSA effective November 30, 1997
for financial reporting purposes. The unaudited statement of operations data
presented below gives effect to the Initial Acquisitions and the IPO, including
certain pro forma adjustments further discussed below, as if they had occurred
on January 1, 1997 (dollars in thousands, except per share amount):
THREE MONTHS
ENDED
MARCH 31, 1997
--------------
(UNAUDITED)
Revenues............................. $ 42,172
Gross profit......................... 9,382
Net income........................... 946
Earnings per share -- basic and
diluted............................ .07
Pro forma adjustments primarily relate to (i) contractual agreements
entered into with suppliers, financing sources and previous owners of the
Founding Companies as a result of the Initial Acquisitions with respect to
combined manufacturers' rebates, floor plan financing interest costs, finance
income and
4
<PAGE>
HOMEUSA, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
owners' compensation differential, (ii) amortization of goodwill recorded as a
result of the Initial Acquisitions over a 40-year estimated life and (iii)
adjustments to the federal and state income tax provisions based on the combined
operations.
The pro forma adjustments are based on estimates, available information and
certain assumptions, and may be revised as additional information becomes
available. The unaudited pro forma information presented herein does not purport
to represent what the Company's results of operations would have actually been
had such events occurred at the beginning of the period presented, as assumed,
or to project the Company's results of operations for any future period or the
future results of the Founding Companies.
The computation of unaudited pro forma earnings per share for the three
months ended March 31, 1997 is based upon (i) 10,441,887 shares issued to the
Founding Companies, management and Notre Capital Ventures II, L.L.C., and (ii)
3,468,199 of the 5,000,000 shares sold in the IPO necessary to pay the cash
portion of the purchase price of the Founding Companies and the expenses of the
IPO.
3. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"), which was adopted by the Company effective December 31, 1997. SFAS No.
128 simplifies the standards required under current accounting rules for
computing earnings per share and replaces the presentation of primary earnings
per share and fully diluted earnings per share with a presentation of basic
earnings per share ("Earnings per share -- Basic") and diluted earnings per
share ("Earnings per share -- Diluted"). Earnings per share -- Basic excludes
dilution and is determined by dividing income available to common stockholders
by the weighted average number of common shares outstanding during the period.
Earnings per share -- Diluted reflects the potential dilution that could occur
if securities and other contracts to issue common stock were exercised or
converted into common stock. The computation of earnings per share for the three
months ended March 31, 1997 is based upon 2,299,311 shares issued to Universal
in connection with the IPO.
4. INCOME TAXES
The Company files a consolidated federal income tax return, which includes
the operations of all acquired businesses for periods subsequent to the
respective date of acquisition. Prior to the IPO, the stockholders of Universal
elected to be taxed under the provisions of Subchapter S of the Internal Revenue
Code. Under these provisions, Universal did not pay federal and certain state
income taxes. Instead, Universal's stockholders paid income taxes based on their
proportionate shares of the Company's net earnings. Effective with the IPO,
Universal's S Corporation status was terminated, and the Company is now subject
to federal income taxes under Subchapter C of the Internal Revenue Code.
5. CREDIT FACILITIES AND FLOOR PLAN FINANCING
In February 1998, the Company entered into a $25 million revolving credit
agreement (the "Credit Facility") with a bank to fund working capital
requirements and future acquisitions. The Credit Facility is secured by the
capital stock of the Company's subsidiaries, and matures in February 2001.
Interest is payable monthly and is based on either the bank's prime rate or a
Eurodollar rate. A commitment fee of .50% is payable on the unused portion of
the facility. The Credit Facility contains certain affirmative and negative
covenants including, but not limited to, maintenance of certain financial ratios
and minimum consolidated net worth. In addition, the Credit Facility requires
the Company to seek the lenders' approval regarding certain acquisitions. No
borrowings have been made under the Credit Facility.
The Company has two floor plan credit facility arrangements with two
commercial lenders to finance a major portion of its manufactured home inventory
until such inventory is sold. Commitments of $75 million and $50 million are
available to the Company. Interest on amounts borrowed is paid monthly at rates
varying from the prime rate to 1% percent below the prime rate. The floor plan
payables are secured by
5
<PAGE>
HOMEUSA, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
substantially all of the Company's manufactured home inventory, the related
furniture, fixtures, accessories and accounts receivable.
Floor plan payables are due upon receipt of sales proceeds from the related
inventory; however, the Company must make periodic payments when the related
home remains in inventory beyond the length of time specified in the floor plan
agreement. Generally, in the event the home remains in inventory 12 months after
the date of purchase, the balance of the obligation related to the home will
become payable over a specified term. In addition, the Company's floor plan
agreements include subjective acceleration clauses which could result in the
lines of credit being due on demand should the Company experience a material
adverse change in its financial position as determined by the lender.
6. COMMITMENTS AND CONTINGENCIES
On February 17, 1998 the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Fleetwood Enterprises, Inc.
("Fleetwood") and HUSA Acquisition Company. Pursuant to the Merger Agreement,
subject to the conditions set forth therein, the Company will merge with and
into a wholly-owned subsidiary of Fleetwood (the "Merger") and will become a
wholly-owned subsidiary of Fleetwood. The Merger Agreement is more fully
described in "Item I. Business" of the Company's Annual Report on Form 10-K
for the year ended December 31, 1997. The Company anticipates that stockholders
will receive proxy materials relating to the proposed Merger in late May or
early June 1998, and that a special meeting to consider and vote upon the
proposed merger will be held in late June or early July 1998. The Merger
Agreement requires the Company to pay a $6 million termination fee if, under
certain prescribed conditions, the Merger Agreement is terminated.
Promptly after the Company publicly announced its proposed merger with
Fleetwood, a complaint (the "Complaint") was filed against the Company, the
members of its Board of Directors, and Fleetwood in the Delaware Court of
Chancery in New Castle County. The Complaint was purportedly filed on behalf of
a stockholder of the Company, individually and as a representative of a class of
holders of the Company's common stock. The suit seeks certification as a class
action. The Complaint alleges, among other things, that by entering into the
Merger Agreement, the Company and the members of its Board of Directors did not
act reasonably and in compliance with their fiduciary duties to the Company's
stockholders. The Complaint seeks to enjoin the proposed Merger and seeks
rescissory and/or compensatory damages, attorneys' fees and other relief.
The Company is also involved in legal actions arising in the ordinary
course of business. Management does not believe the outcome of such legal
actions will have a material, adverse effect on the Company's consolidated
financial position or results of operations.
7. NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This statement requires the presentation of total
non-owner changes in equity, including items not currently reflected in net
income. The Company reported no such changes in equity for the three months
ended March 31, 1998 or 1997.
Also effective January 1, 1998, the Company adopted SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." This
statement requires that segments of a business be disclosed in interim and
annual financial statements. The Company's wholly-owned subsidiaries operate as
a single national retailer of manufactured homes; therefore, the Company does
not report multiple segments with respect to business lines or geographic areas.
6
<PAGE>
HOMEUSA, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and related Condensed Notes thereto.
Statements contained in this Quarterly Report regarding future financial or
operational performance and results of the Company or similar matters that are
not historical facts constitute forward-looking statements. These
forward-looking statements are subject to numerous risks and uncertainties
including, but not limited to, the availability of attractive acquisition
opportunities, the successful integration and profitable management of
businesses acquired, the improvement of operating efficiencies, the availability
of working capital and funding for future acquisitions, the ability to grow
internally through expansion of services and customer bases, reduction of
overhead, the cyclical nature of the homebuilding industry, and the level and
nature of competition from other manufactured home retailers and other factors
discussed in this Quarterly Report.
RECENT DEVELOPMENTS -- MERGER AGREEMENT WITH FLEETWOOD ENTERPRISES
On February 17, 1998 the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Fleetwood Enterprises, Inc.
("Fleetwood") and HUSA Acquisition Company. Pursuant to the Merger Agreement,
subject to the conditions set forth therein, the Company will merge with and
into a wholly-owned subsidiary of Fleetwood (the "Merger") and will become a
wholly-owned subsidiary of Fleetwood. The Merger Agreement is more fully
described in "Item I. Business" of the Company's Annual Report on Form 10-K
for the year ended December 31, 1997. The Company anticipates that stockholders
will receive proxy materials relating to the proposed Merger in late May or
early June 1998, and that a special meeting to consider and vote upon the
proposed merger will be held in late June or early July 1998. The Merger
Agreement requires the Company to pay a $6 million termination fee if, under
certain prescribed conditions, the Merger Agreement is terminated.
After the Company entered into the Merger Agreement with Fleetwood, the
Company modified its acquisition program to focus on the opening of new
Fleetwood Home Center sales centers and the negotiation of acquisitions that are
expected to be consummated after (and are contingent on) the closing of the
Merger Agreement with Fleetwood. The Company's acquisition efforts and its new
sales center openings resulted in its incurring significant administrative costs
during the first quarter of 1998. While the Company believes that its efforts
will result in a significant increase in sales centers in the future, it is not
possible to estimate the number of new sales centers to be opened in 1998 or the
number or size of the acquisitions that will ultimately be completed subsequent
to the Merger.
OVERVIEW
For financial statement presentation purposes, Universal Housing Group
("Universal"), one of the Founding Companies, has been identified as the
accounting acquiror. The following consolidated financial information represents
the operations of Universal for the three months ended March 31, 1997 and the
Founding Companies and HomeUSA for the three months ended March 31, 1998. This
financial information has been derived from the consolidated financial
statements of HomeUSA, Inc. and subsidiaries (dollars in thousands, except
operating data).
7
<PAGE>
HOMEUSA, INC.
ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------------------
1998 1997
-------------------- --------------------
<S> <C> <C> <C> <C>
Statement of Operations Data:
Revenue:
Home sales................. $ 48,852 97.0% $ 9,625 99.8%
Other revenue.............. 1,511 3.0 18 0.2
--------- --------- --------- ---------
Total revenue................... 50,363 100.0 9,643 100.0
Cost of sales................... 38,703 76.8 7,601 78.8
--------- --------- --------- ---------
Gross profit.................... 11,660 23.2 2,042 21.2
Selling, general and
administrative expenses....... 9,438 18.8 1,499 15.5
--------- --------- --------- ---------
Income from operations.......... 2,222 4.4 543 5.7
Interest and other income
(expense), net................ (1,002) (2.0) (63) (0.7)
--------- --------- --------- ---------
Income before income taxes...... 1,220 2.4 480 5.0
Provision for income taxes...... 515 1.0 37 0.4
--------- --------- --------- ---------
Net income...................... $ 705 1.4% $ 443 4.6%
========= ========= ========= =========
Operating Data (Consolidated):
Period end sales centers........ 66 15
Homes sold...................... 1,492 356
Multi-section home sales........ 65% 67%
Average home sale price......... $ 32,743 $ 27,036
</TABLE>
HISTORICAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 1997
HOME SALES. Home sales increased $39.3 million, or 408%, from $9.6 million
for the three months ended March 31, 1997 to $48.9 million for the three months
ended March 31, 1998. Approximately $37.9 million of the increase was
attributable to the acquisition of the Founding Companies. The remaining
increase was attributable to a 7% increase in the number of units sold and a 7%
increase in the average sale price per unit at Universal.
OTHER REVENUE. Other revenue increased $1.5 million, from less than $0.1
million for the three months ended March 31, 1997. Approximately $1.3 million of
the increase was attributable to the acquisition of the Founding Companies. The
remaining increase was primarily attributable to higher finance revenue at
Universal.
GROSS PROFIT. Gross profit increased $9.7 million, or 471%, from $2.0
million for the three months ended March 31, 1997 to $11.7 million for the three
months ended March 31, 1998. Approximately $9.3 million of the increase was
attributable to the acquisition of the Founding Companies. The remaining
increase was attributable to higher manufacturer rebates and higher finance
revenue at Universal. As a percentage of total revenue, gross profit increased
from 21.2% for the three months ended March 31, 1997 to 23.2% for the three
months ended March 31, 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $7.9 million, or 530%, from $1.5 million for
the three months ended March 31, 1997 to $9.4 million for the three months ended
March 31, 1998. Almost all of the increase was attributable to the overhead of
the Founding Companies, corporate overhead of HomeUSA and amortization of
goodwill.
8
<PAGE>
HOMEUSA, INC.
ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
INTEREST AND OTHER INCOME (EXPENSE), NET. Interest and other income
(expense), increased $0.9 million, from $0.1 million for the three months ended
March 31, 1997 to $1.0 million for the three months ended March 31, 1998.
Approximately $0.8 million of the increase was attributable to the acquisition
of the Founding Companies. The remaining increase was primarily a result of
increased interest expense associated with maintaining higher floor plan
balances during the three months ended March 31, 1998 as compared to the three
months ended March 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company had working capital of $9.0 million and no
long-term debt. The Company's credit facilities are discussed in Note 5 to the
Consolidated Financial Statements.
Management anticipates that capital expenditures, exclusive of
acquisitions, will be approximately $9.0 million in 1998. Management believes
that the Company's liquidity and capital resources are adequate to enable the
Company to execute the Company's internal growth plans during 1998. However, in
February 1998 management concluded that the Company's liquidity and capital
resources were not sufficient, in light of the extraordinary competition in the
acquisition market during January and February 1998, to enable the Company to
implement its acquisition strategy on the timetable the Company had
contemplated. Consequently, on February 17, 1998 the Company entered into the
Merger Agreement. See "Recent Developments -- Merger Agreement with Fleetwood
Enterprises" in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997. In the event that the Merger Agreement is not consummated for
any reason, management believes that the Company would (i) seek an alternative
business combination with another manufacturer, (ii) seek additional capital
resources from another source, and/or (iii) attempt to implement its acquisition
strategy by acquiring smaller retailers than the retailers it had originally
sought to acquire.
9
<PAGE>
HOMEUSA, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Promptly after the Company publicly announced its proposed merger with
Fleetwood, a complaint (the "Complaint") was filed against the Company, the
members of its Board of Directors, and Fleetwood in the Delaware Court of
Chancery in New Castle County. The Complaint was purportedly filed on behalf of
a stockholder of the Company, individually and as a representative of a class of
holders of the Company's common stock. The suit seeks certification as a class
action. The Complaint alleges, among other things, that by entering into the
Merger Agreement, the Company and the members of its Board of Directors did not
act reasonably and in compliance with their fiduciary duties to the Company's
stockholders. The Complaint seeks to enjoin the proposed Merger and seeks
rescissory and/or compensatory damages, attorneys' fees and other relief.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K
Current Report dated February 17, 1998 re:
Press release dated February 17, 1998 announcing the proposed
acquisition of HomeUSA, Inc. by Fleetwood Enterprises, Inc.
Current Report dated March 2, 1998 re:
Complaint filed in the Delaware Court of Chancery in New Castle County
seeking to enjoin the proposed merger between HomeUSA, Inc. and
Fleetwood Enterprises, Inc.
10
<PAGE>
HOMEUSA, INC.
SIGNATURE
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.
HOMEUSA, INC.
By: /s/ CARY N. VOLLINTINE
CARY N. VOLLINTINE
PRESIDENT, CHAIRMAN, AND
CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
By: /s/ MICHAEL F. LOY
MICHAEL F. LOY
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
Dated: May 13, 1998
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM HOMEUSA'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 11,655
<SECURITIES> 0
<RECEIVABLES> 10,733
<ALLOWANCES> 0
<INVENTORY> 45,840
<CURRENT-ASSETS> 69,834
<PP&E> 9,930
<DEPRECIATION> (2,782)
<TOTAL-ASSETS> 140,492
<CURRENT-LIABILITIES> 60,866
<BONDS> 0
0
0
<COMMON> 154
<OTHER-SE> 78,057
<TOTAL-LIABILITY-AND-EQUITY> 140,492
<SALES> 48,852
<TOTAL-REVENUES> 50,363
<CGS> 38,703
<TOTAL-COSTS> 48,141
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,189
<INCOME-PRETAX> 1,220
<INCOME-TAX> 515
<INCOME-CONTINUING> 705
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 705
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
