<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 SEPTEMBER 30, 1995
[ ] 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: 0-08305
THE WRITER CORPORATION
(Exact name of registrant as specified in its charter)
COLORADO 84-0510478
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
27 INVERNESS DRIVE EAST, ENGLEWOOD, COLORADO 80112
(Address of principal executive offices) Zip Code
(303) 790-2870
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former
fiscal year, if change since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the preceding 12 months (or for such shorter period that the
registrant is required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
------ ------
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 registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of Form 10-K or any
amendment to Form 10-K. X
-----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes No
------ -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 7,420,395 shares (including
treasury stock) as of October 31, 1995.
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
INDEX
PAGE
PART I. FINANCIAL INFORMATION NUMBER
------
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
September 30, 1995 (Unaudited) and
December 31, 1994 3
Condensed Consolidated Statements
of Operations for the three and nine months
ended September 30, 1995 and 1994 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 1995 and
1994 (Unaudited) 6
Notes to Consolidated Financial Statements
(Unaudited) 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II. OTHER INFORMATION 13
2
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Residential real estate held for sale
and investment, net:
Homes under construction $17,776,000 $17,466,000
Model homes and furnishings 4,652,000 5,154,000
Land and land development 9,012,000 8,905,000
Unplatted land 7,006,000 7,040,000
----------- -----------
Total 38,446,000 38,565,000
Office property and equipment, less
accumulated depreciation of $949,000
and $918,000 433,000 423,000
Other Assets:
Cash and cash equivalents 534,000 1,305,000
Restricted cash 162,000 286,000
Accounts receivable 292,000 192,000
Other 900,000 1,080,000
----------- -----------
Total $40,767,000 $41,851,000
=========== ===========
</TABLE>
(Continued)
3
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES
Notes payable (Note B) $23,375,000 $25,937,000
Accounts payable and accrued expenses 4,819,000 6,356,000
Accrued interest 547,000 442,000
----------- -----------
Total 28,741,000 32,735,000
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.10 par value; authorized,
10,000,000 shares; issued 7,420,395 and
5,958,832 (including treasury stock)
(Note C) 742,000 596,000
Additional Paid-in Capital 14,200,000 12,151,000
Deficit (873,000) (1,588,000)
----------- -----------
Total 14,069,000 11,159,000
Less Treasury Stock, at cost, 244,986
shares 2,043,000 2,043,000
----------- -----------
Total Stockholders' Equity, net 12,026,000 9,116,000
----------- -----------
Total $40,767,000 $41,851,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------------- ----------------------------
1995 1994 1995 1994
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Residential operations:
Revenue $ 6,742,000 $ 9,223,000 $ 20,325,000 $ 27,043,000
Cost of sales (5,719,000) (7,392,000) (16,972,000) (21,095,000)
Expenses (1,640,000) (1,465,000) (4,885,000) (5,170,000)
----------- ----------- ------------ ------------
Income (loss) from residential operations (617,000) 366,000 (1,532,000) 778,000
Interest and other income (expense), net 78,000 161,000 128,000 395,000
----------- ----------- ------------ ------------
Net income (loss) before income taxes (539,000) 527,000 (1,404,000) 1,173,000
Income taxes (expense) benefit (Note D) 682,000 (4,000) 682,000 (17,000)
----------- ----------- ------------ ------------
Net income (loss) before extraordinary item 143,000 523,000 (722,000) 1,156,000
Extraordinary item-gain on extinguishment
of debt (Notes B and D) net of tax 1,284,000 1,437,000
----------- ----------- ------------ ------------
Net income $ 1,427,000 $ 523,000 $ 715,000 $ 1,156,000
=========== =========== ============ ============
Earnings (loss) per share:
Primary
Continuing operations $.02 $.09 $(.12) $.19
Extraordinary item .20 - .24 -
---- ---- ----- ----
Net income $.22 $.09 $ .12 $.19
==== ==== ===== ====
Fully diluted
Continuing operations $.02 $.08 $(.12) $.18
Extraordinary item .20 - .24 -
---- ---- ----- ----
Net income $.22 $.08 $ .12 $.18
==== ==== ===== ====
Weighted average number of shares
Outstanding
Primary 6,485,400 6,127,400 5,974,600 6,127,400
Fully diluted 6,485,400 6,469,100 5,974,600 6,469,100
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
------------------------------
1995 1994
------------ ------------
<S> <C> <C>
NET CASH USED IN OPERATING ACTIVITIES: $ (2,369,000) $ (4,857,000)
------------ ------------
CASH FLOWS USED IN INVESTING ACTIVITIES-
Purchases of office property and equipment (41,000) (49,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 17,255,000 19,078,000
Principal payments on notes payable (17,811,000) (15,759,000)
Proceeds from the sale of common stock 2,195,000
------------ ------------
Net cash provided by financing
activities 1,639,000 3,319,000
------------ ------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (771,000) (1,587,000)
CASH AND CASH EQUIVALENTS, beginning of
period 1,305,000 2,736,000
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 534,000 $ 1,149,000
============ ============
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. ACCOUNTING POLICIES:
The consolidated balance sheet as of September 30, 1995, the related
condensed consolidated statements of operations for the three and nine month
periods ended September 30, 1995 and 1994 and the related condensed
consolidated statements of cash flows for the nine month periods ended
September 30, 1995 and 1994 are unaudited, but in management's opinion,
include all adjustments necessary for a fair presentation of such financial
statements. Such adjustments consisted only of normal recurring items.
Interim results are not necessarily indicative of results for a full year.
The consolidated financial statements include the accounts of The Writer
Corporation and its wholly owned subsidiaries (the Company). All significant
intercompany transactions and balances have been eliminated in consolidation.
The financial statements should be read in conjunction with the audited
Consolidated Financial Statements included in the annual report on Form 10-K
for the year ended December 31, 1994. Except as described herein, the
accounting policies utilized in the preparation of these financial statements
are the same as those set forth in the Company's annual financial statements
except as modified for interim accounting treatment.
B. NOTES PAYABLE:
On June 22, 1995 the Company entered into an agreement with one of its
lenders by which approximately $2,756,000 in outstanding unsecured debt was
satisfied for $750,000 cash payment which resulted in an extraordinary gain
of approximately $2,000,000, (see Note D). The terms of this agreement
required the Company to make a $200,000 payment on July 31, 1995, and an
additional $550,000 payment on August 30, 1995 which the Company made from
the proceeds of the common stock offering discussed in Note C. In addition,
under the terms of a previous restructuring agreement, the Company was
obligated to this lender for stock appreciation rights on 500,000 shares of
the Company's common stock which was also satisfied in full upon final
payment to the lender.
C. PRIVATE PLACEMENT OF COMMON STOCK
During the second quarter, the Company initiated a private placement of its
common stock. The "best efforts" offering is for the sale of a minimum of
1,333,333 shares and a maximum of 2,000,000 shares issued at $1.50 per share,
with a gross sales price of $2,000,000 up to a maximum of $3,000,000. In
conjunction with the offering, the Company has entered into an arrangement
with an investment banking firm. Under the terms of this arrangement the
Company agreed to provide "accredited investors" which would collectively
purchase no less than $1.4 million of the offering and the underwriter has
agreed to a best effort to provide purchasers of no less than $1.1 million of
the offering. The underwriter may be compensated at 6% of the total gross
proceeds in excess of $1 million, of which 3% may be paid in the form of
Company stock issued at $1.50 per share and 3% may be paid in cash. The
minimum offering of $2,000,000 was subscribed to and accepted as of July 31,
1995.
7
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
C. PRIVATE PLACEMENT OF COMMON STOCK:(CONTINUED)
Three of the Company's directors, George S. Writer, Jr. ($300,000), Robert G.
Tointon, through his affiliated company, Phelps-Tointon, Inc. ($200,000) and
Louis P. Bansbach, III ($100,000) invested in this private placement. The
balance of the $2,000,000 minimum was purchased by "accredited investors"
which were unaffiliated with the Company.
On August 30 the Company agreed to extend the offering period for an
additional 90 days in order to allow more time for the underwriter to
finalize the transaction. All sales pursuant to this placement are expected
to be concluded prior to November 30, 1995.
D. INCOME TAXES
The Company regularly evaluates its deferred tax asset and the likelihood of
recoverability. As a result of the extraordinary gain from extinguishment of
debt in the quarter ended September 30, 1995, the valuation allowance
previously provided was adjusted, which resulted in a tax benefit of
$682,000. The approximate $2,000,000 extraordinary gain from extinguishment
of debt is shown net of the related tax effect which includes $40,000 of
alternative minimum tax.
8
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
FINANCIAL CONDITION
At September 30, 1995 the Company's backlog was 87 units, a slight
increase over the 81 units in backlog at June 30, 1995. The Company's
backlog at December 31, 1994 was 36 units. The Company's backlog on
September 30, 1994 was 76 units. These increases reflect the re-
opening and re-marketing of the Company's Castle Pines North project,
as well as the results gained from the enhanced marketing and sales
effort which the Company has been focusing on during the last twelve
months. The Company's backlog at the end of 1994 and beginning of
1995 was negatively impacted by the rising interest rates and other
market factors, including inventory levels and some competitors
willingness to offer significant incentives to buyers which the
Company was not willing to match during the fourth quarter of 1994 and
the first quarter of 1995. The continued stabilization of interest
rates has favorably impacted the Company in its sales and marketing
efforts over the last two quarters, and the Company has offered some
incentives to buyers on selected inventory homes.
During the first and second quarters of 1995 the Company consciously
focused on reducing its speculatory inventory. Although its contract
backlog is up significantly, the overall homes under construction
increased slightly by $310,000 or less than 2%. This reflects the
efforts to move from starting speculatory inventory homes into presold
units. The current inventory remains consistent with the prior
quarter balance.
The Company's model homes and furnishings have decreased by $500,000
from year end, which includes the completion of the six furnished
model homes for the Company's Castle Pines North project and reflects
the sale of the previous Castle Pines North models (five homes), three
models at the Company's SouthPark project and one at each of the
Company's Pier Point and NorthPark single family projects.
The Company's land and land development inventories have increased by
approximately $107,000. This increase reflects the net effect of
finished lot inventories transferred to homes under construction and
initiation of development on approximately one third of a 27 acre
parcel of land for townhomes acquired in Highlands Ranch. The Company
is also actively developing two parcels within its Castle Pines North
project. The Company's unplatted land decreased slightly from the
year end balance due to the transfer of costs associated with the June
acquisition of the Company's new townhome project to land and land
development, now that development has been initiated.
The Company's office property and equipment increased slightly due to
partial upgrading of the computer equipment in an effort to improve
financial and operational reporting capabilities.
The Company's cash balances at September 30, 1995 have decreased from
the year end balance due primarily to reduction in accounts payable
and accrued expenses, as well as from the cash used in operations
during the first nine months of 1995. The proceeds from a private
placement of stock and the use thereof are discussed below. The
Company's restricted cash balances decreased as funds restricted for
land development have been employed for that purpose. The other
assets of the Company decreased by approximately $180,000 due
primarily to the application of a $200,000 earnest deposit to the
closing of a note repayment.
9
<PAGE>
FINANCIAL CONDITION (CONTINUED)
The Company's financial condition was enhanced during the third
quarter by two transactions, one of which involved the sale of the
Company's common stock through a private placement and the second of
which involved the full satisfaction of a $2,756,000 unsecured note
payable obligation for a cash payment of $750,000. (See discussion at
Note B, C and D to the Consolidated Financial Statements of the
Company contained herein.) The approximate $2,100,000 of proceeds
from the common stock sale were used to make the $750,000 cash payment
on the aforementioned debt satisfaction, purchase land and pay down
outstanding real estate taxes, with the balance applied to trade
payables.
RESULTS OF OPERATIONS
The Company closed 36 and 110 units for the three and nine month
periods ended September 30, 1995 as compared to 53 and 154 for the
same periods in the prior year. This decreased revenues by $2,481,000
or 27% and $6,718,000 or 25% over the prior year respective periods.
For the third quarter the average sales price was $187,300 as compared
to $190,300 for the previous quarter and $175,600 for the prior year
nine month period. The changes in average sales price are due to the
change in the mix of townhome, single family and cluster homes sold
during the periods and certain discounts as discussed below. The table
below illustrates this mix.
<TABLE>
<CAPTION>
Closings Townhomes Cluster Homes Single Family Total
- -------- --------- ------------- -------------- -----
<S> <C> <C> <C> <C>
3 month period ended Sept. 30, 1995 19 3 14 36
3 month period ended Sept. 30, 1994 35 1 17 53
9 month period ended Sept. 30, 1995 69 9 32 110
9 month period ended Sept. 30, 1994 88 13 53 154
</TABLE>
Cost of sales decreased $1,673,000 or 23% for the three month period
and $4,123,000 or 20% for the nine month period ended September 30,
1995 as compared to the same periods in 1994. Cost of sales did not
decrease in the same proportion as revenue due to increased market
pressure from competition willing to substantially decrease their
pricing and/or provide significant incentives to their buyers.
Although the Company does not typically follow this discount to move
marketing strategy, some discounting in certain projects has taken
place in order to sell speculative inventory units and/or maintain
market share.
These market factors have also negatively affected the Company's gross
profits. Gross profit for the three and nine month periods ended
September 30, 1995 were $1,023,000 and $1,831,000 respectively versus
$3,353,000 and $5,948,000 for the same periods in 1994. As a
percentage of revenue, gross profit dropped 4.7% and 5.5% for the
three and nine month periods when compared with the prior year.
Operating expenses in the nine month period ended September 30, 1995
decreased by $285,000 as compared to the same period in 1994. This
decrease is attributable to overhead reductions netted with increased
marketing costs, as well as a reduction of approximately $491,000 in
interest expense from profit sharing participations paid to
development lenders on certain selected projects which are nearing
10
<PAGE>
RESULTS OF OPERATIONS (CONTINUED)
completion. As a percentage of revenue these operating expenses
increased 5% because of the revenue decrease. During the third
quarter operating expenses decreased by $236,000 when compared to the
prior quarter. This third quarter decrease was primarily attributable
to lower sales, marketing and general and administrative expenses and
a decrease in interest rates on borrowings. During the first and
second quarter the Company executed a marketing campaign which
included television, radio and billboard advertising, a departure from
the traditional newsprint advertising the Company has used. Although
the campaign was relatively expensive, the costs were shared through
vendor cooperation. Management believes the campaign was effective,
evidenced by the increasing backlog and buyer traffic which has taken
place.
The Company recorded an approximate $2,000,000 gain on the
extinguishment of an unsecured debt. As a result of this gain the
valuation allowance on the deferred tax asset was adjusted, which
resulted in a tax benefit from continuing operations of $682,000. The
extraordinary gain is shown net of the related tax effect. See
additional discussion below.
All of these factors, when combined, led to a gain from operations of
approximately $143,000 for the three months ended and a loss from
operations of $722,000 for the nine month period ended September 30,
1995. Because of the extraordinary gain from debt extinguishment, net
profit for the three and nine month periods ended September 30, 1995
was $1,427,000 and $715,000 respectively.
LIQUIDITY AND CAPITAL RESOURCES
In the Company's most recent annual form 10-K filed for the year ended
December 31, 1994 and form 10-Q for the quarter ended June 30, 1995,
it was noted that, "the Company's liquidity and capital resources
continue to be strained by the recovery from prior years activities,
inventory growth and the increase and development activities which
were undertaken during the last three years."
Management has addressed this problem partly by refocusing attention
on cost control and operational efficiencies which led to some
increased cash flow from the Company's operations. However,
notwithstanding the progress that the Company has made in terms of its
financial restructuring and certain profitable operational periods,
management felt in was necessary to accelerate the generation of new
working capital in order to expand the operations which should allow
for improvement in operating results.
Therefore, in the third quarter the Company partially completed a
private placement of common stock. The offering, under a "best
efforts", is for the sale of a minimum of 1,333,000 shares and a
maximum of 2,000,000 shares issued at $1.50 per share with total
proceeds generated of $2,000,000 up to a maximum of $3,000,000. See
discussion at Note C to the Consolidated Financial Statements of the
Company contained herein.
The Company has used a portion of the proceeds from such private
placement to fund the purchase of raw land for the Company's new
townhome project in Highlands Ranch and for the repayment of an
unsecured note payable at a substantial discount. The balance of the
proceeds were used for working capital purposes including the
reduction in accrued real estate taxes, trade payables and accrued
interest. Management believes that the completion of the offering will
allow the Company to continue to focus on operational areas which
should enhance the Company's ability to improve operating results.
11
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
On June 22, 1995 the Company entered into an agreement with one of its
lenders by which approximately $2,756,000 of outstanding unsecured
debt was repaid for $750,000 which resulted in a gain of approximately
$2,000,000. The tax effects of this transaction are discussed in Note
D to the Consolidated Financial Statements contained herein. The
terms of this restructuring agreement required the Company to make a
$200,000 payment on July 31, 1995 and an additional $550,000 payment
on August 30, 1995, which the Company made from the proceeds of the
aforementioned common stock offering. In addition, under the terms of
a previous restructuring agreement, the Company was obligated to this
lender for stock appreciation rights on 500,000 shares of the
Company's common stock which were also satisfied in full by the final
payment to the lender in August.
In February of 1995 the Company consummated a new $4,100,000 land loan
with a financial institution. Proceeds from the new loan were used to
repay a $2,477,000 obligation outstanding at December 31, 1994 at a
discount which resulted in a gain of $153,000, net of related costs.
The balance of the loan commitment is being used for lot development,
water and sewer tap purchases, and interest payments. This facility
is non-revolving except for the water and sewer tap portion, bears interest
at prime plus 1.5% and matures in three years. In addition to this land
loan, the lender has committed to a $5,000,000 revolving construction
facility for use at the Company's Castle Pines North project. Both
facilities are secured by Deeds of Trust on that project.
In July of 1995 the Company renewed its $12 million credit facility
with a national lender which was originally earmarked for its Castle
Pines North development. The renewal will allow the Company to use
the facility in several of its other projects, as well as Castle Pines
North. With this renewal, and coupled with the new development
facilities and other existing credit facilities, management believes
that it has adequate funds to provide a continuing supply of lots for
building as well as construction financing for the currently
contemplated inventory levels.
The Company is initiating a search for additional building sites
and/or development parcels which would enhance the Company's ability
to sell more homes. Some further equity or debt or some combination
thereof will be necessary in order to accomplish this goal. The
Company is currently evaluating its options and opportunities to raise
these funds.
12
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
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
(b) There were no reports on Form 8-K filed for the nine months
ended September 30, 1995.
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 WRITER CORPORATION
(Registrant)
Date: November 11, 1995 By: /s/ Daniel J. Nickless
------------------------------------
Daniel J. Nickless
Sr. Vice President and
Chief Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 696,000<F1>
<SECURITIES> 0
<RECEIVABLES> 292,000
<ALLOWANCES> 0
<INVENTORY> 38,446,000<F2>
<CURRENT-ASSETS> 0
<PP&E> 1,382,000
<DEPRECIATION> 949,000
<TOTAL-ASSETS> 40,767,000<F3>
<CURRENT-LIABILITIES> 5,366,000
<BONDS> 23,375,000
<COMMON> 742,000
0
0
<OTHER-SE> 11,284,000
<TOTAL-LIABILITY-AND-EQUITY> 40,767,000
<SALES> 6,742,000
<TOTAL-REVENUES> 6,742,000
<CGS> (5,719,000)
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (1,562,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (539,000)
<INCOME-TAX> 682,000<F4>
<INCOME-CONTINUING> 143,000
<DISCONTINUED> 0
<EXTRAORDINARY> 1,284,000
<CHANGES> 0
<NET-INCOME> 1,427,000
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
<FN>
<F1>Cash includes $162,000 of restricted cash
<F2>Inventory includes homes under construction of $17,776,000, model homes and
furnishings of $4,652,000, land and land development of $9,012,000, and
unplatted land of $7,006,000
<F3>Total assets includes $ 900,000 of other assets
<F4>Tax Benefit
</FN>
</TABLE>
