<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, 1997
------------------
[ ] 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.
6061 S. Willow Dr., #232, Englewood, Colorado 80111
------------------------------------------------------------
(Address of principal executive offices) ZipCode
(303) 779-4100
----------------------------------------------------
(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. 7,354,600 shares as of
September 30, 1997.
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
INDEX
Page
PART I. FINANCIAL INFORMATION Number
------
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
September 30, 1997 (Unaudited) and
December 31, 1996 3
Condensed Consolidated Statements
of Operations for the three and nine months
ended September 30, 1997 and 1996 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 1997 and
1996 (Unaudited) 6
Notes to Consolidated Financial Statements (Unaudited) 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS AND LIQUIDITY AND
CAPITAL RESOURCES. 8
PART II. OTHER INFORMATION 13
2
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Residential real estate held for sale, net:
Homes under construction $17,639,000 $12,884,000
Model homes and furnishings 3,127,000 3,439,000
Land and land development 10,366,000 10,692,000
Unplatted land 2,861,000 6,403,000
----------- -----------
Total 33,993,000 33,418,000
Office property and equipment, less accumulated
depreciation of $440,000 and $804,000: 434,000 604,000
Other assets:
Cash and cash equivalents 1,068,000 995,000
Restricted cash 790,000 667,000
Accounts receivable 263,000 235,000
Deferred tax asset 650,000 350,000
Other 804,000 381,000
----------- -----------
Total Assets $38,002,000 $36,650,000
----------- -----------
----------- -----------
</TABLE>
(Continued)
3
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES
Notes payable $15,939,000 $17,241,000
Accounts payable and accrued expenses 5,489,000 5,060,000
Accrued interest 228,000 428,000
----------- -----------
Subtotal 21,656,000 22,729,000
STOCKHOLDERS' EQUITY
Common stock, $.10 par value; authorized,
10,000,000 shares; 7,354,600 and 7,354,600
shares issued and outstanding 735,000 735,000
Additional paid-in capital 12,352,000 12,352,000
Retained earnings 3,259,000 834,000
----------- -----------
Total 16,346,000 13,921,000
----------- -----------
Total Liabilities and Stockholders' Equity $38,002,000 $36,650,000
----------- -----------
----------- -----------
</TABLE>
(Concluded)
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,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Residential operations:
Revenue $12,902,000 $12,990,000 $31,808,000 $32,920,000
Cost of sales (10,565,000) (10,931,000) (25,723,000) (27,728,000)
Expenses (1,740,000) (1,695,000) (5,120,000) (4,750,000)
----------- ----------- ----------- -----------
Income from residential operations 597,000 364,000 965,000 442,000
Interest and other income, net 195,000 6,000 1,134,000 115,000
----------- ----------- ----------- -----------
Net income before income taxes 792,000 370,000 2,099,000 557,000
Income taxes benefit (expense) 220,000 (9,000) 220,000 (9,000)
----------- ----------- ----------- -----------
Net income before extraordinary item 1,012,000 361,000 2,319,000 548,000
Extraordinary item-gain on
extinguishment of debt 106,000
----------- ----------- ----------- -----------
Net income $1,012,000 $361,000 $2,425,000 $548,000
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per share:
Continuing operations $.14 $.05 $0.32 $.07
Extraordinary item - - $0.01 -
---- ---- ----- ----
Net income $.14 $.05 $0.33 $.07
---- ---- ----- ----
---- ---- ----- ----
Weighted average number of shares
Outstanding 7,354,590 7,383,231 7,354,590 7,367,858
</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,
1997 1996
------------ ------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES: $ 784,000 $ 3,575,000
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of office property and equipment (314,000) (95,000)
Proceeds from sale of office property 905,000
------------ ------------
Net cash provided by (used in) investing activity 591,000 (95,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 21,443,000 18,173,000
Principal payments on notes payable (22,745,000) (21,516,000)
Proceeds from the sale of common stock 83,000
------------ ------------
Net cash used in financing activities (1,302,000) (3,260,000)
------------ ------------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 73,000 220,000
CASH AND CASH EQUIVALENTS, beginning of period 995,000 1,409,000
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 1,068,000 $ 1,629,000
------------ ------------
------------ ------------
</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, 1997, the related condensed
consolidated statements of operations for the three and nine month periods ended
September 30, 1997 and 1996 and the related condensed consolidated statements of
cash flows for the nine month periods ended September 30, 1997 and 1996 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, 1996. 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.
In February, 1997 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 (SFAS #128) Earnings Per Share. This
statement is effective for annual periods ending after December 15, 1997. The
Company does not anticipate any material change to previously reported earnings
per share as a result of the adoption of this statement.
B. INCOME TAXES:
The Company computes deferred income taxes based on the difference between the
financial statement and income taxes bases of assets and liabilities and
operating loss and tax credit carryforwards, using enacted tax rates.
The income tax benefit of $220,000 represents the net of estimated deferred
income tax benefit and estimated current income tax expense. Current income
taxes have been minimized as a result of the utilization of the Company's
deferred tax asset, including its net operating loss carryforward.
The Company's continued trend of profitable residential operations has now
provided a basis to estimate that more of its deferred tax asset can more likely
than not be utilized. Therefore $300,000 of the valuation reserve for this
asset has been released, providing income tax benefit during the third quarter
of 1997. The majority of the Company's deferred tax asset which provides
benefit is comprised of valuation reserves of land holdings which were expensed
in prior periods and not deducted for tax reporting, and the net operating loss
carryforward which was $495,000 at December 31, 1996.
7
<PAGE>
THE WRITER CORPORATION
AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES.
FINANCIAL CONDITION
During the third quarter of 1997 the Company's financial condition continued to
strengthen based on quarterly net income of $1,012,000. In addition during the
first nine months of 1997, $784,000 of cash was provided from operations. The
Company continues to focus on debt retirement, a net of $1,302,000 was repaid
from activities year to date, and productive employment of its assets. All of
the Company's land holdings are now under development except one parcel which is
currently being platted and processed with the county.
The Company's backlog at September 30, 1997 was 80 units which was consistent
with the prior quarter's backlog of 79 units. The Company's backlog at
September 30, 1996 was 90 units. The Company's marketing area of Metropolitan
Denver remained stable and the continued low interest rates in the mortgage
market has allowed the Company to continue to attract a wider spectrum of
potential home buyers for its product.
The Company's work in process inventory of homes under construction has
increased by approximately $4,755,000, or 37% compared to the December 31, 1996
balance. This increase is primarily attributable to the 48% increase in
contract backlog from year end which was 54 units at December 31, 1996. In
addition, the Company has had some increase in speculative inventory
commensurate with its higher sales level and higher sales expectations.
The Company's investment in model homes and furnishings has decreased by
approximately 9%, or $312,000 from the previous year end balance. This decrease
is primarily attributable to the Company's program of selling its models to
investors and leasing them back for marketing purposes. In addition, the
Company continues to scrutinize the number of models needed at each of its
projects in order to efficiently market its product. During the third quarter
the Company constructed new models at its Castle Pines North Knightsbridge
project and sold the previously used models. The Company is currently
constructing models at Castle Pines North for a new "Noble Ridge" product line
which will replace the Company's current King's Crossing and Royal Hill product
lines. This shift in strategy will provide for more efficient marketing and
construction management while capitalizing on the most popular designs from each
of the product lines.
The Company's land and land development decreased by approximately $326,000
which represents a net decrease from lots transferred to work in process and
those currently under development. The Company is actively and aggressively
developing its land holdings in order to maximize the potential return from
these assets.
In July , 1997 the Company consummated a lot purchase agreement under which it
will acquire 64 lots in Windsor, Colorado. The Company has purchased six lots
and intends to begin marketing and constructing homes on them during the fourth
quarter of 1997. As part of this agreement, the Company also secured the right
to purchase additional lots based on certain terms as defined in the agreement.
With this new marketing effort, the Company will initiate a Northern Colorado
Division which will focus on development and building opportunities in the
Northern Colorado area.
8
<PAGE>
The Company intends to pursue land and or lot acquisition opportunities for this
division and expects to generate closing revenue during the first half of 1998.
The Company's unplatted land decreased by approximately 55%, or $3,500,000
commensurate to the aforementioned efforts to employ assets into production. As
part of this program, the Company has recently entered into two land sales
contracts under which 62 lots in the Castle Pines North project will be marketed
to other builders. Under the terms of the purchase agreements the Company will
develop the lots prior to sale. The Company is currently developing this
parcel.
At September 30, 1997, the Company has one remaining parcel of ground for which
development has not begun. The parcel is an unplatted single family site which
is zoned for attached product. The Company is currently processing this plat
through the county, and finalizing its product designs with the intention of
beginning development and construction in 1998.
The Company's office properties and equipment have decreased by approximately
$170,000, or 28% from the December 31, 1996 balance. The decrease is
attributable to the sale of the Company's office facility during the first
quarter of 1997. The net year to date activity includes approximately $314,000
of equipment purchases the Company has made to update its computer equipment for
a new management information system which the Company will convert to in 1998.
In addition, the Company has entered into two operating leases for additional
equipment and software during the quarter.
The Company's other assets have increased by approximately $423,000 related
primarily to land deposits for the Lowry project and a receivable established
pursuant to lot sales. The Company has sold ten lots in its Greenbrook project
to the Homeowners Association for use as additional open space.
The Company's notes payable balance has decreased by approximately $1,302,000,
or 8% since year end. A portion of this decrease relates to scheduled debt
repayments tied to individual house closings with third party buyers, however
approximately $891,000 of debt was retired commensurate to the sale of the
Company's office building. During the third quarter the Company's overall debt
increased by approximately $250,000, which is reflective of additional
construction activity related to the work in process inventory. Virtually all
of the Company's work in process inventory is financed through construction
loans.
The Company's accounts payable and accrued liabilities have increase by
approximately $429,000 since year end which is the net change of several
individual accounts. The primary increases relate to customer deposits on home
sales and trade accounts payable. The increase in payables is reflective of the
timing of the Company's construction draw process with its lenders, driven by
the overall increase in inventory levels discussed above. Based on current
production levels, the Company's payables can vary significantly during and at
month end depending on when bank draws are processed. In addition, the Company
has begun to accrue federal and state income taxes, and retirement costs which
will be paid at or after year end.
RESULTS OF OPERATIONS
In addition to closing the sale of twelve finished lots in the first quarter of
1997, the Company closed 58 and 140 units during the three and nine month
periods ended September 30, 1997 as compared to 60 and 153 units for the prior
year comparable periods. During the second quarter of 1997, the Company
recorded 38 sales resulting in revenue of $8,264,000. The increase from the
previous quarter of approximately $4,638,000, or 56% reflects the increased
sales levels which the Company experienced during the first and second quarter
of 1997 which have now been completed for closing. As previously mentioned, the
Company's backlog to begin 1997 resulted in fewer closings during the first two
quarters of 1997 than
9
<PAGE>
compared to 1996. This situation is also reflected in the comparable year to
date revenue and units which notwithstanding higher revenue in the third
quarter still reflect a decrease in revenue from the prior year periods. The
Company's revenues for the nine months ended September 30, 1997 were
$1,112,000, or 3% less than the prior year nine month period.
The table below illustrates the Company's closed product mix, which has been
stable.
CLOSINGS TOWNHOMES CLUSTER HOMES SINGLE FAMILY TOTAL
- -------- --------- ------------- ------------- -----
3 month period ended Sept. 30, 1997 23 5 30 58
3 month period ended Sept. 30, 1996 24 6 30 60
9 month period ended Sept. 30, 1997 57 10 73 140
9 month period ended Sept. 30, 1996 56 13 84 153
The Company's average sales prices have been relatively stable. During the
third quarter the average price was $222,500 and it averaged $222,200 for the
first three quarters of 1997. These amounts compare to a $217,500 average
during the second quarter of 1997 and a $215,300 average during the full year
1996.
During the third quarter of 1997 the Company's cost of sales decreased by
approximately 3% while the revenue decrease was approximately 1% compared to the
previous year periods. This improvement resulted in a gross profit of 18.1%
during the quarter compared to 15.8% during the comparable three month period in
1996 or a 2.3% overall improvement. For the nine month periods ending September
30, the Company's cost of sales decreased by $2,494,000, or approximately 9%
versus a revenue decrease of approximately 5%. These amounts exclude the
revenue generated from certain lot sales of $695,000, which were recorded in the
first quarter of 1997. The changes resulted in gross profit for the first
three quarters of 1997 of 18.9%, a 3.1% improvement over the 15.8% recorded
during 1996. The improvement in gross margin is primarily the result of the
Company's continued efforts to manage costs and the reclassification of certain
costs as discussed below.
The Company's operating expenses increased by $43,000 to $1,740,000, or 13.5% of
revenue during the third quarter compared to the prior year period. The
Company's marketing and general and administrative expenses which are part of
this line item increased by approximately $275,000 over the prior year period
reflective of intensified marketing efforts and a redefining of some job
descriptions under which the Company began treating certain salaries of
production management as general and administrative costs which in prior periods
were included as construction costs. Although these costs were not significant
to the Company's overall financial results, they have impacted the comparisons
related to the gross profit calculations and the operating expenses for the
comparable quarters. The increase in marketing and general and administrative
costs were essentially offset by a $254,000 decrease in interest cost which
reflect lower rates and fees and additional amounts being capitalized to
projects under construction.
For the nine month period ended September 30, 1997 and 1996, the Company's
operating expenses were $5,120,000, and $4,750,000, respectively. This $370,000
increase represents approximately 1% of revenue during 1997.
10
<PAGE>
This increase is also attributable to the aforementioned marketing and general
and administrative expenses less the savings of interest due to lower rates and
fees incurred and additional interest capitalized to assets which were not in
production during the previous year.
The Company's interest and other income rose significantly during the quarter
and reflects the refund of certain real estate taxes paid at several of the
Company's projects where a protest of the valuations was successfully asserted
with certain counties. These refunds represent amounts which the Company
expenses through cost of sales. For the nine month period the Company's
interest and other income includes a $552,000 gain of sale of the Company's
office building and a $342,000 refund of fees that the Company had previously
paid.
Although net income of $2,205,000 before tax was recognized through the nine
month period end, current income taxes have been minimized as a result of the
utilization of the Company's deferred tax asset that had previously been
reserved. The Company's continued trend of profitable residential operations
has now provided a basis to estimate that more of its deferred tax asset can
more likely than not be utilized. Therefore $300,000 of the valuation reserve
for this asset has been released, providing income tax benefit during the third
quarter of 1997. The majority of the Company's deferred tax asset is comprised
of valuation reserves of land holdings which were expensed in prior periods and
not deducted for tax reporting, and the net operating loss carryforward which
was $495,000 at December 31, 1996.
As a result of the items discussed above, the Company recorded net income before
extraordinary items of $1,012,000, which represents a 180% improvement over the
prior year's third quarter income which was $361,000. On a year to date basis,
the Company has recorded $2,319,000 of income before extraordinary items
compared to $548,000 for the prior year nine month period. The strong results
from the third quarter of 1997 have resulted in net income of $2,425,000 for the
nine months ended September 30, 1997 compared to $548,000 for the same period in
the prior year.
LIQUIDITY AND CAPITAL RESOURCES
During the last two years the Company's liquidity has improved as the Company
has returned to profitable operations. During the first nine months of 1997,
the Company has generated approximately $784,000 of cash from operating
activities while using these funds and other cash reserves to continue in its
asset employment and debt reduction programs and to purchase new computer and
other office equipment.
In addition to the stronger operating results, the Company's borrowing
capabilities have been expanded based on the positive operating results and the
strength of the Company's balance sheet with particular emphasis on its debt to
equity ratio.
The Company has available to it an undrawn line of credit for up to $1,700,000.
The line is secured by the collateral value of the Company's Castle Pines North
project. Under the terms of the Company's existing agreement for this working
capital facility, as the underlying collateral is transferred to non-affiliates
adjustments are made to the availability under the line. The line may be
adversely affected by the lot sales currently under contract. The Company has
requested its lender to reevaluate the underlying collateral in general, in
order to maintain the facility at its current commitment level if possible.
Should these modification attempts be unsuccessful then the availability under
the facility will be reduced by approximately $620,000, as the lots are
transferred. Management believes that its current liquidity supplemented by the
modified facility and the Company's other financing sources will continue to
provide it with liquidity necessary to continue the planned expansion of the
Company's activities.
11
<PAGE>
In November the Company closed a new loan facility which refinanced the existing
debt on the Company's Greenbrook project. The new facility will provide
construction and limited development funds necessary to complete this project.
The Company has also received a commitment from the same lender to provide
financing for its acquisition of lots and limited land development and
construction of townhome units at the Lowry Redevelopment Project. It is
anticipated that this facility will be finalized during the fourth quarter of
1997, or early 1998.
In November of 1997, the Company received a $10,000,000 financing commitment
from a national lender which will be used primarily for the financing of the lot
acquisition and home construction in the Windsor project for the Company's new
Northern Colorado Division. The terms of the commitment have been agreed upon
and will include a provision for the acquisition and development of lots and the
construction of homes. The Company's management believes this facility coupled
with current cash or available line of credit funds will be adequate to provide
the necessary financing for this start up project. The Company intends to
identify other development and building opportunities for this Division and will
supplement any additional financing needs not covered by the aforesaid
commitment through its existing lending relationships.
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, 1997.
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.
THE WRITER CORPORATION
(Registrant)
Date: November 10, 1997 By: /s/ Daniel J. Nickless
-----------------------------
Daniel J. Nickless
Sr. Vice President and
Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,858,000<F1>
<SECURITIES> 0
<RECEIVABLES> 263,000
<ALLOWANCES> 0
<INVENTORY> 33,993,000<F2>
<CURRENT-ASSETS> 0
<PP&E> 874,000
<DEPRECIATION> (440,000)
<TOTAL-ASSETS> 38,002,000<F3>
<CURRENT-LIABILITIES> 5,717,000
<BONDS> 15,939,000
0
0
<COMMON> 735,000
<OTHER-SE> 15,611,000
<TOTAL-LIABILITY-AND-EQUITY> 38,002,000
<SALES> 31,808,000
<TOTAL-REVENUES> 31,808,000
<CGS> (25,723,000)
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (3,986,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,099,000
<INCOME-TAX> 220,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 106,000
<CHANGES> 0
<NET-INCOME> 2,425,000
<EPS-PRIMARY> .33
<EPS-DILUTED> 0
<FN>
<F1>Cash includes $790,000 of restricted cash.
<F2>Inventory includes $17,639,000 homes under construction, model home and
furnishings $3,127,000, land and land development $10,366,000,
unplatted land $2,861,000.
<F3>Total assets includes other assets of $1,454,000.
</FN>
</TABLE>
