SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
[ ] 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 000-27081
AMERICAN HOME MORTGAGE HOLDINGS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-4066303
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
12 EAST 49TH STREET, NEW YORK, NY 10017
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(212) 755-8600
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE
Common Stock, $0.01 par value NASDAQ National Market
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
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] or No [ ].
As of September 30, 2000, 8,784,551 shares of the Registrant's
Common Stock, $.01 par value, were outstanding.
<PAGE>
AMERICAN HOME MORTGAGE HOLDINGS, INC.
FORM 10-Q/A
For the Quarter Ended September 30, 2000
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
SIGNATURES
<PAGE>
PART I - FINANCIAL INFORMATION
The dollar amounts of TOTAL ASSETS and TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY, each as of September 30, 2000, have been revised to reflect a $7000
adjustment. No other provisions of the Form 10-Q for the fiscal quarter ended
September 30, 2000 are amended hereby.
ITEM 1.
FINANCIAL STATEMENTS
AMERICAN HOME MORTGAGE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 3,374,539 $ 3,414,017
Accounts receivable 13,996,490 7,102,546
Mortgage loans held for sale, net 118,297,926 65,115,356
Mortgage loans held for investment, net 164,457 153,534
Real estate owned 344,032 112,865
Mortgage servicing rights, net 33,356 34,470
Premises and equipment, net 6,253,301 3,419,693
Prepaid expenses and security deposits 2,305,340 2,034,234
Goodwill 12,849,783 4,497,537
------------ ------------
TOTAL ASSETS $157,619,224 $ 85,884,252
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Warehouse lines of credit $113,412,232 $ 56,804,901
Drafts payable 1,972,626 3,313,686
Accrued expenses and other 13,943,431 5,262,997
Notes payable 2,331,930 1,947,578
Mortgage payable - building 1,298,640 --
Deferred income tax liability 531,950 532,025
------------ ------------
Total liabilities 133,490,809 67,861,187
------------ ------------
COMMITMENTS AND CONTINGENCIES -- --
MINORITY INTEREST 262,431 23,372
STOCKHOLDERS' EQUITY:
Preferred stock $1.00 per share, 1,000,000 shares
authorized, none issued and outstanding -- --
Common stock, $.01 per share par value, 19,000,000
shares authorized, 8,784,551 issued and outstanding 87,845 82,534
Additional paid-in capital 19,517,810 17,249,390
Retained earnings 4,260,329 667,769
------------ ------------
Total stockholders' equity 23,858,984 17,999,693
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $157,619,224 $ 85,884,252
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
AMERICAN HOME MORTGAGE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Gain on sale of mortgage loans, net $ 15,411,656 $ 5,015,536 $ 33,281,451 $ 15,837,750
Interest income, net 691,800 482,583 2,611,873 1,190,951
Other 890,377 330,838 2,034,763 967,553
------------ ------------ ------------ ------------
Total revenues 16,993,833 5,828,957 37,928,087 17,996,254
------------ ------------ ------------ ------------
EXPENSES:
Salaries, commissions and benefits, net 7,959,155 2,831,315 17,555,906 8,654,829
Marketing and promotion 1,788,316 336,141 2,723,543 1,205,089
Occupancy and equipment 1,598,414 552,826 3,977,745 1,575,884
Data processing and communications 713,080 267,910 1,831,038 884,572
Provision for loss 50,000 -- 98,500 27,967
Other 2,104,350 567,928 5,334,737 1,670,729
------------ ------------ ------------ ------------
Total expenses 14,213,315 4,556,120 31,521,469 14,019,070
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 2,780,518 1,272,837 6,406,618 3,977,184
INCOME TAXES 1,195,067 79,859 2,822,727 211,125
------------ ------------ ------------ ------------
INCOME BEFORE MINORITY INTEREST 1,585,451 1,192,978 3,583,891 3,766,059
MINORITY INTEREST IN INCOME OF
CONSOLIDATED JOINT VENTURE 64,562 (17,159) (8,670) 27,332
INCOME TAX EXPENSE DUE TO
CONVERSION OF "S" CORP. -- 625,000 -- 625,000
------------ ------------ ------------ ------------
NET INCOME $ 1,520,889 $ 585,137 $ 3,592,561 $ 3,113,727
============ ============ ============ ============
Earnings per share - basic $ 0.17 $ 0.12 $ 0.43 $ 0.62
Earnings per share - diluted $ 0.17 $ 0.12 $ 0.43 $ 0.62
Weighted average number of shares - basic 8,779,247 5,000,000 8,453,899 5,000,000
============ ============ ============ ============
Weighted average number of shares - diluted 8,779,247 5,000,000 8,453,899 5,000,000
============ ============ ============ ============
Unaudited pro forma information:
Provision for proforma income taxes 548,669 1,737,935
------------ ------------
Pro forma earnings $ 741,327 $ 2,211,917
============ ============
Pro forma basic and diluted earnings per share $ 0.10 $ 0.29
============ ============
Pro forma weighted average number of shares - basic 7,500,000 7,500,000
============ ============
Pro forma weighted average number of shares - diluted 7,533,334 7,533,334
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
AMERICAN HOME MORTGAGE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
2000 1999
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,592,561 $ 3,113,727
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation and amortization 1,086,188 258,783
Provision for loss 98,500 27,967
Origination of mortgage loans held for sale (1,882,964,166) (894,744,878)
Proceeds on sale of mortgage loans 1,831,438,008 896,215,678
Increase in accrued expenses and other liabilities 7,029,203 497,123
Deferred income taxes (75) 640,000
(Increase) / decrease in:
Accounts receivable (7,112,245) (463,961)
Mortgage servicing rights 1,114 (1,000)
Prepaid expenses and security deposits 399,318 (669,097)
--------------- ---------------
Net cash (used in) provided by operating activities (46,431,594) 4,874,342
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of real estate owned, net (231,167) --
Net purchases of loans held for investment (10,923) (80,055)
Acquisition of First Home Mortgage Corp., net (7,339,605) --
Purchases of premises and equipment, net (1,112,880) (877,509)
Increase (decrease) in minority interest 82,219 (85,168)
--------------- ---------------
Net cash used in investing activities (8,612,356) (1,042,732)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in warehouse lines of credit 56,498,940 (11,189,014)
Increase (decrease) in drafts payable (1,341,060) 7,932,897
Decrease in notes payable (153,408) --
Distributions -- (994,012)
Proceeds from issuance of capital stock -- 1,000
--------------- ---------------
Net cash provided by (used in) financing activities 55,004,472 (4,249,129)
--------------- ---------------
NET DECREASE IN CASH (39,478) (417,519)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,414,017 2,891,513
--------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,374,539 $ 2,473,994
=============== ===============
SUPPLEMENTAL DISCLOSURE--CASH PAID FOR:
Interest $ 4,388,818 $ 1,332,523
Taxes 919,836 396,134
</TABLE>
NON CASH ACTIVITIES
On June 30, 2000, the Company issued 489,804 shares of common stock in
exchange for 100% of the outstanding shares of First Home Mortgage Corp. See
Notes to Consolidated Financial Statements.
<PAGE>
AMERICAN HOME MORTGAGE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of American
Home Mortgage Holdings, Inc. and its subsidiaries, American Home Mortgage Corp.
("American Home Mortgage") and Marina Mortgage Company, Inc. ("Marina")
(collectively, the "Company") reflect all adjustments which, in the opinion of
management, are necessary for a fair presentation of the results of the interim
periods presented. All such adjustments are of a normal recurring nature. All
intercompany accounts and transactions have been eliminated. Operating results
for the nine months ended September 30, 2000 are not necessarily indicative of
the results that may be expected for the full year ended December 31, 2000.
The unaudited interim consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements and
notes thereto for the year ended December 31, 1999, included in the Company's
annual report on Form 10-K for the year then ended.
NOTE 2-INCOME TAXES
Prior to September 29, 1999, the Company was treated as an S corporation for
income tax purposes. Effective September 29, 1999, the Company changed its
income tax treatment to a C corporation. Income tax expense of approximately
$80,000 and $211,000 has been recorded for the third quarter and nine months
ending September 30, 1999, respectively. On a pro forma basis income tax expense
would have been approximately $741,000 and $2.2 million for the third quarter
and nine months ending September 30, 1999, respectively. Pro forma income tax
provisions have been presented as if the Company was taxable as a C corporation
for Federal and state income tax purposes for all periods presented.
The pro forma financial information has been presented to show the effect on the
historical results of operations of the Company had it been treated as a C
corporation for Federal and state income tax purposes as of the beginning of the
earliest period presented. The pro forma earnings per share has been presented
as if the shares issued at the time of the Offering were outstanding as of the
beginning of each period.
NOTE 3-EARNINGS PER SHARE
Basic earnings per share is based on the weighted average number of shares
outstanding and excludes the dilutive effect of common stock equivalents.
Diluted earnings per share is based on the weighted average number of shares
outstanding and includes the dilutive effect of common stock equivalents. There
was a de minimus dilutive effect as of September 30, 2000.
NOTE 4-INCORPORATION TRANSACTION
On June 15, 1999, the Company was formed to serve as a holding company for
American Home Mortgage. In conjunction with the closing of its Offering, all of
the issued and outstanding shares of stock of American Home Mortgage were
exchanged for 4,999,900 shares of the Company's Common Stock.
The Financial Accounting Standards Board issued Statements of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133") in June 1998 and No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities an Amendment of FASB
Statement No. 133" ("SFAS 138") in June 2000.
<PAGE>
NOTE 5-DERIVATIVES
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, (collectively referred to as derivatives) and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. If certain conditions are met, a derivative may be specifically
designated as:
o a hedge of the exposure to changes in the fair value of a recognized asset
or liability or an unrecognized firm commitment;
o a hedge of the exposure to variable cash flows of a forecasted transaction;
or
o a hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available for sale security,
or a foreign-currency-denominated forecasted transaction.
Under SFAS 133, an entity that elects to apply hedge accounting is required to
establish at the inception of the hedge the method it will use for assessing the
effectiveness of the hedging derivative and the measurement approach for
determining the ineffective aspect of the hedge. Those methods must be
consistent with the entity's approach to managing risk.
SFAS 138 addresses a limited number of issues causing implementation
difficulties for numerous entities that apply SFAS 133 and amends the accounting
and reporting standards of SFAS 133 for certain derivative instruments and
certain hedging activities.
As part of the Company's secondary marketing activities, mortgage-backed
securities are purchased and sold forward and options are acquired on mortgage
and treasury securities. At September 30, 2000, forward delivery commitments
amounted to approximately $138 million and options to buy securities amounted to
approximately $48 million. These contracts have a high correlation to the price
movement of the loans being hedged. There is currently no recognition of
unrealized gains or losses on these contracts in the balance sheet or statement
of income. When the related loans are sold, the deferred gains or losses from
these contracts are recognized in the statement of income as a component of net
gains or losses on sales of mortgage loans.
These statements are effective for all fiscal quarters of fiscal years beginning
after June 15, 2000. When the Company adopts these statements in January 2001,
management believes there will be a positive fair value impact of $2 million to
$3 million.
NOTE 6-ACQUISITION
On June 30, 2000, the Company completed its acquisition of First Home Mortgage
Corporation ("First Home"), an Illinois corporation, which was merged with and
into American Home Mortgage Corp. The shareholders of First Home received an
aggregate of 489,804 shares of the Company's common stock and $3.6 million, to
be paid over a period of two years. In addition, the shareholders of First Home
may receive additional consideration consisting of cash and shares of the
company's common stock based on the future results of the financial performance
of the First Home division of the Company (please see the Company's current
report on Form 8-K filed with the Securities and Exchange Commission on February
1, 2000 for further information). First Home is an independent mortgage lender
based in metropolitan Chicago. Formed in 1987, First Home originates primarily
residential mortgage loans. It operates 21 branch offices in 4 states and
employs approximately 255 full time employees, including sales personnel. At
June 30, 2000, First Home had assets of $9.7 million. This transaction generated
goodwill of approximately $8.2 million to be amortized over 20 years.
<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.
AMERICAN HOME MORTGAGE HOLDINGS, INC.
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(Registrant)
Dated: November 30, 2000 By: /s/ Robert E. Burke
--------------------------------
Robert E. Burke
Chief Financial Officer
Dated: November 30, 2000 By: /s/ Richard D. Silver
--------------------------------
Richard D. Silver
Controller
