<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15
OF THE SECURITIES EXCHANGE ACT
For Quarter Ended March 31, 1996 Commission File No. 0-6201
BRESLER & REINER, INC.
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(Exact name of Registrant as Specified in its Charter)
DELAWARE 52-0903424
- ------------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer Identification)
incorporation or organization)
401 M Street, S. W., Washington, D. C. 20024
- ------------------------------------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number including area code: (202) 488-8800
--------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to the filing requirements
for at least the past ninety (90) days.
Yes: X No:
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Number of Shares of Common Stock
Outstanding May 15, 1996: 2,792,653
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BRESLER & REINER, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
ASSETS
------
<TABLE>
<CAPTION>
Mar.31, 1996 Dec 31,1995
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(Unaudited)
<S> <C> <C>
Rental Property and Equipment, Net $ 37,687,000 $ 38,018,000
Construction in Process 9,887,000 10,198,000
Homes Held for Sale 3,792,000 3,650,000
Land Held for Development 4,903,000 4,903,000
Land Held for Sale 431,000 431,000
Receivables:
Mortgages and Notes, Affiliates 5,857,000 5,971,000
Mortgages and Notes, Other 1,208,000 1,228,000
Direct Financing Leases 633,000 1,022,000
Other 1,834,000 1,838,000
Investment In and Advances To
Joint Ventures and Partnerships 5,019,000 4,233,000
Cash and Cash Equivalents 10,886,000 10,921,000
Cash Deposits Held in Escrow 10,888,000 11,215,000
Income Taxes Receivable 517,000 991,000
Deferred Charges and Other Assets 6,770,000 6,776,000
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$100,312,000 $101,395,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Notes Payable:
Mortgages Payable $ 33,202,000 $ 33,634,000
Land and Development - 0 - 500,000
Leasing Equipment 69,000 95,000
Accounts Payable 1,711,000 2,703,000
Accrued Expenses 813,000 859,000
Due to Affiliates 432,000 1,000,000
Deposits 279,000 275,000
Deferred Income 1,183,000 1,183,000
Deferred Income Taxes Payable 2,871,000 2,871,000
------------ ------------
Total Liabilities 40,560,000 43,120,000
Minority Interest 311,000 306,000
Shareholders' Equity 59,441,000 57,969,000
------------ ------------
$100,312,000 $101,395,000
============ ============
</TABLE>
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Revenues:
Sales of Homes & Lots $1,775,000 $2,942,000
Other Construction (Net) 260,000 290,000
Rentals-Apartments and Commercial 3,407,000 3,444,000
Hotel Income 1,238,000 1,194,000
Management Fees, Affiliates 214,000 202,000
Leasing Fees, Affiliates 187,000 129,000
Interest:
Affiliates 244,000 289,000
Other 309,000 209,000
Gain on Sale of Realty Interests 105,000 82,000
Equipment Leasing & Vending 49,000 90,000
Income From Equity Investments 211,000 221,000
Other 9,000 6,000
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8,008,000 9,098,000
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Costs and Expenses:
Cost of Sales 1,692,000 2,693,000
Rentals - Apartments & Commercial 1,618,000 1,607,000
Hotel Expense 1,134,000 1,197,000
Land Development Expense 26,000 8,000
General and Administrative 471,000 671,000
Interest Expense 752,000 842,000
Equipment Leasing & Vending 40,000 73,000
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5,733,000 7,091,000
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Net Income Before Income Taxes and
Minority Interest 2,275,000 2,007,000
Income Taxes 798,000 702,000
Minority Interest 5,000 9,000
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Net Income $1,472,000 $1,296,000
========== ==========
Earnings Per Common Share $0.53 $0.46
========== ==========
Weighted Average Number of Common
Shares Outstanding 2,792,653 2,836,403
========== ==========
</TABLE>
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND 1995
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 1,472,000 $ 1,296,000
Adjustments to Reconcile Net Income To Net Cash
Provided By Operating Activities:
Depreciation & Amortization 549,000 587,000
Gain on Sale of Realty Interests (105,000) (82,000)
Direct Financing Lease Payments 242,000 355,000
Amortization of Investment in Direct
Financing Leases (2,000) (35,000)
Proceeds From Sale of Equipment Under
Direct Financing Leases 173,000 - 0 -
(Income) From Equity Investments (211,000) (221,000)
Other (24,000) - 0 -
Changes in Other Assets & Liabilities:
(Increase) Decrease In:
Construction in Process 311,000 286,000
Homes Held for Sale (142,000) - 0 -
Mortgages & Notes Receivable 239,000 285,000
Income Taxes Receivable 474,000 424,000
Other Assets 282,000 2,964,000
Increase (Decrease) In Other Liabilities (1,597,000) (833,000)
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Total Adjustments 189,000 3,730,000
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Net Cash Provided By Operating Activities: 1,661,000 5,026,000
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Cash Flows From Investing Activities:
Investment in Joint Ventures (575,000) (549,000)
Other (163,000) (91,000)
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Net Cash Used in Investing Activities: (738,000) (640,000)
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Cash Flows From Financing Activities:
Repayment of Notes Payable (958,000) (1,377,000)
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Net Cash Used in Financing Activities (958,000) (1,377,000)
------------ ------------
Net Increase (Decrease) in Cash
and Cash Equivalents (35,000) 3,009,000
Cash and Cash Equivalents at Beginning of Year 10,921,000 7,200,000
------------ ------------
Cash and Cash Equivalents at End of Period $ 10,886,000 $ 10,209,000
============ ============
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest (Net of Amount Capitalized) $ 783,000 $ 860,000
Income Taxes 324,000 277,000
Supplemental Disclosure of Non-Cash Activities:
Escrowed Cash Deposits Received 30,000 36,000
Escrowed Cash Deposits Refunded 26,000 50,000
</TABLE>
<PAGE>
BRESLER & REINER, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
GENERAL:
The information contained in this report is furnished for the Registrant,
Bresler & Reiner, Inc., and its subsidiaries referred to collectively as the
"Company". In the opinion of Management, the information in this report
reflects all adjustments of a normal recurring nature which are necessary to
present a fair statement of the results for the interim period shown.
The financial information presented herein should be read in conjunction
with the financial statements included in the Registrant's Form 10-K for the
year ended December 31, 1995 as filed with the Securities and Exchange
Commission.
COMMITMENTS AND CONTINGENCIES:
The Company is contingently liable for $1,292,000 of outstanding
liabilities of non-consolidated partnerships and ventures in which it has
investments.
During 1990 and 1989, the Company purchased limited partnership interests
in limited partnerships, which are operating low income housing units. The
interests acquired range from 79% to 99%, and the required capital contributions
are payable in annual installments over the ten years such tax credit is
available. The amount of projected contributions are to be adjusted annually to
be a percentage of tax benefits derived. The Company anticipates that the
annual tax benefits will be more than sufficient to fund the annual capital
contributions.
At March 31, 1996, the Company had approximately $2,181,000 of outstanding
letters of credit for land improvements in housing projects that it is
developing.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Results of Operations
- ---------------------
Sales of Homes and Lots. Included are sales of 13 homes in the first
------------------------
three months of 1996 as compared with 19 homes in 1995. Continued slow economic
growth, employment uncertainty and proposed Government reduction in the
Washington, DC metropolitan area affected sales at Registrant's projects, and
has resulted in increased inventory of homes as purchasers have terminated sales
agreements.
Registrant's backlog of homes under contract of sale as of March 31 was
24 in 1996 versus 21 in 1995. Registrant generally receives a deposit of
$1,000 to $2,000 which may be forfeited if the buyer terminates the agreement.
The 1996 lower margin on home sales results from a longer holding period
before finished homes are sold.
Hotel Income and Hotel Expense. Included in Hotel Income for the three
------------ --------------
months ended March 31, 1996 is $822,000 of income relating to the Colonnade, a
Baltimore, MD hotel, as compared with $733,000 for the same period in 1995.
Hotel Expense in 1996 reflects $772,000 relating to the Colonnade as compared
with $818,000 for the 1995 period.
Interest, Other. The 1996 results reflect higher interest income on
----------------
invested funds as compared with interest income in the 1995 period. Registrant
has greater cash balances reserved in interest bearing accounts and in U.S.
Treasury instruments.
Equipment Leasing & Vending. The decline in revenues from 1995 to 1996
----------------------------
reflected the Registrant's decision to exit the equipment leasing business.
Liquidity and Capital Resources
-------------------------------
Registrant continues to fund its obligations out of current cash flow. The
banking and finance communities continue to be adverse to most real estate
lending, requiring increased coverage on debt and significant owner investment
in properties. There is no assurance that Registrant will be able to meet all
of its needs out of cash flow or that additional funding will be available to
Registrant if needed.
<PAGE>
During the three month period ended March 31, 1996, Registrant generated cash
flow from operating activities of $1,661,000. Cash flow from operating
activities was used in investing activities of $738,000 which consisted
primarily of funding Registrant's investments in low income housing
partnerships. Cash flow from operating activities was also used in financing
activities for the repayment of mortgages and notes payable in the amount of
$958,000. Overall, cash flow from operating, investing and financing activities
resulted in a decrease of $35,000 in cash and cash equivalents during the three
months ended March 31, 1996.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibit 27 - Financial Data Statement
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter ended March 31,
1996.
<PAGE>
S I G N A T U R E S
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.
BRESLER & REINER, INC.
(Registrant)
Date: May 15, 1996 /S/ Burton J. Reiner
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Burton J. Reiner, President
Date: May 15, 1996 /S/ William Oshinsky
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William Oshinsky, Treasurer
(Principal Financial Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Unaudited
3/31/96 10-Q and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 21,774,000
<SECURITIES> 0
<RECEIVABLES> 9,532,000
<ALLOWANCES> 0
<INVENTORY> 14,110,000
<CURRENT-ASSETS> 0
<PP&E> 61,381,000
<DEPRECIATION> 23,694,000
<TOTAL-ASSETS> 100,312,000
<CURRENT-LIABILITIES> 0
<BONDS> 33,271,000
0
0
<COMMON> 28,000
<OTHER-SE> 59,413,000
<TOTAL-LIABILITY-AND-EQUITY> 100,312,000
<SALES> 2,035,000
<TOTAL-REVENUES> 8,008,000
<CGS> 1,692,000
<TOTAL-COSTS> 1,692,000
<OTHER-EXPENSES> 3,289,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 752,000
<INCOME-PRETAX> 2,275,000
<INCOME-TAX> 798,000
<INCOME-CONTINUING> 1,472,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,472,000
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
</TABLE>
