UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: June 23, 1999
HOMEGOLD FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 0-8909 57-0513287
(State of other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification Number)
3901 PELHAM ROAD, GREENVILLE, SOUTH CAROLINA 29615
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 289-5000
ITEM 5. OTHER INFORMATION
The Company's common stock presently is traded on the NASDAQ National
Market under the symbol "HGFN". In the first quarter of 1999, the Company
received notice from NASDAQ of its intention to delist its stock. The Company
appealed NASDAQ's notice and received an exception and a modification of the
exception. The Company believes it has met all previous conditions related to
the modification of the exception, including the completion of the anticipated
bond repurchases. The remaining terms of the modified exception are as follows:
on or before June 30, 1999, the Company must make a filing with NASDAQ
containing a May 31, 1999 balance sheet, evidencing a minimum of $11.0 million
in net tangible assets, with pro forma adjustments for any significant events or
transactions occurring on or before the filing date. Finally, on or before
August 16, 1999, the Company must make a public filing with the SEC and NASDAQ,
evidencing a minimum of $11.0 million in net tangible assets as of June 30,
1999.
In order to fully comply with the terms of this exception, the Company must be
able to demonstrate compliance with all requirements for continued listing on
the NASDAQ National market. In the event the Company fails to comply with any of
the terms of this modified exception, its securities may be listed on "The
NASDAQ SmallCap Market" pursuant to the maintenance criteria. Based on the
Company's current financial conditions and its forecasted operations, the
Company anticipates being able to meet the financial conditions that are
outlined in the modified exception.
<PAGE>
However, no assurance can be given that the Company's actual operating results
will meet the criteria for continued listing on the NASDAQ National Market.
As of May 31, 1999 the Company's net tangible assets exceeded the $11.0 million
criteria established by NASDAQ.
<TABLE>
<CAPTION>
<S> <C>
Total shareholders' equity (per consolidated balance sheet) $ 16,321,000
Excess of cost over net assets of acquired businesses, net $ (1,621,000)
-------------------
Net tangible assets $ 14,700,000
===================
</TABLE>
As of the date of this filing, there were no significant events or transactions
that would adversely affect the above calculation.
<PAGE>
ITEM 7. FINANCIAL STATEMENT
HOMEGOLD FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED UNAUDITED BALANCE SHEET
MAY 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and cash equivalents $ 43,873
Restricted cash 5,150
Loans receivable 60,576
Less allowance for credit losses on loans (4,439)
Less deferred loan fees (986)
Plus deferred loan costs 695
-----------------
Net loans receivable 55,846
Income taxes receivable 900
Accrued interest receivable 1,882
Other receivables 10,608
Residual receivable, net 49,564
Property and equipment, net 18,825
Real estate and personal property acquired through foreclosure 3,842
Excess of cost over net assets of acquired businesses, net 1,621
Debt origination costs, net 2,768
Deferred income tax asset, net 4,151
Servicing asset 973
Other assets 2,986
-----------------
TOTAL ASSETS $ 202,989
=================
</TABLE>
SEE NOTE TO UNAUDITED CONSOLIDATED BALANCE SHEET, WHICH IS AN INTEGRAL PART OF
THIS STATEMENT.
<PAGE>
HOMEGOLD FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED UNAUDITED BALANCE SHEET
MAY 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C>
Liabilities:
Investor savings:
Notes payable to investors $ 120,029
Subordinated debentures 19,498
-----------------
Total investor savings 139,527
Senior unsecured debt 37,625
Other liabilities:
Accounts payable and accrued liabilities 5,450
Remittances payable 1,946
Income taxes payable 432
Accrued interest payable 1,670
-----------------
Total other liabilities 9,498
-----------------
Total liabilities 186,650
Minority interest 18
Shareholders' equity:
Common stock 492
Capital in excess of par value 38,964
Retained earnings (23,135)
-----------------
Total shareholders' equity 16,321
-----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 202,989
=================
</TABLE>
SEE NOTE TO UNAUDITED CONSOLIDATED BALANCE SHEET, WHICH IS AN INTEGRAL PART OF
THIS STATEMENT.
<PAGE>
HOMEGOLD FINANCIAL, INC. AND SUBSIDIARIES
NOTE TO CONSOLIDATED BALANCE SHEET
NOTE 1--BASIS OF PREPARATION
HomeGold Financial, Inc. (referred to herein sometimes as the "Company"
and "HGFN") states that the accompanying consolidated balance sheet is prepared
in accordance with the Securities and Exchange Commission's rules regarding
interim financial statements, and therefore does not contain all disclosures
required by generally accepted accounting principles for annual financial
statements. Reference should be made to the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998, including the footnotes thereto.
The consolidated balance sheet as of May 31, 1999, is unaudited and in
the opinion of management contains all known adjustments, which consist of only
normal recurring adjustments necessary to present fairly the financial position
of the Company. In preparing the consolidated balance sheet, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance sheet. Actual results could
differ from those estimates. These estimates include, among other things,
valuation of real estate owned, evaluation of deferred income tax asset,
assumptions used to value residual receivables and determination of the market
value of loans and allowance for credit losses.
<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 hereunto duly authorized.
HOMEGOLD FINANCIAL, INC.
By: /s/ Kevin J. Mast
------------------------------------------
Kevin J. Mast
Executive Vice President, Chief Financial
Officer, and Treasurer
