<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM __________ TO _________.
Commission File No. l-6830
FPA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 59-0874323
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3333 Street Road, One Greenwood Square
Bensalem, Pennsylvania 19020
(Address of principal executive offices)
Telephone: (215) 947-8900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (l) 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__ No _____
Number of shares outstanding as of May 12, 1996: 11,578,795 (excluding 1,119,336
shares held in Treasury).
<PAGE>
Item 1. FINANCIAL STATEMENT INDEX
FPA Corporation and Subsidiaries
Index to Financial Statements
PAGE
----
Interim Financial Statements for the quarter
ended March 31, 1996
Consolidated Balance Sheets at March 31, 1996
and June 30, 1995 1
Consolidated Statements of Operations and Changes
in Retained Earnings for the three months and nine months
ended March 31, 1996 and 1995 2
Condensed Consolidated Statements of Cash Flows
for the nine months ended March 31, 1996 and 1995 3
Notes to Consolidated Financial Statements 4-5
<PAGE>
PART I. FINANCIAL INFORMATION
Item l. FINANCIAL STATEMENTS
FPA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, June 30,
1996 l995
---------- --------
Assets (Unaudited)
------
Cash $ 2,675 $ 2,324
Receivables
Trade accounts 3,887 3,636
Mortgage and other notes 1,567 1,674
Real estate held for development and sale
Residential properties completed
or under construction 37,286 35,757
Land held for development or sale
and improvements 56,337 52,921
Property and equipment, at cost, less
accumulated depreciation 491 523
Deferred charges and other assets 4,880 5,439
------- -------
$107,123 $102,274
======== ========
Liabilities and Shareholders' Equity
------------------------------------
Liabilities
Accounts payable 16,382 21,445
Accrued expense 6,080 6,292
Amounts due to related parties 3,309 3,657
Customer deposits 2,903 2,739
Mortgage and other note obligations
primarily secured by:
Mortgage notes receivable 1,301 1,419
Residential properties 29,299 27,998
Land held for development or sale and
improvements 17,857 11,304
Senior notes 371
Subordinated debentures 2,073 2,231
Other notes payable 12,253 9,455
Deferred income taxes 2,583 2,583
Minority interests 642 634
------- -------
Total liabilities 94,682 90,128
------- -------
Shareholders' equity
Common Stock, $.l0 par, 20,000,000 shares
authorized, 12,698,131 shares issued at
March 31, 1996 and June 30, 1995 1,270 1,270
Capital in excess of par value -
common stock 17,726 17,726
Retained earnings (deficit) (5,753) (6,104)
Treasury stock, at cost (1,119,336 shares
at March 31, 1996, 1,002,513 shares
at June 30, 1995) (802) (746)
------- -------
Total shareholders' equity 12,441 12,146
------- -------
Commitments and contingencies
$107,123 $102,274
======== ========
See notes to consolidated financial statements
1
<PAGE>
FPA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND CHANGES IN RETAINED EARNINGS
(in thousands except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------ -----------------
1996 1995 1996 1995
------------------ -----------------
Earned revenues
Residential properties $ 17,822 $ 23,360 $ 58,202 $ 78,469
Land sales 378 363 4,090
Other income 292 380 956 1,021
------ ------ ------ ------
18,114 24,118 59,521 83,580
------ ------ ------ ------
Costs and expenses
Residential properties 15,026 19,978 49,375 67,286
Land sales 293 293 3,380
Other 343 115 557 329
Selling, general
and administrative 2,602 3,388 8,102 9,602
Interest:
Incurred 1,789 1,509 5,047 4,393
Less capitalized (1,463) (1,232) (4,168) (3,592)
Depreciation and
amortization 32 27 96 72
Minority interest in income
(loss) of consolidated
subsidiaries (52) 103 8 192
------ ------ ------ ------
18,277 24,181 59,310 81,662
------ ------ ------ ------
Income (loss) from operations
before income taxes (benefit) (163) (63) 211 1,918
Income tax expense (benefit) (22) (13) 30 437
------ ------ ------ ------
Income (loss) from operations
before extraordinary item (141) (50) 181 1,481
------ ------ ------ ------
Extraordinary gain on early
extinguishment of note
payable, less applicable
income tax expense
(Note A) 170
------ ------ ------ ------
Net income (loss) (141) (50) 351 1,481
Retained earnings (deficit),
at beginning of period (5,612) (5,774) (6,104) (7,305)
------ ------ ------ ------
Retained earnings (deficit),
at end of period $ (5,753) $ (5,824) $ (5,753) $ (5,824)
====== ====== ====== ======
Primary earnings (loss)
per share:
Income (loss) before
extraordinary item $ (.01) $ (.01) $ .02 $ .12
Extraordinary gain .01
------ ------ ------ ------
Total $ (.01) $ (.01) $ .03 $ .12
====== ====== ====== ======
See notes to consolidated financial statements
2
<PAGE>
FPA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Nine Months Ended
March 31,
--------------------------
1996 1995
--------------------------
Cash flows from operating activities:
Net income $ 351 $ 1,481
Adjustment to reconcile net income
to net cash provided by(used in)operating
activities:
Extraordinary gain on early
extinguishment of debt (170)
Depreciation and amortization 96 72
(Increase) decrease in assets
Receivables (144) 2,697
Real estate held for development and sale (4,945) (5,617)
Deferred charges and other assets 494 (506)
Increase (decrease) in liabilities
Accounts payable and accrued expenses (5,251) 3,277
Other liabilities (177) (785)
------ ------
Net cash provided by (used in)
operating activities (9,746) 619
------ ------
Cash flows from financing activities:
Proceeds from mortgages and loans payable 69,026 62,986
Repayments of mortgages and loans payable (58,874) (63,881)
Purchase of treasury stock (55)
------ ------
Net cash provided by (used in)
financing activities 10,097 (895)
------ ------
Net increase (decrease) in cash 351 (276)
Cash at beginning of year 2,324 2,506
------ ------
Cash at end of quarter $ 2,675 $ 2,230
====== ======
Supplemental disclosure of cash flow activities:
Interest paid, net of amounts capitalized $ - $ 74
====== ======
Income taxes paid $ 165 $ 297
====== ======
See notes to consolidated financial statements
3
<PAGE>
FPA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(A) During the second quarter of fiscal 1996, the Company completed a
transaction to fully satisfy a note payable with an outstanding balance of
approximately $380,000 and reacquired 116,823 shares of Common Stock in
exchange for a cash payment of $235,000. These shares have been retained by
the Company as treasury stock. This transaction resulted in an
extraordinary gain of $170,000, net of income tax expense of $30,000, and
has been reflected in the second quarter financial statements.
(B) Primary earnings per common share is computed by dividing net income or
loss by the weighted average number of common shares outstanding and common
stock equivalents. The weighted average number of shares used to compute
primary earnings per common share were 11,746,038 and 11,926,730 for the
three months ended March 31, 1996 and 1995, respectively, and 11,782,705
and 11,924,986 for the nine months ended March 31, 1996 and 1995,
respectively.
(C) Supplemental disclosure of noncash financing activities:
As discussed in Note A, the Company satisfied a note payable with an
outstanding balance of $380,000 and reacquired 116,823 shares of Common
Stock in exchange for a cash payment of $235,000. The purchase price was
allocated between the note and stock resulting in a gain of $170,000, net
of income tax.
During the first quarter of fiscal 1995, the 50,000 shares of Series C
Preferred Stock owned by Mr. Orleans were converted into 6,000,000 shares
of Common Stock. The Series C Preferred Stock had been issued in connection
with the acquisition by the Company of Orleans Construction Corporation
("OCC"). See Note 2 to 1995 Annual Report.
(D) Mortgage and other notes receivables are shown net of allowances for
doubtful accounts of $30,000 at March 31, 1996 and at June 30, 1995.
(E) Residential properties completed or under construction consist of the
following:
4
<PAGE>
March 31, June 30,
1996 1995
--------- --------
Under contract for sale $21,999 $23,242
Unsold 15,287 12,515
------- -------
$37,286 $35,757
======= =======
(F) The above statements are unaudited but include all adjustments which the
Company considers necessary for a fair presentation of the financial
statements. All adjustments made for the periods presented were of a normal
recurring nature. The results of operations for the three and nine month
periods ended March 31, 1996 and 1995 are not necessarily indicative of the
full year.
(G) The Company, through a wholly-owned subsidiary, is the General Partner in
Versailles Associates, L.P., a limited partnership formed to purchase and
develop a 102 multi-family unit community in Cherry Hill, New Jersey. The
terms of the Partnership Agreement provide that the General Partner be
allocated 55% of the net profits and losses of the Partnership and have
exclusive management and control over the development of the property. The
financial statements of the Partnership are included in the consolidated
financial statements of the Company. The limited partner's share of the
income and capital from this entity has been presented as minority
interests in the accompanying consolidated financial statements.
Orleans Construction Corporation (OCC) has entered into a joint venture
agreement with Bridlewood Associates, L.P., a limited partnership formed to
develop an 85 acre parcel of land in Mount Laurel, New Jersey. OCC is the
managing general partner. OCC and the limited partner share equally in the
profits or losses of the entity. The financial statements of the
Partnership are included in the consolidated financial statements of the
Company. The limited partner's share of the income and capital from this
entity has been presented as minority interest in the accompanying
consolidated financial statements.
5
<PAGE>
FPA CORPORATION AND SUBSIDIARIES
Item 2. FPA Corporation and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources
The Company requires capital to purchase and develop land, to
construct units, fund related carrying costs and overhead and to fund various
advertising and marketing costs to facilitate sales. The Company's sources of
capital include funds derived from operations, sales of assets and various
borrowings, most of which are secured. At March 31, 1996, the Company had
approximately $49,040,000 available to be drawn under existing secured revolving
and construction loans for planned development expenditures. These expenditures
include site preparation, roads, water and sewer lines, impact fees and
earthwork, as well as the construction costs of the units and amenities. The
Company received a loan from Jeffrey P. Orleans, Chairman of the Board and Chief
Executive Officer, in the amount of $4,700,000. The terms of the loan have not
been finalized. The purpose of the loan was to provide funding to acquire land
and obtain more favorable pricing from the Company's contractors by reducing
outstanding accounts payable balances. The Company believes that the funds
generated from operations and financing commitments from commercial lenders will
provide the Company with sufficient capital to meet its operating needs through
calendar 1996.
6
<PAGE>
Joint Ventures
The Company is a general partner in two separate joint ventures
with private investors which are developing communities in Cherry Hill and Mount
Laurel, New Jersey. These activities will provide additional operating funds to
the Company without the need for land acquisition funding.
Economic Conditions
The sluggish growth of the general economy in the Northeastern
United States and lack of consumer confidence caused primarily by the
uncertainty of future employment have continued into the third quarter of fiscal
1996. However, the demand for new housing in the Company's marketing areas has
increased. New sales orders during the third quarter of fiscal 1996 increased
$15,000,000 compared to the same quarter in the prior year. The Company has
continued to offer various incentives at certain communities to increase sales
velocity. These actions reduce gross profits and cash proceeds from residential
property sales. Any significant further downturn in economic factors affecting
the real estate industry may require additional incentives or reductions in net
sales prices.
The following table sets forth certain detail as to residential
sales activity for the three and nine months ended March 31, 1996 and 1995, in
the case of revenues earned and new orders, and at the end of the periods
indicated, in the case of backlog.
7
<PAGE>
Nine Months Ended
March 31,
------------------
1996 1995
---- ----
(Dollars in thousands)
Revenues $58,202 $78,469
Units 360 464
Average price per unit $162 $169
New Orders $63,638 $51,120
Units 376 325
Average price per unit $169 $157
Backlog $51,266 $42,612
Units 280 248
Average price per unit $183 $172
There were 376 new orders for the nine months ended March 31, 1996
which was an increase of 16% as compared to the same period in the prior year.
Sales value of new orders increased 24% to $63,638,000. The increased average
sales value was attributable to a shift in the product mix to more single family
homes.
The reduction in units delivered is due primarily to the severe winter
weather conditions experienced during January through March 1996 which hampered
construction activity and delayed deliveries at all of the Company's
communities. The favorable increase in new orders resulted in the increased
backlog as of March 31, 1996.
8
<PAGE>
Inflation
Inflation can have a significant impact on the Company's liquidity.
Rising costs of land, materials, labor, interest and administrative costs have
generally been recoverable in prior years through increased selling prices. The
Company has been able to increase prices to cover a portion of these costs.
However, due to the current sluggish growth in the general economy in the
Northeastern United States, there is no assurance the Company will be able to
continue to increase prices to cover the effects of inflation in the future.
Operating Revenues
Revenues for the third quarter of fiscal 1996 decreased $6,004,000 as
compared to third quarter of fiscal 1995. Revenues from the sale of residential
units included 111 units totaling $17,822,000 during the quarter ended March 31,
1996 as compared to 138 units totaling $23,360,000 during the quarter ended
March 31, 1995. The overall decrease is due primarily to the severe winter
weather conditions previously discussed under economic conditions.
Revenues for the nine months ended March 31, 1996 decreased $24,059,000
as compared to the nine months ended March 31, 1995. Revenues and units
delivered from the sale of residential properties decreased by $20,267,000 and
9
<PAGE>
104 units, respectively. This reduction is due to the various factors discussed
under economic conditions. Land sale revenues for the nine months ended March
31, 1996 decreased $3,727,000 as compared to the nine months ended March 31,
1995 due to the timing of a land sale located in East Brunswick, New Jersey
which occurred during the second quarter of fiscal 1995.
Costs and Expenses
Costs and expenses for the third quarter of fiscal 1996 decreased
$5,904,000 as compared to the same period in the prior year. The reduction is
due primarily to a decrease in cost of residential properties sold and selling,
general and administrative expenses of $4,952,000 and $786,000, respectively.
These decreases are consistent with the decrease in earned revenues from
residential properties previously discussed.
Costs and expenses for the first nine months of fiscal 1996 decreased
$22,352,000 as compared to the first nine months of fiscal 1995. The decrease in
costs and expenses is due primarily to decreases in the cost of real estate
properties sold (including land) and selling, general and administrative
expenses of $20,998,000 and $1,500,000, respectively. These decreases are
consistent with the decrease in earned revenues from residential properties
discussed under operating revenues.
10
<PAGE>
Extraordinary Items
As more fully discussed in Note A of the accompanying Notes to
Consolidated Financial Statements under Item 1, the Company recorded an
extraordinary item during the second quarter of fiscal 1996. The early
extinguishment of a note payable resulted in an extraordinary gain of $170,000,
net of income tax expense of approximately $30,000.
Net Income (loss)
Net loss for the third quarter of fiscal 1996 was $141,000 ($(.01) per
primary share) compared to a net loss of $50,000 ($(.01) per primary share) for
the third quarter of fiscal 1995. This decrease is primarily due to the
reduction in the units delivered as previously discussed under operating
revenues.
Net income for the first nine months of fiscal 1996 was $351,000 ($.03
per primary share) as compared to $1,481,000 ($.12 per primary share) for the
first nine months of fiscal 1995. The decrease is due to a decrease in profits
from the sale of residential units and land sales due to reductions in volume
previously discussed under operating revenues.
Environmental Regulation and Litigation
Development and sale of real property creates a potential for
environmental liability on the part of the developer, owner or any
11
<PAGE>
mortgage lender for its own acts or omissions as well as those of current or
prior owners of the subject property or adjacent parcels. If hazardous
substances are discovered on or emanating from any of the Company's properties,
the owner or operator of the property (including the prior owners) may be held
strictly liable for all costs and liabilities relating to such hazardous
substances. Environmental studies are undertaken in connection with property
acquisitions by the Company.
Approximately 145 homeowners at the 305 unit single family
Colts Neck Estates subdivision in Washington Township, New Jersey have commenced
three lawsuits against the Company, which were separately filed in state and
Federal courts between April and November, 1993, and now have been consolidated
in the United States District Court for the District of New Jersey. The
plaintiffs in the consolidated action allege that the Company and other
defendants built and sold them homes which had been constructed on and or
adjacent to land which has been used as a municipal waste landfill and a pig
farm. The complaints assert claims under the federal Comprehensive Environmental
Response, Compensation and Liability Act, the Federal Solid Waste Disposal Act,
the New Jersey Sanitary Landfill Facility Closure and Contingency Act, the New
12
<PAGE>
Jersey Spill Compensation and Control Act, as well as under theories of private
nuisance, public nuisance, common law fraud, latent defects, negligent
misrepresentation, consumer fraud, negligence, strict liability, vendor
liability, and breach of warranty, among others.
In September, 1993 the Company brought a state court action against
more than 30 of its insurance companies seeking indemnification and
reimbursement of costs of defense in connection with the three Colts Neck
actions referred to above. That action has since been stayed and the Company's
claims against its insurers have also been brought as third-party claims in the
consolidated Colts Neck litigation in Federal court along with third-party
claims against the former owners and operators of the Colts Neck property as
well as claims against the generator of the waste allegedly disposed of on the
property.
Although the Company has vigorously defended the claims brought
by the plaintiff homeowners, the Company and other parties in the Colts Neck
litigation agreed to mediation which resulted in a settlement agreement. The
implementation of the agreement is subject to a number of conditions, including
a determination by the court to accord class action status to the litigation, a
small number of plaintiffs opting out of the class and a satisfactory resolution
13
<PAGE>
with the New Jersey Department of Environmental Protection ("NJDEP") with
respect to its investigation discussed below. The Court has granted preliminary
class certification and has authorized notice of the settlement to the proposed
class. A hearing to consider the final class certification and approval of the
settlement is scheduled for July, 1996. Under the settlement agreement with the
homeowners, if implemented, a judgment of $6,000,000 would be entered against
the Company, of which $650,000 would be paid in cash promptly. Except as set
forth below, any balance of the judgment would be payable solely out of the
proceeds, if any, of recoveries under the litigation against the insurance
companies, and the Company would have no liability itself for the balance of the
judgment not satisfied from such recoveries. The Company would fund the
litigation against the insurance companies, subject to reimbursement of amounts
in excess of $100,000 (subject to a limitation on reimbursement of $300,000)
from recoveries, if any, from the insurance companies, including pretrial
settlements. In the event that the insurance recoveries (whether through
settlements or judgments) are less than $500,000, the Company would pay the
difference to the homeowners.
All testing required by Phase 1A of the phased remedial
investigation ("RI") to be performed at Colts Neck Estates in connection with
the NJDEP investigation referred to above has been completed. The results of
14
<PAGE>
such testing have been submitted to the NJDEP for its review and comment. The
Company continues to fund the cost of the phased RI testing, which is not
expected to materially exceed the original estimate of $136,000.
On February 12, 1996, the Company received an order from the NJDEP
based upon testing results of Phase 1A of the RI. The Company has met with
representatives of NJDEP to clarify the terms and provisions of the order.
Although the Company has appealed the order, the Company intends to submit a
Closure/Post-Closure Plan to NJDEP for its review and approval. The
Closure/Post-Closure Plan of the Company will provide, inter alia, for: (i) site
monitoring, including methane testing of certain areas; (ii) deed restrictions
in certain affected areas; and (iii) establishment of a classification exception
area on certain portions of the premises. Although the Closure/Post-Closure Plan
will, in the Company's judgement, conform substantially to its discussions with
NJDEP, no assurance can be given that the Plan will be accepted by the NJDEP. It
is, therefore, possible that the settlement with the homeowners as well as the
resolution with the NJDEP will not be implemented or will be further delayed.
The Company has accrued estimated costs of environmental
testing as well as all other reasonably estimable future investigatory,
15
<PAGE>
engineering, legal and litigation costs and expenses. The Company previously
increased its recorded reserves to give effect to its estimate of the net amount
payable under the settlement agreement, if implemented, and the unreimbursed
costs to the Company of the insurance litigation. The Company believes that
neither the implementation of the settlement agreement or the resolution of the
NJDEP investigation nor the resolution of the homeowners' claims through future
litigation will have a material effect on its results of operations or its
financial position, although there can be no assurance as to the ultimate
outcome of litigation of these matters.
The Company is not aware of any other environmental liabilities
associated with any of its other projects.
16
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The registrant incorporates herein by reference the information
contained in Part 1 Item 2 "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Environmental Regulation and Litigation."
Item 5. Other Events
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, FPA Corporation (the "Company") is
hereby filing cautionary statements identifying important factors that could
cause the Company's actual results to differ materially from those projected in
forward looking statements of the Company made by, or on behalf of the Company.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits.
Exhibit 27 - Financial Data Schedule (included in electronic
filing format only).
Exhibit 99 - Cautionary statement for purposes of the "Safe
Harbor" provisions of the Private Securities Litigation Reform Act of 1995.
b. Reports in Form 8-K:
None.
17
<PAGE>
Exhibit 99.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995.
FPA Corporation desires to take advantage of the new "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995 and is filing
this Exhibit in order to do so. FPA Corporation wishes to caution readers that
the following important factors, among others, in some cases have affected, and
in the future could affect, FPA's actual results and could cause FPA's actual
consolidated results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of FPA Corporation:
o changes in consumer confidence due to perceived
uncertainty of future employment opportunities and other
factors;
o competition from national and local homebuilders in the
Company's market areas;
o building material price fluctuations;
o changes in mortgage interest rates charged to buyers of
the Company's units;
o changes in the availability and cost of financing for the
Company's operations, including land acquisition;
18
<PAGE>
o revisions in federal, state and local tax laws which
provide incentives for home ownership;
o delays in obtaining land development permits as a result of
(i) federal, state and local environmental and other land
development regulations, (ii) actions taken or failed to be
taken by governmental agencies having authority to issue such
permits, and (iii) opposition from third parties; and
o increased cost of suitable development land.
19
<PAGE>
FPA CORPORATION AND SUBSIDIARIES
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.
FPA CORPORATION
---------------
(Registrant)
MAY 13, 1996 /s/ BENJAMIN D. GOLDMAN
- -------------------- ------------------------
(Date) Benjamin D. Goldman
President and
Chief Operating Officer
MAY 13, 1996 /s/ JOSEPH A. SANTANGELO
- -------------------- --------------------------
(Date) Joseph A. Santangelo
Treasurer, Secretary and
Chief Financial Officer
20
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 2,675
<SECURITIES> 0
<RECEIVABLES> 5,454
<ALLOWANCES> 0
<INVENTORY> 93,623
<CURRENT-ASSETS> 0
<PP&E> 491
<DEPRECIATION> 0
<TOTAL-ASSETS> 107,123
<CURRENT-LIABILITIES> 0
<BONDS> 62,783
1,270
0
<COMMON> 0
<OTHER-SE> 11,171
<TOTAL-LIABILITY-AND-EQUITY> 107,123
<SALES> 58,565
<TOTAL-REVENUES> 59,521
<CGS> 49,668
<TOTAL-COSTS> 59,310
<OTHER-EXPENSES> 661
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 879
<INCOME-PRETAX> 211
<INCOME-TAX> 30
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 170
<CHANGES> 0
<NET-INCOME> 351
<EPS-PRIMARY> .03
<EPS-DILUTED> .00
</TABLE>
