<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 December 31, 1998
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
ORLEANS HOMEBUILDERS, INC.
(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)
One Greenwood Square, Suite #101
3333 Street Road
Bensalem, Pennsylvania 19020
(Address of principal executive offices)
Telephone: (215) 245-7500
(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 February 5, 1999: 11,357,893
(excluding 1,340,238 shares held in Treasury).
<PAGE>
Orleans Homebuilders, Inc. and Subsidiaries
Index to Financial Statements
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets at December 31, 1998
and June 30, 1998 1
Consolidated Statements of Operations and Changes
in Retained Earnings for the three months and
six months ended December 31, 1998 and 1997 2
Consolidated Statements of Cash Flows for the
six months ended December 31, 1998 and 1997 3
Notes to Consolidated Financial Statements 4
Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations. 6
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
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Orleans Homebuilders, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
December 31, June 30,
1998 1998
------------ ---------
<S> <C> <C>
Assets
Cash $ 2,534 $ 2,833
Restricted cash - customer deposits 4,090 3,902
Real estate held for development and sale:
Residential properties completed or under construction 46,587 47,209
Land held for development or sale and improvements 62,356 64,044
Property and equipment, at cost, less accumulated depreciation 1,975 1,892
Receivables, deferred charges and other assets 11,891 10,645
--------- ---------
Total Assets $ 129,433 $ 130,525
========= =========
Liabilities and Shareholders' Equity
Liabilities:
Accounts payable $ 12,523 $ 15,378
Accrued expenses 10,813 9,312
Customer deposits 4,090 3,902
Mortgage and other note obligations primarily secured by real
estate held for development and sale 64,889 65,136
Subordinated debentures 601 601
Notes payable - related parties 7,093 12,052
Other notes payable 3,193 2,918
Deferred income taxes 2,961 2,961
Minority interests 79 546
--------- ---------
Total Liabilities 106,242 112,806
--------- ---------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1 par, 500,000 shares authorized:
Series D convertible preferred stock, 7% cumulative annual
dividend, $30 stated value, issued and outstanding 100,000
shares ($3,000,000 liquidation preference) (Note F) 3,000 --
Common stock, $.10 par, 20,000,000 shares authorized,
12,698,131 shares issued at December 31, 1998 and
June 30, 1998, respectively 1,270 1,270
Capital in excess of par value common stock 17,726 17,726
Retained earnings (deficit) 2,170 (299)
Treasury stock, at cost (1,340,238 shares and 1,342,113 shares
held at December 31, 1998 and June 30, 1998, respectively) (975) (978)
--------- ---------
Total Shareholders' Equity 23,191 17,719
--------- ---------
Total Liabilities and Shareholders' Equity $ 129,433 $ 130,525
========= =========
</TABLE>
See notes to consolidated financial statements
1
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Orleans Homebuilders, Inc. and Subsidiaries
Consolidated Statements of Operations
and Changes in Retained Earnings
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Earned revenues
Residential properties $ 39,309 $ 19,335 $ 73,850 $ 44,176
Related party (Note G) -- 1,472 -- 1,472
Land sales 611 206 1,531 426
Other income 545 434 1,018 759
-------- -------- -------- --------
40,465 21,447 76,399 46,833
-------- -------- -------- --------
Costs and expenses
Residential properties 33,353 16,430 62,692 37,593
Related party (Note G) -- 1,459 -- 1,459
Land sales 516 147 1,294 327
Other 277 184 506 358
Selling, general and administrative 3,737 3,052 7,483 6,330
Interest
Incurred 1,852 1,770 3,972 3,496
Less capitalized (1,665) (1,607) (3,598) (3,169)
Minority interests -- (88) -- (104)
-------- -------- -------- --------
38,070 21,347 72,349 46,290
-------- -------- -------- --------
Income from operations before income taxes 2,395 100 4,050 543
Income tax expense 910 38 1,539 206
-------- -------- -------- --------
Net income 1,485 62 2,511 337
Preferred dividends 42 -- 42 --
-------- -------- -------- --------
Net income available for common shareholders 1,443 62 2,469 337
Retained earnings (deficit), at beginning of period 727 (1,692) (299) (1,967)
-------- -------- -------- --------
Retained earnings (deficit), at end of period $ 2,170 $ (1,630) $ 2,170 $ (1,630)
======== ======== ======== ========
Basic earnings per share $ 0.13 $ 0.01 $ 0.22 $ 0.03
======== ======== ======== ========
Diluted earnings per share $ 0.10 $ 0.01 $ 0.18 $ 0.03
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements
2
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Orleans Homebuilders, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1998 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,469 $ 337
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 157 69
Changes in operating assets and liabilities:
Restricted cash - customer deposits (188) (806)
Real estate held for development and sale 2,310 (504)
Receivables, deferred charges and other assets (1,246) (1,664)
Accounts payable and other liabilities (1,365) 1,818
Customer deposits 188 806
--------- ---------
Net cash provided by operating activities 2,325 56
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment (240) (1,409)
--------- ---------
Net cash used in investing activities (240) (1,409)
--------- ---------
Cash flows from financing activities:
Borrowings from loans secured by real estate assets 52,193 35,547
Repayment of loans secured by real estate assets (52,440) (33,067)
Borrowings from other note obligations 787 1,231
Repayment of other note obligations (2,471) (996)
Stock options exercised 3 --
Distribution to minority interests (456) --
--------- ---------
Net cash provided by (used in) financing activities (2,384) 2,715
--------- ---------
Net increase (decrease) in cash (299) 1,362
Cash at beginning of period 2,833 1,582
--------- ---------
Cash at end of period $ 2,534 $ 2,944
--------- ---------
Supplemental disclosure of cash flow activities:
Interest paid, net of amounts capitalized $ 287 $ --
========= =========
Income taxes paid $ 809 $ 102
========= =========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(A) The accompanying unaudited consolidated financial statements are
presented in accordance with the requirements for Form 10-Q and do not
include all the disclosures required by generally accepted accounting
principles for complete financial statements. Reference is made to the
Form 10-K as of and for the year ended June 30, 1998 for Orleans
Homebuilders, Inc. and subsidiaries (the "Company") for additional
disclosures, including a summary of the Company's accounting policies.
In the opinion of management, the consolidated financial statements
contain all adjustments, consisting of normal recurring accruals,
necessary to present fairly the consolidated financial position of the
Company for the periods presented. The interim operating results of the
Company may not be indicative of operating results for the full year.
(B) Basic earnings per common share are computed by dividing net income by
the weighted average number of common shares outstanding. Diluted
earnings per share include additional common shares that would have
been outstanding if the dilutive potential common shares had been
issued. The weighted average number of shares used to compute basic
earnings per common share and diluted earnings per common share, and a
reconciliation of the numerator and denominator used in the computation
for the three months and six months ended December 31, 1998 and 1997,
respectively, are shown below.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Total common shares issued 12,698,131 12,698,131 12,698,131 12,698,131
Less: Average treasury shares outstanding (1,340,523) (1,342,113) (1,341,318) (1,342,113)
------------ ------------ ------------ ------------
Basic EPS shares 11,357,608 11,356,018 11,356,813 11,356,018
Effect of assumed shares issued under treasury
stock method for stock options 437,732 126,502 421,635 102,316
Effect of assumed conversion of $3 million
Convertible Subordinated 7% Note 2,000,000 -- 2,000,000 --
Effect of assumed conversion of $3 million
Series D Preferred Stock 1,565,217 -- 782,609 --
------------ ------------ ------------ ------------
Diluted EPS shares 15,360,558 11,482,520 14,561,057 11,458,334
============ ============ ============ ============
Net income available for common shareholders $ 1,443,000 $ 62,000 $ 2,469,000 $ 337,000
Effect of assumed conversion of $3 million
Convertible Subordinated 7% Note 32,550 -- 65,100 --
Effect of assumed conversion of $3 million
Series D Preferred Stock 42,000 -- 42,000 --
------------ ------------ ------------ ------------
Adjusted net income for diluted EPS $ 1,517,550 $ 62,000 $ 2,576,100 $ 337,000
============ ============ ============ ============
</TABLE>
4
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(C) Supplemental disclosure of non-cash financing activities: As discussed
in Note (F), on October 20, 1998, the Company issued 100,000 shares of
Series D Preferred Stock to Jeffrey P. Orleans, Chairman and Chief
Executive Officer of the Company, in exchange for an aggregate amount
of $3,000,000 in Company notes held by Mr. Orleans.
(D) Residential properties completed or under construction consists of the
following:
(In thousands)
12/31/98 6/30/98
-------- -------
Under Contract for Sale $31,680 $32,102
Unsold 14,907 15,107
------- -------
$46,587 $47,209
======= =======
(E) From time to time, the Company is named as a defendant in legal actions
arising from its normal business activities. Although the amount of any
liability that could arise with respect to currently pending actions
cannot be accurately predicted, in the opinion of the Company any such
liability will not have a material adverse effect on the financial
position or operating results of the Company.
(F) On October 20, 1998, the Company issued 100,000 shares of Series D
Preferred Stock (the "Series D Stock") to Jeffrey P. Orleans in
exchange for an aggregate amount of $3,000,000 in Company notes held by
Mr. Orleans. The Series D Stock was issued from an aggregate of 500,000
shares of Preferred Stock authorized. The Series D Stock has a
liquidation value of $3,000,000, or $30.00 per share, and requires
annual dividends of 7% of the liquidation value. The dividends are
cumulative and are payable quarterly with the first payment due
December 1, 1998. The Series D Stock may be redeemed by the Company at
any time after December 31, 2003, in whole or in part, at a cash
redemption price equal to the liquidation value plus all accrued and
unpaid dividends on such shares to the date of redemption. The Series D
Stock is convertible into 2,000,000 shares of Common Stock upon the
approval by the American Stock Exchange of a supplemental listing
application covering such shares.
(G) Related party residential property revenues for the three and six
months ended December 31, 1997 included 27 low income homes with an
aggregate sales value of $1,472,000 which were purchased by Jeffrey P.
Orleans. These transactions satisfy, in part, the Company's low income
housing requirements in Mount Laurel Township, New Jersey. The selling
prices for these homes which are determined by state statute, are the
same as if the homes had been sold to unaffiliated third parties.
5
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ORLEANS HOMEBUILDERS, INC. AND SUBSIDIARIES
Item 2. 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 programs to facilitate sales. These expenditures
include site preparation, roads, water and sewer lines, impact fees and
earthwork, as well as the construction costs of the homes and amenities. The
Company's sources of capital include funds derived from operations, sales of
assets and various borrowings, most of which are secured. At December 31, 1998,
the Company had $61,721,000 available to be drawn under existing secured
revolving and construction loans for planned development expenditures. 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.
The Company has continued its ongoing land acquisition efforts
during the first six months of fiscal 1999. During this period, the Company
acquired three additional parcels of land for an aggregate purchase price of
approximately $3,100,000. In addition, as of December 31, 1998, the Company had
agreements to purchase seventeen additional parcels for an aggregate purchase
price of approximately $65,300,000. These purchase agreements are subject to due
diligence review and are contingent upon the receipt of governmental approvals.
The Company expects to utilize purchase money mortgages, secured financings and
existing capital resources to finance these acquisitions. The Company
anticipates completing approximately one-half of these acquisitions over the
next two years.
Results of Operations
The following table sets forth certain detail as to
residential sales activity for the six months ended December 31, 1998 and 1997,
in the case of revenues earned and new orders, and at the end of the periods
indicated, in the case of backlog.
Six Months Ended
December 31, 1998 December 31, 1997
----------------- -----------------
(Dollars in thousands)
Revenues Earned: $73,850 $45,648
Units 382 264
Average Price Per Unit $ 193 $ 173
New Orders: $76,942 $59,382
Units 364 309
Average Price Per Unit $ 211 $ 192
Backlog: $73,846 $51,994
Units 321 255
Average Price Per Unit $ 230 $ 204
6
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Dollar volume of new orders for the six months ended December
31, 1998 increased by approximately 30% to $76,942,000 on 364 orders, compared
to $59,382,000 on 309 orders during the six months ended December 31, 1997. The
opening of new communities in Burlington County, New Jersey, was the primary
reason for the increase in new orders when compared to the first six months of
fiscal 1998. The average price per unit of new orders increased due to an
increase in the number and percentage of single family homes sold in the first
six months of fiscal 1999 compared to the prior fiscal period. Single family
homes sold during the first six months of fiscal 1999 accounted for
approximately 48% of total unit sales compared with approximately 40% during the
first six months of fiscal 1998. In addition, the average unit sales price
increased for the majority of communities open during the first six months of
fiscal 1999 compared with fiscal 1998.
The dollar backlog at December 31, 1998 increased approximately 42% to
$73,846,000 on 321 homes, as compared to the backlog at December 31, 1997, of
$51,994,000 on 255 homes.
Operating Revenues
Earned revenues for the first six months of fiscal 1999 increased
$29,566,000 to $76,399,000, or 63.1%, compared to the first six months of fiscal
1998. Revenues from the sale of residential homes included 382 homes totaling
$73,850,000 during the first six months of fiscal 1999, as compared to 264 homes
totaling $45,648,000 during the first six months of fiscal 1998. Revenues from
related parties for the first six months of fiscal 1998 included 27 low income
homes with a sales value of $1,472,000. The increase in revenues for the first
six months of fiscal 1999, as compared to the first six months of fiscal 1998,
is primarily attributable to the number of units sold which is the result of the
expanding geographic scope of the Company's operations and favorable economic
conditions affecting unit sales volume and price. The average selling price per
unit has increased to approximately $193,000 during the first six months of
fiscal 1999, as compared to approximately $173,000 during the first six months
of fiscal 1998. The increase in average selling price is partially due to an
increase in the base sale price per unit, option revenue per unit, and a change
in product mix towards more townhouse and single family homes than in the
previous comparable period.
Earned revenues for the second quarter of fiscal 1999 increased
$19,018,000 to $40,465,000, or 88.7%, compared to the second quarter of fiscal
1998. Revenues from the sale of residential homes included 194 homes totaling
$39,309,000 during the second quarter of fiscal 1999, as compared to 134 homes
totaling $20,807,000 during the second quarter of fiscal 1998. Revenues from
related parties for the second quarter of fiscal 1998 included 27 low income
homes with a sales
7
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value of $1,472,000. This sale has satisfied, in part, the Company's low income
housing requirements in Mount Laurel Township, New Jersey. The selling prices of
these homes which are determined by state statute, were the same as if the homes
had been sold to unaffiliated third parties. The average selling price per unit
has increased to approximately $203,000 during the second quarter of fiscal
1999, as compared to approximately $155,000 during the second quarter of fiscal
1998. This increase in average selling price is partially due to the lower
average selling price of the aforementioned low income homes sold during the
second quarter of fiscal 1998. In addition, the increase in average selling
price is also due to an increase in the base sale price per unit, option revenue
per unit, and a change in product mix towards more townhouse and single family
homes than in the previous comparable period.
Costs and Expenses
Costs and expenses for the first six months of fiscal 1999
increased $26,059,000, or 56.3%, compared with the first six months of fiscal
1998. The first six months of fiscal 1999 cost of residential properties
increased $23,640,000 to $62,692,000, or 60.5%, when compared with the first six
months of fiscal 1998. This increase in residential property costs is slightly
less than the percentage increase in residential property revenues when compared
with the same period in fiscal 1998. Overall profit margins on residential
properties improved due to positive home pricing and increased sales volume as a
result of strong customer demand. The cost of residential properties as a
percentage of residential property revenues was 84.9% for the first six months
of fiscal 1999 compared with 85.6% for the first six months of fiscal 1998.
For the first six months of fiscal 1999, selling, general and
administrative expenses increased $1,153,000 to $7,483,000, or 18.2%, when
compared with the first six months of fiscal 1998. The year-to-date fiscal 1999
increase in selling, general and administrative expenses is attributable to an
increase in sales commissions related to the increase in residential property
revenues, sales start-up costs associated with the opening of new communities
and having more overall communities open during the first half of fiscal 1999
when compared with the prior fiscal period. The Company's advertising costs
remained consistent with the prior fiscal period, while the other general and
administrative expenses increased slightly. The Company's advertising costs were
consistent with the prior fiscal period as a result of combined advertising for
many new communities that are located within the Philadelphia metropolitan area.
In addition, the increased unit sales volume was absorbed with nominal increases
at the general and administrative expense level. The selling, general and
administrative expenses as a percentage of residential property revenues
decreased to 10.1% during the first six months of fiscal 1999 compared to 13.9%
for the comparable period in the prior fiscal year.
Costs and expenses for the second quarter of fiscal 1999 increased
$16,723,000, or 78.3%, compared with the second quarter of fiscal 1998. The
second quarter fiscal 1999 cost of residential properties increased $15,464,000
to $33,353,000, or 86.4%, when compared with the second quarter of fiscal 1998.
This increase in residential property costs is less than the percentage increase
in residential property revenues when compared with the same period in fiscal
1998. Thus, overall profit margins on residential properties improved due to
positive home pricing and increased sales volume as a result of strong customer
demand. The cost of residential properties as a percentage of
8
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residential property revenues was 84.8% for the second quarter of fiscal 1999
compared with 86% for the second quarter of fiscal 1998.
For the second quarter of fiscal 1999, selling, general and
administrative expenses increased $685,000 to $3,737,000, or 22.4%, when
compared with the second quarter of fiscal 1998. The second quarter fiscal 1999
increase in selling, general and administrative expenses is attributable to an
increase in sales commissions related to the increase in residential property
revenues, sales start-up costs associated with the opening of new communities
and having more overall communities open during the second quarter of fiscal
1999 when compared with the prior fiscal quarter. The Company's advertising
costs remained consistent with the prior fiscal period, while the other general
and administrative expenses increased slightly. The Company's advertising costs
were consistent with the prior fiscal period as a result of combined advertising
for many new communities that are located within the Philadelphia metropolitan
area. In addition, the increased unit sales volume was absorbed with nominal
increases at the general and administrative expense level. The selling, general
and administrative expenses as a percentage of residential property revenues
decreased to 9.5% during the second quarter of fiscal 1999 compared to 14.7% for
the comparable quarter in the prior fiscal year.
Net Income
Net income for the first six months of fiscal 1999 was $2,469,000 ($.22
basic earnings per share, $.18 diluted earnings per share) compared with
$337,000 ($.03 basic and diluted earnings per share) for the first six months of
fiscal 1998 and net income for the second quarter of fiscal 1999 was $1,443,000
($.13 basic earnings per share, $.10 diluted earnings per share) compared with
$62,000 ($.01 basic and diluted earnings per share) for the second quarter of
fiscal 1998. This increase in net income is primarily attributable to an
increase in residential property revenues as a result of unit sales volume,
combined with a decrease in selling, general and administrative costs as a
percentage of residential property revenues.
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 portions of these costs.
However, there is no assurance the Company will be able to continue to increase
prices to cover the effects of inflation in the future.
Year 2000
The Company began assessing its Year 2000 ("Y2K") compliance issues at
the beginning of fiscal 1998 and at that time determined that its primary
internal computer hardware and computer software were not Y2K compliant.
Subsequently, the Company determined that it would be more cost efficient to
install a new Y2K compliant software package than to modify the existing
software package. In the first quarter of fiscal 1999, the Company contracted to
purchase a new software package, including several specific enhancements to
modify the software to meet the Company's
9
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needs. As part of the Company's contingency plan, in order to mitigate the risks
associated with the possibility that the software enhancements will not be
completed on time, the Company has required that the base software package be
placed in escrow. The Company believes that implementation of the base software
package will require substantially less time than the enhanced software package.
In addition, in the first quarter of fiscal 1999, the Company upgraded its
existing primary computer hardware system to support the new computer software
package. The Company has recently installed the new hardware and base software
for the application development stage of its Y2K computer compliance program and
the Company's goal is to complete the full implementation by June 30, 1999.
Through December 31, 1998, the Company has incurred approximately
$300,000 in connection with Y2K readiness, including consulting fees, internal
staff costs and other expenses. The Company expects to incur additional
expenditures of approximately $300,000 in the next fiscal year to be Y2K
compliant.
The Company is also investigating the Y2K compliance status of its
vendors, subcontractors and suppliers through the Company' s own internal vendor
compliance effort. This investigation is in its preliminary stages and the
Company's goal is to complete this investigation, as well as any corrective
efforts by March 31, 1999. Since the Company does not rely on any individual
vendor, subcontractor or supplier for a significant portion of its operations,
the potential impact of Y2K non-compliance risks by any individual vendor,
subcontractor or supplier is not expected to have any material effect on the
Company.
While the Company believes it is taking all appropriate steps to
achieve internal Y2K compliance, any potential future business interruptions,
costs, damages or losses related thereto, are also dependent upon the Y2K
compliance of third parties. In the event that the Company or a combination of
the Company's vendors, subcontractors or suppliers experience disruptions due to
the Y2K issue, the Company's operations could be adversely affected. The Y2K
issue is universal and complex, as virtually every computer operation will be
affected in some way. Consequently, no assurance can be given that complete Y2K
compliance can be achieved without significant additional costs.
Forward Looking Statement
The Company's estimates of costs and completion dates for its Y2K
readiness program represent management's best estimates. These estimates are
based upon many assumptions, including the availability of external resources to
assist with systems remediation and replacement efforts, key third party
suppliers, vendors and customers being Y2K compliant and in the event of
non-compliance, the Company's execution of its contingency plan. If any of the
assumptions ultimately prove to have been incorrect, the cost and completion
dates set forth above could be substantially and adversely affected.
10
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Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995.
The following important factors could cause Orleans
Homebuilders' actual consolidated results to differ materially from those
expressed in any forward-looking statements made by, or on behalf of, Orleans
Homebuilders, Inc.:
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
homes;
o changes in the availability and cost of financing for the Company's
operations, including land acquisition;
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.
11
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On December 11, 1998, the Company held its Annual Meeting of
Stockholders pursuant to a notice dated November 4, 1998. Definitive proxy
materials were filed with the Securities and Exchange Commission prior to the
meeting. A total of 10,466,748 shares were voted at the meeting constituting
92.2% of the 11,356,018 shares entitled to vote.
At the Annual Meeting, the seven nominees (Sylvan M. Cohen, Benjamin D.
Goldman, Robert N. Goodman, Andrew N. Heine, David Kaplan, Lewis Katz and
Jeffrey P. Orleans) who were nominated for re-election and were previously
elected by the stockholders were all elected.
The results of the vote were as follows:
Shares for Which
Shares Voted For Vote Was Withheld
---------------- -----------------
Sylvan M. Cohen 10,203,611 263,137
Benjamin D. Goldman 10,206,073 260,675
Robert N. Goodman 10,204,223 262,525
Andrew N. Heine 10,205,723 261,025
David Kaplan 10,206,223 260,525
Lewis Katz 10,139,623 327,125
Jeffrey P. Orleans 10,206,223 260,525
The stockholders also approved the following:
o An increase in the number of shares on which options may be
granted under the 1992 Incentive Stock Option Plan from 910,000
to 1,210,000 shares.
Shares Voted Shares
------------ ------
For 9,057,669
Against 370,295
Abstain 1,612
o An increase in the number of shares on which options may be
granted under the 1995 Stock Option Plan for Non-Employee
Directors from 100,000 to 125,000 shares.
Shares Voted Shares
------------ ------
For 9,381,965
Against 46,104
Abstain 1,507
12
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o The appointment of PricewaterhouseCoopers LLP as independent
accountants to examine the books, accounts and records of the
Company for fiscal 1999.
Shares Voted Shares
------------ ------
For 10,463,948
Against 2,600
Abstain 200
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27 - Financial Data Schedule
(included in electronic filing format only).
(b) Reports on Form 8-K
None.
13
<PAGE>
ORLEANS HOMEBUILDERS, INC. 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.
ORLEANS HOMEBUILDERS, INC.
(Registrant)
February 12, 1999 /S/ Michael T. Vesey
---------------------------------------
Michael T. Vesey
President and Chief Operating Officer
February 12, 1999 /S/ Joseph A. Santangelo
---------------------------------------
Joseph A. Santangelo
Treasurer, Secretary and
Chief Financial Officer
14
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<S> <C>
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<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,534
<SECURITIES> 0
<RECEIVABLES> 4,090
<ALLOWANCES> 0
<INVENTORY> 108,943
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0
3,000
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<SALES> 75,381
<TOTAL-REVENUES> 76,399
<CGS> 63,986
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<OTHER-EXPENSES> 506
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 374
<INCOME-PRETAX> 4,050
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<NET-INCOME> 2,511
<EPS-PRIMARY> .22
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