<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: September 30, 1994 Commission File No. 1-6963
ORIOLE HOMES CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-1228702
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1690 S. Congress Ave., Suite 200 Delray Beach, Fl. 33445
- - - -------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 274-2000
- - - --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---
Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the close of the period covered by this report.
Class Outstanding at September 30, 1994
- - - ------------------------------------- ---------------------------------
Common Stock, Class A, par value $.10 1,895,549
Common Stock, Class B, par value $.10 2,729,975
<PAGE> 2
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 5,295,462 $ 14,650,532
------------ ------------
Receivables:
Mortgage notes 1,514,056 1,618,659
Other 0 4,000
------------ ------------
1,514,056 1,622,659
------------ ------------
Inventories:
Land 114,793,863 111,959,716
Houses and condominiums completed or
under construction 50,703,780 38,057,470
Model houses and condominiums 2,486,676 2,416,948
------------ ------------
167,984,319 152,434,134
Less: Estimated costs of completion
included in inventories 30,897,730 24,031,951
------------ ------------
137,086,589 128,402,183
Property and equipment (at cost):
Land 7,171,220 7,172,279
Buildings 22,612,530 23,130,421
Furniture, fixtures and equipment 5,433,933 5,357,097
------------ ------------
35,217,683 35,659,797
Less: Accumulated depreciation 10,341,350 9,920,818
------------ ------------
24,876,333 25,738,979
------------ ------------
Other:
Prepaid expenses 2,347,945 1,812,081
Unamortized debt issuance costs 2,399,574 2,497,438
Investment in and advances to joint venture 7,000,000 3,500,000
Land held for investment (at cost) 2,996,901 2,791,450
Other assets 1,695,810 727,271
------------ ------------
16,440,230 11,328,240
------------ ------------
Total Assets $185,212,670 $181,742,593
============ ============
</TABLE>
See notes to consolidated financial statements
-1-
<PAGE> 3
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Liabilities:
Notes payable - banks $ - $ 96,317
Mortgage notes payable 14,824,365 14,399,479
Accounts payable 6,305,850 6,507,891
Dividends payable - 762,078
Customer deposits 9,687,677 6,091,570
Income taxes payable 988,092 647,326
Accrued expenses and other liabilities 6,311,802 7,157,750
Deferred income taxes 532,916 850,908
12 1/2% Senior Notes due January 15, 2003,
net of $1,712,714 discount in 1994 and
$1,812,306 discount in 1993 68,287,286 68,187,694
------------ ------------
Total Liabilities 106,937,988 104,701,013
Shareholders' Equity:
Class A common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding -
1,895,549 in 1994 and in 1993 189,555 189,555
Class B common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding -
2,729,975 in 1994 and in 1993 272,998 272,998
Additional paid-in capital 19,267,327 19,267,327
Retained earnings 58,544,802 57,311,700
------------ ------------
Total Shareholders' Equity 78,274,682 77,041,580
------------ ------------
Total Liabilities and Shareholders' Equity $185,212,670 $181,742,593
============ ============
</TABLE>
See notes to consolidated financial statements
-2-
<PAGE> 4
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------------- ----------------------------
1994 1993 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Sale of houses and condominiums $68,882,909 $57,641,374 $32,120,303 $21,822,052
Sale of land 1,523,945 558,900 651,462 140,458
Other operating revenues 2,560,858 2,741,535 829,725 869,593
Interest, rentals and other income 2,648,388 2,334,410 978,274 782,785
Gain on sale of property and
land held for investment, net 129,566 23,547 73,389 7,061
----------- ----------- ----------- ------------
75,745,666 63,299,766 34,653,153 23,621,937
----------- ----------- ----------- ------------
Costs and Expenses:
Cost of houses and condominiums sold 57,406,030 46,935,005 25,986,333 17,768,557
Cost of land sold 1,335,358 481,494 564,644 119,032
Costs relating to other operating revenues 1,977,838 1,834,303 669,842 652,135
Selling, general and administrative
expenses 11,347,538 11,117,428 4,182,696 3,779,342
Interest cost incurred 7,785,220 7,598,751 2,674,327 2,579,042
Interest capitalized (deduct) (7,353,087) (7,441,920) (2,242,194) (2,579,042)
----------- ----------- ----------- ------------
72,498,897 60,525,061 31,835,648 22,319,066
----------- ----------- ----------- ------------
Income before provision for income taxes
and extraordinary item 3,246,769 2,774,705 2,817,505 1,302,871
Provision for income taxes 1,251,589 1,085,527 1,090,293 504,166
----------- ----------- ----------- ------------
Income before extraordinary item 1,995,180 1,689,178 1,727,212 798,705
Extraordinary Item-Loss on
repurchase of debt (less applicable
income taxes of $602,906) - (999,288) - -
----------- ----------- ----------- ------------
Net Income $ 1,995,180 $ 689,890 $ 1,727,212 $ 798,705
=========== =========== =========== ===========
Earnings per Class A and
Class B Common Share:
Net income before extraordinary item $ .43 $ .37 $ .37 $ .17
----------- ----------- ----------- -----------
Extraordinary item - (.22) - -
----------- ----------- ----------- -----------
Total Net Income $ .43 $ .15 $ .37 $ .17
=========== =========== =========== ===========
Average Number of Class A and Class B
Common Shares Outstanding 4,625,524 4,625,524 4,625,524 4,625,524
=========== =========== =========== ===========
Dividends per Class A Common Share $ .15 $ .40 $ .15 $ -
=========== =========== =========== ===========
Dividends per Class B Common Share $ .175 $ .425 $ .175 $ -
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements
-3-
<PAGE> 5
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(Unaudited)
<TABLE>
<CAPTION>
September 30,
-------------------------------------
1994 1993
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 1,995,180 $ 689,890
Adjustments to reconcile net income to net
cash (used in) operating activities
Depreciation 922,633 937,329
Amortization 272,456 1,816,841
Deferred income taxes (317,992) (143,525)
Gain on sale of property and equipment and other assets (129,566) (23,547)
Changes in assets and liabilities
Decrease in receivables 108,603 119,203
(Increase) in inventories (8,684,406) (20,104,105)
(Increase) in other assets (1,504,403) (308,990)
(Decrease) increase in accounts payable (202,041) 651,420
Increase in customer deposits 3,596,107 3,775,949
Increase (decrease) in income taxes payable 340,766 (388,097)
Increase (decrease) in accrued expenses and other liabilities (846,078) 2,313,900
----------- -----------
Total adjustments (6,443,921) (11,353,622)
----------- -----------
Net cash (used in) operating activities (4,448,741) (10,663,732)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in joint ventures (3,500,000) -
Land held for investment (205,451) -
Capital expenditures (421,193) (320,759)
Proceeds from the sale of property
and equipment and other assets 490,772 64,920
----------- -----------
Net cash (used in) investing activities (3,635,872) (255,839)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes 425,016 -
Borrowings under line of credit agreements 9,500,000 3,696,317
Repayments under line of credit agreements (9,596,317) (16,500,000)
Payment of term loan - (22,000,000)
Repurchase of Debentures - (18,563,000)
Proceeds of Senior Notes (net) - 68,099,906
Senior notes issuance cost (75,000) (2,681,680)
Dividends paid (1,524,156) (1,918,459)
----------- -----------
Net cash (used in) provided by financing activities (1,270,457) 10,133,084
----------- -----------
NET DECREASE IN CASH (9,355,070) (786,487)
CASH AT BEGINNING OF PERIOD 14,650,532 6,942,103
----------- -----------
CASH AT END OF PERIOD $ 5,295,462 $ 6,155,616
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest (net of amount capitalized) $ 2,520,041 $ -
Income taxes $ 1,228,815 $ 1,014,243
</TABLE>
See notes to consolidated financial statements
-4-
<PAGE> 6
FORM 10Q
ORIOLE HOMES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet as of September 30, 1994, the related
statements of income and cash flows for the three and nine months
ended September 30, 1994 and 1993 have been prepared by the Company
without audit. In the opinion of the management of the Company, all
adjustments (consisting of normal recurring accruals) necessary for a
fair presentation of the unaudited interim periods have been reflected
herein.
Certain footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1993 annual
report to shareholders.
Certain balances have been reclassified to conform to the current year
presentation.
2. The results of operations for the three and nine months ended
September 30, 1994 are not necessarily indicative of the results for
the entire year.
3. Affiliated Companies.
The Company does not have investments in affiliated companies.
-5-
<PAGE> 7
ORIOLE HOMES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
4. Backlog of Contracts for Sales of Houses and Condominiums
<TABLE>
<CAPTION>
September 30, 1994 December 31, 1993
--------------------- ---------------------
Units Amounts Units Amounts
-------- ------------ ------- ------------
<S> <C> <C> <C> <C>
Single-Family Homes 106 $ 20,719,916 81 $ 14,068,923
Multi-Family 243 37,715,592 176 25,286,538
--- ------------ --- ------------
Total 349 $ 58,435,508 257 $ 39,355,461
=== ============ === ============
</TABLE>
5. Following is a computation of earnings per share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- --------------------
September 30, September 30,
1994 1993 1994 1993
--------- --------- -------- -------
<S> <C> <C> <C> <C>
Income before extraordinary item $1,727,212 $ 798,705 $1,995,180 $ 1,689,178
Extraordinary item - - - (999,288)
---------- ---------- ---------- -----------
Net Income $1,727,212 $ 798,705 $1,995,180 $ 689,890
========== ========== ========== ===========
Weighted Average number of
common shares outstanding 4,625,524 4,625,524 4,625,524 4,625,524
========== ========== ========== ===========
Earnings per share before
extraordinary item $ 0.37 $ 0.17 $ 0.43 $ 0.37
Extraordinary item - - - (.22)
---------- ---------- ---------- -----------
Total earnings per share $ 0.37 $ 0.17 $ 0.43 $ 0.15
========== ========== ========== ===========
</TABLE>
6. Credit commitments
On January 13, 1993, the Company issued 12 1/2% Senior Notes ("Notes"),
due January 15, 2003. The Notes have a face value of $70,000,000 and were
issued at a discount of $1,930,600. The Notes are senior unsecured
obligations of the Company subject to redemption at the Company's option
on or after January 15, 1998, at 105% of the principal amount and
thereafter at prices declining annually to 100% of the principal amount
on or after January 15, 2001.
The indenture under which the Notes were issued requires sinking fund
payments of $17,500,000 on January 15, 2001 and January 15, 2002.
The indenture contains certain covenants that, among other things, limit
the ability of the Company to incur additional indebtedness, pay dividends
or make certain other distributions, repurchase or issue capital stock or
subordinated indebtedness.
A portion of the proceeds of the Notes offering was used to repay all
debt outstanding under the Company's bank credit agreement, and the
redemption at par of the Company's outstanding 12 7/8% Subordinated
Debentures due July 15, 2000. The balance of the proceeds was added to
the Company's working capital.
On July 13, 1993, the Company entered into a secured revolving loan
agreement with a bank which provides up to $10,000,000 in short-term
financing at an interest rate of prime plus 1 1/2%. As of September 30,
1994, there was no amount outstanding.
-6-
<PAGE> 8
Suite 1200
777 Brickell Avenue
Miami, FL 33131-2867
305 377-9900
FAX 305 377-9130
GRANT THORNTON
Accountants and
Management Consultants
The U.S. Member Firm of
Grant Thornton International
Board of Directors
Oriole Homes Corp.
We have reviewed the accompanying consolidated balance sheet of Oriole Homes
Corp. and Subsidiaries as of September 30, 1994, and the related consolidated
statements of income and cash flows for the three-month and nine-month periods
then ended. These financial statements are the responsibility of the company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data, and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1993, and the
related consolidated statements of income, shareholder's equity, and cash flows
for the year then ended (not presented herein) and in our report dated February
4, 1994, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated balance sheet as of December 31, 1993, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
GRANT THORNTON
Miami, Florida
October 26, 1994
-7-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1994, COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1993
The Company's revenues from home sales increased $10.3 million (or 47%) during
the third quarter of 1994 as compared to the same period in 1993. The Company
delivered 204 homes in the 1994 quarter compared to 168 in the same period of
1993. The average selling price of homes delivered increased 21.2% (from
$129,893 to $157,452). The Company entered into 124 new contracts with an
aggregate dollar value of $20.0 million in the third quarter of 1994 compared
to 168 new contracts with an aggregate dollar amount of $25.1 million in the
1993 period. The Company attributes its increase in revenues largely to the
deliveries of 16 upscale multi-family units in the Fairway Point project with
an average selling price of $455,642 per unit.
Interest, rentals and other income increased to $1.0 million from $.8 million
in the same period of 1993 mainly due to interest generated from the Company's
investment in a joint venture.
Cost of home sales increased to $26.0 million in 1994 from $17.8 million in
1993 mainly as a result of the increase in the number and dollar amount of
homes delivered. As a percentage of home sales, cost of homes sold decreased
to 80.9% from 81.4%. Gross margins during the third quarter of 1994 were
positively affected by the inclusion in 1994 of the sales at Fairway Point.
Selling, general and administrative expenses increased to $4.2 million in 1994
from $3.8 million in 1993, but as a percentage of total revenues, these
expenses decreased to 12.1% in 1994 from 16.0% in 1993.
Net income in the 1994 third quarter increased to $1.7 million from $.8 million
in 1993, and net income as a percentage of total revenues, 1994 reflects 5.0%
as compared to 3.4% in 1993.
NINE MONTHS ENDED SEPTEMBER 30, 1994, COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1993
The Company's revenues from home sales increased $11.2 million (or 19.5%). The
Company delivered 481 homes in the first nine months of 1994 as compared to 463
homes in the same period of 1993. The average selling price of homes delivered
increased 15% from $124,495 to $143,208. New contracts signed (573) in 1994
decreased 9% from the 633 units contracted in the same period of 1993, but the
dollar amount of those contracts in 1994 increased to $88.0 million from $85.6
million in 1993 mainly because of the inclusion of 21 new sales contracts at
the Fairway Point project at an average selling price of $524,903.
Other operating revenues decreased from $2.7 million in 1993 to $2.6 million in
1994 mainly as a result of a refund in 1993 of previously paid real estate
taxes. Interest, rentals and other income increased from $2.4 million in 1993
to $2.8 million in 1994 mainly due to interest generated from the Company's
investment in a joint venture.
Cost of sales increased from $46.9 million in 1993 to $57.4 million in 1994.
As a percentage of sales, cost of sales increased from 81.4% in 1993 to 83.3%
in 1994.
Selling, general and administrative expenses increased from $11.1 million in
1993 to $11.3 million in 1994, but as a percentage of total revenues, decreased
to 15.0% in 1994 from 17.6% in 1993.
Net income increased from $.7 million in the first nine months of 1993 to $2.0
million in the comparable period of 1994. Net income for the first nine months
of 1993 was affected by a nonrecurring extraordinary
-8-
<PAGE> 10
expense in the amount of $999,288, net of income taxes, or $.22 per share in
connection with the early redemption of the Company's Subordinated Debentures
and the early repayment of a bank credit agreement.
The dollar amount of the Company's backlog, which reflects new sales contracts
that have yet to close, increased 1.8% to $58,435,508 (representing 349 units)
as of September 30, 1994 from $57,390,440 (representing 410 units) as of
September 30, 1993. The average per unit value of the Company's backlog now
stands at $167,437, representing an increase of 19.6% over the $139,977
recorded at the end of 1993's third quarter. Included in this year's backlog
are 17 units from the Fairway Point project valued at a total of $9,122,635, or
an average of $536,626 per unit.
FINANCIAL CONDITION AND LIQUIDITY
The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition and inventory balances. The Company has historically
financed its working capital needs through funds generated from operations,
borrowings and the issuance of common stock.
As of September 30, 1994, the Company had outstanding borrowings of
approximately $83.1 million, including $68.3 million of Senior Notes due 2003
(the "Senior Notes") and available cash and short term investments of
approximately $5.3 million. At September 30, 1994 the Company also had
available funds of approximately $10 million pursuant to available but unused
credit facilities. The Company believes that the funds generated from
operations and its borrowing availability under credit facilities will be
sufficient to fund the Company's foreseeable working capital requirements, with
the possible exception of land acquisitions.
As of September 30, 1994, the Company had invested $7 million in two joint
ventures with a reputable South Florida building company. The Joint Ventures
Agreements provide that the Company is to receive (1) a 10% return plus $4,000
as each of 108 units are sold; (2) a 15% return, plus $2,800 as each developed
lot or dwelling unit is sold and 5% of the gross sales price on land sales.
The Company's investment and its return are guaranteed by the other Joint
Venturer and by the principal shareholder of the Joint Venturer.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
The September 30, 1994 unaudited Financial Statements included in this Form
10-Q have been reviewed by Grant Thornton in accordance with established
professional standards and procedures for such a review.
There were no reports on Form 8-K for the nine months ended September 30, 1994.
-9-
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13, 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.
ORIOLE HOMES CORP.
------------------
(Registrant)
Date: November 3, 1994 /s/ R. D. Levy
- - - ----------------------- -----------------------------------
R.D. Levy,
Chairman of the Board,
Chief Executive Officer,
Director
Date: November 3, 1994 /s/ A. Nunez
- - - ----------------------- -----------------------------------
A. Nunez, Senior Vice President
Treasurer, Chief Financial Officer,
Chief Accounting Officer, Director
-10-
<PAGE> 12
EXHIBIT INDEX
-------------
Exhibit Sequentially
Number Exhibit Numbered Page
- - - ------- ------- -------------
27 Financial Data Schedule
(for SEC filing purposes only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ORIOLE HOMES CORP. FOR THE PERIOD ENDED
SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 5,295,462
<SECURITIES> 242,985
<RECEIVABLES> 1,514,056
<ALLOWANCES> 0
<INVENTORY> 137,086,589
<CURRENT-ASSETS> 0<F1>
<PP&E> 35,217,683
<DEPRECIATION> 10,341,350
<TOTAL-ASSETS> 185,212,670
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 83,111,651
<COMMON> 462,553
0
0
<OTHER-SE> 77,812,129
<TOTAL-LIABILITY-AND-EQUITY> 185,212,670
<SALES> 70,406,854
<TOTAL-REVENUES> 75,745,666
<CGS> 58,741,388
<TOTAL-COSTS> 60,719,226
<OTHER-EXPENSES> 11,347,538
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 432,133
<INCOME-PRETAX> 3,246,769
<INCOME-TAX> 1,251,589
<INCOME-CONTINUING> 1,995,180
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,995,180
<EPS-PRIMARY> .43
<EPS-DILUTED> 0
<FN>
<F1>Company reports on a non-classified Balance Sheet
</FN>
</TABLE>
