<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: March 31, 1995 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 March 31, 1995
------------------------------------- ---------------------------------
Common Stock, Class A, par value $.10 1,893,349
Common Stock, Class B, par value $.10 2,732,175
<PAGE> 2
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 3,282,732 $ 14,609,489
------------ ------------
Receivables:
Mortgage notes 1,137,278 1,266,297
------------ ------------
Inventories:
Land 113,888,225 112,721,638
Houses and condominiums completed or
under construction 44,283,681 40,497,339
Model houses and condominiums 1,948,258 2,199,908
------------ ------------
160,120,164 155,418,885
Less: Estimated costs of completion
included in inventories 25,281,254 28,592,120
------------ ------------
134,838,910 126,826,765
------------ ------------
Property and equipment (at cost):
Land 7,170,113 7,170,113
Buildings 22,619,177 22,473,045
Furniture, fixtures and equipment 5,526,313 5,432,784
------------ ------------
35,315,603 35,075,942
Less: Accumulated depreciation 10,651,426 10,447,207
------------ ------------
24,664,177 24,628,735
------------ ------------
Other:
Prepaid expenses 2,453,796 1,990,535
Unamortized debt issuance costs 2,207,797 2,277,529
Investment in and advances to joint venture 6,700,000 7,000,000
Land held for investment (at cost) 2,996,901 2,996,901
Other assets 3,016,585 2,413,479
------------ ------------
17,375,079 16,678,444
------------ ------------
Total Assets $181,298,176 $184,009,730
============ ============
</TABLE>
See notes to consolidated financial statements
-1-
<PAGE> 3
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Liabilities:
Mortgage notes payable $ 17,510,468 $ 17,419,250
Accounts payable 5,788,666 6,464,417
Dividends payable - 993,409
Customer deposits 6,875,256 4,975,199
Accrued expenses and other liabilities 5,482,709 7,820,330
Deferred income taxes 186,255 456,430
12 1/2% Senior Notes due January 15, 2003,
net of $1,593,800 discount in 1995 and
$1,632,318 discount in 1994 66,370,200 66,457,682
------------ ------------
Total Liabilities 102,213,554 104,586,717
------------ ------------
Shareholders' Equity:
Class A common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding -
1,893,349 in 1995 and in 1994 189,335 189,335
Class B common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding -
2,732,175 in 1995 and in 1994 273,218 273,218
Additional paid-in capital 19,267,327 19,267,327
Retained earnings 59,354,742 59,693,133
------------ ------------
Total Shareholders' Equity 79,084,622 79,423,013
------------ ------------
Total Liabilities and Shareholders' Equity $181,298,176 $184,009,730
============ ============
</TABLE>
See notes to consolidated financial statements
-2-
<PAGE> 4
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Revenues:
Sale of houses and condominiums $ 13,037,915 $ 20,515,583
Sale of land 80,000 186,010
Other operating revenues 787,824 881,747
Interest, rentals and other income 895,321 739,426
Gain on sale of property and land held for investment, net 56,355 20,958
------------ ------------
14,857,415 22,343,724
------------ ------------
Costs and Expenses:
Cost of houses and condominiums sold 10,948,114 17,485,479
Cost of land sold 73,881 159,738
Costs relating to other operating revenues 722,866 647,935
Selling, general and administrative expenses 3,438,372 3,770,404
Interest costs incurred 2,566,027 2,555,768
Interest capitalized (deduct) (2,348,996) (2,555,768)
------------ ------------
15,400,264 22,063,556
------------ ------------
Income (loss) before provision (benefit) for income taxes (542,849) 280,168
Provision (benefit) for income taxes (204,458) 105,228
------------ ------------
Net Income (Loss) $ (338,391) $ 174,940
============ ============
Earnings per Class A and B Common Share:
Net Income (Loss) $ (.07) $ .04
============ ============
Average Number of Class A and Class B
Common Shares Outstanding 4,625,524 4,625,524
============ ============
Dividends per Class A Common Share $ - $ -
============ ============
Dividends per Class B Common Share $ - $ -
============ ============
</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>
March 31,
-----------------------------
1995 1994
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (338,391) $ 174,940
------------ -----------
Adjustments to reconcile net income (loss) to net
cash (used in) operating activities
Depreciation 301,541 302,723
Amortization 108,250 92,597
Deferred income taxes (270,175) (97,673)
Gain on sale of property and equipment and other assets (56,356) (20,959)
Changes in assets and liabilities
Decrease (increase) in receivables 129,019 (268,527)
(Increase) in inventories (8,012,145) (4,246,287)
(Increase) in other assets (1,066,367) (822,323)
(Decrease) in accounts payable (675,751) (649,528)
Increase in customer deposits 1,900,057 3,424,118
(Decrease) in accrued expenses and other liabilities (2,337,621) (2,128,296)
------------ -----------
Total adjustments (9,979,548) (4,414,155)
------------ -----------
Net cash (used in) operating activities (10,317,939) (4,239,215)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Return on investment in joint venture 300,000 -
Investment in joint venture - (16,399)
Capital expenditures (417,769) (181,133)
Proceeds from the sale of property
and equipment and other assets 137,142 116,765
------------ -----------
Net cash provided by (used in) investing activities 19,373 (80,767)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes 101,901 106,814
Payment of mortgage notes (10,683) (42)
Repayments under line of credit agreements - (86,317)
Repurchase of senior notes (126,000) -
Senior notes issuance cost - (75,000)
Dividends paid (993,409) (762,078)
------------ -----------
Net cash (used in) financing activities (1,028,191) (816,623)
------------ -----------
NET (DECREASE) IN CASH (11,326,757) (5,136,605)
CASH AT BEGINNING OF PERIOD 14,609,489 14,650,532
------------ -----------
CASH AT END OF PERIOD $ 3,282,732 $ 9,513,927
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest (net of amount capitalized) $ 2,308,382 $ 2,155,008
Income taxes $ 405,000 $ 647,330
</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 March 31, 1995, the related
statements of operations and cash flows for the three months ended
March 31, 1995 and 1994 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, 1994 annual
report to shareholders.
Certain balances have been reclassified to conform to the current year
presentation.
2. The results of operations for the three months ended March 31, 1995
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>
March 31, 1995 December 31, 1994
--------------------- -----------------------
Units Amounts Units Amounts
----- ----------- ----- -----------
<S> <C> <C> <C> <C>
Single-Family Homes 71 $15,137,062 58 $12,197,851
Multi-Family 111 22,438,263 85 $17,149,922
--- ----------- --- -----------
Total 182 $37,575,325 143 $29,347,773
=== =========== === ===========
</TABLE>
5. Following is a computation of earnings per share:
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
3/31/95 3/31/94
------------ -----------
<S> <C> <C>
Net Income (Loss) $ (338,391) $ 174,940
=========== ===========
Weighted average number of
common shares outstanding 4,625,524 4,625,524
=========== ===========
Earnings (loss) per share $ (.07) $ .04
=========== ===========
</TABLE>
6. Credit commitments
On January 13, 1993, the Company issued its 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, repurchases or
issuances of capital stock or subordinated indebtedness.
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 March 31,
1995, there was no outstanding loan balance.
-6-
<PAGE> 8
Suite 1200
777 Brickell Avenue
Miami, FL 33131-2867
305 377-9900
FAX 305 377-9130
GRANT THORNTON
GRANT THORNTON LLP 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 March 31, 1995, and the related consolidated
statements of operations and cash flows for the three-month period 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, 1994, and the
related consolidated statements of income, shareholders' equity, and cash flows
for the year then ended (not presented herein) and in our report dated February
10, 1995, 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, 1994, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
GRANT THORNTON LLP
Miami, Florida
April 25, 1995
-7-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION
RESULTS OF OPERATIONS.
THREE MONTHS ENDED MARCH 31, 1995, COMPARED TO THREE MONTHS ENDED MARCH 31,
1994
The Company's revenues from home sales decreased to $13.0 million (or 36.5%)
during the first quarter of 1995 as compared to the same period of 1994. The
Company delivered 91 homes in the 1995 quarter compared to 154 in the same
period of 1994, with an increase of 7.6% in the average selling price of homes
delivered (from $133,218 to $143,274). The number of new contracts signed
(130) and the aggregate dollar value of those contracts ($21.3 million)
decreased in 1995 from 255 and $38.2 million in the 1994 period. The Company
anticipates that its second quarter revenues and earnings will be lower than
those recorded in the second quarter of 1994. However, the Company expects
sales to rebound in the third and fourth quarters of this year. The Company
believes that revenues and the number of new contracts are being adversely
affected by higher interest rates and higher home prices precipitated by
increases in material costs and by new building codes regarding greater
hurricane protection. In addition, resales nationally have been down and that
is affecting the ability of the Company's prime customers, active adults, to
fund the purchase of retirement houses in Florida. Further, several of the
Company's most popular residential projects have recently been completed and
the last units delivered. Though new projects have recently been opened for
sale, because of the time lag between land development and construction
schedules, these new projects may not result in closings in 1995 even if new
sales contracts are entered into immediately.
Other operating revenues decreased to $.8 million during the first quarter of
1995 from $.9 million in the same period of 1994 as a result of higher
vacancies in The Pier Club rental project. Interest, rentals and other income
increased from $.8 million to $1.0 million, namely due to the return on
investment in Joint Ventures.
Cost of home sales decreased to $10.9 million in 1995 from $17.5 million in
1994, mainly as a result of a decrease in the number of homes delivered. As a
percentage of home sales, cost of homes sold decreased to 84.0% from 85.2%.
Gross margins during the first quarter of 1995 have increased due to the
ability of the Company to pass some cost increases on to customers.
Selling, general and administrative expenses decreased slightly in the 1995
period as compared to the 1994 first quarter, but as a percentage of total
revenues, these expenses increased to 23.1% from 16.9% in the same period of
1994.
Net income in the 1995 first quarter amounted to a loss of $.4 million from a
profit of $.2 million in the comparable period of 1994. The decrease is
attributed to a reduction of total income of $14.9 million in the first quarter
of 1995 from $22.3 million in the same period of 1994.
-8-
<PAGE> 10
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.
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
The March 31, 1995 unaudited Financial Statements included in this form 10-Q
have been reviewed by Grant Thornton LLP in accordance with established
professional standards and procedures for such a review.
(a) There were no reports on Form 8-K for the three months ended March 31,
1995.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
-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: May 9, 1995 /s/ R.D. Levy
- -------------------------- ---------------------------------
R.D. Levy,
Chairman of the Board,
Chief Executive Officer,
Director
Date: May 9, 1995 /s/ A. Nunez
- -------------------------- ---------------------------------
A. Nunez, Senior Vice President
Treasurer, Chief Financial Officer,
Chief Accounting Officer, Director
-10-
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ORIOLE HOMES CORPORATION FOR THE QUARTER ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.<F1>
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 3,282,732
<SECURITIES> 0
<RECEIVABLES> 1,137,278
<ALLOWANCES> 0
<INVENTORY> 134,838,910
<CURRENT-ASSETS> 0
<PP&E> 35,315,603
<DEPRECIATION> (10,651,426)
<TOTAL-ASSETS> 181,298,176
<CURRENT-LIABILITIES> 0
<BONDS> 83,880,668
<COMMON> 462,553
0
0
<OTHER-SE> 78,622,069
<TOTAL-LIABILITY-AND-EQUITY> 181,298,176
<SALES> 13,117,915
<TOTAL-REVENUES> 14,857,415
<CGS> 11,021,995
<TOTAL-COSTS> 11,744,861
<OTHER-EXPENSES> 3,438,372
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 217,031
<INCOME-PRETAX> (542,849)
<INCOME-TAX> 204,458
<INCOME-CONTINUING> (338,391)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (338,391)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
<FN>
<F1>Company reports on a non-classified balance sheet.
</FN>
</TABLE>
