<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, 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 September 30, 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>
September 30, December 31,
1995 1994
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 2,666,623 $ 14,609,489
------------ ------------
Receivables:
Mortgage notes 351,370 1,266,297
------------ ------------
Inventories:
Land 119,672,848 112,721,638
Houses and condominiums completed or
under construction 47,337,001 40,497,339
Model houses and condominiums 2,787,592 2,199,908
------------ ------------
169,797,441 155,418,885
Less: Estimated costs of completion
included in inventories 26,958,305 28,592,120
------------ ------------
142,839,136 126,826,765
------------ ------------
Property and equipment (at cost):
Land 7,168,636 7,170,113
Buildings 22,417,244 22,473,045
Furniture, fixtures and equipment 5,687,433 5,432,784
------------ ------------
35,273,313 35,075,942
Less: Accumulated depreciation 11,010,280 10,447,207
------------ ------------
24,263,033 24,628,735
------------ ------------
Other:
Prepaid expenses 3,396,413 1,990,535
Unamortized debt issuance costs 2,141,749 2,277,529
Investment in and advances to joint ventures 5,790,000 7,000,000
Land held for investment (at cost) 3,001,783 2,996,901
Other assets 4,025,123 2,413,479
------------ ------------
18,355,068 16,678,444
------------ ------------
Total Assets $188,475,230 $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>
September 30, December 31,
1995 1994
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Liabilities:
Notes payable - bank $ 8,500,000 $ -
Mortgage notes payable 15,061,896 17,419,250
Accounts payable 5,666,712 6,464,417
Dividends payable - 993,409
Customer deposits 6,794,796 4,975,199
Accrued expenses and other liabilities 6,592,126 7,820,330
Deferred income taxes 562,525 456,430
12 1/2% Senior Notes due January 15, 2003,
net of $1,520,495 discount in 1995 and
$1,632,318 discount in 1994 66,443,505 66,457,682
------------ ------------
Total Liabilities 109,621,560 104,586,717
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 59,123,790 59,693,133
------------ ------------
Total Shareholders' Equity 78,853,670 79,423,013
------------ ------------
Total Liabilities and Shareholders' Equity $188,475,230 $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>
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------------- --------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Sale of houses and condominiums $49,032,659 $68,882,909 $21,603,572 $32,120,303
Sale of land 1,316,329 1,523,945 21,100 651,462
Other operating revenues 2,315,089 2,560,858 763,645 829,725
Interest, rentals and other income 2,902,818 2,648,388 943,684 978,274
Gain on sale of property and
land held for investment, net 144,142 129,566 29,690 73,389
----------- ----------- ----------- -----------
55,711,037 75,745,666 23,361,691 34,653,153
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of houses and condominiums sold 41,538,240 57,406,030 17,712,326 25,986,333
Cost of land sold 1,129,854 1,335,358 19,762 564,644
Costs relating to other operating revenues 2,294,850 1,977,838 782,614 669,842
Selling, general and administrative
expenses 11,075,540 11,347,538 4,012,108 4,182,696
Interest costs incurred 7,899,547 7,785,220 2,749,522 2,674,327
Interest capitalized (deduct) (7,313,929) (7,353,087) (2,573,387) (2,242,194)
----------- ----------- ----------- -----------
56,624,102 72,498,897 22,702,945 31,835,648
----------- ----------- ----------- -----------
Income (loss) before provision for (benefit from)
income taxes (913,065) 3,246,769 658,746 2,817,505
Provision for (benefit from) income taxes (343,722) 1,251,589 247,885 1,090,293
----------- ----------- ----------- -----------
Net Income (Loss) $ (569,343) $ 1,995,180 $ 410,861 $ 1,727,212
=========== =========== =========== ===========
Earnings per Class A and Class B Common Share:
Net Income (Loss) $ (.12) $ .43 $ .09 $ .37
=========== =========== =========== ===========
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 $ - $ .15
=========== =========== =========== ===========
Dividends per Class B Common Share $ - $ .175 $ - $ .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>
Nine Months Ended
September 30,
-----------------------------
1995 1994
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (569,343) $ 1,995,180
------------ -----------
Adjustments to reconcile net income to net
cash (used in) operating activities
Depreciation 926,611 922,633
Amortization 337,934 272,456
Deferred income taxes 106,095 (317,992)
Gain on sale of property and equipment and other assets (144,142) (129,566)
Changes in assets and liabilities
Decrease in receivables 914,927 108,603
(Increase) in inventories (16,012,371) (8,684,406)
(Increase) in other assets (3,017,522) (1,504,403)
(Decrease) in accounts payable (797,705) (202,041)
Increase in customer deposits 1,819,597 3,596,107
(Decrease) increase in income taxes payable (296,904) 340,766
(Decrease) in accrued expenses and other liabilities (931,300) (846,078)
------------ -----------
Total adjustments (17,094,780) (6,443,921)
------------ -----------
Net cash (used in) operating activities (17,664,123) (4,448,741)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Return of (investment in) joint venture 1,210,000 (3,500,000)
Land held for investment (4,882) (205,451)
Capital expenditures (1,033,293) (421,193)
Proceeds from the sale of property
and equipment and other assets 616,526 490,772
------------ -----------
Net cash provided by (used in) investing activities 788,351 (3,635,872)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes 149,875 425,016
Payment of mortgage notes (2,507,229) 0
Borrowings under line of credit agreements 14,500,000 9,500,000
Repayments under line of credit agreements (6,000,000) (9,596,317)
Repurchase of senior notes (126,000) 0
Issuance costs (90,331) (75,000)
Dividends paid (993,409) (1,524,156)
------------ -----------
Net cash provided by (used in) financing activities 4,932,906 (1,270,457)
------------ -----------
NET (DECREASE) IN CASH (11,942,866) (9,355,070)
CASH AT BEGINNING OF PERIOD 14,609,489 14,650,532
------------ -----------
CASH AT END OF PERIOD $ 2,666,623 $ 5,295,462
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of amount capitalized) $ 2,603,664 $ 2,520,041
Income taxes $ 643,049 $ 1,228,815
</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, 1995, the related
statements of operations and cash flows for the three and nine months
ended September 30, 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 and nine months ended
September 30, 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>
September 30, 1995 December 31, 1994
------------------ -----------------
Units Amounts Units Amounts
----- ------- ----- -------
<S> <C> <C> <C> <C>
Single-Family Homes 112 $23,369,755 58 $12,197,851
Multi-Family 128 19,065,288 85 17,149,922
--- ----------- --- -----------
Total 240 $42,435,043 143 $29,347,773
=== =========== === ===========
</TABLE>
5. Following is a computation of earnings per share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
9/30/95 9/30/94 9/30/95 9/30/94
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net Income (Loss) $ 410,861 $ 1,727,212 $ (569,343) $1,995,180
========== =========== ========== ==========
Weighted average number of
common shares outstanding 4,625,524 4,625,524 4,625,524 4,625,524
========== =========== ========== ==========
Earnings (loss) per share $ .09 $ .37 $ (.12) $ .43
========== =========== ========== ==========
</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 provided up to $10,000,000 in short-term
financing at an interest rate of prime plus 1 1/2%. This agreement was
amended as of August 23, 1995 to increase the line of credit to
$15,000,000. As of September 30, 1995, the outstanding loan balance
was $8,500,000.
-6-
<PAGE> 8
Suite 1200
777 Brickell Avenue
Miami, FL 33131-2867
305 377-9900
FAX 305 377-9130
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 September 30, 1995, and the related consolidated
statements of operations 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, 1994, and the
related consolidated statements of operations, 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
October 31, 1995
-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, 1995, COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1994
The Company's revenues from home sales decreased $10.5 million (32.7%) during
the third quarter of 1995 as compared to the same period in 1994. The Company
delivered 98 homes in the third quarter of 1995 compared to 204 in the same
period of 1994. The average selling price of homes delivered increased 40.0%
(from $157,452 to $220,445). The Company entered into 113 new contracts with
an aggregate dollar value of $19.0 million in the third quarter of 1995
compared to 124 new contracts with an aggregate dollar value of $20.0 million
in the 1994 period.
There is a trend to less costly new housing. The Company is continuing its
efforts to sell its more costly inventory and make a transition to new models,
more attractively priced. The Company expects its results to improve during
1996 as these new models come on stream. The Company's new projects in the
Naples area, on the west coast of Florida, and Ocala, in the central portion of
Florida, are presently under construction and new contracts are starting to
materialize.
Interest, rentals and other income decreased to $1.0 million during the third
quarter of 1995 as compared to $1.1 million in the same period of 1994.
Cost of home sales decreased to $17.7 million in 1995 from $26.0 million in
1994 mainly as a result of the decrease in the number and dollar amount of
homes delivered. As a percentage of home sales, cost of homes sold increased
82.0% from 80.9%. Gross margins during the third quarter of 1995 were
adversely affected due to increases in construction costs and the reduction in
selling prices caused by market conditions.
Selling, general and administrative expenses decreased to $4.0 million in 1995
from $4.2 million in 1994, but as a percentage of total revenues, increased to
17.2% in the third quarter of 1995 as compared to 12.1% in the same period of
1994.
Net profit in the third quarter of 1995 amounted to $.4 million as compared to
$1.7 million for the same period of 1994. The decrease is attributed mainly to
lower sales and margins on sales of houses and condominiums.
NINE MONTHS ENDED SEPTEMBER 30, 1995, COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1994
The Company's revenues from home sales decreased 28.8% to $49.0 million in the
nine month period of 1995 as compared to $68.9 million in the same period of
1994. The Company delivered 280 units in the first nine months of 1995 as
compared to 481 units in 1994. The average selling price of homes delivered
increased 22.3% from $143,208 to $175,117. In 1995, 377 new contracts were
signed with a value of $62.1 million representing a decrease of 29.4% in the
dollar value from 573 contracts valued at $88.0 million in 1994.
Other operating revenues decreased from $2.6 million in 1994 to $2.3 million in
1995. Interest, rentals and other income increased from $2.8 million in 1994 to
$3.0 million in 1995 mainly due to interest generated from the Company's
investment in a joint venture.
Cost of sales decreased from $57.4 million in 1994 to $41.5 million in 1995.
As a percentage of home sales, cost of sales increased from 83.3% in 1994 to
84.7% in 1995.
-8-
<PAGE> 10
Selling, general and administrative expenses decreased from $11.3 million in
1994 to $11.1 million in 1995, but as a percentage of total revenues, increased
to 19.9% in 1995 from 15.0% in 1994.
Net income decreased from $2.0 million in the first nine months of 1994 to a
loss of $.6 million in 1995. Net income for the first nine months of 1995 was
affected by a reduction in the total sales of houses and condominiums combined
with a decrease in the margins due to competitive market.
The dollar amount of the Company's backlog, which reflects new sales contracts
that have yet to close, decreased 27.4% to $42,435,043 (representing 240 units)
as of September 30, 1995 from $58,435,508 (representing 349 units) as of
September 30, 1994. The average per unit value of the Company's backlog now
stands at $176,813, representing an increase of 5.6% over $167,437 recorded at
the end of the 1994 third quarter.
FINANCIAL CONDITION AND LIQUIDITY
The Company's financing needs depend primarily on sales volume, asset turnover,
land acquisition and inventory balances. The Company has historically financed
its working capital needs from funds generated through operations, borrowings
and the issuance of common stock.
As of September 30, 1995, the Company had outstanding borrowings of
approximately $90.0 million, including $66.4 million of Senior Notes due 2003
("Senior Notes"). It had available cash and short term investments of
approximately $2.8 million. At September 30, 1995, the Company also had
available funds of approximately $6.5 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 requirements, with the
possible exception of land acquisitions.
As of September 30, 1995, the Company had invested $5,790,000 in two Joint
Ventures with a reputable South Florida home builder. The Joint Venture
Agreements provide that the Company is to receive (1) a 10% return plus $4,000
as each of 112 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, 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.
There were no reports on Form 8-K for the nine months ended September 30, 1995.
Exhibit filed
Exhibit 27 - Financial Data Schedule (for SEC use only).
-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, 1995 /s/ R. D. Levy
- ----------------------------- -----------------------------------
R.D. Levy,
Chairman of the Board,
Chief Executive Officer,
Director
Date: November 3, 1995 /s/ A. Nunez
- ----------------------------- -----------------------------------
A. Nunez, Senior Vice President
Treasurer, Chief Financial Officer,
Chief Accounting Officer, Director
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ORIOLE HOMES CORP. FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995<F1>
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,666,623
<SECURITIES> 0
<RECEIVABLES> 351,370
<ALLOWANCES> 0
<INVENTORY> 142,839,136
<CURRENT-ASSETS> 0
<PP&E> 35,273,313
<DEPRECIATION> (11,010,280)
<TOTAL-ASSETS> 188,475,230
<CURRENT-LIABILITIES> 0
<BONDS> 90,005,401
<COMMON> 462,553
0
0
<OTHER-SE> 78,391,117
<TOTAL-LIABILITY-AND-EQUITY> 188,475,230
<SALES> 50,348,988
<TOTAL-REVENUES> 55,711,037
<CGS> 42,668,094
<TOTAL-COSTS> 44,962,944
<OTHER-EXPENSES> 11,075,540
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 585,618
<INCOME-PRETAX> (913,065)
<INCOME-TAX> (343,722)
<INCOME-CONTINUING> (569,343)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (569,343)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
<FN>
<F1>Company reports on a non-classified balance sheet.
</FN>
</TABLE>
