<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: June 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 June 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>
June 30, December 31,
1995 1994
(Unaudited) (Audited)
------------- -------------
<S> <C> <C>
Cash and cash equivalents $ 3,960,405 $ 14,609,489
------------- -------------
Receivables:
Mortgage notes 347,375 1,266,297
------------- -------------
Inventories:
Land 116,906,807 112,721,638
Houses and condominiums completed or
under construction 45,373,021 40,497,339
Model houses and condominiums 2,740,641 2,199,908
------------- -------------
165,020,469 155,418,885
Less: Estimated costs of completion
included in inventories 24,857,843 28,592,120
------------- -------------
140,162,626 126,826,765
------------- -------------
Property and equipment (at cost):
Land 7,169,358 7,170,113
Buildings 22,500,153 22,473,045
Furniture, fixtures and equipment 5,512,413 5,432,784
------------- -------------
35,181,924 35,075,942
Less: Accumulated depreciation 10,814,270 10,447,207
------------- -------------
24,367,654 24,628,735
------------- -------------
Other:
Prepaid expenses 3,114,786 1,990,535
Unamortized debt issuance costs 2,142,880 2,277,529
Investment in and advances to joint ventures 6,040,000 7,000,000
Land held for investment (at cost) 3,001,783 2,996,901
Other assets 3,300,325 2,413,479
------------- -------------
17,599,774 16,678,444
------------- -------------
Total Assets $ 186,437,834 $ 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>
June 30, December 31,
1995 1994
(Unaudited) (Audited)
-------------- --------------
<S> <C> <C>
Liabilities:
Notes payable - bank $ 4,000,000 $ -
Mortgage notes payable 14,886,126 17,419,250
Accounts payable 6,318,237 6,464,417
Dividends payable - 993,409
Customer deposits 8,275,604 4,975,199
Accrued expenses and other liabilities 8,085,920 7,820,330
Deferred income taxes 23,441 456,430
12 1/2% Senior Notes due January 15, 2003,
net of $1,558,303 discount in 1995 and
$1,632,318 discount in 1994 66,405,697 66,457,682
-------------- --------------
Total Liabilities 107,995,025 104,586,717
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 58,712,929 59,693,133
-------------- --------------
Total Shareholders' Equity 78,442,809 79,423,013
-------------- --------------
Total Liabilities and Shareholders' Equity $ 186,437,834 $ 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>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------------- -------------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Sale of houses and condominiums $ 27,429,087 $ 36,762,606 $ 14,391,172 $ 16,247,023
Sale of land 1,295,229 872,483 1,215,229 686,473
Other operating revenues 1,551,444 1,731,133 763,620 849,386
Interest, rentals and other income 1,959,134 1,670,114 1,063,813 930,688
Gain on sale of property and
land held for investment, net 114,452 56,177 58,097 35,219
------------ ------------ ------------ ------------
32,349,346 41,092,513 17,491,931 18,748,789
------------ ------------ ------------ ------------
Costs and Expenses:
Cost of houses and condominiums sold 23,825,914 31,419,697 12,877,800 13,934,218
Cost of land sold 1,110,092 770,714 1,036,211 610,976
Costs relating to other operating revenues 1,512,236 1,307,996 789,370 660,061
Selling, general and administrative
expenses 7,063,432 7,164,842 3,625,060 3,394,438
Interest costs incurred 5,150,025 5,110,893 2,583,998 2,555,125
Interest capitalized (deduct) (4,740,542) (5,110,893) (2,391,546) (2,555,125)
------------ ------------ ------------ ------------
33,921,157 40,663,249 18,520,893 18,599,693
------------ ------------ ------------ ------------
Income (loss) before provision for (benefit from)
income taxes (1,571,811) 429,264 (1,028,962) 149,096
Provision for (benefit from) income taxes (591,607) 161,296 (387,149) 56,068
------------ ------------ ------------ ------------
Net Income (Loss) $ (980,204) $ 267,968 $ (641,813) $ 93,028
============ ============ ============ ============
Earnings per Class A and Class B Common Share:
Net Income (Loss) $ (.21) $ .06 $ (.14) $ .02
============ ============ ============ ============
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 $ - $ - $ - $ -
============ ============ ============ ============
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>
Six Months Ended
June 30,
--------------------------------
1995 1994
--------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (980,204) $ 267,968
-------------- -------------
Adjustments to reconcile net income to net
cash (used in) operating activities
Depreciation 603,250 613,388
Amortization 209,679 180,279
Deferred income taxes (432,989) (97,064)
Gain on sale of property and equipment and other assets (114,452) (56,177)
Changes in assets and liabilities
(Increase) decrease in receivables 918,922 (342,868)
(Increase) in inventories (13,335,861) (10,105,141)
(Increase) in other assets (2,012,112) (1,836,845)
(Decrease) in accounts payable (146,180) (249,707)
Increase in customer deposits 3,300,405 5,883,346
(Decrease) in income taxes payable (296,904) (647,326)
Increase in accrued expenses and other liabilities 562,494 686,938
-------------- -------------
Total adjustments (10,743,748) (5,971,177)
-------------- -------------
Net cash (used in) operating activities (11,723,952) (5,703,209)
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Return of (investment in) joint venture 960,000 (3,500,000)
Land held for investment (4,882) -
Capital expenditures (602,190) (332,812)
Proceeds from the sale of property
and equipment and other assets 374,473 230,984
-------------- -------------
Net cash provided by (used in) investing activities 727,401 (3,601,828)
-------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes 149,875 212,318
Payment of mortgage notes (2,682,999) -
Borrowings under line of credit agreements 6,000,000 -
Repayments under line of credit agreements (2,000,000) (86,317)
Repurchase of senior notes (126,000) -
Senior notes issuance cost - (75,000)
Dividends paid (993,409) (762,078)
-------------- -------------
Net cash provided by (used in) financing activities 347,467 (711,077)
-------------- -------------
NET (DECREASE) IN CASH (10,649,084) (10,016,114)
CASH AT BEGINNING OF PERIOD 14,609,489 14,650,532
-------------- -------------
CASH AT END OF PERIOD $ 3,960,405 $ 4,634,418
============== =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of amount capitalized) $ 341,462 $ -
Income taxes $ 514,000 $ 1,042,331
</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 June 30, 1995, the related statements
of operations and cash flows for the three and six months ended June 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 six months ended June 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>
June 30, 1995 December 31, 1994
--------------------- -------------------
Units Amounts Units Amounts
----- ------- ----- -------
<S> <C> <C> <C> <C>
Single-Family Homes 100 $20,936,693 58 $12,197,851
Multi-Family 125 24,140,216 85 17,149,922
--- ----------- --- -----------
Total 225 $45,076,909 143 $29,347,773
=== =========== === ===========
</TABLE>
5. Following is a computation of earnings per share:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
6/30/95 6/30/94 6/30/95 6/30/94
-------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
Net Income (Loss) $ (641,813) $ 93,028 $ (980,204) $ 267,968
============== =========== ============= ===========
Weighted average number of
common shares outstanding 4,625,524 4,625,524 4,625,524 4,625,524
============== =========== ============= ===========
Earnings (loss) per share $ (.14) $ 0.02 $ (.21) $ 0.06
============== =========== ============= ===========
</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 June 30, 1995,
the outstanding loan balance was $4,000,000.
-6-
<PAGE> 8
Board of Directors
Oriole Homes Corp.
We have reviewed the accompanying consolidated balance sheet of Oriole Homes
Corp. and Subsidiaries as of June 30, 1995, and the related consolidated
statements of operations and cash flows for the three-month and six-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 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
July 28, 1995
-7-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995, COMPARED TO THREE MONTHS ENDED JUNE 30, 1994
The Company's revenues from home sales decreased $1.9 million (11.4%) during
the second quarter of 1995 as compared to the same period in 1994. The Company
delivered 91 homes in the 1995 quarter compared to 123 in the same period of
1994. The average selling price of homes delivered increased 19.7% (from
$132,090 to $158,145). The Company entered into 134 new contracts with an
aggregate dollar value of $21.9 million in the second quarter of 1995 compared
to 194 new contracts with an aggregate dollar value of $29.7 million in the
1994 period. Revenues from homes sales continue to reflect a weakness in the
industry. Resales are weak nationally and active adults, the prime customers
of the Company, have found it harder to sell their present home to use the
proceeds to purchase a retirement home in Florida. There is also a trend to
settle for 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 has new projects in the Naples
area, on the west coast of Florida, and Ocala in the central portion of the
State of Florida. These projects should help the Company diversify its product
lines and geographic market.
Interest, rentals and other income increased to $1.1 million from $.9 million
in the same period of 1994 mainly due to interest generated from the Company's
investments in a joint venture.
Cost of home sales decreased to $12.9 million in 1995 from $13.9 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
to 89.5% from 85.8%. Gross margins during the second 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 increased to $3.6 million in 1995
from $3.4 million in 1994 and as a percentage of total revenues, increased to
20.7% in the second quarter of 1995 as compared to 18.1% in the same period of
1994.
Net loss in the 1995 second quarter amounted to $.6 million from a profit of
$.09 million in the comparable period of 1994. The decrease is attributed
mainly to lower sales and margins on sales of houses and condominiums.
SIX MONTHS ENDED JUNE 30, 1995, COMPARED TO SIX MONTHS ENDED JUNE 30, 1994
The Company's revenues from home sales decreased 25.4% to $27.4 million in the
six month period of 1995 as compared to $36.8 million in the same period of
1994. The Company delivered 182 units in the first six months of 1995 as
compared to 277 units in 1994. The average selling price of homes delivered
increased 13.6% from $132,717 to $150,709. In 1995, 264 new contracts were
signed with a value of $43.2 million representing a decrease from 449 contracts
valued at $67.9 million in 1994.
Other operating revenues decreased from $1.7 million in 1994 to $1.6 million in
1995. Interest, rentals and other income increased from $1.7 million in 1994
to $2.1 million in 1995 mainly due to interest generated from the Company's
investments in a joint venture.
Cost of sales decreased from $31.4 million in 1994 to $23.8 million in 1995.
As a percentage of home sales, cost of home sales increased from 85.5% in 1994
to 86.9% in 1995.
-8-
<PAGE> 10
Selling, general and administrative expenses decreased from $7.2 million in
1994 to $7.1 million in 1995 but as a percentage of total revenues, increased
to 21.8% in 1995 from 17.4% in 1994.
Net income decreased from a profit of $.3 million in the first six months of
1994 to a loss of $1.0 million in 1995. Net income for the first six 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 36.1% to $45,076,909 (representing 225 units)
as of June 30, 1995 from $70,540,886 (representing 429 units) as of June 30,
1994. The average per unit value of the Company's backlog now stands at
$200,342, representing an increase of 21.8% over $164,431 recorded at the end
of the 1994 second quarter. Included in this year's backlog are 17 units from
the upscale project Fairway Point valued at a total of $9,625,721, or an
average of $566,219 per unit. If Fairway Point units are eliminated, the
backlog as of June 30, 1995 would have consisted of 208 units valued at
$35,451,188, or an average of $170,438 per unit as compared to 400 units with a
value of $56,411,546, or an average of $141,029 per unit as of June 30, 1994.
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 from funds generated through operations,
borrowings and the issuance of common stock.
As of June 30, 1995, the Company had outstanding borrowings of approximately
$85.3 million, including $66.4 in Senior Notes due 2003 ("Senior Notes"). It
had available cash and short term investments of approximately $4.0 million.
At June 30, 1995, the Company also had available funds of approximately $6
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 June 30, 1995, the Company had invested $6,040,000 in two Joint Ventures
with a reputable South Florida building company. 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.
-9-
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 4 - RESULTS OF VOTES OF SHAREHOLDERS
(a) On May 15, 1995, a regular Annual Shareholders Meeting was held at the
Company's headquarters located at 1690 South Congress Avenue, Delray
Beach, FL 33445.
(b) Not applicable.
(c) The following matters were submitted to Shareholders:
ELECTION OF DIRECTORS, CLASS A
<TABLE>
<CAPTION>
BROKERS
FOR ABSTENTION NON-VOTE
--- ---------- --------
<S> <C> <C> <C>
R. D. Levy 1,688,561 3,308 24,008
H. A. Levy 1,688,561 3,308 24,008
E. E. Hubshman 1,688,561 3,308 24,008
A. Nunez 1,688,561 3,308 24,008
E. H. Berns 1,688,561 3,308 24,008
</TABLE>
ELECTION OF DIRECTORS, CLASS B
<TABLE>
<CAPTION>
BROKERS
FOR ABSTENTION NON-VOTE
--- ---------- --------
<S> <C> <C> <C>
R. E. Deems 1,791,855 1,116 27,576
D. C. McClosky 1,791,855 1,116 27,576
P. R. Lehrer 1,791,855 1,116 27,576
</TABLE>
-10-
<PAGE> 12
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
The June 30, 1995 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 six months ended June 30, 1995.
Exhibit
No. Description
- ------- -----------
27 Financial Data Schedule (for SEC use only)
-11-
<PAGE> 13
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: August 4, 1995 s/ R.D. Levy
- --------------------------- -----------------------------------
R.D. Levy,
Chairman of the Board,
Chief Executive Officer,
Director
Date: August 4, 1995 s/ A. Nunez
- --------------------------- -----------------------------------
A. Nunez, Senior Vice President
Treasurer, Chief Financial Officer,
Chief Accounting Officer, Director
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ORIOLE HOMES CORP. FOR THE SIX MONTHS ENDED JUNE 30,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,960,405
<SECURITIES> 0
<RECEIVABLES> 347,375
<ALLOWANCES> 0
<INVENTORY> 140,162,626
<CURRENT-ASSETS> 0
<PP&E> 35,181,924
<DEPRECIATION> (10,814,270)
<TOTAL-ASSETS> 186,437,834
<CURRENT-LIABILITIES> 0
<BONDS> 85,291,823
<COMMON> 462,553
0
0
<OTHER-SE> 77,980,256
<TOTAL-LIABILITY-AND-EQUITY> 186,437,834
<SALES> 28,724,316
<TOTAL-REVENUES> 32,349,346
<CGS> 24,936,006
<TOTAL-COSTS> 26,448,242
<OTHER-EXPENSES> 7,063,432
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 409,483
<INCOME-PRETAX> (1,571,811)
<INCOME-TAX> (591,607)
<INCOME-CONTINUING> (980,204)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (980,204)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
