<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, 1996 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 issuer's classes of
common stock, as of the close of the period covered by this report.
Class Outstanding at March 31, 1996
- ------------------------------------------- ---------------------------------
Common Stock, Class A, par value $.10 1,891,249
Common Stock, Class B, par value $.10 2,734,275
<PAGE> 2
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 3,093,156 $ 3,275,615
------------ ------------
Receivables:
Mortgage notes 279,999 280,562
Due at closing 0 114,700
Income taxes 1,472,430 1,660,846
------------ ------------
1,752,429 2,056,108
Inventories:
Land 102,852,855 103,435,218
Houses and condominiums completed or
under construction 56,870,775 48,306,006
Model houses and condominiums 4,698,256 3,386,194
------------ ------------
164,421,886 155,127,418
Less: Estimated costs of completion
included in inventories 24,810,264 23,699,916
------------ ------------
139,611,622 131,427,502
------------ ------------
Property and equipment (at cost):
Land 7,164,432 7,168,046
Buildings 22,141,073 22,283,655
Furniture, fixtures and equipment 5,500,185 5,445,387
------------ ------------
34,805,690 34,897,088
Less: Accumulated depreciation 10,518,145 10,892,078
------------ ------------
24,287,545 24,005,010
------------ ------------
Other:
Prepaid expenses 3,600,441 2,378,932
Unamortized debt issuance costs 2,103,311 2,098,760
Investment in and advances to joint ventures 5,625,000 5,625,000
Land held for investment (at cost) 3,004,583 3,001,783
Other assets 5,251,379 5,609,607
------------ ------------
19,584,714 18,714,082
------------ ------------
Total Assets $188,329,466 $179,478,317
============ ============
</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,
1996 1995
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Liabilities:
Line of credit $ 17,500,000 $ 8,500,000
Mortgage notes payable 13,480,079 15,041,573
Accounts payable 10,387,595 7,328,804
Customer deposits 8,458,446 6,072,046
Accrued expenses and other liabilities 4,978,766 8,393,132
12 1/2% Senior Notes due January 15, 2003,
net of $1,442,417 discount in 1996 and
$1,482,687 discount in 1995 66,521,583 66,481,313
------------ ------------
Total Liabilities 121,326,469 111,816,868
Shareholders' Equity:
Class A common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding -
1,891,249 in 1996 and in 1995 189,125 189,125
Class B common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding -
2,734,275 in 1996 and in 1995 273,428 273,428
Additional paid-in capital 19,267,327 19,267,327
Retained earnings 47,273,117 47,931,569
------------ ------------
Total Shareholders' Equity 67,002,997 67,661,449
------------ ------------
Total Liabilities and Shareholders' Equity $188,329,466 $179,478,317
============ ============
</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,
---------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Sale of houses and condominiums $16,700,443 $13,037,915
Sale of land 712,356 80,000
Other operating revenues 776,822 787,824
Interest, rentals and other income 848,573 895,321
Gain on sale of property and land held for investment, net 20,360 56,355
----------- -----------
19,058,554 14,857,415
----------- -----------
Costs and Expenses:
Cost of houses and condominiums sold 14,305,086 10,948,114
Cost of land sold 652,459 73,881
Costs relating to other operating revenues 731,080 722,866
Selling, general and administrative expenses 4,240,219 3,438,372
Interest costs incurred 2,865,659 2,566,027
Interest capitalized (deduct) (2,679,940) (2,348,996)
----------- -----------
20,114,563 15,400,264
----------- -----------
Loss before benefit from income taxes (1,056,009) (542,849)
Benefit from income taxes (397,557) (204,458)
----------- -----------
Net Loss $ (658,452) $ (338,391)
=========== ===========
Loss per Class A and B Common Share:
Net Loss $ (0.14) $ (0.07)
=========== ===========
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>
Three Months Ended
March 31,
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (658,452) $ (338,391)
------------ ------------
Adjustments to reconcile net income to net
cash used in operating activities
Depreciation 322,294 301,541
Amortization 131,955 108,250
Deferred income taxes 448,942 (270,175)
Gain on sale of property and equipment and other assets (20,360) (56,356)
Changes in assets and liabilities
Decrease in receivables 303,679 129,019
(Increase) in inventories (8,184,120) (8,012,145)
(Increase) in other assets (1,315,023) (1,066,367)
Increase (decrease) in accounts payable 3,058,791 (675,751)
Increase in customer deposits 2,386,400 1,900,057
(Decrease) in accrued expenses and other liabilities (3,414,366) (2,337,621)
------------ ------------
Total adjustments (6,281,808) (9,979,548)
------------ ------------
Net cash (used in) operating activities (6,940,260) (10,317,939)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Return on investment in joint venture - 300,000
Capital expenditures (755,304) (417,769)
Proceeds from the sale of property
and equipment and other assets 170,835 137,142
------------ ------------
Net cash (used in) provided by investing activities (584,469) 19,373
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes 12,800,000 101,901
Payment of mortgage notes (14,361,494) (10,683)
Borrowings under line of credit agreements 11,500,000 -
Repayments under line of credit agreements (2,500,000) -
Repurchase of senior notes - (126,000)
Issuance costs (96,236) -
Dividends paid - (993,409)
------------ ------------
Net cash provided by (used in) financing activities 7,342,270 (1,028,191)
------------ ------------
NET DECREASE IN CASH (182,459) (11,326,757)
CASH AT BEGINNING OF PERIOD 3,275,615 14,609,489
------------ ------------
CASH AT END OF PERIOD $ 3,093,156 $ 3,282,732
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of amount capitalized) $ 2,269,324 $ 2,308,382
Income taxes $ 349 $ 405,000
</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, 1996, the related
statements of operations and cash flows for the three months ended March
31, 1996 and 1995 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, 1995 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, 1996 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, 1996 December 31, 1995
Units Amounts Units Amounts
----- ----------- ----- -----------
<S> <C> <C> <C> <C>
Single-Family Homes 176 $33,080,438 115 $23,225,708
Multi-Family 139 22,221,487 78 12,123,361
--- ----------- --- -----------
Total 315 $55,301,925 193 $35,349,069
=== =========== === ===========
</TABLE>
5. Following is a computation of earnings per share:
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
3/31/96 3/31/95
----------- -----------
<S> <C> <C>
Net Loss $ (658,452) $ (338,391)
========== ==========
Weighted average number of
common shares outstanding 4,625,524 4,625,524
========== ==========
Loss per share $ (0.14) $ (0.07)
========== ==========
</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%. This agreement was
amended August 23, 1995 to increase the line of credit to $15,000,000 and
January 12, 1996 to increase the line of credit to $20,000,000. As of
March 31, 1996, the outstanding loan balance was $17,500,000.
-6-
<PAGE> 8
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, 1996, 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, 1995, 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
16, 1996, 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, 1995, 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 29, 1996
-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, 1996, COMPARED TO THREE MONTHS ENDED MARCH 31,
1995
The Company's revenues from home sales increased to $16.7 million (28.1%)
during the first quarter of 1996 as compared to the same period of 1995. The
Company delivered 98 homes in the 1996 first quarter compared to 91 in the same
period of 1995. The average selling price of homes delivered increased 18.9%
(from $143,274 to $170,413). The Company entered into 220 new contracts with
an aggregate value of $36.7 million in the first quarter of 1996 compared to
130 new contracts with an aggregate value of $21.3 million in the 1995 period.
The Company's backlog has increased from $35.3 million at December 31, 1995 to
$55.3 million as of March 31, 1996. Favorable interest rates and a more
aggressive merchandising program contributed to a larger number of of new
contracts.
Other operating revenues and interest, rentals and other income remained at the
same level of the 1995 period.
As a percentage of home sales, cost of homes sold increased to 85.7% from
84.0%. Gross margins during the first quarter of 1996 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 in the 1996 period as
compared to the 1995 first quarter, but as a percentage of total revenues,
these expenses decreased to 22.2% from 23.1% in the same period of 1995.
Net income in the 1996 first quarter amounted to a loss of $.7 million compared
to a loss of $.4 million in the comparable period of 1995. The decrease is
attributed mainly to lower margins on sales of houses and condominiums.
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. The Company has a $20.0 million
revolving line of credit of which $2.5 million was available at a rate of prime
plus 1.5%, which expires July 1, 1997.
The Company continues negotiations for the sale of certain assets which, if
closed, may result in aggregate sales of approximately $10.0 million. The
Company is also anticipating the receipt of an income tax refund of
approximately $1.4 million during the second quarter of 1996.
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
The March 31, 1996 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,
1996.
Exhibit Description
------- -----------
27 Financial Data Schedule (for SEC use only).
-8-
<PAGE> 10
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 10, 1996 /s/ R.D. Levy
- ------------------- ------------------------
R.D. Levy,
Chairman of the Board,
Chief Executive Officer,
Director
Date: May 10, 1996 /s/ A. Nunez
- ------------------- ------------------------
A. Nunez, Senior Vice President
Treasurer, Chief Financial Officer,
Chief Accounting Officer, Director
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,093,156<F1>
<SECURITIES> 0
<RECEIVABLES> 1,752,429
<ALLOWANCES> 0
<INVENTORY> 139,611,622
<CURRENT-ASSETS> 0
<PP&E> 34,805,690
<DEPRECIATION> (10,518,145)
<TOTAL-ASSETS> 188,329,466
<CURRENT-LIABILITIES> 0
<BONDS> 97,501,662
0
0
<COMMON> 462,553
<OTHER-SE> 66,540,444
<TOTAL-LIABILITY-AND-EQUITY> 188,329,466
<SALES> 17,412,799
<TOTAL-REVENUES> 19,058,554
<CGS> 14,957,545
<TOTAL-COSTS> 15,688,625
<OTHER-EXPENSES> 4,240,219
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 185,719
<INCOME-PRETAX> (1,056,009)
<INCOME-TAX> (397,557)
<INCOME-CONTINUING> (658,452)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (658,452)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
<FN>
<F1>COMPANY REPORTS ON A NON-CLASSIFIED BALANCE SHEET.
</FN>
</TABLE>
