<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, 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 issuers classes of
common stock, as of the close of the period covered by this report.
Class Outstanding at June 30, 1996
- ------------------------------------- ----------------------------
Common Stock, Class A, par value $.10 1,883,349
Common Stock, Class B, par value $.10 2,742,175
<PAGE> 2
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited) (Audited)
------------- -------------
<S> <C> <C>
Cash and cash equivalents $ 1,867,533 $ 3,275,615
------------- -------------
Receivables:
Mortgage notes 279,036 280,562
Due at closing - 114,700
Income taxes - 1,660,846
------------- -------------
279,036 2,056,108
Inventories:
Land 94,492,088 103,435,218
Houses and condominiums completed or
under construction 57,251,877 48,306,006
Model houses and condominiums 4,547,652 3,386,194
------------- -------------
156,291,617 155,127,418
Less: Estimated costs of completion
included in inventories 18,437,026 23,699,916
------------- -------------
137,854,591 131,427,502
Property and equipment (at cost): ------------- -------------
Land 7,046,758 7,168,046
Buildings 21,187,593 22,283,655
Furniture, fixtures and equipment 4,994,471 5,445,387
------------- -------------
33,228,822 34,897,088
Less: Accumulated depreciation 9,805,547 10,892,078
------------- -------------
23,423,275 24,005,010
------------- -------------
Other:
Prepaid expenses 3,725,879 2,378,932
Unamortized debt issuance costs 2,011,626 2,098,760
Investment in and advances to joint ventures 5,613,000 5,625,000
Land held for investment (at cost) 3,010,783 3,001,783
Other assets 4,207,499 5,609,607
------------- -------------
18,568,787 18,714,082
------------- -------------
Total Assets $181,993,222 $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>
June 30, December 31,
1996 1995
(Unaudited) (Audited)
------------- -------------
<S> <C> <C>
Liabilities:
Line of credit $ 8,000,000 $ 8,500,000
Mortgage notes payable 12,737,728 15,041,573
Accounts payable 9,653,073 7,328,804
Customer deposits 9,954,975 6,072,046
Accrued expenses and other liabilities 7,477,069 8,393,132
12 1/2% Senior Notes due January 15, 2003,
net of $1,402,147 discount in 1996 and
$1,632,318 discount in 1995 66,561,853 66,481,313
------------- -------------
Total Liabilities 114,384,698 111,816,868
Shareholders' Equity:
Class A common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding - 1,883,349
in 1996 and 1,891,249 in 1995 188,335 189,125
Class B common stock, $.10 par value
Authorized - 10,000,000 shares
Issued and outstanding - 2,742,175
in 1996 and 2,734,275 in 1995 274,218 273,428
Additional paid-in capital 19,267,327 19,267,327
Retained earnings 47,878,644 47,931,569
------------- -------------
Total Shareholders' Equity 67,608,524 67,661,449
------------- -------------
Total Liabilities and Shareholders' Equity $181,993,222 $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>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------- -------------------------
1996 1995 1996 1995
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Sale of houses and condominiums $40,405,407 $27,429,087 $23,704,964 $14,391,172
Sale of land 1,622,356 1,295,229 910,000 1,215,229
Other operating revenues 1,592,049 1,551,444 815,227 763,620
Interest, rentals and other income 1,890,054 1,959,134 1,041,481 1,063,813
Gain on sale of property and
land held for investment, net 667,124 114,452 646,764 58,097
------------ ----------- ----------- -----------
46,176,990 32,349,346 27,118,436 17,491,931
------------ ----------- ----------- -----------
Costs and Expenses:
Cost of houses and condominiums sold 34,190,319 23,825,914 19,885,233 12,877,800
Cost of land sold 1,683,070 1,110,092 1,030,611 1,036,211
Costs relating to other operating revenues 1,502,229 1,512,236 771,149 789,370
Selling, general and administrative expenses 8,539,766 7,063,432 4,299,547 3,625,060
Interest costs incurred 5,675,898 5,150,025 2,810,239 2,583,998
Interest capitalized (deduct) (5,329,435) (4,740,542) (2,649,495) (2,391,546)
------------ ----------- ----------- -----------
46,261,847 33,921,157 26,147,284 18,520,893
------------ ----------- ----------- -----------
Income (loss) before provision for (benefit from)
income taxes (84,857) (1,571,811) 971,152 (1,028,962)
Provision for (benefit from) income taxes (31,932) (591,607) 365,625 (387,149)
------------ ----------- ----------- -----------
Net Income (Loss) $ (52,925) $ (980,204) $ 605,527 $ (641,813)
============ =========== =========== ===========
Earnings per Class A and Class B Common Share:
Net Income (Loss) $ (.01) $ (.21) $ .13 $ (.14)
============ =========== =========== ===========
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,
------------- -------------
1996 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (52,925) $ (980,204)
Adjustments to reconcile net income to net
cash used in operating activities
Depreciation 652,660 603,250
Amortization 263,910 209,679
Deferred income taxes 458,375 (432,989)
Gain on sale of property and equipment and other assets (667,124) (114,452)
Changes in assets and liabilities
Decrease in receivables 1,777,072 918,922
(Increase) in inventories (8,762,718) (13,335,861)
(Increase) in other assets (403,214) (2,012,112)
Increase (decrease) in accounts payable 2,324,269 (146,180)
Increase in customer deposits 3,882,929 3,300,405
(Decrease) increase in accrued expenses and other liabilities (916,063) 265,590
------------ ------------
Total adjustments (1,389,904) (10,743,748)
------------ ------------
Net cash used in operating activities (1,442,829) (11,723,952)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Return on investment in joint venture 12,000 960,000
Land held for investment (9,000) (4,882)
Capital expenditures (1,130,447) (602,190)
Proceeds from the sale of property
and equipment and other assets 4,062,275 374,473
------------ ------------
Net cash provided by investing activities 2,934,828 727,401
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes 12,800,000 149,875
Payment of mortgage notes (15,103,845) (2,682,999)
Borrowings under line of credit agreements 15,500,000 6,000,000
Repayments under line of credit agreements (16,000,000) (2,000,000)
Repurchase of senior notes - (126,000)
Issuance costs (96,236) -
Dividends paid - (993,409)
------------ ------------
Net cash (used in) provided by financing activities (2,900,081) 347,467
------------ ------------
NET DECREASE IN CASH (1,408,082) (10,649,084)
CASH AT BEGINNING OF PERIOD 3,275,615 14,609,489
------------ ------------
CASH AT END OF PERIOD $ 1,867,533 $ 3,960,405
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of amount capitalized) $ 265,923 $ 341,462
Income taxes $ 529 $ 514,000
</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 June 30, 1996, the related
statements of operations and cash flows for the three and six months
ended June 30, 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 and six months ended June 30,
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>
June 30, 1996 December 31, 1995
------------ ------------ ------------ -----------
Units Amounts Units Amounts
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Single-Family Homes 217 $39,450,339 115 $23,225,708
Multi-Family 157 22,625,082 78 12,123,361
----------- ----------- ----------- -----------
Total 374 $62,075,421 193 $35,349,069
=========== =========== =========== ===========
</TABLE>
5. Following is a computation of earnings per share:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
6/30/96 6/30/95 6/30/96 6/30/95
------------ ------------ ------------ ----------
<S> <C> <C> <C> <C>
Net Income (Loss) $ 605,527 $ (641,813) $ (52,925) $ (980,204)
=========== =========== =========== ===========
Weighted average number of
common shares outstanding 4,625,524 4,625,524 4,625,524 4,625,524
=========== =========== =========== ===========
Earnings (loss) per share $ .13 $ (.14) $ (.01) $ (.21)
=========== =========== =========== ===========
</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 $120,000,000 in short-term financing at an
finterest 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 June 30,1996, the outstanding
loan balance was $8,000,000.
- 6 -
<PAGE> 8
Suite 1200
77 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 June 30, 1996, and the related consolidated
statements of operations and cash flows for the three-month and six-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, 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
August 2, 1996
- 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, 1996, COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
The Company's revenues from home sales increased $9.3 million (64.7%) during
the second quarter of 1996 as compared to the same period in 1995. The Company
delivered 125 homes in the 1996 quarter compared to 91 in the same period of
1995. The average selling price of homes delivered increased 19.9% (from
$158,145 to $189,640). The Company entered into 184 new contracts with an
aggregate dollar value of $30.5 million in the second quarter of 1996, compared
to 134 new contracts with an aggregate dollar value of $21.9 million in the
1995 period.
Interest, rentals and other income increased to $1.7 million from $1.1 million
in the same period of 1995 mainly due to the gain on the sale in the 1996
second quarter of the remaining lots in an existing subdivision and the sale of
recreation leases. Cost of home sales increased to $19.9 million in 1996 from
$12.9 million in 1995 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 83.9% from 89.5%.
Selling, general and administrative expenses increased to $4.3 million in 1996
from $3.6 million in 1995 mainly due to higher advertising expense and sales
commissions related to a larger volume of closings. As a percentage of total
revenues, the 1996 period was reduced to 15.9% as compared to 20.7% in the same
period of 1995. The second quarter of 1996 reflected a profit of $.6 million
as compared to a loss of $.6 million in the comparable period of 1995. This
increase is attributable to the sale of assets mentioned above and the
improvement in margins on sales.
SIX MONTHS ENDED JUNE 30, 1996, COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
The Company's revenues from home sales increased 47.3% to $40.4 million in the
six month period of 1996 as compared to $27.4 million in the same period of
1995. The Company delivered 223 units in the first six months of 1996 as
compared to 182 units in 1995. The average selling price of homes delivered
increased 20.2% to $181,190 from $150,709. In 1996, 404 new contracts were
signed with a value of $67.1 million representing an increase from 264
contracts valued at $43.2 million in 1995.
Other operating revenues remained at the same level of $1.5 million in the six
months of 1995 and 1996.
Interest, rentals and other income increased from $2.1 million in 1995 to $2.6
million in 1996 mainly due to profits generated from the sale of recreation
leases and the remaining lots in an existing subdivision.
Cost of sales increased to $34.2 million in 1996 from $23.8 million in 1995.
As a percentage of home sales, cost of home sales decreased from 86.9% in 1995
to 84.6% in 1996.
Selling, general and administrative expenses increased to $8.5 million in 1996
from $7.1 million in 1995 but as a percentage of total revenues, decreased to
18.5% in 1996 from 21.8% in 1995.
- 8 -
<PAGE> 10
Net loss decreased from $1.0 million in the first six months of 1995 to a loss
of $.05 million in 1996. The decrease in net loss for the first six months of
1996 was benefited from the profit on the sale of certain recreation leases and
the sale of the remaining lots in an existing subdivision. The dollar amount
of the Company's backlog which reflects new sales contracts that have yet to
close increased 37.7% to $62,075,421 (representing 374 units) as of June 30,
1996 from $45,076,909 (representing 225 units) as of June 30, 1995. The
average per unit value of the Company's backlog now stands at $165,977 as
compared to $200,342 at the end of the 1995 second quarter. Included in last
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.
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, 1996, the Company has outstanding borrowings of approximately
$87.3 million, including $66.6 million in Senior Notes due 2003. It had
available cash and short term investments of approximately $1.9 million. At
June 30, 1996, the Company also had available funds of approximately $12
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 June 30, 1996, the Company had invested $5,613,000 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
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 12, 1996 /s/ R.D. Levy
--------------------- ------------------------------------
R.D. Levy,
Chairman of the Board,
Chief Executive Officer,
Director
Date: August 12, 1996 /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 SIX MONTHS ENDED JUNE 30,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS. <F1>
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,867,533
<SECURITIES> 0
<RECEIVABLES> 279,036
<ALLOWANCES> 0
<INVENTORY> 137,854,591
<CURRENT-ASSETS> 0
<PP&E> 33,228,822
<DEPRECIATION> (9,805,547)
<TOTAL-ASSETS> 181,993,222
<CURRENT-LIABILITIES> 0
<BONDS> 87,299,581
0
0
<COMMON> 462,553
<OTHER-SE> 67,145,971
<TOTAL-LIABILITY-AND-EQUITY> 181,993,222
<SALES> 42,027,763
<TOTAL-REVENUES> 46,176,990
<CGS> 35,873,389
<TOTAL-COSTS> 37,375,618
<OTHER-EXPENSES> 8,539,766
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 346,463
<INCOME-PRETAX> (84,857)
<INCOME-TAX> (31,932)
<INCOME-CONTINUING> (52,925)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (52,925)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
<FN>
<F1>COMPANY REPORTS ON A NON-CLASSIFIED BALANCE SHEET.
</FN>
</TABLE>
