<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, 1998 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: (561) 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 October 20, 1998
- ---------------------------------------- -----------------------------------
Common Stock, Class A, par value $.10 1,864,149
Common Stock, Class B, par value $.10 2,761,375
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
(Unaudited) (Audited)
------------- ------------
<S> <C> <C>
Cash and cash equivalents $ 9,180,991 $ 19,830,523
------------ ------------
Receivables
Mortgage notes 265,475 267,323
Income taxes -- 765,437
------------ ------------
265,475 1,032,760
Inventories
Land 54,228,232 58,120,681
Houses and condominiums completed or
under construction 44,337,304 42,007,641
Model houses and condominiums 4,589,453 4,871,304
------------ ------------
103,154,989 104,999,626
Less estimated costs of completion
included in inventories 8,337,106 11,597,567
------------ ------------
94,817,883 93,402,059
------------ ------------
Property and equipment, at cost
Land 517,554 654,936
Buildings 3,505,343 4,338,159
Furniture, fixtures and equipment 3,564,522 3,339,242
------------ ------------
7,587,419 8,332,337
Less accumulated depreciation 4,021,766 4,055,564
------------ ------------
3,565,653 4,276,773
------------ ------------
Property and equipment held for sale, at cost 11,786,414 12,264,126
Investments in and advances to joint ventures 3,880,313 4,495,000
Other
Prepaid expenses 2,138,876 2,275,569
Unamortized debt issuance costs 1,153,683 1,552,227
Land held for investment, at cost 2,127,009 2,354,398
Other assets 3,824,764 3,576,695
------------ ------------
9,244,332 9,758,889
------------ ------------
Total assets $132,741,061 $145,060,130
============ ============
</TABLE>
See notes to the consolidated financial statements
-1-
<PAGE> 3
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Liabilities
Line of credit $ 10,000 $ 10,000
Mortgage notes payable 12,276,366 12,438,445
Accounts payable and accrued liabilities 11,457,079 13,141,491
Customer deposits 7,240,893 6,389,145
Senior notes 55,713,067 66,184,074
------------ ------------
Total liabilities 86,697,405 98,163,155
Shareholders' equity
Class A common stock, $.10 par value
Authorized - 10,000,000 shares,
issued and outstanding -
1,864,149 in 1998 and in 1997 186,415 186,415
Class B common stock, $.10 par value
Authorized - 10,000,000 shares,
issued and outstanding -
2,761,375 in 1998 and in 1997 276,138 276,138
Additional paid-in capital 19,267,327 19,267,327
Retained earnings 26,313,776 27,167,095
------------ ------------
Total shareholders' equity 46,043,656 46,896,975
------------ ------------
Total liabilities and shareholders' equity $132,741,061 $145,060,130
============ ============
</TABLE>
See notes to the 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,
------------------------------- ------------------------------
1998 1997 1998 1997
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenues
Sales of houses and condominiums $ 53,414,898 $ 68,113,343 $ 14,917,563 $ 22,889,269
Sales of land 8,500 50,500 8,500 45,000
Other operating revenues 2,950,750 2,503,132 954,846 850,123
Gain on sale of property and
land held for investment, net 1,224,940 520,884 434,359 19,351
Interest, rentals and other income 2,267,475 2,454,993 613,124 628,816
------------ ------------ ------------ -------------
59,866,563 73,642,852 16,928,392 24,432,559
------------ ------------ ------------ -------------
Costs and Expenses
Cost of houses and
condominiums sold 45,992,350 60,439,803 12,745,421 20,221,824
Inventory valuation adjustment -- 17,050,000 -- --
Fixed asset valuation adjustment -- 4,525,000 -- --
Cost of land sold 2,097 13,338 2,097 10,092
Costs relating to other
operating revenues 2,405,195 2,853,572 782,688 1,162,225
Selling, general and
administrative expenses 11,256,876 13,005,549 3,438,892 3,822,028
Interest costs incurred 6,717,194 7,511,187 2,154,916 2,449,965
Interest capitalized (deduct) (5,653,830) (6,992,537) (1,824,640) (2,279,292)
------------ ------------ ------------ -------------
60,719,882 98,405,912 17,299,374 25,386,842
------------ ------------ ------------ -------------
Loss before benefit from income taxes (853,319) (24,763,060) (370,982) (954,283)
Benefit from income taxes -- (1,131,359) -- (824,098)
------------ ------------ ------------ -------------
Net loss $ (853,319) $(23,631,701) $ (370,982) $ (130,185)
============ ============ ============ =============
Net loss per Class A and B common
share available for common
stockholders - Basic $ (.18) $ (5.11) $ (.08) $ (.03)
============ ============ ============ ==============
Weighted average number of common
shares outstanding - Basic 4,625,524 4,625,524 4,625,524 4,625,524
============ ============ ============ ==============
Net loss per Class A and B common
share available for common
stockholders - Diluted $ (.18) $ (5.11) $ (.08) $ (.03)
============ ============ ============ ==============
Weighted average number of common
shares outstanding - Diluted 4,625,524 4,625,524 4,625,524 4,625,524
============ ============ ============ ==============
</TABLE>
See notes to the consolidated financial statements
-3-
<PAGE> 5
ORIOLE HOMES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------
1998 1997
------------- -----------
<S> <C> <C>
Cash flows from operating activities
Net (loss) $ (853,319) $(23,631,701)
Adjustments to reconcile net (loss) to net
cash (used in) provided by operating activities
Depreciation 928,766 1,033,229
Amortization 699,537 376,320
Deferred income taxes -- (365,922)
Gain on sale of property and land held for investment, net (1,224,940) (520,884)
(Increase) decrease in operating assets
Receivables 767,285 2,408,204
Inventories (1,386,912) 931,444
Inventory valuation adjustment -- 17,050,000
Fixed asset valuation adjustment -- 4,525,000
Other assets (111,376) (801,988)
Increase (decrease) in operating liabilities
Accounts payable and accrued liabilities (1,684,412) (4,210,243)
Customer deposits 851,748 3,285,673
------------ ------------
Total adjustments (1,160,304) 23,710,833
------------ ------------
Net cash (used in) provided by operating activities (2,013,623) 79,132
------------ ------------
Cash flows from investing activities
Return on investment in joint ventures 614,687 1,928,000
Land held for investment -- (7,626)
Capital expenditures (584,441) (382,515)
Proceeds from the sale of property and equipment 2,267,924 1,102,139
------------ ------------
Net cash provided by investing activities 2,298,170 2,639,998
------------ ------------
Cash flows (used in) financing activities
Payment of mortgage note (162,079) (150,927)
Borrowings under line of credit agreement -- 14,398,971
Repayments under line of credit agreement -- (15,498,971)
Repurchase of senior notes (10,772,000)
------------ ------------
Net cash (used in) financing activities (10,934,079) (1,250,927)
------------ ------------
Net (decrease) increase in cash and cash equivalents (10,649,532) 1,468,203
Cash and cash equivalents at beginning of period 19,830,523 2,409,376
------------ ------------
Cash and cash equivalents at end of period $ 9,180,991 $ 3,877,579
============ ============
Supplemental disclosures of cash flow information Cash paid
during the period for:
Interest (net of amount capitalized) $ 3,311,614 $ 2,497,969
Income taxes $ 2,627 $ --
</TABLE>
See notes to consolidated financial statements
-4-
<PAGE> 6
ORIOLE HOMES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet as of September 30, 1998 and the related
statements of operations and cash flows for the three months and nine
months ended September 30, 1998 and 1997 of Oriole Homes Corp. and its
subsidiaries have been prepared by the Company without audit. In the
opinion of 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, 1997 annual report on Form
10K.
Certain reclassifications have been made to conform to the current year
presentation.
2. The results of operations for the three months and the nine months ended
September 30, 1998 are not necessarily indicative of the results for the
entire year.
3. Inventory valuation adjustment
Statement of Financial Accounting Standards ("SFAS") No. 121 requires
that long-lived assets held and used by the Company be reviewed for
impairment whenever events or changes indicate that the net book value of
the asset may not be recoverable. An impairment loss is recognized if the
sum of the undiscounted expected future cash flows from the use of the
assets is less than the net book value of the assets. The Company
periodically reviews the carrying value of its assets and, if such
reviews indicate the potential for lack of recovery of the net book
value, adjusts the assets accordingly.
In this regard, the Company recorded in the first quarter of 1997 a
non-cash inventory valuation adjustment totaling $8,700,000 or $1.88 per
common share, reducing certain land inventory to its estimated fair value
less cost to sell. The inventory adjustment pertained to land for
approximately 1,000 unsold housing units located in five developments. In
addition, the Company recorded, in the second quarter of 1997, an
inventory valuation adjustment of $8,350,000 or $1.81 per common share
related to certain land inventory in the amount of $8,150,000 for
approximately 1,200 unsold housing units and the contingent sale portion
of a land sale in the amount of $200,000.
Deteriorating market conditions during the first half of 1997 caused the
Company to lower selling prices in order to maintain acceptable sales
levels and absorb then current inventory, resulting in the inventory
valuation adjustment.
4. Fixed asset adjustment
The Company recorded in the second quarter of 1997 a fixed asset
valuation adjustment of $4,525,000, or $.98 per common share, related to
a rental apartment project. During the second quarter, management decided
to dispose of this rental project and, therefore, reduced its carrying
amount to its fair value less cost to sell.
5. These adjustments were based in part on management estimates and
assumptions that affected the reported valuation of the assets and the
amount of revenues and expenses. There have been no subsequent valuation
adjustments since June 30, 1997. Actual future results could differ from
these estimates.
-5-
<PAGE> 7
ORIOLE HOMES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Backlog of contracts for sales of houses and condominiums
<TABLE>
<CAPTION>
September 30, 1998 December 31, 1997
--------------------- ---------------------
Units Amounts Units Amounts
----- ----------- ----- -----------
<S> <C> <C> <C> <C>
Single-family 159 $27,710,883 152 $27,683,438
Multi-family 148 20,235,833 91 12,730,745
--- ----------- --- -----------
Total 307 $47,946,716 243 $40,414,183
=== =========== === ===========
</TABLE>
7. Senior notes
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 provisions restricting the amount and type of
indebtedness the Company may incur, the purchase by the Company of its
stock and the payment of cash dividends. At September 30, 1998, dividend
payments are restricted and will be restricted until the Company posts
cumulative net income in excess of $62,200,000.
During the nine months ended September 30, 1998, the Company repurchased
$5,722,000 of Senior Notes to be used as part of the sinking fund and has
accumulated $13,400,000 toward the $17,500,000 payment due January 15,
2001.
8. Line of credit
A revolving loan agreement (line of credit) with a bank, collateralized
by land, provides up to $10,000,000 of borrowings, at an interest rate of
prime plus 1.5%, of which $9,990,000 is available at September 30, 1998.
The agreement expires June 30, 2000.
The line of credit can be used to finance ongoing development and
construction of residential real estate and short-term capital needs and
only requires monthly interest payments. The agreement has no
compensating balance arrangements and contains typical restrictions and
covenants, the most restrictive of which include that:
a. the Company shall maintain, at all times through the life of the
loan, its consolidated tangible net worth at not less than
$42,000,000, and;
b. the Company's ability to incur additional debt is restricted.
9. Income taxes
At September 30, 1998, the Company has no deferred tax benefit related to
its net operating loss as the Company's ability to realized these
benefits is not "more likely than not" as defined by FASB Statement No.
109 "Accounting for Income Taxes".
-6-
<PAGE> 8
ORIOLE HOMES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. New accounting pronouncements
The Financial Accounting Standards Board has issued Statement of
Financial Standards Nos. 130 ("SFAS 130"), "Reporting Comprehensive
Income", and 131 ("SFAS 131"), "Disclosures about Segments of an
Enterprise and Related Information". SFAS 130 prescribes standards for
reporting comprehensive income and its components. SFAS 131 establishes
guidance as to the required disclosure for reporting segment
information. The Company has adopted these standards, which have no
impact on the Company.
11. Commitments and contingencies
The Company is involved, from time to time, in litigation arising in
the ordinary course of business, none of which is expected to have a
material adverse effect on the Company's consolidated financial
position or results of operations.
The Company is also subject to the normal obligations associated with
entering into contracts for the purchase, development and sale of real
estate in the routine conduct of its business.
-7-
<PAGE> 9
Grant Thornton LLP
Certified Public Accountants
200 East Broward Boulvevard, Suite 2000
Fort Lauderdale, Florida 33301
Board of Directors
Oriole Homes Corp.
We have reviewed the accompanying consolidated balance sheet of Oriole Homes
Corp. and Subsidiaries as of September 30, 1998, 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.
Miami, Florida
November 9, 1998
-8-
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1997
The Company's revenues from home sales decreased $8.0 million (34.8%)
to $14.9 million during the third quarter of 1998 as compared to the comparable
quarter of 1997 primarily as a result of a reduction in the number of homes
delivered. Oriole delivered 91 homes in the 1998 third quarter compared to 141
in the same period in 1997. The average selling price of homes delivered
increased from $162.3 to $163.9. The number of contracts signed at 80 and the
aggregate dollar value of those contracts at $12.8 million decreased in the 1998
third quarter from 94 and $15.8 million, respectively, from the same period in
1997.
Non homebuilding revenues increased $0.5 million during the quarter
ended September 30, 1998 compared to the same period in 1997, primarily due to
the sales of recreation facility leases during the third quarter of 1998.
Cost of home sales decreased to $12.7 million (37.0%) in 1998 from
$20.2 million in 1997 as a result of a decrease in the number of homes
delivered. As a percentage of home sales, cost of sales decreased to 85.4% from
88.4% in the third quarter of 1997. This was the result of a reduction in direct
construction costs, the impact of the 1997 inventory valuation adjustment and
the execution of a strategy to better match sales pace with construction
delivery schedules.
Selling, general and administrative expenses, exclusive of an
extraordinary charge to write-off unamortized debt discount associated with the
purchase of $5.7 million in Senior Notes, decreased by $0.4 million. These
expenses, however, increased as a percentage of revenues to 20.3% from 15.6% of
revenues from the same period in 1997 due to the reduction in revenues related
to fewer home deliveries, as previously discussed.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
increased $0.9 million (108.0%) to $1.7 million in the third quarter of 1998 as
compared to the same period in 1997 primarily due to the increase in operating
income during this period.
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1997
The Company's revenues from home sales decreased $14.7 million (21.6%)
to $53.4 million in the nine month period of 1998 as compared to the comparable
period of 1997 as a result of a reduction in the number of homes delivered.
Oriole delivered 324 homes in the nine month period compared to 423 homes in the
same period in 1997. The average selling price of homes delivered in 1998
increased about 2.4%, from $161.0 to $164.9. The number of contracts signed at
388 and the aggregate dollar value of those contracts at $60.9 million decreased
in the 1998 nine month period from 549 and $87.5 million, respectively, from the
same period in 1997.
Non homebuilding revenues increased to $6.4 million in the 1998 nine
month period compared to $5.5 million in the comparable period of 1997 primarily
due to $0.7 million derived from sales of recreation facility leases.
Cost of home sales decreased to $46.0 million (23.9%) in 1998 from
$60.4 million in 1997 as a result of a decrease in the number of homes
delivered. As a percentage of home sales, cost of sales decreased to 86.1% from
88.7% in the nine month period of 1997 as the result of the increase in average
selling price previously mentioned, the impact of the 1997 inventory valuation
adjustment and the execution of a strategy to better match sales pace with
construction delivery schedules.
Selling, general and administrative expenses, exclusive of an
extraordinary charge to write-off unamortized debt discount associated with the
purchase of $10.8 million in Senior Notes, decreased by $2.1 million (16.4%) to
$10.9 million in the nine month period ended September 30, 1998 compared to the
-9-
<PAGE> 11
same period in 1997. This improvement was the result of the implementation of
strategic initiatives designed to enhance operating efficiencies, which included
a workforce reduction program, the consolidation of facilities, a centralized
purchasing initiative and functional outsourcing.
EBITDA increased $2.6 million (87.9%) to $5.6 million in 1998 from $3.0
million in 1997 primarily due to the increase in operating income for the nine
months ended September 30, 1998.
In the nine months ended September 30, 1997 there was a net loss of
$23.6 million ($5.11 per share) primarily due to a non-cash pre-tax charge of
$17.1 million to write-down the value of certain land inventory and a $4.5
million charge to write-down the cost of a rental apartment project to estimated
fair market value, less cost to sell. Exclusive of this write-off, the net loss
for this period was $2.0 million ($0.44 per share). This compares to a net loss
of $0.9 million ($0.18 per share) for the comparable period ended September 30,
1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition, construction volume and the market value of
non-homebuilding land. In the past, the Company has financed its working capital
needs through funds generated by operations, the sale of investment property and
long-term borrowings.
During 1998, the Company used a portion of available cash provided by
operations to purchase $10.8 million of senior notes and decrease other
liabilities in part by accelerating payment of payables to its vendors in
consideration for discounts ranging from 2.0% to 6.0%. In July 1998, the Company
purchased land for development purposes for $1.8 million in cash.
At September 30, 1998, the Company had approximately $9.2 million in
cash and cash equivalents and the availability of substantially all of it's
$10.0 million revolving line of credit.
Oriole also has an outstanding principal balance of $12.3 million of a
purchase money mortgage at an interest rate of 7.15%, collateralized by land and
buildings. Of this balance, $0.2 million is due in 1998 and the balance is
payable by 2003.
The Company had no firm commitments for capital expenditures other than
disclosed below in subsequent events as of the balance sheet date. The Company
believes that current cash resources, cash from operations and borrowings under
its line of credit will be sufficient to meet anticipated working capital
requirements through September 30, 1999.
SUBSEQUENT EVENTS
In October 1998, the expiration date of the Company's $10.0 million
revolving line of credit was extended to June 30, 2000.
On October 15, 1998, the Company purchased land for development
purposes for $2.8 million in cash.
FORWARD LOOKING STATEMENTS
Certain statements made in this document, including certain statements
made in Management's Discussion and Analysis, contain "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
regarding the expectations of management with respect to revenues,
profitability, marketplace conditions, adequacy of funds from operations and
regulatory conditions applicable to the Company, among other things.
-10-
<PAGE> 12
Management cautions the these statements are qualified by their terms
and/or important factors, many of which are outside the control of the Company,
that could cause actual results and events to differ materially from the
statements made herein, including, but not limited to the following: changes in
consumer preferences, increases in interest rates, a reduction in labor
availability, increases in the cost of labor and materials, changes in the
regulatory environment particularly as relates to zoning and land use,
competitive pricing pressures and the general state of the economy, both
nationally and in the Company's market.
YEAR 2000
The Company has assessed, and formulated a plan to resolve, its
information technology ("IT") and non-IT system year 2000 issues. The Company
intends to either replace its software systems and applications in their
entirety or to substantially upgrade these systems and applications in the first
quarter of 1999 for reasons unrelated to year 2000 compliance. The Company had
been advised that both the new replacement systems and applications, as well as
the upgraded systems and applications will cause its IT system to be fully year
2000 compliant. The Company expects to test its systems and applications for
year 2000 compliance in conjunction with its cost of its new or upgraded
software systems and applications. The Company does not consider any other IT or
any non-IT systems of the Company to be critical to Company operations and if
non-capable for year 2000, the only effect would be inconvenience. There will be
no incremental additional cost for acquiring a software and applications system
that is year 2000 compliant and the Company does not anticipate that testing or
any other measure relating to implementing its plan for year 2000 compliance
will result in costs that would have a material impact on future earnings.
The Company has and is consulting with its subcontractors and suppliers
regarding their year 2000 readiness and has been advised that they will be year
2000 compliant in all material respects. In any event, the Company believes that
it would not be difficult to find alternative subcontractors and suppliers in
the event that one of its existing subcontractors and suppliers were unable to
satisfactorily perform as the result of failure to be year 2000 compliant.
-11-
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On May 21, 1998, the Securities and Exchange Commission (the "SEC") adopted
changes to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the
shareholder proposal rule), and related rules. Pursuant to these rule changes,
the SEC returned to its pre-1992 practice of reviewing on a case-by-case basis
whether shareholder proposals raise significant social policy issues, and
therefore are includable in an issuer's proxy statement, or whether the proposal
may be excluded as "ordinary business."
In addition, the SEC amended Rule 14a-4, which governs a company's use of its
discretionary proxy voting authority with respect to a shareholder proposal that
the shareholder has not sought to include in the proxy statement pursuant to
Rule 14a-8. New Rule 14(c)(1) sets a 45 day advance notice requirement. If a
shareholder fails to notify the company at least 45 days prior to the month and
day of mailing the prior year's proxy statement, then management will be
permitted to use their discretionary voting authority when the proposal is
raised at the company's annual meeting, without any discussion of the matter in
the proxy statement.
In the case of Oriole, the deadline for notice to Oriole for shareholder
proposals that are not sought to be included in the proxy statement with respect
to the 1999 Annual Meeting is March 15, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The September 30, 1998 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.
Exhibits and Reports on Form 8K
(a) Exhibits
Exhibit 27-Financial Data Schedule (for SEC use only)
(b) There were no reports on Form 8-K filed for the three months ended
September 30, 1998.
-12-
<PAGE> 14
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: 11/9/98 s/ R.D. Levy
-----------------------------------------
R.D. Levy,
Chairman of the Board,
Chief Executive Officer,
Director
Date: 11/9/98 s/ J. Pivinski
-----------------------------------------
J. Pivinski, Vice President - Finance,
Treasurer, Chief Financial Officer
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ORIOLE CORP. HOMES FOR THE NINE MONTH PERIOD ENDED
SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.<F1>
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 9,180,991
<SECURITIES> 0
<RECEIVABLES> 265,475
<ALLOWANCES> 0
<INVENTORY> 94,817,883
<CURRENT-ASSETS> 0
<PP&E> 25,988,647
<DEPRECIATION> 10,636,580
<TOTAL-ASSETS> 132,741,061
<CURRENT-LIABILITIES> 0
<BONDS> 67,999,433
0
0
<COMMON> 462,553
<OTHER-SE> 45,581,103
<TOTAL-LIABILITY-AND-EQUITY> 132,741,061
<SALES> 53,423,398
<TOTAL-REVENUES> 59,866,563
<CGS> 45,994,447
<TOTAL-COSTS> 48,399,642
<OTHER-EXPENSES> 11,256,876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,063,364
<INCOME-PRETAX> (853,319)
<INCOME-TAX> 0
<INCOME-CONTINUING> (853,319)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (853,319)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
<FN>
<F1>COMPANY REPORTS ON A NON-CLASSIFIED BALANCE SHEET
</FN>
</TABLE>
