================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 0-13800
INTERNATIONAL AMERICAN HOMES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2472608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9950 Princess Palm Ave., Suite 112, Tampa, FL 33619
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 664-1100
NOT APPLICABLE
(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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [X] No [ ]
As of July 31, 1998, the number of shares outstanding of the registrant's common
stock, par value $.01, was 2,780,895.
================================================================================
Total number of pages: 17
PAGE 1
<PAGE>
INTERNATIONAL AMERICAN HOMES, INC.
AND SUBSIDIARIES
Index
-----
Page
----
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited) as of June 30,
1998 and March 31, 1998......................................3
Consolidated Statements of Income and Retained Earnings
(Unaudited) for the three months ended June 30, 1998
and 1997.....................................................5
Consolidated Statements of Cash Flows (Unaudited) for the
three months ended June 30, 1998 and 1997....................6
Notes to Consolidated Financial Statements (Unaudited).......7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.........................11
Item 3. Quantitative and Qualitative Disclosures About Market Risk..16
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K............................16
Signatures ...................................................................17
PAGE 2
<PAGE>
Part I. Financial Information:
ITEM 1
------
FINANCIAL STATEMENTS
INTERNATIONAL AMERICAN HOMES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
ASSETS
June 30, 1998 March 31, 1998
----------------- ------------------
CASH AND CASH EQUIVALENTS $ 254 $ 1,461
($51 and $290 restricted)
RECEIVABLES 2,674 532
REAL ESTATE INVENTORY 17,317 20,964
COLLATERAL FOR BONDS PAYABLE 4,249 4,500
PROPERTY AND EQUIPMENT - less
accumulated depreciation of $570
and $544, respectively 62 88
OTHER ASSETS 501 638
----------------- ------------------
TOTAL ASSETS $ 25,057 $ 28,183
================= ==================
The accompanying notes are an integral part of these consolidated balance
sheets.
PAGE 3
<PAGE>
INTERNATIONAL AMERICAN HOMES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, 1998 March 31, 1998
----------------- ------------------
LIABILITIES
MORTAGE NOTES AND LOANS PAYABLE $ 8,653 $ 11,246
BONDS PAYABLE 4,098 4,341
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 4,045 5,968
CUSTOMER DEPOSITS 136 194
----------------- ------------------
Total Liabilities 16,932 21,749
----------------- ------------------
STOCKHOLDERS' EQUITY
PREFERRED STOCK - $.01 par value; 4,000,000
shares authorized; none issued or
outstanding - -
COMMON STOCK - $.01 par value; 10,000,000
shares authorized; 2,960,843 shares
issued; 2,780,895 and 2,790,895
shares outstanding, respectively 30 30
ADDITIONAL PAID-IN CAPITAL 2,366 2,381
RETAINED EARNINGS 5,731 4,025
TREASURY STOCK - 179,948 and 169,948
shares, respectively (2) (2)
----------------- ------------------
Total Stockholders' Equity 8,125 6,434
----------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 25,057 $ 28,183
================= ==================
The accompanying notes are an integral part of these consolidated balance
sheets.
PAGE 4
<PAGE>
INTERNATIONAL AMERICAN HOMES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended June 30,
----------------------------------
1998 1997
-------------- --------------
REVENUES
Home sales $ 14,551 $ 16,198
Interest and other income 75 148
-------------- --------------
14,626 16,346
-------------- --------------
COSTS AND EXPENSES
Cost of home sales 12,276 14,196
Selling, general and administrative 1,589 1,723
Interest 83 140
Depreciation 24 38
Reversal of creditor liability (1,322) 0
-------------- --------------
12,650 16,097
-------------- --------------
INCOME BEFORE INCOME TAXES 1,976 249
PROVISION FOR INCOME TAXES 270 106
-------------- --------------
NET INCOME 1,706 143
RETAINED EARNINGS, BEGINNING OF PERIOD 4,025 4,729
-------------- --------------
RETAINED EARNINGS, END OF PERIOD $ 5,731 $ 4,872
============== ==============
PER SHARE DATA (Basic and Fully Diluted)
Net income $ .61 $ .05
============== ==============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and fully diluted 2,780,895 2,784,395
============== ==============
The accompanying notes are an integral part of these consolidated statements.
PAGE 5
<PAGE>
INTERNATIONAL AMERICAN HOMES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three Months Ended June 30,
----------------------------------
1998 1997
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,706 $ 143
Adjustments to reconcile net income to
net cash provided by operating activities:
Reversal of creditor liability (1,322) -
Depreciation 24 38
Changes in operating assets and liabilities
Increase in receivables (2,142) (1,095)
Decrease (Increase) in real estate inventory 3,647 (205)
Decrease in collateral for bonds payable 251 155
(Decrease) Increase in accounts payable and
accrued liabilities (601) 404
(Decrease) Increase in customer deposits (58) 24
Decrease in other assets 137 40
-------------- --------------
Net cash provided (used) by operating
activities 1,642 (496)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (Increase) in restricted cash 239 (25)
Property and equipment, net 2 (3)
-------------- --------------
Net cash provided by (used in) investing
activities 241 (28)
-------------- --------------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from mortgage notes and loans payable 2,671 8,485
Payments of mortgage notes and loans payable (5,264) (9,354)
Repayments of bonds payable - finance
subsidiaries (243) (153)
Purchase of treasury stock (15) -
-------------- --------------
Net cash used in financing activities (2,851) (1,022)
-------------- --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (968) (1,546)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 1,171 1,613
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 203 $ 67
============== ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 332 $ 494
============== ==============
Income taxes $ 0 $ 138
============== ==============
The accompanying notes are an integral part of these consolidated statements.
PAGE 6
<PAGE>
INTERNATIONAL AMERICAN HOMES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
International American Homes, Inc. (the "Company") was incorporated under the
laws of the State of Delaware on April 27, 1983. The Company, through its
subsidiary, designs, builds, and sells single-family homes and villas and
develops finished building lots, primarily in middle income communities in
suburban residential areas in Greater Tampa, Florida.
During the fiscal year ended March 31, 1998, and in prior years, the Company
also conducted home building activities in Metropolitan Washington, D.C.. Such
activities have been terminated and a plan for the orderly withdrawal from that
market was adopted. During the quarter ended December 31, 1997, the sale of new
homes was discontinued. Homes for which the Company had entered into
non-contingent contracts are being completed and model homes and excess lot
inventory have been sold. It is anticipated that all activities will be
completed by the quarter ending September 30, 1998.
The interim consolidated financial statements have been prepared without audit
and pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, all adjustments for interim periods
presented have been made (which include only normal recurring accruals and
deferrals) for a fair presentation of consolidated financial position, results
of operations, and cash flows. The consolidated financial statements and
condensed notes should be read in conjunction with the Consolidated Financial
Statements and Notes thereto included in the Company's latest Annual Report on
Form 10-K. Results for interim periods are not necessarily indicative of the
results which might be expected for a full year.
The interim Consolidated Financial Statements for the quarter ended June 30,
1998 are not comparable with any prior period because of the restructuring of
operations (i.e. exiting from the Washington, D.C. market).
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ('SFAS") No. 130, "Reporting Comprehensive
Income," which is effective for fiscal years beginning after December 31, 1997.
The statement established standards for reporting and display of comprehensive
income and its components. The Company plans to adopt SFAS No. 130 in the fiscal
year that began April 1, 1998 and does not expect that it will have an impact on
its financial statements.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information," which is
effective for fiscal years beginning after December 15, 1997. The Company plans
to adopt SFAS No. 131 in the fiscal year that began April 1, 1998 and has not
determined the impact of adoption.
NOTE 2 - CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, the Company generally considers
all highly liquid instruments purchased with an original maturity of three
months or less to be cash equivalents.
PAGE 7
<PAGE>
NOTE 3 - PLAN OF REORGANIZATION
On April 16, 1990, the Company and certain of its wholly-owned subsidiaries
filed voluntary petitions for relief under Chapter 11, Title 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the District of
New Jersey (the "Bankruptcy Court"). On August 12, 1992, the Bankruptcy Court
entered an order confirming the Company's Plan of Reorganization (the "Plan" or
"Plan of Reorganization").
The Plan provided for distributions to creditors equal to 50 percent of future
cash flows (as defined in the Plan), if any, for the periods ending June 30,
1993 through June 30, 1998. The plan also requires that before the Company can
pay any dividends to stockholders that it must first pay to the certain holders
of creditors claims $1,250,000. The plan also contained other restrictive
covenants regulating various aspects of the Company's operations. With the
exception of the dividend restriction which continues, all other restrictive
covenants expire on August 12, 1998.
During the year ended March 31, 1993 the Company provided an estimated liability
for potential distributions of cash flow to creditors of $1,322,000. The Company
has calculated the cash flow (as defined in the plan) for the cumulative six
year period ended June 30, 1998 and has determined that there was no cash flow
(as defined in the plan) for that period. Accordingly, no distribution to
creditors was required. At June 30, 1998, the Company reversed the estimated
liability and recognized income of $1,322,000.
NOTE 4 - PROVISION FOR RESTRUCTURING
The Consolidated Financial Statements for the year ended March 31, 1998 included
a restructuring charge of $1,840,000 ($1,214,000 after benefit for federal
income tax) associated with the termination of home-building operations in
Metropolitan Washington, D.C.. The restructuring has resulted in cumulative
charges of $1,593,000 through the quarter ended June 30, 1998. It is anticipated
that all activities will be substantially completed by the quarter ending
September 30, 1998. However, administrative and construction services are
expected to be incurred beyond that date. Although the Company believes that the
remaining restructuring reserve is sufficient based on current period estimates,
the actual cost of restructuring may be greater or less. The Company also
believes that it has sufficient cash flow and cash on hand to absorb the
remaining costs associated with the restructuring.
NOTE 5 - REAL ESTATE INVENTORY
Real estate inventory consists of the following (in thousands):
June 30, 1998 March 31, 1998
------------- --------------
Accumulated costs of construction completed
and in progress $ 8,008 $ 10,286
Land and land development costs 9,065 10,510
Land options and deposits 244 168
------------- --------------
$ 17,317 $ 20,964
============= ==============
From time to time as part of the normal operations of the business, the
subsidiaries of the Company have bought lots or land which the other subsidiary
of the Company was obligated to buy from a third party seller or which the other
subsidiary of the Company owned. Such transactions were at prices approximating
fair market value and were not material to the financial statements taken as a
whole.
PAGE 8
<PAGE>
NOTE 6 - CONDENSED FINANCIAL STATEMENTS OF CONSOLIDATED FINANCE SUBSIDIARIES
The Company's wholly-owned finance subsidiaries were established to sell
collateralized mortgage obligations through participation in various
multi-builder bond programs. In these sales, which last occurred in 1987, the
Company originated and pooled mortgage loans which were then pledged as
collateral for bonds payable. The interest rates on the mortgage loans that
comprise the collateral for bonds payable roughly equate with the interest rates
on the related bonds payable.
Condensed financial information is as follows (in thousands):
Condensed Balance Sheets
(Unaudited)
June 30, 1998 March 31, 1998
------------- --------------
Assets:
Collateral for bonds payable $ 4,249 $ 4,500
Other assets 9 6
------------- --------------
$ 4,258 $ 4,506
============= ==============
Liabilities and Equity:
Bonds payable $ 4,098 $ 4,341
Equity and intercompany advances 160 165
------------- --------------
$ 4,258 $ 4,506
============= ==============
Condensed Statements of Operations
(Unaudited)
Three Months Ended June 30,
--------------------------------
1998 1997
------------- --------------
Revenues - Interest and other income $ 86 $ 113
============= ==============
Income before income taxes $ 3 $ 3
============= ==============
PAGE 9
<PAGE>
NOTE 7 - COMMITMENTS AND CONTINGENCIES
The interim Consolidated Financial Statements for the quarter ended June 30,
1998 reflect a liability of $247,000 representing the remaining balance of the
restructuring provision associated with the termination of home-building
operations in Metropolitan Washington, D.C. (See note 4). Although the Company
believes that the remaining provision is sufficient based on current period
estimates, the actual cost may be greater or less than the remaining provision.
At June 30, 1998, the Company had commitments to purchase 249 finished building
lots at a total purchase price of approximately $6,014,000 over a two-year
period. Substantial deposits will be forfeited if the Company is unable to
satisfy these commitments. See Management Discussion and Analysis of Financial
Condition and Results of Operations- Liquidity and Capital Resources.
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 financial position or the results of operations.
PAGE 10
<PAGE>
ITEM 2
------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with, and is qualified in
its entirety by, the Consolidated Financial Statements and the notes thereto and
other financial information included elsewhere in this Quarterly Report on Form
10-Q. Certain statements in the Notes to Consolidated Financial Statements and
in this "Management's Discussion and Analysis of Financial Condition and Results
of Operations" are forward-looking statements. Such statements are subject to
and dependent upon a number of risks and uncertainties as discussed therein
and/or herein and in the Company's prior reports filed with the Securities and
Exchange Commission, which statements, individually or collectively, could cause
actual results to differ materially.
During the past several years a competitive housing market in Metropolitan
Washington, D.C., especially in the areas in which the Company conducted home
building operations, resulted in continued operating losses in the Company's
Metropolitan Washington, D.C. subsidiary. Management changes were made and
administrative costs were reduced in order to minimize the loss. In addition,
several communities in which operations had been performing poorly were
abandoned. Notwithstanding those changes, lower operating margins and higher
selling expenses continued to adversely affect the Company's ability to restore
profitability. Accordingly during the quarter ended December 31, 1997, the Board
of Directors of the Company approved management's plan to discontinue the
building and sale of homes and effect an orderly withdrawal from the
Metropolitan Washington, D.C. housing market. It is anticipated that the
restructuring will be substantially completed by the quarter ending September
30, 1998 (see note 4).
LIQUIDITY AND CAPITAL RESOURCES
The interim Consolidated Financial Statements for the quarter ended June 30,
1998 contain a liability of $247,000 representing the remaining balance of the
restructuring provision associated with the termination of home-building
operations in Metropolitan Washington, D.C. (see note 4). The actual cost may be
greater or less than the remaining provision. The Company believes that it has
sufficient cash flow on hand to absorb the remaining costs associated with the
restructuring.
The Company, through its subsidiaries, obtains financing from commercial banks
for a portion of the cost of acquiring finished building lots and for most of
the costs of the construction of homes. This financing is generally available
for homes that are subject to a contract of sale and also for a limited number
of homes in advance of sale. The Company's loan commitments as well as current
banking regulations limit the portion of each home that can be financed to
approximately 75% of its value. Since the Company uses its own capital resources
to fund those costs that cannot be financed, the Company's future growth will be
limited by the amount of such resources. As a result of the use of these
financing arrangements, the Company is currently, and expects to continue to be,
highly leveraged.
The Company's subsidiaries currently have financing agreements in the aggregate
amount of $24,294,000 with commercial banks located in the areas in which the
subsidiaries operate. The terms of these financing agreements vary, are each for
one year or more from their date of origination (with expiration dates ranging
from September, 1998 to September, 1999), are generally guaranteed by the
Company, and are all secured by the related real estate inventory. The Company's
Chairman and President has agreed to personally guarantee certain of these
obligations up to an aggregate maximum amount of $13,700,000. At June 30, 1998,
the outstanding principal amount of loans guaranteed by the Company's Chairman
and President was $3,251,000.
PAGE 11
<PAGE>
The Company generally acquires finished building lots under contracts which
spread the time for acquisition of such lots over a period of time that roughly
coincides with the estimated time required for the sale of the homes on those
lots. At June 30, 1998, the Company had commitments to purchase 249 finished
building lots at a total purchase price of approximately $6,014,000 over a
two-year period. These commitments assure a continuing supply of finished
building lots in the future. In conjunction therewith $244,000 of land options
and deposits have been paid. A substantial portion of those deposits will be
forfeited if the Company is unable to satisfy these commitments.
During the year ended March 31, 1996, the Company purchased a parcel of land in
Greater Tampa, Florida containing approximately 360 lots of which 300 were
undeveloped. At June 30, 1998, the Company had developed 150 of those
undeveloped lots into finished building lots and delivered 99 homes on those
lots in prior periods up to and including June 30, 1998. The Company obtained
financing from a commercial bank to fund a portion of the cost of acquiring and
developing the land.
The Company's short-term liquidity and its ability to operate over the short
term are reasonably assured by the financing agreements in place, by the
Company's backlog of sales contracts, and by the commitments to acquire finished
building lots. The Company's long-term liquidity is not affected by any material
capital expenditures but would be impacted by the inability to renew certain of
the financing agreements when they mature. The strength of the housing markets
in the areas where the Company operates and the ability of the Company to
maintain a continued supply of finished building lots will also affect the
Company's long-term liquidity. Management believes that the Company currently
has adequate financing and liquidity to meet its short-term financial
obligations and to fund the short-term acquisition and construction of
inventory. However, there is no assurance that such financing will be available
to the Company in the future. In addition, homebuilding is a cyclical industry
with economic conditions having a substantial impact on operating performance.
PAGE 12
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth certain information with respect to homes
delivered and homes sold during the periods presented, as well as homes sold
under contract but not delivered ("Backlog") at the dates shown (dollars in
thousands). For comparative purposes, 1997 information has been restated to
eliminate the results from restructured operations (i.e. the exiting from the
Washington, D.C. market).
Three Months Ended
June 30,
-----------------------------------------------
1998 1997
------------------- -------------------
Homes delivered
Units 109 80
Home sales revenue $14,551 $10,490
Average sales price $133.5 $131.1
Homes sold
Units 94 87
Sales value $13,137 $11,748
Average sales price $139.8 $135.0
June 30,
-----------------------------------------------
1998 1997
------------------- -------------------
Backlog
Units 92 89
Sales value $13,301 $11,662
Average sales price $144.6 $131.0
The increase in home sales revenues for the three months ended June 30, 1998
compared to the three months ended June 30, 1997 result from a combination of an
increase in the number of units delivered and an increase in the average sales
price of the units delivered. The increase in the number of units delivered
results generally from a greater number of operating communities. The increase
in the average sales price results from a wider product range and price
increases.
The Company realized an increase in the number of homes sold during the three
months ended June 30, 1998 compared to the three months ended June 30, 1997. The
increase is attributable to an increase in the number of communities in which
the company builds and a greater number of sales in each community.
The increase in the average sales price of homes sold during the three months
ended June 30, 1998 compared to the three months ended June 30, 1997 results
from a wider product range and price increases.
PAGE 13
<PAGE>
THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997
The following table sets forth, for the periods indicated, certain information
regarding the Company's operations (dollars in thousands).
Operations for the three months ended June 30, 1998 are not comparable to the
three months ended June 30, 1997 because of the restructuring of operations
(i.e. the exiting from the Washington, D.C. market).
Three Months Ended June 30,
----------------------------------------------
1998 1997
---------------- -----------------
Dollars % Dollars %
------- ------- ------- -------
Home sales revenues $14,551 100.0 $16,198 100.0
Cost of home sales 12,276 84.4 14,196 87.6
Gross profit 2,275 15.6 2,002 12.4
Selling, general and
administrative expenses 1,589 10.9 1,723 10.6
Income before income taxes and
reversal of creditor liability 654 4.5 249 1.5
Reversal of creditor liability 1,322 9.1 - -
Income before income taxes 1,976 13.6 249 1.5
THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1997
The following table sets forth, for the periods indicated, certain information
regarding the Company's remaining Florida operations (dollars in thousands).
Three Months Ended June 30,
----------------------------------------------
1998 1997
---------------- -----------------
Dollars % Dollars %
------- ------- ------- -------
Home sales revenues $14,551 100.0 $10,490 100.0
Cost of home sales 12,276 84.4 8,908 84.9
Gross profit 2,275 15.6 1,582 15.1
Selling, general and
administrative expenses 1,589 10.9 1,155 11.0
Income before income taxes 654 4.5 388 3.7
Gross profit increased in amount and as a percentage of home sales revenues over
the prior comparable period. The increase in gross profit is attributed
primarily to higher home sales revenues and a slight decrease in cost of home
sales as a percentage of home sales revenues.
PAGE 14
<PAGE>
Selling, general and administrative expenses for the three months ended June 30,
1998 increased in amount but remained relatively constant as a percentage of
home sales revenues over the prior comparable period. The increase in selling
expenses is primarily attributed to the higher home sales revenues. The increase
in general and administrative expenses is attributed to the full absorption of
all corporate charges which in the past had been allocated to both of the
Company's Subsidiaries (see note 4, " provision for restructuring") and higher
employment costs.
The change in income before income taxes and reversal of creditor liability for
the three months ended June 30, 1998 compared to the three months ended June 30,
1997 reflects the change in gross profit and selling, general and administrative
expenses.
The reversal of the creditor liability results from the elimination of the
estimated liability for potential distributions of cash flow to creditors
provided during the year ended March 31, 1993 (see note 3, "plan of
reorganization").
The change in income before income taxes for the three months ended June 30,
1998 compared to the three months ended June 30, 1997 reflects the changes in
all the components of income and expense set forth above.
For the three months ended June 30, 1998 and June 30, 1997 a provision for
income taxes of $270,000 and $106,000 was recorded. For both periods the rates
were calculated at statutory rates.
Interest and other income includes $86,000 and $113,000 and interest expense
includes $83,000 and $110,000 for the three months ended June 30, 1998 and June
30, 1997, respectively, from wholly-owned finance subsidiaries established in
prior years to sell collateralized mortgage obligations through participation in
various multi-builder bond programs.
PAGE 15
<PAGE>
ITEM 3
------
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None
ITEM 6
------
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
PAGE 16
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
INTERNATIONAL AMERICAN HOMES, INC.
Date: August 11, 1998 By: /s/ Robert J. Suarez
------------------------
Robert J. Suarez
President
Date: August 11, 1998 By: /s/ Robert I. Antle
-----------------------
Robert I. Antle
Executive Vice President, Treasurer, and
Chief Financial Officer
PAGE 17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 254
<SECURITIES> 0
<RECEIVABLES> 2674
<ALLOWANCES> 0
<INVENTORY> 17317
<CURRENT-ASSETS> 0<F1>
<PP&E> 632
<DEPRECIATION> 570
<TOTAL-ASSETS> 25057
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 12751
0
0
<COMMON> 30
<OTHER-SE> 8095
<TOTAL-LIABILITY-AND-EQUITY> 25057
<SALES> 14551
<TOTAL-REVENUES> 14626
<CGS> 12276
<TOTAL-COSTS> 12650
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1976
<INCOME-TAX> 270
<INCOME-CONTINUING> 1706
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1706
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
<FN>
<F1>The Company does not present a classified balance sheet
</FN>
</TABLE>
