SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
AMENDMENT NO. 2
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission File Number: 1-8967
ATLANTIC GULF COMMUNITIES CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 59-0720444
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2601 South Bayshore Drive
MIAMI, FLORIDA 33133-5461
- -------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (305) 859-4000
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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.
[X] Yes [ ] 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 Sections 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.
[X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.
There are 9,721,720 shares of the Registrant's Common Stock outstanding as of
May 12, 1997.
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
No.
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PART I. - FINANCIAL INFORMATION
<S> <C> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1997 and December 31,
1996 1
Consolidated Statements of Operations for the Three Months Ended
March 31, 1997 and 1996 2
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1997 and 1996 3
Notes to Consolidated Financial Statements 4
PART II. - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 6
SIGNATURES 7
</TABLE>
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996
(in thousands of dollars)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
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ASSETS (UNAUDITED)
------
<S> <C> <C>
Cash and cash equivalents $ 2,458 $ 7,050
Restricted cash and cash equivalents 6,004 6,034
Contracts receivable, net 8,773 9,649
Mortgages, notes and other receivables, net 55,170 63,800
Land and residential inventory 146,485 153,417
Property, plant and equipment, net 2,802 2,911
Other assets, net 25,153 20,532
--------- ---------
Total assets $ 246,845 $ 263,393
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable and accrued liabilities $ 9,322 $ 16,914
Customers' and other deposits 5,945 5,483
Other liabilities 13,267 15,393
Notes, mortgages and capital leases 169,145 169,215
--------- ---------
197,679 207,005
--------- ---------
Stockholders' equity
Common stock, $.10 par value; 15,665,000
shares authorized; 9,807,997 and
9,795,642 shares issued 981 980
Contributed capital 122,176 122,123
Accumulated deficit (67,982) (60,706)
Minimum pension liability adjustment (6,000) (6,000)
Treasury stock, 86,277 shares, at cost (9) (9)
--------- ---------
Total stockholders' equity 49,166 56,388
--------- ---------
Total liabilities and stockholders' equity $ 246,845 $ 263,393
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended March 31, 1997 and 1996
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
Revenues: 1997 1996
---- ----
<S> <C> <C>
Real estate sales:
Homesite $ 2,550 $ 14,598
Tract 6,664 5,745
Residential 7,070 2,870
-------- --------
Total real estate sales 16,284 23,213
Other operating revenue 593 1,133
Interest income 1,372 1,341
-------- --------
Total revenues 18,249 25,687
-------- --------
Costs and expenses:
Cost of real estate sales:
Homesite 1,988 10,919
Tract 6,155 4,703
Residential 5,316 2,175
-------- --------
Total cost of real estate sales 13,459 17,797
Selling expense 2,129 2,552
Other operating expense 330 699
Other real estate costs 2,906 4,257
General and administrative expense 2,200 3,130
Depreciation 184 249
Cost of borrowing, net of amounts capitalized 4,035 3,288
Other expense 175 207
-------- --------
Total costs and expenses 25,418 32,179
-------- --------
Loss before non-recurring and extraordinary items (7,169) (6,492)
-------- --------
Other income (expense) (non-recurring items):
Reorganization reserves 429 1,267
Utility condemnation -- 4,151
Miscellaneous (536) 669
-------- --------
Total non-recurring items (107) 6,087
-------- --------
Loss before extraordinary items (7,276) (405)
Extraordinary gain on extinguishment of debt -- 3,770
-------- --------
Net income (loss) $ (7,276) $ 3,365
======== ========
Loss before extraordinary item per common share $ (.75) $ (.04)
======== ========
Net income (loss) per common share $ (.75) $ .35
======== ========
Weighted average common shares outstanding 9,722 9,733
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996
(in thousands of dollars)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (7,276) $ 3,365
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,072 1,212
Gain from utility condemnations or sales -- (4,846)
Extraordinary gain from extinguishment of debt -- (3,770)
Other (income) expense 81 (231)
Reorganization items (175) (597)
Other net changes in assets and liabilities:
Restricted cash 30 1,787
Receivables (2,951) 13,483
Land and residential inventory 6,956 8,029
Other assets (4,999) (4,242)
Accounts payable and accrued liabilities (7,404) (4,571)
Customer deposits 462 (1,320)
Other liabilities (215) (526)
Other, net -- (11)
-------- --------
Net cash provided by (used in) operating activities (14,419) 7,762
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment, net (75) (48)
Proceeds from utility system sale -- 1,244
Funds withdrawn from utility trust accounts 12,109 --
-------- --------
Net cash provided by investing activities 12,034 1,196
-------- --------
Cash flows from financing activities:
Borrowings under credit agreements 52,857 15,935
Repayments under credit agreements (53,461) (23,935)
Principal payments on other liabilities (1,603) (2,232)
Net cash used in financing activities -------- --------
Net cash used in financing activities (2,207) (10,232)
-------- --------
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period (4,592) (1,274)
Cash and cash equivalents at end of period 7,050 3,560
-------- --------
$ 2,458 $ 2,286
======== ========
Supplemental cash flow information:
Interest payments, net of amounts capitalized
$ 2,483 $ 4,625
======== ========
Reorganization item payments
$ 1,644 $ 2,428
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1997
(unaudited)
(1) The March 31, 1997 financial statements are unaudited and subject to
year-end adjustments. In management's opinion, the interim financial
statements reflect all adjustments, principally consisting of normal
recurring accruals, necessary for a fair presentation of the financial
position and results of operations. Results for interim periods are not
necessarily indicative of results for the full year. For a complete
description of the Company's accounting policies, see "Notes to
Consolidated Financial Statements" included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996. Certain prior
year amounts have been reclassified to conform with the 1997
presentation.
(2) The net income (loss) per common share is based on the weighted average
number of shares of common stock outstanding during the periods. The
effect of any outstanding warrants and options to purchase common stock
on the per share computation was anti-dilutive or not material during
the periods.
(3) The Company capitalizes interest primarily on land inventory being
developed for sale which is subsequently charged to income when the
related asset is sold. Capitalized interest was $1,275,000 and
$1,892,000, for the three months ended March 31, 1997 and 1996,
respectively.
(4) Revenue from the sale of residential units other than Regency Island
Dunes ("Regency") condominium units is recognized when the earnings
process is complete. Revenue from the sale of Regency condominium units
is recognized using the percentage-of-completion method. Earned revenue
is based on the percentage of costs incurred to date to total estimated
costs to be incurred. This percentage is then applied to the expected
revenue associated with units that have been sold to date. Revenue from
the sale of land is recognized when the cash received, as a percentage
of the sales price, is at least 20% for land sales other than retail
land sales and 10% for retail land sales, the earnings process is
complete and the collection of any remaining receivable is reasonably
assured.
(5) The Company has made an estimate of Available Cash, as defined in the
Company's loan agreements, at June 30, 1997, and has determined, based
on this estimate, that the Company will not have any Available Cash
requiring it to make any portion of the interest payments on the Cash
Flow Notes for the six-month period commencing January 1, 1997 and
ending June 30, 1997. In addition, the Company did not have any
Available Cash requiring it to make any interest payments for the
twelve month period ended December 31, 1996. Interest on the Cash Flow
Notes is noncumulative. Therefore, the Company has not recorded
interest expense associated with the Cash Flow Notes during the three
months ended March 31, 1997 and 1996. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations Liquidity and
Capital Resources."
4
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1997
(unaudited)
(6) In January 1997, pursuant to the Company's 1996 Non-Employee Directors'
Stock Plan, the Company issued 12,355 shares of Atlantic Gulf's common
stock to the Non-Employee Directors at a price of $4.3125 per share for
the first quarter of 1997.
(7) The Company and AP-AGC, LLC ("Apollo") entered into an Amended and
Restated Investment Agreement dated as of February 7, 1997, amended as
of March 20, 1997, and amended and restated as of May 12, 1997. The
Company, certain of its subsidiaries, and Apollo entered into a Secured
Note Agreement dated as of February 7, 1997, and amended and restated
as of May 12, 1997. Apollo, a Delaware limited liability company, is an
affiliate of Apollo Real Estate Investment Fund II, L.P. ("Apollo Fund
II"), a private real estate investment fund, the general partner of
which is Apollo Real Estate Advisors II, L.P., a New York-based
investment fund.
5
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits required by Item 601 of Regulation S-K
*(10.1) Utility Lot Trust Agreement, dated as of December 26,
1996, between Atlantic Gulf Communities Corporation and
the Division of Florida Land Sales, Condominiums, and
Mobile Homes, and Peninsula State Title, as Trustee.
*(10.2) Restated, Amended and Consolidated Trust Agreement,
dated as of December 26, 1996, amended as of December
30, 1996, between the State of Florida, Department of
Business Regulation, Division of Florida Land Sales,
Condominiums, and Mobile Homes, Atlantic Gulf
Communities Corporation and First Union National Bank of
Florida, as Trustee.
*(10.3) First Amendment to the Restated, Amended and
Consolidated Trust Agreement dated as of December 26,
1996, amended as of December 30, 1996.
(27) Financial Data Schedule.
- --------------------
* previously filed
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on February 13, 1997, pursuant
to Item 5, Other Events, reporting that the Company entered into an Investment
Agreement dated as of February 7, 1997 with Apollo.
6
<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.
ATLANTIC GULF COMMUNITIES CORPORATION
Date: October 16, 1997 /s/ THOMAS W. JEFFREY
-------------------------------
Thomas W. Jeffrey
Executive Vice President
and Chief Financial Officer
Date: October 16, 1997 /s/ CALLIS N. CARLETON
-------------------------------
Callis N. Carleton
Vice President and Controller
(Principal Accounting Officer)
7
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
*(10.1) Utility Lot Trust Agreement, dated as of December 26,
1996, between Atlantic Gulf Communities Corporation and
the Division of Florida Land Sales, Condominiums, and
Mobile Homes, and Peninsula State Title, as Trustee.
*(10.2) Restated, Amended and Consolidated Trust Agreement,
dated as of December 26, 1996, amended as of December
30, 1996, between the State of Florida, Department of
Business Regulation, Division of Florida Land Sales,
Condominiums, and Mobile Homes, Atlantic Gulf
Communities Corporation and First Union National Bank of
Florida, as Trustee.
*(10.3) First Amendment to the Restated, Amended and
Consolidated Trust Agreement dated as of December 26,
1996, amended as of December 30, 1996.
(27) Financial Data Schedule.
- --------------------
* previously filed
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on February 13, 1997, pursuant
to Item 5, Other Events, reporting that the Company entered into an Investment
Agreement dated as of February 7, 1997 with Apollo.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AT MARCH 31,
1997 (UNAUDITED) AND THE CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000771934
<NAME> Gulf Atlantic Communities Corporation
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,462
<SECURITIES> 0
<RECEIVABLES> 63,943 <F1>
<ALLOWANCES> 0
<INVENTORY> 146,485
<CURRENT-ASSETS> 0 <F2>
<PP&E> 2,802 <F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 246,845
<CURRENT-LIABILITIES> 0 <F2>
<BONDS> 169,145
0
0
<COMMON> 981
<OTHER-SE> 48,185
<TOTAL-LIABILITY-AND-EQUITY> 246,845
<SALES> 16,284
<TOTAL-REVENUES> 18,249
<CGS> 13,459
<TOTAL-COSTS> 15,918
<OTHER-EXPENSES> 6,001
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,035
<INCOME-PRETAX> (7,276)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,276)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,276)
<EPS-PRIMARY> (.75)
<EPS-DILUTED> (.75)
<FN>
<F1> The values for Receivables and PP&E Represent Net Amounts.
<F2> The Company does not prepare a Classified Balance Sheet. Therefore, Current
Assets and Current Liabilities are not applicable.
</FN>
</TABLE>
