SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q/A
AMENDMENT NO. 4
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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
--------------
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 11,509,077 shares of the Registrant's Common Stock outstanding as of
August 12, 1997.
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
NO.
----
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1997 and
December 31, 1996 ................................... 1
Consolidated Statements of Operations for the Three
and Six Months Ended June 30, 1997 and 1996 ......... 2
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1997 and 1996 ................. 3
Notes to Consolidated Financial Statements .......... 4
PART II. - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .................... 7
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1997 and December 31, 1996
(in thousands of dollars)
June 30, December 31,
1997 1996
--------- -----------
ASSETS (unaudited)
------
Cash and cash equivalents $ 4,461 $ 7,050
Restricted cash and cash equivalents 3,971 6,034
Contracts receivable, net 7,979 9,649
Mortgages, notes and other receivables, net 48,018 63,800
Land and residential inventory 140,066 153,417
Property, plant and equipment, net 2,730 2,911
Other assets, net 25,704 20,532
--------- ---------
Total assets $ 232,929 $ 263,393
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable and accrued liabilities $ 11,408 $ 16,914
Customers' and other deposits 4,369 5,483
Other liabilities 12,378 15,393
Notes, mortgages and capital leases 137,140 169,215
--------- ---------
165,295 207,005
--------- ---------
Cumulative Redeemable Convertible Preferred Stock
Series A preferred stock 7,796 --
Series B preferred stock 9,055 --
--------- ---------
16,851 --
--------- ---------
Stockholders' equity
Common stock, $.10 par value; 70,000,000
and 15,665,000 shares authorized;
11,595,354 and 9,795,642 shares issued 1,160 980
Contributed capital 132,284 122,123
Accumulated deficit (76,652) (60,706)
Minimum pension liability adjustment (6,000) (6,000)
Treasury stock, 86,277 shares, at cost (9) (9)
--------- ---------
Total stockholders' equity 50,783 56,388
--------- ---------
Total liabilities and stockholders' equity $ 232,929 $ 263,393
========= =========
See accompanying notes to consolidated financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Six Months Ended June 30, 1997 and 1996
(in thousands, except per share data)
(unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- -------------------
Revenues: 1997 1996 1997 1996
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Real estate sales:
Homesite $ 9,532 $ 9,627 $ 12,082 $24,225
Tract 6,042 30,204 12,706 35,949
Residential 2,201 6,451 9,271 9,321
-------- ------- -------- -------
Total real estate sales 17,775 46,282 34,059 69,495
Other operating revenue 852 1,149 1,445 2,282
Interest income 1,745 1,789 3,117 3,130
-------- ------- -------- -------
Total revenues 20,372 49,220 38,621 74,907
-------- ------- -------- -------
Costs and expenses:
Cost of real estate sales:
Homesite 9,268 7,494 11,256 18,413
Tract 5,538 24,906 11,693 29,609
Residential 3,082 4,896 8,398 7,071
-------- ------- -------- -------
Total cost of real estate sales 17,888 37,296 31,347 55,093
Selling expense 1,889 3,272 4,018 5,824
Other operating expense 298 558 628 1,257
Other real estate costs 2,896 4,435 5,802 8,692
General and administrative expense 2,456 2,256 4,656 5,386
Depreciation 169 223 353 472
Cost of borrowing, net of amounts capitalized 4,699 3,098 8,734 6,386
Other expense 287 95 462 302
-------- ------- -------- -------
Total costs and expenses 30,582 51,233 56,000 83,412
-------- ------- -------- -------
Loss before non-recurring and extraordinary items (10,210) (2,013) (17,379) (8,505)
-------- ------- -------- -------
Other income (expense) (non-recurring items):
Reorganization reserves 1,365 -- 1,794 1,267
Utility condemnation -- -- -- 4,151
Miscellaneous 175 2,509 (361) 3,178
-------- ------- -------- -------
Total non-recurring items 1,540 2,509 1,433 8,596
-------- ------- -------- -------
Income (loss) before extraordinary item (8,670) 496 (15,946) 91
Extraordinary gain on extinguishment of debt -- -- -- 3,770
-------- ------- -------- -------
Net income (loss) $ (8,670) $ 496 $(15,946) $ 3,861
======== ======= ======== =======
Net income (loss) before extraordinary item
per common share $ (.88) $ .05 $ (1.63) $ .01
======== ======= ======== =======
Net income (loss) per common share $ (.88) $ .05 $ (1.63) $ .40
======== ======= ======== =======
Weighted average common shares outstanding 9,863 9,699 9,793 9,716
======== ======= ======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1997 and 1996
(in thousands of dollars)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(15,946) $ 3,861
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 2,998 2,605
Gain from utility condemnations or sales -- (5,684)
Extraordinary gain from extinguishment of debt -- (3,770)
Other income (1,337) (1,881)
Reorganization items 179 (882)
Land acquisitions (5,572) (7,903)
Other net changes in assets and liabilities:
Restricted cash 2,063 2,738
Receivables 4,798 10,002
Land and residential inventory 19,197 37,295
Other assets (8,668) (6,462)
Accounts payable and accrued liabilities (5,252) (4,867)
Customer deposits (1,114) (1,638)
Other liabilities (483) (1,060)
Other, net -- (261)
-------- --------
Net cash provided by (used in) operating activities (9,137) 22,093
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment, net (172) (167)
Proceeds from sale of property, plant and equipment, net -- 773
Proceeds from utility condemnations or sales -- 25,690
Funds withdrawn from utility trust accounts 12,109 --
-------- --------
Net cash provided by investing activities 11,937 26,296
-------- --------
Cash flows from financing activities:
Borrowings under credit agreements 66,699 25,448
Repayments under credit agreements (99,745) (66,081)
Principal payments on other liabilities (1,218) (2,380)
Proceeds from issuance of common stock 10,000 --
Proceeds from issuance of preferred stock 18,875 --
-------- --------
Net cash used in financing activities (5,389) (43,013)
-------- --------
Increase (decrease) in cash and cash equivalents (2,589) 5,376
Cash and cash equivalents at beginning of period 7,050 3,560
-------- --------
Cash and cash equivalents at end of period $ 4,461 $ 8,936
======== ========
Supplemental cash flow information:
Interest payments, net of amounts capitalized $ 4,951 $ 3,827
======== ========
Reorganization item payments $ 900 $ 2,861
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1997
(unaudited)
(1) The June 30, 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 ("1996 Annual
Report"). 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 $1,447,000 and
$2,722,000 for the three and six-month periods ended June 30, 1997,
respectively, and $1,369,000 and $3,261,000 for the three and six-month
periods ended June 30, 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) Due to the necessity to establish reserves against future mandatory
debt, and capital and operating expenditures, the Company did not have
Available Cash, as defined in the Company's loan agreements, at June
30, 1997, to enable it to make any 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
enabling it to make any interest payments for the year 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 six months ended June 30, 1997 and 1996. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
(6) 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 and 11,158 shares at a price of $5.50 per share for the
second quarter of 1997.
4
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1997
(unaudited)
(7) The Company and AP-AGC, LLC a Delaware limited liability company
("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 15, 1997 (the "Investment Agreement"). In
addition, the Company, certain of its subsidiaries and Apollo entered
into a Secured Agreement dated as of February 7, 1997, and amended and
restated as of May 15, 1997 (the "Secured Agreement" and, together with
the Investment Agreement, the "Agreements"). Apollo 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.
Pursuant to the Agreements, Apollo agreed to purchase from the Company
up to 2,500,000 shares of 20% Series A Cumulative Redeemable
Convertible Preferred Stock (the "Series A Preferred Stock") at a per
share price of $9.88, and 5,000,000 warrants to purchase up to
5,000,000 shares of Common Stock (the "Investor Warrants"), at a per
warrant price of $.06, for an aggregate purchase price of up to $25
million (the "Apollo Transaction"). See Part II. Item 2. CHANGES IN
SECURITIES.
On June 24, 1997, pursuant to the Agreements, Apollo purchased 553,475
shares of Series A Preferred Stock and Investor Warrants to purchase an
additional 1,106,950 shares of Common Stock, for an aggregate purchase
price of $5,534,752.
Also on June 24, 1997, the Company and certain purchasers (the "Private
Purchasers") consummated a private placement pursuant to which the
Private Purchasers purchased for an aggregate price of $20 million; (a)
1,776,199 shares of Common Stock for $10 million, and (b) 1,000,000
shares of 20% Series B Cumulative Redeemable Convertible Preferred
Stock (the "Series B Preferred Stock"), at a per share price of $9.88,
and 2,000,000 Series B Warrants to purchase 2,000,000 shares of Common
Stock at a per warrant price of $.06 for an aggregate purchase price of
$10 million. The Series B Preferred Stock balance at June 30, 1997 is
the total aggregate purchase price of $10 million net of corresponding
Series B Warrants purchased - $0.120 million and net of Series B
issuance costs - $0.825 million for a net Series B Preferred Stock
balance of $9.055 million.
The Series A Preferred Stock, Investor Warrants, Series B Preferred
Stock and Series B Warrants are convertible or exercisable into Common
Stock, at $5.75 per share, subject to certain adjustments.
Of the total proceeds of approximately $25.5 million from the
above-mentioned transactions, $13.3 million were used to reduce the
amount outstanding under the Term Loan and $7.9 million were used to
reduce the amount outstanding under the Reducing Revolving Loan.
On June 30, 1997, pursuant to the Agreements, Apollo purchased, for an
aggregate purchase price of $3,340,000, an additional 334,000 shares of
Series A Preferred Stock and Investor Warrants to purchase an
additional 668,000 shares of Common Stock. The Company used
approximately $3.0 million of these proceeds plus an acquisition loan
of $2.6 million to acquire a 2.9-acre parcel in the
5
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1997
(unaudited)
downtown business district of Fort Lauderdale, Florida upon which the
Company plans to construct a high-rise luxury apartment complex to be
called Las Olas Tower.
The Series A Preferred Stock balance at June 30, 1997 is the total
aggregate purchase price of Series A Preferred Stock issued to Apollo
as of that date - $8.875 million, net of corresponding Investor
Warrants purchased - $.106 million and net of Series A issuance costs -
$.973 million for a net Series A Preferred Stock balance of $7.796
million.
On July 31, 1997, pursuant to the Agreements, Apollo purchased, for an
aggregate purchase price of $8.5 million, an additional 850,000 shares
of Series A Preferred Stock and Investor Warrants to purchase an
additional 1,700,000 shares of Common Stock. On July 31, 1997,
approximately $7.5 million of these proceeds were used to acquire
approximately 600 acres in Frisco, Texas which is near Dallas, Texas.
This property is anticipated to yield approximately 1,725 single family
units.
On August 7, 1997, pursuant to the Agreements, Apollo purchased, for an
aggregate purchase price of $2,590,000, an additional 259,000 shares of
Series A Preferred Stock and Investor Warrants to purchase an
additional 518,000 shares of Common Stock. On August 7, 1997, the
Company utilized approximately $2.5 million of these proceeds plus a
purchase money mortgage of $8.0 million to acquire approximately 515
acres of residential property in the Fort Myers, Florida area in a
project known as West Bay Club. Subsequent to this acquisition, the
Company owns a total of approximately 841 acres in West Bay Club and is
planning to assemble a total of 879 acres in this project which is
anticipated to yield approximately 545 single family homes and 520
high-rise condominium units.
The holders of the Series A Preferred Stock and the Series B Preferred
Stock are entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefore, cash dividends on
each share of preferred stock at an annual rate equal to 20% of the
Liquidation Preference in effect from time to time. All dividends are
cumulative, whether or not declared, on a daily basis from the date on
which the preferred stock is originally issued by the Company, and will
be payable quarterly in arrears on March 31, June 30, September 30, and
December 31 of each year commencing on September 30, 1997. As of June
30, 1997, the Series A Preferred Stock Liquidation Preference was
$8.875 million and the corresponding undeclared but accumulated and
unpaid dividends were $0.023 million. As of June 30, 1997, the Series B
Preferred Stock Liquidation Preference was $10 million and the
corresponding undeclared but accumulated and unpaid dividends were
$0.038 million. The total undeclared but accumulated dividends as of
June 30, 1997 did not materially affect the net income (loss) per
common share. Following an Event of Default (as defined in the
respective Statement of Designation with respect to the Series A
Preferred Stock or the Series B Preferred Stock, dividends accumulate
at an annual rate equal to 23% of the Liquidation Preference.
6
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits required by Item 601 of Regulation S-K
10 *(a) Form of Mortgage and Security Agreement, as of June 23,
1997, to the Bank of New York.
*(b) Form of Personal Property Security Agreement, as of
June 23, 1997, in favor of The Bank of New York.
*(c) Form of Stock Pledge Agreement, as of June 23, 1997, in
favor of The Bank of New York.
*(d) Form of Junior Mortgage and Security Agreement, as of
June 23, 1997, to Foothill Capital Corporation.
*(e) Form of Junior Personal Property Security Agreement, as
of June 23, 1997, in favor of Foothill Capital
Corporation.
*f) Form of Junior Stock Pledge Agreement, as of June 23,
1997, in favor of Foothill Capital Corporation.
27 Financial Data Schedule.
- ----------------
* previously filed
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on June 5, 1997, pursuant to
Item 5, Other Events, reporting that the Company and 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 15, 1997.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
ATLANTIC GULF COMMUNITIES CORPORATION
Date: October 16, 1997 /s/ J. LARRY RUTHERFORD
----------------------------------
J. Larry Rutherford
Chairman of the Board,
President, and
Chief Executive Officer
Date: October 16, 1997 /s/ CALLIS N. CARLETON
----------------------------------
Callis N. Carleton
Vice President and Controller
(Principal Accounting Officer)
8
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
10 *(a) Form of Mortgage and Security Agreement, as of June 23,
1997, to the Bank of New York.
*(b) Form of Personal Property Security Agreement, as of
June 23, 1997, in favor of The Bank of New York.
*(c) Form of Stock Pledge Agreement, as of June 23, 1997, in
favor of The Bank of New York.
*(d) Form of Junior Mortgage and Security Agreement, as of
June 23, 1997, to Foothill Capital Corporation.
*(e) Form of Junior Personal Property Security Agreement, as
of June 23, 1997, in favor of Foothill Capital
Corporation.
*(f) Form of Junior Stock Pledge Agreement, as of June 23,
1997, in favor of Foothill Capital Corporation.
27 Financial Data Schedule.
- --------------
* previously filed
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED BALANCE SHEET AT JUNE 30, 1997 (UNAUDITED) AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000771934
<NAME> ATLANTIC GULF COMMUNITIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 8,432
<SECURITIES> 0
<RECEIVABLES> 55,997<F1>
<ALLOWANCES> 0
<INVENTORY> 140,066
<CURRENT-ASSETS> 0<F2>
<PP&E> 2,730<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 232,929
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 137,140
16,851
0
<COMMON> 1,160
<OTHER-SE> 49,623
<TOTAL-LIABILITY-AND-EQUITY> 232,929
<SALES> 34,059
<TOTAL-REVENUES> 38,621
<CGS> 31,347
<TOTAL-COSTS> 35,993
<OTHER-EXPENSES> 12,164
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,506
<INCOME-PRETAX> (15,946)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,946)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,946)
<EPS-PRIMARY> (1.63)
<EPS-DILUTED> (1.63)
<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>
