UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
Commission file number: 1-8967
ATLANTIC GULF COMMUNITIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 59-0720444
(State or jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2601 SOUTH BAYSHORE DRIVE 33133-5461
MIAMI, FLORIDA (Zip Code)
(Address of principal executive offices)
(305) 859-4000
(Registrant's telephone number, including area code)
APPLICABLE ONLY TO CORPORATE ISSUERS:
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
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest date practicable:
There were 12,639,733 shares of the Registrant's common stock, $.10 par value
per share, outstanding as of May 13, 1999.
<PAGE>
SPECIAL NOTE ABOUT FORWARD LOOKING STATEMENTS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED IN THIS QUARTERLY REPORT ON FORM
10-Q FOR THE FISCAL QUARTER ENDED MARCH 31, 1999, CERTAIN MATTERS DISCUSSED
HEREIN INCLUDING CERTAIN FORWARD LOOKING STATEMENTS BASED ON MANAGEMENT'S
EXPECTATIONS REGARDING, AND EVALUATIONS OF CURRENT INFORMATION ABOUT, THE
COMPANY'S BUSINESS THAT INVOLVE RISKS AND UNCERTAINTIES, AND ARE SUBJECT TO
FACTORS THAT COULD CAUSE ACTUAL FUTURE RESULTS TO DIFFER, BOTH ADVERSELY AND
MATERIALLY, FROM CURRENTLY ANTICIPATED RESULTS, INCLUDING, WITHOUT LIMITATION,
THE EFFECT OF ECONOMIC AND MARKET CONDITIONS; THE CYCLICAL NATURE OF THE REAL
ESTATE MARKET IN PRIMARY MARKETS IN FLORIDA, OTHER PRIMARY MARKETS IN THE
SOUTHEASTERN UNITED STATES AND LUXURY/RESORT MARKETS; THE INDUSTRY AND INDUSTRY
SEGMENT CONDITIONS AND DIRECTIONS; INTEREST RATES; THE AVAILABILITY AND COST OF
FINANCING REAL ESTATE ACQUISITIONS AND DEVELOPMENTS; THE SALEABILITY OF
PREDECESSOR ASSETS; CONSTRUCTION COSTS; WEATHER; THE AVAILABILITY OF HIGH
QUALITY REAL ESTATE PARCELS IN PRIMARY MARKETS IN FLORIDA, OTHER PRIMARY MARKETS
IN THE SOUTHEASTERN UNITED STATES AND LUXURY/RESORT MARKETS; THE AVAILABILITY
AND COST OF MATERIALS AND LABOR; CONSUMER PREFERENCES AND TASTES; GOVERNMENTAL
REGULATION; COMPETITIVE PRESSURES; THE COMPANY'S OWN DEBT AND EQUITY STRUCTURE
AND RELATED FINANCING CONTINGENCIES AND RESTRICTIONS; MANAGEMENT LIMITATIONS;
THE COMPANY'S ABILITY TO CLOSE FINANCINGS OF NEW REAL ESTATE AT PARTICULAR TIMES
RELATIVE TO THE COMPANY'S CASH FLOW NEEDS AT SUCH TIMES; THE COMPANY'S ABILITY
TO REFINANCE EXISTING INDEBTEDNESS; LEGISLATION; RESOLUTION OF PENDING
LITIGATION IN WHICH THE COMPANY IS A DEFENDANT; THE SUCCESS OR LACK THEREOF OF
THE COMPANY'S CURRENT DEVELOPMENT PROJECTS; AND THE SUCCESS OR LACK THEREOF OF
THE COMPANY'S STRATEGIC ALTERNATIVE INITIATIVE.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998 .......... 2
Consolidated Statements of Operations for the Three Months Ended March 31,
1999 and 1998 ................................................................... 3
Consolidated Statements of Cash Flows for the Three Months Ended March 31,
1999 and 1998 ................................................................... 4
Notes to Consolidated Financial Statements ...................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations ................................................................... 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ............................................................... 17
Item 2. Changes in Securities ........................................................... 17
Item 3. Defaults Upon Senior Securities ................................................. 18
Item 4. Submission of Matters to a Vote of Security Holders ............................. 18
Item 5. Other Information ............................................................... 18
Item 6. Exhibits and Reports on Form 8-K ................................................ 19
SIGNATURES ........................................................................................ 20
</TABLE>
<PAGE>
UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE, ALL REFERENCES HEREIN TO (1)
"ATLANTIC GULF" REFER SOLELY TO ATLANTIC GULF COMMUNITIES CORPORATION AND (2)
THE "COMPANY" INCLUDE ATLANTIC GULF AND ITS DIRECT AND INDIRECT WHOLLY OWNED
SUBSIDIARIES.
PART I. FINANCIAL INFORMATION
[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY.]
1
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1999 and December 31, 1998
(in thousands, except share amounts and par value)
March 31, December 31,
----------- -----------
1999 1998
ASSETS (unaudited)
<S> <C> <C>
Cash and cash equivalents $ 7,743 $ 9,413
Restricted cash and cash equivalents 1,078 1,041
Contract receivables, net 3,651 4,109
Mortgages, notes and other receivables, net 27,387 29,273
Land and residential inventory 170,365 166,870
Property, plant and equipment, net 3,895 3,950
Other assets, net 19,406 15,150
----------- -----------
Total assets $ 233,525 $ 229,806
=========== ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Accounts payable and accrued liabilities $ 15,400 $ 17,533
Other liabilities 15,922 8,207
Notes and mortgages payable 155,220 151,805
----------- -----------
Total liabilities 186,542 177,545
----------- -----------
Redeemable Preferred Stock
Series A, 20%, $.01 par value, 2,500,000 shares authorized;
2,500,000 shares issued and outstanding, having a liquidation
preference of $34,342 and $32,706, as of March 31, 1999
and December 31, 1998, respectively 32,251 30,403
Series B, 20%, $.01 par value; 2,000,000 shares authorized;
2,000,000 shares issued and outstanding, having a liquidation
preference of $27,194 and $25,899 as of March 31, 1999
and December 31, 1998, respectively 25,844 24,417
----------- -----------
58,095 54,820
----------- -----------
Commitments and Contingencies
Common stockholders' (deficit) equity
Common stock, $.10 par value, 70,000,000 shares authorized;
12,753,354 and 11,933,359 shares issued as of
March 31, 1999 and December 31, 1998, respectively 1,275 1,193
Contributed capital 113,087 117,994
Accumulated deficit (119,107) (115,379)
Accumulated other comprehensive loss (6,351) (6,351)
Treasury stock, 158,536 shares, at cost (16) (16)
----------- -----------
Total common stockholders' (deficit) equity (11,112) (2,559)
----------- -----------
Total liabilities and common stockholders' (deficit) equity $ 233,525 $ 229,806
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended March 31, 1999 and 1998
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
--------------------
Revenues: 1999 1998
-------- --------
Real estate sales:
Homesite $ 7,642 $ 3,431
Commercial 5,318 5,541
Vertical Residential Units - -
-------- --------
Total real estate sales 12,960 8,972
Other operating revenue 2,259 1,025
Interest income 881 1,367
-------- --------
Total revenues 16,100 11,364
-------- --------
Costs and expenses:
Cost of real estate sales:
Homesite 6,887 3,007
Commercial 3,903 5,482
Vertical Residential Units - -
-------- --------
Total cost of real estate sales 10,790 8,489
Selling expense 1,833 1,252
Operating expense 377 302
Real estate costs 1,737 1,799
General and administrative expense 3,653 2,009
Cost of borrowing, net of amounts capitalized 1,787 1,382
Other expense 190 405
-------- --------
Total costs and expenses 20,367 15,638
-------- --------
Operating loss (4,267) (4,274)
-------- --------
Other income (expense):
Reorganization items 539 514
Miscellaneous - (189)
-------- --------
Total other income (expense) 539 325
-------- --------
Net loss (3,728) (3,949)
-------- --------
Less:
Accrued preferred stock dividends 2,931 2,329
Accretion of preferred stock to redemption amount 344 318
Modification of preferred stock security interest 2,380 -
-------- --------
5,655 2,647
-------- --------
Net loss applicable to common stock $ (9,383) $ (6,596)
======== ========
Basic and diluted net loss per common share $ ( .77) $ ( .57)
======== ========
Weighted average common shares outstanding 12,163 11,529
======== ========
See accompanying notes to consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1999 and 1998
(in thousands of dollars)
(unaudited)
Three Months Ended
March 31,
--------------------
1999 1998
-------- --------
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (3,728) $ (3,949)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 796 1,032
Other (income) expense 30 (75)
Reorganization items - 51
Other net changes in assets and liabilities:
Restricted cash (37) 334
Receivables 2,314 1,164
Land and residential inventory (3,495) 1,368
Other assets (4,256) (321)
Accounts payable and accrued liabilities (2,133) (5,361)
Other liabilities 252 (393)
-------- --------
Net cash used in operating activities (10,257) (6,150)
-------- --------
Cash flow from investing activities:
Additions to property, plant and equipment, net (117) (307)
-------- --------
Net cash used in investing activities (117) (307)
-------- --------
Cash flows from financing activities:
Borrowings under credit agreements 81,838 6,080
Repayments under credit agreements (73,434) (6,276)
Proceeds from issuance of common stock 300 -
Proceeds from issuance of preferred stock - 1,735
-------- --------
Net cash provided by financing activities 8,704 1,539
-------- --------
Decrease in cash and cash equivalents (1,670) (4,918)
Cash and cash equivalents at beginning of period 9,413 9,188
-------- --------
Cash and cash equivalents at end of period $ 7,743 $ 4,270
======== ========
Supplemental cash flow information:
Interest payments, net of amounts capitalized $ 1,328 $ 5,302
======== ========
Reorganization item payments $ - $ 51
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1999
(unaudited)
(1) The March 31, 1999 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, 1998, as amended by
that certain Amendment to Form 10-K on Form 10-K/A-1, as filed with the
Securities and Exchange Commission (the "SEC") on April 30, 1999 ("1998
Form 10-K"). Certain prior year amounts have been reclassified to
conform with the 1999 presentation.
(2) Net income (loss) per share of common stock, $.10 par value per share,
of the Company ("Common Stock"), is computed by (a) deducting accrued
preferred stock dividends and the accretion of preferred stock to
redemption amount from net income (loss) to determine net income (loss)
applicable to common stock and (b) then dividing net income (loss)
applicable to common stock by 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 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 $4,154,000 and
$3,014,000 for the three months ended March 31, 1999 and 1998,
respectively.
(4) 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 all the criteria
for sales pursuant to SFAS 66, ACCOUNTING FOR SALES OF REAL ESTATE,
have been met.
(5) Pursuant to the Company's 1996 Non-Employee Directors' Stock Plan, the
Company issued to its Non-Employee Directors 30,000 shares of Common
Stock at a price of $0.75 per share for the first quarter of 1999.
(6) The Company and AP-AGC, LLC, an affiliate of Apollo Real Estate
Advisors, L.P. ("Apollo"), are parties to that certain Investment
Agreement, as amended (the "Investment Agreement"), pursuant to which
Apollo agreed to purchase, subject to certain conditions, (a) 2.5
million shares of 20% Cumulative Redeemable Convertible Preferred
Stock, Series A (the "Series A Preferred Stock"), and (b) warrants to
purchase up to 5 million shares of Common Stock (the "Investor
Warrants"), for an aggregate purchase price of $25 million (the "Apollo
Transaction"). As of December 31, 1998, Apollo had purchased (A) 2.5
million shares of Series A Preferred Stock for $24.7 million ($9.88 per
share) and (B) Investor Warrants to acquire up to 5 million shares of
Common Stock for $0.3 million ($.06 per Investor Warrant share).
5
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1999
(unaudited)
(7) Redeemable preferred stock (which includes the Series A Preferred Stock
and the 20% Cumulative Redeemable Convertible Preferred Stock, Series B
(the "Series B Preferred Stock")) consisted of the following at March
31, 1999 and December 31, 1998 (in thousands of dollars):
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
SERIES A PREFERRED STOCK
<S> <C> <C>
Gross proceeds $ 25,000 $ 25,000
Accrued dividends 9,342 7,706
-------- --------
Liquidation Preference amount 34,342 32,706
Less issue costs (3,104) (3,104)
Less warrants purchased (300) (300)
Plus accretion of preferred stock to redemption amount 1,313 1,101
-------- --------
32,251 30,403
-------- --------
SERIES B PREFERRED STOCK
Private Placement 6/24/97
Gross proceeds 10,000 10,000
Accrued dividends 4,126 3,453
-------- --------
Liquidation Preference amount 14,126 13,453
Less issue costs (950) (950)
Less warrants purchased (120) (120)
Plus accretion of preferred stock to redemption amount 434 369
-------- --------
13,490 12,752
-------- --------
Rights Offering 11/19/97
Gross proceeds 10,000 10,000
Accrued dividends 3,068 2,446
-------- --------
Liquidation Preference amount 13,068 12,446
Less issue costs (950) (950)
Less warrants purchased (120) (120)
Plus accretion of preferred stock to redemption amount 356 289
-------- --------
12,354 11,665
-------- --------
Total Series B 25,844 24,417
-------- --------
Total redeemable preferred stock $ 58,095 $ 54,820
======== ========
</TABLE>
(8) During the first three months of 1999 and 1998, comprehensive loss
consisted only of the net losses for those periods.
6
<PAGE>
ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1999
(unaudited)
(9) Segment Reporting
Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
Primary Luxury
Market Resort Predecessor
Operations Operations Assets Other Total
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total Revenues $ 9,324 $ 1,749 $ 1,887 $ 3,140 $ 16,100
============ ============= ============= =======================
Gross Profit $ 1,641 $ 308 $ 221 $ - $ 2,170
============ ============= ============= ===========
Unallocated revenues and (expenses) (5,898)
----------
Net Loss $ (3,728)
==========
</TABLE>
Three Months Ended March 31, 1998
<TABLE>
<CAPTION>
Primary Luxury
Market Resort Predecessor
Operations Operations Assets Other Total
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total Revenues $ 2,535 $ - $ 6,437 $ 2,392 $ 11,364
============ ============= ============= =======================
Gross Profit $ 388 $ - $ 95 $ - $ 483
============ ============= ============= ===========
Unallocated revenues and (expenses) (4,432)
----------
Net Loss $ (3,949)
==========
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CURRENT BUSINESS
The Company is a Florida-based, planned community development and asset
management company. The Company's CORE BUSINESS consists of:
- PRIMARY MARKET OPERATIONS, consisting of the acquisition,
development and sale of real estate projects ("PRIMARY
PROJECTS") containing residential homesite components such as
single-family lots, multi-family lots/units and residential
tract sales ("HOMESITES") and/or non-residential components
such as commercial, industrial, office and institutional
("COMMERCIAL DEVELOPMENT") in primary markets in Florida and
other selected primary markets in the southeastern United
States ("PRIMARY MARKETS").
- LUXURY/RESORT OPERATIONS, consisting of the acquisition,
development and sale of real estate projects ("LUXURY/RESORT
PROJECTS") in which the Company engages in one or more of the
following activities: Homesite development, construction of
VERTICAL RESIDENTIAL UNITS (i.e., single family housing,
condominiums and timeshare units), and construction and
operation of equity golf clubs and other amenities
("AMENITIES"). The Company's existing Luxury/Resort Projects
are located in selected markets in Florida and Colorado
("LUXURY/RESORT MARKETS").
The Company's (1) Primary Markets and Luxury/Resort Markets
are referred to as its "CORE MARKETS" and (2) Primary Projects
and Luxury/Resort Projects are referred to as its "CORE
PROJECTS."
- OTHER OPERATIONS, consisting principally of:
-- ENVIRONMENTAL SERVICES, consisting of the provision
of environmental services to third parties on a
contract basis; and
-- RECEIVABLES PORTFOLIO MANAGEMENT, consisting of
portfolio management of MORTGAGE RECEIVABLES (as
defined below) and CONTRACT RECEIVABLES (as defined
below) resulting principally from the sale or other
disposition of PREDECESSOR ASSETS (as defined below).
As of March 31, 1999, the Company (1) owned outright, or had ownership
interests in, 11 Core Projects, consisting of seven Primary Projects and four
Luxury/Resort Projects and (2) had five additional planned Primary Projects
under control. The 11 existing Core Projects and five planned Primary Projects
are referred to as the Company's "CORE DEVELOPMENT PORTFOLIO."
The Company also is engaged in the orderly disposition of scattered
PREDECESSOR HOMESITES (as defined below) and PREDECESSOR TRACTS (as defined
below) located in secondary markets in Florida and Tennessee (collectively,
"PREDECESSOR ASSETS"). As discussed below, the continuing disposition of
Predecessor Assets is a run-off business and not part of the Company's Core
Business.
8
<PAGE>
CORE BUSINESS
GENERAL. The Company's Core Business consists of three principal
business lines, (1) development of Primary Projects, (2) development of
Luxury/Resort Projects and (3) Other Operations, principally including
Environmental Services and Receivables Portfolio Management.
PRIMARY PROJECTS. As of March 31, 1999, the Company was engaged in the
acquisition, development and sale of Primary Projects in Florida, North
Carolina, Georgia and Texas. See PART I, ITEM 1. BUSINESS - CORE BUSINESS --
PRIMARY PROJECTS of the 1998 Amended Form 10-K for more information concerning
these Projects, including the scope and location of each Project.
REMAINING UNSOLD LOTS/UNITS/ACRES IN THE PRIMARY PROJECTS, BY
PROJECT. The following table summarizes the number of remaining unsold
lots/units/acres at the Company's Primary Projects, by Project, as of March 31,
1999:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
REMAINING UNSOLD LOTS/UNITS/ACRES AS OF MARCH 31, 1999(1)
-----------------------------------------------------------------------------------
SINGLE FAMILY MULTI-FAMILY COMMERCIAL
-----------------------------------------------------------------------------------
TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL
LOTS ENTITLED(2) UNITS ENTITLED(2) ACRES ENTITLED(2)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OWNED PROPERTIES
Lakeside Estates .................. 488 488 - - - -
Saxon Woods ....................... 375 375 - - - -
West Meadows ...................... 739 739 - - - -
The Trails of West Frisco ......... 1,451 1,451 - - - -
-----------------------------------------------------------------------------------
SUBTOTAL OWNED PROPERTIES 3,053 3,053 - - - -
-----------------------------------------------------------------------------------
JOINT VENTURE PROPERTIES
Sunset Lakes ...................... 1,226 1,226 - - - -
Falcon Trace ...................... 631 631 - - - -
Cary Glen ......................... 852 852 257 257 - -
-----------------------------------------------------------------------------------
SUBTOTAL JOINT VENTURE PROPERTIES 2,709 2,709 257 257 - -
-----------------------------------------------------------------------------------
CONTROLLED PROPERTIES (3)
Anneewakee Falls (4) .............. 1,200 - - - - -
Grand Oaks ........................ 1,282 - - - - -
Rayland ........................... 3,766 - 534 - 75 -
Orlando Naval Training Center ..... 911 - 2,129 - 131 -
Harbor Bay ........................ 1,371 - 410 - 44 -
-----------------------------------------------------------------------------------
SUBTOTAL CONTROLLED PROPERTIES .... 8,530 - 3,073 - 250 -
-----------------------------------------------------------------------------------
TOTAL ALL PROPERTIES .............. 14,292 5,762 3,330 257 250 -
-----------------------------------------------------------------------------------
</TABLE>
(1) Varying from project to project, unsold units are developed, under
development or to be developed in the future. The change in remaining
unsold lots/units/acres from December 31, 1998 is a result of sales
activity and any modifications made to the scope of the Project during
the intervening period.
(2) "Entitled" means having the necessary discretionary local, state, and
federal government approvals and permits to proceed with development.
9
<PAGE>
(3) The Company does not currently own these Projects, but has entered into
contractual relationships (i.e., purchase agreements with customary
conditions precedent, option agreements, joint venture arrangements,
other similar arrangements, etc.) to acquire them. There can be no
assurance the Company will actually acquire these properties.
(4) This Project is located in Georgia, southwest of Atlanta in Douglas
County. The Company controls this Project through a purchase contract
executed on February 19, 1999.
LUXURY/RESORT PROJECTS. The Company also is engaged in the acquisition,
development and sale of master planned Luxury/Resort Projects in Luxury/Resort
Markets in Florida and Colorado. See PART I, ITEM 1. BUSINESS - CORE BUSINESS --
LUXURY/RESORT PROJECTS of the 1998 Amended Form 10-K for more information
concerning these Projects, including the scope and location of each Project.
REMAINING UNSOLD LOTS/UNITS/ACRES IN THE LUXURY/RESORT
PROJECTS, BY PROJECT. The following table summarizes the number of remaining
unsold lots/units/acres at the Company's Luxury/Resort Projects, by Project, as
of March 31, 1999:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
REMAINING UNSOLD LOTS/UNITS/ACRES AT MARCH 31, 1999(1)
----------------------------------------------------------------------------------------------
VERTICAL RESIDENTIAL UNITS
HOMESITES --------------------------------------------------------- COMMERCIAL
SINGLE FAMILY SINGLE FAMILY MULTI-FAMILY TIMESHARE CABINS DEVELOPMENT
----------------------------------------------------------------------------------------------
TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL
LOTS ENTITLED UNITS ENTITLED UNITS ENTITLED UNITS ENTITLED ACRES ENTITLED
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OWNED PROPERTIES
West Bay Club ............. 396 396 81 81 597 597 - - 12 12
Spring Valley Ranch ....... 372 - - - 50 - 75 - - -
Riverwalk Tower ........... - - - - 375 375 - - - -
----------------------------------------------------------------------------------------------
SUBTOTAL OWNED PROPERTIES . 768 396 81 81 1,022 972 75 - 12 12
----------------------------------------------------------------------------------------------
JOINT VENTURE PROPERTIES
Jupiter Ocean Grande ...... - - - - 154 154 - - - -
----------------------------------------------------------------------------------------------
TOTAL ALL PROPERTIES ...... 768 396 81 81 1,176 1,126 75 - 12 12
----------------------------------------------------------------------------------------------
</TABLE>
(1) Varying from Project to Project, unsold units are developed, under
development or to be developed in the future. The change in remaining
unsold lots/units/acres from December 31, 1998 is a result of sales
activity and any modifications made to the scope of the Project during
the intervening period.
OTHER OPERATIONS
ENVIRONMENTAL SERVICES. EQ Lab, a wholly owned subsidiary of
the Company, is a full service ecological consulting firm and laboratory. EQ Lab
recorded approximately $360,000 and $448,000 of total revenues in 1999 and 1998,
respectively. Revenues from unaffiliated parties totaled approximately $232,000
and $378,000 in 1999 and 1998, respectively.
RECEIVABLES PORTFOLIO MANAGEMENT. The Company is actively
engaged in the management and collection of a portfolio of (1) contract
receivables originated by the Predecessor Company's homesite installment sales
program (the "CONTRACT RECEIVABLES") and (2) mortgage receivables generated
primarily from
10
<PAGE>
the Company's sales of Predecessor Tracts (the "MORTGAGE RECEIVABLES," which,
together with the Contract Receivables, are collectively referred to as the
"RECEIVABLES PORTFOLIO"). As of March 31, 1999, the portfolio of Contract
Receivables had a net book value of $3.7 million, and the portfolio of Mortgage
Receivables had a net book value of $27.4 million.
PREDECESSOR ASSETS
The following table summarizes the Company's Predecessor Homesite
Inventory by secondary market area as of March 31, 1999:
<TABLE>
<CAPTION>
PREDECESSOR HOMESITE INVENTORY
Other Total
Standard Developed Buildable Other Predecessor
Market Area Buildable Lots Reserved Restricted Homesites
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
North Port 3,594 9 47 131 3,781
Port Charlotte 753 71 1,614 362 2,800
Port St. Lucie 203 27 318 63 611
Port Malabar 159 4 1,765 1,541 3,469
Port Labelle 67 - 23 1,724 1,814
Sabal Trace - - - - -
Silver Springs Shores 2,393 85 226 280 2,984
Cumberland Cove 221 - - 8 229
Other 47 - 30 6 83
----------------------------------------------------------------------------------
Total 7,437 196 4,023 4,115 15,771
==================================================================================
</TABLE>
The following table summarizes the Company's Predecessor Commercial
Development Inventory by secondary market area as of March 31, 1999:
PREDECESSOR COMMERCIAL DEVELOPMENT INVENTORY
Total
Market Area Acres
-----------------------------------------------------
North Port 572
Port Charlotte 1,419
Port St. Lucie 322
Port Malabar 911
Port Labelle 804
Silver Springs Shores 36
Cumberland Cove 685
Other 39
---------------
Total 4,788
===============
11
<PAGE>
The decrease in inventory from December 31, 1998 is primarily a result
of sales activity during the intervening period in accordance with the Company's
plan of disposal of Predecessor Assets. See PART I, ITEM 1. BUSINESS -
PREDECESSOR ASSETS of the 1998 Amended Form 10-K for information concerning the
Predecessor Homesite and Predecessor Commercial Development Inventory.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
The Company's results of operations for its Core Business and
Predecessor Assets for the three months ended March 31, 1999 and 1998 are
summarized below:
COMBINING RESULTS OF REAL ESTATE OPERATIONS
Three Months Ended March 31, 1999
(in thousands)
Primary Luxury/
Market Resort Predecessor
Operations Operations Assets Total
-----------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Real estate sales
Homesite ................................... $ 4,824 $ 1,749 $ 1,069 $ 7,642
Commercial ................................. 4,500 - 818 5,318
Vertical Residential Units ................. - - - -
-----------------------------------------------------
Total real estate sales ....................... 9,324 1,749 1,887 12,960
Costs and expenses:
Cost of real estate sales
Homesite ................................... 4,444 1,441 1,002 6,887
Commercial ................................. 3,239 - 664 3,903
Vertical Residential Units ................. - - - -
-----------------------------------------------------
Total cost of real estate sales .................. 7,683 1,441 1,666 10,790
-----------------------------------------------------
Gross margin real estate sales ................... $ 1,641 $ 308 $ 221 $ 2,170
=====================================================
Results of Joint Venture Operations(1) ........... $ (75) $ (115) $ - $ (190)
=====================================================
</TABLE>
(1) Included in "other operating revenue" in the Consolidated Statements of
Operations.
12
<PAGE>
COMBINING RESULTS OF REAL ESTATE OPERATIONS
Three Months Ended March 31, 1998
(in thousands)
<TABLE>
<CAPTION>
Primary Luxury
Market Resort Predecessor
Operations Operations Assets Total
----------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Real estate sales
Homesite ............................ $ 2,535 $ - $ 896 $ 3,431
Commercial .......................... - - 5,541 5,541
Vertical Residential Units .......... - - - -
----------------------------------------------------
Total real estate sales ................ 2,535 - 6,437 8,972
Costs and expenses:
Cost of real estate sales
Homesite ............................ 2,147 - 860 3,007
Commercial .......................... - - 5,482 5,482
Vertical Residential Units .......... - - - -
----------------------------------------------------
Total cost of real estate sales ........... 2,147 - 6,342 8,489
----------------------------------------------------
Gross margin real estate sales ............ $ 388 $ - $ 95 $ 483
====================================================
Results of Joint Venture Operations(1) .... $ (174) $ (115) $ - $ (289)
====================================================
</TABLE>
(1) Included in "other operating revenue" in the Consolidated Statements of
Operations.
OVERVIEW. The Company reported a net loss applicable to Common Stock of
$9.4 million in the first quarter of 1999 compared to a net loss of $6.6 million
applicable to Common Stock in the first quarter of 1998. The increase in the net
loss of $2.8 million was primarily due to (1) a $1.6 million increase in general
and administrative expenses, (2) an increase in preferred stock charges of $3.0
million, (3) an increase in selling expenses of $581,000 and (4) a decrease in
interest income of $486,000, partially offset by (5) a $1.7 million increase in
gross margin on real estate sales and (6) a $1.2 million increase in other
operating revenue.
PRIMARY MARKET OPERATIONS.
HOMESITES. Net margins from Homesite sales in the first
quarter of 1999 were comparable to the first quarter of 1998. Revenues from
Homesite sales increased $2.3 million in the first quarter of 1999 compared to
the first quarter of 1998 primarily due to sales at The Trails of West Frisco
Project. There were no sales at The Trails of West Frisco Project in the first
three months of 1998. The Homesite sales gross margin percentage was 7.9% in the
first quarter of 1999 compared to 15.3% in the first quarter of 1998. The lower
gross margin percentage on Homesite sales in the first quarter of 1999 was
primarily due to a decline in the gross margin
13
<PAGE>
associated with the Lakeside Estates Project of 11.8% on comparable prior year
sales due to an increase in the estimated cost to complete the project.
As of March 31, 1999, the Company had under contract approximately 648
Homesites for $19.8 million with 11 homebuilders in the Lakeside Estates
Project, the Saxon Woods Project, the West Meadows Project and The Trails of
West Frisco Project. As of March 31, 1998, the Company had under contract
approximately 889 Homesites for $25.7 million with 13 homebuilders in the
Lakeside Estates Project, the Saxon Woods Project, the West Meadows Project and
The Trails of West Frisco Project.
COMMERCIAL DEVELOPMENT. Commercial Development revenues were
$4.5 million in the first quarter of 1999 with no comparable sales in the first
quarter of 1998. In January 1999, the Company sold and closed a $4.5 million
tract sale in the West Meadows Project.
JOINT VENTURES. Results of Joint Ventures increased by $99,000
in the first quarter of 1999 compared to the first quarter of 1998. This was
primarily due to a gain on the sale of the Country Lakes JV Venture interest. As
of March 31, 1999 and 1998, the Company's JV Projects had 1,322 and 4,445
Homesites under contract, respectively, totaling approximately $63.7 million and
$80.0 million, respectively, in future gross revenue, a portion of which is
allocable to the Company as a joint venturer.
LUXURY/RESORT OPERATIONS.
HOMESITES. During the first quarter of 1999, initial Homesite
sales occurred in the West Bay Club Project. Because the project was still under
initial development at the time, there were no comparable sales in the first
quarter of 1998.
As of March 31, 1999, the Company had under contract approximately 13
Homesites for $3.1 million with 7 homebuilders in the West Bay Club Project.
There were no pending sales contracts at the project as of March 31, 1998.
JOINT VENTURES. Results of Joint Ventures in the first quarter
of 1999 were comparable to the first quarter of 1998. The joint venture losses
relate to the Jupiter Ocean Grande Project.
PREDECESSOR ASSETS.
PREDECESSOR HOMESITES. Revenues from Predecessor Homesite
sales increased $174,000 in the first quarter of 1999 compared to the first
quarter of 1998 primarily due to the sale of 75 Predecessor Homesites in the
Sable Trace Project. There were no sales at this project in the first quarter of
1998. A comparable number of other Predecessor Homesites were sold in the first
quarter of 1999 compared to the first quarter of 1998. The Predecessor Homesite
sales gross margin percentage of 6.3% in the first quarter of 1999 compared to
4.0% in the first quarter of 1998 is consistent with the Company's accelerated
plan of disposal of its Predecessor Assets.
As of March 31, 1999, the Company had under contract approximately 111
Predecessor Homesites for $958,000, including nine commercial lots allocated to
Predecessor Homesites for $449,000. As of March 31, 1998, the Company had under
contract approximately 215 Predecessor Homesites for $633,000.
14
<PAGE>
PREDECESSOR TRACTS. Revenues from Predecessor Tract sales
decreased $4.7 million in the first quarter of 1999 compared to the first
quarter of 1998 primarily due to fewer sales from a declining inventory balance.
As of March 31, 1999, there were pending Predecessor Tract sales contracts or
letters of intent totaling approximately $901,000. As of March 31, 1998, there
were pending Predecessor Tract sales contracts or letters of intent totaling
approximately $14.4 million.
The 18.8% gross margin percentage for Predecessor Tract sales in the
first quarter of 1999 is due to significantly fewer sales on more profitable
terms. The first quarter 1998 gross margin percentage of 1.1% is generally more
consistent with the accelerated plan of disposal of Predecessor Assets.
OTHER RESULTS OF OPERATIONS.
OTHER OPERATING REVENUE. Other operating revenue increased by
$1.2 million in the first quarter of 1999 compared to the first quarter of 1998.
This increase was due to the collection of our remaining management fee in
connection with the sale of the Country Lakes joint venture.
INTEREST INCOME. Interest income decreased by $486,000 in the
first quarter of 1999 compared to the first quarter of 1998. This decrease
corresponds to a reduction in the outstanding amount of Contract Receivables and
Mortgage Receivables due to principal collections on these portfolios during the
intervening period.
SELLING EXPENSES. Selling expenses increased $581,000 in the
first quarter of 1999 compared to the first quarter of 1998 due to increased
real estate sales in the first quarter of 1999 compared to the first quarter of
1998. The ratio of selling expense as a percentage of real estate sales was
comparable in the first quarters of 1999 and 1998.
GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative
expense increased $1.6 million in the first quarter of 1999 compared to the
first quarter of 1998 primarily due to (1) expenses of the Special Committee of
the Board of Directors associated with the Company's strategic alternatives
initiative, including the retention of BT Alex. Brown, (2) certain severance
expenses and (3) employee bonuses, including the stock component of bonuses
issued to certain executives effective March 15, 1999.
COSTS OF BORROWING NET OF CAPITALIZED INTEREST. Costs of
borrowing net of capitalized interest, increased by $405,000 in the first
quarter of 1999 compared to the first quarter of 1998. While notes, mortgages
and capital leases increased in the first quarter of 1999 compared to the first
quarter of 1998, the increase in indebtedness primarily related to projects on
which the interest is capitalized. Thus, the increase in expense is primarily
due to an increase in the interest rate on the non-capitalized portion of the
corporate debt outstanding. The increase in rate is due primarily to (1) the New
Senior Loan Facilities, which are interest bearing, which refinanced $39.5
million of Cash Flow Notes which were non-interest bearing, combined with (2) a
higher overall interest rate and (3) the amortization of loan fees over the
short duration of New Senior Loan Facilities. See LIQUIDITY AND CAPITAL
RESOURCES below.
PREFERRED STOCK CHARGES. During the first quarter of 1999, the
Company recorded a $2.9 million accrual for dividends associated with its
Preferred Stock. The dividends were accumulated but unpaid as of March 31, 1999.
The dividend rate is 20% of the liquidation preference value of the Preferred
Stock. The liquidation preference value of the Preferred Stock is $10 per share,
plus accumulated and unpaid dividends. In addition, the Company accreted
$344,000 of the value of its Preferred Stock to the redemption amount in the
first quarter of 1999. In connection with the closing of the New Senior Loan
Facilities in February 1999, the Company issued notes totaling $1.85 million and
500,000 shares of common stock at a price of $1.061 per share to AP-AGC, LLC
("Apollo") in exchange for Apollo's (a) consent to the Company entering into the
New Senior Loan Facilities and agreement to subordinate its collateral interest
in certain
15
<PAGE>
of the Company's assets, (b) agreement to certain amendments to the Secured
Agreement and Investment Agreement and (c) agreement to enter into the new
Intercreditor Agreement with the lenders party to the New Senior Loan
Facilities. The total value of the consideration paid to Apollo was $2.4
million. The total of approximately $5.7 million of preferred stock charges was
charged to contributed capital in the accompanying March 31, 1999 consolidated
balance sheet.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL. As of March 31, 1999, the Company's (1) cash and cash
equivalents totaled approximately $7.7 million and (2) restricted cash and cash
equivalents totaled $1.1 million, consisting primarily of (a) escrows for the
sale or development of real estate properties, (b) funds held in trust to pay
certain bankruptcy claims and (c) various other escrow accounts. Of the $1.7
million decrease in cash and cash equivalents during the first quarter of 1999,
(i) $10.3 million was used in operating activities and (ii) $117,000 was used in
investing activities, partially offset by (iii) $8.7 million provided by
financing activities.
Cash used in operating activities included approximately (1) $4.4
million for interest payments, (2) $3.0 million for property tax payments, (3)
$11.4 million for construction and development expenditures and (4) $4.9 million
of fees associated with the Company's refinancing efforts. Cash used in
operating activities was offset in part by net cash generated from real estate
sales and other operations.
Cash used in investing activities consisted of $117,000 of property,
plant and equipment additions.
Cash provided by financing activities consisted primarily of borrowings
of $8.4 million under various project financings and the New Senior Loan
Facilities, which were funded on February 2, 1999. The remaining $300,000 was
provided by stock purchases in connection with certain executive compensation
bonuses.
NEW SENIOR LOAN FACILITIES. Dated as of December 31, 1998, effective on
February 2, 1999, Atlantic Gulf closed on its $39.5 million New Revolving Loan
Facility and its $26.5 million New Term Loan Facility (collectively, the "NEW
SENIOR LOAN FACILITIES"). The New Revolving Loan Facility had a $4.0 million
mandatory reduction which was met by the refinancing of the West Frisco Project
under the Anglo American Facility discussed below.
Amounts outstanding (1) under the New Revolving Loan Facility bear
interest at a fixed rate equal to 11% per annum and (2) under the New Term Loan
Facility bear interest at a fixed rate equal to 15% per annum. As of March 31,
1999, the Company had outstanding (a) $28.0 million under its New Revolving Loan
Facility and (b) $26.5 million under its New Term Loan Facility.
ANGLO AMERICAN FACILITY. On March 31, 1999, West Frisco Development
Corporation ("WFDC"), an indirect wholly-owned subsidiary of Atlantic Gulf,
borrowed $7.0 million from Anglo American Financial (the "ANGLO AMERICAN
FACILITY"). The Anglo American Facility (1) is a full recourse obligation of
WFDC, secured by a deed of trust on the West Frisco Project, (2) matures on
December 31, 1999, (3) bears interest at the rate of 1.75% per month and (4)
requires payments of interest only (monthly in arrears) until maturity. Atlantic
Gulf has guaranteed the Anglo American Facility. Atlantic Gulf used $4.0 million
of the proceeds of the Anglo American Facility to fund the March 31, 1999
commitment reduction under the New Revolving Loan Facility.
16
<PAGE>
OTHER MATERIAL OBLIGATIONS COMING DUE IN 1999. During 1999, (1) the
commitment under the New Revolving Loan Facility will decline by $1.0 million on
May 31, 1999 and (2) the Anglo American Facility will mature on December 31,
1999. If the outstanding principal balance under the New Revolving Loan Facility
exceeds the outstanding commitment following the commitment reduction on May 31,
1999, the Company will immediately be obligated to pay the outstanding amount
down to the amount of the reduced commitment.
In addition to the aforementioned reduction in the commitment under
the New Revolving Loan Facility and the maturation of the Anglo American
Facility, Atlantic Gulf's other material obligations for the remainder of 1999
consist primarily of approximately $93 million of planned expenditures for
development, construction and other capital improvements, a substantial portion
of which will be funded through individual project development loans or joint
venture arrangements, many of which are already in place. If the Company is
unable to obtain the capital resources to fund these obligations and
expenditures, the implementation of the Company's business plan will be
adversely affected, slowing the Company's anticipated revenue growth and
increasing the time necessary to achieve profitability. However, management
believes that the Company, through a combination of sources, will be able to
obtain the funds necessary to continue to implement its business plan and, at
the same time, satisfy its debt obligations as they become due.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There were no new developments since April 30, 1999 with respect to the
legal proceedings referenced in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, as amended by that certain Amendment to Form 10-K
on Form 10-K/A-1, as filed with the Securities and Exchange Commission on April
30, 1999 (the "1998 Amended Form 10-K").
In addition to the legal proceedings specifically referenced in the
1998 Amended Form 10-K, the Company is, from time to time, involved in other
litigation matters primarily arising in the normal course of its business. It is
the opinion of management that the resolution of these other litigation matters
will not have a material adverse affect on the Company's business or financial
position.
ITEM 2. CHANGES IN SECURITIES
ISSUANCE OF 500,000 SHARES OF COMMON STOCK TO APOLLO. In connection
with the closing of the New Senior Loan Facilities in February 1999, the Company
issued, among other things, 500,000 shares of Common Stock to Apollo, in
exchange for Apollo's (a) consent to the Company entering into the New Senior
Loan Facilities and agreement to subordinate its collateral interest in certain
of the Company's assets, (b) agreement to certain amendments to the Secured
Agreement and Investment Agreement and (c) agreement to enter into the new
Intercreditor Agreement with the lenders party to the New Senior Loan
Facilities. See PART II, ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES
of the 1998 Amended Form 10-K for more information concerning the issuance of
these shares.
17
<PAGE>
FUNDING OF A PORTION OF CERTAIN OF THE 1998 SENIOR EXECUTIVE BONUSES
WITH SHARES OF COMMON STOCK. Effective as of March 15,1999, the Company issued
(a) 213,333 shares of Common Stock to Mr. Rutherford, the President and Chief
Executive Officer of Atlantic Gulf, in payment of 50% (valued at $200,000) of
Mr. Rutherford's 1998 Annual Bonus (in the aggregate amount of $400,000) and (b)
106,666 shares of Common Stock to Mr. Laguardia, an Executive Vice President and
Chief Operating Officer of Atlantic Gulf, in payment of 50% (valued at $100,000)
of Mr. Laguardia's 1998 Annual Bonus (in the aggregate amount of $200,000). See
PART III, ITEM 11. EXECUTIVE COMPENSATION - EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS of the 1998 Amended Form 10-K
for more information concerning the issuance of these shares.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
WARRANT RESET. As part of the Preferred Stock sales transactions
consummated in 1997 and early 1998, the Company issued (a) warrants to Apollo,
the holder of all of the shares of Series A Preferred Stock, to acquire up to
5,000,000 shares of Common Stock and (b) warrants to the purchasers of the
Series B Preferred Stock to acquire up to 4,000,000 shares of Common Stock
(collectively, the "Warrants"). The Warrants have an exercise price of $5.75 per
share (the "Exercise Price"). The Exercise Price is subject to a downward
adjustment, calculated as of March 31, 1999, based on a formula related to the
shortfall between actual operating cash flow during the prescribed testing
period from certain business lines and targeted operating cash flow (i.e., $62.4
million) from such business lines during the prescribed testing period (the
"Warrant Reset"). Management is in the process of finalizing the Warrant Reset
calculation. At this time, based on the information currently available to it,
management believes that the likely range of the Warrant Reset will be a
downward adjustment of $0.95 to $1.25 in the per share Exercise Price of the
Warrants. The calculation of the Warrant Reset downward adjustment is subject to
further review before being finalized. The Company will announce the amount of
the definitive Warrant Reset downward adjustment as soon as it's available under
cover of a Current Report on Form 8-K, which it will file with the Securities
and Exchange Commission.
STRATEGIC TRANSACTION. On March 26, 1999, the Company announced that
(1) its Board of Directors had formed a Special Committee to explore strategic
alternatives to maximize stockholder value and (2) it has retained BT Alex.
Brown, a leading investment banking firm, to assist the Special Committee in
reviewing strategic transactions.
18
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K
(27) Financial Data Schedule.
(b) Reports on Form 8-K
1. Form 8-K, filed with the Securities and Exchange Commission on
March 31, 1999, announcing that the Company had formed a
Special Committee of the Board of Directors to explore
strategic alternatives to maximize stockholder value and
retained BT Alex. Brown to assist the Special Committee in
reviewing such possible alternatives.
19
<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
/s/ THOMAS W. JEFFREY
------------------------------------------
Thomas W. Jeffrey
Executive Vice President and
Chief Financial Officer
Dated: May 13, 1999
/s/ PAULA J. COOK
------------------------------------------
Paula J. Cook
Vice President and Controller
Dated: May 13, 1999
20
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1999 (UNAUDITED) AND
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS THEN ENDED (UNAUDITED)
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000771934
<NAME> Atlantic Gulf Communities Corporation
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 8,821
<SECURITIES> 0
<RECEIVABLES> 163,334
<ALLOWANCES> 0
<INVENTORY> 170,365
<CURRENT-ASSETS> 0
<PP&E> 3,895
<DEPRECIATION> 0
<TOTAL-ASSETS> 194,970
<CURRENT-LIABILITIES> 0
<BONDS> 155,220
58,095
0
<COMMON> 1,275
<OTHER-SE> (12,387)
<TOTAL-LIABILITY-AND-EQUITY> 194,970
<SALES> 12,960
<TOTAL-REVENUES> 16,100
<CGS> 10,790
<TOTAL-COSTS> 20,367
<OTHER-EXPENSES> (539)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,382
<INCOME-PRETAX> (9,383)
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<NET-INCOME> (9,383)
<EPS-PRIMARY> (.77)
<EPS-DILUTED> (.77)
</TABLE>
