SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
--------------------------------------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-14830
CONTINENTAL HOMES HOLDING CORP.
(Exact name of registrant as specified in its charter)
Delaware 86-0554624
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
7001 N. Scottsdale Road, Suite 2050 85253
Scottsdale, Arizona (Zip Code)
(Address of principal executive offices)
(602) 483-0006
(Registrant's telephone number, including area code)
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
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock December 27, 1996
--------------------- -----------------
$.01 par value 6,897,330
- --------------------------------------------------------------------------------
<PAGE>
CONTINENTAL HOMES HOLDING CORP.
FORM 10-Q
FOR THE QUARTER ENDED
NOVEMBER 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
<S> <C> <C>
Item 1. Financial Statements:
Consolidated Balance Sheets as of November 30, 1996 and
May 31, 1996.............................................................. 3
Consolidated Statements of Income for the three and six months ended
November 30, 1996 and 1995................................................ 4
Consolidated Statements of Cash Flows for the six months ended
November 30, 1996 and 1995................................................ 5
Notes to unaudited Consolidated Financial Statements........................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................................... 8
PART II. OTHER INFORMATION
Item 4. Submission of matters to a vote of Security Holders.......................... 12
Item 6. Exhibits and Reports on Form 8-K............................................. 12
</TABLE>
2
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
November 30, May 31,
1996 1996
---- ----
(In thousands)
<S> <C> <C>
ASSETS
Homebuilding:
Cash and cash equivalents $ 21,414 $ 25,236
Receivables 19,052 16,693
Homes, lots and improvements in production 405,229 344,880
Property and equipment, net 3,614 2,271
Prepaid expenses and other assets 19,453 16,797
Excess of cost over related net assets acquired 10,224 11,715
---------- ----------
478,986 417,592
---------- ----------
Mortgage banking:
Mortgage loans held for sale 17,418 20,350
Mortgage loans held for long-term investment, net -- 86
Other assets 191 406
---------- ----------
17,609 20,842
---------- ----------
Total assets $ 496,595 $ 438,434
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
Accounts payable and other liabilities $ 63,624 $ 52,240
Notes payable, senior and convertible subordinated debt 269,994 244,999
Deferred income taxes 1,621 1,236
---------- ----------
335,239 298,475
---------- ----------
Mortgage banking:
Notes payable 12,169 5,359
Bonds payable -- 168
Other 1,104 686
---------- ----------
13,273 6,213
---------- ----------
Total liabilities 348,512 304,688
---------- ----------
Minority interest 4,494 4,797
---------- ----------
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value:
Authorized - 2,000,000 shares, Issued none -- --
Common stock, $.01 par value:
Authorized - 20,000,000 shares, Issued 7,080,900 shares 71 71
Treasury stock, at cost - 183,570 and 88,265 shares (2,153) (384)
Capital in excess of par value 60,475 60,396
Retained earnings 85,196 68,866
---------- ----------
Total stockholders' equity 143,589 128,949
---------- ----------
Total liabilities and stockholders' equity $ 496,595 $ 438,434
========== ==========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated balance sheets.
3
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
November 30, November 30,
------------ ------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Home sales $ 162,883 $ 135,384 $ 346,547 $ 268,330
Land sales 14,643 506 15,124 11,267
Mortgage banking and title operations 2,564 2,481 5,830 4,946
Other income (loss), net 163 (6) 398 106
----------- ----------- ----------- -----------
Total revenues 180,253 138,365 367,899 284,649
----------- ----------- ----------- -----------
COSTS AND EXPENSES
Homebuilding:
Cost of home sales 132,976 110,431 282,650 218,857
Cost of land sales 13,996 498 14,492 11,329
Selling, general and administrative
expenses 17,084 15,072 35,724 30,028
Interest, net 1,361 1,305 2,746 2,454
Mortgage banking and title operations:
Selling, general and administrative
expenses 2,082 1,652 4,138 3,255
Interest, net (198) (21) (399) 34
----------- ----------- ----------- -----------
Total costs and expenses 167,301 128,937 339,351 265,957
----------- ----------- ----------- -----------
Income before income taxes 12,952 9,428 28,548 18,692
Income taxes 5,160 4,113 11,520 8,153
----------- ----------- ----------- -----------
Net income $ 7,792 $ 5,315 $ 17,028 $ 10,539
=========== =========== =========== ===========
Earnings per common share $ 1.12 $ .77 $ 2.44 $ 1.52
Earnings per common share assuming
full dilution $ .81 $ .64 $ 1.76 $ 1.30
Cash dividends per share $ .05 $ .05 $ .10 $ .10
Weighted average number of shares
outstanding 6,978,297 6,946,666 6,990,820 6,937,117
=========== =========== =========== ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated statements.
4
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
November 30,
------------
1996 1995
---- ----
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 17,028 $ 10,539
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 1,642 1,649
Minority Interest (303) --
Increase in deferred income taxes 385 694
Decrease (increase) in assets
Homes, lots and improvements in production (52,552) (18,404)
Receivables 816 2,066
Prepaid expenses and other assets (2,393) (894)
Increase in liabilities
Accounts payable and other liabilities 10,358 6,652
-------- --------
Net cash provided (used) by operating activities (25,019) 2,302
-------- --------
Cash flows from investing activities:
Net additions of property and equipment (1,750) (371)
Cash paid for acquisitions, net of cash acquired (1,205) --
Adjustment to purchase price 1,700 --
-------- --------
Net cash used by investing activities (1,255) (371)
-------- --------
Cash flows from financing activities:
Increase (decrease) in notes payable to financial
institutions 25,008 (34,008)
Retirement of bonds payable (168) (789)
Retirement of Convertible Subordinated Notes -- (33,250)
Issuance of Convertible Subordinated Notes -- 72,475
Stock options exercised 232 230
Repurchase of stock (1,922) --
Dividends paid (698) (692)
-------- --------
Net cash provided by financing activities 22,452 3,966
-------- --------
Net increase (decrease) in cash (3,822) 5,897
Cash at beginning of period 25,236 12,848
-------- --------
Cash at end of period $ 21,414 $ 18,745
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized $ 3,245 $ 4,029
Income taxes $ 9,097 $ 6,495
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated statements.
5
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The consolidated financial statements include the accounts of
Continental Homes Holding Corp. and its subsidiaries (the
"Company"). In the opinion of the Company, the accompanying
unaudited consolidated financial statements contain all
adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the Company's financial position,
results of operations and cash flows for the periods presented.
These consolidated financial statements should be read in
conjunction with the consolidated financial statements and the
related disclosures contained in the Company's annual report on
Form 10-K for the year ended May 31, 1996, filed with the
Securities and Exchange Commission.
The results of operations for the three and six months ended
November 30, 1996 are not necessarily indicative of the results to
be expected for the full year.
Note 2. Interest Capitalization
The Company follows the practice of capitalizing for its
homebuilding operations certain interest costs incurred on land
under development and homes under construction. Such capitalized
interest is included in cost of home sales when the units are
delivered. The Company capitalized such interest in the amount of
$9,223,000 and $8,101,000 and expensed as a component of cost of
home sales $8,892,000 and $7,594,000 in the six months ended
November 30, 1996 and 1995, respectively.
Note 3. Notes payable, Senior and Convertible Subordinated Debt
Notes payable, senior and convertible subordinated debt for
homebuilding consist of:
<TABLE>
<CAPTION>
November 30, May 31,
1996 1996
---- ----
(In thousands)
<C> <C> <C>
10% senior notes, due 2006, net of discount of $1,870 and $1,972 $128,130 $128,028
12% senior notes, due 1999, net of premium of $89 and $113 11,589 11,613
6-7/8% convertible subordinated notes, due 2002 86,250 86,250
Notes payable 44,025 19,108
-------- --------
$269,994 $244,999
======== ========
</TABLE>
6
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Note 4. Interest, net
The summary of the components of interest, net is as follows:
Three months ended Six months ended
November 30, November 30,
------------ ------------
1996 1995 1996 1995
------- ------- ------- -------
(In thousands)
Interest expense, homebuilding $ 1,519 $ 1,427 $ 2,985 $ 2,661
Interest income, homebuilding (158) (122) (239) (207)
------- ------- ------- -------
$ 1,361 $ 1,305 $ 2,746 $ 2,454
======= ======= ======= =======
Interest expense, mortgage banking $ 83 $ 644 $ 260 $ 1,368
Interest income, mortgage banking (281) (665) (659) (1,334)
------- ------- ------- -------
$ (198) $ (21) $ (399) $ 34
======= ======= ======= =======
7
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
ITEM 2.
-------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Homebuilding
------------
The following table sets forth, for the periods indicated, unit
activity, average sales price and revenue from home sales for the Company:
<TABLE>
<CAPTION>
Quarters ended Six months ended
November 30, November 30,
------------ ------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Units delivered 1,145 1,028 2,513 2,057
Average sales price $142,256 $131,696 $137,902 $130,447
Revenue from home sales (000's) $162,883 $135,384 $346,547 $268,330
Percentage increase from prior year 20.3% 40.8% 29.1% 33.3%
Change due to volume 11.4% 40.1% 22.2% 31.9%
Change due to average sales price 8.9% .7% 6.9% 1.4%
</TABLE>
The volume increase in the quarter and six months ended November 30,
1996 compared to the same periods during fiscal 1996 resulted from improved
deliveries in Denver, South Florida and Texas and the Company's expansion into
the Dallas, Texas market. The average sales price increase in the quarter and
six months ended November 30, 1996 compared to the same periods during fiscal
1996 resulted primarily from an increase in volume in the Denver market where
the average sales price is over $206,000.
The following table summarizes information related to the Company's
backlog at the dates indicated:
November 30,
------------
(Dollars in thousands)
----------------------
1996 1995
---- ----
Units Dollars Units Dollars
----- ------- ----- -------
Phoenix 714 $ 95,850 937 $117,972
Texas 492 53,523 421 46,539
South Florida 176 21,555 116 16,738
Denver 230 44,522 130 27,284
Southern California 72 24,630 88 21,401
----- -------- ----- --------
Total backlog 1,684 $240,080 1,692 $229,934
===== ======== ===== ========
Average price per unit $143 $136
==== ====
The aggregate sales value of new contracts signed decreased 6% in the
six months ended November 30, 1996 to $277,005,000 representing 2,048 homes as
compared with $294,769,000 representing 2,256 homes for the six months ended
November 30, 1995. Most of the decline was a result of decreased order activity
in the Phoenix and Austin markets during the first six months of fiscal 1997
compared to the same period last year. This decline was the result of unusually
strong new orders in the prior period and not due to a significant deterioration
in either market.
8
<PAGE>
The following table summarizes information related to cost of home
sales, selling, general and administrative ("SG&A") expenses and interest, net
for homebuilding:
<TABLE>
<CAPTION>
Quarters ended November 30, Six months ended November 30,
--------------------------- -----------------------------
1996 1995 1996 1995
---- ---- ---- ----
Dollars % Dollars % Dollars % Dollars %
------- - ------- - ------- - ------- -
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue from
home sales $162,883 100.0% $135,384 100.0% $346,547 100.0% $268,330 100.0%
Cost of home sales 132,976 81.6 110,431 81.6 282,650 81.6 218,857 81.6
-------- ----- -------- ----- -------- ----- -------- -----
Gross profit from
home sales 29,907 18.4 24,953 18.4 63,897 18.4 49,473 18.4
SG&A expenses 17,084 10.5 15,072 11.1 35,724 10.3 30,028 11.2
-------- ----- -------- ----- -------- ----- -------- -----
Operating income from
homebuilding 12,823 7.9 9,881 7.3 28,173 8.1 19,445 7.2
Interest, net 1,361 .9 1,305 1.0 2,746 .8 2,454 .9
-------- ----- -------- ----- -------- ----- -------- -----
Pre-tax profit from
homebuilding $ 11,462 7.0% $ 8,576 6.3% $ 25,427 7.3% $ 16,991 6.3%
======== ===== ======== ===== ======== ===== ======== =====
</TABLE>
The increase in total SG&A expenses for the quarter and six months
ended November 30, 1996 compared to the quarter and six months ended November
30, 1995 was principally due to the increased volume which increased variable
marketing costs (sales commissions, advertising and model furniture
amortization). Additionally, SG&A increased with the addition of the Dallas
operation during the first quarter of fiscal 1997. SG&A expenses for each home
delivered were $14,921 and $14,661 in the second quarter of fiscal 1997 and
1996, respectively and $14,216 and $14,598 in the first six months of fiscal
1997 and 1996, respectively. The Company capitalizes certain SG&A expenses for
homebuilding. Accordingly, total SG&A costs incurred for homebuilding were
$19,996,000 and $41,321,000 for the three and six months ended November 30, 1996
compared to $16,861,000 and $33,841,000 for the corresponding fiscal 1996
period.
The Company capitalizes certain interest costs for its homebuilding
operations and includes such capitalized interest in cost of home sales when the
related units are delivered. Accordingly, total interest incurred by the Company
was $6,263,000 and $12,208,000 for the three and six months ended November 30,
1996, respectively compared to $5,447,000 and $10,762,000 for the three and six
months ended November 30, 1995, respectively. For the six month period ended
November 30, 1996, interest, net for homebuilding was $2,746,000 compared with
$2,454,000 for the six months ended November 30, 1995.
The Company's pre-tax profit from homebuilding for the six months ended
November 30, 1996 was $25,427,000 compared to $16,991,000 for the corresponding
six months ended November 30, 1995. Pre-tax profit increased in the six months
of fiscal 1997 due primarily to increased volume and improved results in most
markets.
9
<PAGE>
Mortgage Banking
----------------
The Company's mortgage banking operations are conducted through its
wholly-owned subsidiary CH Mortgage Company ("CHMC"). The following table
summarizes operating information for the Company's mortgage banking operations:
Quarters ended Six months ended
November 30, November 30,
------------ ------------
1996 1995 1996 1995
---- ---- ---- ----
(Dollars in thousands)
Number of loans originated 680 685 1,557 1,361
Loan origination fees $ 636 $ 641 $ 1,480 $ 1,286
Sale of servicing and marketing gains 1,191 1,225 2,695 2,478
Other revenue 291 44 571 205
------- ------- ------- -------
Total revenues 2,118 1,910 4,746 3,969
General and administrative expenses 1,783 1,261 3,504 2,696
------- ------- ------- -------
Operating income from mortgage banking 335 649 1,242 1,273
Interest, net (198) (21) (399) 38
------- ------- ------- -------
Pre-tax profit from mortgage banking $ 533 $ 670 $ 1,641 $ 1,235
======= ======= ======= =======
Revenues and general and administrative expenses from mortgage banking increased
in the six months ended November 30, 1996 primarily as a result of an increase
in originations and expansion into the Denver, Miami and Southern California
markets.
Consolidated operations
-----------------------
Net income was $17,028,000 ($2.44 per share, $1.76 fully diluted) for
the six months ended November 30, 1996 compared to $10,539,000 ($1.52 per share,
$1.30 fully diluted) for the period ended November 30, 1995.
Liquidity and Capital Resources
- -------------------------------
The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition and inventory balances. The Company has financed, and
expects to continue to finance, its working capital needs through funds
generated by operations and borrowings. Funds for future land acquisitions and
construction costs are expected to be provided primarily by cash flows from
operations and future borrowings as permitted under the Company's loan
agreements. On June 27, 1996, the Company entered into a credit agreement
("Credit Agreement") with a group of banks which provides for a $110 million
unsecured revolving line of credit. Borrowings under the Credit Agreement bear
interest at LIBOR plus 1.75% or prime plus .125% at the Company's election and
subject to the rating on its senior debt. Available borrowings under the Credit
Agreement are limited to certain percentages of housing unit costs, finished
lots, land under development and receivables as defined in the Credit Agreement.
As a result of this formula, the borrowing base at November 30, 1996 was
$110,000,000 and $41,500,000 was outstanding. The Company believes that amounts
generated from operations and such additional borrowings will provide funds
adequate to finance its existing homebuilding activities and meet its debt
service requirements. The Company is currently negotiating to increase the
aforementioned credit agreement to $140 million. Such increase will be used to
fund the development costs at its Rancho Carrillo project in San Diego. The
Company believes the line will be increased by the end of its third fiscal
quarter. In the event the group of
10
<PAGE>
banks does not increase the facility, the Company believes its current liquidity
will be sufficient to fund the improvements.
CHMC has a warehouse line of credit for $25,000,000 which is guaranteed
by the Company. Pursuant to the warehouse line of credit, the Company issues
drafts to fund its mortgage loans. The amount represented by a draft is drawn on
the warehouse line of credit when the draft it presented for payment. At
November 30, 1996, the amount outstanding under the warehouse line of credit and
the amount of funding drafts that had not been presented for payment was
$12,169,000. The Company believes that this line is sufficient for its mortgage
banking operations.
On November 10, 1995, the Company completed the sale of $75,000,000
principal amount of its 6-7/8% Convertible Subordinated Notes due November 2002.
On December 5, 1995, the Company sold an additional $11,250,000 of such notes.
The net proceeds were used to redeem the Company's 6-7/8% Convertible
Subordinated Notes due March 2002 and to reduce temporarily outstanding amounts
under certain of the Company's revolving lines of credit (including the
warehouse line of credit). In connection with the redemption of the notes, the
Company recorded, in the third quarter of fiscal 1996, an extraordinary loss,
net of taxes, of approximately $859,000 due to the write-off of unamortized
discount and debt issuance costs. The Convertible Notes are immediately
convertible into shares of the Company's common stock at a rate of 42.105 shares
for each $1,000 principal amount of Convertible Notes.
On April 18, 1996 the Company completed the sale of $130,000,000
principal amount of its 10% Senior Notes due April 2006. The Company used
approximately $107,542,000 of the net proceeds to repurchase $98,500,000
aggregate principal amount of its 12% Senior Notes due 1999. The remaining
proceeds were used to reduce temporarily outstanding amounts under certain of
the Company's revolving lines of credit. In connection with the repurchase of
the 12% Senior Notes, the Company recorded, in the fourth quarter of fiscal
1996, an extraordinary loss, net of taxes, of approximately $6,059,000 related
primarily to a tender offer premium.
Pursuant to a stock repurchase plan approved by the Board of
Directors on December 22, 1994, the Company repurchased 117,000 shares of its
common stock at an average price of $16.36 in November 1996.
Forward looking information; certain cautionary statements
- ----------------------------------------------------------
Certain statements contained in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section are forward
looking statements. Such statements involve risks and uncertainties and actual
results may differ materially from those projected or implied. Further, certain
forward looking statements are based on assumptions of future events which may
not prove to be accurate. Risks and uncertainties include risks associated with
new and future communities, competition, financing availability, fluctuations in
interest rates or labor and material costs, government regulation, geographic
concentration and general economic conditions.
11
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
PART II
OTHER INFORMATION
Item 4. Submission of matters to a vote of Security Holders
---------------------------------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) 11 Statement of Computation of Earnings Per Share.
27 Financial Data Schedule.
(b) Reports on Form 8-K: There were no reports on Form 8-K filed for
the six months ended November 30, 1996.
12
<PAGE>
CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
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.
CONTINENTAL HOMES HOLDING CORP.
Date: January 7, 1997 By: /s/Julie E. Collins
--------------------------
JULIE E. COLLINS
Financial Vice President
Date: January 7, 1997 By: /s/ Donald R. Loback
--------------------------
DONALD R. LOBACK
Chief Executive Officer
13
Exhibit 11
Continental Homes Holding Corp.
Computation of Earnings Per Share
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
November 30, November 30,
------------ ------------
Fully diluted: 1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 7,792 $ 5,315 $ 17,028 $ 10,539
Interest Expense on convertible
subordinated notes, net of
income taxes 874 585 1,749 994
----------- ----------- ----------- -----------
$ 8,666 $ 5,900 $ 18,777 $ 11,533
Weighted average number of
shares outstanding 6,978,297 6,946,666 6,990,820 6,937,117
Conversion of convertible
subordinated notes (42.55 shares
per $1,000 principal amount of notes) -- 1,489,250 -- 1,489,250
Conversion of convertible
subordinated notes (42.105 shares
per $1,000 principal amount of notes) 3,631,556 736,838 3,631,556 368,419
Incremental shares relating to stock
options exercisable 45,625 85,754 52,970 90,001
----------- ----------- ----------- -----------
Weighted average number of shares
outstanding assuming full dilution 10,655,478 9,258,508 10,675,346 8,884,787
=========== =========== =========== ===========
Fully diluted net income per share $ .81 $ .64 $ 1.76 $ 1.30
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> NOV-30-1996
<EXCHANGE-RATE> 1
<CASH> 21,414
<SECURITIES> 0
<RECEIVABLES> 36,470
<ALLOWANCES> 0
<INVENTORY> 405,229
<CURRENT-ASSETS> 0
<PP&E> 3,614
<DEPRECIATION> 0
<TOTAL-ASSETS> 496,595
<CURRENT-LIABILITIES> 0
<BONDS> 282,163
0
0
<COMMON> 71
<OTHER-SE> 143,518
<TOTAL-LIABILITY-AND-EQUITY> 496,595
<SALES> 346,547
<TOTAL-REVENUES> 367,899
<CGS> 282,650
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,347
<INCOME-PRETAX> 28,548
<INCOME-TAX> 11,520
<INCOME-CONTINUING> 17,028
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,028
<EPS-PRIMARY> 2.44
<EPS-DILUTED> 1.76
</TABLE>
