<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 August 31, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934
Commission File Number: 0-15925
CAPITAL PACIFIC HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2956559
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
4100 MacArthur Blvd., Suite 200, Newport Beach, CA 92660
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(714) 622-8400
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) 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 XX No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class and Title of Shares Outstanding as of
Capital Stock October 10, 1995
---------------------------- ------------------------
<S> <C>
Common Stock, $.10 Par Value 14,995,000
</TABLE>
<PAGE> 2
CAPITAL PACIFIC HOLDINGS, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I - Financial Information:
Item 1 - Financial Statements
Consolidated Balance Sheets -
August 31, 1995 and February 28, 1995 1
Consolidated Statements of Operations for the
Three Months Ended August 31, 1995 and 1994 and 2
the Six Months Ended August 31, 1995 and 1994
Consolidated Statements of Cash Flows for the
Six Months Ended August 31, 1995 and 1994 3
Notes to Consolidated Financial Statements 4-8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
Part II - Other Information:
Item 4 - Submission of matters to a vote of Security
Holders 12
</TABLE>
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
CAPITAL PACIFIC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
<TABLE>
<CAPTION>
August 31,
1995 February 28,
(Unaudited) 1995
----------- ------------
<S> <C> <C>
Cash and cash equivalents $ 16,976 $ 22,401
Restricted cash 1,318 1,421
Accounts and notes receivable 2,970 3,818
Residential inventories 193,452 167,807
Plant, property and equipment 6,451 5,891
Prepaid expenses and other assets 13,154 13,837
-------- --------
$234,321 $215,175
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 25,660 $ 21,516
Notes payable 44,692 29,391
Bonds payable 100,000 100,000
-------- --------
Total liabilities 170,352 150,907
-------- --------
Minority Interest 3,724 3,524
Stockholders' equity (deficit):
Common stock, par value $.10 per share, 30,000,000 shares
authorized; 14,995,000 issued and outstanding 1,500 1,500
Additional paid-in capital 211,888 211,888
Accumulated deficit (153,143) (152,644)
-------- --------
Total stockholders' equity 60,245 60,744
-------- --------
$234,321 $215,175
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE> 4
CAPITAL PACIFIC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months Six months
ended August 31, ended August 31,
------------------------ ------------------------
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenue:
Sales of homes $27,637 $31,050 $59,340 $61,638
Sales of land and lots - 1,140 733 2,292
Interest and other income 779 1062 1483 2092
------- ------- ------- -------
28,416 33,252 61,556 66,022
------- ------- ------- -------
Costs and expenses:
Cost of homes 23,004 25,241 49,544 49,714
Cost of land and lots - 907 470 1,799
Selling, general and administrative 5722 4609 12192 9154
Minority Interest 41 1,902 124 3,433
------- ------- ------- -------
28,767 32,659 62,330 64,100
------- ------- ------- -------
Income (loss) before income taxes
and extraordinary gain (351) 593 (774) 1,922
Provision (benefit) for income taxes (125) 237 (275) 699
------- ------- ------- -------
Income (loss) before extraordinary gain (226) 356 (499) 1223
Extraordinary gain (net of tax effect) - - - 3,075
------- ------- ------- -------
NET INCOME/(LOSS) $ (226) $ 356 $ (499) $ 4,298
======= ======= ======= =======
Net income/(loss) per common share:
Before extraordinary gain $ (0.01) $ 0.02 $ (0.03) $ 0.08
Extraordinary gain 0.00 0.00 0.00 0.20
------- ------- ------- -------
Net income/(loss) $ (0.01) $ 0.02 $ (0.03) $ 0.28
======= ======= ======= =======
Weighted average number of common shares 14,995 14,995 14,995 14,995
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE> 5
CAPITAL PACIFIC HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended
August 31,
----------------------------
1995 1994
-------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ (499) $ 4,298
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Extraordinary gain - (4,713)
Depreciation and amortization 645 109
Increase in residential inventories (25,645) (51,090)
Decrease in receivables, prepaid
expenses and other assets 1,123 (2,012)
Decrease in accounts payable and
accrued liabilities 4,144 3,670
-------- --------
NET CASH USED IN OPERATING ACTIVITIES (20,232) (49,738)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant, property and equipment, net (764) (3,370)
Decrease (increase) in investment in partnerships 70 (14)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (694) (3,384)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Bond issue proceeds, net - 96,287
Increase (decrease) in minority interest in joint ventures 200 (9,245)
Borrowings from (payments to) notes payable, net 15,301 (18,046)
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 15,501 68,996
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (5,425) 15,874
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 22,401 10,001
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 16,976 $ 25,875
======== ========
Supplemental disclosure of non-cash transactions:
Note payable reduced by debt forgiveness - $ 4,713
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 6
CAPITAL PACIFIC HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the
financial statements and notes thereto included in the Form 10-K for the
fiscal year ended February 28, 1995 of Capital Pacific Holdings, Inc. (the
"Company") filed under the Company's former name J.M. Peters Company, Inc.
In the opinion of management, the financial statements presented herein
include all adjustments (which are solely of a normal recurring nature)
necessary to present fairly the Company's financial position and results of
operations. The results of operations for the three month period ended
August 31, 1995, are not necessarily indicative of the results that may be
expected for the year ending February 29, 1996.
2. Notes payable:
Notes payable at August 31, 1995 and February 28, 1995, are summarized as
follows (in thousands):
<TABLE>
<CAPTION>
August 31, February 28,
1995 1995
---------- ------------
<S> <C> <C>
Promissory note collateralized by
deeds of trust, including
interest varying from 8% to
prime plus 1.5% $ 2,946 $ 4,878
Notes payable to banks, including
interest varying from prime plus
one percent to prime plus one and
one-quarter percent, maturing before
October 1, 1996 secured by certain
real estate inventories on a
non-recourse basis 16,228 17,011
Notes payable to banks, including interest
at prime plus one percent maturing March
31, 1998 secured by certain real estate
inventories on a recourse basis 23,018 5,002
Promissory note payable to previous owner
of Clark Wilson secured by Stock Pledge
Agreement on a non-recourse basis,
interest at 8% payable based on
performance of the entity acquired 2,500 2,500
------- -------
$44,692 $29,391
======= =======
</TABLE>
4
<PAGE> 7
3. Supplemental Guarantor Information
In connection with the offering in fiscal 1995 of $100,000,000 in senior
unsecured notes (the "Offering"), the Company and certain of its wholly-owned
subsidiaries (Guarantors) jointly, severally, fully and unconditionally
guaranteed such notes. Supplemental condensed combined financial information of
the Company, Guarantors and non-guarantors is presented as follows. As
discussed in Note 3 in Notes To Supplemental Guarantor Information, these
financial statements are prepared using the equity method of accounting for the
Company's and the Guarantors' investments in subsidiaries and partnerships.
This supplemental financial information should be read in conjuction with the
consolidated financial statements.
As Of And For The Six Months Ended August 31, 1995
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Capital Pacific Non- Total
Holdings, Inc. Guarantors(1) Guarantors(2) Eliminations(4) Consolidated
--------------- ------------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET
Cash $ 12,839 $ 686 $ 3,451 $ 0 $ 16,976
Inventories 137,062 25,112 31,278 193,452
Investment in Partnerships
and subsidiaries (3) 26,252 1,050 38 (25,461) 1,879
Intercompany advances 21,576 0 0 (21,576) 0
Other 16,782 760 4,036 436 22,014
-------- ------- ------- -------- --------
Total Assets $214,511 $27,608 $38,803 $(46,601) $234,321
======== ======= ======= ======== ========
Accounts payable and
accrued liabilities $ 17,386 $ 4,211 $ 4,476 $ (413) $ 25,660
Intercompany advances 0 6,571 15,005 (21,576) 0
Notes payable 136,880 1,667 6,145 144,692
Minority interest 0 0 0 3,724 3,724
Shareholders' equity 60,245 15,159 13,177 (28,336) 60,245
-------- ------- ------- -------- --------
Total Liabilities & Equity $214,511 $27,608 $38,803 $(46,601) $234,321
======== ======= ======= ======== ========
STATEMENT OF OPERATIONS
Revenues:
Sales of homes and land $ 8,154 $25,967 $25,952 $ 0 $ 60,073
Interest and other
income, net 476 148 523 1,147
Equity in income of
partnerships and
subsidiaries (3) 1,371 117 38 (1,190) 336
-------- ------- ------- -------- --------
Total Revenues 10,001 26,232 26,513 (1,190) 61,556
-------- ------- ------- -------- --------
Cost of homes and land 7,088 21,406 21,520 50,014
Selling, general and
administrative 4,278 3,480 4,434 12,192
Minority interest 0 0 0 124 124
-------- ------- ------- -------- --------
Income (loss) before
provision (benefit) for
income taxes (1,365) 1,346 559 (1,314) (774)
Provision (benefit) for
income taxes (866) 478 113 (275)
-------- ------- ------- -------- --------
NET INCOME (LOSS) $ (499) $ 868 $ 446 $ (1,314) $ (499)
======== ======= ======= ======== ========
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
Capital Pacific Non- Total
Holdings, Inc. Guarantors(1) Guarantors(2) Eliminations(4) Consolidated
--------------- ------------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF CASH FLOWS
Net cash from (used in)
operating activities $(10,822) $ (784) $ (8,426) $(200) $(20,232)
Net cash from (used in)
investment activities (538) 0 (156) 0 (694)
Net cash from (used in)
financing activities 19,087 (1,942) (1,844) 200 15,501
-------- ------- -------- ----- --------
Net increase (decrease)
in cash 7,727 (2,726) (10,426) 0 (5,425)
Cash - beginning of
period 5,112 3,412 13,877 0 22,401
-------- ------- -------- ----- --------
Cash - end of period $ 12,839 $ 686 $ 3,451 $ 0 $ 16,976
======== ======= ======== ===== ========
</TABLE>
6
<PAGE> 9
NOTES TO SUPPLEMENTAL GUARANTOR INFORMATION
(1) Guarantors are Durable Homes, Inc., J.M. Peters Nevada, Inc., and Peters
Ranchland Company, Inc., all wholly-owned subsidiaries of Capital Pacific
Holdings, Inc.
(2) The non-guarantors are:
(a) The limited partnerships in which Peters Ranchland Company, Inc., is
General Partner:
- Ranchland Alicante Development, L.P.
- Ranchland Montilla Development, L.P.
- Ranchland Fairway Estates Development, L.P.
- Ranchland Portola Development, L.P.
(b) The limited partnerships in which Capital Pacific
Holdings, Inc., is General Partner:
- Peters Walnut Estates
(c) The limited partnership in which J.M. Peters Nevada, Inc., is
General Partner:
- Taos Estates, L.P.
(d) The limited partnerships in which J.M. Peters California,
Inc., is a General Partner:
- J.M.P. Mulholland Estates I
- J.M.P. Mulholland Estates II
(e) Certain wholly-owned subsidiaries of Capital Pacific Holdings, Inc.:
- Newport Design Center, Inc.
- Capital Pacific Communities, Inc.
- Durable Homes ofCalifornia, Inc.
- Capital Pacific Mortgage, Inc.
- J.M. Peters Arizona, Inc.
- Clark Wilson Homes, Inc. (will become a guarantor in fiscal year
1996)
- Fairway Financial Corporation
- Parkland Estates, Inc.
- J.M. Peters California, Inc.
7
<PAGE> 10
NOTES TO SUPPLEMENTAL GUARANTOR INFORMATION (CONT.)
(3) Investments in partnerships and subsidiaries are accounted for by the
Company and the Guarantors on the equity method for purposes of the
supplemental combining presentation. The following partnerships are not
consolidated in the financial statements and are not guarantors:
- Bayhill Escrow, Inc.
- J.M.P. Harbor View, L.P.
- J.M.P. Canyon Estates, L.P.
(4) The elimination entries eliminate investments in subsidiaries,
partnerships and intercompany balances.
8
<PAGE> 11
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FINANCIAL CONDITION
In August 1995 the Company successfully completed negotiations with its
principal bank lender increasing total contingent availability under all credit
facilities with the bank from $50 million to $90 million. As of August 31,
1995 the Company has in place three separate facilities (the "Facilities") with
the bank as follows:
- $25 million Non-Recourse Secured Acquisition and
Development line of credit ("A & D")
- $40 million Recourse Secured Production line of credit
("Recourse Production Line")
- $25 million Non-Recourse Secured Production line of credit
("Non-Recourse Production Line")
At August 31, 1995 the Company had utilized $11.4 million of the A & D Line,
$23.0 million of the Recourse Production Line and none of the Non-Recourse
Production Line. The availability of the Facilities is limited by covenants
in the Indenture governing the Offering and in the agreements governing the
Facilities. In addition to the principal bank lines, the Company has separate
non-recourse lines for the operations in Nevada and Texas.
For the six months ended August 31, 1995, the Company closed the sale of 469
homes and 3 land lots. The Company, at August 31, 1995 had in excess of 700
homes under construction. This construction activity is currently being
financed out of Company cash, bank financing and the existing joint ventures
with CalPERS. The Company anticipates that it will continue to utilize bank
financing to cover liquidity needs in excess of Company cash in the event this
approximate level of construction activity continues.
The Company expects that cash flow generated from operations will be sufficient
to cover the debt service on the Offering for the foreseeable future.
BALANCE SHEET ITEMS
Cash and cash equivalents decreased to $17.0 million at August 31, 1995 from
$22.4 million at February 28, 1995 due to the increased construction activity
net of additional construction loan borrowings. The Company anticipates that
the level of cash and financing available is sufficient to meet its needs in
the near term.
Residential inventories increased from $167.8 million at February 28, 1995 to
$193.4 million at August 31, 1995. The increase is due to the progress made on
the over 700 residential homes under construction.
9
<PAGE> 12
Due to the increased construction activity, accounts payable and accrued
liabilities increased to $25.7 million at August 31, 1995 from $21.5 million at
February 28, 1995. Notes payable increased from $29.4 million at February 28,
1995 to $44.7 million at August 31, 1995 due principally to increased
construction borrowing.
RESULTS OF OPERATIONS
SECOND QUARTER OF FISCAL 1996 COMPARED WITH THE SECOND QUARTER OF FISCAL 1995:
Revenues from housing sales for the second quarter of fiscal 1996 and the
second quarter of fiscal 1995 were $27.6 million and $31.1 million,
respectively, reflecting a decrease of $3.5 million from the corresponding
period of fiscal 1995. Home closings for the second quarter of fiscal 1996
were 211 versus 172 homes during the second quarter of fiscal 1995. While unit
closings increased, the decreased revenues represent the lower average sales
prices in the Nevada and Texas operations compared to California. In addition,
the Company closed 13 homes in unconsolidated joint venture operations during
the second quarter of fiscal 1996.
Cost of sales for the three months ended August 31, 1995 was $23.0 million
versus $25.2 million for the three months ended August 31, 1994. These figures
result in a gross profit margin of 16.8 percent in fiscal 1996 as compared to
18.7 percent in fiscal 1995. Selling, general and administrative expense
increased $1.1 million or 24% for the second quarter of fiscal 1996 as compared
to the second quarter of fiscal 1995. This increase is due to the acquisition
of Clark Wilson Homes, Inc. ("Clark Wilson") in September of 1994. Clark
Wilson added $1.8 million of sales, general and administrative expense to the
consolidated group.
Minority interest expense was $41 thousand for the second quarter of fiscal
1996 compared to $1.9 million for the second quarter of fiscal 1995. The
decrease was due to the decreased number of closings in the Company's
consolidated joint venture projects. Because of adequate financing, the Company
has not entered into any new joint venture arrangements.
As a result of the foregoing factors the Company posted a net loss of $226
thousand for the three months ended August 31, 1995 compared to net income of
$356 thousand for the three months ended August 31, 1994.
For the second quarter of fiscal 1996 the Company recorded 234 net orders on
homes contracted for sales, less cancellations which was 112 homes greater than
in the comparable quarter of fiscal 1995. The Company had 521 homes in its
backlog (homes under contract but not closed) at August 31, 1995, which was an
increase of 299 homes over the Company's backlog at August 31, 1994.
10
<PAGE> 13
FIRST SIX MONTHS OF FISCAL 1996 COMPARED WITH THE FIRST SIX MONTHS OF FISCAL
1995:
Revenues from housing sales for the first six months of fiscal 1996 and the
first six months of fiscal 1995 were $59.3 million and $61.6 million,
respectively, reflecting a decrease of $2.3 million from the corresponding
period of fiscal 1995. Home closings for the first six months of fiscal 1996
were 437 versus 365 homes during the first six months of fiscal 1995. While
unit closings increased, the decreased revenues represent the lower average
sales prices in the Nevada and Texas operations compared to California. In
addition, the Company closed 32 homes in unconsolidated joint venture
operations during the first six months of fiscal 1996. Due to substantial
rainfall in the winter and spring, California home starts were delayed. As a
result, home closings in California were reduced in the first six months of
fiscal 1996.
Cost of sales for the six months ended August 31, 1995 was $49.5 million versus
$49.7 million for the six months ended August 31, 1994. These figures result
in a gross profit margin of 16.5 percent in fiscal 1996 as compared to 19.3
percent in fiscal 1995.
Selling, general and administrative expense increased $3.0 million or 33% for
the first six months of fiscal 1996 as compared to the first six months of
fiscal 1995. This increase is due to the acquisition of Clark Wilson in
September of 1994. Clark Wilson added $3.5 million of sales, general and
administrative expense to the consolidated group during the first six months of
fiscal 1996.
Minority interest expense was $124 thousand for the six months ended August 31,
1995 compared to $3.4 million for the six months ended August 31, 1994. The
decrease was due to the decreased number of closings in the Company's
consolidated joint venture projects.
The Company posted no extraordinary gain for the six months ended August 31,
1995. An extraordinary gain of approximately $4.7 million ($3.1 million net of
income taxes) was recorded for the six month period ended August 31, 1994
resulting from the retirement of a construction loan and interest due thereon
at less than the book amount of the liability.
As a result of the foregoing factors the Company posted a net loss of $499
thousand for the six months ended August 31, 1995 compared to net income of
$4.3 million for the six months ended August 31, 1994.
For the first six months of fiscal 1996 the Company recorded 558 net orders on
homes contracted for sales, less cancellations which was 276 homes greater than
in the comparable period of fiscal 1995. The Company had 521 homes in its
backlog (homes under contract but not closed) at August 31, 1995, which was an
increase of 299 homes over the Company's backlog at August 31, 1994.
11
<PAGE> 14
PART II - OTHER INFORMATION
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Annual Meeting of Shareholders of the Company held on July 26, 1995 the
following directors were elected to serve until the next meeting at which
directors are elected: Hadi Makarechian, Dale Dowers, Karlheinz M. Kaiser,
Allan L. Acree, and William A. Funk. In addition, the shareholders approved a
Stock Incentive Plan enabling the Company to grant to key employees of the
Company and its affiliates and to directors shares, options to purchase shares
and stock appreciation rights. The proposal to approve the Stock Incentive
Plan received 14,838,677 votes for, 21,961 votes against, and 0 votes were
withheld. There were 12,350 abstentions and 122,012 broker non-votes as to
such matter. In addition, at the meeting the shareholders approved an
amendment to the Company's Articles of Incorporation to change the name of the
Company to Capital Pacific Holdings, Inc. The proposal to approve the name
change received 13,845,164 votes for, 116,633 votes against, and 0 votes were
withheld. There were 5,350 abstentions and 1,027,853 broker non-votes as to
such matter.
12
<PAGE> 15
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.
CAPITAL PACIFIC HOLDINGS, INC.
Date: October 10, 1995 BY: /S/ HADI MAKARECHIAN
-------------------------------------
Hadi Makarechian, Chairman and
Chief Executive Officer
Date: October 10, 1995 BY: /S/ ANTHONY M. LAUGHLIN
-------------------------------------
Anthony M. Laughlin, Vice President
and Chief Financial Officer
(Principal Financial Officer)
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description Page Number
- -------------- ----------- -----------
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> AUG-31-1995
<CASH> 16,976
<SECURITIES> 0
<RECEIVABLES> 2,970
<ALLOWANCES> 0
<INVENTORY> 193,452
<CURRENT-ASSETS> 0
<PP&E> 9,431
<DEPRECIATION> 2,980
<TOTAL-ASSETS> 234,321
<CURRENT-LIABILITIES> 25,660
<BONDS> 144,692
<COMMON> 1,500
0
0
<OTHER-SE> 211,888
<TOTAL-LIABILITY-AND-EQUITY> 234,321
<SALES> 60,073
<TOTAL-REVENUES> 61,556
<CGS> 50,014
<TOTAL-COSTS> 50,014
<OTHER-EXPENSES> 12,316
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (774)
<INCOME-TAX> (275)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (499)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
