FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---- EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1998
----------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- -----------
For Quarter Ended Commission file number 0-19633
--------- -------
ENGLE HOMES, INC.
- --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-2214791
- ------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
123 N.W. 13th Street
Boca Raton, Florida 33432
- ------------------------------- --------------------------------
(Address of principal executive offices) (Zip code)
(Registrant's telephone number, including area code) (561) 391-4012
----------------------
NONE
- --------------------------------------------------------------------------
(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 report(s), and (2) has been subject to filing requirements
for the past 90 days.
YES x NO
------ ------
Number of shares of common stock outstanding as of July 31, 1998: 11,163,181
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
ENGLE HOMES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(dollars in thousands)
<CAPTION>
July 31, October 31,
1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
CASH
Unrestricted $ 19,598 $ 15,565
Restricted 1,135 981
INVENTORIES 354,165 230,108
PROPERTY AND EQUIPMENT, net 4,124 2,623
OTHER ASSETS 21,139 18,979
GOODWILL 5,375 5,627
MORTGAGE LOANS HELD FOR SALE 22,328 14,529
--------- ---------
TOTAL ASSETS $ 427,864 $ 288,412
========= =========
LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES $ 30,276 $ 21,167
CUSTOMER DEPOSITS 11,267 7,472
BORROWINGS 58,466 82,064
SENIOR NOTES PAYABLE (including
$4,840 to related parties in 1997) 149,263 40,000
CONVERTIBLE SUBORDINATED NOTES 30,000
FINANCIAL SERVICES BORROWINGS 22,328 14,529
--------- ---------
TOTAL LIABILITIES $ 271,600 $ 195,232
--------- ---------
SHAREHOLDERS' EQUITY
PREFERRED STOCK, $.01 par, share authorized
1,000,000, none issued
COMMON STOCK, $.01 par, shares authorized
25,000,000; issued and outstanding 11,163,181
and 6,931,693, respectively 112 69
ADDITIONAL PAID-IN CAPITAL 103,037 47,852
RETAINED EARNINGS 53,115 45,259
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 156,264 93,180
--------- ---------
$ 427,864 $ 288,412
========= =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
2
<TABLE>
ENGLE HOMES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(dollars in thousands, except per share data)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 31, JULY 31,
--------------------- ---------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES
Sales of homes $ 149,963 $ 103,079 $ 345,315 $ 296,758
Sales of land 762 675 11,127 6,254
Rent and other 881 356 2,049 967
Financial services 5,219 3,015 13,086 8,374
--------- --------- --------- ---------
156,825 107,125 371,577 312,353
--------- --------- --------- ---------
COSTS AND EXPENSES
Cost of sales - homes 128,532 88,100 293,561 253,637
Cost of sales - land 736 635 10,069 5,693
Selling, marketing, general
and administrative 15,022 9,791 37,753 29,204
Depreciation and amortization 857 567 2,092 1,839
Financial services 3,510 2,176 9,178 6,507
--------- --------- --------- ---------
148,657 101,269 352,653 296,880
--------- --------- --------- ---------
INCOME BEFORE INCOME TAX AND
EXTRAORDINARY ITEMS 8,168 5,856 18,924 15,473
Provision for income taxes 3,145 2,254 7,286 5,957
--------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEMS 5,023 3,602 11,638 9,516
Loss on extinguishment of debt,
net of income taxes (1,802) (2,612)
--------- --------- --------- ---------
NET INCOME $ 3,221 $ 3,602 $ 9,026 $ 9,516
========= ========= ========= =========
Net income per share before
extraordinary items
Basic $ 0.45 $ 0.52 $ 1.22 $ 1.37
Diluted $ 0.44 $ 0.43 $ 1.18 $ 1.14
Extraordinary items
Basic $ (0.16) $ (0.27)
Diluted $ (0.16) $ (0.25)
Net income per share
Basic $ 0.29 $ 0.52 $ 0.95 $ 1.37
Diluted $ 0.28 $ 0.43 $ 0.93 $ 1.14
Shares used in earnings per
share calculations
Basic 11,152 6,930 9,572 6,930
Diluted 11,369 9,106 10,326 9,106
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
3
<TABLE>
ENGLE HOMES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Shareholders' Equity
For the Nine Months Ended July 31, 1998
(Unaudited)
(in thousands)
<CAPTION>
COMMON STOCK ADDITIONAL
-------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Amounts at
October 31, 1997 6,932 $ 69 $ 47,852 $ 45,259 $ 93,180
Net Income for the
Nine Months Ended
July 31, 1998 9,026 9,026
Dividends to
Shareholders (1,170) (1,170)
Issuance of
common stock 3,105 31 39,472 39,503
Common stock issued in
connection with
conversion of debt 1,100 11 15,391 15,402
Common stock issued
in connection with
employee stock bonus
plan 9 140 140
Common stock issued
in connection with
exercise of stock
options 17 1 182 183
------ ----- ---------- -------- --------
Amounts at
July 31, 1998 11,163 $ 112 $ 103,037 $ 53,115 $156,264
====== ===== ========== ======== ========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
4
<TABLE>
ENGLE HOMES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(dollars in thousands)
<CAPTION>
NINE MONTHS ENDED
JULY 31,
---------------------
1998 1997
--------- ---------
<S> <C> <C>
NET CASH REQUIRED BY OPERATING
ACTIVITIES $ (97,397) $ (13,538)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net acquisitions of
property and equipment (2,947) (363)
--------- ---------
Net cash required by
investing activities (2,947) (363)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in borrowings 183,347 47,510
Repayment of borrowings (206,945) (42,399)
Proceeds from issuance of senior notes 145,875
Redemption of bonds (56,415)
Proceeds from issuance common stock 39,503
Distribution to shareholders (1,170) (1,525)
Proceeds from exercise of stock options 182
--------- ---------
Net cash provided by
financing activities 104,377 3,586
--------- ---------
NET INCREASE (DECREASE) IN CASH 4,033 (10,315)
CASH AT BEGINNING OF PERIOD 15,565 18,262
--------- ---------
CASH AT END OF PERIOD $ 19,598 $ 7,947
========= =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
5
ENGLE HOMES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 1 BASIS OF PRESENTATION AND BUSINESS
These statements do not contain all information required by generally
accepted accounting principles that are included in a full set of financial
statements. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments necessary to present
fairly the financial position of Engle Homes, Inc. and subsidiaries ("the
Company") at July 31, 1998 and results of its operations and its cash flows
for the period then ended and period ended July 31, 1997. These unaudited
condensed consolidated financial statements should be read in conjunction with
the audited financial statements and notes contained in the Company's Form 10-K
for the year ended October 31, 1997. Results of operations for this period are
not necessarily indicative of results to be expected for the full year.
Engle Homes, Inc. and subsidiaries are engaged principally in construction
and sale of residential homes and land development in Florida; Dallas, Texas;
Denver, Colorado; Raleigh, North Carolina; Atlanta, Georgia; Phoenix, Arizona;
Virginia and Maryland. Ancillary products and services to its residential
homebuilding include land sales to other builders, origination and sale of
mortgage loans, and title transfer services. The consolidated financial
statements include the accounts of the Company and all subsidiaries. All
significant intercompany balances and transactions have been eliminated in
consolidation.
<TABLE>
NOTE 2 INVENTORIES (dollars in thousands)
<CAPTION>
July 31, October 31,
1998 1997
--------- ---------
<S> <C> <C>
Land and improvements for residential homes
under development $ 267,954 $ 182,279
Residential homes under construction 84,927 46,049
Land zoned for commercial development 1,284 1,780
--------- ---------
$ 354,165 $ 230,108
========= =========
</TABLE>
6
<TABLE>
NOTE 3 CAPITALIZATION OF INTEREST (dollars in thousands)
Included in inventory is the following:
<CAPTION>
For the Three Months For the Nine Months
Ended July 31, Ended July 31,
-------------------- ------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Interest capitalized,
beginning of period $16,617 $16,800 $16,378 $16,821
Interest incurred and
capitalized 4,733 3,811 13,010 11,626
Amortized to cost of sales-homes (5,119) (3,775) (11,767) (11,085)
Amortized to cost of sales-land (24) (98) (1,414) (624)
------- ------- ------- -------
Interest capitalized, end
of period $16,207 $16,738 $16,207 $16,738
======= ======= ======= =======
</TABLE>
NOTE 4 SHAREHOLDERS' EQUITY AND SENIOR NOTES PAYABLE
On May 14, 1998, the Company declared a cash dividend of $.04 per
share to shareholders of record on June 5, 1998, which was paid on
June 25, 1998.
On October 17, 1997, the Company announced the early redemption of $15.0
million of its 7% Convertible Subordinated Debentures due 2003. On November 18,
1997, the Company redeemed approximately $14.6 million aggregate principal
amount of the debentures. In addition during the quarter ending January 31,
1998, $570,000 of the 7% Convertible Subordinated Notes were converted by the
holders into approximately 41,000 shares of Common Stock. During the three
months ended April 30, 1998, the remaining 14.8 million of the debentures were
converted into approximately 1.1 million shares of common stock.
In February 1998, the Company received net proceeds of approximately $137.1
million from the sale of 3.1 million shares of common stock and $100 million
principal amount of 9.25% Senior Notes due 2008. Proceeds from these offerings
were used to repay existing indebtedness and for general corporate purposes.
On June 9, 1998, the Company sold in a private placement pursuant to Rule
144A, $50,000,000 of 9.25% Series B Senior Notes due 2008 ("Series B Notes) and
called for the early redemption of the $40,000,000 outstanding principal amount
of such 11.75% Senior Notes ("Existing Notes"). The Company used the net
proceeds from the Series B Notes primarily to redeem the Existing Notes and
repayment of certain bank indebtedness.
7
<TABLE>
NOTE 5 EARNINGS PER SHARE (dollars in thousands except per share data)
<CAPTION>
During the first quarter of fiscal 1998, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share." As a
result, all previously reported earnings per share data has been restated to
conform with SFAS No. 128. Basic and diluted earnings per share are calculated
as follows:
For the Three Months For the Nine Months
Ended July 31, Ended July 31,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Basic:
Net income before
extraordinary item $ 5,023 $ 3,602 $11,638 $ 9,516
Weighted average number of
shares outstanding 11,152 6,930 9,572 6,930
Basic earnings per share 0.45 0.52 1.22 1.37
Diluted:
Net income before
extraordinary item $ 5,023 $ 3,602 $11,638 $ 9,516
Interest on 7% convertible
debentures reflected in cost
of sales, net of tax effect 346 506 857
------- ------- ------- -------
Net income applicable to
diluted common shares $ 5,023 $ 3,948 $12,144 $10,373
======= ======= ======= =======
Weighted average number of
common shares outstanding 11,152 6,930 9,572 6,960
Weighted average shares
issuable from assumed
exercise of 7% convertible
debentures 2,143 549 2,143
Options to acquire common stock 217 3 205 3
Other common stock equivalents 30 30
------- ------- ------- -------
Diluted weighted average
common shares outstanding 11,369 9,106 10,326 9,106
------- ------- ------- -------
Diluted earnings per share 0.44 0.43 $ 1.18 $ 1.14
======= ======= ======= =======
</TABLE>
8
Part 1 - Item II
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
<TABLE>
The following table sets forth for the periods indicated certain items of
the Company's financial statements expressed as a percentage of the Company's
total revenues:
<CAPTION>
For the Three For the Nine
Months Ended Months Ended
July 31, July 31,
----------------- -----------------
1998 1997 1998 1997
------ ------- ------ -------
<S> <C> <C> <C> <C>
Total Revenues 100.0% 100.0% 100.0% 100.0%
Costs of home construction and
land sales 82.4 82.8 81.7 83.0
Selling, marketing, general and
administrative expense 9.6 9.1 10.2 9.3
Income before taxes and
extraordinary items 5.2 5.5 5.1 5.0
</TABLE>
<TABLE>
Backlog
Sales of the Company's homes are generally made pursuant to a standard
contract which requires a down payment of up to 10% of the sales price. The
contract includes a financing contingency which permits the customer to cancel
in the event mortgage financing at prevailing interest rates (including
financing arranged by the Company) is unobtainable within a specified period,
typically four to six weeks. The Company includes an undelivered home sale in
its backlog upon execution of the sales contracts and receipt of the down
payment. Revenue is recognized only upon the closing and delivery of a home.
The Company estimates that the average period between the execution of a
purchase agreement for a home and delivery is approximately four to five months.
The following table sets forth the Company's backlog for the periods indicated:
<CAPTION>
July 31,
(dollars in thousands)
1998 1997
---------------- ----------------
Units Dollars Units Dollars
----- --------- ----- ---------
<S> <C> <C> <C> <C>
South Florida 371 75,800 389 $ 88,300
Orlando 319 62,100 165 32,200
West Coast Florida 187 30,800 71 11,600
Texas 160 25,500 55 9,200
Denver 203 41,500 98 19,400
Virginia/Maryland 64 17,600 49 12,500
North Carolina 29 5,000 10 2,200
Atlanta 19 3,000 0 0
Arizona 190 39,300 13 2,700
----- --------- ----- ---------
TOTAL 1,542 $ 300,600 850 $ 178,100
===== ========= ===== =========
</TABLE>
9
The increase in unit backlog at July 31, 1998 was due to a record 878
new homes sales contracts signed during the three months ended July 31, 1998.
This represents a 101% increase in the number of new home sales contracts
signed, when compared with 437 contracts in the quarter ended July 31, 1997.
The Company is currently marketing 80 subdivisions at July 31, 1998, compared
to 66 subdivisions at July 31, 1997, including 16 subdivisions in South Florida;
16 in Central Florida; 14 in West Coast Florida; 11 in Denver, CO; 5 in Dallas,
TX; 5 in Virginia and Maryland; 3 in Raleigh, North Carolina; 7 in Phoenix,
Arizona and 3 in Atlanta, Georgia.
Result of Operations:
Three Months Ended July 31, 1998 compared to July 31, 1997.
The Company's revenues from home sales for the quarter ended July 31, 1998
increased $46.9 million (or 45.5%) compared to the same period in fiscal 1997.
The number of homes delivered increased 50.3% (to 780 from 519) and the average
selling price of homes delivered decreased 3.5% (to $192,000 from $199,000).
The increase of revenues and homes delivered is primarily attributable to the
increase in backlog at April 30, 1998 compared with the prior-year period.
Management believes that changes in the average selling price of homes delivered
from period to period are attributable to discrete factors at each of its
subdivisions, including product mix and premium lot availability, and cannot be
predicted for future periods with any degree of certainty.
Cost of home sales increased $40.4 million (or 45.9%) compared to the
quarter ended July 31, 1997 primarily due to the related increase in home
sale revenues. Cost of home sales as a percentage of home sales increased to
85.7% from 85.5% as a result of the product mix of homes delivered.
The Company's selling, marketing, general and administrative ("S,G&A")
expenses increased approximately $5.2 million (or 53.4%) during the three months
ended July 31, 1998, as compared to the corresponding fiscal 1997 period,
primarily due to selling and marketing expenses associated with the increased
number of homes delivered during the period and an increase in selling
expenditures related to an increase in the number of residential subdivisions.
S,G&A expenses as a percentage of total revenues for the three months ended
July 31, 1998 increased to 9.6% compared to 9.1%, primarily due to an
increase in selling expenditures related to an increase in the number of
residential subdivisions and an increase in sales commission expense due to
higher in-house and broker sales commissions.
Primarily as a result of an increase in revenues, net income before
extraordinary item increased by $1.4 million in the three months ended July 31,
1998 from the comparable period in fiscal 1997.
Nine Months Ended July 31, 1998 compared to July 31, 1997.
The Company's revenues from home sales for the nine months ended
July 31, 1998 increased $48.6 million (or 16.4%) compared to the same period in
fiscal 1997. The number of homes delivered increased 21.4% (to 1788 from 1473)
and the average selling price of homes delivered decreased 4% (to $193,000
from $201,000). The increase of revenues and homes delivered is primarily
attributable to a an increase in backlog during the nine months ended July 31,
1998 compared with the prior year period. Management believes that changes in
the average selling price of homes delivered from period to period are
attributable to discrete factors at each of its subdivisions, including product
mix and premium lot availability, and cannot be predicted for future periods
with any degree of certainty.
10
The Company's revenues from land sales increased approximately $4.9 million
during the nine months ended July 31, 1998, as compared to the same period
in fiscal 1997, primarily as a result of an increase in commercial land sales
at Pembroke Falls, a master-planned community in South Florida. Cost of land
sales as a percentage of land sales were comparable for the nine months ended
July 31, 1998 and the same period in fiscal year 1997.
Cost of home sales increased $39.9 million (or 15.7%) compared to the same
period in fiscal 1997 primarily due to the related increase in home sales
revenue. Cost of home sales as a percentage of home sales decreased to 85.0%
from 85.5% as a result of the product mix of homes delivered.
The Company's selling, marketing, general and administrative ("S,G&A")
expenses increased approximately $8.5 million (or 29.3%) during the nine months
ended July 31, 1998, as compared to the corresponding fiscal 1997 period,
primarily due to selling and marketing expenses associated with the increased
number of homes delivered during the period and an increase in selling
expenditures related to an increase in the number of residential subdivisions.
S,G&A expenses as a percentage of total revenues for the nine months ended July
31, 1998 increased to 10.2% compared to 9.3%, primarily due to an increase in
selling expenditures related to an increase in the number of residential
subdivisions and an increase in sales commission expense due to higher in-house
and broker sales commissions.
Primarily as a result of the increase in revenues, net income before
extraordinary item increased by $2.1 million in the nine months ended July 31,
1998 from the comparable period in fiscal 1997.
Liquidity and Capital Resources
The Company's financing needs depend upon its construction volume, asset
turnover and land acquisitions. 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 borrowing as permitted under the Company's bank credit facilities.
At July 31, 1998, the Company had outstanding $19.1 million of purchase
money mortgages and bank borrowings of $39.4 million under its Revolving Credit
Facility, and had available additional borrowings of $13.0 million.
On May 28, 1998, the Company entered into a new Revolving Credit Facility.
The Revolving Credit Facility provides for up to $170 million of unsecured
borrowings. Borrowings under the Revolving Credit Facility generally bear
interest at a fluctuating rate based upon the prime rate, the federal funds rate
or LIBOR. All outstanding borrowings under the Revolving Credit Facility are
due in May 2001. The Revolving Credit Facility contains various operating and
financial covenants and all of the Company's subsidiaries are guarantors of the
Company's obligations under the Revolving Credit Facility. Available
borrowings under the Revolving Credit Facility are limited to certain
percentages of finished lots, construction costs, land and land under
development.
The Revolving Credit Facility replaced all of the Company's secured lines
of credit other than the Warehouse Line of Credit. All amounts outstanding
under the secured lines of credit have been repaid with the proceeds of
borrowings under the Revolving Credit Facility. The Company believes that
amounts generated from operations and additional borrowings under the Revolving
Credit Facility will provide adequate funds to finance its homebuilding
activities and meet its debt service requirements for fiscal year 1998.
11
On October 17, 1997, the Company announced the early redemption of $15.0
million of its 7% Convertible Subordinated Debentures due 2003. On November 18,
1997, the Company redeemed approximately $14.6 million aggregate principal
amount of the debentures. The Company established a $15.0 million short term
unsecured credit facility to fund this redemption. During the three months
ended July 31, 1998 the Company converted 14.8 million of the debentures into
approximately 1.1 million shares of common stock.
In February 1998, the Company received net proceeds of approximately $137.1
million from the sale of 3.1 million shares of common stock and $100 million
principal amount of 9.25% Senior Notes due 2008. Proceeds from these offerings
were used to repay existing indebtedness and for general corporate purposes.
On June 9, 1998, the Company sold in a private placement pursuant to Rule
144A, $50,000,000 of 9.25% Series B Senior Notes due 2008 ("Series B Notes) and
called for the early redemption of the $40,000,000 outstanding principal amount
of such 11.75% Senior Notes ("Existing Notes"). The Company used the net
proceeds from the Series B Notes primarily to redeem the Existing Notes and
repayment of certain bank indebtedness.
Preferred Home Mortgage Company ("PHMC") has a warehouse line of credit in
the amount of $30 million which is guaranteed by the Company. At July 31,
1998, PHMC had outstanding borrowings of $22.3 million pursuant to such credit
line from origination of mortgage loans.
Land Acquisition and Construction Financing
The Company is continually exploring opportunities to purchase parcels of
land for its homebuilding operations and is, at any given time, in various
stages of proposing, making offers for, and negotiating the acquisition of
various parcels, whether outright or through options. During the nine months
ended July 31, 1998, the Company increased land inventories approximately $85.7
million to provide land for continued growth.
The Company has increased its land development and construction activities
in response to current and anticipated demand and expects to pursue additional
land acquisition and development opportunities in the future. However, the
Company's ability to undertake significant additional projects is expected to
depend in part upon the availability of financing on satisfactory terms. To
date, the Company has not had any significant difficulties in securing
acquisition, development and construction financing and, except with respect
to major land acquisitions, management believes that such financing will
continue to be available on satisfactory terms. However, there can be no
assurance that sufficient financing on satisfactory terms will continue to be
available.
Year 2000 Issues
The Company conducts its business primarily with commercial software
provided by third party vendors. After an analysis of the Company's exposure
to the impact of year 2000 issues, management believes that such commercial
software is substantially year 2000 compliant and that completion of the year
2000 compliance is not expected to have a material impact on the Company's
business, operations or financial condition. Management is not in a position
to evaluate the extent, if any, to which any year 2000 issues that may affect
the economy generally or any of its subcontractors, suppliers or vendors in
particular would also be likely to affect the Company.
12
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Report and other such Company filings (collectively, "SEC filings") under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended (as well as information communicated orally or in writing between the
dates of such SEC filings) contains or may contain information that is forward
looking, related to subject matter such as national and local economic
conditions, the effect of governmental regulation on the Company, the
competitive environment in which the Company operates, changes in interest
rates, home prices, availability and cost of land for future growth,
availability of working capital and the availability and cost of labor and
materials. Such forward looking information involves important risks and
uncertainties that could significantly affect expected results. These risks
and uncertainties are addressed in this and other SEC filings.
Part II - Other Information
Item 1-6 Not applicable.
13
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.
ENGLE HOMES, INC.
-----------------
(Registrant)
Date: September 2, 1998 \s\ ALEC ENGELSTEIN
- ------------------------ ------------------------
Alec Engelstein
Chief Executive Officer
Date: September 2, 1998 \s\ DAVID SHAPIRO
- ------------------------ ------------------------
David Shapiro
Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> JUL-31-1998
<CASH> 20,733
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 354,165
<CURRENT-ASSETS> 0
<PP&E> 4,124
<DEPRECIATION> 0
<TOTAL-ASSETS> 427,864
<CURRENT-LIABILITIES> 0
<BONDS> 207,729
0
0
<COMMON> 112
<OTHER-SE> 156,152
<TOTAL-LIABILITY-AND-EQUITY> 427,864
<SALES> 356,442
<TOTAL-REVENUES> 371,577
<CGS> 303,630
<TOTAL-COSTS> 303,630
<OTHER-EXPENSES> 49,023
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 18,924
<INCOME-TAX> 7,286
<INCOME-CONTINUING> 11,638
<DISCONTINUED> 0
<EXTRAORDINARY> (2,612)
<CHANGES> 0
<NET-INCOME> 9,026
<EPS-PRIMARY> .95
<EPS-DILUTED> .93
</TABLE>
