FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996 or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period from _____________ to _____________
Commission File Number: 33-58934
LUNDGREN BROS. CONSTRUCTION, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0970679
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
935 East Wayzata Boulevard
Wayzata, Minnesota 55391
(Address of principal executive offices) (Zip Code)
(612 473-1231
(Registrant's telephone number, including area code)
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 _____
On November 14, 1996, there were 594 voting shares and 10,031 nonvoting shares
of the registrant's no par value common stock outstanding.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
SEPTEMBER 30, 1996 DECEMBER 31, 1995
------------------ -----------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 748 $ 2,984
Restricted cash 1,393 816
Receivables 1,389 1,078
Deposits and prepaid expenses 3,241 2,861
Inventories 38,285 34,166
Land option and earnest money deposits 798 921
Property and equipment, net 1,502 1,682
Other assets 3,486 3,255
------- -------
Total assets $50,842 $47,763
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Obligations under bank lines of credit 4,765 3,650
Debt obligations 28,648 25,260
Obligations under capital leases 501 505
Accounts payable 4,999 7,303
Cost to complete sold homes 1,482 1,245
Customer deposits 1,787 1,846
Accrued expenses 1,171 1,484
Income taxes payable 374 85
-------- --------
Total liabilities 43,727 41,378
Commitments and contingencies -- --
Stockholders' equity:
Common stock, no par value; authorized, 12,000
shares; 594 shares voting and 10,031
shares nonvoting issued and outstanding 99 99
Retained earnings 7,016 6,286
------- -------
7,115 6,385
------- -------
Total liabilities and stockholders' equity $50,842 $47,763
====== ======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
<CAPTION>
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 23,381 $ 19,406 $ 53,313 $ 46,615
Cost of revenues 19,839 16,335 45,404 39,702
-------- -------- -------- --------
Gross profit 3,542 3,071 7,909 6,913
Operating expenses:
Selling 999 722 2,309 2,094
General and administrative 1,169 1,152 3,181 3,184
-------- -------- -------- --------
1,374 1,197 2,419 1,635
Other income (expense):
Interest expense (338) (451) (1,331) (1,345)
Other, net 21 80 152 110
-------- -------- -------- --------
Income from operations before
income taxes 1,057 826 1,240 400
Income tax provision 437 332 510 160
-------- -------- -------- --------
Income from operations before cumulative
effect of change in accounting method 620 494 730 240
Cumulative effect on prior years of change in accounting
method, net of income taxes of $527 -- -- -- 763
-------- -------- -------- --------
Net income 620 494 730 1,003
Retained earnings, beginning of period 6,396 5,610 6,286 5,101
-------- -------- -------- --------
Retained earnings, end of period $ 7,016 $ 6,104 $ 7,016 $ 6,104
======== ======== ======== ========
Net income per share:
Income from operations $ 58 $ 46 $ 69 $ 22
Cumulative effect of change in accounting method -- -- -- 72
-------- -------- -------- --------
$ 58 $ 46 $ 69 $ 94
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
<CAPTION>
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 730 $ 1,003
Adjustments to reconcile net income to
net cash used in operating activities:
Cumulative effect of change in accounting method -- (763)
Depreciation and amortization 335 398
Deferred income taxes -- 75
Gain on disposal of property and equipment -- (34)
Gain on sale of investment (123) --
Changes in operating assets and liabilities (3,174) (5,009)
-------- --------
Net cash used in operating activities (2,232) (4,330)
Cash flows from investing activities:
Expenditures for property and equipment (104) (173)
Proceeds from disposal of property and equipment -- 73
Proceeds from sale of investment 159 --
Increase in cash surrender value of
life insurance (275) (217)
Other 14 (64)
-------- --------
Net cash used in investing activities (206) (381)
Cash flows from financing activities:
Proceeds from bank lines of credit 25,759 16,238
Payment of principal on bank lines of credit (24,644) (13,746)
Proceeds from debt obligations 32,463 28,293
Payment of principal on debt obligations (33,315) (27,786)
Payment of principal on capital lease obligations (4) (15)
Payment of debt issuance costs (57) --
-------- --------
Net cash provided by financing activities 202 2,984
-------- --------
Decrease in cash and cash equivalents (2,236) (1,727)
Cash and cash equivalents, at the beginning of the period 2,984 3,318
-------- --------
Cash and cash equivalents, at the end of the period $ 748 $ 1,591
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
LUNDGREN BROS. CONSTRUCTION, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
NOTE 1. GENERAL
SIGNIFICANT ACCOUNTING POLICIES
The audited 1995 annual report of Lundgren Bros. Construction, Inc. and
Subsidiaries (the Company), filed in its 1995 Form 10-K, contains a summary of
significant accounting policies in the Notes to the Consolidated Financial
Statements. The same accounting policies are followed in the preparation of the
interim financial statements.
PER SHARE AMOUNTS
Per share amounts are computed by dividing by the weighted average number of
shares of voting and nonvoting common stock outstanding during each period. The
number of outstanding shares of common stock for the three and nine months ended
September 30, 1996 and 1995 was 10,625.
BASIS OF PRESENTATION AND INTERIM PERIODS
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring
accruals) considered necessary for fair presentation have been included. The
interim results are not necessarily indicative of the results for a fiscal year
as a whole.
NOTE 2. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(UNAUDITED)
RECEIVABLES
<S> <C> <C>
Trade $ 1,187 $ 768
Escrows 187 319
Contracts and notes 18 26
Employees and officers 18 17
Other 34 3
------- -------
1,444 1,133
Less allowance for doubtful accounts 55 55
------- -------
$ 1,389 $ 1,078
======= =======
INVENTORIES
Homes under construction $13,947 $10,822
Model homes 3,349 3,539
Lots held for sale 15,169 14,464
Land under development 562 --
Land held for future development 5,258 5,341
------- -------
$38,285 $34,166
======= =======
DEBT OBLIGATIONS
Construction loans on single family homes $11,656 $ 9,317
Promissory notes 5,608 3,860
Development loans 6,313 6,415
Subordinate debenture series 2,951 2,962
Street, sewer and water assessments on land
under development and lots held for sale 982 1,598
Installment loans 825 736
Unsecured demand notes payable, stockholders 313 357
Noncompete obligation, officer -- 15
------- -------
$28,648 $25,260
======= =======
</TABLE>
Effective October 18, 1996, the Company began selling $3,000,000 principal
amount of its new issue of Senior Subordinated Debentures at an interest
rate of 11% per annum, payable quarterly. Principal is due October 1,
2004. On October 30, 1996, the Company closed on the sale of all
$3,000,000 of its Senior Subordinated Debentures.
ACCRUED EXPENSES
Payroll, bonuses and payroll taxes $ 452 $ 926
Other, principally interest 719 558
------- -------
$ 1,171 $ 1,484
======= ======
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
The Company acquired developed lots and land for future development under
promissory notes with the sellers, aggregating $4,240 and $1,281 during
the nine months ended September 30, 1996 and 1995, respectively.
NOTE 3. SEGMENT REPORTING
The Company operates principally in two business segments as follows:
* The new homes division, engaged in the interrelated activities
of land acquisition and development and the design,
construction, painting, staining and sale of detached single
family homes.
* The remodeling division, engaged in the activities of
designing and constructing residential remodeling projects.
These projects include complete house renovations, kitchen
remodelings, bathroom remodelings, second story additions,
finished basements, enclosed porches and patios and other
miscellaneous projects.
The following is a summary of the financial information relating to the
Company's two business segments. A substantial amount of cost allocations are
necessary to determine the operating income (loss) by segment. For this reason,
and because the Company is an integrated enterprise, management does not
represent that these segments, if operated as independent businesses, would
result in the operating income (loss) amounts shown. Intersegment sales are not
significant.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
New homes $ 22,002 $ 18,251 $ 50,179 $ 43,345
Remodeling 1,379 1,155 3,134 3,270
Operating income (loss):
New homes 1,377 1,154 2,657 1,731
Remodeling (3) 43 (238) (96)
</TABLE>
NOTE 4. LAND OPTION AND EARNEST MONEY DEPOSITS
The Company has entered into option and purchase agreements to acquire lots in
residential housing developments and land for future development. Upon exercise
of an option, option payments are generally applied to the purchase price of
land acquired in accordance with the terms of the agreement. Earnest money
deposits are credited against future purchases. The Company had land purchase
commitments totaling approximately $1,486 and $3,069 at September 30, 1996 and
December 31, 1995, respectively, related to the earnest money deposits.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company is organized in two business segments: new homes and remodeling. The
new homes segment includes land acquisition and development, home building and
home sales and painting and staining services. Remodeling consists of home
remodeling design and construction services.
NEW HOMES
Revenues increased $3.8 million or 20.6% and $6.8 million or 15.8% for the three
and nine months ended September 30, 1996, respectively, compared to the same
periods in 1995. The Company closed on sales of 63 and 143 homes in the three
and nine months ended September 30, 1996, respectively, compared to 58 and 135
closings in the same periods in 1995. The average selling price of homes closed
increased by 11.3% and 9.4% for the three and nine months ended September 30,
1996, respectively, from the average selling price of homes closed for the same
periods in 1995. The Company believes that the increase in homes closed in the
three and nine months ended September 30, 1996 was due to the timing of the
removal of customer purchase contingencies and subsequent house starts in 1996
compared to 1995. The increase in average selling price is due to general price
increases as a result of inflation and changes in the mix of homes closed in
1996 compared to 1995.
Gross profit margin for the new homes segment remained steady for the three
months ended September 30, 1996 compared to the same period in 1995. For the
nine months ended September 30, 1996 the gross profit margin increased to 14.9%
compared to 14.5% for the same period in 1995. The Company believes that this
increase in gross profit margin is due to changes in the location of the home
developments, improvements to the Company's cost controls and an increase in the
mix of homes sold on land developed by the Company versus lots purchased from
other developers.
Operating expenses for the new homes segment (which include selling, general and
administrative expenses) increased by $334,000 and $239,000 in the three and
nine months ended September 30, 1996, respectively, compared to the same periods
in 1995. As a percentage of total new home revenues, these expenses remained
constant for the three months ended September 30, 1996 compared to the same
period in 1995 and decreased to 9.6% for the nine months ended September 30,
1996, compared to 10.5% for the same period in 1995. The increase in the dollar
amount of these expenses is mainly due to increases in personnel and
professional fees in 1996. These increased costs were partially offset by the
write-off, in 1995, of costs incurred on abandoned land acquisition projects.
REMODELING
The remodeling segment incurred an operating loss of $3,000 in the three months
ended September 30, 1996, compared to operating income of $43,000 for the same
period in 1995. For the nine months ended September 30, 1996, operating loss
increased to $238,000 compared to $96,000 for the same period in 1995. This
increase is due to a smaller number of closings and lower profit margins on jobs
in 1996 compared to 1995.
OTHER INCOME (EXPENSE), NET
Interest expense decreased $113,000 or 25.1% and $14,000 or 1.0% for the three
and nine months ended September 30, 1996, respectively, compared to the same
periods in 1995 This decrease is due to a reduction in the completed homes
inventories in the three months ended September 30, 1996, compared to the same
period in 1995. Other income (expense), net increased $42,000 in the nine months
ended September 30, 1996 from the same period in 1995. The increase is mainly
due to the $123,000 gain on the sale of an investment in a land development
partnership.
NET INCOME
Net income for the three months ended September 30, 1996 was $620,000, an
increase of $126,000 from $494,000 for the same period in 1995. This increase is
mainly due to an increase in homes closed in the three months ended September
30, 1996, compared to the same period in 1995. Net income for the nine months
ended September 30, 1996 was $730,000, a decrease of $273,000 from $1.0 million
of net income for the same period in 1995. This decrease is mainly due to the
1995 change in accounting for land acquisition and development costs of
$763,000, which is partially offset by the gain on sale of an investment in a
land development partnership and improved operating income from new home sales.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows used in operating activities were $2.2 million for the nine months
ended September 30, 1996, a decrease of approximately $2.1 million from the $4.3
million used for the same period in 1995. During the nine months ended September
30, 1996, cash was used for a reduction of accounts payable of $2.3 million and
increases in restricted cash of $577,000. These uses of cash were partially
offset in 1996 by a increase in income taxes payable of $289,000, with the
balance of cash used in operations financed through increased borrowings on the
Company's lines of credit and other debt obligations of $202,000 and the
reduction of cash and cash equivalents of $2.2 million.
Cash flows used in investing activities were $206,000 for the nine months ended
September 30, 1996, a decrease of approximately $175,000 from $381,000 cash used
for the same period in 1995. The decrease was primarily due to proceeds from the
sale of an investment in a land development partnership and a reduction of
expenditures for property and equipment, which were partially offset by an
increase in the cash surrender value of life insurance.
Cash flows provided by financing activities were $202,000 for the nine months
ended September 30, 1996, a decrease of approximately $2.7 million from the $3.0
million for the same period in 1995. The decrease was primarily due to a
reduction in net borrowings on the Company's bank lines of credit as a result of
a decrease in cash used in operating activities in 1996 relative to 1995 and a
reduction of cash and cash equivalents as of September 30, 1996 compared to
September 30, 1995.
FINANCING
The Company believes that internally generated funds, amounts available under
its four lines of credit and borrowing arrangements entered into in the ordinary
course of business will continue to be the primary sources of capital for
liquidity. In October 1996, the Company raised additional financing through the
issuance of $3.0 million of Senior Subordinate Debentures.
The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition and inventory balances. The Company presently
finances substantially all of its land acquisition and development and home
construction activities through borrowing arrangements for individual projects
or homes under construction. The borrowing arrangements evolve with each stage
of the process from land acquisition, to development, to construction of a home
and to the sale of the home and lot.
The Company also utilizes secured lines of credit to finance its operations. The
Company has approved aggregate credit of $9.1 million subject to a borrowing
base. At September 30, 1996, the aggregate maximum credit available under the
lines of credit was $8.5 million, of which $4.8 million was utilized and $3.7
million was available.
The Company's outstanding indebtedness as of September 30, 1996 included $20.6
million due within one year. The Company has historically operated with a
substantial amount of its outstanding indebtedness due within one year and has
historically paid such debt out of earnings or through refinancing, where
applicable. The Company believes that the amounts available under its lines of
credit, borrowing arrangements and amounts generated from operations will be
sufficient to satisfy its debt obligations due in the next year. However, there
can be no assurance that the Company will be able to continue to obtain adequate
short-term financing, including bank financing, in the future. The Company may
explore additional financing alternatives in the future.
PART II. OTHER INFORMATION
Items 1 through 5.
Not applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are hereby incorporated by reference or filed
herewith as indicated.
3.1(1) Articles of Incorporation of Lundgren in effect on the date hereof.
3.2(1) Bylaws of Lundgren on the date hereof.
4.1(7) Form of Debenture (included as Sections 2.2(A) and (B) of Indenture
filed as Exhibit 4.2 hereto to this Annual Report on Form 10-K).
4.2(7) Form of Indenture by and between Lundgren and National City Bank
Minneapolis, National Association, as Trustee, including a Form of
Debenture.
10.1(1) Lease by and between Lundgren, as lessor, Glenbrook Office Building
Partnership, and Peter Pflaum and Patrick C. Wells, general
partners, dated September 28, 1978.
10.2(1) Amended and Restated Stock Purchase Agreement, dated February 1, 1993,
by and among Lundgren, Peter Pflaum, Patrick Wells, Edmund M. Lundgren,
Gerald T. Lundgren and Allan D. Lundgren.
10.3(3) Revolving Credit Line Agreement between the Company and Builders
Development & Finance, Inc., dated March 18, 1994.
10.4(5) Amended and Restated Mortgage Note, dated January 25, 1995, of the
Company payable to Builders Development & Finance, Inc.
10.5(3) Combination Mortgage, Security Agreement and Fixture Financing
Statement between the Company and Builders Development & Finance, Inc.,
dated March 18, 1994.
10.6(1) Guaranty by Peter Pflaum, Patrick C. Wells, Allan D. Lundgren, Edmund
M. Lundgren and Gerald T. Lundgren for the benefit of Builders
Development & Finance, Inc., dated July 27, 1990.
10.7(1) Demand Discretionary Revolving Credit Agreement between the Company and
Norwest Bank Minnesota, National Association, dated November 30, 1990.
10.8(1) First Amended and Restated Revolving Note, dated May 1, 1992, of the
Company payable to Norwest Bank Minnesota, National Association.
10.9(1) Assignment of Life Insurance Policy as Collateral by the Company in
favor of Norwest Bank Minnesota, National Association, dated November
30, 1990.
10.10(1) Assignment of Life Insurance Policy as Collateral by the Company in
favor of Norwest Bank Minnesota, National Association, dated May 1,
1992.
10.11(1) Guaranty by Peter Pflaum, Patrick C. Wells, Allan D. Lundgren, Edmund
M. Lundgren and Gerald T. Lundgren for the benefit of Norwest Bank
Minnesota, National Association, dated November 5, 1990 and all
extensions thereof.
10.12(5) Commercial Lease, dated June 1, 1995, by and between Koecheler & Olson
Leasing and Lundgren Bros. Plumbing.
10.13(5) Lease Agreement, dated April 10, 1995, by and between B.M. Acquisitions
Corporation (Brush Masters, Inc.) and John J. Day.
10.14(1) Loan Agreement, dated as of May 8, 1992, by and between the Company and
Builders Development & Finance, Inc.
10.15(1) First Mortgage Note, dated May 8, 1992, of the Company payable to
Builders Development & Finance, Inc.
10.16(1) Second Mortgage Note, dated May 8, 1992, of the Company payable to
Builders Development & Finance, Inc.
10.17(1) First Mortgage, dated May 8, 1992, by the Company in favor of Builders
Development & Finance, Inc.
10.18(1) Second Mortgage, dated May 8, 1992, by the Company in favor of Builders
Development & Finance, Inc.
10.19(1) Guaranty, dated as of May 8, 1992, by Peter Pflaum, Edmund M. Lundgren,
Gerald T. Lundgren, Allan D. Lundgren and Patrick C. Wells for the
benefit of Builders Development & Finance, Inc.
10.20(1) Construction Loan Agreement, dated as of July 22, 1992, by and between
the Company and Scherer Bros. Financial Services Co.
10.21(1) Mortgage and Security Agreement, dated July 22, 1992, between the
Company and Scherer Bros. Financial Services Co.
10.22(1) Promissory Note, dated July 22, 1992, of the Company payable to Scherer
Bros. Financial Services Co.
10.23(1) Guaranty, dated as of July 22, 1992, by Allan Lundgren for the benefit
of Scherer Bros. Financial Services Co.
10.24(1) Guaranty, dated as of July 22, 1992, by Patrick Wells for the benefit
of Scherer Bros. Financial Services Co.
10.25(1) Guaranty, dated as of July 22, 1992, by Peter Pflaum for the benefit of
Scherer Bros. Financial Services Co.
10.26(1) Guaranty, dated as of July 22, 1992, by Edmund Lundgren for the benefit
of Scherer Bros. Financial Services Co.
10.27(1) Guaranty, dated as of July 22, 1992, by Gerald Lundgren for the benefit
of Scherer Bros. Financial Services Co.
10.28(1) Development Loan Agreement, dated May 15, 1992, by and between the
Company and Construction Mortgage Investors Co.
10.29(1) First Mortgage Note, dated May 15, 1992, of the Company payable to
Construction Mortgage Investors Co.
10.30(1) First Mortgage, dated May 15, 1992, by the Company in favor of
Construction Mortgage Investors Co.
10.31(1) Guaranty, dated May 15, 1992, by Peter Pflaum, Patrick C. Wells, Allan
D. Lundgren, Edmund M. Lundgren and Gerald T. Lundgren for the benefit
of Construction Mortgage Investors Co.
10.32(1) Contribution Agreement, dated as of February 17, 1993, by and among the
Company, Peter Pflaum, Patrick C. Wells, Allan D. Lundgren, Edmund M.
Lundgren and Gerald T. Lundgren.
10.33(5) Shopping Center Lease, dated February 9, 1994, by and between Oakdale
Mall Associates and Lundgren Bros. Construction, Inc. d/b/a Lundgren
Bros. Remodeling.
10.34(1) Form of Option to Purchase Land.
10.35(1) Form of Contingent Purchase Agreement.
10.36(5) Amendment No. 1 to Amended and Restated Stock Purchase Agreement, dated
April 1, 1993.
10.37(2) Amended and Restated Demand Discretionary Revolving Credit Agreement,
dated March 18, 1994, by and between Norwest Bank Minnesota, National
Association and Lundgren Bros. Construction, Inc.
10.38(4) Fourth Amended and Restated Revolving Note (Demand), dated March 14,
1995, of the Company payable to Norwest Bank Minnesota, National
Association.
10.39(4) Consent and Reaffirmation of Guaranty, dated March 14, 1995, by Peter
Pflaum, Patrick C. Wells, Edmund M. Lundgren, Allan D. Lundgren and
Gerald T. Lundgren in favor of Norwest Bank Minnesota, National
Association.
10.40(3) Satisfaction of Combination Mortgage, Security Agreement and Fixture
Financing Statement executed by Builders Development & Finance, Inc. on
March 29, 1994.
10.41(3) Letter Agreement, dated February 17, 1994, between Builders Funding
Corporation and Lundgren Bros. Construction, Inc.
10.42(4) Amendment, Extension and Reaffirmation Agreement, dated March 14, 1995,
by and among Lundgren Bros. Construction, Inc., Patrick C. Wells, Peter
Pflaum, Edmund M. Lundgren, Allan D. Lundgren and Gerald T. Lundgren
and Norwest Bank Minnesota, National Association.
10.43(4) Supplemental Assignment of Life Insurance Policies as Collateral, dated
March 14, 1995, by Lundgren Bros. Construction, Inc. in favor of
Norwest Bank Minnesota, National Association.
10.44(4) Second Supplemental Assignment of Life Insurance Policies as
Collateral, dated March 16, 1995, by Lundgren Bros. Construction, Inc.
in favor of Norwest Bank Minnesota, National Association.
10.45(5) Third Amendment to Combination Mortgage, Security Agreement and Fixture
Financing Statement and Amendment to Revolving Credit Line Agreement,
dated January 25, 1995, by Lundgren Bros. Construction, Inc. and
Builders Development & Finance, Inc.
10.46(6) Second Amended and Restated Mortgage Note, dated May 20, 1996, of
Lundgren Bros. Construction, Inc. payable to Builders Development &
Finance, Inc.
10.47(6) Eighth Amendment to Combination Mortgage, Security Agreement and
Fixture Financing Statement and Second Amendment to Revolving Credit
Line Agreement and Reaffirmation Agreement, dated May 20, 1996, by
Lundgren Bros. Construction, Inc. and Builders Development & Finance,
Inc.
10.48(6) Promissory Note, dated March 21, 1996, of Lundgren Bros. Construction,
Inc. payable to First Bank National Association.
10.49(6) Letter Agreement, dated March 21, 1996, by Lundgren Bros. Construction,
Inc. and First Bank National Association.
10.50(6) Pledge Agreement, dated March 21, 1996, by Lundgren Bros. Construction,
Inc. for the benefit of First Bank National Association.
10.51(6) Control Agreement (With Broker or other Securities Intermediary), dated
March 21, 1996, by Lundgren Bros. Construction, Inc., First Bank
National Association and FBS Investment Services, Inc.
10.52(6) Guaranty, dated March 12, 1996, by Edmund M. Lundgren for the benefit
of First Bank National Association.
10.53(6) Guaranty, dated March 12, 1996, by Allan Lundgren for the benefit of
First Bank National Association.
10.54(6) Guaranty, dated March 12, 1996, by Peter Pflaum for the benefit of
First Bank National Association.
10.55(6) Guaranty, dated March 12, 1996, by Patrick C. Wells for the benefit of
First Bank National Association.
10.56(6) Guaranty, dated March 12, 1996, by Gerald Lundgren for the benefit of
First Bank National Association.
18.1(4) Letter on accounting change, Coopers & Lybrand L.L.P., dated May 12,
1995.
27 Financial Data Schedule
(1) Incorporated by reference to the Exhibit of the same number to the
Company's Registration Statement on Form S-1, Registration No. 33-58934.
(2) Incorporated by reference to the Exhibit of the same number to the
Company's Annual Report on Form 10-K for the year ended December 31, 1993.
(3) Incorporated by reference to the Exhibit of the same number to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1994.
(4) Incorporated by reference to the Exhibit of the same number to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995.
(5) Incorporated by reference to the Exhibit of the same number to the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
(6) Incorporate by reference to the Exhibit of the same number to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1996.
(7) Incorporated by reference to the Exhibit of the same number to the
Company's Registration Statement on Form S-1, Registration No. 333-12137.
(b) Reports on Form 8-K.
The Registrant filed no reports on Form 8-K during the quarter ended
September 30, 1996.
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.
LUNDGREN BROS. CONSTRUCTION, INC.
Date: November 14, 1996 By: /s/ Peter Pflaum
Peter Pflaum
(Principal Executive Officer)
(Principal Financial Officer)
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