SECURITES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITES EXCHANGE ACT OF 1934
-------------------------------------
Date of report (Date of earliest event reported):
September 9, 1999
THE FORECAST GROUP "Registered Tradename", L.P.
FORECAST "Registered Tradename" CAPITAL CORPORATION
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(Exact name of registrant as specified in its charter)
California 33-0582072
California 33-72106 33-0582077
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(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification Number)
of Incorporation)
10670 Civic Center Drive, Rancho Cucamonga, California 91730
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(Address of principal executive offices) (Zip Code)
(909) 987-7788
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(Registrant's telephone number, including area code)
not applicable
- -------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Sale of Arizona Division Assets.
--------------------------------
On September 9, 1999, The Forecast Group "Registered
Tradename", L.P., a California limited partnership ("Forecast"),
sold all of its real property and personal property assets held
in connection with its residential building communities in and
around the City of Phoenix in Maricopa County, Arizona to Kaufman
and Broad of Arizona, Inc., an Arizona corporation ("K&B"),
for approximately $33.5 million in cash. The purchase price was
determined through arm's-length bargaining after Forecast's
solicitation of competitive bids from selected qualified
purchasers. The four development projects sold to K&B were
commonly known as San Tan Ranch, Terracita (also known as
Rousseau), Deer Valley Ranch and Nantucket (the "Sale
Communities"). To the extent that lots in the Sale Communities
were not in a finished lot condition (i.e., ready for
construction of a residence) at the closing, Forecast is
obligated to bring them to a finished lot condition promptly
after the closing.
In addition, as part of the purchase price, K&B
acquired the right to purchase (or receive an assignment of the
right to purchase) a fifth parcel of land in Maricopa County,
commonly known as the Wittman property, currently subject to a
purchase agreement between Forecast, as buyer, and the fee
owners, as seller. Subject to certain conditions, upon
Forecast's recordation of a final plat for the property, K&B will
be obligated to purchase the Wittman property from Forecast for
approximately $4.0 million in cash. The Wittman acquisition is
subject to a number of closing conditions. No assurances can be
given that K&B will acquire the Wittman property (or the right to
purchase the Wittman property) from Forecast.
Prior to these transactions, none of Forecast's
partners had any material relationship with K&B, its directors or
its officers or any of their associates.
In accordance with the terms of the Indenture under
which Forecast"Registered Tradename" Capital Corporation issued
its 11 3/8% Senior Notes due 2000 (the "Notes"), within 13 months
of the sale, the net proceeds will either be reinvested in other
assets or used to make a repurchase offer to the holders of the Notes.
Cautionary Statement
--------------------
This Current Report on Form 8-K contains forward
looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The words "expect,"
"intends," "will" and similar expressions identify forward
looking statements. Forward-looking statements involve risks and
uncertainties, many of which are outside of Forecast's control.
Forecast's actual results could differ materially from those
described in such forward-looking statements. Certain factors
that may cause actual results to differ include, but are not
limited to, the risk that the Wittman property sale may not close
due to a failure of a closing condition or some other reason and
the risks relating to the homebuilding business generally
detailed in Forecast's filings with the Securities and Exchange
Commission.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(b) Pro Forma Financial Information.
--------------------------------
See the index to pro forma financial information
included on page F-1 of this report, all of which financial
information is incorporated herein by this reference.
(c) Exhibits
The following exhibits are part of this current report
on Form 8-K and are numbered in accordance with Item 601 of
Regulation S-K.
Exhibit No. Description
- ----------- -----------
10.1
Purchase and Sale Agreement, dated August 20,
1999, by and among The Forecast Group "Registered
Tradename", L.P., Forecast Residential Sales
of Arizona Limited Partnership,
Kaufman and Broad of Arizona, Inc.
and Kaufman and Broad Home Corporation.
99.1 Press Release issued by Forecast September 20,
1999 announcing the sale of the Arizona division
assets.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
THE FORECAST "Registered Tradename" GROUP, L.P.
By: FORECAST HOMES, INC.,
a California corporation,
Its: General Partner
Date: September 24, 1999 By: /s/ James P. Previti
----------------
James P. Previti
President
FORECAST "Registered Tradename" CAPITAL CORPORATION
Date: September 24, 1999 By: /s/ James P. Previti
----------------
James P. Previti
President
<PAGE>
THE FORECAST GROUP "Registered Tradename", L.P.
FORECAST "Registered Tradename" CAPITAL CORPORATION
INDEX TO PRO FORMA FINANCIAL INFORMATION
Financial Statements:
THE FORECAST GROUP "Registered Tradename", L.P.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
as of July 31, 1999......................................
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the nine months ended July 31, 1999.......
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended October 31, 1998...........
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements.......................................
<PAGE>
The Forecast Group "Registered Tradename", L.P.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
July 31, 1999
(Amount's in 000's)
<TABLE>
The Forecast Group The Forecast Group
"Registered "Registered
Tradename", Pro Forma Tradename", L.P.
L.P. Adjustments Pro Forma
--------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Cash and Cash Equivalents $16,422 $30,200 (A) $ 33,834
(12,788) (B)
Real Estate Inventory 131,368 (28,911) (A) 102,457
Other 12,036 12,036
-------- -------- -- --------
Total Assets $159,826 $(11,499) $148,327
======== ======== ========
Liabilities and
Partners' Equity
Accounts Payable, Accrued
Expenses, and Other $24,874 $(1,176) (A) $ 23,698
Notes Payable
Senior Notes 19,700 19,700
Collateralized by
Real Estate Inventory 68,862 (12,788) (B) 56,074
Other Notes Payable 4,027 4,027
------ ------ -- ------
Total Notes Payable 92,589 (12,788) 79,801
------- ------ -- ------
Total Liabilities 117,463 (13,964) 103,499
Partners' Equity 42,363 2,465 (A) 44,828
-------- -------- -- --------
Total Liabilities and
Partners' Equity $159,826 $(11,499) $148,327
======== ======== ========
</TABLE>
[FN] See Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements.
<TABLE>
The Forecast Group "Registered Tradename" , L.P.
Unaudited Pro Forma Condensed Consolidated
Statement of Operations
For the Nine Months Ended July 31, 1999
(Amount's in 000's)
The Forecast Group
The Forecast Group "Registered
"Registered Pro Forma Tradename", L.P.
Tradename, L.P. Adjustments Pro Forma
---------------------------------------------------
<S> <C> <C> <C> <C>
Homebuilding Revenues $185,192 $(15,067) (C) $170,125
Cost of Homes Sold 151,797 (12,416) (C) 139,381
------- ------ -- -------
Gross Profit 33,395 (2,651) 30,744
Land Sales Revenue 8,776 (2,288) (C) 6,488
Cost of Land Sold 9,361 (1,921) (C) 7,440
----- ----- -- -----
Income (Loss) on
Land Sales (585) (367) (952)
Operating Expenses and
Other
- -----
Selling & Marketing Exp. 11,976 (2,187) (C) 9,789
General & Admin. Exp. 11,104 (945) (C) 10,159
Other (1,490) (27) (C) (1,517)
----- ----- ------
Total Operating
Expenses and Other 21,590 (3,159) 18,431
Net Income Before
Extraordinary Item $11,220 $141 $11,361
======= ==== =======
</TABLE>
[FN] See Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements.
<TABLE>
The Forecast Group "Registered Tradename", L.P.
Unaudited Pro Forma Condensed Consolidated
Statement of Operations
For the Year ended October 31, 1998
(Amounts in 000's)
The Forecast Group
The Forecast Group "Registered
"Registered Prop Forma Tradename", L.P.
Tradename", L.P. Adjustments Pro Forma
-----------------------------------------------------
<S> <C> <C> <C> <C>
Homebuilding Revenues $198,074 $(29,228) (C) $168,846
Cost of Homes Sold 164,335 (24,858) (C) 139,477
------- ------ -------
Gross Profit 33,739 (4,370) 29,369
Operating Expenses and
Other
- ------
Selling & Marketing Exp. 14,384 (4,312) (C) 10,072
General & Admin. Exp. 11,397 (963) (C) 10,434
Other (2,489) - (2,489)
------ ----- -----
Total Operating
Expenses and Other 23,292 (5,275) 18,017
------- ------ ------
Net Income Before
Extraordinary Item $10,447 $905 $11,352
======= ==== =======
</TABLE>
[FN] See Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements.
<PAGE>
The Forecast Group "Registered Tradename", L.P.
Notes To Unaudited Pro Forma Condensed Consolidated
Financial Statements
July 31, 1999
NOTE 1 - BASIS OF PRESENTATION
On September 9, 1999, as more fully described in Item 2, the
Forecast Group "Registered Tradename", L.P. ("Forecast")
sold all of its real property and personal property assets held
in connection with its current residential building communities
in and around the City of Phoenix in Maricopa County, Arizona,
to an unrelated third party.
The accompanying unaudited pro forma condensed consolidated
balance sheet of Forecast as of July 31, 1999 gives effect to the
sale, as if it had occurred on July 31, 1999. The accompanying
unaudited pro forma condensed consolidated statements of
operations of Forecast for the nine months ended July 31, 1999
and the year ended October 31, 1998 give effect to the sale, as
if the sale had occurred on November 1, 1998 for purposes of the
July 31, 1999 unaudited pro forma condensed consolidated
statement of operations and November 1, 1997 for purposes of the
October 31, 1998 unaudited pro forma condensed consolidated
statement of operations.
The unaudited pro forma condensed consolidated financial
statements are presented for informational purposes only and are
not necessarily indicative of what the actual consolidated
financial position and results of operations of Forecast would
have been as of July 31, 1999, and for the nine months ended July
31, 1999 or the year ended October 31, 1998, nor does it purport
to represent the future consolidated financial position and
results of operations of Forecast. This information should be
read in conjunction with the audited consolidated financial
statements and other financial information contained in
Forecast's Form 10-K for the year ended October 31, 1998 and
Forecast's Form 10-Q for the nine months ended July 31, 1999,
including the notes thereto.
NOTE 2 - PRO FORMA ADJUSTMENTS
Pro Forma Balance Sheet Adjustments
The pro forma adjustments to the unaudited pro forma consolidated
balance sheet as of July 31, 1999 are as follows:
(A) Represents the net cash proceeds received from the sale, the
estimated accounts payables assumed by the seller, the
reduction of real estate inventory by the cost basis of the
real estate sold, and the estimated profit on the sale. A
summary of the sale (excluding the option to purchase the
Wittman property) is as follows:
<TABLE>
<S> <C>
Net cash proceeds from sale $30,200,000
Estimated accounts payable assumed by seller 1,176,000
Cost basis of real estate inventory sold (28,911,000)
----------
Estimated Profit on Sale $2,465,000
==========
</TABLE>
As a condition to the sale, Forecast has agreed to perform
certain construction improvements estimated to cost $3,300,000.
These funds have been withheld from the sale proceeds until the
improvements are completed, and are not reflected above.
(B) Represents use of sales proceeds to paydown notes payable
collateralized by real estate inventory sold.
Pro Forma Statement of Operations Adjustments
The pro forma adjustments to the unaudited pro forma condensed
consolidated statements of operations for the nine months ended
July 31, 1999 and for the year ended October 31, 1998 are as
follows:
(C) Represents decrease in homebuilding revenues, cost of homes
sold, land revenues, cost of land sold, selling and
marketing expenses, general and administrative expenses
other expenses, which were recognized relating to the
real estate inventory in Arizona:
<TABLE>
For the Nine For the Year
Months Ended Ended
July 31, 1999 October 31, 1998
------------ ----------------
<S> <C> <C>
Homebuilding Revenues $15,067,000 $29,228,000
Cost of Homes Sold 12,416,000 24,858,000
Land Sale Revenue 2,288,000 -
Cost of Land Sold 1,921,000 -
Selling and Marketing Expenses 2,187,000 4,312,000
General and Admin. Expenses 945,000 963,000
Other 27,000 -
</TABLE>
<PAGE>
EXHIBIT INDEX
Pursuant to Item 601(a)(2) of Regulation S-K, this exhibit
index immediately precedes the exhibits.
Exhibit No. Description
- ----------- -----------
10.1 Purchase and Sale Agreement, dated August 20, 1999,
by and among The Forecast Group "Registered
Tradename", L.P., Forecast Residential Sales of
Arizona Limited Partnership, Kaufman and Broad of
Arizona, Inc. and Kaufman and Broad Home Corporation.
99.1 Press Release issued by Forecast, September 20,1999
announcing the sale of the Arizona division assets.
