<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995 Commission File No. 1-6736
STARRETT HOUSING CORPORATION
(Exact Name of Registrant as specified in its charter)
NEW YORK 13-5411123
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
909 THIRD AVENUE, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)751-3100
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 reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
6,566,402 shares of common stock.
<PAGE> 2
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Financial Statements:
Statement of Consolidated Financial Position - March 31, 1995 . . . . . . 3
Condensed Statement of Consolidated Financial Position -
December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Common Stockholders' Equity - March 31, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Consolidated Operations - For the Three Months
ended March 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Cash Flows - For the Three Months
ended March 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 8
Management's Discussion of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 9-10
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Exhibit A - Computation of Primary Earnings per Share - For the
Three Months ended March 31, 1995 and 1994 . . . . . . . 12
</TABLE>
2
<PAGE> 3
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
MARCH 31, 1995
(In Thousands)
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . $ 9,076
U.S. Treasury/Certificates of Deposit . . . . . . . . . . . . . 828
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . 25,647
Inventory of real estate . . . . . . . . . . . . . . . . . . . 54,766
Investments in real estate joint ventures . . . . . . . . . . . 7,451
Property and Equipment-Net . . . . . . . . . . . . . . . . . . 3,163
Land Held for Investment . . . . . . . . . . . . . . . . . . . 1,965
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . 9,488
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . $112,384
========
LIABILITIES AND EQUITY:
Liabilities:
Payable Within One Year:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . $ 9,216
Current portion of long-term obligations . . . . . . . . . . . 17,975
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . 12,247
--------
Total Liabilities Payable Within One Year . . . . . . 39,438
Deferred Income taxes . . . . . . . . . . . . . . . . . . . . . 4,602
Deferred Revenues . . . . . . . . . . . . . . . . . . . . . . . 1,812
Long-Term Obligations . . . . . . . . . . . . . . . . . . . . . 18,817
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . 64,669
--------
Common Stockholders' Equity
Common stock-par value, $1.00; authorized, 18,000 shares . . . 6,566
Capital in excess of par value . . . . . . . . . . . . . . . . 23,933
Retained earnings . . . . . . . . . . . . . . . . . . . . . . 19,620
Pension liability adjustment . . . . . . . . . . . . . . . . . (814)
Shares held in treasury-at cost . . . . . . . . . . . . . . . (1,590)
--------
Common Stockholders' Equity . . . . . . . . . . . . . . . . . . 47,715
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . $112,384
========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
December 31,
1994
------------
<S> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,474
U.S. Treasury/Certificates of Deposit . . . . . . . . . . . . . 304
Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 25,918
Inventory of Real Estate . . . . . . . . . . . . . . . . . . . 52,332
Investments in Real Estate Joint Ventures . . . . . . . . . . . 6,701
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . 13,538
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $116,267
========
LIABILITIES AND EQUITY
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . $ 10,874
Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . 20,359
Deferred Revenues . . . . . . . . . . . . . . . . . . . . . . . 1,851
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . 36,066
Common Stockholders' Equity . . . . . . . . . . . . . . . . . . 47,117
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $116,267
========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
(In Thousands Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
-------- ------------
<S> <C> <C>
Common Stock - Par Value, $1.00; Authorized,
18,000,000 shares; Issued, 6,566,402 shares . . . $ 6,566 $ 6,566
Capital in Excess of Par Value . . . . . . . . . . 23,933 23,933
Retained Earnings . . . . . . . . . . . . . . . . . 19,620 19,022
Pension Liability Adjustment . . . . . . . . . . . (814) (814)
Less: Shares Held in Treasury - at cost;
1995, 305,442 and 1994, 305,427
shares . . . . . . . . . . . . . . . . . . (1,590) (1,590)
------- -------
TOTAL COMMON STOCKHOLDERS' EQUITY . . . . . . . . . $47,715 $47,117
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
For The Three Months Ended March 31, 1995 and 1994
(In Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . $30,281 $27,395
Construction Costs . . . . . . . . . . . . . . . . . 16,902 15,415
------- -------
Income from Construction Contracts and
Related Revenues . . . . . . . . . . . . . . . . . . 13,379 11,980
------- -------
Expenses:
General and Administrative . . . . . . . . . . . . . 6,395 6,057
Security Service Labor and Other Costs . . . . . . . 2,479 2,186
Selling . . . . . . . . . . . . . . . . . . . . . . 1,452 1,097
Mortgage and Closing Costs . . . . . . . . . . . . . 1,210 1,175
Interest . . . . . . . . . . . . . . . . . . . . . . 108 165
------- -------
Total . . . . . . . . . . . . . . . . . . . . . 11,644 10,680
------- -------
Income before Income Taxes . . . . . . . . . . . . . 1,735 1,300
Income Taxes . . . . . . . . . . . . . . . . . . . . 746 605
------- -------
Net Income . . . . . . . . . . . . . . . . . . . . . $ 989 $ 695
======= =======
Earnings per Common Share:
Net Income . . . . . . . . . . . . . . . . . . . . . $.16 $.11
==== ====
Weighted average number of shares . . . . . . . . . . 6,261 6,261
===== =====
Cash Dividends per Share . . . . . . . . . . . . . . $.0625 None
====== ====
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE> 7
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended March 31, 1995 and 1994
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 989 $ 695
Adjustments to Reconcile Income to Net Cash
Provided by Operating Activities:
Depreciation and amortization . . . . . . . . . . . . 712 517
Deferred income taxes . . . . . . . . . . . . . . . . 37 151
Changes in Operating Assets and Liabilities:
Receivables . . . . . . . . . . . . . . . . . . . . 271 (922)
Inventories . . . . . . . . . . . . . . . . . . . . (2,402) 4,977
Account payable . . . . . . . . . . . . . . . . . . (1,658) (2,347)
Other assets . . . . . . . . . . . . . . . . . . . . (1,759) (1,245)
Accrued liabilities . . . . . . . . . . . . . . . . 979 2,182
Deferred revenues . . . . . . . . . . . . . . . . . (39) (145)
------- -------
Cash (Used In) Provided by Operating Activities . . . . (2,870) 3,863
------- -------
INVESTING ACTIVITIES:
Investment in Real Estate Joint Ventures . . . . . . . (801) (256)
Proceeds From Real Estate Joint Ventures . . . . . . . 51
Investments in and Advances to Partnerships . . . . . . 94 (4)
U.S. Treasury/Certificates of Deposit . . . . . . . . . (524) 7,506
Purchase of Property and Equipment . . . . . . . . . . (157) (228)
------- -------
Net Cash (Used In) Provided by Investing
Activities . . . . . . . . . . . . . . . . . . . . . . (1,337) 7,018
------- -------
FINANCING ACTIVITIES:
Repayment of Long Term Obligations . . . . . . . . . . (6,371) (6,023)
Proceeds from Long Term Obligations . . . . . . . . . . 2,571
Payment of Cash Dividends to Common
Stockholders . . . . . . . . . . . . . . . . . . . . . (391)
------- -------
Net Cash Used In Financing Activities . . . . . . . . . (4,191) (6,023)
------- -------
(Decrease) Increase in Cash and Cash Equivalents . . . (8,398) 4,858
Cash and Cash Equivalents Beginning of Period . . . . . 17,474 12,171
------- -------
Cash and Cash Equivalents End of Period . . . . . . . . $ 9,076 $17,029
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
7
<PAGE> 8
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements of Starrett Housing
Corporation and its subsidiaries have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The consolidated financial statements as of and for the three months
ended March 31, 1995 and 1994 are unaudited and are subject to year-end audit
and adjustments. The results of operations for the interim periods are not
necessarily indicative of the results of operations for the fiscal year. For
comparability purposes, certain 1994 amounts have been reclassified to conform
with the 1995 classifications. For further information, refer to the
consolidated financial statements and footnotes included thereto in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1995 AND 1994
During the three months ended March 31, 1995 the Company had income
from operations of $1,735,000 as compared with $1,300,000 in 1994, and net
income of $989,000 or $.16 a share for the three months ended March 31, 1995 as
compared with $695,000 or $.11 a share for the similar period in 1994. Earnings
per share were based on average shares outstanding of 6,261,000 in 1995 and
1994.
The increase in income was primarily attributable to the continued
strong performance of Levitt Corporation and Grenadier Realty Corp. Levitt's
house sales (new contracts) increased by $2,200,000 or 11.8% during the three
months ended March 31, 1995 as compared to 1994 due to an increase in the number
of houses delivered in the Company's domestic region, coupled with a higher
average selling price of homes in both the Puerto Rico and domestic regions.
Levitt's backlog of homes contracted for sale increased from
$65,500,000 at March 31, 1994 to $78,900,000 at March 31, 1995. Included in
Levitt's sales backlog is its 50% interests in joint ventures.
During the quarter ended March 31, 1995, Levitt showed a net increase
of approximately $3,200,000 in various development projects, increasing its
inventory and joint venture investments in its single-family home division.
Grenadier Realty Corp. reported a $530,000 or 9.4% increase in revenues
for the three months ended March 31, 1995 as compared to 1994, reflecting the
Company's expanded services to private and institutional property owners as well
as banks and thrift institutions.
9
<PAGE> 10
HRH Construction Corporation continues to operate at or near break-even
and is actively seeking to increase its backlog of business, particularly in the
hospital and medical research facilities, as well as, the governmental and
institutional sectors.
Cash Flow and Liquidity
While the Company presently has various banking relationships, it does
not have any formal lines of credit other than its Levitt subsidiary. The
Company has begun a program to secure a formal line of credit with its banking
institutions and anticipates this process to be completed by the end of the
year.
10
<PAGE> 11
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.
STARRETT HOUSING CORPORATION
(Registrant)
s/ Paul Milstein
----------------------------------------
Paul Milstein - Chairman
s/ Lewis A. Weinfeld
----------------------------------------
Lewis A. Weinfeld - Senior Vice
President and Treasurer
(Principal Accounting Officer)
DATE: May 12, 1995
11
<PAGE> 12
EXHIBIT A
STARRETT HOUSING CORPORATION AND SUBSIDIARIES
EXHIBIT SETTING FORTH THE COMPUTATION OF PRIMARY
EARNINGS PER SHARE INFORMATION
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
1995 1994
---- ----
<S> <C> <C>
Weighted average number of shares outstanding during
the period . . . . . . . . . . . . . . . . . . . . . . . 6,261 6,261
===== =====
Net Income . . . . . . . . . . . . . . . . . . . . . . . $989 $695
==== ====
Primary earnings per share:
Net Income . . . . . . . . . . . . . . . . . . . . . $.16 $.11
==== ====
</TABLE>
12
<PAGE> 13
EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 9,076,000
<SECURITIES> 828,000
<RECEIVABLES> 26,123,000
<ALLOWANCES> 476,000
<INVENTORY> 54,766,000
<CURRENT-ASSETS> 83,132,000
<PP&E> 10,647,000
<DEPRECIATION> 7,484,000
<TOTAL-ASSETS> 112,384,000
<CURRENT-LIABILITIES> 39,438,000
<BONDS> 0
<COMMON> 6,566,000
0
0
<OTHER-SE> 41,149,000
<TOTAL-LIABILITY-AND-EQUITY> 112,384,000
<SALES> 30,281,000
<TOTAL-REVENUES> 30,281,000
<CGS> 16,902,000
<TOTAL-COSTS> 16,902,000
<OTHER-EXPENSES> 11,536,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 108,000
<INCOME-PRETAX> 1,735,000
<INCOME-TAX> 746,000
<INCOME-CONTINUING> 989,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 989,000
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
