The Presley Companies Reports Profit For Third Quarter


NEWPORT BEACH, Calif.,Nov. 10, 1998 (PRIMEZONE) -- The Presley Companies (NYSE: PDC) today reported net income for the third quarter ended September 30, 1998 of $3,299,000, or $0.06 per share, on sales of $89,509,000, as compared with a net loss of ($3,200,000), or ($0.06) per share, on sales of $68,349,000 for the comparable period a year ago. Sales of homes were $89,319,000 for the quarter ended September 30, 1998, up 32 percent from $67,583,000 for the comparable period a year ago.

For the nine months ended September 30, 1998, the Company reported net income of $1,214,000, or $0.02 per share, on sales of $236,517,000, as compared with a net loss of ($82,228,000), or ($1.58) per share, on sales of $233,710,000 for the comparable period a year ago. The net income for the nine months ended September 30, 1998 includes an extraordinary gain from retirement of debt of $522,000 after applicable income taxes. The net loss for the nine months ended September 30, 1997 included a non-cash charge of $74,000,000 as a result of the recognition of impairment losses on certain of the Company's real estate assets.

Homes sold, closed and in backlog for the Company and its unconsolidated joint ventures as of and for the periods presented are as follows:


                                           As of and for       As of and for
                                          the Three Months    the Nine Months
                                         Ended September 30, Ended September 30,
                                         __________________  __________________
                                          1998      1997      1998       1997
                                          ____      ____      ____       ____

Number of homes sold
  Company                                 507        419      1,587      1,296
  Unconsolidated joint ventures            42          -        123          -
                                          ___        ___      _____      _____
                                          549        419      1,710      1,296
                                          ___        ___      _____      _____
                                          ___        ___      _____      _____

Number of homes closed
  Company                                 474        357      1,206      1,186
  Unconsolidated joint ventures            20          -         22          -
                                          ___        ___      _____      _____
                                          494        357      1,228      1,186
                                          ___        ___      _____      _____
                                          ___        ___      _____      _____

Backlog of homes sold but not closed 
 at end of period
  Company                                 777        392        777        392
  Unconsolidated joint ventures           108          -        108          -
                                          ___        ___        ___        ___
                                          885        392        885        392
                                          ___        ___        ___        ___
                                          ___        ___        ___        ___

Net new home orders for the quarter ended September 30, 1998 increased 31 percent to 549 units from 419 a year ago. For the third quarter of 1998, net new orders decreased 12 percent to 549 from 622 units in the second quarter of 1998. The number of homes closed in the third quarter of 1998 increased 38 percent to 494 from 357 in the third quarter of 1997. The backlog of homes sold as of September 30, 1998 was 885, up 126 percent from 392 units a year earlier, and up 7 percent from 830 units at June 30, 1998.

The dollar amount of backlog of homes sold but not closed as of September 30, 1998 was $222,790,000, as compared to $81,258,000 as of September 30, 1997 and $204,409,000 as of June 30, 1998. The Company's inventory of completed and unsold homes as of September 30, 1998 has decreased by 35 percent to 26 units from 40 units as of June 30, 1998.

The improvement in net new homes orders, closings and backlog for the third quarter of 1998 as compared with the third quarter of 1997 is primarily the result of improved market conditions in substantially all of the Company's markets and additional sales locations as a result of new land acquisitions. At September 30, 1998, the Company had 47 sales locations as compared to 43 sales locations at September 30, 1997.

The Company also reported that for purposes of the Indenture governing its Senior Notes, EBITDA (earnings before interest, taxes, depreciation and amortization) was $32,963,000 for the third quarter of 1998 as compared to $24,379,000 for the third quarter of 1997. EBITDA coverage of interest incurred for the three months ended September 30, 1998 was 4.31, as compared to 3.00 for the three months ended September 30, 1997. EBITDA after development expenditures amounted to $6,557,000 for the third quarter of 1998 as compared to $2,921,000 for the third quarter of 1997.

The Presley Companies is one of the oldest and largest homebuilders in the Southwest with development communities in California, Arizona, New Mexico and Nevada. Founded in 1956, The Presley Companies has built and sold more than 45,000 homes and currently has 47 sales locations. Presley's corporate headquarters are located in Newport Beach, California.

Certain statements contained in this release that are not historical information contain forward-looking statements. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among others, changes in general economic conditions and in the markets in which the Company competes, changes in interest rates and competition.


                              THE PRESLEY COMPANIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (in thousands except per common share amounts)
                                   (unaudited)

                                       Three Months Ended     Nine Months Ended
                                           September 30,         September 30,
                                       __________________     _________________
                                        1998       1997       1998       1997
                                        ____       ____       ____       ____
Sales
      Homes                           $ 89,319   $ 67,583   $225,592   $223,234
      Lots, land and other                 190        766     10,925     10,476
                                        ______     ______    _______    _______
                                        89,509     68,349    236,517    233,710
                                        ______     ______    _______    _______

Operating costs
      Cost of sales - homes            (75,197)   (59,737)  (194,194)  (200,679)
      Cost of sales - lots, 
        land and other                  (1,227)      (913)   (11,378)    (9,983)
      Impairment loss on 
        real estate assets                   -          -          -    (74,000)
      Sales and marketing               (5,385)    (5,191)   (15,180)   (15,826)
      General and administrative        (3,188)    (3,686)   (10,144)   (12,047)
                                         _____      _____     ______     ______
                                       (84,997)   (69,527)  (230,896)  (312,535)
                                        ______     ______    _______    _______

Operating income (loss)                  4,512     (1,178)     5,621    (78,825)

Income from unconsolidated 
  joint ventures                           501          -        346          -

Interest expense, net of 
  amounts capitalized                   (2,180)    (2,237)    (7,073)    (5,001)

Other income, net                          669        215      1,638      1,598
                                         _____      _____      _____      _____

Income (loss) before income taxes and
  extraordinary item                     3,502     (3,200)       532    (82,228)

(Provision) credit for income taxes       (203)         -        160          -
                                         _____      _____      _____      _____

Income (loss) before 
  extraordinary item                     3,299      (3,200)      692    (82,228)

Extraordinary item - gain from 
  retirement of debt, net of 
    applicable income taxes of $363          -           -       522          -
                                         _____       _____     _____      _____

Net income (loss)                      $ 3,299    $ (3,200)  $ 1,214   $(82,228)
                                         _____       _____     _____      _____
                                         _____       _____     _____      _____

Basic and diluted earnings per common share
      Before extraordinary item        $  0.06    $  (0.06)  $  0.01   $  (1.58)
      Extraordinary item                     -           -      0.01          -
                                         _____       _____     _____      _____

      After extraordinary item         $  0.06    $  (0.06)  $  0.02   $  (1.58)
                                         _____       _____     _____      _____
                                         _____       _____     _____      _____


                              THE PRESLEY COMPANIES

                           CONSOLIDATED BALANCE SHEETS
          (in thousands except number of shares and par value per share)

                                                  September 30,   December 31,
                                                      1998           1997
                                                  ____________    ___________
                                                  (unaudited)
                                   ASSETS
Cash and cash equivalents                         $    7,260      $    4,569
Receivables                                           10,520           8,652
Real estate inventories                              207,219         255,472
Investments in and advances to unconsolidated
   joint ventures                                     23,161           7,077
Property and equipment, less accumulated
  depreciation of $3,154 and $2,339 at September 30,
  1998 and December 31, 1997, respectively             3,303           3,613
Deferred loan costs                                    4,045           3,266
Other assets                                           3,678           2,595
                                                     _______         _______
                                                    $259,186        $285,244
                                                     _______         _______
                                                     _______         _______


                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Accounts payable                                   $  20,497       $  12,854
Accrued expenses                                      17,427          23,136
Notes payable                                         65,526          74,935
121/2% Senior Notes due 2001                         160,000         180,000
                                                     _______         _______
                                                     263,450         290,925
Stockholders' equity (deficit)
  Common stock:
      Series A common stock, par value $.01 per share;
         100,000,000 shares authorized; 34,792,732 
         issued and outstanding at September 30, 1998
         and 17,838,535 issued and outstanding at 
         December 31, 1997, respectively                 348             178

      Series B restricted voting convertible common stock, 
         par value $.01 per share; 50,000,000 shares 
         authorized; 17,402,946 shares issued and 
         outstanding at September 30, 1998 and 
         34,357,143 issued and outstanding at 
         December 31, 1997, respectively                 174             344
	
  Additional paid-in capital                         114,802         114,599

  Accumulated deficit from January 1, 1994          (119,588)       (120,802)
                                                     _______         _______
                                                      (4,264)         (5,681)
                                                     _______         _______
                                                    $259,186        $285,244
                                                     _______         _______
                                                     _______         _______


                              THE PRESLEY COMPANIES

                       SUPPLEMENTAL FINANCIAL INFORMATION
                              (dollars in thousands)
                                   (unaudited)


The following table sets forth certain selected unaudited financial data regarding the Company's cash flow for the purposes of the Indenture governing the Company's Senior Notes:

                                       Three Months Ended     Nine Months Ended
                                           September 30,         September 30,
                                       __________________     ________________
                                        1998       1997       1998       1997
                                        ____       ____       ____       ____

EBIT                                $  11,472  $   5,189  $  26,121  $  13,564
Amortization of Non-Cash Costs to 
   Cost of Sales, excluding interest 
    amortized to cost of sales         21,202     19,012     65,698     72,082
Depreciation and amortization             289        178        811        546
                                       ______     ______     ______     ______

EBITDA                               $ 32,963   $ 24,379   $ 92,630   $ 86,192
                                       ______     ______     ______     ______
                                       ______     ______     ______     ______

Development expenditures:
   Lot and amenity development       $(14,383)  $(13,818)  $(35,186)  $(41,284)
   Land acquisitions                   (8,837)    (7,238)   (23,181)   (30,144)
   Net change in housing inventory     (3,161)      (402)   (30,300)     9,135
   Investment in unconsolidated 
    joint ventures                        (25)         -     15,571          -
                                       ______     ______     ______     ______

     Total development expenditures   (26,406)   (21,458)   (73,096)   (62,293)
                                       ______     ______     ______     ______

EBITDA after development 
  expenditures                       $  6,557   $  2,921   $ 19,534   $ 23,899
                                       ______     ______     ______     ______
                                       ______     ______     ______     ______

Interest expensed and amortized to 
   cost of sales:
      Interest incurred             $   7,652  $   8,119   $ 24,308   $ 23,566
      Less capitalized interest        (5,472)    (5,992)   (17,235)   (18,865)
                                       ______     ______     ______     ______
         Interest expensed              2,180      2,127      7,073      4,701
         Amortization of capitalized
            interest included in 
             cost of sales              6,392      6,187     18,196     16,142
                                       ______     ______     ______     ______

         Total interest expensed and 
            amortized to cost 
             of sales               $   8,572  $   8,314   $ 25,269   $ 20,843
                                       ______     ______     ______     ______
                                       ______     ______     ______     ______

Interest incurred                   $   7,652  $   8,119   $ 24,308   $ 23,566
                                       ______     ______     ______     ______
                                       ______     ______     ______     ______

EBITDA/Interest incurred                 4.31x      3.00x      3.81x       3.66x
                                       ______     ______     ______     ______
                                       ______     ______     ______     ______

(1) The impairment loss on real estate assets was not included in calculating EBIT for 1997.
-0-

     Contact:  Investor Relations
               W. Douglass Harris
               The Presley Companies
               (949) 640-6400
                   or
               Media Relations
               Stern and Co.
               (310) 442-8414