NEWPORT BEACH, Calif. -- May 11, 1999 -- (PRIMEZONE) The Presley Companies (NYSE: PDC) today reported net income for the first quarter ended March 31, 1999 of $5,396,000, or $0.10 per share, on sales of $82,297,000, as compared with a net loss of ($3,198,000), or ($0.06) per share, on sales of $66,478,000 for the comparable period a year ago. Sales of homes were $82,071,000 for the quarter ended March 31, 1999, up 27 percent from $64,391,000 for the comparable period a year ago. Sales of lots and land were $226,000 for the quarter ended March 31, 1999, as compared with $2,087,000 for the quarter ended March 31, 1998.
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
the Three Months
Ended March 31,
1999 1998
Number of homes sold
Company 466 539
Unconsolidated joint ventures 188 -
Combined total 654 539
Number of homes closed
Company 401 337
Unconsolidated joint ventures 116 -
Combined total 517 337
Backlog of homes sold but not closed at end of period
Company 564 605
Unconsolidated joint ventures 190 -
Combined total 754 605
Dollar amount of backlog of homes sold but not closed at
end of period (in millions):
Company $123.0 $140.0
Unconsolidated joint ventures 76.7 -
Combined total $199.7 $140.0
Net new home orders for the quarter ended March 31, 1999 increased 21 percent to 654 units from 539 units a year ago. For the first quarter of 1999, net new home orders increased 52 percent to 654 from 429 units in the fourth quarter of 1998. The number of homes closed in the first quarter of 1999 was up 53 percent to 517 from 337 in the first quarter of 1998. The backlog of homes sold as of March 31, 1999 was 754, up 25 percent from 605 units a year earlier, and up 22 percent from 617 units at December 31, 1998.
The dollar amount of backlog of homes sold but not closed as of March 31, 1999 was $199,700,000, as compared with $140,000,000 as of March 31, 1998 and $165,100,000 as of December 31, 1998. The Company also reported that its inventory of completed and unsold homes as of March 31, 1999 decreased by 42 percent to 29 units from 50 units as of December 31, 1998.
Wade H. Cable, President and Chief Executive Officer, stated "I am pleased that the Company has now reported a net profit for four consecutive quarters and that the backlog of homes sold but not closed remains at the highest levels in more than nine years."
Mr. Cable further stated "the improvement in net new home orders and backlog for the first quarter of 1999 as compared with the first quarter of 1998 is primarily the result of improved market conditions in substantially all of the Company's markets."
The Company also reported that for purposes of the Indenture governing its Senior Notes, EBITDA (earnings before interest, taxes, depreciation and amortization) was $32,593,000 for the first quarter of 1999 as compared to $24,032,000 for the first quarter of 1998. EBITDA coverage of interest incurred for the three months ended March 31, 1999 was 5.23, as compared to 2.78 for the three months ended March 31, 1998. EBITDA after development expenditures amounted to $21,030,000 for the first quarter of 1999 as compared to $(9,892,000) for the first quarter of 1998.
The Presley Companies is one of California's 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 47,000 homes and currently has 42 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
March 31,
1999 1998
Sales
Homes $82,071 $64,391
Lots, land and other 226 2,087
82,297 66,478
Operating costs
Cost of sales - homes (68,020) (56,750)
Cost of sales - lots, land and other (675) (1,901)
Sales and marketing (4,075) (5,087)
General and administrative (3,931) (3,681)
(76,701) (67,419)
Income (loss) from unconsolidated joint ventures 2,945 (26)
Operating income (loss) 8,541 (967)
Interest expense, net of amounts capitalized (2,215) (2,631)
Financial advisory expenses (692) -
Other income, net 667 400
Income (loss) before income taxes 6,301 (3,198)
Provision for income taxes (905) -
Net income (loss) $ 5,396 $ (3,198)
Basic and diluted earnings per common share $ 0.10 $ (0.06)
THE PRESLEY COMPANIES
CONSOLIDATED BALANCE SHEETS
(in thousands except number of shares and par value per share)
March 31, December 31,
1999 1998
(unaudited)
ASSETS
Cash and cash equivalents $ 2,084 $ 23,955
Receivables 10,750 8,613
Real estate inventories 164,697 174,502
Investments in and advances to unconsolidated
joint ventures 33,516 30,462
Property and equipment, less accumulated
depreciation of $3,464 and $3,156 at March 31, 1999
and December 31, 1998, respectively 2,711 2,912
Deferred loan costs 2,993 3,381
Other assets 2,629 2,579
$219,380 $246,404
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 17,019 $ 17,364
Accrued expenses 23,471 27,823
Notes payable 26,765 55,393
121/2% Senior Notes due 2001 140,000 140,000
207,255 240,580
Stockholders' equity
Common stock:
Series A common stock, par value $.01 per share;
100,000,000 shares authorized; 34,792,732 issued
and outstanding at March 31, 1999 and December
31, 1998, respectively 348 348
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 March 31,
1999 and December 31, 1998, respectively 174 174
Additional paid-in capital 117,154 116,249
Accumulated deficit from January 1, 1994 (105,551) (110,947)
12,125 5,824
$219,380 $246,404
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
March 31,
1999 1998
EBIT $ 11,602 $ 5,397
Amortization of Non-Cash Costs to Cost of Sales,
excluding interest amortized to cost of sales 20,683 18,380
Depreciation and amortization 308 255
EBITDA $ 32,593 $ 24,032
Development expenditures:
Lot and amenity development $ (10,060) $(12,377)
Land acquisitions (4,907) (8,264)
Net change in housing inventory 3,404 (7,683)
Investment in unconsolidated joint ventures - (5,600)
Total development expenditures (11,563) (33,924)
EBITDA after development expenditures $ 21,030 $ (9,892)
Interest expensed and amortized to cost of sales:
Interest incurred $ 6,227 $ 8,641
Less capitalized interest (4,012) (6,011)
Interest expensed 2,215 2,630
Amortization of capitalized interest
included in cost of sales 6,096 5,990
Total interest expensed and amortized to
cost of sales $ 8,311 $ 8,620
Interest incurred $ 6,227 $ 8,641
EBITDA/Interest incurred 5.23x 2.78x
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