NEWPORT BEACH, Calif., Aug. 11, 1999 (PRIMEZONE) -- The Presley Companies (NYSE:PDC) today reported net income for the second quarter ended June 30, 1999 of $9,477,000, or $0.18 per share, on sales of $95,715,000, as compared with net income of $1,114,000, or $0.02 per share, on sales of $80,530,000 for the comparable period a year ago. Sales of homes were $91,985,000 for the quarter ended June 30, 1999, up 28 percent from $71,882,000 for the comparable period a year ago. Sales of lots and land were $3,730,000 for the quarter ended June 30, 1999, as compared with $8,648,000 for the quarter ended June 30, 1998. The net income for the current quarter included an extraordinary gain from the retirement of debt of $1,789,000, or $0.03 per share, after applicable income taxes, as compared with $522,000, or $0.01 per share, after applicable income taxes, for the comparable period a year ago.
For the six months ended June 30, 1999, the Company reported net income of $14,873,000, or $0.28 per share, on sales of $178,012,000, as compared with a net loss of ($2,085,000), or ($0.04) per share, on sales of $147,008,000 for the comparable period a year ago. Sales of homes were $174,056,000 for the six months ended June 30, 1999, up 28 percent from $136,273,000 for the comparable period a year ago. Sales of lots and land were $3,956,000 for the six months ended June 30, 1999, as compared with $10,735,000 for the six months ended June 30, 1998. The results for the six months ended June 30, 1999 included an extraordinary gain from the retirement of debt of $1,789,000, or $0.03 per share, after applicable income taxes, as compared with $522,000, or $0.01 per share, after applicable income taxes, for the comparable period a year ago.
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 Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Number of homes sold
Company 462 559 928 1,080
Unconsolidated joint ventures 143 63 331 81
Combined total 605 622 1,259 1,161
Number of homes closed
Company 438 395 839 732
Unconsolidated joint ventures 96 2 212 2
Combined total 534 397 1,051 734
Backlog of homes sold but not closed at
end of period
Company 588 744 588 744
Unconsolidated joint
Ventures 237 86 237 86
Combined total 825 830 825 830
Dollar amount of backlog of homes sold
but not closed at end of period (in millions):
Company $120.0 $159.4 $120.0 $159.4
Unconsolidated joint
Ventures 95.7 45.0 95.7 45.0
Combined total $215.7 $204.4 $215.7 $204.4
Net new home orders for the quarter ended June 30, 1999 decreased 3 percent to 605 units from 622 units a year ago. For the second quarter of 1999, net new home orders decreased 7 percent to 605 units from 654 units in the first quarter of 1999. The number of homes closed in the second quarter of 1999 was up 35 percent to 534 from 397 in the first quarter of 1998. The backlog of homes sold as of June 30, 1999 was 825, down slightly from 830 units a year earlier, and up 9 percent from 754 units at March 31, 1999.
The dollar amount of backlog of homes sold but not closed as of June 30, 1999 was $215,700,000, as compared with $204,400,000 as of June 30, 1998 and $199,700,000 as of March 31, 1999. The Company also reported that its inventory of completed and unsold homes as of June 30, 1999 decreased by 21 percent to 23 units from 29 units as of March 31, 1999.
Wade H. Cable, President and Chief Executive Officer, stated "I am pleased that the Company has now reported a net profit for five consecutive quarters and that the backlog of homes sold but not closed remains at the highest levels in more than nine years. During the current quarter, the Company realized a total pre-tax profit of $11,063,000."
Mr. Cable further stated "the significant improvement in net new home orders and number of homes closed for the first half of 1999 as compared with the first half 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 $42,658,000 for the second quarter of 1999 as compared to $35,635,000 for the second quarter of 1998. EBITDA coverage of interest incurred for the three months ended June 30, 1999 was 7.73, as compared to 4.45 for the three months ended June 30, 1998. EBITDA after development expenditures amounted to ($6,460,000) for the second quarter of 1999 as compared to $22,869,000 for the second quarter of 1998.
The Company also announced that it has received notification from the New York Stock Exchange that the Securities and Exchange Commission has approved amendments to the NYSE's continued listing standards. While these new continued listing standards took effect on July 27, 1999, the SEC is soliciting comments on these new standards for a 90-day period. The NYSE has stated that it expects permanent approval of the standards as currently drafted.
The NYSE has notified the Company that it is below these new criteria. The NYSE has further informed the Company that failure to raise its stock price above $1.00 per share within six months will result in immediate suspension of trading and application to the SEC for delisting. In addition, the Company has 45 days to present a business plan to the NYSE that will demonstrate compliance with all aspects of the other criteria within the next 12 months. If the NYSE accepts the Company's business plan, the Company will be monitored for quarterly compliance with its plan. If the Company fails to achieve the quarterly milestones or if at the completion of the 12 months it is not in compliance with the new continued listing criteria, the Company will be suspended from trading on the NYSE and application will be made to the SEC for delisting. If the Company achieves all quarterly milestones and meets the NYSE continued listing criteria at the end of the 12-month period, the Company will be considered in "good standing" and no longer subject to business plan review. However, the Company would be subject to the NYSE's ongoing listing review policies and procedures. If the business plan is not accepted by the NYSE or the Company elects not to submit a business plan, the Company will be subject to immediate trading suspension and subsequent delisting procedures.
The Company has notified the NYSE that it intends to submit a business plan within the 45-day period. There can be no assurance, however, that the business plan will be accepted by the NYSE; that the Company will achieve the quarterly milestones included in the plan; or that the Company will comply with the new continued listing criteria at the completion of the 12-month period.
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 48,000 homes and currently has 40 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, as well as the other factors discussed in the Company's reports filed with the Securities and Exchange Commission.
THE PRESLEY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per common share amounts)
(unaudited)
3 Months Ended 6 Months Ended
June 30, June 30,
1999 1998 1999 1998
Sales
Homes 91,985 $ 71,882 $174,056 $136,273
Lots, land and other 3,730 8,648 3,956 10,735
95,715 80,530 178,012 147,008
Operating costs
Cost of sales - homes (76,097) (62,247) (144,117) (118,997)
Cost of sales - lots,
land and other (3,066) (8,250) (3,741) (10,151)
Sales and marketing (4,385) (4,708) (8,460) (9,795)
General and
Administrative (3,942) (3,275) (7,873) (6,956)
(87,490) (78,480) (164,191) (145,899)
Equity in income (loss) of unconsolidated
joint ventures 1,919 (129) 4,864 (155)
Operating income 10,144 1,921 18,685 954
Interest expense, net of
amounts capitalized (1,456) (2,262) (3,671) (4,893)
Financial advisory
Expenses (588) - (1,280) -
Other income (expense),
Net 874 570 1,541 969
Income (loss) before
income taxes and
extraordinary item 8,974 229 15,275 (2,970)
(Provision) credit for
income taxes (1,286) 363 (2,191) 363
Income (loss) before
extraordinary item 7,688 592 13,084 (2,607)
Extraordinary item - gain
from retirement of debt,
net of applicable
income taxes 1,789 522 1,789 522
Net income (loss) $ 9,477 $ 1,114 $ 14,873 $ (2,085)
Basic and diluted earnings per common
share
Before extraordinary
Item $ 0.15 $ 0.01 $ 0.25 $ (0.05)
Extraordinary item 0.03 0.01 0.03 0.01
After extraordinary
Item $ 0.18 $ 0.02 $ 0.28 $ (0.04)
THE PRESLEY COMPANIES
CONSOLIDATED BALANCE SHEETS
(in thousands except number of shares and par value per share)
June 30, December 31,
1999 1998
(unaudited)
ASSETS
Cash and cash equivalents $ 12,277 $ 23,955
Receivables 13,601 8,613
Real estate inventories 176,522 174,502
Investments in and advances to
Unconsolidated joint ventures 34,949 30,462
Property and equipment, less
accumulated depreciation of
$3,705 and $3,156 at June 30, 1999
and December 31, 1998, respectively 2,534 2,912
Deferred loan costs 2,441 3,381
Other assets 3,908 2,579
$246,232 $246,404
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 15,929 $ 17,364
Accrued expenses 25,825 27,823
Notes payable 61,290 55,393
12-1/2% Senior Notes due 2001 120,000 140,000
223,044 240,580
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
June 30, 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
June 30, 1999 and December
31, 1998, respectively 174 174
Additional paid-in capital 118,740 116,249
Accumulated deficit from
January 1, 1994 (96,074) (110,947)
23,188 5,824
$246,232 $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 Six Months Ended
June 30, June 30,
1999 1998 1999 1998
EBIT $ 17,569 $ 9,252 $ 29,171 $ 14,649
Amortization of Non-Cash
Costs to Cost of Sales,
excluding interest
amortized to cost
of sales 24,849 26,116 45,532 44,496
Depreciation and
Amortization 240 267 548 522
EBITDA $ 42,658 $ 35,635 $ 75,251 $ 59,667
Development expenditures:
Lot and amenity
Development $ (9,259) $ (8,426) $(19,319) $(20,803)
Land acquisitions (34,209) (6,080) (39,116) (14,344)
Net change in housing
Inventory (6,063) (19,456) (2,659) (27,139)
Investment in unconsolidated
joint ventures 413 21,196 413 15,596
Total development
Expenditures (49,118) (12,766) (60,681) (46,690)
EBITDA after development
Expenditures $ (6,460) $ 22,869 $ 14,570 $ 12,977
Interest expensed and amortized
to cost of sales:
Interest
Incurred $ 5,520 $ 8,014 $ 11,747 $ 16,656
Less capitalized
Interest (4,064) (5,752) (8,076) (11,763)
Interest
Expensed 1,456 2,262 3,671 4,893
Amortization of
capitalized interest
included in cost
of sales 7,056 5,814 13,152 11,804
Total interest expensed
and amortized
to cost of
sales $ 8,512 $ 8,076 $ 16,823 $ 16,697
Interest
Incurred $ 5,520 $ 8,014 $ 11,747 $ 16,656
EBITDA/Interest
Incurred 7.73x 4.45x 6.41x 3.58x
CONTACT: Investor Relations
W. Douglass Harris
The Presley Companies
(949) 640-6400
Media Relations
Steven D. Stern
Pondel/Wilkinson Group
(310) 207-9300