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