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THE PRESLEY COMPANIES REPORTS SECOND QUARTER RESULTS

 THE PRESLEY COMPANIES REPORTS SECOND QUARTER RESULTS
 NEWPORT BEACH, Calif., Aug. 10 /PRNewswire/ -- The Presley


Companies (NYSE: PDC) today reported a net loss for the second quarter of ($14,323,000), or ($0.77) per share, compared with net income of $2,080,000 or $0.17 per share, on a pro forma basis, for the comparable period a year ago.
 Operations for the second quarter ended June 30, 1992 generated pre-tax income of $2,126,000 on sales of $45,055,000, compared with $3,847,000 on sales of $42,599,000 a year ago. As a result of recent adverse market conditions, the company also reported a writedown of $26,000,000 ($15,600,000 after taxes) in certain of its real estate assets.
 For the six months ended June 30, 1992, the company reported a net loss of ($13,966,000), or ($0.75) per share on sales of $71,806,000, compared with net income for the same period a year ago of $1,377,000, or $0.11 per share on a pro forma basis, on sales of $70,721,000.
 Wade H. Cable, president and chief executive officer said, "The Presley management team periodically reviews its projects. As a result of our most recent review, and in view of the fact that recent competitive conditions required a reduction of sales prices and an increase in buyer incentives, we determined that a writedown was appropriate for certain of our developments. These writedowns occurred primarily in projects acquired in 1989 when home prices and land values were at their peak. The total inventory writedown represents approximately 6 percent of the book value of the company's real estate inventories at June 30, 1992."
 For the company and its unconsolidated joint ventures, closings in the second quarter of this year were up nearly 42 percent to 292 from 206 in the second quarter a year ago. For the first half of this year, closings were up 33 percent to 473 units, from 355 a year ago. New orders for the quarter ended June 30, 1992 rose 16 percent to 290 units from 250 a year ago. For the first half of this year, new orders were also up nearly 35 percent to 627 units from 465 a year ago. However, for the second quarter of 1992, new orders were down 14 percent to 290 units from 337 in the first quarter of 1992. The backlog of homes sold, but not closed, as of June 30, 1992 was 349, up 24 percent from 281 units a year earlier, and approximately the same as the 351 units at March 31, 1992. Mr. Cable cautioned, however, that, "The increase in new orders and closings in 1992 compared to 1991 does not necessarily indicate an improving economy or improving profit margins." Mr. Cable said that, "Although we have recently seen an increase in net new home orders for the first six weeks of the third quarter of 1992 to 177 units, up 52 percent from the 116 units for the same period of 1991, this increase is attributable in large part to reduced sales prices and increased buyer incentives, as well as lower interest rates.
 "Of further concern to management is the potential effect on the company's borrowing capacity of the erosion in value of the company's real estate inventory. This inventory is continually being reappraised by the banks. In the near-term, the company anticipates that appraised values will be lower. The company's borrowing capacity is based on the most recent appraised values of its real estate inventory at any given time. Lower appraised values could have a significant impact on the borrowing capacity and liquidity of the company."
 The Presley Companies is one of California's oldest and largest homebuilders. It has operations in California, Arizona and New Mexico, with 40 sales locations, including 29 in its master-planned communities and 11 at its other projects.
 THE PRESLEY COMPANIES
 Condensed Consolidated Statements of Operations
 (In thousands except per common share amounts and unit data)
 (unaudited)
 Three Months Ended Six Months Ended
 June 30, June 30,
 1992 1991 1992 1991
 Sales
 Homes $43,460 $35,818 $68,946 $62,105
 Lots, land and other 1,595 6,781 2,860 8,616
 Total 45,055 42,599 71,806 70,721
 Cost of sales
 Homes 39,299 32,272 62,260 55,631
 Lots, land and other 1,976 2,979 3,126 4,722
 Total 41,275 35,251 65,386 60,353
 Gross profit 3,780 7,348 6,420 10,368
 Reduction of certain
 real estate assets to
 estimated net
 realizable value (26,000) --- (26,000) ---
 Equity in earnings
 of unconsolidated
 joint ventures 997 404 1,629 541
 Other expenses (income)
 General and
 administrative 2,580 2,548 5,090 5,566
 Other (income)
 expense, net (893) (1,045) (1,954) (2,273)
 Interest incurred 9,101 11,022 17,513 20,509
 Interest capitalized (8,137) (8,620) (15,323) (15,439)
 Total 2,651 3,905 5,326 8,363
 Income (loss) before
 income taxes (23,874) 3,847 (23,277) 2,546
 Credit (provision)
 for income taxes
 including pro
 forma amounts 9,551 (1,767) 9,311 (1,169)
 Net income (loss) ($14,323) $2,080 ($13,966) $1,377
 Net income (loss)
 per common share ($0.77) $0.17 ($0.75) $0.11
 Average common shares
 outstanding 18,500 12,410 18,500 12,410
 Unit Data (Including Unconsolidated Joint Ventures)
 Homes closed 292 206 473 355
 Net new home orders 290 250 627 465
 Backlog - End of period 349 281 349 281
 THE PRESLEY COMPANIES
 Condensed Consolidated Balance Sheets
 (in thousands)
 Assets
 June 30, Dec. 31,
 1992 1991
 (unaudited)
 Cash and cash equivalents $8,666 $19,678
 Real estate inventories 414,096 420,777
 Investments in and advances to
 unconsolidated joint ventures 36,203 37,457
 Other assets 34,950 35,276
 Total $493,915 $513,188
 Liabilities and Stockholders' Equity
 Accounts payable and accrued expenses $21,002 $22,001
 Notes payable 330,469 324,612
 Income taxes payable --- 2,390
 Deferred income taxes 405 8,219
 Stockholders' equity 142,039 155,966
 Total $493,915 $513,188
 Note to financial summary: The Presley Companies filed a registration statement on Form S-1 with the Securities and Exchange Commission for the sale of 7,000,000 shares of common stock at $10 per share, which became effective on Oct. 9, 1991, and was completed on Oct. 18, 1991. As a result of this offering, the company has 18,500,000 shares of common stock outstanding. The company had historically elected to be taxed as an S corporation for income tax purposes. As as S corporation, the company was not subject to federal and certain state income taxes. Upon consummation of this transaction in October 1991, the company became subject to federal and state income taxes. The supplemental pro forma income taxes provided for in the statements of operations for the three- and six-month periods ended June 30, 1991 represent the estimated income taxes that would have been reported had the company filed federal and state income tax returns as a regular corporation for this period.
 -0- 8/10/92
 /CONTACT: Dave Siegel or Craig Manchester of The Presley Companies, 714-640-6400/
 (PDC) CO: The Presley Companies ST: California IN: CST SU: ERN


BP-AL -- LA021 -- 8755 08/10/92 20:11 EDT
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