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THE PRESLEY COMPANIES REPORTS THIRD QUARTER RESULTS; RESTRUCTURE DISCUSSIONS

 NEWPORT BEACH, Calif., Nov. 15 /PRNewswire/ -- The Presley Companies (NYSE: PDC) today reported a net loss for the third quarter ended Sept. 30, 1993 of ($3,434,000) or ($0.19) per share on sales of $81,538,000, compared with a net income of $2,556,000 or $0.14 per share on sales of $59,093,000 for the comparable period a year ago.
 For the nine months ended Sept. 30, 1993, the company reported a net loss of ($22,260,000) or ($1.20) per share on sales of $182,130,000 compared with a net loss for the same period a year ago of ($11,410,000) or ($0.62) per share on sales of $148,037,000.
 The net loss for the quarter ended Sept. 30, 1993 was attributed primarily to 1) declining margins in the company's major projects and 2) a decrease in the amount of interest which is capitalized because a major portion of the company's land development has been substantially completed or is awaiting further development activity and therefore does not qualify for interest capitalization. Offsetting these factors, during the quarter ended Sept. 30, 1993, the company's wholly owned joint venture project, Carmel Mountain Ranch, completed the sale of its golf course for $7,000,000, which resulted in a pre-tax profit to the company of approximately $1,200,000.
 The net loss for the nine months ended Sept. 30, 1993 was attributed primarily to the factors described in the preceding paragraph and to a writedown of $13,100,000 ($11,300,000 after taxes) in certain of the company's real estate assets during the second quarter. In the comparable period a year ago, the net loss included a writedown of $26,000,000 ($15,600,000 after taxes) in certain of the company's real estate projects.
 For the company and its unconsolidated joint venture, closings in the third quarter of this year were up 77 percent to 446 from 252 in the third quarter a year ago. For the first nine months of this year, closings were up 45 percent to 1,052 units, from 725 a year ago. Net new home orders for the quarter ended Sept. 30, 1993 rose 16 percent to 376 units from 325 a year ago. For the first nine months of this year, new orders were also up 26 percent to 1,195 units from 952 a year ago. For the third quarter of 1993, new orders were down 11 percent from 424 units in the second quarter of 1993. The backlog of homes sold as of Sept. 30, 1993 was 381, down 10 percent from 422 units a year earlier, and down 16 percent from 451 units at June 30, 1993. Management believes that the increase in new orders and closings in the third quarter of 1993 compared with the same period a year ago is attributable in large part to reduced sales prices, increased buyer incentives and lower interest rates.
 The company's principal source of funding for its projects is a secured revolving lending facility (the "Revolving Facility"). Effective on May 11, 1993 (the "Closing Date") the company and the lenders who participate in the Revolving Facility (with Bank of America National Trust and Savings Association, as agent) executed an amendment of the Revolving Facility that provided for the extension of the maturity of the Revolving Facility to May 11, 1995, and revised and restructured the Revolving Facility in various other respects. Concurrent with and subsequent to the Closing Date, Foothill Capital Corporation and First Plaza Group Trust have replaced First Interstate Bank, The Bank of California and California Federal Bank, as lenders who participate in the Revolving Facility, and Pearl Street L.P. and Internationale Nederlanden (U.S.) Capital Corporation (previously known as ING Bank) have replaced Continental Bank as lenders who participate in the Revolving Facility. The company is currently discussing with its lenders a possible restructure of the company's debt and equity capitalization. No assurances can be given that any such restructuring will be achieved.
 The Presley Companies is one of California's oldest and largest homebuilders. It has operations in California, Arizona and New Mexico, with 39 sales locations, including 28 in its master-planned communities and 11 at its other projects.
 THE PRESLEY COMPANIES
 Consolidated Statements of Operations
 (In thousands, except per common share amounts)
 (Unaudited)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Sales
 Homes $74,297 $49,601 $172,761 $135,685
 Lots, land and other 7,241 9,492 9,369 12,352
 Total 81,538 59,093 182,130 148,037
 Cost of sales
 Homes 66,901 38,897 153,406 107,267
 Lots, land and other 6,280 5,640 8,636 9,104
 Total 73,181 44,537 162,042 116,371
 Gross profit 8,357 14,556 20,088 31,666
 Reduction of certain
 real estate assets to
 estimated net
 realizable value --- --- (13,100) (26,000)
 Equity in earnings
 of unconsolidated
 joint ventures (30) (17) 229 542
 Other expenses (income)
 Sales and marketing 5,149 4,490 13,610 11,927
 General and
 administrative 2,819 3,002 8,617 8,805
 Other (income)
 expense, net (26) 569 (118) (1,375)
 Interest incurred 9,157 9,077 25,018 27,916
 Interest capitalized (5,338) (8,279) (14,609) (24,928)
 Total 11,761 8,859 32,518 22,345
 Income (loss) before
 minority partners'
 interest in
 consolidated income (3,434) 5,680 (25,301) (16,137)
 Minority partners'
 interest in
 consolidated income --- (1,462) --- (2,922)
 Income (loss) before
 income taxes (3,434) 4,218 (25,301) (19,059)
 Credit (provision)
 for income taxes --- (1,662) 3,041 7,649
 Net income (loss) ($3,434) $2,556 ($22,260) ($11,410)
 Net income (loss)
 per common share ($0.19) $0.14 ($1.20) ($0.62)
 Number of common shares
 outstanding 18,500 18,500 18,500 18,500
 Note: Effective in the first quarter of 1993, the company reclassified buyer incentives, which had previously been included in "Other Expenses -- Sales and marketing," as a reduction of sales revenue. Such reclassifications, in the amount of $2,592,000 and $5,877,000, have been made to present comparable financial information for the three and nine months ended Sept. 30, 1992, respectively. The reclassifications had no impact on previously reported net income (loss) and related per share amounts.
 THE PRESLEY COMPANIES
 Consolidated Balance Sheets
 (In thousands except number of shares and par value per share)
 Sept. 30, Dec. 31,
 1993 1992
 (Unaudited)
 Assets
 Cash and cash equivalents $17,264 $15,405
 Receivables 15,021 11,689
 Real estate inventories 444,824 476,218
 Investments in and advances to
 unconsolidated joint ventures 12,896 13,640
 Property and equipment, less
 accumulated depreciation of $5,550
 and $4,999, respectively 1,078 2,298
 Other assets 7,734 4,502
 Total $498,817 $523,752
 Liabilities and Stockholders' Equity
 Accounts payable $10,707 $8,854
 Accrued expenses 9,845 11,151
 Due to joint venture partners --- 9,405
 Deferred income taxes --- 3,041
 Notes payable 354,901 345,743
 Total 375,453 378,194
 Stockholders' equity
 Common stock, par value $.01 per share;
 100,000,000 shares authorized;
 18,500,000 shares issued and outstanding 185 185
 Additional paid-in capital 155,474 155,474
 Promissory notes related
 to common stock issued (3,013) (3,079)
 Accumulated deficit (29,282) (7,022)
 Total 123,364 145,558
 Total $498,817 $523,752
 Unit Data (Including Unconsolidated Joint Venture)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Homes closed 446 252 1,052 725
 Net new home orders 376 325 1,195 952
 Backlog -- end of period 381 422 381 422
 -0- 11/15/93
 /CONTACT: Dave Siegel or Craig Manchester of The Presley Companies, 714-640-6400/
 (PDC)


CO: The Presley Companies ST: California IN: CST SU: ERN

MF-EH -- LA001 -- 4685 11/15/93 17:02 EST
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Date:Nov 15, 1993
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