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THE PRESLEY COMPANIES REPORTS THIRD-QUARTER RESULTS

 THE PRESLEY COMPANIES REPORTS THIRD-QUARTER RESULTS
 NEWPORT BEACH, Calif., Nov. 13 /PRNewswire/ -- The Presley


Companies (NYSE: PDC) today reported net income for the third quarter ended Sept. 30, 1992 of $2,556,000, or $0.14 per share on sales of $50,229,000, compared with net income of $1,133,000, or $0.09 per share on a pro forma basis on sales of $31,445,000, for the comparable period a year ago. Pre-tax income for these periods was $4,218,000 for 1992 and $1,907,000 for 1991. The results for the three months ended Sept. 30, 1992 include a $3,700,000 pre-tax gain to the company from the sale of a golf course, after allocation of profit of $900,000 to a minority partner.
 For the nine months ended Sept. 30, 1992, the company reported a net loss of ($11,410,000), or ($0.62) per share on sales of $122,035,000, compared with net income for the same period a year ago of $2,510,000, or $0.20 per share on a pro forma basis on sales of $102,166,000. Operations for the nine months ended Sept. 30, 1992 generated pre-tax income of $6,941,000 compared with pre-tax income of $4,453,000 a year ago. However, the results for the nine months ended Sept. 30, 1992 include a writedown of $26,000,000 ($15,600,000 after taxes) in certain of the company's real estate assets during the second quarter ended June 30, 1992, as a result of adverse market conditions.
 For the company and its unconsolidated joint ventures, closings in the third quarter of this year were up 25 percent to 252 from 201 in the third quarter a year ago. For the first nine months of this year, closings were up 30 percent to 725 units from 556 a year ago. Net new home orders for the quarter ended Sept. 30, 1992 rose 22 percent to 325 units from 266 a year ago. For the first nine months of this year, new orders were up 30 percent to 952 units from 731 a year ago. For the third quarter of 1992, new orders were up 12 percent to 325 units, from 290 in the second quarter of 1992. The backlog of homes sold, but not closed, as of Sept. 30, 1992 was 422, up 22 percent from 346 units a year earlier, and up 21 percent from 349 units at June 30, 1992.
 As stated previously, management does not necessarily believe the increase in sales and closings is indicative of an improving economy or improved profit margins, but rather is attributable in large part to reduced sales prices, increased buyer incentives and an increase in the number of sales locations and products offered in the 1992 period compared to the 1991 period, as well as lower interest rates in 1992 compared to 1991.
 Management continues to be concerned about the effect that the decline in the value of the company's real estate inventory will have on the company's borrowing capacity. The company's borrowing capacity is based on the most recent appraised values of its real estate inventory at any given time. Recent lower appraisals have reduced the company's borrowing capacity. Under the current lending agreement, the borrowing base at Sept. 30, 1992 is based upon the appraised value calculation of approximately $327.3 million (Maximum Loan Amount). At that date, current principal outstandings of approximately $329.4 million exceeded the Maximum Loan Amount by approximately $2.1 million. To date, the banks have not required a repayment of principal in the amount of the excess. In the near term, the company anticipates that new appraisals required by the company's lenders will result in lower appraised values, which in turn will reduce the available Maximum Loan Amount. The company and the banks are currently in discussions regarding a restructure and extension of the current lending agreement to be effective on or before its maturity date of January 31, 1993. The company believes that an agreement can be reached, although no assurances can be given in that regard.
 In addition, at Sept. 30, 1992 the company's joint ventures had loans outstanding totalling approximately $60.1 million. On Nov. 9, 1992, one of these loans on the Horsethief Canyon Ranch joint venture project, in the approximate amount of $19.1 million matured and remains outstanding. To date, the bank has not required repayment and discussions with the lender are continuing. A loan on the Carmel Mountain Ranch joint venture project in the approximate amount of $27.2 million will mature on Dec. 31, 1992. The company's joint venture partner on the Carmel Mountain project has recently been taken over by the Resolution Trust Corporation. The joint venture is currently in discussion with its banks regarding an extension of this loan.
 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
 Condensed Consolidated Statements of Operations
 (In thousands, except per common share amounts and unit data)
 (Unaudited)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Sales
 Homes $40,737 $29,350 $109,683 $91,455
 Lots, land and other 9,492 2,095 12,352 10,711
 Total 50,229 31,445 122,035 102,166
 Cost of sales
 Homes 35,782 26,030 98,042 81,661
 Lots, land and other 5,848 1,862 8,974 6,584
 Total 41,630 27,892 107,016 88,245
 Gross profit 8,599 3,553 15,019 13,921
 Reduction of certain
 real estate assets to
 estimated net
 realizable value --- --- (26,000) ---
 Equity in earnings
 of unconsolidated
 joint ventures 375 2,269 2,004 2,810
 Other expenses (income)
 General and
 administrative 2,668 2,443 7,758 8,009
 Other (income)
 expense, net 1,290 (629) (664) (2,902)
 Interest incurred 8,440 9,911 25,953 30,420
 Interest capitalized (7,642) (7,810) (22,965) (23,249)
 Total 4,756 3,915 10,082 12,278
 Income (loss) before
 income taxes 4,218 1,907 (19,059) 4,453
 Credit (provision)
 for income taxes
 including pro
 forma amounts (1,662) (774) 7,649 (1,943)
 Net income (loss) $2,556 $1,133 ($11,410) $2,510
 Net income (loss)
 per common share $0.14 $0.09 ($0.62) $0.20
 Average common shares
 outstanding 18,500 12,410 18,500 12,410
 Unit Data (Including Unconsolidated Joint Ventures)
 Net new homes orders 325 266 952 731
 Homes closed 252 201 725 556
 Backlog -- end of period 422 346 422 346
 THE PRESLEY COMPANIES
 Condensed Consolidated Balance Sheets
 (In thousands)
 Sept. 30, Dec. 31,
 1992 1991
 (unaudited)
 Assets
 Cash and cash equivalents $6,610 $19,678
 Real estate inventories 429,359 420,777
 Investments in and advances to
 unconsolidated joint ventures 36,572 37,457
 Other assets 26,345 35,276
 Total $498,886 $513,188
 Liabilities and Stockholders' Equity
 Accounts payable and accrued expenses $21,562 $22,001
 Notes payable 330,893 324,612
 Income taxes payable --- 2,390
 Deferred income taxes 1,815 8,219
 Stockholders' equity 144,616 155,966
 Total $498,886 $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 an 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 consolidated statements of operations for the three- and nine-month periods ended Sept. 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 these periods.
 -0- 11/13/92
 /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-LS -- LA018 -- 0948 11/13/92 18:06 EST
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