SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2004
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
0-23270
Commission File Number
Dominion Homes, Inc.
(Exact name of registrant as specified in its charter)
| Ohio | 31-1393233 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
5000 Tuttle Crossing Blvd, Dublin, Ohio
(Address of principal executive offices)
43016-5555
(Zip Code)
(614) 356-5000
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
| 1. | Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes x No ¨
Number of common shares outstanding as of November 9, 2004: 8,206,515
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Dominion Homes, Inc.
Consolidated Balance Sheets
(In thousands, except share information)
| September 30, 2004 (unaudited) |
December 31, 2003 |
|||||||
| Assets | ||||||||
| Cash and cash equivalents |
$ | 7,757 | $ | 5,025 | ||||
| Accounts receivable |
||||||||
| Trade |
955 | 217 | ||||||
| Due from financial institutions for residential closings |
3,045 | 2,316 | ||||||
| Real estate inventories |
||||||||
| Land and land development costs |
302,296 | 205,543 | ||||||
| Homes under construction |
108,330 | 117,319 | ||||||
| Other |
4,820 | 3,947 | ||||||
| Total real estate inventories |
415,446 | 326,809 | ||||||
| Prepaid expenses and other |
6,376 | 7,220 | ||||||
| Deferred income taxes |
3,374 | 5,781 | ||||||
| Property and equipment, at cost |
19,689 | 18,538 | ||||||
| Less accumulated depreciation |
(11,677 | ) | (9,764 | ) | ||||
| Net property and equipment |
8,012 | 8,774 | ||||||
| Total assets |
$ | 444,965 | $ | 356,142 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Accounts payable |
$ | 16,524 | $ | 17,765 | ||||
| Deposits on homes under contract |
1,386 | 2,034 | ||||||
| Accrued liabilities |
39,611 | 30,104 | ||||||
| Note payable, banks |
190,801 | 129,220 | ||||||
| Term debt |
8,951 | 10,958 | ||||||
| Total liabilities |
257,273 | 190,081 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders’ equity |
||||||||
| Common shares, without stated value, 12,000,000 shares authorized, 8,497,061 shares issued and 8,266,515 shares outstanding on September 30, 2004 and 8,430,761 shares issued and 8,211,250 shares outstanding on December 31, 2003 |
66,091 | 66,890 | ||||||
| Deferred compensation |
(2,891 | ) | (5,107 | ) | ||||
| Retained earnings |
127,443 | 108,264 | ||||||
| Accumulated other comprehensive loss |
(65 | ) | (1,132 | ) | ||||
| Treasury stock, at cost (230,546 shares at September 30, 2004 and 219,511 shares at December 31, 2003) |
(2,886 | ) | (2,854 | ) | ||||
| Total shareholders’ equity |
187,692 | 166,061 | ||||||
| Total liabilities and shareholders’ equity |
$ | 444,965 | $ | 356,142 | ||||
The accompanying notes are an integral part of the consolidated financial statements.
2
Dominion Homes, Inc.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| Revenues |
$ | 162,623 | $ | 153,188 | $ | 426,476 | $ | 397,147 | ||||
| Cost of real estate sold |
126,383 | 116,491 | 329,232 | 302,055 | ||||||||
| Gross profit |
36,240 | 36,697 | 97,244 | 95,092 | ||||||||
| Selling, general and administrative |
20,972 | 19,434 | 59,769 | 52,414 | ||||||||
| Income from operations |
15,268 | 17,263 | 37,475 | 42,678 | ||||||||
| Interest expense |
2,389 | 1,984 | 6,180 | 5,730 | ||||||||
| Income before income taxes |
12,879 | 15,279 | 31,295 | 36,948 | ||||||||
| Provision for income taxes |
5,377 | 6,142 | 12,116 | 14,758 | ||||||||
| Net income |
$ | 7,502 | $ | 9,137 | $ | 19,179 | $ | 22,190 | ||||
| Earnings per share |
||||||||||||
| Basic |
$ | 0.94 | $ | 1.16 | $ | 2.40 | $ | 2.80 | ||||
| Diluted |
$ | 0.91 | $ | 1.13 | $ | 2.34 | $ | 2.74 | ||||
| Weighted average shares outstanding |
||||||||||||
| Basic |
8,008,556 | 7,905,076 | 7,981,174 | 7,927,934 | ||||||||
| Diluted |
8,222,127 | 8,083,986 | 8,178,974 | 8,095,492 | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
3
Dominion Homes, Inc.
Consolidated Statement of Changes in Shareholders’ Equity
(In thousands)
(Unaudited)
| Deferred Compensation |
Accumulated Other Comprehensive Income (Loss) |
Treasury |
Total |
||||||||||||||||||||||||
| Common Shares |
Liability |
Trust Shares |
Retained Earnings |
||||||||||||||||||||||||
| Balance, December 31, 2003 |
$ | 66,890 | $ | (3,873 | ) | $ | (1,234 | ) | $ | 108,264 | $ | (1,132 | ) | $ | (2,854 | ) | $ | 166,061 | |||||||||
| Net income |
19,179 | 19,179 | |||||||||||||||||||||||||
| Unrealized hedging gain, net of deferred taxes of $711 |
1,067 | 1,067 | |||||||||||||||||||||||||
| Comprehensive income |
20,246 | ||||||||||||||||||||||||||
| Shares awarded and redeemed |
(799 | ) | 1,215 | 416 | |||||||||||||||||||||||
| Shares distributed from Trust for deferred compensation |
(233 | ) | 233 | — | |||||||||||||||||||||||
| Shares repurchased |
(32 | ) | (32 | ) | |||||||||||||||||||||||
| Deferred compensation |
1,164 | (163 | ) | 1,001 | |||||||||||||||||||||||
| Balance, September 30, 2004 |
$ | 66,091 | $ | (1,727 | ) | $ | (1,164 | ) | $ | 127,443 | $ | (65 | ) | $ | (2,886 | ) | $ | 187,692 | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
4
Dominion Homes, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 19,179 | $ | 22,190 | ||||
| Adjustments to reconcile net income to cash used in operating activities: |
||||||||
| Depreciation and amortization |
3,266 | 2,934 | ||||||
| Issuance of common shares for compensation |
78 | 59 | ||||||
| Reserve for real estate inventories |
— | 360 | ||||||
| Deferred income taxes |
3,118 | (135 | ) | |||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable |
(1,467 | ) | (1,152 | ) | ||||
| Real estate inventories |
(87,727 | ) | (38,753 | ) | ||||
| Prepaid expenses and other |
698 | (1,397 | ) | |||||
| Accounts payable |
(1,241 | ) | 11,600 | |||||
| Deposits on homes under contract |
(648 | ) | 316 | |||||
| Accrued liabilities |
9,914 | 80 | ||||||
| Net cash used in operating activities |
(54,830 | ) | (3,898 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Purchase of property and equipment |
(1,158 | ) | (6,018 | ) | ||||
| Net cash used in investing activities |
(1,158 | ) | (6,018 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Payments on note payable banks |
(348,260 | ) | (322,951 | ) | ||||
| Proceeds from note payable banks |
409,841 | 336,901 | ||||||
| Payments on term debt |
(1,837 | ) | (892 | ) | ||||
| Payments on deferred financing fees |
(250 | ) | (188 | ) | ||||
| Payments on capital lease obligations |
(1,080 | ) | (1,014 | ) | ||||
| Proceeds from issuance of common shares |
338 | 43 | ||||||
| Common shares purchased or redeemed |
(32 | ) | (1,834 | ) | ||||
| Net cash provided by financing activities |
58,720 | 10,065 | ||||||
| Net change in cash and cash equivalents |
2,732 | 149 | ||||||
| Cash and cash equivalents, beginning of period |
5,025 | 4,121 | ||||||
| Cash and cash equivalents, end of period |
$ | 7,757 | $ | 4,270 | ||||
| Supplemental disclosures of cash flow information: |
||||||||
| Interest paid (net of amounts capitalized) |
$ | 1,810 | $ | 1,908 | ||||
| Income taxes paid |
$ | 13,654 | $ | 17,764 | ||||