SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 20, 1999
WASHINGTON HOMES, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-7643 52-0818872
(State or other jurisdiction (Commission File No.) (IRS Employer
incorporation) Identification No.)
1802 Brightseat Road, Landover, Maryland 20785-4235
(Address of principal executive offices) (Zip
code)
Registrant's telephone number, including area code: (301) 772-8900
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 20, 1999, the registrant, through two newly formed wholly-
owned subsidiaries, acquired a substantial part of the assets and assumed
liabilities of Breland Homes Inc., Breland Properties Inc. and Breland
Homes of Mississippi LLC (collectively "Sellers"), entities owned by Louis
W. Breland. The Sellers operated a homebuilding and land development
business in the areas in and around Huntsville, Alabama and Gulfport and
Biloxi, Mississippi under the name "Breland Homes."
In the acquisition the registrant assumed approximately $9 million of
Sellers' bank debt and assumed liabilities of approximately $400,000 as of
the closing date and will pay Sellers a cash amount estimated to be
approximately $5.0 million. The cash amount will be calculated as $3
million plus the book value of the acquired assets less the book value of
assumed liabilities at December 31,1998 less the combined net income after
taxes of the Sellers for the period from January 1 to February 28, 1999.
The exact purchase price is to be based on a final accounting scheduled to
occur by May 20, 1999.
In the acquisition, the registrant acquired the inventory of finished
building lots, completed homes, model homes and houses in various stages of
construction and was assigned lot option contracts to acquire additional
building lots and customer contracts for the delivery of finished houses.
The registrant acquired control of approximately 2,600 building lots and a
backlog of 90 homes under construction which have been contracted for with
a delivery value of $12.1 million.
Other assets acquired, included the name "Breland Homes" and other
intellectual and personal property. The registrant did not acquire any
cash items or certain accounts receivable and inter-company obligations,
among other things.
The acquisition was made using in part the proceeds from a newly
established $15 million revolving line of credit from Compass Bank which is
based in Alabama. This line is intended to provide the operations in
Alabama and Mississippi with working capital. The line of credit matures
in two years but may be extended, and is secured by the assets of the newly
formed subsidiaries and guaranteed by the registrant. The interest on the
line is a floating rate based upon London Inter-Bank Offered Rate (LIBOR).
Other funds for the transaction were from internally generated cash
resources.
The registrant also entered into a newly formed venture with Louis W.
Breland to be owned 50% by each to develop building lots for the use by the
registrant in Alabama and Mississippi.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statement of businesses acquired.
The financial statements required by Item 7(a) will be filed
by an amendment to this Current Report on Form 8-K as soon as
practicable but no later than July 2, 1999.
(b) Pro forma financial information.
The pro forma financial information required by Item 7(b) will be
filed by an amendment to this Current Report on Form 8-K as soon
as practicable but no later than July 2, 1999.
(c) Exhibits
Exhibit No. Description of Exhibit
2(a) Asset Purchase Agreement #1 dated as of March 24, 1999
by and among the Registrant, Westminster Homes of
Alabama LLC, Westminster Homes of Mississippi, LLC,
Breland Homes of Mississippi, LLC, Breland Properties,
Inc., and Louis W. Breland.
2(b) Asset Purchase Agreement #2 dated as of March 24, 1999
by and among the Registrant, Westminster Homes of
Alabama LLC, Westminster Homes of Mississippi LLC,
Breland Homes, Inc. and Louis W. Breland.
Upon request of the Commission, omitted schedules to the above listed
documents will be furnished supplementary to the Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WASHINGTON HOMES, INC.
Date: May 4, 1999 By: /s/ GEATON A. DECESARIS, JR.
Geaton A. DeCesaris, Jr.
President and
Chief Executive Officer