1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to ________________.
Commission file number: 0-29027
Whitehall Limited, Inc.
(Exact name of small business issuer as specified in its charter)
Florida 84-1092599
- ---------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or
organization)
290 Cocoanut Avenue, Sarasota, Florida 34236
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Address of principal executive offices
941-954-1181
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(Issuer's telephone number)
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ] No [x]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 8,946,000
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [x]
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Part I
Financial Information
Item 1. Financial Statements
See financial statements beginning on page F-1
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Form 10-QSB, other than historical financial information, may consist of
forward-looking statements that include risks and uncertainties, including, but
not limited to, statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations." Such statements are based upon
many assumptions and are subject to risks and uncertainties. Actual results
could differ materially from the results discussed in the forward-looking
statements due to a number of factors, including, but not limited to, those
identified in this document and the Company's other filings with the Securities
and Exchange Commission. The Company disclaims any intent or obligation to
update these forward-looking statements.
OVERVIEW:
The Company builds quality homes with custom features at moderate prices. The
homes are designed principally for the entry level or "moving up" home buyers'
market, as well as the retirement segment of such market. Residences constructed
and marketed by the Company usually range in size from 1,200 to 3,500 square
feet and have purchase prices ranging from $150,000 to $500,000. The company
markets the residences through commissioned employees and independent real
estate brokers in the Company's market area, which consists of the West Coast of
the State of Florida, primarily, Sarasota, Manatee, Collier, Pasco and
Hillsborough Counties. Residential unit sales are usually conducted from sales
offices located in furnished models in each subdivision where the Company is
active. The Company also typically constructs a limited number of speculative
homes in each residential subdivision in which it is active in order to enhance
marketing and sales activities.
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Results of operations for the six and three months ended September 30, 2000 as
compared to the six and three months ended September 30, 1999:
The Company is presently engaged in the development of the following projects:
Estimated Number of Units closed Units closed
Average Units Six months Three months
Total Selling To close Ended Ended
Number of Price As of ----------------------------------------
Project Units Per Unit 9/30/00 9/30/00 9/30/99 9/30/00 9/30/99
- ---------------- ---------- ---------- ---------- ---------- ------------- ------- -------
Avalon at
The Villages
Of Palm Aire 114 $186,000 42 26 5 16 4
Beekman Place
& village 148 165,000 0 (A) 18 9
Bermuda Club 30 200,000 6 2 2 1 2
Governor's Green 16 325,000 0 1
Heron Creek Golf
Country Club 112 250,000 38
Lake JoVita 60 240,000 60
Off Site 2 1 1
-------- -------- ------ -------- ------
Total 146 30 27 18 15
======== ======== ====== ======== ======
- ------------
(A) Project completed Fall of 1999
Results of Operations
The following table sends forth operating data as a percentage of
revenue:
Six months ended Three months ended
September 30, September 30,
---------------- ------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Home and lot sales 98% 96% 98% 96%
Other 2% 4% 2% 4%
---- ---- ---- ----
Total 100% 100% 100% 100%
---- ---- ---- ----
Costs and expenses:
Cost of sales 73% 74% 76% 71%
Selling 8% 10% 7% 9%
General and administrative 12% 23% 12% 9%
Interest 3% 3% 3% 3%
---- ---- ----
Total 96% 110% 98% 92%
---- ---- ---- ----
Income(loss) before income taxes 4% (10)% 2% 8%
---- ---- ---- ----
Revenues:
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Home and Lot Sales:
The Company's Home and Lot sales increased by approximately
$2,957,000 to approximately $5,907,000 for the six months ended
September 30, 2000 as compared to approximately $2,950,000 for
the six months ended September 30, 1999. The Company's Home and
Lot sales also increased by approximately $1,125,000 for the
three months ended September 30, 2000 to approximately
$2,831,000 from approximately $1,706,000 for the three months
ended September 30, 1999. Beginning in 1999 and continuing
throughout 2000, the Company was able to take advantage of the
strong real estate markets, thereby increasing the average base
sales price per unit, as well as sell an increased number of
options per unit. In addition, the Company began certain phases
of projects under development that contained the premium or
choice units thereby demanding a higher unit value. Also, the
Company commenced the sale of units in higher end projects. As a
result of the aforementioned, the average unit sales price on
the 30 units closed during the six months ended September 30,
2000 was approximately $197,000 as compared to approximately
$109,000 for the 27 units closed during the six months ended
September 30, 1999. The Company closed three more units in the
quarter ending September 30, 2000 as compared to the quarter
ending September 30, 1999, thereby accounting for the increased
sales volume in the quarter then ended.
Other Revenue:
Other revenue consists of Management fee, interest, and sundry
income. During the six and three months ended September 30,
2000, other revenue was approximately $109,000 and $47,000,
respectively, as compared to approximately $127,000 and $69,000
for the six and three months ended September 30, 1999. The
primary reason for the decrease is due to the Company earning
approximately $71,000 and $33,000 less of other income during
2000.
Costs and expenses:
Cost of sales:
Cost of sales increased by approximately $2,109,000 to
approximately $4,372,000 for the six months ended September 30,
2000 as compared to approximately $2,263,000 for the six months
ended September 30,1999. Cost of sales also increased by
approximately $939,000 for the three months ended September 30,
2000 to approximately $2,154,000 from approximately $1,215,000
for the three months ended September 30, 1999. The primary
reason for the increase was due to the number of units
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closed during this period. However, the cost as a percent of
sales was fairly constant from 1999 to 2000.
Selling, general and administrative:
Selling, general and administrative increased for the six and
three months ended September 30, 2000 as compared to the six and
three months ended September 30, 1999 by approximately $205,000
and $252,000, respectively. The primary reason for this is that
selling expenses increased by approximately $163,000 and
$40,000, respectively, due to the number of closings and units
under contract.
Interest:
Interest increased for the six and three months ended September
30, 2000 as compared to the six and three months ended September
30, 1999 by approximately $71,000 and $18,000, respectively. The
primary reason for this is the increased construction activity
and outstanding borrowings that resulted from these borrowing.
As a result of the aforementioned and the Company fully utilizing its net
operating loss carryovers in 1999, the Company's net income was approximately
$159,000 ($.02 per share) and $37,000 (less than $.01 per share) for the six and
three months ended September 30, 2000 as compared to approximately $(293,000)
and $150,000 for the six and three months ended September 30,1999.
Liquidity and Capital Resources:
As of September 30, 2000, the Company had net assets of approximately $1,313,000
including cash and cash equivalents of approximately $786,000. During the six
months ended September 30, 2000, the Company's cash position increased by
approximately $111,000. Its operating activities generated approximately
$266,000 of cash. This was caused by a liquidation of inventories due the sales
of units of approximately $1,128,000, offset by utilizing customer deposits of
approximately $1,217,000 and the company's overall profitability. The Company's
investing activities utilized cash of approximately $248,000 of which
approximately $150,000 was lent to the principle stockholder and approximately
$97,000 was invested in marketable securities. The Company's financing
activities provided approximately $93,000 of cash principally from the proceeds
of its mortgages and notes payable( net of repayments).
The Company's principal source of financing has historically been provided from
its construction financing which is based on the value of the underlying
projects. In
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addition, in 1999, the Company received capital contributions of approximately
$858,000 and loans from its principle stockholder in the amount of approximately
$1,319,000.
Part II
Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K
We did not file any reports on Form 8-K during the quarter for
which this report is filed.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Whitehall Limited, Inc.
August 15, 2001 /s/ Ronald Mustari
-----------------------------------------
Ronald Mustari, President and
Chief Executive Officer
(Principal Executive Officer)
August 15, 2001 /s/ Joanne Mustari
-----------------------------------------
Joanne Mustari, Treasurer and
Chief Financial Officer
Principal Financial and Accounting Officer)
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
PAGE
----
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet at September 30, 2000(unaudited) F-2-3
Condensed Consolidated Statements of Income
Six and Three months Ended September 30, 2000 and 1999(unaudited) F-4-5
Condensed Consolidated Statement of Changes in Stockholders' Equity
Six months ended September 30, 2000(unaudited) F-6
Condensed Consolidated Statements of Cash Flows(unaudited)
Six months ended September 30, 2000 and 1999(unaudited) F-7
Notes to Condensed Consolidated Financial Statements F-8
F-1
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash in Banks $ 786,250
Due from affiliated companies 157,217
Due from stockholder (Net) 444,348
Investments 167,314
-----------
TOTAL CURRENT ASSETS 1,555,129
-----------
CONSTRUCTION COSTS IN PROGRESS
Land and development costs 1,452,654
Homes under construction and furnished models 5,805,790
-----------
TOTAL CONSTRUCTION COSTS IN PROGRESS 7,258,444
-----------
PROPERTY AND EQUIPMENT
Office land and building 1,656,844
Office furniture and fixtures 2,354
Construction equipment 59,735
Vehicles 101,817
-----------
TOTAL 1,820,750
Less: Depreciation 53,199
-----------
TOTAL PROPERTY AND EQUIPMENT 1,767,551
-----------
OTHER ASSETS 215,041
-----------
TOTAL ASSETS $10,796,165
===========
See Notes to Unaudited Condensed Consolidated Financial Statements
F-2
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS EQUITY
LIABILITIES
Accounts Payable $ 955,383
Customers' Deposits 2,461,295
Income Taxes Payable-Current 235,495
Notes and Loans Payable:
Land and Development Loans 94,000
Construction Loans 3,349,810
Notes Payable 434,044
------------
TOTAL CURRENT LIABILITIES 7,530,027
Income Taxes-Deferred 210,236
Note Payable-Related Party 1,319,196
Note Payable-Long-Term Debt 424,014
------------
TOTAL LIABILITIES 9,483,473
------------
STOCKHOLDERS' EQUITY
Preferred stock; $.10 par value authorized, 100,000,000
shares: none issued 0
Common stock; $.10 par value authorized-
500,000,000 shares; issued and
outstanding 8,946,000 shares 894,600
Paid in capital in excess of Par Value 478,321
Retained earnings (deficit) (60,229)
------------
TOTAL STOCKHOLDERS' EQUITY 1,312,692
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,796,165
============
See Notes to Unaudited Condensed Consolidated Financial Statements
F-3
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 2000
(UNAUDITED)
FOR THE THREE
MONTHS ENDED
--------------------------
9/30/99 9/30/00
---------- ----------
INCOME
Homes and Lot Sales $1,706,125 $2,830,768
Real Estate Commissions 0 708
Interest 3,023 13,081
Other 66,108 33,321
---------- ----------
TOTAL INCOME 1,775,256 2,877,878
COST OF HOMES AND LOTS SALES 1,214,766 2,153,679
---------- ----------
NET INCOME (BEFORE OPERATING EXPENSES) 560,490 724,199
---------- ----------
OPERATING EXPENSES
Selling and General 87,656 173,742
Personnel 101,342 239,922
Office 98,882 153,053
Real estate commissions 64,299 18,446
Interest 58,566 77,331
---------- ----------
TOTAL OPERATING EXPENSES 410,745 662,494
---------- ----------
NET INCOME (BEFORE INCOME TAXES) 149,745 61,705
FEDERAL & STATE INCOME TAXES 0 24,688
---------- ----------
NET INCOME FOR THE PERIOD $ 149,745 $ 37,017
========== ==========
NET INCOME PER COMMON SHARE $ 0.02 --
========== ==========
BASIC WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 8,946,000 8,946,000
========== ==========
See Notes to Unaudited Condensed Consolidated Financial Statements
F-4
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 2000
(UNAUDITED)
FOR THE SIX
MONTHS ENDED
-----------------------------
9/30/99 9/30/00
----------- -----------
INCOME
Homes and Lot Sales $ 2,949,817 $ 5,907,277
Management Fees 0 28,541
Real Estate Commissions 0 7,072
Interest 5,455 23,231
Other 121,232 50,469
----------- -----------
TOTAL INCOME 3,076,504 6,016,590
COST OF HOMES AND LOTS SALES 2,263,307 4,372,123
----------- -----------
NET INCOME (BEFORE OPERATING EXPENSES) 813,197 1,644,467
----------- -----------
OPERATING EXPENSES
Selling and General 226,544 363,350
Personnel 229,829 441,982
Office 203,893 305,887
Real estate commissions 84,769 111,206
Interest 87,915 158,520
Other 272,831 0
----------- -----------
TOTAL OPERATING EXPENSES 1,105,781 1,380,945
----------- -----------
NET INCOME(LOSS) (BEFORE INCOME TAXES) (292,584) 263,522
FEDERAL & STATE INCOME TAXES 0 104,221
----------- -----------
NET INCOME (LOSS) FOR THE PERIOD $ (292,584) $ 159,301
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE $ (0.03) $ 0.02
=========== ===========
BASIC WEIGHTED AVERAGE NUMBER OF
COMMON SHARES 8,946,000 8,946,000
=========== ===========
See Notes to Unaudited Condensed Consolidated Financial Statements
F-5
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
RETAINED
COMMON STOCK PAID-IN EARNINGS
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
--------- --------- ---------- ---------- ----------
BALANCE - APRIL 1, 2000 8,946,000 $ 894,600 $ 432,022 $ (219,530) $1,107,092
Forgiveness of shareholders'
interest 46,299 $ 46,299
Net income for the six months
ended September 30, 2000 159,301 159,301
--------- --------- ---------- ---------- ----------
Balance-September 30, 2000 8,946,000 $ 894,600 $ 478,321 $ (60,229) $1,312,692
========= ========= ========== ========== ==========
See Notes to Unaudited Condensed Consolidated Financial Statements
F-6
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 2000
(UNAUDITED)
9/30/99 9/30/00
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income on loss $ (292,584) $ 159,301
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 18,881 19,664
Shareholders forgiveness of interest 26,691 46,299
Changes in assets and liabilities:
Land and development costs (1,886,577) 167,843
Homes under constructions and furnished models (2,147,781) (1,295,851)
Customer deposits 549,626 1,217,088
Vehicles 16,563 (18,277)
Other assets (210,277) 42,665
Accounts payable and accrued liabilities 525,925 (165,485)
Income taxes-deferred 210,236 0
Income taxes-current 0 104,221
Due from affiliates (247,811) (11,671)
----------- -----------
NET CASH USED BY OPERATING
ACTIVITIES (3,437,108) 265,797
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Loan and other (111,826) (150,291)
Property and equipment (1,123,351) 0
Investments 0 (97,464)
----------- -----------
NET CASH FLOWS FROM INVESTING
ACTIVITIES (1,235,177) (247,755)
----------- -----------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Note payable-related party 1,319,196 0
Stockholders capital contribution 857,992 0
Construction loans 2,347,775 298,779
Notes payable 270,673 (205,870)
----------- -----------
NET CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES 4,795,636 92,909
----------- -----------
NET INCREASE IN CASH 123,351 110,951
NET CASH - BEGINNING OF PERIOD 126,794 675,299
----------- -----------
NET CASH - END OF PERIOD $ 250,145 $ 786,250
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
Interest paid $ 61,224 $ 112,221
=========== ===========
Income taxes paid $ 0 $ 0
=========== ===========
See Notes to Unaudited Condensed Consolidated Financial Statements
F-7
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
FKA CAMBRIDGE UNIVERSAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND LINE OF
BUSINESS
CONSOLIDATION: The accompanying consolidated financial statements include the
accounts of Whitehall Homes, Inc. and Affiliated Companies and the Company and
its wholly-owned subsidiary WHITEHALL HOMES, II, INC. after elimination of
significant inter-company accounts and transactions.
Earnings Per Share:
The Company has presented "basic" earnings per share in the accompanying
statements of income in accordance with the provisions of Statement of Financial
Accounting Standards No. 128, Earnings per Share ("SFAS 128"). SFAS 128 also
requires the presentations of "diluted" earnings per share if the amount differs
from basic earnings per share. Basic earnings per share are calculated by
dividing net income by the weight average number of common shares outstanding
during each period. The calculation of diluted earnings per share is similar to
that of basic earnings per share, except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if all potentially dilutive common shares, such as those issuable upon the
exercise of stock options and warrants, were issued during the period. For the
years ended March 31, 2000 and 1999, diluted earnings per share have not been
presented because there were no additional shares derived from the assumed
conversion of the note payable-stockholder at fair value and the application of
the treasury stock method.
Significant accounting policies and line of business have not changed
from March 31, 2000.
NOTE II - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of the
management, all adjustments (consisting of normal recurring accruals) considered
F-8
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necessary for a fair presentation have been included. Operating results for the
three months period and six months period ended September 30, 2000 are not
necessarily indicative of the results that may be expected for the year ended
March 31, 2001. These quarterly financial statements should be read in
conjunction with the audited financial statements and the footnotes thereto for
the year ended March 31, 2000.
NOTE III - DEBT
The Company increased debt due to significant increase in building
operations, but substantially within its established lines of credit. All notes
payable are current.
F-9