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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: December 31, 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
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 nine and three months ended December 31,
2000 as compared to the nine and three months ended December 31, 1999:
The Company is presently engaged in the development of the following
projects:
ESTIMATED NUMBER OF UNITS CLOSED UNITS CLOSED
AVERAGE UNITS NINE MONTHS THREE MONTHS
TOTAL SELLING TO CLOSE ENDED ENDED
NUMBER OF PRICE AS OF ------------------- -------------------
PROJECT UNITS PER UNIT 12/31/00 12/31/00 12/31/99 12/31/00 12/31/99
--------- --------- --------- -------- --------- -------- --------
Avalon at
The Villages
Of Palm Aire 114 $186,000 31 37 13 11 8
Beekman Place
& village 148 165,000 0 A 20 2
Bermuda Club 30 200,000 3 5 4 3 3
Governor's Green 16 325,000 0 1
Heron Creek Golf
Country Club 112 250,000 35 3 3
Lake JoVita 60 240,000 60
Off Site 2 2
--- -- -- -- --
Total 129 47 40 17 13
=== == == == ==
- --------------
(A) Project completed Fall of 1999
Results of Operations
The following table sends forth operating data as a percentage of
revenue:
NINE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------- ------------------
2000 1999 2000 1999
----- ------ ------ -------
Revenues:
Home and lot sales 98% 97% 98% 99%
Other 2% 3% 2% 1%
--- --- --- ---
Total 100% 100% 100% 100%
--- --- --- ---
Costs and expenses:
Cost of sales 72% 75% 67% 74%
Selling 6% 6% 7% 5%
General and administrative 12% 16% 22% 8%
Interest 3% 2% 3% 1%
--- --- --- ---
Total 93% 99% 88% 88%
--- --- --- ---
Income before income taxes 7% 1% 12% 12%
--- --- --- ---
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Revenues:
Home and Lot Sales:
The Company's Home and Lot sales increased by approximately
$3,446,000 to approximately $9,333,000 for the nine months ended
December 31, 2000 as compared to approximately $5,887,000 for the
nine months ended December 31, 1999. The Company's Home and Lot
sales also increased by approximately $489,000 for the three
months ended December 31, 2000 to approximately $3,426,000 from
approximately $2,937,000 for the three months ended December 31,
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. As a result of the aforementioned,
the average unit sales price on the 47 units closed during the
nine months ended December 31, 2000 was approximately $199,000 as
compared to approximately $147,000 for the 40 units closed during
the year ended December 31, 1999. The Company closed four more
units in the quarter ending December 31, 2000 as compared to the
quarter ending December 31, 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 nine and three months ended December 31, 2000,
other revenue was approximately $195,000 and $85,000,
respectively, as compared to approximately $152,000 and $25,000
for the nine and three months ended December 31, 1999. The
primary reason for the increase is due to the Company earning
approximately $50,000 and $33,000 more of interest income during
the period.
Costs and expenses:
Cost of sales:
Cost of sales increased by approximately $2,314,000 to
approximately $6,844,000 for the nine months ended December 31,
2000 as compared to approximately $4,530,000 for the nine months
ended December 31, 1999. Cost of sales also increased by
approximately $179,000 for the three months ended December 31,
2000 to approximately $2,361,000 from approximately $2,182,000
for the three months ended December 31, 1999. The primary reason
for the increase was due to the number of units closed
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during this period. However, the cost as a percent of sales
decreased in 2000 as compared to 1999. The Company was successful
in keeping its direct cost in line, while taking advantage of the
positive trends in the real estate markets.
Selling, general and administrative:
Selling, general and administrative increased for the nine and
three months ended December 31, 2000 as compared to the nine and
three months ended December 31, 1999 by approximately $436,000
and $257,000, respectively. The primary reason for this is that
selling expenses increased by approximately $237,000 and
$100,000, respectively, due to the number of closings and units
under contract.
Interest:
Interest increased for the nine and three months ended December
31, 2000 as compared to the nine and three months ended December
31, 1999 by approximately $159,000 and $88,000, 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
$429,000 ($.05 per share) and $269,000 ($.03 per share) for the nine and three
months ended December 31, 2000 as compared to approximately $39,000 and $332,000
for the nine and three months ended December 31, 1999.
Liquidity and Capital Resources:
As of December 31, 2000, the Company had net assets of approximately $1,605,000
including cash and cash equivalents of approximately $717,000. During the nine
months ended December 31, 2000, the Company's cash position increased by
approximately $42,000. Its operating activities used approximately $654,000 of
cash. This was used to increase inventories by approximately $2,099,000, which
were funded mainly by the Company's net income of approximately $429,000,
increase in customer deposits of approximately $724,000 and an increase in other
short-term obligations of approximately $208,000. The Company's investing
activities utilized approximately $266,000 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
$963,000 of cash principally from the proceeds of its mortgages and notes
payable.
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
$881,000 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
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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
(Formerly Cambridge Universal Corporation)
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000 F-2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE AND THREE MONTHS ENDED DECEMBER 31,
2000 AND 1999 F-3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 2000 AND 1999 F-4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS F-5
* * *
F-1
9
WHITEHALL LIMITED, INC. AND SUBSIDIARIES
(Formerly Cambridge Universal Corporation)
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
(Unaudited)
ASSETS
Cash and cash equivalents $ 717,460
Investment in marketable securities 167,314
Inventories 8,229,587
Due from affiliate 186,500
Due from stockholders 444,348
Property and equipment, net 1,757,503
Other assets 232,906
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Total $11,735,618
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages and notes payable $ 5,171,790
Accounts payable and accrued expenses 1,063,545
Customer deposits and advances 1,968,684
Income taxes payable 397,104
Deferred tax liabilities 210,236
Note payable - stockholder 1,319,196
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Total liabilities 10,130,555
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Commitments and contingencies
Stockholders' equity:
Preferred stock; $.10 par value; authorized
100,000,000 shares; issued none --
Common stock; $.10 par value; authorized
500,000,000 shares; issued and outstanding
8,946,000 shares 894,600
Additional paid-in capital 501,406
Retained earnings 209,057
-----------
Total stockholders' equity 1,605,063
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Total $11,735,618
===========
See Notes to Unaudited Condensed Consolidated Financial Statements.
F-2
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
(Formerly Cambridge Universal Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE AND THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(Unaudited)
Nine Months Three Months
Ended December 31, Ended December 31,
-------------------------- --------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
Revenue:
Home and lot sales $9,333,036 $5,886,909 $3,425,759 $2,937,092
Management fees 56,678 28,137
Interest income 57,392 7,036 34,161 1,581
Sundry income 80,531 145,059 22,990 23,827
---------- ---------- ---------- ----------
Totals 9,527,637 6,039,004 3,511,047 2,962,500
---------- ---------- ---------- ----------
Costs and expenses:
Cost of sales 6,843,834 4,530,113 2,360,505 2,182,037
Selling 597,887 360,552 234,537 134,008
General and administrative 1,140,482 942,229 392,613 235,676
Interest 251,027 140,955 92,507 53,040
---------- ---------- ---------- ----------
Totals 8,833,230 5,973,849 3,080,162 2,604,761
---------- ---------- ---------- ----------
Income before income taxes 694,407 65,155 430,885 357,739
Provision for income taxes 265,820 26,199 161,599 26,199
---------- ---------- ---------- ----------
Net income $ 428,587 $ 38,956 $ 269,286 $ 331,540
========== ========== ========== ==========
Basic earnings per share $ .05 $ -- $ .03 $ .04
========== ========== ========== ==========
Basic weighted average common shares
outstanding 8,946,000 8,946,000 8,946,000 8,946,000
========== ========== ========== ==========
See Notes to Unaudited Condensed Consolidated Financial Statements.
F-3
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
(Formerly Cambridge Universal Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(Unaudited)
2000 1999
----------- -----------
Operating activities:
Net income $ 428,587 $ 38,956
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 29,987 18,839
Forgiveness of stockholders' interest 69,384 49,777
Changes in operating assets and liabilities:
Inventories (2,099,151) (3,415,157)
Due to/from affiliates (40,954) (179,888)
Other assets 24,800 (224,679)
Accounts payable and accrued expenses (57,323) 737,021
Customer deposits and advances 724,477 26,199
Income taxes payable 265,820 720,376
----------- -----------
Net cash used in operating activities (654,373) (2,228,556)
----------- -----------
Investing activities:
Purchase of property and equipment (18,542) (1,161)
Investments (97,464) (200,000)
Stockholders' loans and other (150,291) (207,763)
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Net cash used in investing activities (266,297) (408,924)
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Financing activities:
Capital contributions 880,818
Proceeds of mortgages and notes payable 2,716,731 2,047,985
Repayments of mortgages and note payable (1,753,900) --
----------- -----------
Net cash provided by financing activities 962,831 2,928,803
----------- -----------
Net increase in cash and cash equivalents 42,161 291,323
Cash and cash equivalents, beginning of period 675,299 126,794
----------- -----------
Cash and cash equivalents, end of period $ 717,460 $ 418,117
=========== ===========
Supplemental disclosure of cash flow data:
Interest paid, net of amount capitalized $ 181,643 $ 91,178
=========== ===========
See Notes to Unaudited Condensed Consolidated Financial Statements.
F-4
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WHITEHALL LIMITED, INC. AND SUBSIDIARIES
(Formerly Cambridge Universal Corporation)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of presentation:
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments,
consisting of normal recurring accruals, necessary to present fairly
the financial position of Whitehall Limited, Inc. and Subsidiaries
(the "Company") as of December 31, 2000, their results of operations
for the nine and three months ended December 31, 2000 and 1999 and
their cash flows for the nine months ended December 31, 2000 and
1999. Pursuant to the rules and regulations of the United States
Securities and Exchange Commission (the "SEC"), certain information
and disclosures normally included in financial statements prepared
in accordance with accounting principles generally accepted in the
United States of America have been condensed in or omitted from
these financial statements unless significant changes have taken
place since the end of the most recent fiscal year. Accordingly,
these unaudited condensed consolidated financial statements should
be read in conjunction with the audited financial statements as of
March 31, 2000 and for the years ended March 31, 2000 and 1999 and
the notes thereto (the "Audited Financial Statements") and the other
information included in the Company's Annual Report on Form 10-KSB
(the "Form 10-KSB") for the year ended March 31, 2000 that was
previously filed with the SEC.
The results of the Company's operations for the nine and three
months ended December 31, 2000 are not necessarily indicative of the
results of operations for the full year ending March 31, 2001.
Significant accounting policies and business operations have not
changed since March 31, 2000 and the year then ended.
The 1999 condensed consolidated financial statements have been
reclassified to conform to the 2000 presentation.
Note 2 - Earnings per common share:
As further explained in Note 1 of the notes to the Audited Financial
Statements, the Company presents basic earnings per share and, if
appropriate, diluted earnings per share in accordance with the
provisions of Statement of Financial Accounting Standards No. 128,
"Earnings per Share" ("SFAS 128"). Diluted per share amounts have
not been presented in the accompanying unaudited condensed
consolidated statements of operations for the nine and three months
ended December 31, 2000 and 1999 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.
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F-5