FOR IMMEDIATE RELEASE
Wednesday, August 14, 2002
CALPROP REPORTS SECOND QUARTER RESULTS
Company Reports a Net Loss of $1,224,951 in the Second Quarter
--------------------------------------------------------------
MARINA DEL REY, CA, August 14, 2002 -- Calprop Corporation (OTCBB:CLPO), a
California and Colorado home builder, in reporting financial results for the
three and six month periods ended June 30, 2002, today reported net losses from
operations for both of the aforementioned periods ended June 30, 2002.
"For the three and six month periods ended June 30, 2002, Calprop incurred
net losses of $1,224,951 and $1,492,397, respectively. Our backlog decreased to
$19,517,378 on 56 units, down 38.9% from $31,920,000 on 87 units a year ago.
Currently, Calprop is developing seven projects of which five are close to
completion as compared to nine projects at this time a year ago. We have focused
on retiring debt the past twelve months in order to strengthen our balance
sheet. Presently, we are investigating properties to acquire and have entered
escrow on two new properties, a 110 unit townhouse project in Santa Rosa,
California and a 133 lot development in Murrieta, California. Both of these
projects should commence within the next 90 days as we continue to target
another four acquisitions prior to year's end. Furthermore, our lease ups of our
Andalucia Luxury Apartments in San Diego, California and ParcWest Apartments in
Milpitas, California are both quite successful with 95% of the 181 units leased
after six months and 30% of the 68 units leased after three weeks,
respectively," said Victor Zaccaglin, Calprop's chairman and chief executive
officer.
For the second quarter, Calprop's revenues were $43.1 million, an increase
of $16.5 million or 60.9% from $26.8 million of revenues in the second quarter a
year ago. The increase in real estate sales for the three period of 2002 was
primarily due to the high volume of inventory of completed homes available for
sale in 2002 compared to completed homes available for sale in 2001. In the
second quarter of 2002, the Company sold 113 homes with an average sales price
of $381,050, a 48.7% increase in the volume of home sales compared to 76 homes
with an average sales price of $352,200 for the second quarter of 2001. Income
from development operations before recognition of impairment of real estate was
$753,007 for the second quarter, down $1,627,151 or 68.4% compared to $2,380,158
in the prior year's quarter. Net loss for the second quarter of 2002 was
$1,224,951 or ($0.12) per share on 10,254,005 weighted average shares and common
stock equivalents for dilutive net income, compared with net income of
$1,724,075 or $0.17 per share on 10,447,676 weighted average shares and common
stock equivalents for dilutive net income, in the same quarter a year ago.
During the second quarter of 2002, the Company recorded an impairment loss
on real estate under development of $271,844 in the Saddlerock project. The
project consisted of 94 homes with five product lines in Aurora, Colorado. The
lack of demand of the product lines resulted in a slower absorption rate. The
Company introduced three new product lines and converted certain upgrades as
standards during the second quarter of 2002 to increase the absorption rate. The
introduction of the new product lines increased direct construction cost,
marketing, production overhead and interest costs and as a result the Company
recorded an impairment loss on real estate under development.
3
Additionally, during the second quarter of 2002, the Company recorded an
impairment loss on real estate under development of $1,560,381 in the Parc
Metropolitan project as actual sales prices for certain units were lower than
anticipated. The lack of demand for upgrades and options in the project also
impacted the sales revenue for the project.
For the year-to-date period, revenues were $64.4 million, up 27.6% from
$50.4 million in 2001. The increase in real estate sales for the six month
period of 2002 was primarily due to the high volume of inventory of completed
homes available for sale in 2002 compared to completed homes available for sale
in 2001. During the first six months of 2002, the Company sold 171 homes with an
average sales price of $376,300, a 18.8% increase in the volume of home sales
compared to 144 homes with an average sales price of $350,200 for the six months
of 2001. Income from development operations before recognition of impairment of
real estate for the six months ended June 30, 2002, decreased to $847,781 or
80.8% from $4,425,995 in the prior year's period. The significant decrease of
income from development operations during the second quarter of 2002 and six
months ended June 30, 2002 resulted from a slower absorption rate, and increased
production overhead costs. The increased sales price was not sufficient to
offset the increased direct construction cost, marketing and sales incentives,
production overhead and interest costs. The company reported a net loss of
$1,492,397 or ($0.15) per share on 10,254,005 weighted average shares and common
stock equivalents for dilutive net income, for the six months ended June 30,
2002, a $4,560,649 decrease from the net income of $3,068,252 or $0.17 per share
on 10,432,483 weighted average shares and common stock equivalents for dilutive
net income, in 2001.
General and administrative expenses decreased to $521,006 in the three
months ended June 30, 2002 from $695,344 in the corresponding period. For the
six months ended June 30, 2002, general and administrative expenses decreased to
$1,076,452 from $1,430,187 in the corresponding 2001 period. The decrease is due
to the focus efforts to decrease corporate overhead costs.
Calprop Corporation, based in Marina Del Rey, California, builds quality
homes in some of the most desirable communities in both Northern and Southern
California as well as the Colorado Denver Metropolitan area. The company's
common stock is traded on the OTCBB under the symbol CLPO.
- tables follow -
4
CALPROP CORPORATION
Balance Sheets
(Unaudited)
June 30, December 31,
2002 2001
------------- -------------
Assets:
Real estate development $ 51,883,653 88,789,252
Other assets: 2,079,471
Cash and cash equivalents 3,563,968 6,535,343
Deferred tax asset 4,327,262 774,882
Other assets 842,048 788,752
------------
Receivable from affiliates 167,274
------------ ------------
Total other assets 8,900,552 10,178,448
------------ ------------
Total assets $ 60,784,205 98,967,700
============ ============
Liabilities and Stockholders' Equity:
Trust deeds and notes payable $ 26,917,552 66,341,488
Related-party notes 18,107,043 20,702,243
------------ ------------
Total trust deeds, notes payable and 45,024,595 87,043,731
related-party notes
Accounts payable and accrued liabilities 1,723,131 9,316,681
Warranty reserves 760,268 546,984
------------ ------------
Total liabilities 47,507,994 96,907,396
Stockholders' equity:
Common stock, no par value
Authorized - 20,000,000 shares
Issued and outstanding - 10,254,005 shares
at June 30, 2002 and December 31, 2001 10,254,005 10,290,535
Additional paid-in capital 25,845,986 25,849,961
Deferred compensation (51,000) (105,525)
Notes receivable from common stock sale (521,367) (519,733)
------------
Accumulated deficit (22,251,413) (24,085,122)
------------ ------------
Total stockholders' equity 13,276,211 11,430,116
------------
============ ============
Total liabilities and stockholders' equity $ 60,784,205 108,337,512
============ ============
- more -
5
CALPROP CORPORATION
Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Development operations:
Real estate sales 43,058,399 26,757,550 64,350,669 50,429,686
Cost of real estate sales 42,305,392 24,377,392 63,502,888 46,003,691
------------ ------------ ------------ ------------
Income from development operations before 753,007 2,380,158 847,781 4,425,995
recognition of impairment of real estate
Recognition of impairment of real estate
development (1,832,225) -- (1,832,225) --
------------ ------------ ------------ ------------
(Loss) income from development operations (1,079,218) 2,380,158 (984,444) 4,425,995
Income from investment in real estate venture 185,022 -- 109,253 --
Other income
------------ ------------ ------------ ------------
Interest and miscellaneous 190,251 37,436 252,299 70,619
------------ ------------ ------------ ------------
Management fee -- -- 207,182 --
------------ ------------ ------------ ------------
Total other income 190,251 37,436 459,481 70,619
------------ ------------ ------------ ------------
Other expenses:
General and administrative expenses 521,006 695,344 1,076,452 1,430,187
Minority interests -- (1,825) 235 (1,825)
(Loss) income before provision for income taxes (1,224,951) 1,724,075 (1,492,397) 3,068,252
------------ ------------ ------------ ------------
Provision for income taxes
------------ ------------ ------------ ------------
Net (loss) income ($1,224,951) 1,724,075 ($1,492,397) 3,068,252
============ ============ ============ ============
Basic net (loss) income per share ($0.12) $0.17 ($0.15) $0.30
====== ===== ====== =====
Diluted net (loss) income per share ($0.12) $0.17 ($0.15) $0.29
====== ===== ====== =====
Weighted average number of common
shares and common stock equivalents
for dilutive net (loss) income 10,254,005 10,447,676 10,254,005 10,432,483
Units
single family 113 76 171 144
--- -- --- ---
total 113 76 171 144
# # #