Company Press Release: Avatar Holdings, Inc.
March 23, 2000
CORAL GABLES, FL -- Avatar Holdings Inc. (Nasdaq: AVTR) yesterday reported net income for 1999 of $88,150,000 on
revenues of $190,690,000, compared with a net loss for 1998 of $22,785,000 on revenues of $113,482,000. Revenues
for 1999 do not include operating revenues, or proceeds from the sales, of discontinued water and wastewater utilities
and vacation ownership operations.
Continuing operations before income taxes for 1999 resulted in a net loss of $1,593,000, compared to a net loss
of $17,720,000 for 1998, including expenses related to development of Avatar's active adult community, Solivita,
in Poinciana, Florida. Net of such development expenses of $3,409,000 in 1999 and $1,074,000 in 1998, operations
resulted in a pre-tax operating profit of $1,816,000 for 1999 compared to a loss of $16,646,000 for 1998.
The improvement in net income from continuing operations for 1999 is primarily attributable to an increase in homebuilding
profitability at Avatar's communities in Harbor Islands, Poinciana and Cape Coral, Florida and Rio Rico, Arizona
and a reduction in net interest expense. The improvement in homebuilding profitability is partially offset by an
increase in expenses related to development of Avatar's active adult community, Solivita.
The following table summarizes selected homebuilding data for 1999,1998 and 1997.
Dollar Volume $112,833,000 $99,162,000 $73,571,000
Average Price
Per Unit $243,700 $196,750 $144,540
Backlog
Number of Units 339 397 376
Aggregate
Dollar Value $90,321,000 $84,711,000 $57,043,000
Average Price Per
Unit $266,434 $213,378 $151,710
Revenues generated from closings at Poinciana and Cape Coral, Florida, and Rio Rico, Arizona, increased $4,444,000
(or 7.8%) from 1998 to 1999. Pre-tax profit contribution increased 131.8% to $6,605,000 for 1999 from $2,850,000
for 1998. Cash flow generated from homebuilding activities at these three communities increased 91.3% to $7,605,000
for 1999 from $3,976,000 for 1998. Avatar's Harbor Islands community neared sell out of its current phases in 1999,
with contracts signed increasing $19,369,000 (44.8%) to $62,597,000 (109 units) in 1999 from $43,228,000 (87 units)
in 1998. Closings at Harbor Islands generated revenues of $46,161,000 for 1999, an increase of 210.3% over revenues
of $14,876,000 for 1998, resulting in a pre-tax profit of $7,428,000, compared to a loss of $2,383,000 for 1998.
At Harbor Islands, cash flow of $8,688,000 for 1999 compares to a deficit of $1,509,000 for 1998.
Avatar's assets on December 31, 1999 totaled $391,135,000, compared to $472,991,000 on December 31, 1998, which
included $182,120,000 related to discontinued water and wastewater utilities operations and $26,479,000 related
to discontinued vacation ownership operations. Stockholders' equity at December 31, 1999 was $193,577,000, compared
to $112,257,000 at December 31, 1998.
In 1999, Avatar made open market purchases of 764,164 shares of its Common Stock at an average price of $16.42
per share and $2,633,000 principal amount of its 7% Convertible Subordinated Notes at an average price of $94.294.
At December 31, 1999, there were 8,405,938 shares of Avatar Common Stock outstanding with a book value of $23.03
per share.
In April 1999, Avatar sold substantially all of its water and wastewater utilities operations for a cash sales
price of $208,619,000, subject to certain adjustments, which resulted in available pre-tax cash proceeds of $139,249,000
after payment of indebtedness, certain other liabilities and expenses and redemption of preferred stock of a utilities
subsidiary. In July 1999, Avatar sold its vacation ownership operations, which resulted in pre-tax cash proceeds
of $3,497,000, subject to certain adjustments. In June 1999, Avatar sold certain real estate assets located in
Cape Coral, Florida, for approximately $44,859,000, resulting in pre-tax cash proceeds of approximately $37,000,000
after payment of related indebtedness and expenses.
Avatar Holdings Inc. is primarily engaged in real estate operations in Florida and Arizona. Its principal real
estate operations are conducted at Poinciana in central Florida near Orlando, Harbor Islands on Florida's east
coast and at Rio Rico, south of Tucson, AZ. Avatar's common shares trade on The Nasdaq Stock Market under the symbol
AVTR. The 7% Notes trade on The Nasdaq SmallCap Market under the symbol AVTRG.
Certain statements discussed herein constitute ``forward-looking statements'' within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties
and other important factors that could cause the actual results, performance or achievements of results to differ
materially from any future results, performance or achievements expressed or implied by such forward- looking statements.
Such risks, uncertainties and other important factors include, among others: the successful implementation of Avatar's
business strategy; shifts in demographic trends affecting active adult communities and other real estate development;
the level of immigration and in-migration to regional market areas; national and local economic conditions and
events, including employment levels, interest rates, consumer confidence, the availability of mortgage financing
and demand for new and existing housing; access to future financing; competition; changes in, or the failure or
inability to comply with, government regulations; and other factors as are described in Item 7 (Management's Discussion
and Analysis of Financial Condition and Results of Operations) of Avatar's Form 10-K.
AVATAR HOLDINGS INC. AND SUBSIDIARIES
Selected financial data for the years ended December 31, 1999 and 1998
(Dollars in thousands except per share data)
1999 1998
Revenues $190,690 $113,482
Net (loss) from
continuing operations ($1,030) ($17,720)
Income from
discontinued operations $634 $3,643
Gain (loss) on
disposal of
discontinued
operations, less
income tax expense
of $12,492 for 1999 $88,546 ($6,400)
Income (loss) before
extraordinary item $88,150 ($20,477)
Extraordinary item:
(loss) on early
extinguishment of debt --- ($2,308)
Net income (loss) $88,150 ($22,785)
Basic and diluted EPS:
(Loss) from
continuing operations ($0.11) ($1.93)
Income from
discontinued operations $0.07 $0.40
Gain (loss) on
disposal of discontinued $9.68 ($0.70)
operations
(Loss) from
extraordinary item --- ($0.25)
Net income (loss) $9.64 ($2.48)
Total assets $391,135 $472,991
Total
stockholders' equity $193,577 $112,257
Stockholders' equity
per share $23.03 $12.24
SOURCE: Avatar Holdings, Inc.