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Stock Dips After Presley Posts $51-Million Loss for 1993 : Finances: The Newport Beach home builder says it plans a debt-for-equity swap with lenders, though no deal is reached yet.

March 04, 1994|DEBORA VRANA | SPECIAL TO THE TIMES

NEWPORT BEACH — Fiscally troubled Presley Cos. on Thursday reported a loss for 1993, and the news, though expected, pushed down the company's already depressed stock price.

The Newport Beach home builder reported an annual loss of $51 million, or $2.75 a share, which included a $33.3-million write-down related to its real estate holdings. That compared to a loss of $10.5 million, or 57 cents a share, for 1992.

In Thursday's trading on the New York Stock Exchange, Presley's stock dropped 12 cents a share to close at $2.75.

The company had said in January that it would post an annual loss and was launching a major restructuring.

In a statement Thursday, Presley said plans for a debt-for-equity swap to restructure a $340-million credit line would reduce stockholders' equity by $79 million, at least $9 million more than the amount estimated by the company in its Jan. 24 announcement.

"Before, it was an estimated number. Now it's final. It's not that material a difference," said Craig Manchester, spokesman for Presley. "The majority of the shareholders are already aware of these changes."

If approved by Presley shareholders, the swap would convert $95 million of the debt into 43.16 million shares of common stock, equal to 70% of the outstanding shares. The swap would give Presley's lenders, mostly investors rather than banks, greater control.

On Thursday, however, the company said there is still no signed letter of understanding with its lenders, and the restructuring is still being discussed.

Presley builds planned communities in California, Arizona and New Mexico. The company has become a victim of its own aggressive land acquisition policy in the late 1980s, when it purchased most of its properties with loans. The company bought vacant real estate at the top of the market and since then has seen land values plummet.

On a positive note, the company said Thursday that its home closings were up 29% to 1,475 units during 1993 from 1,144 for the previous 12 months.

Presley Posts Losses

A $29-million loss in the fourth quarter, ending Dec. 31, contributed to Presley Cos.' fiscal year $51-million decline. The company attributed the quarterly loss to a $20.2-million write-down of its real estate assets, declining margins and changes in interest capitalization. Figures in millions of dollars, except per-share data:

4th qtr 4th qtr 12 months 12 months 1992 1993 1992 1993 Revenue $80.1 $72.2 $228.1 $254.4 Net income (loss) .92 (29.0) (10.5) (51.0) Per share (loss) 0.05 (1.55) (0.57) (2.75)

Source: The Presley Cos.; Researched by JANICE L. JONES / Los Angeles Times

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