The Presley Companies Reports Second Quarter Net Income of $9,477,000, Or $0.18 Per Share


NEWPORT BEACH, Calif., Aug. 11, 1999 (PRIMEZONE) -- The Presley Companies (NYSE:PDC) today reported net income for the second quarter ended June 30, 1999 of $9,477,000, or $0.18 per share, on sales of $95,715,000, as compared with net income of $1,114,000, or $0.02 per share, on sales of $80,530,000 for the comparable period a year ago. Sales of homes were $91,985,000 for the quarter ended June 30, 1999, up 28 percent from $71,882,000 for the comparable period a year ago. Sales of lots and land were $3,730,000 for the quarter ended June 30, 1999, as compared with $8,648,000 for the quarter ended June 30, 1998. The net income for the current quarter included an extraordinary gain from the retirement of debt of $1,789,000, or $0.03 per share, after applicable income taxes, as compared with $522,000, or $0.01 per share, after applicable income taxes, for the comparable period a year ago.

For the six months ended June 30, 1999, the Company reported net income of $14,873,000, or $0.28 per share, on sales of $178,012,000, as compared with a net loss of ($2,085,000), or ($0.04) per share, on sales of $147,008,000 for the comparable period a year ago. Sales of homes were $174,056,000 for the six months ended June 30, 1999, up 28 percent from $136,273,000 for the comparable period a year ago. Sales of lots and land were $3,956,000 for the six months ended June 30, 1999, as compared with $10,735,000 for the six months ended June 30, 1998. The results for the six months ended June 30, 1999 included an extraordinary gain from the retirement of debt of $1,789,000, or $0.03 per share, after applicable income taxes, as compared with $522,000, or $0.01 per share, after applicable income taxes, for the comparable period a year ago.

Homes sold, closed and in backlog for the Company and its unconsolidated joint ventures as of and for the periods presented are as follows:


                               As of and for    As of and for
                              the Three Months  the Six Months
                               Ended June 30,   Ended June 30,
                               1999     1998    1999     1998
Number of homes sold
Company                         462      559     928    1,080
Unconsolidated joint ventures   143       63     331       81
             Combined total     605      622   1,259    1,161
  
Number of homes closed
Company                         438      395     839      732
Unconsolidated joint ventures    96        2     212        2
             Combined total     534      397   1,051      734
  
Backlog of homes sold but not closed at
     end of period
   Company                      588      744     588      744
   Unconsolidated joint 
    Ventures                    237       86     237       86
             Combined total     825      830     825      830
  
Dollar amount of backlog of homes sold
     but not closed at end of period (in millions):
   Company                   $120.0   $159.4  $120.0   $159.4
   Unconsolidated joint 
    Ventures                   95.7     45.0    95.7     45.0
              Combined total $215.7   $204.4  $215.7   $204.4

Net new home orders for the quarter ended June 30, 1999 decreased 3 percent to 605 units from 622 units a year ago. For the second quarter of 1999, net new home orders decreased 7 percent to 605 units from 654 units in the first quarter of 1999. The number of homes closed in the second quarter of 1999 was up 35 percent to 534 from 397 in the first quarter of 1998. The backlog of homes sold as of June 30, 1999 was 825, down slightly from 830 units a year earlier, and up 9 percent from 754 units at March 31, 1999.

The dollar amount of backlog of homes sold but not closed as of June 30, 1999 was $215,700,000, as compared with $204,400,000 as of June 30, 1998 and $199,700,000 as of March 31, 1999. The Company also reported that its inventory of completed and unsold homes as of June 30, 1999 decreased by 21 percent to 23 units from 29 units as of March 31, 1999.

Wade H. Cable, President and Chief Executive Officer, stated "I am pleased that the Company has now reported a net profit for five consecutive quarters and that the backlog of homes sold but not closed remains at the highest levels in more than nine years. During the current quarter, the Company realized a total pre-tax profit of $11,063,000."

Mr. Cable further stated "the significant improvement in net new home orders and number of homes closed for the first half of 1999 as compared with the first half of 1998 is primarily the result of improved market conditions in substantially all of the Company's markets."

The Company also reported that for purposes of the Indenture governing its Senior Notes, EBITDA (earnings before interest, taxes, depreciation and amortization) was $42,658,000 for the second quarter of 1999 as compared to $35,635,000 for the second quarter of 1998. EBITDA coverage of interest incurred for the three months ended June 30, 1999 was 7.73, as compared to 4.45 for the three months ended June 30, 1998. EBITDA after development expenditures amounted to ($6,460,000) for the second quarter of 1999 as compared to $22,869,000 for the second quarter of 1998.

The Company also announced that it has received notification from the New York Stock Exchange that the Securities and Exchange Commission has approved amendments to the NYSE's continued listing standards. While these new continued listing standards took effect on July 27, 1999, the SEC is soliciting comments on these new standards for a 90-day period. The NYSE has stated that it expects permanent approval of the standards as currently drafted.

The NYSE has notified the Company that it is below these new criteria. The NYSE has further informed the Company that failure to raise its stock price above $1.00 per share within six months will result in immediate suspension of trading and application to the SEC for delisting. In addition, the Company has 45 days to present a business plan to the NYSE that will demonstrate compliance with all aspects of the other criteria within the next 12 months. If the NYSE accepts the Company's business plan, the Company will be monitored for quarterly compliance with its plan. If the Company fails to achieve the quarterly milestones or if at the completion of the 12 months it is not in compliance with the new continued listing criteria, the Company will be suspended from trading on the NYSE and application will be made to the SEC for delisting. If the Company achieves all quarterly milestones and meets the NYSE continued listing criteria at the end of the 12-month period, the Company will be considered in "good standing" and no longer subject to business plan review. However, the Company would be subject to the NYSE's ongoing listing review policies and procedures. If the business plan is not accepted by the NYSE or the Company elects not to submit a business plan, the Company will be subject to immediate trading suspension and subsequent delisting procedures.

The Company has notified the NYSE that it intends to submit a business plan within the 45-day period. There can be no assurance, however, that the business plan will be accepted by the NYSE; that the Company will achieve the quarterly milestones included in the plan; or that the Company will comply with the new continued listing criteria at the completion of the 12-month period.

The Presley Companies is one of California's oldest and largest homebuilders in the Southwest with development communities in California, Arizona, New Mexico and Nevada. Founded in 1956, The Presley Companies has built and sold more than 48,000 homes and currently has 40 sales locations. Presley's corporate headquarters are located in Newport Beach, California.

Certain statements contained in this release that are not historical information contain forward-looking statements. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among others, changes in general economic conditions and in the markets in which the Company competes, changes in interest rates and competition, as well as the other factors discussed in the Company's reports filed with the Securities and Exchange Commission.


                     THE PRESLEY COMPANIES
   
             CONSOLIDATED STATEMENTS OF OPERATIONS
          (in thousands except per common share amounts)
                           (unaudited)
   
   
                            3 Months Ended    6 Months Ended
                              June 30,            June 30,
                            1999     1998      1999     1998
Sales
  Homes                   91,985 $ 71,882   $174,056 $136,273
  Lots, land and other     3,730    8,648      3,956   10,735
                          95,715   80,530    178,012  147,008
Operating costs
   Cost of sales - homes (76,097) (62,247)  (144,117) (118,997)
   Cost of sales - lots, 
    land and other        (3,066)  (8,250)    (3,741)  (10,151)
   Sales and marketing    (4,385)  (4,708)    (8,460)   (9,795)
   General and 
    Administrative        (3,942)  (3,275)    (7,873)   (6,956)
                         (87,490) (78,480)  (164,191) (145,899)
   
Equity in income (loss) of unconsolidated
    joint ventures         1,919     (129)     4,864      (155)
   
Operating income          10,144    1,921     18,685       954
   
Interest expense, net of 
   amounts capitalized    (1,456)  (2,262)    (3,671)   (4,893)
Financial advisory 
   Expenses                 (588)       -     (1,280)        -
Other income (expense),
   Net                       874      570      1,541       969
    
Income (loss) before 
   income taxes and
   extraordinary item      8,974      229     15,275    (2,970)
(Provision) credit for 
   income taxes           (1,286)     363     (2,191)      363
    
Income (loss) before 
   extraordinary item      7,688      592     13,084    (2,607)
    
Extraordinary item - gain 
   from retirement of debt,
   net of applicable 
   income taxes            1,789      522      1,789       522
    
Net income (loss)       $  9,477 $  1,114   $ 14,873  $ (2,085)
   
Basic and diluted earnings per common
   share
      Before extraordinary
       Item            $    0.15 $   0.01   $   0.25  $  (0.05)
      Extraordinary item    0.03     0.01       0.03      0.01
      After extraordinary
       Item            $    0.18 $   0.02   $   0.28  $  (0.04)
       
       
    
                      THE PRESLEY COMPANIES
          
                  CONSOLIDATED BALANCE SHEETS
 (in thousands except number of shares and par value per share)
        
         
                                      June 30,    December 31,
                                        1999         1998
                                    (unaudited)
                         ASSETS
Cash and cash equivalents           $   12,277    $  23,955
Receivables                             13,601        8,613
Real estate inventories                176,522      174,502
Investments in and advances to 
   Unconsolidated joint ventures        34,949       30,462
Property and equipment, less 
  accumulated depreciation of 
  $3,705 and $3,156 at June 30, 1999
  and December 31, 1998, respectively    2,534        2,912
Deferred loan costs                      2,441        3,381
Other assets                             3,908        2,579
                                      $246,232     $246,404
        
            LIABILITIES AND STOCKHOLDERS' EQUITY
    
Accounts payable                     $  15,929    $  17,364
Accrued expenses                        25,825       27,823
Notes payable                           61,290       55,393
12-1/2% Senior Notes due 2001          120,000      140,000
                                       223,044      240,580
Stockholders' equity
  Common stock:
      Series A common stock, par value
         $.01 per share; 100,000,000 
         shares authorized; 34,792,732 
         issued and outstanding at 
         June 30, 1999 and December
         31, 1998, respectively            348          348
        
      Series B restricted voting convertible
         common stock, par value 
         $.01 per share; 50,000,000 shares
         authorized; 17,402,946 shares 
         issued and outstanding at 
         June 30, 1999 and December 
         31, 1998, respectively            174         174
        
  Additional paid-in capital           118,740     116,249
        
  Accumulated deficit from 
     January 1, 1994                   (96,074)   (110,947)
                                        23,188       5,824
                                      $246,232    $246,404
    
        
    
                  THE PRESLEY COMPANIES
       
          SUPPLEMENTAL FINANCIAL INFORMATION
                  (dollars in thousands)
                       (unaudited)
         
         
The following table sets forth certain selected unaudited 
financial data regarding the Company's cash flow for the
purposes of the Indenture governing the Company's Senior Notes:
            
                        Three Months Ended   Six Months Ended
                             June 30,            June 30,
                           1999     1998      1999     1998
             
EBIT                    $ 17,569 $   9,252  $ 29,171 $ 14,649
Amortization of Non-Cash
   Costs to Cost of Sales,
   excluding interest 
   amortized to cost 
   of sales               24,849    26,116    45,532   44,496
Depreciation and 
   Amortization              240       267       548      522
    
EBITDA                  $ 42,658 $  35,635  $ 75,251 $ 59,667
    
Development expenditures:
   Lot and amenity 
      Development     $  (9,259) $  (8,426) $(19,319) $(20,803)
   Land acquisitions    (34,209)    (6,080)  (39,116)  (14,344)
   Net change in housing 
      Inventory          (6,063)   (19,456)   (2,659)  (27,139)
   Investment in unconsolidated 
      joint ventures        413     21,196       413    15,596
    
      Total development 
         Expenditures   (49,118)   (12,766)  (60,681)  (46,690)
    
EBITDA after development 
   Expenditures       $  (6,460) $  22,869  $ 14,570  $ 12,977
               
Interest expensed and amortized 
to cost of sales:
      Interest 
         Incurred     $   5,520  $   8,014  $ 11,747  $ 16,656
      Less capitalized
         Interest        (4,064)    (5,752)   (8,076)  (11,763)
         Interest 
            Expensed      1,456      2,262     3,671     4,893
         Amortization of 
            capitalized interest
            included in cost
            of sales      7,056      5,814    13,152    11,804
    
         Total interest expensed 
            and amortized 
            to cost of 
            sales     $   8,512  $   8,076  $ 16,823  $ 16,697
         
Interest 
   Incurred           $   5,520  $   8,014  $ 11,747  $ 16,656
      
EBITDA/Interest 
   Incurred                7.73x      4.45x     6.41x     3.58x
   
CONTACT:  Investor Relations
          W. Douglass Harris
          The Presley Companies
          (949) 640-6400
      
          Media Relations
          Steven D. Stern
          Pondel/Wilkinson Group
          (310) 207-9300