8-K 1 w49059e8-k.txt CURRENT REPORT 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 15, 2001 ----------------------------- The Fortress Group, Inc. -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-28024 54-1774977 ------------------------------------------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1650 Tysons Boulevard, Suite 600, McLean, Virginia 22102 ------------------------------------------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone No., Including Area Code: (703) 442-4545 ------------------------------ 1 2 Item 2 - Disposition of Assets On February 28, 2001, the Company sold to Riverwood Properties, Inc., a company owned by the Company's former Chief Operating Officer, the assets of the Company's subsidiary Brookstone Homes for approximately $4.1 million in cash and the assumption of existing debt. Brookstone conducted the Company's business in Milwaukee, Wisconsin. The purchase price was determined by arms-length negotiations. On May 1, 2001, the Company sold substantially all of the assets of, including the mortgage operations related to, the Company's subsidiary Fortress-Florida, Inc. D.R. Horton, Inc., and its affiliates paid approximately $28.0 million in cash and assumed the existing debt. Fortress-Florida conducted the Company's business in Jacksonville, Florida. The purchase price was determined by arms-length negotiation, and there is no material relationship between the Company and D.R. Horton, Inc. Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits (b) Unaudited pro forma financial information pursuant to Article 11 of Regulation S-X Pro Forma Condensed Consolidated Balance sheet as of December 31, 2000 Pro Forma Condensed Consolidated Statement of Operations for the Year ended December 31, 2000 The unaudited pro forma condensed consolidated balance sheet as of December 31, 2000, is based on the unaudited historical financial statements of Brookstone Homes and Fortress Florida and the historical financial statements of the Company after giving affect to the dispositions described in Item 2 as if the sale had been consummated on December 31, 2000. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2000, is based on the unaudited historical condensed consolidated statements of operations of Brookstone Homes and Fortress Florida and the historical condensed consolidated financial statements of the Company after giving affect to the dispositions described in Item 2 as if the sale had been consummated on January 1, 2000. These unaudited pro forma financial statements may not be indicative of the results that actually would have occurred if the transactions had been in effect on the dates indicated or which may be obtained in the future. The unaudited pro forma financial statements should be read in conjunction with the financial statements of the Company including its Annual Report on Form 10-K for the year ended December 31, 2000. 2 3 THE FORTRESS GROUP, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) DECEMBER 31, 2000 (IN THOUSANDS)
FORTRESS DISPOSITIONS PRO FORMA -------- ------------ --------- GROUP, INC. CONSOLIDATED ----------- ------------ ASSETS: Cash and cash equivalents $ 7,412 $ 30,371 $ 37,783 Accounts Receivable, net 11,400 (457) 10,943 Inventories 312,111 (45,918) 266,193 Mortgage Loans 12,153 0 12,153 Property and equipment, net 11,032 (236) 10,796 Other assets, net 67,459 (6,456) 61,003 --------- --------- --------- TOTAL ASSETS $ 421,567 $ (22,696) $ 398,871 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY: Short Term Liabilities $ 58,580 $ (5,920) $ 52,660 Notes, LT Liabilities 285,641 (18,386) 267,255 Shareholders' Equity 77,346 1,610 78,956 --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 421,567 $ (22,696) $ 398,871 ========= ========= =========
3 4 THE FORTRESS GROUP, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) YEAR ENDED DECEMBER 31, 2000 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FORTRESS DISPOSITIONS PRO FORMA -------- ------------ --------- GROUP, INC. CONSOLIDATED ----------- ------------ Total Homebuilding Revenue $ 682,733 $(132,710) $ 550,023 Cost of Sales 582,113 (114,987) 467,126 --------- --------- --------- Gross Profit 100,620 (17,723) 82,897 Operating Expenses 82,454 (13,118) 69,336 Restructuring Charges 14,849 0 14,849 --------- --------- --------- Operating Income 3,317 (4,605) (1,288) Other Expenses (Income) (183) 129 (54) --------- --------- --------- Builder Pretax Profit 3,500 (4,734) (1,234) Financial Services 440 0 440 --------- --------- --------- INCOME/(LOSS) BEFORE TAXES 3,940 (4,734) (794) Provision/(Benefit) for Income Taxes 1,726 (1,941) (215) --------- --------- --------- NET INCOME (LOSS) $ 2,214 (2,793) (579) ========= ========= ========= Net Loss Applicable to Common Shareholders $ (455) $ (5,462) $ (3,248) ========= ========= ========= Net Loss Per Share, Basic and Diluted $ (0.15) $ (1.78) $ (1.06) ========= ========= =========
4 5 (c) Exhibits 2.9 Asset Purchase Agreement dated May 1, 2001, by and between D. R. Horton , Inc. and Registrant. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
The Fortress Group, Inc. Date: May 15, 2001 By: /s/ GEORGE C. YEONAS ------------------------------------- -------------------------------------------------- George C. Yeonas Chief Executive Officer
5 6 INDEX TO EXHIBITS Exhibit Number Description ------ ----------- 2.9 Asset Purchase Agreement dated May 1, 2001, by and between D. R. Horton , Inc. and Registrant. 6