| HomeUSA, Inc. | |||
| Ticker: | HSH | Three Riverway, Suite 630 | |
| Exchange: | NASDAQ-National Market | Houston, TX 77056 | |
| Industry: | Service (SIC Code 7251) | (713) 965-0520 | |
| # of Employees: | 639 | ||
| Type of Shares: | Common Shares | Filing Date: | 9/15/97 | |
| U.S. Shares: | 5,000,000 | Offer Date: | 11/20/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $8.50 - $10.00 | |
| Primary Shares: | 5,000,000 | Offer Price: | $8.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.56 | |
| Offering Amount: | $46,250,000 | Selling: | $0.30 | |
| Expenses: | $4,000,000 | Reallowance: | $0.10 | |
| Shares Out After: | 15,441,887 |
| Manager | Tier | Phone |
| BT Alex Brown | Lead Manager | (410) 727-1700 |
| Bear, Stearns & Co. Inc. | Co-manager | (212) 272-4850 |
| Montgomery Securities | Co-manager | (415) 627-2100 |
| Sanders Morris Mundy Inc. | Co-manager | (713) 250-4281 |
| Issuer's Law Firm: | Bracewell & Patterson |
| Bank's Law Firm: | Piper & Marbury |
| Auditor: | Arthur Andersen |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/97 | |||
| Revenue: | $192.84 | $97.78 | Assets: | $116.96 | |
| Net Income: | $6.57 | $2.87 | Curr Assets: | ||
| EPS: | $0.48 | $0.21 | Liabilities: | $83.64 | |
| Prior EPS: | Curr Liabilities: | ||||
| Cash Flow/Oper: | Equity: | $33.32 | |||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | Working Cap: | -$19.74 | |||
| Business Description |
| The company was founded to become the leading independent national retailer of manufactured homes by pursuing consolidation of the highly fragmented manufacturing housing retail industry. The manufactured housing retail industry generated $14 billion in sales in 1996 and is highly fragmented, with over 6,000 retail sales centers. The vast majority of manufactured housing retailers are independently-owned private companies operating a single sales center. The Company believes that most of these retailers have not adopted a professional sales and marketing approach and do not offer their customers the full range of available products and services. Because many retailers have limited access to capital for the modernization and expansion of their businesses and have few attractive liquidity options, the Company believes that significant consolidation opportunities exist. The Company believes that it will develop a competitive advantage by offering manufacturers a substantial and stable distribution system committed to maintaining high standards of professionalism in sales and marketing, installation and service. |
| Competition |
| The manufactured housing retail industry is highly competitive and the capital requirements for entry are relatively small, with inventory financing and customer financing generally available to a prospective retailer from various lenders. The manufactured housing industry has over 6,000 retail sales centers, approximately ten percent of which are owned by the four vertically integrated manufacturers. Manufactured homes compete with a variety of alternative forms of housing, particularly new and existing site-built homes and rental apartments, and any decline in the cost of site-built housing is likely to reduce demand for manufactured housing. The principal competitive factors for retail sales are price, marketing techniques, range of products and services, product availability, price and terms of customer financing, and ability to assist purchasers in obtaining sites on which to locate purchased homes. The Company is not able to estimate the total number of competitors in its marketing area, but believes that minimal barriers to entry have contributed to a significant increase in the number of new retailers over the past several years. Acontinuation of this increase in the number of retailers is likely to lead to greater competition, reduced profit margins and possibly a decline in the Company's home sales. The Company also may be required to compete for acquisition candidates, particularly with the four vertically integrated manufacturers of manufactured housing that are or may become active in making acquisitions of retail sales centers. The vertically integrated manufacturers have greater resources than the Company in terms of existing dealer networks as well as greater financial strength. The Company will seek to differentiate itself from other independent retailers. This differentiation strategy includes the Company's: (i) purchasing power advantages, such as volume rebates from manufacturers, and floor plan financing, (ii) attractive residential displays of homes targeted to the markets served, (iii) more highly-trained and motivated sales force and (iv) ability to offer customers a comprehensive package of products and services from a single retail source. The Company is not able to estimate the total number of competitors in its market areas but believes that minimal barriers to entry have contributed to a significant increase in the number of retailers over the past several years. A continuation of the increase in the number of retailers is likely to lead to greater competition, reduced profit margins and possibly a decline in the Company's home sales. |
| Business Plan |
| The Company's strategy includes: (I) Expansion through acquisitions; (ii) Decentralized operations; (iii) Increased operating efficiencies; (iv) Improved floor plan financing; (v) Maximize manufacturer rebates; (vi) Volume purchasing; (vii) Promote internal growth; (viii) Expand value-added services; (ix) Open new sales centers; (x) Enhance curb appeal; and (xi) National advertising and marketing |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to pay the cash portion of the purchase price for the Founding Companies, to repay expenses incurred in connection with the organization of HomeUSA and the Offering and for working capital and future acquisitions. |
| Officer Name | Title | Age |
| Randle C. Cooper | 3President of Cooper, Director | 37 |
| Cary N. Vollintine | Chairman of the Board, Chief Executive Officer and President | 55 |
| David E. Thompson | Chief Operating Officer of AAA Homes, Director | 44 |
| Gary W. Fordham | President of AAA Homes, Director | 42 |
| Frank C. McDonald | President of McDonald, Director | 46 |
| Stanley Poisso | President of Mobile World, Director | 66 |
| Harold K. Patrick | President of Patrick, Director | 59 |
| Larry T. Shaffer | President of Universal, Director | 56 |
| Frank W. Montfort | Senior Vice President of Market Development | 47 |
| Philip deMena | Senior Vice President of Real Estate and Construction | 57 |
| Michael F. Loy | Senior Vice President, Chief Financial Officer and Director | 52 |
| Don A. Palmour | Vice President and Chief Technology Officer | 42 |
| Philip Campbell | Vice President and Controller | 36 |
| Donald D. Moseley | Vice President of Financial Services | 52 |