The management of the Group of TECHNICAL OLYMPIC announces that TECHNICAL OLYMPIC USA INC. (TOUSA), its listed on NYSE USA subsidiary, announced today that it has amended its revolving credit facility and also provided additional details regarding the company s 2006 third quarter results (9/30/06).
TOUSA s management reported in this announcement that it has reached an agreement with its lenders, replacing TOUSA s existing $800 million unsecured revolving credit facility with an amended $800 million secured revolving credit facility that increases the company s current borrowing capacity and provides additional liquidity on a pro-forma basis. There are no changes to the existing terms or pricing.
The amendment process was initiated as a result of a material adverse change in one of TOUSA s guarantor subsidiaries which holds the company s investment in the Transeastern joint venture. TOUSA filed a relevant Form with the USA Capital Market Commission (Securities and Exchange Commission).
TOUSA also reported consolidated net sales orders, that is after the deduction of cancellations, of 1,470 for the third quarter of 2006, a 19% decrease from the 1,821 consolidated net sales orders reported in the third quarter of 2005.
Joint venture net sales orders for the third quarter of 2006 were 125, an 86% decrease from the 871 net sales orders reported in the third quarter of 2005. TOUSA s consolidated (that is, including its subsidiaries) cancellation rate was 33% for the third quarter of 2006 compared to 20% for the third quarter of 2005. TOUSA s combined (that is, including its subsidiaries and joint ventures) cancellation rate for the third quarter of 2006 was 44% compared to 18% for the third quarter of 2005.
The company anticipates a pre-tax charge in the range of $35 million to $48 million for the third quarter of 2006 related to land deposit write-offs and asset impairment charges, excluding the impact of the Transeastern joint venture, based on reviews currently in process and not yet completed.
TOUSA is currently assessing impairment charges related to the Transeastern joint venture and expects to announce these charges in its third quarter earnings announcement. As stated on September 29, 2006, a pre-tax charge of $141 million as well as a $89 million reduction in earnings could be required should TOUSA determine that its investment and receivables are impaired.
In this case the potential impact on the consolidated financial statements of TECHNICAL OLYMPIC S.A will be proportionate, based on its 67% share in TOUSA.
TOUSA will release earnings for the third quarter of 2006 and hold its investor call in a later announcement.