8-K 1 w53154e8-k.txt FORM 8-K 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): September 11, 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 August 31, 2001, the Company sold its subsidiary Christopher Homes LLC ("Christopher") to The JCS Family #1 Trust, (the "Trust"), a trust created by J. Christopher Stuhmer, a former owner of Christopher Homes and a former director of Fortress. Mr. Stuhmer is also the owner of 378,303 shares of Fortress common stock (approximately 12% of the current outstanding common shares). The sale price for the subsidiary was approximately $28.0 million, in the form of the assumption of secured debt and other liabilities. In connection with the transaction, the Company will record a loss on sale estimated at $10.7 million before taxes in the third quarter. The transaction will generate a tax benefit expected to result in approximately $5.0 million in cash savings. Christopher conducted the Company's business in Las Vegas, Nevada. The purchase price was determined by arms-length negotiation. As previously reported in the Company's Annual Report on Form 10-K filed on March 30, 2001 and Current Report on Form 8-K filed on May 15, 2001, the Company sold on February 28, 2001, to Acquisition Company of Wisconsin, 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 assumption of the existing secured debt and other liabilities. Brookstone conducted the Company's business in Milwaukee, Wisconsin. As previously reported in the Company's Quarterly Report on Form 10-Q filed on May 15, 2001 and Current Report on Form 8-K filed on May 15, 2001, the Company sold on May 1, 2001, to D. R. Horton, Inc. and affiliates, 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 assumption of the existing secured debt and other liabilities. Fortress-Florida conducted the Company's business in Jacksonville, Florida. As previously reported in the Company's Quarterly Report on Form 10-Q filed on August 14, 2001 and Current Report on Form 8-K filed on July 13, 2001, the Company sold on July 2, 2001, to Whittaker Builders, Inc. and affiliates, substantially all of the assets of the Company's subsidiary Whittaker Homes LLC. Whittaker Builders, Inc. and its affiliates paid approximately $51.4 million, which included approximately $11.8 million in cash and assumption of the existing secured debt and other liabilities. Whittaker Homes LLC conducted the Company's business in St. Louis, Missouri. 2 3 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 Sheets as of December 31, 2000 and June 30, 2001 Pro Forma Condensed Consolidated Statements of Operations for the Year ended December 31, 2000 and Six Months ended June 30, 2001 The unaudited pro forma condensed consolidated balance sheet as of December 31, 2000, is based on the historical financial statements of Brookstone Homes, Fortress-Florida, Whittaker Homes and Christopher Homes and the historical financial statements of the Company after giving affect to the dispositions described in Item 2 as if the sales had been consummated on December 31, 2000. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2001, is based on the historical financial statements of Whittaker Homes and Christopher Homes and the historical financial statements of the Company after giving effect to the dispositions described in Item 2 as if the sales had been consummated on June 30, 2001. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2000 and six months ended June 30, 2001 is based on the historical consolidated statements of operations of Brookstone Homes, Fortress-Florida, Whittaker Homes and Christopher Homes and the historical consolidated financial statements of the Company after giving affect to the dispositions described in Item 2 as if the sales had been consummated on January 1, 2000 and January 1, 2001 respectively. The unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2001 does not reflect the $10.2 million net of tax gain on retirement of the $45.8 million face value of its Senior Notes. The unaudited pro forma condensed consolidated balance sheet also reflects the Company's purchase of $45.8 million face value of its Senior Notes for approximately $24.7 million in cash during the second quarter of 2001 and the pay down of additional secured debt. The reduction of unsecured debt will result in an interest savings to the Company of approximately $6.3 million on an annualized basis. 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 and Quarterly Report on Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001. 3 4 THE FORTRESS GROUP, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) DECEMBER 31, 2000 (IN THOUSANDS)

(1) The disposition and debt repurchase column is summarized as follows:

4 5 THE FORTRESS GROUP, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) JUNE 30, 2001 (IN THOUSANDS)

(2) The disposition column is summarized as follows:

5 6 THE FORTRESS GROUP, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) YEAR ENDED DECEMBER 31, 2000 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(3) The disposition column is summarized for major categories as follows:

6 7 THE FORTRESS GROUP, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 2001 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(4) The disposition column is summarized for major categories as follows:

7 8 (c) Exhibits 2.11 Purchase Agreement dated April 5, 2001, among J. Christopher Stuhmer, Christopher Homes, LLC, Fortress Holding - Virginia, 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: September 11, 2001 By: /S/ George C. Yeonas ---------------------------- ------------------------- George C. Yeonas Chief Executive Officer 8 9 INDEX TO EXHIBITS Exhibit Number Description 2.11 Purchase Agreement dated April 5, 2001, among J. Christopher Stuhmer, Christopher Homes, LLC, Fortress Holding - Virginia, Inc. and Registrant. 9

FORTRESS GROUP INC 8-K