<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              --------------------
                                    FORM 10-K

(MARK ONE)

/X/      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2000

                                       OR

/ /      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                   FOR THE TRANSITION PERIOD FROM      TO

                           COMMISSION FILE NO. 0-20614

                          ---------------------------

                           THE ROTTLUND COMPANY, INC.
             (Exact name of registrant as specified in its charter)

            MINNESOTA                                  41-1228259
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
    incorporation or organization)

                             3065 CENTRE POINTE ROAD
                           ROSEVILLE, MINNESOTA 55113
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (651) 638-0500

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, par
value $.10

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

The aggregate market value of voting stock held by nonaffiliates of the
registrant as of June 15, 2000 was approximately $ 3,725,000.

As of June 15, 2000, there were 5,815,572 shares of Common Stock of the
registrant issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the documents listed below have been incorporated by
reference into the indicated part of this Form 10-K.

<TABLE>

                DOCUMENT INCORPORATED                                                      PART OF FORM 10-K
                ---------------------                                                      -----------------

<S>                                                                                             <C>
        Proxy Statement for 2000 Annual Meeting of Shareholders                                 Part III

</TABLE>

================================================================================

<PAGE>

                                 FORM 10-K INDEX

<TABLE>
<CAPTION>

                                                                                                               PAGE
                                                                                                               ----

<S>                                                                                                            <C>
PART I............................................................................................................1

         Item 1.  BUSINESS........................................................................................1

         Item 2.  PROPERTIES......................................................................................7

         Item 3.  LEGAL PROCEEDINGS...............................................................................7

         Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS DURING FOURTH QUARTER OF FISCAL
                  YEAR............................................................................................7

PART II...........................................................................................................8

         Item 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
                  STOCKHOLDER MATTERS.............................................................................8

         Item 6.  SELECTED FINANCIAL DATA AND STATISTICAL COMPARISON..............................................9

         Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                  FINANCIAL CONDITION............................................................................10

         Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................12

         Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................................................13

         Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURES...........................................................13

PART III.........................................................................................................27

         Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............................................27

         Item 11. EXECUTIVE COMPENSATION.........................................................................27

         Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.....................................................................................27

         Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................27

PART IV..........................................................................................................28

         Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K.......................................................................................28

</TABLE>

<PAGE>

                                     PART I

ITEM 1.    BUSINESS

GENERAL

         The Rottlund Company, Inc. ("Rottlund" or the "Company"), through its
subsidiaries, designs, builds and markets attached and detached townhomes and
condominiums, and detached single family homes in the metropolitan areas of
Minneapolis-St. Paul, Minnesota; Des Moines, Iowa; Indianapolis, Indiana;
Southern New Jersey and Naples-Ft. Myers, Orlando and Tampa, Florida.

         Rottlund was founded in 1973, and until 1993, all of the Company's
developments were located in the Minneapolis-St. Paul market where Rottlund has
maintained the largest market share of any builder in nine of the last ten
years. Nationally, Rottlund ranks as the ninth largest attached, for sale,
homebuilder and has been ranked in among the top 100 homebuilders since 1991.
During the year ended March 31, 1994 ("fiscal 1994"), the Company began home
building operations in Naples-Ft. Myers, Florida, and Des Moines, Iowa; during
the first quarter of the year ended March 31, 1995 ("fiscal 1995"), the Company
began home building operations in Indianapolis, Indiana, and Orlando and Tampa,
Florida; and during the year ended March 31, 1996 ("fiscal 1996"), the Company
acquired certain assets and assumed certain liabilities of Kevin Scarborough,
Inc., a residential homebuilder operating in Southern New Jersey. During the
year ended March 31, 2000 ("Fiscal 2000"), the Company substantially exited the
Orlando and Naples-Ft. Myers, Florida markets. The Company sold land, finished
lots, residential housing under construction and various models. All references
to the Company contained herein, unless the context indicates otherwise, include
its wholly owned subsidiaries Rottlund Homes of Iowa, Inc., Rottlund Homes of
Florida, Inc., Rottlund Homes of Indiana, Inc., Rottlund Homes of New Jersey,
Inc., and Rottlund Homes of Indiana Limited Partnership.

         As of March 31, 2000, the Company owned or controlled through options
over 2,100 home sites in communities under development, and land for the
development of over 5,400 additional planned home sites in proposed communities.

         The Company's homes are sold primarily through its own staff of sales
personnel. The Company markets its homes to a wide range of buyers, emphasizing
high quality construction and customer satisfaction. Its promotional efforts
include advertisements in newspapers and other printed media, radio and
television, illustrated brochures, billboards, on-site displays and model homes.
Purchasers of the Company's homes are given the opportunity to select, at
additional cost, various optional amenities such as upgraded carpet, fireplaces,
varied interior and exterior color schemes, lighting and upgraded appliances.
The Company offers a diverse product line ranging from townhomes to
single-family homes at prices generally ranging from $90,000 to $400,000. The
average price of the Company's homes delivered in fiscal 2000 was approximately
$164,000.

         The Company has focused on the implementation of a Product Leadership
Strategy, as reflected by the diversity of its product offerings. This strategy
has been paramount in its quest to maintain its No. 1 market leadership position
in the Minneapolis-St. Paul market. Management believes that the Company's
Product Leadership Strategy has also provided a competitive advantage in the Des
Moines and Southern New Jersey markets. Rottlund's Product Leadership Strategy
emphasizes the Company's design capabilities, enabling it to offer quality homes
at all price levels at which the Company competes. The Company markets its homes
to a wide range of buyers including entry level, first and second time move-up,
active adults and retirees. Furthermore, management believes the Company has
been particularly effective marketing to non-traditional families, such as
single parent households. Product offerings such as attached villas and
townhomes have been designed with specific amenities to fill the needs of these
unique market niches while maintaining the affordability required by single
parents. Other attached, for sale communities use design characteristics, such
as enhanced security features, that appeal to single female buyers and have
enabled Rottlund to secure increased market share in this growing niche.


                                        1
<PAGE>

OPERATING STRATEGY

         Set forth below are the major elements of the Company's operating
strategy:

         MARKETS. The Minneapolis-St. Paul metropolitan area has been the
Company's primary market and has accounted for the majority of revenues since
the Company's inception. The Company has built and delivered more homes in this
market over the last five years than any other home builder. The Company's
management believes that its marketing strategy of establishing itself as a name
brand builder in the Minneapolis-St. Paul market has helped the Company to
achieve its success. The Company presently accounts for approximately 4.0% of
all homes sold in this market. The Company does not presently intend to increase
its share of the Minneapolis-St. Paul market, but rather to expand its
operations in the Des Moines, Iowa; Indianapolis, Indiana; Southern New Jersey
and Tampa, Florida markets. Rottlund is implementing its name brand builder
strategy in these markets.

         PRODUCTS. The Company markets its homes to a wide range of buyers,
including entry level, move-up and retirees. Accordingly, the Company offers a
number of home styles and price ranges at various locations. The Company's
product offerings include villas, townhomes and detached single family homes.
Sales prices presently range from approximately $90,000 to $400,000, and the
average sales price of homes being delivered during fiscal 2000 was
approximately $164,000. Management believes the Company's ability and
willingness to build homes in accordance with home buyers' needs will enable the
Company to continue to grow. Management further believes that the Company's
long-standing strategy of product diversification enables it to respond rapidly
to changing market conditions and the cyclical nature of the home-building
industry.

         COST CONTROL. The Company controls the cost of construction through the
efficient design of its homes and favorable pricing from subcontractors due to
the high volume of work performed for the Company. Rottlund uses an advanced,
industry-specific management information system to control construction costs.
This system allows the Company to monitor subcontractor performance and
expenditures for each home built. All subcontracted work is authorized through
the generation of purchase orders, which are approved for payment by the
Company's on-site construction supervisors upon completion of work. Any
additional costs require authorization through the issuance of variance purchase
orders, which require reporting of the reason for the variance and measures
taken to eliminate further variances. This strategy permits the Company to
monitor gross margins on each individual home from the time a purchase agreement
is signed through the building process to closing. The Company requires all
subcontractors to perform all home construction and site improvement work on a
fixed price basis. In addition, management continually monitors selling, general
and administrative expenses in an effort to control overhead and improve
efficiency.

         INVENTORY MANAGEMENT. Two of the major risks in the home-building
industry are excessive home site inventory and inventory of completed homes. The
Company attempts to reduce its vulnerability to these risks by (i) acquiring
control of improved home sites through option contracts that allow the Company
to build homes with relatively minimal capital expenditures and limited risks,
(ii) acquiring land for development with seller financing, (iii) acquiring land
through purchase agreements on a nonrecourse basis that enables the Company to
obtain necessary governmental approvals before the acquisition of the land
(generally, the down payment on a land purchase or option agreement will be
returned to the Company if all approvals are not obtained, although
pre-development costs may not be recoverable), (iv) beginning construction of a
single family home only after execution of a sales contract, receipt of
satisfactory earnest money and, where applicable, a tentative mortgage approval,
and (v) controlling the number of finished homes held in inventory.

LAND ACQUISITION AND DEVELOPMENT

         The Company generally follows a policy of acquiring options to purchase
land for future community developments. The Company attempts to acquire land
with minimum cash investment and the maximum degree of purchase money financing
that the Company is able to obtain from sellers. The purchase money financing
and purchase agreements are generally on a nonrecourse basis, thereby limiting
the Company's financial exposure to the amounts invested in property and
predevelopment costs. This policy may somewhat raise the cost of land the
Company acquires, but it also significantly reduces risk to the Company.
Furthermore, this policy allows the Company to obtain necessary development
approvals prior to acquisition of land.


                                        2
<PAGE>

         The Company's purchase agreements are typically subject to numerous
conditions including, but not limited to, the Company's ability to obtain
necessary zoning and other governmental approvals for the proposed development.
The Company believes it has been successful in obtaining local governmental
approvals through proactive interaction with neighborhood and citizen groups.
The Company maintains a policy of holding neighborhood meetings to gain support
for its development activities. During the initial municipal approval process,
the Company confirms the availability of utilities, conducts environmental
reviews, arranges acquisition development and financing, and completes its
marketing construction feasibility studies. As a result, the Company is
generally able to begin marketing immediately after closing the land purchase.
This results in reduced carrying costs and increased liquidity for future
development opportunities.

         The Company has been able to acquire control of improved single family
detached home sites through option contracts that enable the Company to build in
an area if it purchases a specified number of home sites each month. Contracts
of this nature allow the Company to begin offering homes for sale in a new
community with relatively minimal capital expenditures and limited risk.
Accordingly, the Company has adopted a strategy of acquiring control of single
family detached home sites through option contracts when appropriate
opportunities, that meet the Company's marketing strategy, exist. The Company
expects the availability of such contracts to satisfy the majority of the
Company's requirements for detached single family home sites. Due to the
product-specific nature of the Company's attached home sites, the Company
expects limited opportunities for option contracts for this portion of its
developed home site requirements. Accordingly, the continuation of the Company's
development activities to satisfy its land inventory requirements will depend
upon its continued ability to locate, enter into contracts to acquire, obtain
governmental approvals for, obtain acquisition and development financing for,
consummate the acquisition of, and improve, suitable parcels of land.


                   AVAILABLE HOME SITE INVENTORY (ALL CITIES)

         The following table sets forth information with respect to the
Company's available lot inventory by state as of March 31, 2000.

<TABLE>
<CAPTION>

                                                      HOMES UNDER CONSTRUCTION
                                TOTAL     -------------------------------------------------  UNSOLD SITES AVAILABLE
MARKET                        AVAILABLE      SOLD (1)          MODELS       INVENTORY (2)          FOR FUTURE
------                        ---------      --------          ------       -------------          ----------
                                                                                                  CONSTRUCTION
                                                                                                  ------------
<S>                           <C>            <C>               <C>          <C>                   <C>
Minnesota..................       982            338               30              49                  565
Florida....................       491            102               11              37                  341
Iowa.......................       402             41               13              46                  302
Indiana....................       448             23                6              67                  352
New Jersey.................       406             59                4              10                  333
                               ------           ----              ---            ----               ------
Total......................     2,729            563               64             209                1,893
                                =====            ===               ==             ===

</TABLE>

----------------------
(1)      Under contract and under construction but not yet closed.
(2)      Inventory are unsold homes that are completed or in various stages of
         construction.

         Although the Company does not purchase land for speculation, the
Company has and will purchase land with the intent of selling home sites within
developments to other builders. Additionally, the Company has attempted to
manage the risk of home building in particular areas through cooperation with
other builders by building in the same subdivision. This arrangement provides
for diversity in the types of homes in the Company's communities and the
advantages of joint marketing.

         Rottlund strives to maintain a supply of developed home sites to meet
anticipated homebuilding requirements for not more than 24 months. As of March
31, 2000 the Company had an aggregate of 1,893 home sites available for future
construction, which represents approximately a 18-month supply based on actual
deliveries anticipated in fiscal 2001. The Company believes there is an adequate
supply of undeveloped land in all metropolitan areas where it conducts business
to maintain adequate home site inventories.

         Detached single family homes sold by the Company are marketed to
move-up and entry-level buyers. Move-up homes are sold in the $170,000 to
$300,000 price range, while entry level homes are sold in the $120,000


                                        3
<PAGE>

to $160,000 price range. The Company offers detached single family homes in a
variety of floor plans and exterior styles with two, three and four bedrooms,
two or more bathrooms and a two-car attached garage.

         The Company also offers attached product lines that offer a variety of
floor plans and provide for certain options. Entry-level townhomes are sold in
the $90,000 to $150,000 price range, and the balance of townhome sales are sold
in the $150,000 to $400,000 price range. The Company believes that the fastest
growing segments of the home buying market are single persons and couples
without children. The Company has adopted a strategy to capture these segments
by developing expertise in the design, marketing, financing and construction of
alternative or attached housing types that appeal to these segments.

         Contracts for the sale of homes are at fixed retail prices. The offered
prices of homes have generally increased from time to time during the sellout
period for each community and in response to cost increases; however, there can
be no assurance that sales prices will increase in the future.

         All of the attached home communities are governed by a homeowner's
association (the "Association"). The Company, acting as declarant, is
responsible for the management of the Association until 75% of the homes within
the Association are closed.

         The Company's line of homes is designed to promote efficient use of
space and materials to minimize construction costs and time, thereby maximizing
the value of the homes in the marketplace. The Company is continually developing
new home designs to replace or augment existing home designs in an effort to
assure that the Company's homes are responsive to current consumer preferences
and are unique in the marketplace. In order to respond to consumer preferences,
the Company relies primarily on its internal marketing department to analyze
information gathered from buyer profiles, focus groups, exit interviews at model
sites, telephone surveys and demographic data bases. With new designs, the
Company engages a number of unaffiliated architectural firms, in addition to its
in-house architectural staff. All home designs are copyrighted by the Company.
The Company does not license its home designs to other builders and vigorously
pursues infringers.

         The Company expends considerable effort in developing a design and
marketing concept for each of its communities. This includes determination of
product line, layout of streets, layout of individual home sites or structures
and overall community design. The communities have attractive entrances with
distinctive signage and landscaping. The Company recognizes the importance of
the sense of "neighborhood" and strives to create this feeling within its
communities to preserve and enhance the investment of its home buyers.

CONSTRUCTION

         Rottlund acts as the general contractor for the construction of its
residential communities. The Company's construction supervisors monitor the
construction of each home, participate in design and building decisions,
coordinate the activities of subcontractors and suppliers, maintain quality and
cost controls and monitor compliance with zoning and building codes.

         The Company maintains a strategy of subcontracting all home
construction at a fixed cost basis. The Company believes this strategy limits
its financial exposure during downturns in the housing market. All subcontracted
work is authorized by purchase orders that require approval for payment by the
construction supervisor upon completion. Any additional costs require
authorization through the issuance of variance purchase orders. All variances
require reporting of the reason therefor, and measures taken to eliminate
further variances.

         Subcontractors typically are retained by the Company for a specific
time period or project pursuant to a contract that obligates the subcontractor
to complete its duties at a fixed price. Contracts with the Company's
subcontractors and material suppliers are entered into after competitive bidding
during predetermined time periods or on a project by project basis.

         The construction of detached single family homes is generally tied to
home buyer sales contracts to minimize the costs and risks of completed but
unsold inventory.


                                        4
<PAGE>

         Construction time for each home is tied to a construction schedule
established for each of the Company's home types. Variances from the schedule
are infrequent but may occur due to weather conditions or availability of labor,
materials and supplies. The Company's line of homes is designed to promote
efficient use of space and materials to minimize construction costs and time.
The Company's construction schedules are typically from three to six months.

         Personnel at the Company's corporate headquarters are responsible for
architectural design, home site planning, and accounting and closing, among
other responsibilities. The Company's management information system is designed
to monitor the progress of each home built by the Company, from acceptance of a
sales contract to delivery of a completed home to the buyer. At any time after
contract acceptance, the Company can provide the home buyer with the
construction status of its home and the anticipated delivery date.

         The Company historically has maintained its construction schedule
throughout the entire year, despite seasonal climate changes in the
Minneapolis-St. Paul and Des Moines metropolitan areas. Additional winter
construction charges are incurred, however, in connection with propane heating
costs, frost ripping charges, utility construction charges and special footing
designs. Further, the Company is required, at closing, to put into escrow
amounts to cover items that cannot be installed in the winter, including
driveways, sidewalks and air conditioning.

MARKETING AND SALES

         In Minnesota, Indiana, New Jersey and Florida, the Company sells its
homes through commissioned employees who work from sales offices in model homes
located in each Rottlund community. In addition, the Company cooperates with
outside independent brokers on approximately 33% of all of its sales. The
Company utilizes independent realtors for home sales in Iowa. In all instances,
Company sales employees assist prospective buyers through the home buying
process by providing information on the Company's line of homes, pricing,
options and upgrades, mortgage financing, warranties, construction, as well as
information regarding the Company itself. The Company provides a Home Buyer's
Guide to all prospective customers. The Home Buyer's Guide highlights the steps
involved in buying a new home in an effort to accurately set the expectations of
the Company's customers. Sales personnel are trained by the Company and attend
periodic meetings where they are updated on current financing, construction
schedules, marketing and advertising plans.

         Rottlund has adopted a strategy of becoming a "name brand" builder in
the Minneapolis-St. Paul market. This strategy has been implemented through its
visible support of public television, Fraser Community Services and other
community organizations. Rottlund also advertises through newspaper, radio,
television and a billboard campaign. In its expansion into new markets, the
Company will, over time, attempt to utilize this same strategy of advertising to
increase customer awareness of the Company's products. In order to respond to
consumer preferences, the Company relies upon its internal marketing department
to analyze information that is gathered from buyer profiles, focus groups, exit
interviews at model sites, telephone surveys, and demographic data bases. The
Company's comprehensive marketing program also includes direct mail,
participation in home tour events and use of fully merchandised model homes.
Management believes model homes play an important role in demonstrating the
functional use of space in the Company's homes and allowing prospective buyers
to experience the emotional aspects of the home buying process. The Company
attempts to create attractive model homes and chooses interior merchandising for
each type of home based upon the lifestyles of targeted customers.

         The Company builds a portion of its homes under the guidelines and
specifications of the Federal Housing Administration (FHA) and the Veterans
Administration (VA), thereby providing eligible prospective buyers the added
benefit of the availability of FHA/VA-insured mortgages. The Company may also
from time to time help its customers secure below market interest rates by
contributing points to buy-down the existing mortgage rates.

CUSTOMER SERVICE AND QUALITY CONTROL

         Rottlund is committed to providing a high level of customer service as
an important component of its competitive strategy. The Company, through its
on-site team of a sales representative and construction supervisor, maintains
personalized contact with its customers.


                                        5
<PAGE>

         The Company's construction supervisors follow an inspection process on
each home the Company builds. This process is designed to ensure that each home
meets or exceeds the Company's performance standards for its homes.

         Upon completion of construction of each home, and prior to closing, an
employee of the Company's Customer Care Department conducts a quality control
inspection of the completed home. From this inspection, a list is created that
sets forth those areas that do not meet the Company's performance standards, and
therefore, require correction by the contract builder. Also prior to closing,
the Customer Care Department accompanies the buyer on a customer orientation of
their home to demonstrate the proper use and care of the home, including the
mechanical equipment and other components of the home. At the customer
orientation, the buyer is also familiarized with the service warranty process
following closing on the home.

         The Company's Customer Care Department handles all service and warranty
requests following the closing of each home. Management believes the
participation of Customer Care personnel both prior to and after closing reduces
post-closing service costs, fosters the Company's reputation for service, and
ultimately leads to the building of a referral base of business.

         The Company provides all home owners with a one-year comprehensive
warranty and a two-year warranty on all mechanical systems, and further
provides, from an unaffiliated insurance company, a ten to fifteen year
structural warranty.

COMPETITION AND MARKET FACTORS

         The development and sale of residential properties is highly
competitive and fragmented. The Company competes with a number of national home
builders and numerous local builders on the basis of a number of interrelated
factors, including: location, product design, perceived value, price and
reputation in the marketplace. The Company's homes must also compete with resale
of existing homes and available rental housing. Management believes Rottlund's
primary competitive advantages are based upon the following strengths: (i)
product innovation, (ii) offering homes with the highest perceived value, (iii)
product diversification, enabling the Company to offer homes to all segments of
the population, (iv) marketing programs and community involvement programs that
have established Rottlund as a "name brand" builder in the Minneapolis-St. Paul
market, (v) the location of its communities, and (vi) its reputation for
superior customer service and quality.

         Rottlund maintains a strong position in its markets due in part to
product innovation. The Company's ability to respond to the changing needs of
home buyers has allowed continued growth despite declining demand for previously
popular products. The Company continuously examines its markets to determine
whether housing needs for certain segments of the population are being met, and
attempts to respond by designing and building homes to meet such needs if they
are not being met. Management believes this is one of the primary reasons for
its long-term success. The Company's years of experience provide it with
expertise in the area of design, construction and financing of attached housing.
The Company believes that this experience is especially important in the
attached home market, which is subject to stricter regulation than the detached
home market.

         The housing industry is cyclical and is affected by consumer confidence
levels, prevailing economic conditions and interest rate levels. Other factors
affecting the industry include increases in construction costs; increases in
costs associated with home ownership, such as property taxes; changes in
consumer preferences and demographic trends. The Company believes that its
experience provides a sound understanding of the nature of the industry, and
therefore, it is able to base its strategic planning on such cyclical
conditions.

EMPLOYEES

         As of March 31, 2000, the Company employed 233 persons, 45 as on-site
sales personnel, 65 involved in construction, 26 as customer care personnel, 21
as product development personnel and 76 as executive, administrative and
clerical personnel. The Company's employees are not covered by a collective
bargaining agreement and the Company believes it has good relationships with its
employees.


                                        6
<PAGE>

GOVERNMENTAL REGULATION

         The Company's business is subject to regulation by a variety of state
and federal laws and regulations relating to, among other things, advertising,
charging, collection of state sales and use taxes, zoning and product safety.
While the Company believes it is presently in material compliance with such
regulations, in the event that it should be determined that the Company is not
in compliance with all such laws and regulations, the Company could become
subject to cease and desist orders, injunctive proceedings, civil fines and
other penalties.

ITEM 2.    PROPERTIES

         The Company's principal offices are located at 3065 Centre Pointe Road,
Roseville, Minnesota 55113. The offices total 10,000 square feet, and are leased
from an unrelated party through March 31, 2006, at a base annual rent of
$94,000. Various computer equipment and office furniture are also leased by the
Company.

ITEM 3.    LEGAL PROCEEDINGS

         The Company is not currently a party to any material pending legal
proceedings. From time to time the Company may become involved in routine
litigation incidental to its business.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS DURING FOURTH
           QUARTER OF FISCAL YEAR

         There were no matters submitted to a vote of the Company's shareholders
during the three-month period ended March 31, 2000.


                                        7
<PAGE>

                                     PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

         On February 19, 1998, the Company's Common Stock was listed on the
American Stock Exchange ("AMEX") under the symbol "RH". Also on that date, the
Company's Common Stock ceased trading on the NASDAQ National Market System.

         The following table sets forth the range of high and low sale prices
for the Company's Common Stock for each of the fiscal quarters of the two years
ended March 31, 2000 and 1999.

STOCK QUOTATIONS

<TABLE>
<CAPTION>

                                                                         HIGH       LOW
                                                                         ----       ---

<S>                                                                      <C>        <C>
                  Fiscal 2000
                       First Quarter...................................  5-3/4      3-3/4
                       Second Quarter..................................  4-15/16    2-5/8
                       Third Quarter...................................  3-3/8      2-3/8
                       Fourth Quarter..................................  3-1/4      2-5/16


                  Fiscal 1999
                       First Quarter...................................  4-7/8      3-3/4
                       Second Quarter..................................  4-5/8      3-5/8
                       Third Quarter...................................  4-1/2      3
                       Fourth Quarter..................................  5-3/4      4

</TABLE>

         As of June 15, 2000, the Company had approximately 150 holders of
record of its Common Stock.

         The transfer agent for the Company's Common Stock is Norwest Bank
Minnesota, N.A., 161 North Concord Exchange, South St. Paul, Minnesota,
55075-0738, telephone: (651) 450-4064.

         The Company has not paid any dividends on its Common Stock since its
initial public offering in October 1992 and expects that for the foreseeable
future it will follow a policy of retaining earnings in order to finance the
continued development of its business. Payment of dividends is within the
discretion of the Company's Board of Directors and will depend upon the
earnings, capital requirements and operating and financial condition of the
Company, among other factors. In addition, the terms of the Company's revolving
credit line contain restrictions on the ability of the Company to pay dividends.
The Company has not made any sales of restricted stock during the previous three
fiscal years.


                                        8
<PAGE>


ITEM 6.    SELECTED FINANCIAL DATA AND STATISTICAL COMPARISON

         The following table sets forth selected financial data with respect to
the Company for the periods indicated. This information should be read in
conjunction with the Financial Statements and related notes appearing elsewhere
herein and "Management's Discussion and Analysis of Results of Operations and
Financial Conditions." The Company's Statement of Operations and Balance Sheet
data as of and for each of the years set forth below have been derived from
financial statements that have been audited by Arthur Andersen LLP, independent
public accountants.

<TABLE>
<CAPTION>

                                                  2000          1999          1998           1997          1996
                                                  ----        --------      --------       --------      --------
                                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND UNIT DATA)
<S>                                           <C>           <C>           <C>            <C>           <C>
STATEMENT OF OPERATIONS DATA:
   Net sales................................  $  260,834    $  252,675    $  160,830     $  180,457    $   131,583
   Cost of sales............................     222,488       215,074       139,284        156,332        110,589
                                              ----------    ----------    ----------     ----------    -----------
   Gross profit.............................      38,346        37,601        21,546         24,125         20,994
   Selling, general and administrative
      expenses..............................      26,409        26,112        20,541         19,569         13,671

   Write-down of land(1)                             --            --            --           1,500            --
                                              ----------    ----------    ----------     ----------    -----------
   Operating income.........................      11,937       11,489         1,005          3,056           7,323
   Interest expense.........................       2,685        2,714         2,018            958             153
                                              ----------    ----------    ----------     ----------    -----------
   Income (loss) before provision (benefit)
      for income taxes......................       9,252        8,775        (1,013)         2,098           7,170
   Provision (benefit) for income taxes.....       3,793        3,598          (415)           862           2,928
                                              ----------    ----------    ----------     ----------    -----------
     Net income (loss)......................  $    5,459    $   5,177     $    (598)     $   1,236     $     4,242
                                              ==========    =========     ==========     ==========    ===========

   Basic earnings (loss) per share..........  $     0.94    $    0.90     $   (0.10)     $    0.22     $      0.75
                                              ==========    =========     ==========     ==========    ===========
   Diluted earnings (loss) per share........  $     0.94    $    0.90     $   (0.10)     $    0.22     $      0.74
                                              ==========    =========     ==========     ==========    ===========
   Weighted average shares outstanding......       5,804        5,773         5,745          5,735           5,749
                                              ==========    =========     =========      =========     ===========

OPERATING DATA:
   Number of home sales closed..............       1,495        1,624         1,092          1,346           1,187
                                              ==========    =========     =========      =========     ===========
   Average sales price......................  $      164    $     156     $     146      $     134     $       111
                                              ==========    =========     =========      =========     ===========

BALANCE SHEET DATA:
   Inventories and properties held for
      development or sale...................  $   77,455    $  70,042     $  74,379      $  81,825     $    74,650
   Total assets.............................      98,766       89,365        88,281         96,234          83,756
   Notes and mortgage notes payable.........      44,204       38,467        47,907         54,137          40,584
   Shareholders' equity.....................      37,160    $  31,598     $  26,315      $  26,819     $    25,396

</TABLE>

------------------------

(1)      The Company recorded a noncash write-down of land development costs and
         finished lots at development sites in Florida and Indiana in fiscal
         1997. See Note 1 of the Notes to Consolidated Financial Statements.


                                        9
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
         FINANCIAL CONDITION

GENERAL

         The following table sets forth, for the periods indicated, unit
activity, average sales price and revenue from home sales:

<TABLE>
<CAPTION>

                                                   2000                1999                1998
                                           -------------------   -----------------   -----------------
<S>                                               <C>                 <C>                 <C>
Homes closed:
   Single family.........................                  526                 688                 431
   Multi-family..........................                  969                 936                 661
Average sales price:
   Single family.........................         $    197,000        $    180,000        $    186,000
   Multi-family..........................              146,000             138,000             122,000
Net sales:
   Single family.........................         $103,514,000        $123,700,000        $ 80,370,000
   Multi-family..........................         $141,926,000         128,975,000          80,460,000
                                                  ------------        ------------        ------------
Total net sales                                   $245,440,000        $252,675,000        $160,830,000
                                                  ============        ============        ============

</TABLE>


         The following table sets forth the Company's backlog (homes under
contract but not closed):

<TABLE>
<CAPTION>

              MARCH 31                                        NUMBER OF HOMES          SALES VALUE
              --------                                        ---------------          -----------

<S>                                                                 <C>               <C>
              2000........................................          563               $109,493,000
              1999........................................          567                $99,562,000
              1998........................................          631                $98,380,000

</TABLE>

         The Company estimates that the period between receipt of sales
contracts and delivery of completed homes to the purchasers is generally four to
six months. The Company's backlog historically tends to increase between January
and April. Trends in the Company's backlog are subject to change from period to
period based upon economic conditions including consumer confidence levels,
interest rates and the availability of mortgages.

RESULTS OF OPERATIONS

         YEAR ENDED MARCH 31, 2000 COMPARED TO YEAR ENDED MARCH 31, 1999

         The Company's home sales decreased $7.2 million or 2.9% during fiscal
2000 as compared to fiscal 1999, despite a 5.5% increase in the average sales
price of homes closed, due to a 7.9% decrease in the number of homes closed.
This increase was due to an overall increase in prices for homes sold by the
Company. In addition to these homes sales, the Company had land sales of $15.4
million during fiscal 2000 as compared to fiscal 1999 when there were no land
sales.

         Gross profit on homes sales increased by $0.6 million or 1.6% during
fiscal 2000 as compared to fiscal 1999. The gross profit margin on home sales
increased to 15.1% during fiscal 2000 as compared to 14.9% in fiscal 1999. The
increased gross profit margin on home sales was primarily due to strength in the
overall homebuilding industry which combined with higher average selling prices
decreased fixed costs as a percentage of revenue. In addition to these home
sales, the Company had land sales which accounted for $1.4 million in gross
profit. The gross profit margin on these land sales was 9.1%.

         Selling, general and administrative expenses increased by $0.3 million
to $26.4 million in fiscal 2000 from $26.1 million in fiscal 1999. As a
percentage of net sales, selling, general and administrative expenses for home
sales increased to 10.8% in fiscal 2000 from 10.3% in fiscal 1999. The increase
was due primarily to the increased number of projects started in fiscal 2000.


                                       10
<PAGE>

         Interest expense was $2.7 million in fiscal 2000 as compared to $2.7
million in fiscal 1999. Interest expense for the revolving credit facility
increased due to the increased level of new business activity. Interest expense
on Senior Notes decreased due to lower principle balances. The Company
capitalizes certain interest costs for land development and includes such
capitalized interest in cost of sales when the related homes are delivered to
purchasers. Total interest incurred by the Company was approximately $5.1
million in fiscal 2000 and $5.2 million in fiscal 1999.

         The Company's tax rate was approximately 41% in fiscal 2000 and 1999
which reflects the federal statutory rate plus the effect of state taxes, net of
federal benefit.

         Net income increased from $5,177,000 in fiscal 1999 to $5,459,000 in
fiscal 2000. This increase was partially due to the sale of land in fiscal 2000.

         YEAR ENDED MARCH 31, 1999 COMPARED TO YEAR ENDED MARCH 31, 1998

         The Company's home sales increased $91.8 million or 57% during fiscal
1999 as compared to fiscal 1998 as a result of a 48.6% increase in the number of
homes closed and a 5.7% increase in the average sales price of homes closed.
This increase was due to an overall increase in prices for homes sold by the
Company.

         Gross profit increased by $16.1 million or 75% during fiscal 1999 as
compared to fiscal 1998. The gross profit margin increased to 14.9% during
fiscal 1999 as compared to 13.4% in fiscal 1998. The increase in gross profit
was primarily due to strength in the overall homebuilding industry combined with
higher revenues which decreased fixed costs as a percentage of revenue.

         Selling, general and administrative expenses increased by $5.6 million
to $26.1 million in fiscal 1999 from $20.5 million in fiscal 1998. As a
percentage of net sales, selling, general and administrative expenses decreased
to 10.3% in fiscal 1999 from 12.8% in fiscal 1998. This decrease was primarily
due to the increase in home sales during fiscal 1999.

         Interest expense was $2.7 million in fiscal 1999 as compared to $2.0
million in fiscal 1998. The increase in interest expense is primarily due to an
increase in borrowings under the Company's revolving credit facility used to
fund the increased level of business activity. The Company capitalizes certain
interest costs for land development and includes such capitalized interest in
cost of sales when the related homes are delivered to purchasers. Total interest
incurred by the Company was approximately $5.2 million for fiscal 1999 and $5.1
million for fiscal 1998.

         The Company's tax rate was approximately 41% in fiscal 1999 and 1998
which reflects the federal statutory rate plus the effect of state taxes, net of
federal benefit.

         Net income increased from a net loss of $598,000 in fiscal 1998 to a
net gain of $5,177,000 in fiscal 1999. This increase was primarily due to the
increase in home sales during fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES

         Cash flows provided by (used for) operating activities decreased $15.7
million from $12.0 million in fiscal 1999 to ($3.7) million in fiscal 2000. This
decrease was primarily due to a reduced amount of residential housing completed
and under construction. Cash flows used for investing activities were not
significant. Cash flows used for financing activities decreased by $15.1 million
from $9.3 million in fiscal 1999 to ($5.8) million in fiscal 2000.

         Cash flows provided by operating activities increased $7.6 million from
$4.4 million in fiscal 1998 to $12.0 million in fiscal 1999. This increase was
primarily due to increased income. Cash flows used for investing activities were
not significant. Cash flows used for financing activities increased by $3.2
million from $6.1 million in fiscal 1998 to $9.3 million in fiscal 1999.

         The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition and inventory balances. In December 1994, the Company
issued $25 million of 12.11% Senior Notes payable and in February 1996, the
Company issued an additional $10 million of 9.42% Senior Notes payable
(collectively referred


                                       11
<PAGE>

to as the "Senior Notes"). Proceeds were used to retire certain mortgage notes
payable and for working capital purposes. Principal and interest payments of
approximately $652,000 are due monthly through December 2003. Subsequent to
year-end, the Company paid in full the obligations associated with the Senior
Notes, including $900,000 in early extinguishment penalties.

         At March 31, 2000, the Company also had a $35.0 million unsecured
revolving credit facility from a commercial lender. Borrowings under this
facility totaled $21.1 million at March 31, 2000. After year-end this facility
was increased to $55.0 million to fund the purchase of the Senior Notes
discussed above. The Company believes that amounts available under its existing
borrowing arrangements (assuming extensions and renewals of debt in the ordinary
course of business) and amounts generated from operations will provide funds
adequate for its homebuilding activities and debt service. The Company had no
significant commitments as of March 31, 2000 requiring the use of funds.

         The Company has generally been able to secure financing for its
acquisition, development and construction activities, and management believes
that such arrangements will continue to be available on terms satisfactory to
the Company. There can be no assurance, however, that continued financing for
land acquisitions will be available or, if available, will be on terms
satisfactory to the Company.

INFLATION AND EFFECTS OF CHANGING PRICES

         Real estate and residential housing prices are affected by inflation,
which can cause increases in the price of land, raw materials and subcontracted
labor. Unless such costs are recovered through higher sales prices, gross profit
margins will decrease. As interest rates increase, construction and financing
costs, as well as the cost of borrowing funds, also increase which can result in
lower gross profits. High mortgage interest rates would make it more difficult
for the Company's customers to qualify for home mortgage loans. These factors
have a much more significant effect on the Company's operations than does
seasonality, in part because homes can be constructed year-round.

YEAR 2000 CONSIDERATIONS

         Over the last two fiscal years the Company began to evaluate and
implement changes to its systems in order to ensure Year 2000 compliance. As a
result of this process, the Company and its subsidiaries tested all critical
systems during calendar year 1999 and repaired, upgraded and/or replaced those
found to be not Year 2000 compliant. The cost of replacing, upgrading or
otherwise changing non-compliant systems was not material.

         As a result of the attention the Company paid to addressing its Year
2000 readiness, there have not been, to date, any adverse impact on the
Company's operations or financial condition, or the operation or financial
condition of any of its individual subsidiaries as a result of any Year 2000
issues. In addition, the Company is not aware of any Year 2000 problems
experienced by any of its vendors, subcontractors or other third parties

         Although the Company has not been affected to date by Year 2000
compliance issues, Year 2000 issues could arise subsequent to the date of this
report. The Company believes such circumstances are highly unlikely to occur and
that, even if they were to occur, it is highly unlikely that the Company's
financial condition or the operations of its subsidiaries would be materially
adversely affected.


ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's exposure to market risk for changes in interest rates
relates primarily to the Company's short-term borrowings and long-term debt
obligations.

         The Company's credit facility carries interest rate risk that is
generally related to the federal funds rate. If that rate were to change while
the Company was borrowing under the facility, interest expense would increase or
decrease accordingly. The effect of a basis point change of 100 in interest
rates, for example, would have an estimated $_______, pre-tax earnings and cash
flow impact, assuming that all other variables are held constant. As


                                       12
<PAGE>

of March 31, 2000, $21.1 million were under this facility. Following year-end,
the credit facility was increased to pay off the Senior Notes and all debt thus
became floating rate.

         The Company has no earnings or cash flow exposure due to market risks
on its Senior Notes payable as a result of the fixed-rate nature of the debt.
Interest rate changes would, however, affect the fair market value of the debt.
At March 31, 2000, the Company had fixed rate debt of $21.8, maturing in
December 2003.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The financial statements of the Company as of March 31, 2000 and 1999,
and for the years then ended together with the Report of Independent Public
Accountants are included in this Form 10-K on the pages indicated below.


                   THE ROTTLUND COMPANY, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                                               Page
                                                                                                               ----

<S>                                                                                                            <C>
Report of Independent Public Accountants..................................................................       14

Consolidated Balance Sheets as of March 31, 2000 and 1999.................................................       15

Consolidated Statements of Operations for the Years Ended March 31, 2000, 1999 and 1998...................       16

Consolidated Statements of Shareholders' Equity for the Years Ended March 31, 2000, 1999 and 1998.........       17

Consolidated Statements of Cash Flows for the Years Ended March 31, 2000, 1999 and 1998...................       18

Notes to Consolidated Financial Statements................................................................       19

</TABLE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES

         None

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To The Rottlund Company, Inc.:

         We have audited the accompanying consolidated balance sheets of The
Rottlund Company, Inc. (a Minnesota corporation) and Subsidiaries as of March
31, 2000 and 1999, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended March 31, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting


                                       13
<PAGE>

principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The Rottlund
Company, Inc. and Subsidiaries as of March 31, 2000 and 1999, and the results of
its operations and its cash flows for each of the three years in the period
ended March 31, 2000, in conformity with accounting principles generally
accepted in the United States.



                                                             ARTHUR ANDERSEN LLP

Minneapolis, Minnesota,
May 5, 2000


                                       14
<PAGE>


                   THE ROTTLUND COMPANY, INC. AND SUBSIDIARIES

                           Consolidated balance sheets
                                 As of March 31
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                                  2000          1999
                                                                                               ----------    ----------

                                           ASSETS

<S>                                                                                             <C>           <C>
CASH AND CASH EQUIVALENTS                                                                       $  8,087      $  6,558
ESCROW AND OTHER RECEIVABLES                                                                       2,447         2,607
LAND, DEVELOPMENT COSTS AND FINISHED LOTS                                                         47,224        46,315
RESIDENTIAL HOUSING COMPLETED AND UNDER CONSTRUCTION                                              30,231        23,727
PROPERTY AND EQUIPMENT, net                                                                          867           941
DEFERRED INCOME TAXES                                                                              1,796         1,605
OTHER ASSETS, net                                                                                  8,114         7,612
                                                                                               ---------     ---------
                                                                                                $ 98,766      $ 89,365
                                                                                               =========     =========

</TABLE>
<TABLE>
<CAPTION>

                            LIABILITIES AND SHAREHOLDERS' EQUITY

<S>                                                                                             <C>           <C>
LIABILITIES:
   Revolving credit facility                                                                    $ 21,135      $ 10,285
   Senior notes payable                                                                           21,845        26,731
   Mortgage notes payable                                                                          1,224         1,451
   Accounts payable                                                                               10,785         8,905
   Accrued liabilities                                                                             6,459         6,132
   Income taxes payable                                                                              158         4,263
                                                                                               ---------     ---------
               Total liabilities                                                                  61,606        57,767
                                                                                               =========     =========

COMMITMENTS AND CONTINGENCIES (Note 6)

SHAREHOLDERS' EQUITY:
   Preferred stock, $.10 par value, 10,000 shares authorized; 0 shares issued
      and outstanding                                                                               ----          ----
   Common stock, $0.10 par value, 40,000 shares authorized; 5,804 and 5,773 shares issued
      and outstanding                                                                                146           143
   Paid-in capital                                                                                11,951        11,851
   Retained earnings                                                                              25,063        19,604
                                                                                                --------      --------

               Total shareholders' equity                                                         37,160        31,598
                                                                                                --------      --------
                                                                                                $ 98,766      $ 89,365
                                                                                                ========      ========

</TABLE>

               The accompanying notes are an integral part of these consolidated
balance sheets.


                                       15
<PAGE>


                   THE ROTTLUND COMPANY, INC. AND SUBSIDIARIES

                      Consolidated statements of operations

                          For the years ended March 31
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                     2000            1999           1998
                                                  ------------    -----------    -----------

<S>                                                  <C>           <C>           <C>
NET SALES:
   Homes                                             $ 245,440     $ 252,675     $ 160,830
   Land                                                 15,394          ----          ----
                                                     ---------     ---------     ---------
               Total net sales                         260,834       252,675       160,830

COST OF SALES:
   Homes                                               208,449       215,074       139,284
   Land                                                 14,039          ----          ----
                                                     ---------     ---------     ---------
               Gross margin                             38,346        37,601        21,546

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES            26,409        26,112        20,541
                                                     ---------     ---------     ---------
               Operating income                         11,937        11,489         1,005

INTEREST EXPENSE                                         2,685         2,714         2,018
                                                     ---------     ---------     ---------
               Income (loss) before income taxes         9,252         8,775        (1,013)

INCOME TAX PROVISION (BENEFIT)                           3,793         3,598          (415)
                                                     ---------     ---------     ----------
               Net income (loss)                     $   5,459     $   5,177     $    (598)
                                                     =========     =========     ==========

BASIC AND DILUTED EARNINGS (LOSS) PER SHARE          $    0.94     $    0.90     $   (0.10)
                                                     =========     =========     ==========

</TABLE>

            The accompanying notes are an integral part of these consolidated
financial statements.


                                       16
<PAGE>





                   THE ROTTLUND COMPANY, INC. AND SUBSIDIARIES

                 Consolidated statements of shareholders' equity

                          For the years ended March 31
                                 (In thousands)

<TABLE>
<CAPTION>

                                                        Common stock        Paid-in   Retained
                                                     -------------------   --------   --------
                                                        Shares     Amount     Capital   Earnings     Total
                                                      ---------   --------   --------- ----------   --------
<S>                                                   <C>         <C>        <C>       <C>          <C>
BALANCE, March 31, 1997                                 5,716      $138       $11,656    $15,025     $26,819
   Net loss                                              ----       ---          ----       (598)       (598)
   Stock issued under employee stock purchase plan         29         3            91       ----          94
                                                        -----      ----       -------   --------    --------

BALANCE, March 31, 1998                                 5,745       141        11,747     14,427      26,315
   Net income                                            ----       ---          ----      5,177       5,177
   Stock issued under employee stock purchase plan         28         2           104       ----         106
                                                       --------   --------   --------   --------    --------

BALANCE, March 31, 1999                                 5,773       143        11,851     19,604      31,598
   Net income                                            ----       ----         ----      5,459       5,459
   Stock issued under employee stock purchase plan         31         3           100       ----         103
                                                       --------   --------   --------   --------    --------

BALANCE, March 31, 2000                                 5,804      $146       $11,951    $25,063     $37,160
                                                       ======      ====       =======    =======     =======

</TABLE>

            The accompanying notes are an integral part of these consolidated
financial statements.


                                       17
<PAGE>

                   THE ROTTLUND COMPANY, INC. AND SUBSIDIARIES

                      Consolidated statements of cash flows

                          For the years ended March 31
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                      2000          1999          1998
                                                                                    ----------    ----------    ---------
<S>                                                                                  <C>           <C>            <C>
OPERATING ACTIVITIES:
   Net income (loss)                                                                 $  5,459      $  5,177       $ (598)
   Adjustments to reconcile net income (loss) to net cash provided by (used
   for) operating activities-
     Depreciation and amortization                                                        724           790          626
     Deferred income taxes                                                               (191)         (441)         186
     Change in operating items:
       Escrow and other receivables                                                       160           (87)      (1,008)
       Land, development costs and finished lots                                         (909)          932        1,989
       Residential housing completed and under construction                            (6,504)        3,405        5,457
       Other assets                                                                      (575)       (3,002)      (1,012)
       Accounts payable                                                                 1,880        (2,648)       2,264
       Accrued liabilities                                                                327         3,626       (1,573)
       Income taxes payable                                                            (4,105)        4,263       (1,910)
                                                                                      --------      -------       -------

         Net cash provided by (used for) operating activities                          (3,734)       12,015        4,421
                                                                                      --------       ------       ------

INVESTING ACTIVITIES:
   Purchase of property and equipment, net                                               (577)         (370)      (1,054)
                                                                                     ---------     ---------      -------

FINANCING ACTIVITIES:
   Proceeds from (repayments of) revolving credit facility, net                        10,850        (4,725)        (175)
   Repayments of senior notes payable                                                  (4,886)       (4,194)      (2,943)
   Proceeds from issuance of mortgage notes payable                                       784         1,094          174
   Repayments of mortgage notes payable                                                (1,011)       (1,615)      (3,286)
                                                                                     ---------     ---------      -------
   Proceeds from stock issued under employee stock purchase plan                          103           106           94


       Net cash provided by (used for) financing activities                             5,840        (9,334)      (6,136)
                                                                                     ---------     ---------      -------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                    1,529         2,311       (2,769)

CASH AND CASH EQUIVALENTS:
   Beginning of year                                                                    6,558         4,247        7,016
                                                                                     ---------     ---------      -------

   End of year                                                                       $  8,087      $  6,558      $ 4,247
                                                                                     ========      ========      =======

SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid for interest, net of amounts capitalized                                $  2,685      $  2,714       $2,025
                                                                                     ========      ========       ======
   Cash paid for income taxes                                                        $  8,095      $   ----       $2,022
                                                                                     ========      ========       ======

</TABLE>

            The accompanying notes are an integral part of these consolidated
financial statements.


                                       18
<PAGE>

                   THE ROTTLUND COMPANY, INC. AND SUBSIDIARIES

                   Notes to consolidated financial statements
                             March 31, 2000 and 1999

1.       BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

The Rottlund Company, Inc. (a Minnesota corporation) and its subsidiaries,
collectively referred to as the Company, are engaged in the design,
construction, marketing and sale of residential real estate. The Company's
primary developments are in Minnesota, with additional development sites in
Iowa, Florida, Indiana and New Jersey; accordingly, the Company's operations can
be impacted significantly by the residential real estate market conditions in
each of these geographic areas.

During fiscal year 2000 the Company substantially exited the Orlando and Ft.
Myers, Florida, markets. The Company sold land, finished lots, residential
housing under construction and various models with a carrying value of
approximately $10,835,000 for $12,090,000. Certain of the sales were made to
a former vice president of the Company. In management's opinion, such
transactions were negotiated at terms equivalent to those used in transacting
business with unrelated parties. Additionally, the Company sold land in
certain other transactions for approximately $3,304,000.

The Company has generally been able to secure financing for its acquisition,
development and construction activities, and management believes that such
arrangements will continue to be available on terms satisfactory to the Company.
However, there can be no assurance that continued financing for land
acquisitions will be available or, if available, will be on terms satisfactory
to the Company.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of The
Rottlund Company, Inc. and its wholly owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Ultimate results could differ from those estimates.

REVENUE RECOGNITION

Revenue from sales of properties is recognized upon a formal closing and
conveyance of title to the buyer. Escrow receivables represent funds held in
escrow because the Company is obligated to perform minor activities subsequent
to a formal closing. Customer earnest money deposits received under binding
purchase agreements are reflected as accrued liabilities until a formal closing.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. As of March 31, 2000
and 1999, approximately $899,000 and $900,000, respectively, of cash and cash
equivalents was restricted for customer earnest money deposits.


                                       19
<PAGE>

LAND, DEVELOPMENT COSTS AND FINISHED LOTS

Direct costs related to land development, including land acquisition costs,
improvement and construction costs for clearing and grading, roads and utility
systems, architectural, surveying, engineering and legal fees, and real estate
taxes, are capitalized as costs of land. The Company also capitalizes interest
incurred in connection with land held for development up to the point it is
deemed fully realizable upon sale. Interest of approximately $2,400,000,
$2,400,000 and $2,942,000 was capitalized in fiscal years 2000, 1999 and 1998,
respectively. Aggregate development costs are allocated to finished lots and
charged to cost of sales upon a formal closing and conveyance of title to the
buyer.

RESIDENTIAL HOUSING COMPLETED AND UNDER CONSTRUCTION

Residential housing completed and under construction represents the direct costs
of construction of single-family and multifamily home projects, excluding land
costs. Residential housing is valued at the lower of cost or estimated fair
value.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Additions and major renewals are
capitalized, while maintenance and repairs are charged to expense as incurred.
Depreciation is provided using accelerated methods, principally over three to
five years for model home furnishings and five to seven years for furniture and
equipment. Accumulated depreciation totaled $807,000 and $878,000 as of March
31, 2000 and 1999, respectively.

OTHER ASSETS

Other assets consists primarily of the excess of the purchase price paid for
business acquisitions over the net assets acquired, deferred financing costs and
deposits for the option to acquire land. The excess of the purchase price paid
for business acquisitions over the net assets acquired is being amortized over
20 years, with accumulated amortization of $294,000 and $220,000 as of March 31,
2000 and 1999, respectively. Deferred financing costs are amortized over the
lives of the respective financing agreements, with accumulated amortization of
$201,000 and $163,000 as of March 31, 2000 and 1999, respectively. Deposits for
the option to acquire land are capitalized as land, development costs and
finished lots at the time of exercise or are charged to expense upon expiration.

INCOME TAXES

The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the difference between the financial statement
and tax bases of assets and liabilities using currently enacted tax rates.

PRODUCT WARRANTY

The Company warrants its residential housing for periods of 10 and 15 years. The
Company purchases insurance coverage for periods after two years. Warranty costs
are estimated at the time of sale and adjusted annually to reflect ultimate
experience. Product warranty costs are included in cost of sales in the
accompanying consolidated statements of operations.

ADVERTISING

The Company's advertising expense amounted to $2,038,000, $1,848,000 and
$2,316,000 in fiscal years 2000, 1999 and 1998, respectively.

NET EARNINGS (LOSS) PER SHARE

The Company adopted SFAS No. 128, "Earnings per Share," effective December 31,
1997. As a result, all prior periods presented have been restated to conform to
the provisions of SFAS No. 128, which requires presentation of


                                       20
<PAGE>

basic and diluted earnings per share. Basic earnings per share is computed by
dividing net income available to common shareholders by the weighted average
number of common shares outstanding during the year. Diluted earnings per share
is computed under the treasury stock method and is calculated to reflect the
dilutive effect of the Company's stock option plans. A reconciliation of these
amounts is as follows (in thousands, except per share and antidilutive stock
options data):

<TABLE>
<CAPTION>

                                                            2000          1999          1998
                                                        ------------   ------------   ---------

<S>                                                     <C>            <C>            <C>
Net income (loss)                                       $      5,459   $      5,177   $    (598)
                                                        ============   ============   =========

Weighted average number of common shares outstanding:

    Basic                                                      5,804          5,773       5,745

   Dilutive effect of stock options                             ----           ----        ----
                                                        ------------   ------------   ---------

Common and potential common shares outstanding:
    Diluted                                             $      5,804   $      5,773   $   5,745
                                                        ============   ============   =========
    Basic earnings (loss) per share                     $       0.94   $       0.90   $   (0.10)
                                                        ============   ============   =========
    Diluted earnings (loss) per share                   $       0.94   $       0.90   $   (0.10)
                                                        ============   ============   =========
    Antidilutive stock options                               705,378        838,102     535,102
                                                        ============   ============   =========

</TABLE>

Stock options were antidilutive because they had an exercise price greater than
the average market price during the year or due to the net loss.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as
amended by SFAS No. 137, becomes effective for the years beginning after June
15, 2000. SFAS No. 133 requires that all derivatives be measured at fair value
and recognized as assets or liabilities in the balance sheet. Changes in the
fair value of derivatives should be recognized in either net earnings or
comprehensive income, depending on the designated purpose of the derivative. The
Company is currently analyzing the adoption of SFAS No. 133 and determining the
effect, if any, on the Company's financial position and results of operations.

2.       DEBT

REVOLVING CREDIT FACILITY

The Company has an unsecured revolving credit agreement (the Credit Facility)
that provides borrowings of up to $35 million, of which $5 million may be used
for letters of credit. Borrowings under the Credit Facility are subject to a
borrowing base calculation based on a defined percentage of land, development
costs, finished lots and the working capital of the Company. Borrowings under
the Credit Facility bear interest at the federal funds rate plus 0.5 percent
(9.5 percent as of March 31, 2000). As of March 31, 2000, borrowings outstanding
under the Credit Facility's line of credit totaled $21,135,000, and $8,865,000
was available for borrowing under the calculation described above. The Credit
Facility expires in March 2002.

During fiscal years 2000, 1999 and 1998, the maximum balance outstanding under
current and former revolving credit facilities was $32,815,000, $21,835,000 and
$20,860,000, and the average balance was $23,818,000, $18,151,000 and
$12,359,000, respectively. The weighted average interest rate during such years
was 8.9 percent, 8.7 percent and 9.5 percent, respectively. The carrying amount
of borrowings outstanding under the Credit Facility as of March 31, 2000 and
1999 approximates its fair value due to its current maturities and/or variable
interest rates.

Subsequent to year-end, the Company increased the borrowings provided under the
Credit Facility to $55 million. The Company utilized the increase in its
facility to pay, in full, the obligations associated with Senior Notes (noted
below), including $900,000 in early extinguishment penalties.


                                       21
<PAGE>

SENIOR NOTES PAYABLE

In December 1994, the Company issued $25 million of 12.1 percent senior notes
payable, and in February 1996, the Company issued an additional $10 million of
9.4 percent senior notes payable (collectively, the Senior Notes). Proceeds were
used to retire certain mortgage notes payable and for working capital purposes.
During fiscal year 2000, the Company paid an additional 0.5 percent of interest
on each of the senior notes. Monthly payments of varying amounts are due on the
Senior Notes through December 2003. As of March 31, 2000 and 1999, the fair
value of the Senior Notes was approximately $24,713,000 and $28,914,000,
respectively.

MORTGAGE NOTES PAYABLE

Mortgage notes payable are primarily for the acquisition and development of
land, with fixed interest rates ranging from 8 percent to 9 percent and
variable interest rates at prime plus 1.0 percent. These nonrecourse notes
are collateralized by land, with a carrying cost of approximately $1,763,000
as of March 31, 2000, and mature at various dates through December 2001. The
carrying amounts of mortgage notes payable approximate their fair value due
to their current maturities and/or variable interest rates.

Scheduled annual maturities of the Senior Notes and mortgage notes payable as of
March 31, 2000 are as follows (in thousands):

<TABLE>
<CAPTION>

            Fiscal Year                                         Amount
            -----------                                       ----------
<S>                                                            <C>
            2001                                               $  6,419
            2002                                                  5,948
            2003                                                  6,371
            2004                                                  4,331
            2005                                                   ----
                                                              ---------
                                                               $ 23,069
                                                              =========

</TABLE>

The Credit Facility contains various restrictive covenants including, among
others, certain financial covenants relating to minimum consolidated tangible
net worth and earnings levels, as well as funding, borrowing base requirements,
payment of dividends and maximum land and construction limitations. The Company
was in compliance with all financial covenants as of March 31, 2000.

3.       INCOME TAXES

The following summarizes the income tax provision (benefit) for the years ended
March 31 (in thousands):

<TABLE>
<CAPTION>

                                                                               2000        1999        1998
                                                                             ---------    --------    --------
<S>                                                                          <C>          <C>         <C>
            Current:
               Federal                                                         $3,568      $3,575      $(606)
               State                                                              416         464          5
            Deferred                                                             (191)       (441)       186
                                                                               -------     -------     -----

            Provision (benefit) for income taxes                               $3,793      $3,598      $(415)
                                                                               ------      ------      ------

</TABLE>

                                       22
<PAGE>

The components of deferred income taxes consist of the following as of March 31
(in thousands):

<TABLE>
<CAPTION>

                                                                                       2000         1999
                                                                                     ---------    ---------

<S>                                                                                  <C>          <C>
            Inventory                                                                $    891     $    904
            Warranty reserves                                                             577          396
            Other                                                                         281          134

            Other accrued liabilities                                                      47          171
                                                                                     --------     --------
            Deferred income tax asset                                                $  1,796     $  1,605
                                                                                     ========     ========

</TABLE>

A reconciliation of the Company's statutory federal income tax rate to the
effective tax rate is as follows for the years ended March 31:

<TABLE>
<CAPTION>

                                                                               2000        1999         1998
                                                                             ---------    --------    ---------

<S>                                                                          <C>          <C>         <C>
            Statutory federal rate                                             34.0%        34.0%       34.0%
            State income taxes, net of federal benefit                          6.0          6.0         6.0
            Other                                                               1.0          1.0         1.0
                                                                                ---          ---         ---
            Effective tax rate                                                 41.0%        41.0%       41.0%
                                                                               =====        =====       =====

</TABLE>

4.       EMPLOYEE STOCK PLANS

STOCK OPTION PLANS

The Company has a stock option plan (the Plan) which provides for the granting
of options to designated employees, nonemployees and consultants of the Company
to purchase up to an aggregate of 1,300,000 shares of common stock at an
exercise price not less than the fair market value of the common stock on the
dates the options are granted. The options become exercisable in equal amounts
over a five-year period from the date of grant and expire ten years from the
date of grant. Certain options granted during fiscal year 1999 have a vesting
period of seven years, yet are accelerated if certain financial targets are met
each year.

The Company also has a director stock option plan (DSOP), pursuant to which
100,000 shares of common stock have been reserved for the granting of stock
options to the Company's outside directors. Under the DSOP, the Company granted
initial options for the purchase of 1,000 shares to each of the two outside
directors and thereafter will grant stock options for the purchase of 1,000
additional shares of common stock annually for each year of continued service on
the board. Each option is granted at fair market value on the date of grant and
is exercisable for a period of four years, commencing one year after the date of
grant.


                                       23
<PAGE>

The following table summarizes activity in the stock option plans:

<TABLE>
<CAPTION>

                                                                                                    Weighted
                                                                         Number of shares            average
                                                                      ------------------------      exercise
                                                                       The Plan        DSOP           price
                                                                      -----------    ---------     ----------

<S>                                                                   <C>            <C>           <C>
            Balance, March 31, 1997                                     575,636        4,000         $6.26

               Canceled                                                 (40,534)        ----          6.37
                                                                      ---------    ---------       -------

            Balance, March 31, 1998                                     535,102        4,000          5.55
               Granted                                                  303,000        2,000          4.56
                                                                      ---------     ---------      -------

            Balance, March 31, 1999                                     838,102        6,000          5.31
               Granted                                                  100,675        2,000          6.05

               Canceled                                                (233,399)         ----          4.67
                                                                      ---------     ---------      -------

            Balance, March 31, 2000                                     705,378        8,000         $5.74
                                                                      =========     =========      =======

            Options exercisable as of March 31, 2000                    548,972        6,000         $5.84
                                                                      =========     =========      =======

            Shares available for future grants                          294,622       88,000
                                                                      =========     =========

</TABLE>

Shares outstanding under the stock option plans as of March 31, 2000 have
exercise prices ranging from $4.50 to $8.53 and a weighted average remaining
contractual life of 6.3 years.

The Company follows the provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation." As permitted by SFAS No. 123, the Company has elected to continue
to account for its stock option plans under the provisions of APB Opinion No.
25, "Accounting for Stock Issued to Employees," under which no compensation
costs have been recognized. Because the measurement provisions of SFAS No. 123
have not been applied to options granted prior to April 1, 1995, the resulting
pro forma compensation costs may not be representative of those to be expected
in future years. Had compensation costs for these plans been recorded at fair
value consistent with the provisions of SFAS No. 123, the Company's net income
(loss) and earnings (loss) per share would have been as follows:

<TABLE>
<CAPTION>

                                                                    2000             1999           1998
                                                                 ----------      -----------     ----------
<S>                                                              <C>             <C>             <C>
       Net income (loss) (in thousands):
          As reported                                              $5,459          $ 5,177         $ (598)
          Pro forma                                                 5,238            4,959           (713)

       Basic and diluted earnings (loss) per share:
          As reported                                              $ 0.94          $  0.90         $(0.10)
          Pro forma                                                  0.90             0.86          (0.12)

</TABLE>

The weighted average fair value of stock options granted in fiscal year 2000 was
$0.05.

The fair value of each option is estimated on the date of grant using the
Black-Scholes option pricing model. The following assumptions were used to
estimate the fair value of options granted in the fiscal years:

<TABLE>
<CAPTION>

                                                             2000                  1999                  1998
                                                      -------------------    ------------------    ----------------

<S>                                                   <C>                    <C>                   <C>
Risk-free interest rate                                  5.84%-6.38%            4.33%-6.74%           5.97%-6.11%
Expected life                                             1-4 years             5-10 years            5-10 years
Expected volatility                                          43%                    42%                 34%-36%
Expected dividend yield                                      None                   None                  None

</TABLE>

                                       24
<PAGE>

EMPLOYEE STOCK PURCHASE PLAN

The Company sponsors an employee stock purchase plan (the Purchase Plan). A
total of 250,000 shares of common stock are reserved for issuance under the
Purchase Plan. The Purchase Plan permits eligible employees to purchase common
stock at 85 percent of the lower fair market value of the common stock at
certain dates. During the years ended March 31, 2000, 1999 and 1998, employee
contributions of approximately $103,000, $106,000 and $94,000, respectively,
were used to purchase common stock under the terms of the Purchase Plan.

5.       RETIREMENT SAVINGS PLAN

The Company sponsors a 401(k) profit-sharing plan which covers all employees
over the age of 20 1/2 years who elect to participate. The Company may, at its
discretion, make contributions to the 401(k) plan. All plan contributions vest
in equal installments over a five-year period. The Company contributed $197,000,
$191,000 and $80,000 to the 401(k) plan in fiscal years 2000, 1999 and 1998,
respectively.

6.       COMMITMENTS AND CONTINGENCIES

LETTERS OF CREDIT AND BONDS

Letters of credit are issued by banks, and bonds are issued by insurance
companies on behalf of the Company during the ordinary course of business, as
required by certain development agreements with municipalities. As of March 31,
2000, the Company had outstanding letters of credit totaling $2,846,000 and
outstanding bonds totaling $3,863,000.

LITIGATION

The Company is party to certain claims arising in the ordinary course of
business. In the opinion of management, based upon the advice of legal counsel,
the outcomes of such claims are not expected to be material to the Company's
financial position, results of operation or cash flows.

LEASES

The Company is obligated under various noncancelable operating leases for office
facilities and certain equipment. Rental expense under these agreements,
excluding leaseback of model homes, was approximately $817,000, $728,000 and
$714,000 in fiscal years 2000, 1999 and 1998, respectively.

Future minimum lease payments required under noncancelable operating lease
agreements are as follows (in thousands):

<TABLE>
<CAPTION>

            FISCAL YEAR                                          Amount
                                                               -----------

<S>                                                            <C>
            2001                                               $    505
            2002                                                    391
            2003                                                    358
            2004                                                    274
            2005                                                    147
            Thereafter                                              132
                                                               --------
                                                               $  1,807
                                                               ========
</TABLE>

During fiscal year 1999, the Company entered into three agreements for the sale
and leaseback of 21 of its model homes in Minnesota and New Jersey for
approximately $3,602,000, which resulted in the recognition of an approximately
$518,000 gain in fiscal year 1999. The lease term on the individual model homes
is month-to-month, and rental expense for fiscal years 2000 and 1999 was
approximately $453,000 and $335,000 respectively.


                                       25
<PAGE>

7.       QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following is a condensed summary of quarterly results of operations for
fiscal years 2000 and 1999 (in thousands, except per share data):

<TABLE>
<CAPTION>

                                                                                                       Basic and
                                                                                                        diluted
                                                                          Gross          Net          earnings per
                                                         Net sales        profit        income            share
                                                       ------------    ------------   ----------    -----------------

<S>                                                     <C>            <C>            <C>           <C>
Fiscal year 2000:
   First quarter                                          $ 49,587       $ 7,143        $  316           $0.05
   Second quarter                                           62,813         9,213         1,148            0.20
   Third quarter                                            60,777         8,648         1,078            0.19

   Fourth quarter                                           87,657        13,342         2,917            0.50
                                                       -----------     ---------      --------           -----
                                                          $260,834       $38,346        $5,459           $0.94
                                                       ===========     =========      ========           =====

Fiscal year 1999:
   First quarter                                          $ 51,355       $ 6,870        $  347           $0.06
   Second quarter                                           63,782         9,700         1,318            0.23
   Third quarter                                            58,786         8,729         1,023            0.18

   Fourth quarter                                           78,752        12,302         2,489            0.43
                                                       ------------    ------------   ----------    ----------
                                                          $252,675       $37,601        $5,177           $0.90
                                                       ============    ============   ==========    ==========

</TABLE>

         The three months ended March 31, 2000, and December 31, 1999, include
pre-tax land sales of $11,089,000, and $4,305,000, respectively.


                                       26
<PAGE>


                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information regarding the directors of the Company is incorporated
herein by reference to the descriptions set forth under the caption "Election of
Directors" in the Proxy Statement for Annual Meeting of Shareholders to be held
September 7, 2000 (the "2000 Proxy Statement"). Set forth below are the names,
ages and positions of the executive officers of the Company.

<TABLE>

<S>                                                      <C>   <C>
                  David H. Rotter.....................   53    President, Secretary and Director
                  Bernard J. Rotter...................   57    Vice President, Treasurer and Director
                  Todd M. Stutz.......................   42    Executive Vice President and Director
                  Lawrence B. Shapiro.................   44    Chief Financial Officer and Director

</TABLE>

         The officers of the Company are elected annually and serve at the
discretion of the Board of Directors. Lawrence B. Shapiro and Todd M. Stutz are
employed pursuant to written employment agreements.

BACKGROUND OF EXECUTIVE OFFICERS

         DAVID H. ROTTER is a founder of the Company and has been a member of
its Board of Directors since its inception. He served as the Company's Vice
President from 1973 through March, 1990, and has served as President from April,
1990, to the present. He has also served as the Company's Secretary since its
inception. He is the brother of Bernard J. Rotter.

         BERNARD J ROTTER has served as a Director, Vice President and Treasurer
of the Company since July 1984. He is the brother of David H. Rotter.

         TODD M. STUTZ was elected a Director of the Company in August, 1992,
and has served as Executive Vice President since June, 1991. He joined the
Company in April, 1989, and served as its Land Development Manager until June,
1991. Between April, 1980, and March, 1989, he was employed by the Housing and
Redevelopment Authority of the City of Columbia Heights, Minnesota, as Executive
Director.

         LAWRENCE B. SHAPIRO was elected Chief Financial Officer and a Director
of the Company in August, 1992. Prior to that time, he served as the Company's
Controller.

ITEM 11.   EXECUTIVE COMPENSATION

         Information regarding executive compensation is incorporated herein by
reference to the information set forth under the caption "Executive
Compensation" in the 2000 Proxy Statement.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information regarding security ownership of certain beneficial owners
and management of the Company is incorporated herein by reference to the
information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the 2000 Proxy Statement.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information regarding certain relationships and related transactions
with the Company is incorporated herein by reference to the information set
forth under the caption "Certain Transactions" in the 2000 Proxy Statement.


                                       27
<PAGE>

                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a)      DOCUMENTS FILED WITH THIS REPORT.

                  (1)      See index to consolidated financial statements on
                           page 13 of this report.

                  (2)      All supplemental schedules are omitted because of the
                           absence of conditions under which they are required
                           or because the information is shown in the
                           Consolidated Financial Statements or notes thereto.

         (b)      REPORTS ON FORM 8-K. During the quarter ended March 31, 2000,
                  the Company filed no reports on Form 8-K with the Securities
                  and Exchange Commission.

         (c)      EXHIBITS

<TABLE>
<CAPTION>

EXHIBIT
NUMBER            DESCRIPTION
------            -----------

<S>               <C>
3.1               The Company's Restated Articles of Incorporation.(1)
3.2               The Company's Bylaws.(1)
10.1              The Rottlund Company, Inc. 1992 Stock Option Plan.(1)
10.2              The Rottlund Company, Inc. 1992 Director Stock Option Plan.(1)
10.3              The Rottlund Company, Inc. Employee Stock Purchase Plan.(1)
10.4              Form of Shareholders Agreement.(1)
10.5              Second Amended and Restated Credit Agreement with BankBoston, N.A., dated November 30,
                  1999.
10.6              First Modification of Second Amended and Restated Credit Agreement with Fleet National Bank
                  and Bank United, dated April 21, 2000.
10.7              Employment Agreement with Todd M. Stutz, dated February 1, 1999.(2)
10.8              Change in Control Agreement of Todd M. Stutz, dated February 1, 1999.(2)
10.9              Employment Agreement with Lawrence B. Shapiro, dated February 1, 1999.(2)
10.10             Change in Control Agreement of Lawrence B. Shapiro, dated February 1, 1999.(2)
11                Computation of Per Share Earnings.
21                Subsidiaries of the Company.
23                Consent of Arthur Andersen LLP.
27.1              Financial Data Schedule.

</TABLE>

------------------------
(1)  Incorporated by reference to the Company's Registration Statement on Form
     S-1, Registration No. 33-51726 (the "Form S-1").
(2)  Incorporated by reference to the Company's filing on Form 10-K for the year
     ended March 31, 1999.


                                       28
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of section 13 or 15(d) 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 ROTTLUND COMPANY. INC.
Dated:  June 29, 2000
                           By              /s/ David H. Rotter
                             -----------------------------------------------
                                              David H. Rotter
                             PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

                 SIGNATURE                                      TITLE                               DATE
                 ---------                                      -----                               ----

<S>                                           <C>                                               <C>
            /s/ David H. Rotter               President, Chief Executive Officer                June 29, 2000
-------------------------------------------   and Director
              David H. Rotter

           /s/ Bernard J. Rotter              Vice President, Treasurer and Chairman            June 29, 2000
-------------------------------------------   of the Board
             Bernard J. Rotter

          /s/ Lawrence B. Shapiro             Chief Financial Officer and Director              June 29, 2000
-------------------------------------------   (Principal Financial and Accounting
            Lawrence B. Shapiro               Officer)

             /s/ Todd M. Stutz                Executive Vice President and Director             June 29, 2000
-------------------------------------------
               Todd M. Stutz


-------------------------------------------   Director
                Dennis Doyle


-------------------------------------------   Director
               Scott D. Rued

</TABLE>

                                       29