William Lyon Homes, a private home builder based in Newport Beach, Calif., disclosed in a 10-Q filing with the Securities and Exchange Commission that it lost $11.2 million in the first quarter ended March 31. There were no earnings estimates as the company, not publicly held, is not followed by equity analysts on Wall Street. It reports to the SEC based on public holdings of its debt.
The company said home-building revenue fell 3% to $36.6 million on a 16% decline in homes closed to 111, primarily attributable to a a 39% decrease in Southern California to 43 homes closed in the 2011 period. It said the drop was partially offset by an increase in the average sales price to $329,500 from $286,800 a year earlier due to a change in product mix.
New orders decreased 6% to 170 homes as a 40% drop in orders offset gains of 96% to 49 in Northern California, of 41% in Arizon to 31 and and of 11% to 21 in Nevada. Cancellation rates decreased to 15% from 19% for the quarter ended March 31, 2010. Sales per community declined to 9.0 from 9.5 for the three months ended March 31, 2010. Community count remained at 19, but the regional mixed changed, with
Backlog fell 41% to 143 units. Dollar value of homes in backlog was down 32% to $54.3 million. The company said it was able to convert 100% of its units in backlog at December 31, 2010 into closings during the quarter.
Lyon said its gross margin percentage for the quarter fell to 12.8% from 17.2% in the 2010 period.
Lot count fell 3% to 10,471 but owned lots increased 5% to 10.054.
The company ended the quarter with $45.4 million in cash, down from $71.3 million at the close of 2010. It listed $489.2 million in term debt on the balance sheet, flat with the end of last year's fourth quarter.
In the filing, the company said, "The U.S. housing market and broader economy remain in a period of uncertainty; however, there are signs of stabilization in certain of our local markets, though at near historically low levels. Entering 2011, there are indications that certain aforementioned negative trends may be slowing or improving. However, there are also a number of factors that may further worsen market conditions or delay a recovery in the homebuilding industry, including, but not limited to: (i) high levels of unemployment, which correlates to low levels of consumer confidence; (ii) continued foreclosure activity with immeasurable shadow inventory; (iii) upward trending mortgage rates, as the current level of low mortgage rates is not expected to remain in the long-term; (iv) increased costs and standards related to FHA loans, which continue to be a significant source of homebuyer financing; and (v) increase in the cost of building materials."