William Lyon Homes significantly narrowed its losses in the first quarter of 2010, down to a loss of $8.5 million compared with $69 million in the first quarter of 2009. But company executives are making no promises that 2010 sales will be any better than in 2009.

Market stabilization will be the story of 2010, while 2011 will be the company's growth year, executives said during a May 6 conference call. That's when the company's new communities, brought on-line at a lower value, should begin to take off.

In the meantime, the company plans to harvest cash out of its existing land holdings by bringing some projects out of hibernation, reopening communities, and by monetizing some of its Arizona land by either developing it or selling it on the open market, executives said.

Lyon's new-home deliveries fell 30% in the company's first quarter to 132 from 188, while home sales revenue fell 33%, down to $37.9 million compared with $56.5 million in the same quarter of last year. Average home sales prices were down 5% from $300,800 to $286,800, which executives said was primarily due to product mix.

Net new-home contracts were virtually flat at 181 versus 182 in the first quarter of 2009. Backlog of homes was 243, up 4%. The dollar amount of backlog was $79.7 million, up 8% from $74.1 million a year ago and up 41% from $56.5 million Dec. 31, 2009.

Sales per sales location, however, were up 52% year over year, from 6.3 per community in the quarter ended March 31 to 9.5. But the average number of sales locations in the quarter was 19, down 34% from 29 in the same quarter last year.

Home building gross margin percentages increased to 17.2% from 10.1%, and cancellation rates were down to 19% from 27% a year ago.

Lyon bought 547 lots in the first quarter: 155 lots in Southern California's Orange County; 302 finished lots in the San Francisco Bay Area, primarily in the East Bay and the South Bay; and 90 lots in Las Vegas. The company finished the quarter with 10,840 lots under control, down 8.7%.

At the end of the quarter, Lyon had $151 million in cash on hand, up 28% from $118 million in the first quarter of 2009. Debt to total capital was 79.8%, down 470 basis points from 84.5%.

Lyon Homes is privately held but reports fianancial results for beneift of its bondholders.

Learn more about markets featured in this article: Los Angeles, CA, San Francisco, CA.