Orleans Homebuilders, No. 42 in the 2006 BUILDER 100 is reporting a fourth-quarter loss (period ending June 30) of $11.3 million, but CEO Jeffrey P. Orleans remains positive that the Bensalem, Pa.-based company will navigate itself through this rough period.
"Needless to say, these are difficult times in the economy and in home building," Orleans said Wednesday morning during a teleconference. "Orleans [Homebuilding] can meet each and every challenge. We have through tough times before."
Despite quarterly losses, the home builder had positive net new orders for the second straight quarter and its cancellation rate stabilized at 20 percent two quarters in a row. In addition, the CEO says the builder "met their objectives over the past 90 days." The company's CFO, Garry P. Herdler, says the builder's next objective is to "rank their priorities."
The public builder also announced Wednesday that it has obtained an extension of its bank agreement until 2009.
Orleans Homebuilders operates in Southeastern Pennsylvania; Central and Southern N.J.; Orange County, N.Y.; Charlotte, Greensboro, and Raleigh, N.C.; Richmond and Tidewater, Va.; Chicago; Orlando, Palm Coast, and Palm Bay, Fla.; and Phoenix. Orleans says the builder's placement throughout the nation is an advantage in these tough times.
"You've heard this many times - location, location, location," Orleans says. "We are in more stable markets than other home builders."
"Florida stinks, and the Midwest is problematic," Orleans says. "There is a good stable mix in the Northern markets, and the Carolinas are stable."
The CEO added that 80 percent of the company's revenue comes from its Northern and Southern markets. So far, Orleans says the company has resisted using incentives as a sales tool but acknowledges that the builder may consider doing so in some markets.