Avatar Holdings Inc., Coral Gables, Fla., (NASDAQ: AVTR) late Monday reported a net loss of $8.8 million (-$1.01 per diluted share) for the third quarter ended September 30, 2009. The net loss in the prior-year quarter was $22.1 million (-$2.59 per share). The sole analyst surveyed was expecting a loss of $1.10 per share.
The loss included $332,000 in impairment charges,down from $27.2 million from last year's third quarter.
Revenues declined 32% to $52.9 million as the company closed 76 homes, a 15% increase over the comparable quarter last year. Dollar volume decreased by 27% to $13.2 million as average prices fell to $174,000 from $276,000 at the same time last year.
Net new orders jumped 56% to 42, with the dollar volume of contracts signed up by 1% from the prior-year quarter to $6,977,000. The cancellation rate was 14%. Backlog was down to 40 units with a value of $8.99 million and an average price of $225,000 from 92 units worth $28.6 million at an average price of $310,000 at the same time last year.
Inventory of unsold homes either completed or under construction, including72 homes in St. Lucie County that were acquired in September, was down to164 units from 233 at yearend 2008, with 86% completed.
The gross margin (excluding impairment charges) fell to 6% in the quarter from 12% in the prior-year quarter. The company ended the quarter with$218.5 million in cash and cash equivalents compared to $156.9 million at the same time last year, including $38.4 million in proceeds from its public offering of 2,250,000 shares of common stock in September 2009.
Avatar had total borrowings of $118.6 million, including $62.6 million of 4.50% convertible senior notes due 2024 and $55.9 million outstanding under the unsecured credit facility. Avatar's book value per share at September 30, 2009 was $39.74.
In its 10-Q filing with the Securities and Exchange Commission, Avatar said, "The decline in dollar value of the housing contracts signed...continues to reflect the weak market for new residences in the geographic areas where our communities are located. Our communities are located in areas of Florida and Arizona where there is an excess of units for sale, including foreclosures and assets being sold by lenders, and an increase use of various sales incentives by residential builders in our markets, including Avatar."
The company added, "We do not anticipate a meaningful improvement in our markets in the near term."
Shares of Avatar were trading up 2% at $17.42 shortly after midday Tuesday.