Avatar Holdings has clearly been hit with the same market meltdown every other builder is facing. It sold 63.2% fewer homes last year than the year before. Yet it somehow managed to emerge from 2007 in the black and with almost as much cash on hand as at the end of 2006.
The Coral Gables, Fla.,-based company reported Monday, March 17, net income of $21.4 million for 2007 ($2.22 per share diluted) compared to $174.7 million in 2006, an 88% drop, but still a profit compared to the losses most builders have been posting. It also had $192 million in cash on hand at the end of last year compared to nearly $204 million at the end of '06.
"Our sales results continue to reflect the weak market for new single-family and multifamily residences in our markets," the earnings release stated. "We continue to experience a high level of cancellations of sales contracts for homes. We do not anticipate a meaningful improvement in our markets in the near term."
That's a fair guess considering the company ended '07 with only 147 units in backlog compared to 549 in '06. Avatar closed 780 homes in '07 compared with 2,122 in 07.
Avatar, which has owned most of its land for a long time and has commercial and industrial as well as residential properties in its portfolio, was able to bolster its balance sheet by selling some land. It realized pre-tax income of nearly $22 million land sales, with almost $20 million related to the sale of commercial and industrial properties.
At mid-day, the company's stock was up $1.24 (2.54%) to $50.14 a share. Its price has ranged from $33.60 to $84.61 a share in the last 52 weeks.