Brookfield Homes Corp. (NYSE:BHS), Fairfax, Va., on Wednesday reported a net loss of $363,000 (-$0.12 per share) for its second quarter ended June 30 as home closings and revenues declined, but the company also reported a 12% increase in net new orders. There were no earnings estimates from analysts.
The loss compares with a loss of $10.8 million ($-0.33) for the same period last year. On a pro forma basis, net income attributable to Brookfield Homes Corp. was $187,000, which compared with a loss of $8.8 million in last year's second quarter.
Brookfield took impairments on housing and land inventory of $4 million compared to charges for the second quarter of 2008 on housing and land inventory of $17 million and $10 million on investments in housing and land joint ventures.
Revenue was down 20.8% to $95 million as home closings fell 21.8% to 169 and the average selling price declined 11.3% to $486,000. Net new orders, however, were up 12% to 266, and backlog increased from 287 units in last year's quarter to 310 this year. Community count was down to 30 from 33 during the comparable period last year.
At June 30, 2009, the company owned or controlled 27,052 lots. During the quarter, the company acquired 1,412 lots in the San Diego/Riverside area for$12 million at foreclosure. It had acquired another 1,800 during the first quarter.
In its earnings release, the company stated, "Selling communities have seen an increased number of homebuyers take advantage of improved affordability, low interest rates, declining home prices and government stimulus programs.However the North American homebuilding industry continues to face a number of challenges, with home foreclosures continuing to have an effect on inventory and new home sales. Despite these challenging conditions, this risk is mitigated by the company's assets which are largely located in geographic areas with a constrained supply of lots and which have demonstrated strong economic characteristics over the long term."
It also said the increase in sales activity had continued into July and that it expects to entitle 1,500 lots during 2009 and 2010. It now expects to generate approximately $90 million of operating cash flow in 2009, which it plans to use to reduce debt. During the second quarter, $16 million of operating cash flow was generated, while $53 million of project-specific debt was repaid from operating cash flow and proceeds received from a preferred stock issuance.