Orleans Homebuilders, Inc. (Amex:OHB), Bensalem, Pa., late Thursday reported a loss for the first fiscal quarter of 2009 ended Sept. 30 of $21.9 million($1.19 per diluted share).
Included in the loss were $9.4 million in inventory impairments, $200,000 in write-offs of abandoned projects and other pre-acquisition costs, a $4.18 million charge to goodwill related to the acquistion of Parker and Lancaster in Charlotte, N.C. and an $8.46 million charge to deferred tax assets.
Home building revenues declined 26% to $88.6 million on the closing of 200 homes compared to $119.4 million on 263 homes for the prior year period. The average selling price for homes delivered quarter was $443,000 compared to $454,000 in the prior year period.
Net new orders were off 59% to $53.6 million (135 homes) compared to $132.6 million (303 homes) for the prior year period. The cancellation rate for the quarter was 36%, up from 21% in the prior-year's quarter.
Backlog at September 30, 2008 decreased 39% to $203.3 million (421 homes) compared to $331.1 million (649 homes) at the end of last year's quarter.The average selling price for homes in backlog at June 30, 2008 was $483,000 compared to $510,000 as of September 30, 2007.
Orleans cut its lot count by 31% year-year-year to 7,004 at quarter's end, including 1,775 lots controlled through contracts and options. Approximately 52% of the Company's owned lots are in its northern region, 37% in its southern region, 6% in its midwestern region and 5% in its Florida region.
The company had $27.3 million in cash on its books as of quarter's end, down from $72.3 million at the end of the fiscal fourth quarter ended June 30.
During a Friday morning conference call with analysts, Garry P. Herdler, EVP and CFO, said the company expected to be cash-flow positive in fiscal 2009.³We are pretty cautious about giving guidance on that," he said, adding, "we will generate cash in 2009, but it won¹t be [like 2008]--we had a few one-time items last year. It¹ll be back-end weighted."
Jeffrey P. Orleans, chairman and CEO, said the company would be looking for ways to continue cutting costs in 2009. "Land spend will be at a minimal this year," he said. The company also believes it can still wring dollars from SG&A.
"Some builders have been saying reductions will get harder," said Herdler."But we still feel like we can make reductions." Michael T. Vesey, president and COO, said, "We've already taken out a lot just in a reduction in forces. We already reduced it by $4.5 million. It's challenging. We are continuing to look at this on a monthly basis."
Both Herdler and Orleans said they believed stimulus on the demand side of the housing market such as that proposed under the Fix Housing First initiative is needed. "I believe something is necessary," said Orleans. "People are waiting for someone to turn on a light switch. We have people circling who just won't buy."
Herdler agreed: "We support doing something on the demand side of the equation. So, we support the plan, and we think the mortgage buy-down makes sense."