BENSALEM, Pa., Nov. 13 /PRNewswire-FirstCall/ -- Orleans
Homebuilders, Inc. (AMEX:OHB) is a residential homebuilder with
operations in Southeastern Pennsylvania; Central and Southern New
Jersey; Orange County, New York; Charlotte, Raleigh and Greensboro,
North Carolina; Richmond and Tidewater, Virginia; Chicago,
Illinois; and Orlando, Florida. The Company's Charlotte, North
Carolina operations also include adjacent counties in South
Carolina. Financial Highlights for the Three Months Ended September
30, 2008: -- Fiscal year 2009 first quarter residential property
revenue decreased 26% to $88.6 million (200 homes) compared to
$119.4 million (263 homes) for the prior year period. The average
selling price for homes delivered in the fiscal 2009 first quarter
was $443,000 compared to $454,000 in the prior year period. --
Fiscal year 2009 first quarter net new orders decreased 59% to
$53.6 million (135 homes) compared to $132.6 million (303 homes)
for the prior year period. -- The backlog at September 30, 2008
decreased 39% to $203.3 million (421 homes) compared to $331.1
million (649 homes) at September 30, 2007. At September 30, 2008,
90% of this backlog was in the Company's northern and southern
regions, compared with 87% in those regions at September 30, 2007.
The average selling price for homes in backlog at June 30, 2008 was
$483,000 compared to $510,000 as of September 30, 2007. -- The
Company experienced a cancellation rate of approximately 36% for
the three months ended September 30, 2008, which is an increase
from 21% for the three months ended September 30, 2007. This
increase was primarily driven by lower gross orders. -- The Company
owned or controlled approximately 7,004 building lots at September
30, 2008, which includes approximately 1,775 building lots
controlled through contracts and options. At September 30, 2007,
the Company owned or controlled approximately 10,177 building lots,
of which approximately 2,519 were controlled through contracts and
options. This represents a 31% decrease of lots owned or controlled
since September 30, 2007. As of September 30, 2008, approximately
52% of the Company's owned lots are in its northern region;
approximately 37% in its southern region, approximately 6% are in
its midwestern region and approximately 5% in its Florida region.
-- Fiscal year 2009 first quarter GAAP loss from continuing
operations was $21.9 million ($1.19 per diluted share) as compared
to a GAAP loss from continuing operations of $1.8 million ($0.10
per diluted share) for the prior year period. On a non-GAAP
adjusted basis, the fiscal year 2009 first quarter loss from
continuing operations was $4.5 million ($0.24 per diluted share)
compared to fiscal year 2008 first quarter loss from continuing
operations of $1.1 million ($0.06 per diluted share). Please refer
to the section included herein under the heading "Use of Non-GAAP
Financial Information" for a discussion of the Company's use of
non-GAAP adjusted financial information (1). -- Fiscal year 2009
first quarter non-GAAP adjusted EBITDA decreased to $(2.4) million
compared to $4.2 million for the prior year period. Please refer to
the section included herein under the heading "Use of Non-GAAP
Financial Information" for a discussion of the Company's use of
non-GAAP adjusted financial information (1). -- During the first
quarter of fiscal year 2009, the Company recorded an impairment
charge to goodwill in the amount of $4.2 million. This goodwill
impairment charge is related to the Parker and Lancaster
acquisition, and was recorded in the Company's Southern operating
segment. -- During the first quarter of fiscal year 2009, the
Company's deferred tax asset reserve increased by $8.5 million.
Jeffrey P. Orleans, Chairman and Chief Executive Officer stated:
"Although the downturn in the housing industry has continued and
conditions remain difficult, we believe that consumer confidence
and the housing market will ultimately get better. With that in
mind, we are focused on our stated core objectives, and we remain
confident in our long-term opportunities." Inventory Impairments
and Write-Off of Abandoned Projects and Pre-Acquisition Costs As a
result of a various factors, including worsening economic
conditions and increasing unemployment rates, a decrease in
anticipated absorption rates at various communities, slower than
anticipated pace of new orders, increased uncertainty with respect
to the overall mortgage market, increased mortgage underwriting
standards, an increase in sales incentives and decreased homebuyer
demand due to lower consumer confidence in the overall housing
market, the Company recorded a pre-tax charge in the fiscal year
2009 first quarter related to inventory impairments on inventory
held at September 30, 2008. -- For the fiscal year 2009 first
quarter, the Company recorded inventory impairments of $9.4
million. For the fiscal year 2008 first quarter, the Company
recognized $0.7 million for inventory impairments. -- The total
write-offs of abandoned projects and other pre-acquisition costs
for the fiscal year 2009 first quarter were $0.2 million compared
to $0.4 million for the fiscal year 2008 first quarter. Outlook The
unfavorable market conditions in the housing industry, and
challenges in the capital markets and the general economic
environment, have each continued to negatively impact the Company's
closings, new order activity, pricing and cancellations. New and
resale home inventory remains elevated in several markets, and this
excess inventory along with the negative impact of foreclosures,
have contributed to the continuing difficulties buyers face in
selling their existing homes. Demand for new homes remains
depressed due to decreased consumer confidence; and increased
economic uncertainty; reduced availability of mortgage financing
related to tightened underwriting standards; and general
instability in the credit markets and the financial services
industry. Price discounting remains significant to drive absorption
rates. Government support to assist troubled financial institutions
and to potentially minimize foreclosures may ultimately provide
much needed stability in the financial and mortgage markets to
begin to improve consumer confidence. Despite these recent actions,
we believe that the challenges will remain in the homebuilding
industry at least in the near term. The Company believes that
unfavorable market and economic conditions will likely continue to
have a negative impact on new orders, new order pricing and
cancellations, thereby further reducing future revenues, gross
margins and net income. The Company is responding to these
unfavorable market conditions by attempting to maintain absorption
levels through the introduction of lower priced value offerings,
the use of sales incentives; reevaluating its individual land
holdings; reducing its land expenditures; continuing to operate
with reduced housing inventory levels and emphasizing cost
reductions to adjust for lower levels of production. Further
decreases in demand for our homes may require the company to
further increase the use of sales incentives. The Company continues
to evaluate its owned and controlled lot positions and other assets
and alternatives. Orleans Homebuilders will hold its quarterly
conference call to discuss results for the first quarter of fiscal
year 2009 on Friday November 14, 2008, at 10:00 a.m. Eastern
Standard Time. This call is being web cast by CCBN and can be
accessed at Orleans Homebuilders' web site at
http://www.orleanshomes.com/ by clicking on the heading "Investor
Relations." The webcast is also being distributed over CCBN's
Investor Distribution Network to both institutional and individual
investors. Individual investors can listen to the call through
CCBN's individual investor center at http://www.earnings.com/ or by
visiting any of the investor sites in CCBN's Individual Investor
Network. Institutional investors can access the call via CCBN's
password-protected event management site, StreetEvents
(http://www.streetevents.com/). A replay of the conference call
will be available later that day on the Company's website at
http://www.orleanshomes.com/. A copy of this press release,
including the Company's results of operations for the three months
ended September 30, 2008 to be discussed during the conference
call, is available at the Company's website,
http://www.orleanshomes.com/, under the heading "Investor
Relations." About Orleans Homebuilders, Inc. Orleans Homebuilders,
Inc. develops, builds and markets high-quality single-family homes,
townhouses and condominiums. The Company serves a broad customer
base including luxury, move-up, empty nester, active adult and
first-time homebuyers. The Company currently operates in the
following eleven distinct markets: Southeastern Pennsylvania;
Central and Southern New Jersey; Orange County, New York;
Charlotte, Raleigh and Greensboro, North Carolina; Richmond and
Tidewater, Virginia; Chicago, Illinois; and Orlando, Florida. The
Company's Charlotte, North Carolina operations also include
adjacent counties in South Carolina. To learn more about Orleans
Homebuilders, please visit http://www.orleanshomes.com/. Orleans
Homebuilders, Inc. and Subsidiaries Condensed Consolidated
Statements of Operations (in thousands, except per share amounts)
(Unaudited) Three Months Ended September 30, 2008 2007 --------
-------- Earned revenues Residential properties $88,602 $119,357
Land sales and other income 1,719 3,519 -------- -------- 90,321
122,876 -------- -------- Costs and expenses Residential properties
87,707 102,953 Land sales and other expense 1,808 3,252 Selling,
general and administrative 16,578 18,275 Impairment of goodwill
4,180 - Interest, net 1,864 - -------- -------- 112,137 124,480
-------- -------- Loss from continuing operations before income
taxes (21,816) (1,604) Income tax expense (benefit) 120 159
-------- -------- Loss from continuing operations (21,936) (1,763)
-------- -------- Loss from discontinued operations, net of taxes -
(292) -------- -------- Net loss $(21,936) $(2,055) ========
======== Basic / diluted loss per share Continuing Operations
$(1.19) $(0.10) Discontinued Operations $- $(0.02) --------
-------- Net Loss $(1.19) $(0.11) Basic / diluted weighted average
shares outstanding 18,504 18,502 -------- -------- Orleans
Homebuilders, Inc. Selected Balance Sheet Data (in thousands)
(Unaudited) September 30, June 30, 2008 2008 ------------
------------ Cash and cash equivalents $27,332 $72,341 Restricted
cash - due from title company 7,288 19,269 Marketable securities
15,745 - Residential properties 202,645 193,257 Land and
improvements 345,541 359,555 Inventory not owned - VIE 15,944
13,050 Inventory not owned - Other Financial Interests 12,031
12,171 Land deposits and costs of future developments 10,139 10,380
Total assets 668,427 716,112 Obligations related to inventory not
owned - VIE 13,571 10,875 Obligations related to inventory not
owned - Other Financial Interests 11,931 12,071 Mortgage
obligations secured by real estate 383,135 396,133 Subordinated
notes 105,000 105,000 Other notes payable 704 718 Shareholders'
equity 60,994 82,501 Use of Non-GAAP Financial Information (1)
Pursuant to the requirements of Regulation G, we have provided a
reconciliation of adjusted net income and adjusted earnings per
share, which are non-GAAP financial measures, to net income and
earnings per share, the most directly comparable GAAP financial
measures. Adjusted net income and adjusted earnings per share
represents income from continuing operations and earnings per share
from continuing operations excluding the after-tax effects of
charges for inventory impairments, land sale impairments, the
write-off of abandoned projects and other pre-acquisition costs,
impairment of goodwill, severance charges and tax valuation
allowances. For purposes of Regulation G, a non-GAAP financial
measure is a numerical measure of a registrant's historical or
future financial performance, financial position or cash flows that
excluded amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet, or statement of cash
flows of the issuer; or includes amounts, that are excluded from
the most directly comparable measure so calculated and presented.
In this regard, GAAP refers to generally accepted accounting
principles in the United States of America. The Company believes
these adjusted financial results are useful to both management and
investors in the analysis of the Company's financial performance
when comparing it to prior periods and that they provide investors
with an important perspective on the current underlying operating
performance of the business by isolating the after-tax impact of
non-cash charges related to inventory impairments, the write-off of
abandoned projects and other pre-acquisition costs, impairment of
goodwill and tax valuation allowances. Orleans Homebuilders, Inc.
Reconciliation of Net Loss to Adjusted Net Loss (in thousands,
except per share amounts) (Unaudited) Three Three Months Months
Ended Ended 9/30/2008 9/30/2007 Reported net loss $(21,936)
$(2,055) ======================== Reported net loss per common
share $(1.19) $(0.11) ======================== Adjusted net loss
and earnings per share: Reported net loss $(21,936) $(2,055)
Reported loss from discontinued operations, net of tax - (292)
------------------------ Reported loss from continuing operations,
net of tax (21,936) (1,763) Asset impairments 9,418 712 Goodwill
Impairment 4,180 - Write-off of debt acquisition costs 784 -
Write-off of abandoned projects 157 400 Tax impact of one time
charges (5,530) (445) Deferred tax asset valuation allowance 8,463
- ------------------------ Adjusted net loss $(4,464) $(1,096)
======================== Adjusted diluted net loss per common share
$(0.24) $(0.06) ======================== Basic shares outstanding
18,504 18,502 Common stock equivalents - - ------------------------
Diluted shares outstanding 18,504 18,502 ========================
Common stock equivalents are anti-dilutive for the three months
ended 9/30/2008 and 9/30/2007. Orleans Homebuilders, Inc.
Reconciliation of Adjusted EBITDA to Net Loss (in thousands)
(Unaudited) Three Three Months Months Ended Ended 9/30/2008
9/30/2007 Adjusted EBITDA $(2,394) $4,165 Asset impairments 9,418
712 Goodwill impairment 4,180 - Write-off of debt acquisition costs
784 - Write-off of abandoned projects and other pre-acquisition
costs 157 400 Share-based compensation 483 559
------------------------- EBITDA (17,416) 2,494 Income tax
(benefit) expense 120 159 Interest in cost of sales 4,144 3,809
Depreciation 256 289 ------------------------- Loss from continuing
operations, net of tax (21,936) (1,763) Loss from discontinued
operations, net of tax - (292) ------------------------- Net loss
$(21,936) $(2,055) ------------------------- Pursuant to the
requirements of Regulation G, we have provided a reconciliation of
Adjusted EBITDA, a non-GAAP financial measure, to the most directly
comparable GAAP financial measure. Adjusted EBITDA represents
earnings from continuing operations before inventory impairments,
land sale impairments, write-off of abandoned projects and other
pre-acquisition costs, impairment of goodwill, stock option
expense, severance charges, interest expense, previously
capitalized interest amortized to residential properties cost of
sales, income taxes, depreciation, amortization, and extraordinary
items. For purposes of Regulation G, a non-GAAP financial measure
is a numerical measure of a registrant's historical or future
financial performance, financial position or cash flows that
excluded amounts, or is subject to adjustments that have the effect
of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statement of operations, balance sheet, or statement of cash
flows of the issuer; or includes amounts, that are excluded from
the most directly comparable measure so calculated and presented.
In this regard, GAAP refers to generally accepted accounting
principles in the United States of America. The Company believes
Adjusted EBITDA provides a meaningful measure of operating
performance. Forward-Looking Statements Certain information
included herein and in other Company statements, reports and SEC
filings is forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements concerning anticipated earnings per share,
flexibility and liquidity provided by our Restated Revolving Credit
Facility, revenues, sales, operating results, financial resources,
pace of sales, industry outlook, economic conditions, future
impairment charges, future tax valuation allowance, possible
government support for the housing and financial services
industries, anticipated tax refunds, anticipated debt repayment,
anticipated use of proceeds from transactions, reductions in land
expenditures, the Company's ability to meet its internal financial
objectives including debt reduction objectives, the impact of
recent transactions on the Company's liquidity, capital structure
and finances, and the Company's response to market conditions. Such
forward-looking information involves important risks and
uncertainties that could significantly affect actual results and
cause them to differ materially from expectations expressed herein
and in other Company statements, reports and SEC filings. For
example, there can be no assurance that the Company will be able to
adjust successfully to current market conditions. These risks and
uncertainties include local, regional and national economic
conditions, the effects of governmental regulation, the competitive
environment in which the Company operates, fluctuations in interest
rates, changes in home prices, the availability and cost of land
for future growth, the availability of capital, the availability
and cost of labor and materials, our dependence on certain key
employees and weather conditions. Additional information concerning
factors the Company believes could cause its actual results to
differ materially from expected results is contained in Item 1A of
the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2008 filed with the SEC. Orleans Homebuilders, Inc.
Summary of Deliveries by Region (Dollars in thousands) (Unaudited)
Three Months Ended September 30, 2008 2007 -------- --------
DELIVERIES Northern Region Homes 97 105 Dollars $46,725 $51,026
Average Sales Price $482 $486 Southern region Homes 64 100 Dollars
$27,278 $48,373 Average Sales Price $426 $484 Midwestern region
Homes 28 28 Dollars $11,478 $12,836 Average Sales Price $410 $458
Florida region Homes 11 30 Dollars $3,121 $7,122 Average Sales
Price $284 $237 Total Homes 200 263 Dollars $88,602 $119,357
Average Sales Price $443 $454 Orleans Homebuilders, Inc. Summary of
New Orders by Region (Dollars in thousands) (Unaudited) Three
Months Ended September 30, 2008 2007 -------- -------- NEW ORDERS
Northern Region Homes 55 113 Dollars $25,454 $53,582 Average Sales
Price $463 $474 Southern region Homes 51 121 Dollars $18,225
$58,582 Average Sales Price $357 $484 Midwestern region Homes 21 40
Dollars $8,160 $13,436 Average Sales Price $389 $336 Florida region
Homes 8 29 Dollars $1,791 $6,976 Average Sales Price $224 $241
Total Homes 135 303 Dollars $53,630 $132,576 Average Sales Price
$397 $438 Orleans Homebuilders, Inc. Summary of Backlog by Region
(Dollars in thousands) (Unaudited) At September 30, BACKLOG 2008
2007 -------- -------- Northern Region Homes 168 263 Dollars
$88,547 $147,191 Average Sales Price $527 $560 Southern region
Homes 203 264 Dollars $94,706 $140,737 Average Sales Price $467
$533 Midwestern region Homes 41 67 Dollars $17,766 $28,532 Average
Sales Price $433 $426 Florida region Homes 9 55 Dollars $2,318
$14,672 Average Sales Price $258 $267 Total Homes 421 649 Dollars
$203,337 $331,132 Average Sales Price $483 $510 DATASOURCE: Orleans
Homebuilders, Inc. CONTACT: Garry P. Herdler - Executive Vice
President & Chief Financial Officer of Orleans Homebuilders,
Inc., +1-215-245-7500 Web site: http://www.orleanshomes.com/
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