BENSALEM, Pa., Feb. 11 /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 December
31, 2008: -- Fiscal year 2009 second quarter residential property
revenue decreased 39% to $87.8 million (199 homes) compared to
$144.5 million (323 homes) for the prior year period. The average
selling price for homes delivered in the fiscal 2009 second quarter
was $441,000 compared to $447,000 in the prior year period. --
Fiscal year 2009 second quarter net new orders decreased 64% to
$41.2 million (113 homes) compared to $114.7 million (284 homes)
for the prior year period. -- The backlog at December 31, 2008
decreased 48% to $156.8 million (335 homes) compared to $301.3
million (610 homes) at December 31, 2007. The average selling price
for homes in backlog at December 31, 2008 was $468,000 compared to
$494,000 as of December 31, 2007. -- The Company experienced a
cancellation rate of approximately 31% for the three months ended
December 31, 2008, which is an increase from 26% for the three
months ended December 31, 2007. This increase was primarily driven
by lower gross orders. -- The Company owned or controlled
approximately 6,387 building lots at December 31, 2008, which
includes approximately 1,353 building lots controlled through
contracts and options. At December 31, 2007, the Company owned or
controlled approximately 8,500 building lots, of which
approximately 2,550 were controlled through contracts and options.
This represents a 25% decrease of lots owned or controlled since
December 31, 2007. As of December 31, 2008, approximately 52% of
the Company's owned lots are in its northern region; approximately
36% in its southern region, approximately 7% are in its midwestern
region and approximately 5% in its Florida region. -- Fiscal year
2009 second quarter GAAP loss from continuing operations was $15.6
million ($0.84 per diluted share) as compared to a GAAP loss from
continuing operations of $38.6 million ($2.09 per diluted share)
for the prior year period. On a non-GAAP adjusted basis, the fiscal
year 2009 second quarter loss from continuing operations was $3.5
million ($0.19 per diluted share) compared to fiscal year 2008
second quarter loss from continuing operations of $2.0 million
($0.11 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 second quarter
non-GAAP adjusted EBITDA decreased to $573,000 compared to $3.1
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 second quarter of
fiscal year 2009, the Company's deferred tax asset reserve
increased by $6.0 million. Financial Highlights for the Six Months
Ended December 31, 2008: -- Fiscal year 2009 year-to-date second
quarter residential property revenue decreased 33% to $176.4
million (399 homes) compared to $263.8 million (586 homes) for the
prior year period. The average selling price for homes delivered in
the fiscal year 2009 year-to-date second quarter was $442,000
compared to $450,000 in the prior year period. -- Fiscal year 2009
year-to-date second quarter net new orders decreased 62% to $94.9
million (248 homes) compared to $247.3 million (587 homes) for the
prior year period. -- The Company experienced a cancellation rate
of approximately 34% for the six months ended December 31, 2008,
which is an increase from 24% for the six months ended December 31,
2007. This increase was primarily driven by lower gross orders. --
Fiscal year 2009 year-to-date second quarter GAAP loss from
continuing operations was $37.6 million ($2.03 per diluted share)
as compared to a GAAP loss from continuing operations of $40.4
million ($2.18 per diluted share) for the prior year period. On a
non-GAAP adjusted basis, the fiscal year 2009 year-to-date second
quarter loss from continuing operations was $8.0 million ($0.43 per
diluted share) compared to fiscal year 2008 year-to-date second
quarter loss from continuing operations of $3.1 million ($0.17 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 year-to-date second quarter
non-GAAP adjusted EBITDA decreased to $43,000 compared to $7.3
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 half 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 six months of fiscal year 2009, the Company's deferred tax
asset reserve increased by $14.4 million. Jeffrey P. Orleans,
Chairman and Chief Executive Officer stated: "The downturn in the
housing industry has continued, due to continued external factors,
including rising unemployment and diminished consumer confidence.
Ultimately, the housing market will get better, although the timing
of such improvement is uncertain. The anticipated federal stimulus
provides some hope that this rebound will occur sooner than
previously expected. We are also hopeful that the anticipated
federal stimulus bill will provide a meaningful tax credit for all
homebuyers. We believe there is pent-up demand in some markets that
when combined with reduced mortgage rates may stimulate buyers who
have been waiting on the sidelines. With this in mind, we remain
focused on our stated objectives, and we are confident in our
long-term opportunities." Inventory Impairments, Impairment on Land
to be Sold and Write-Off of Abandoned Projects and Pre-Acquisition
Costs: The overall economic downturn deepened during the second
quarter of fiscal year 2009 significantly impacting the
homebuilding market. Amidst rising unemployment, high foreclosures,
increased supply of existing home inventory, tight credit and
falling home resale values homebuyers' confidence continued to
deteriorate. This has resulted in increased sales incentives and
decreased homebuyer demand causing the company to record pre-tax
charges in the three and six months ended December 31, 2008 and
2007, as follows: Orleans Homebuilders, Inc Inventory Impairments
(in thousands) (Unaudited) Three Three Six Six Months Months Months
Months Ended Ended Ended Ended 12/31/2008 12/31/2007 12/31/2008
12/31/2007 North $6,005 $5,654 $10,904 $6,366 South 2,598 5,200
2,695 5,200 Midwest - 9,668 3,907 9,668 Florida 67 2,395 582 2,395
-- ----- --- ----- Total $8,670 $22,917 $18,088 $23,629 ======
======= ======= ======= Land Sale Impairment -- During the three
months ended December 31, 2007, the Company specifically identified
parcels of land to sell and negotiated contracts with potential
buyers. Prior to the closing of the land sale transactions, the
Company recorded asset impairments on the land to be sold of $36.6
million for the three and six months ended December 31, 2007, such
that there was no resulting gain or loss on sale. The Company's
midwestern region recorded impairments of $23.2 million related to
the sale of two parcels. The Company's Florida region recorded
impairments of $8.4 million to the sale of four parcels. The
Company's southern region recorded impairments of $5.0 million
related to the sale of two parcels. Additionally, the Company
recorded an impairment charge of $20.7 million related to the sale
of its land position in the western region. This impairment charge
is included in loss from discontinued operations. There were no
such land sale related impairments in the three and six months
ended December 31, 2008. Abandoned Projects and other
pre-acquisition costs -- The total write-offs of abandoned projects
and other pre-acquisition costs for the three and six months ended
December 31, 2008 was $1.6 million and $1.8 million, respectively.
This compares to $462 thousand and $862 thousand for the three and
six months ended December 31, 2007. Outlook The challenges faced by
the housing industry have increased during the last quarter.
Difficulties which were previously confined to certain segments of
the economy (including homebuilding) have expanded to a greater
portion of the United States and global economy. Economic reports
show that the United States economy is suffering from rising
unemployment, lower consumer spending, falling wages, tight credit
and continuing difficulties in the real estate industry. Housing
starts have fallen to record lows, unemployment has increased and
consumer confidence is at or near record lows. During the quarter,
it was announced that the United States economy had been in a
recession since December 2007. As a result, we believe that overall
economic conditions and conditions in the housing and mortgage
markets will remain difficult and these conditions may continue to
have a negative impact on new orders, new order pricing and
consumer confidence related to housing in the near term, thereby
further reducing revenues, gross margins and net income. We are
continuing to respond to these unfavorable market conditions by
attempting to maintain absorption levels through the use of sales
incentives, reevaluating our individual land holdings, reducing our
land expenditures, limiting our supply of unsold homes under
construction and emphasizing cost reductions to adjust for lower
levels of production. Further decreases in demand for our homes may
require us to further increase the use of sales incentives and to
take other steps to reduce expenditures and expenses. Garry P.
Herdler, Executive Vice President and Chief Financial Officer
stated: "Given the lower net orders, weak economic conditions and
capital markets volatility we observed during the second fiscal
quarter, the Company has continued to focus on maintaining
liquidity and generating cash flow. We have limited the supply of
unsold homes under construction during the quarter, reduced our
budgeted land expenditures in the coming quarters, and we continue
to focus on cost reductions." Orleans Homebuilders will hold its
quarterly conference call to discuss results for the second quarter
of fiscal year 2009 on Thursday, February 12, 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 and six
months ended December 31, 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/.
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 recovery of the housing market, the Company's
long-term opportunities, continuing overall economic conditions and
conditions in the housing and mortgage markets, 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 legislation and its
impact, 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/A for the fiscal year
ended June 30, 2008 filed with the SEC. Orleans Homebuilders, Inc.
and Subsidiaries Condensed Consolidated Statements of Operations
(in thousands, except per share amounts) (Unaudited) Three Months
Ended Six Months Ended December 31, December 31, 2008 2007 2008
2007 ---- ---- ---- ---- Earned revenues Residential properties
$87,753 $144,490 $176,355 $263,847 Land sales and other income
2,475 10,453 4,194 13,972 ----- ------ ----- ------ 90,228 154,943
180,549 277,819 ------ ------- ------- ------- Costs and expenses
Residential properties 87,248 147,425 174,955 250,378 Land sales
and other expense 1,858 46,225 3,666 49,477 Selling, general and
administrative 16,121 24,588 32,699 42,863 Impairment of goodwill -
- 4,180 - Interest, net 1,019 - 2,883 - ----- --- ----- --- 106,246
218,238 218,383 342,718 ------- ------- ------- ------- Loss from
continuing operations before income taxes (16,018) (63,295)
(37,834) (64,899) Income tax benefit (397) (24,688) (277) (24,529)
---- ------- ---- ------- Loss from continuing operations (15,621)
(38,607) (37,557) (40,370) ------ ------ ------ ------ Loss from
discontinued operations, net of taxes - (12,778) - (13,070)
-------- -------- -------- -------- Net loss $(15,621) $(51,385)
$(37,557) $(53,440) ======== ======== ======== ======== Basic /
diluted loss per share Continuing Operations $(0.84) $(2.09)
$(2.03) $(2.18) Discontinued Operations $- $(0.69) $- $(0.71) --
------ -- ------ Net Loss $(0.84) $(2.78) $(2.03) $(2.89) Basic /
diluted weighted average shares outstanding 18,518 18,502 18,511
18,502 ====== ====== ====== ====== Orleans Homebuilders, Inc
Selected Balance Sheet Data (in thousands) (Unaudited) December 31,
June 30, 2008 2008 ---- ---- Cash and cash equivalents $10,795
$72,341 Restricted cash - due from title company 1,911 19,269
Marketable securities 17,318 - Residential properties 192,729
193,257 Land and improvements 340,055 359,555 Inventory not owned -
VIE 10,668 13,050 Inventory not owned - Other Financial Interests
12,158 12,171 Land deposits and costs of future developments 10,486
10,380 Total assets 625,009 716,112 Obligations related to
inventory not owned - VIE 10,235 10,875 Obligations related to
inventory not owned - Other Financial Interests 12,058 12,071
Mortgage obligations secured by real estate 365,409 396,133
Subordinated notes 105,000 105,000 Other notes payable - 718
Shareholders' equity 45,759 82,501 Use of Non-GAAP Financial
Information (1) Pursuant to the requirements of Regulation G, we
have provided a reconciliation of adjusted net loss and adjusted
loss per share, which are non-GAAP financial measures, to net loss
and loss per share, the most directly comparable GAAP financial
measures. Adjusted net loss and adjusted loss per share represents
loss from continuing operations and loss per share from continuing
operations excluding the after-tax effects of charges for inventory
impairments, land sale impairments, the write-off of debt
acquisition costs, 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, land sale 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 Six Six Months
Months Months Months Ended Ended Ended Ended 12/31/2008 12/31/2007
12/31/2008 12/31/2007 Reported net loss $(15,621) $(51,385)
$(37,557) $(53,440) ======== ======== ======== ======== Reported
net loss per common share $(0.84) $(2.78) $(2.03) $(2.89) ======
====== ====== ====== Adjusted net loss and earnings per share:
Reported net loss $(15,621) $(51,385) $(37,557) $(53,440) Reported
loss from discontinued operations, net of tax - (12,778) - (13,070)
--- ------- --- ------- Reported loss from continuing operations,
net of tax (15,621) (38,607) (37,557) (40,370) Inventory
impairments 8,670 22,917 18,088 23,629 Land sale impairments -
36,556 - 36,556 Goodwill Impairment - - 4,180 - Write-off of debt
acquisition costs - - 784 - Write-off of abandoned projects 1,641
462 1,798 862 Severance - 500 - 500 Tax impact of one time charges
(4,209) (23,872) (9,739) (24,312) Deferred tax asset valuation
allowance 5,979 - 14,442 - ----- --- ------ --- Adjusted net loss
$(3,540) $(2,044) $(8,004) $(3,135) ======= ======= ======= =======
Adjusted diluted net loss per common share $(0.19) $(0.11) $(0.43)
$(0.17) ====== ====== ====== ====== Basic shares outstanding 18,518
18,502 18,511 18,502 Common stock equivalents - - - - --- --- ---
--- Diluted shares outstanding 18,518 18,502 18,511 18,502 ======
====== ====== ====== Common stock equivalents are anti-dilutive for
the three and six months ended 12/31/2008 and 12/31/2007. Orleans
Homebuilders, Inc Reconciliation of Adjusted EBITDA to Net Loss (in
thousands) (Unaudited) Three Three Six Six Months Months Months
Months Ended Ended Ended Ended 12/31/2008 12/31/2007 12/31/2008
12/31/2007 Adjusted EBITDA $573 $3,119 $43 $7,282 Inventory
impairments 8,670 22,917 18,088 23,629 Land sale impairments -
36,556 - 36,556 Goodwill impairment - - 4,180 - Write-off of debt
acquisition costs - - 784 - Write-off of abandoned Projects and
other pre-acquisition costs 1,641 462 1,798 862 Severance - 500 -
500 Share-based compensation 478 600 961 1,159 --- --- --- -----
EBITDA (10,216) (57,916) (25,768) (55,424) Income tax (benefit)
expense (397) (24,688) (277) (24,529) Interest in cost of sales
4,535 5,114 8,679 8,923 Interest incurred less interest capitalized
1,019 - 2,883 - Depreciation 248 265 504 552 --- --- --- --- Loss
from continuing operations, net of tax (15,621) (38,607) (37,557)
(40,370) Loss from discontinued operations, net of tax - (12,778) -
(13,070) --- ------- --- ------- Net loss $(15,621) $(51,385)
$(37,557) $(53,440) ======== ======== ======== ======== 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 loss from continuing operations before inventory
impairments, land sale impairments, write-off of debt acquisition
costs, 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. Orleans Homebuilders, Inc Summary of Deliveries by
Region (Dollars in thousands) (Unaudited) Three Months Six Months
Ended Ended December 31, December 31, 2008 2007 2008 2007 ---- ----
---- ---- DELIVERIES Northern Region Homes 73 118 170 223 Dollars
$33,102 $57,024 $79,827 $108,050 Average Sales Price $453 $483 $470
$485 Southern region Homes 100 127 164 227 Dollars $44,227 $61,827
$71,505 $110,200 Average Sales Price $442 $487 $436 $485 Midwestern
region Homes 20 34 48 62 Dollars $9,198 $15,725 $20,676 $28,561
Average Sales Price $460 $463 $431 $461 Florida region Homes 6 44
17 74 Dollars $1,226 $9,914 $4,347 $17,036 Average Sales Price $204
$225 $256 $230 Total Homes 199 323 399 586 Dollars $87,753 $144,490
$176,355 $263,847 Average Sales Price $441 $447 $442 $450 Orleans
Homebuilders, Inc Summary of New Orders by Region (Dollars in
thousands) (Unaudited) Three Months Six Months Ended Ended December
31, December 31, 2008 2007 2008 2007 ---- ---- ---- ---- NEW ORDERS
Northern Region Homes 41 109 96 222 Dollars $16,505 $45,890 $41,959
$99,472 Average Sales Price $403 $421 $437 $448 Southern region
Homes 52 119 103 240 Dollars $17,472 $50,183 $35,697 $108,765
Average Sales Price $336 $422 $347 $453 Midwestern region Homes 17
33 38 73 Dollars $6,767 $13,532 $14,927 $26,968 Average Sales Price
$398 $410 $393 $369 Florida region Homes 3 23 11 52 Dollars $490
$5,082 $2,281 $12,058 Average Sales Price $163 $221 $207 $232 Total
Homes 113 284 248 587 Dollars $41,234 $114,687 $94,864 $247,263
Average Sales Price $365 $404 $383 $421 Orleans Homebuilders, Inc
Summary of Backlog by Region (Dollars in thousands) (Unaudited) At
December 31, BACKLOG 2008 2007 ---- ---- Northern Region Homes 136
254 Dollars $71,950 $136,057 Average Sales Price $529 $536 Southern
region Homes 155 256 Dollars $67,951 $129,093 Average Sales Price
$438 $504 Midwestern region Homes 38 66 Dollars $15,335 $26,339
Average Sales Price $404 $399 Florida region Homes 6 34 Dollars
$1,582 $9,840 Average Sales Price $264 $289 Total Homes 335 610
Dollars $156,818 $301,329 Average Sales Price $468 $494 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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