Ashton Woods USA L.L.C. Reports 2008 First Quarter Results and Conference Call

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ATLANTA, Oct. 15 /PRNewswire-FirstCall/ — ASHTON WOODS USA L.L.C. (Bloomberg: ASHWOO) (CUSIP: 045086 AB 1), one of the nation's largest private homebuilders based on number of closings and revenues, today reported financial results for its fiscal first quarter ended August 31, 2007.
    Highlights included:

    — Net loss of $10.6 million on revenues of $97.5 million, as compared to
       net income of $11.5 million  on revenues of $156.6 million in the prior
       year's first quarter;
    — Home closings of 361, down 32.3% as compared to the first quarter of
       fiscal year 2007;
    — Net new home orders of 259 for the quarter ended August 31, 2007,
       representing a decrease of 28.1% compared to the same period in the
       prior year;
    — Inventory impairments of $13.5 million, as compared to $5.1 million in
       the prior year's first quarter.
Tom Krobot, President and Chief Executive Officer of ASHTON WOODS USA L.L.C., said, “Our financial results for the fiscal first quarter ending August 31, 2008 reflect the continued deterioration of the housing market. The homebuilding market continues to suffer from an excess supply of new and used homes available for sale in the market place, which has been exacerbated by the sub-prime mortgage credit crunch experienced in recent months.

Mr. Krobot continued, “We experienced declines in net new home orders, home closings and net income in the fiscal first quarter of 2008 as compared to the same period in the prior year as fewer potential homebuyers have been able to qualify for a mortgage loan as compared to a year ago, resulting in a smaller pool of homebuyers and impacting the sale of existing homes by our move-up buyers. Additionally, the demand for new homes has declined as consumers continue to see home prices adjust downward, which has contributed to the weakening of consumer confidence.”

Bob Salomon, Chief Financial Officer of ASHTON WOODS USA L.L.C., said, “We have made significant strides in reducing our cost structure to meet the lower levels of demand for new homes and remain committed to maintaining a conservative balance sheet through the homebuilding downturn. We have focused our efforts on generating net new home orders through the use of various sales incentives to improve sales absorptions and maintain existing backlog. Our supply of land owned and controlled at 3.4 years is one of the most conservative in the industry and places us in position to capitalize on market opportunities in the future.”

The Company will hold a conference call on Tuesday, October 16, 2007, at 2:00 pm EDT to discuss the results and take questions. To access the conference call, participants should dial 800-762-6568. Participants may call in beginning at 1:50 pm EDT. The call will be recorded and replayed beginning 5:30 pm EDT on October 16, 2007 through 11:59 PM EDT on November 16, 2007. To access the replay dial 800-475-6701 (reference conference code 889687).

With headquarters in Atlanta, Georgia, Ashton Woods USA L.L.C. is one of the nation's largest private homebuilders based on the number of home closings and revenues. The Company currently operates in Atlanta, Dallas, Houston, Orlando, Phoenix, Denver and Tampa.
                           ASHTON WOODS USA L.L.C.

                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                           August 31, 2007      May 31, 2007
                                                     ($ in thousands)

    Assets
    Cash and cash equivalents                         $176               $38
    Inventory:
         Construction in progress and
          finished homes                           158,891           145,434
         Land and land under development           217,236           233,504
    Real estate not owned                            5,158             5,865
    Property and equipment, net                      7,822             7,405
    Accounts receivable                              2,285             3,775
    Other assets                                    13,280            14,997
    Investments in unconsolidated entities           5,327             5,455
                                                  $410,175          $416,473

    Liabilities and Members' equity
     Liabilities
         Notes payable                            $190,498          $188,039
         Customer deposits                           6,548             6,917
         Liabilities related to real estate
          not owned                                  4,145             4,767
         Accounts payable and accruals              45,946            43,059
    Total liabilities                              247,137           242,782
    Minority interests in real estate not
     owned                                             809               697
    Members' equity                                162,229           172,994
                                                  $410,175          $416,473

                             ASHTON WOODS USA L.L.C.

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                                      Three Months Ended
                                                          August 31,
                                                    2007              2006
                                                       ($ in thousands)
    Statement of Operations Data:
    Revenues
    Home sales                                     $97,410          $149,357
    Land sales                                          —             6,982
    Other                                               93               303
                                                    97,503           156,642
    Cost of sales
    Home sales                                      91,821           121,496
    Land sales                                          —             2,643
                                                    91,821           124,139
    Gross profit
    Home sales                                       5,589            27,861
    Land sales                                          —             4,339
    Other                                               93               303
                                                     5,682            32,503
    Expenses
    Sales and marketing                              7,390             9,241
    General and administrative                       7,882            10,475
    Related Party                                      217               320
    Franchise taxes                                     15                53
    Depreciation and amortization                    1,309             1,548
                                                    16,813            21,637

    Earnings in unconsolidated entities                516               616
    Net (loss) income                             $(10,615)          $11,482

    Other Data:
    Home gross margin                                 5.7%             18.7%
    Ratio of sales and marketing, general
     and administrative and related
     party expenses to revenues                      15.9%             12.8%

    Ratio of net (loss) income to revenues          (10.9%)             7.3%
    EBITDA                                         $(6,898)          $15,356
    Net new home orders                                259               360
    Backlog (units) at end of period                   719             1,076
    Land Impairments                               $13,541            $5,102

                                                       Three Months Ended
                                                            August 31,
                                                      2007              2006
                                                         ($ in thousands)

    Net (loss) income                             $(10,615)          $11,482
    Franchise taxes                                     15                53
    Depreciation and amortization                    1,309             1,548
    Interest expense in cost of sales                2,393             2,273
    EBITDA                                         $(6,898)          $15,356
                                         Three Months Ended
                                             August 31,
                                          2007      2006       Change     %

    Homes closed (units):

    Atlanta                                   55       113        (58) (51.3%)
    Orlando                                   67        89        (22) (24.7%)
    Tampa                                     17         2         15  750.0%
    East                                     139       204        (65) (31.9%)

    Dallas                                    81       131        (50) (38.2%)
    Houston                                   73       106        (33) (31.1%)
    Phoenix                                   57        92        (35) (38.0%)
    Denver                                    11         –         11      n/m
    West                                     222       329       (107) (32.5%)
    Company total                            361       533       (172) (32.3%)

                                          Three Months Ended
                                              August 31,
                                            2007      2006     Change     %

    Average sales price per home closed
     ($ in thousands):

    Atlanta                                 $280      $278         $2    0.7%
    Orlando                                  326       267         59   22.1%
    Tampa                                    342       313         29    9.3%
    East                                     310       272         38   14.0%

    Dallas                                   219       222         (3)  (1.4%)
    Houston                                  223       213         10    4.7%
    Phoenix                                  305       456       (151) (33.1%)
    Denver                                   271         –        271      n/m
    West                                     245       306        (61) (19.9%)
    Company total                           $270      $293       $(23)  (7.9%)

                                          Three Months Ended
                                              August 31,
                                            2007      2006     Change     %

    Net new home orders (units):

    Atlanta                                   56        88        (32) (36.4%)
    Orlando                                   31        27          4   14.8%
    Tampa                                     17        13          4   30.8%
    East                                     104       128        (24) (18.8%)

    Dallas                                    45        94        (49) (52.1%)
    Houston                                   59       121        (62) (51.2%)
    Phoenix                                   43        17         26  152.9%
    Denver                                     8         –          8      n/m
    West                                     155       232        (77) (33.2%)
    Company total                            259       360       (101) (28.1%)
                                          Three Months Ended
                                              August 31,
                                            2007      2006     Change     %

    Active communities at end of
     period:

    Atlanta                                    8        10         (2) (20.0%)
    Orlando                                    6         8         (2) (25.0%)
    Tampa                                      3         3          –    0.0%
    East                                      17        21         (4) (19.0%)

    Dallas                                    11        11          –    0.0%
    Houston                                   10        13         (3) (23.1%)
    Phoenix                                    8         8          –    0.0%
    Denver                                     1         –          1      n/m
    West                                      30        32         (2)  (6.3%)
    Company total                             47        53         (6) (11.3%)
                                         Three Months Ended
                                              August 31,
                                            2007      2006     Change     %

    Backlog (units) at end of period:

    Atlanta                                   83       178        (95) (53.4%)
    Orlando                                   90       281       (191) (68.0%)
    Tampa                                     32        46        (14) (30.4%)
    East                                     205       505       (300) (59.4%)

    Dallas                                   176       253        (77) (30.4%)
    Houston                                  141       184        (43) (23.4%)
    Phoenix                                  178       134         44   32.8%
    Denver                                    19         –         19      n/m
    West                                     514       571        (57) (10.0%)
    Company total                            719     1,076       (357) (33.2%)

                                         Three Months Ended
                                              August 31,
                                            2007      2006     Change     %

    Sales value of backlog at end of
     period ($ in thousands):

    Atlanta                              $26,786   $51,139   $(24,353) (47.6%)
    Orlando                               36,321    94,844    (58,523) (61.7%)
    Tampa                                 11,367    18,030     (6,663) (37.0%)
    East                                  74,474   164,013    (89,539) (54.6%)

    Dallas                                40,203    60,964    (20,761) (34.1%)
    Houston                               33,243    43,780    (10,537) (24.1%)
    Phoenix                               63,105    56,383      6,722   11.9%
    Denver                                 5,116         –      5,116      n/m
    West                                 141,667   161,127    (19,460) (12.1%)
    Company total                       $216,141  $325,140  $(108,999) (33.5%)
SOURCE Ashton Woods USA L.L.C.

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