NEWS RELEASE
CONTACTS: Joseph A. Santangelo - Chief Financial Officer
Homebuilders, Inc. (215) 245-7500
(www.orleanshomes.com)
FOR IMMEDIATE RELEASE:
ORLEANS HOMEBUILDERS REPORTS RESULTS
FOR FIRST QUARTER 2005 AND REAFFIRMS
GUIDANCE FOR FISCAL YEAR 2005
BENSALEM, PENNSYLVANIA, NOVEMBER 8, 2004:
Orleans Homebuilders, Inc. (ASE:OHB) is a residential homebuilder with
operations in Southeastern Pennsylvania; Central and Southern New Jersey;
Charlotte, Greensboro and Raleigh, North Carolina; Richmond and Tidewater
Virginia; Orlando, Florida; and Chicago, Illinois. On August 9, 2004 the Company
entered into a letter of intent to acquire Peachtree Residential Properties,
Inc. with operations in Atlanta, Georgia and Charlotte, North Carolina.
Financial Highlights for the First Quarter Ended September 30, 2004:
o Fiscal year 2005 first quarter residential property revenue
increased 41% to $138,312,000 (405 homes) compared with
$98,383,000 (335 homes) for the prior year period.
o Fiscal year 2005 first quarter new orders increased 30% to
$170,797,000 (466 homes) compared with $131,042,000 (401 homes)
for the prior year period.
o The backlog at September 30, 2004 increased 65% to $594,097,000
(1,643 homes) compared with $360,088,000 (1,116 homes) at
September 30, 2003.
o Fiscal year 2005 first quarter net income increased 9% to
$8,202,000 ($.44 per diluted share) compared to $7,518,000 ($.45
per diluted share) for the prior year period.
o Fiscal year 2005 first quarter EBITDA(1) increased 5% to
$15,010,000 compared with $14,267,000 for the prior year period.
o The Company currently controls approximately 15,900 building
lots, a 29% increase compared to the approximately 12,300
building lots at June 30, 2004.
The first quarter results include the acquisition of Realen Homes for the period
beginning July 28, 2004, the date the Company acquired Realen Homes. On July 28,
2004, the Company acquired 463 backlog units with a value of $170,785,000 from
Realen Homes. Diluted earnings per share were relatively flat when compared with
the prior year quarter, primarily due to the completion of an offering of
2,000,000 newly issued shares of common stock in the third quarter of fiscal
year 2004, which was a 15% increase in share count. The first quarter net income
was reduced by approximately $1,083,000 due to the additional costs recognized
in connection with the first quarter deliveries of the acquired Realen Homes
inventory, as a result of the fair market value write-up of the acquired
inventory and acquired backlog sales contracts. This was partially offset by the
recognition of approximately $765,000 of net income that was previously deferred
pending resolution of outstanding issues related to an isolated business
transaction. Despite the impact of the acquisition accounting, the first quarter
fiscal year 2005 net income increased 9% compared to the prior year period. In
spite of several hurricanes in Florida along with their impact on several other
markets in which we operate, and excluding the acquisition of Realen Homes, the
Company grew residential property revenue and new orders for the first quarter
ended September 30, 2004 by approximately 13% and 5%, respectively, when
compared to the prior year quarter.
"We are extremely pleased with our record backlog of $594,097,000
which we believe will enable us to achieve our revenue and earnings guidance for
fiscal 2005. Our acquisition of Realen Homes has provided us entry into the
Chicago region and strengthened our position in the Philadelphia marketplace. In
addition, we are pleased with our organic revenue and new order growth in the
first quarter despite the impact of the hurricanes on several of our operating
regions. We believe that our current backlog coupled with our continued ability
to obtain additional desirable building lots through the expansion of existing
markets and entry into new markets have left us well positioned for continued
new order, revenue and earnings growth," commented Jeffery Orleans, Chairman and
CEO. "Additionally, we believe our broad range of home designs and price points
allows us to capitalize on opportunities and favorable economic and demographic
trends within our industry."
Fiscal Year 2005 Guidance:
o The Company reaffirms its fiscal year ending June 30, 2005
guidance with respect to net income of $2.87 to $2.92 per diluted
share.
o The Company reaffirms its fiscal year ending June 30, 2005
guidance that revenue will exceed $800 million.
Additional recognition:
o For the third consecutive year Orleans Homebuilders was listed by
Fortune Magazine as one of Fortune's 100 Fastest Growing
Companies.
o For the third consecutive year Orleans Homebuilders was ranked by
Forbes Magazine as one of America's Ten Best Small Companies.
Orleans Homebuilders will hold its quarterly conference call to discuss
first quarter results on Tuesday, November 9, 2004, at 10:00 a.m. Eastern Time.
This call is being web cast by CCBN and can be accessed at Orleans Homebuilders'
web site at www.orleanshomes.com under "Investor Relations". The web cast 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 www.fulldisclosure.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 (www.streetevents.com). A replay of the conference
call will be available later that day on the Company's website at
www.orleanshomes.com. A copy of this press release, including the Company's
results of operations for the three months ended September 30, 2004 to be
discussed during the conference call, is available at the Company's website,
www.orleanshomes.com, under "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 first-time, luxury, move-up, empty nester and active
adult homebuyers. The Company currently operates in the following ten distinct
markets: Southeastern Pennsylvania; Central and Southern New Jersey; Charlotte,
Raleigh and Greensboro, North Carolina; Richmond and Tidewater, Virginia;
Orlando, Florida; and Chicago, Illinois. The Company's Charlotte, North Carolina
operations also include adjacent counties in South Carolina. To learn more about
Orleans Homebuilders, please visit www.orleanshomes.com.
(1) Reconciliation of EBITDA to net income
- ----------------------------------------------------------------
THREE MONTHS THREE MONTHS
ENDED 9/30/04 ENDED 9/30/03
- ----------------------------------------------------------------
EBITDA $15,010,000 $14,267,000
- ----------------------------------------------------------------
Income tax expense 5,275,000 4,875,000
- ----------------------------------------------------------------
Interest 1,286,000 1,743,000
- ----------------------------------------------------------------
Depreciation 247,000 131,000
- ----------------------------------------------------------------
Net income $8,202,000 $7,518,000
- ----------------------------------------------------------------
(1) Pursuant to the requirements of Regulation G, we have provided a
reconciliation of EBITDA, a non-GAAP financial measure, to the most
directly comparable GAAP financial measure. EBITDA represents net earnings
before 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 EBITDA provides a meaningful measure of
operating performance.
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, operating results, financial
resources, pace of sales, growth and expansion. 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 current sales pace can continue in the
absence of an improvement in the current general economic environment. 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 7 of the Company's Annual Report of
Form 10-K for the fiscal year ended June 30, 2004 filed with the SEC.
Orleans Homebuilders, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
2004 2003
--------- ---------
Earned revenues
Residential properties $ 138,312 $ 98,383
Land sales and other income 1,850 2,052
--------- --------
140,162 100,435
--------- --------
Costs and expenses
Residential properties 109,591 74,809
Land sales and other expense 985 1,713
Selling, general and administrative 16,095 11,448
Interest, net 14 72
--------- --------
126,685 88,042
--------- --------
Income from operations before income taxes 13,477 12,393
Income tax expense 5,275 4,875
--------- --------
Net income $ 8,202 $ 7,518
========= ========
Net income 8,202 7,518
Preferred dividends - 53
--------- --------
Net income available for common shareholders $ 8,202 $ 7,465
========= ========
Earnings per share:
Basic $ 0.47 $ 0.58
========= ========
Diluted $ 0.44 $ 0.45
========= ========
Weighted average number of shares:
Basic 17,523 12,795
========= ========
Diluted 18,755 16,681
========= ========
Supplemental information:
Reconciliation of EBITDA to net income (1):
EBITDA $ 15,010 $ 14,267
Income tax expense (5,275) (4,875)
Interest (1,286) (1,743)
Depreciation and amortization (247) (131)
--------- --------
Net income $ 8,202 $ 7,518
========= ========
(1) EBITDA is a non-GAAP financial measure representing net earnings before
interest expense, previously capitalized interest amortized to residential
properties cost of sales, income taxes, depreciation, amortization and
extraordinary items.
Orleans Homebuilders, Inc
Summary of Deliveries, New Orders and Backlog by Region
(Dollars in thousands)
(Unaudited)
Three Months Ended
September 30,
2004 2003
----------- -----------
DELIVERIES
Northern Region (NJ, PA) (1)
Homes 155 140
Dollars $ 67,283 $ 53,020
Average Sales Price $ 434 $ 379
Southern region (NC, SC, VA)
Homes 116 111
Dollars $ 40,448 $ 34,416
Average Sales Price $ 349 $ 310
Florida region (FL) (2)
Homes 89 84
Dollars $ 14,403 $ 10,947
Average Sales Price $ 162 $ 130
Midwestern region (IL) (1)
Homes 45 -
Dollars $ 16,178 $ -
Average Sales Price $ 360 $ -
Total
Homes 405 335
Dollars $ 138,312 $ 98,383
Average Sales Price $ 342 $ 294
NEW ORDERS
Northern Region (NJ, PA) (1)
Homes 164 146
Dollars $ 77,437 $ 62,555
Average Sales Price $ 472 $ 428
Southern region (NC, SC, VA)
Homes 130 167
Dollars $ 47,428 $ 56,038
Average Sales Price $ 365 $ 336
Florida region (FL) (2)
Homes 106 88
Dollars $ 21,729 $ 12,449
Average Sales Price $ 205 $ 141
Midwestern region (IL) (1)
Homes 66 -
Dollars $ 24,203 $ -
Average Sales Price $ 367 $ -
Total
Homes 466 401
Dollars $ 170,797 $ 131,042
Average Sales Price $ 367 $ 327
(1) Information on residential revenue earned and new orders for the three
months ending September 30, 2004 includes Realen Homes' Southeastern
Pennsylvania and Chicago, Illinois operations for the period beginning
July 28, 2004, the date the Company acquired Realen Homes through,
September 30, 2004. Realen Homes' Southeastern Pennsylvania operations had
30 new home orders totaling $12,300,000 and delivered 35 homes totaling
$10,737,000 in residential revenue from July 28, 2004 through September
30, 2004.
(2) Information on residential revenue earned and new orders for the three
months ending September 30, 2003 is for the period beginning July 28,
2003, the date the Company entered this market through its acquisition of
Masterpiece Homes, through September 30, 2003.
At September 30, At September 30,
2004 2003
---------------- ----------------
BACKLOG
Northern Region (NJ, PA) (1)
Homes 669 468
Dollars $ 292,973 $ 199,469
Average Sales Price $ 438 $ 426
Southern region (NC, SC, VA)
Homes 351 346
Dollars $ 135,247 $ 117,455
Average Sales Price $ 385 $ 339
Florida region (FL)
Homes 336 302
Dollars $ 60,174 $ 43,164
Average Sales Price $ 179 $ 143
Midwestern region (IL)
Homes 287 -
Dollars $ 105,703 $ -
Average Sales Price $ 368 $ -
Total
Homes 1,643 1,116
Dollars $ 594,097 $ 360,088
Average Sales Price $ 362 $ 323
(1) The backlog at September 30, 2004, includes the backlog of Realen Homes'
Southeastern Pennsylvania operations.
Orleans Homebuilders, Inc
Selected Balance Sheet Data
(in thousands)
(Unaudited)
September 30, June 30,
2004 2004
------------- -----------
Residential properties $ 215,803 $ 140,401
Land and improvements 288,817 161,265
Inventory not owned 107,025 88,995
Land deposits and costs of future developments 31,941 23,356
Total assets 718,358 486,602
Obligations related to inventory not owned 97,491 81,992
Mortgage obligations secured by real estate 210,124 128,773
Unsecured line of credit 103,448 -
Notes payable and amounts due to related parties 7,868 2,879
Other notes payable 4,685 1,139
Shareholders' equity 183,137 174,905