LOS ANGELES–(BUSINESS WIRE)–KB Home (NYSE:KBH – News), one of America’s premier homebuilders, today reported financial results for its third quarter ended August 31, 2009. Results for the quarter include:
- Revenues totaled $458.5 million, down 33% from $681.6 million in the third quarter of 2008, due to lower housing revenues. Third quarter housing revenues were $454.2 million, down 32% from $668.3 million in the year-earlier quarter, the result of a 20% year-over-year decrease in homes delivered to 2,240 and a 15% decline in the average selling price over the same period to $202,800.
- The Company generated a net loss of $66.0 million, or $.87 per diluted share, in the third quarter of 2009. These results included pretax, noncash charges of $47.7 million for inventory and joint venture impairments and the abandonment of land option contracts. In the 2008 third quarter, the Company reported a net loss of $144.7 million, or $1.87 per diluted share, which included pretax, noncash charges of $82.2 million for inventory and joint venture impairments.
- Company-wide net orders increased 62% in the third quarter to 2,158, up from 1,329 in the third quarter of 2008 with each of the Company’s geographic regions experiencing year-over-year net order growth. The Company’s backlog at August 31, 2009 totaled 3,722 homes, representing potential future housing revenues of approximately $734.1 million. A year earlier, the Company’s backlog totaled 4,774 homes, representing potential future housing revenues of approximately $1.13 billion.
- On July 30, 2009, the Company issued $265.0 million in aggregate principal amount of 9.1% senior notes due 2017, using the net proceeds to purchase, pursuant to a simultaneous tender offer, $250.0 million in aggregate principal amount of its $350.0 million 6 3/8% senior notes due 2011. The two transactions effectively extended the maturity of $250.0 million of senior debt by six years, enhancing the maturity schedule of the Company’s outstanding public debt. Other than the maturity of the remaining $100.0 million of 6 3/8% senior notes in 2011, the Company’s next public debt maturity is in 2014 when $250.0 million of 5 3/4% senior notes become due. The Company had no borrowings outstanding under its revolving credit facility as of August 31, 2009.
- The Company recently announced it has resumed homebuilding operations in the Washington, D.C. metro market, bolstering its presence in the southeastern United States and complementing its existing operations across Florida and the Carolinas. The Company believes its value-engineered product line, The Open SeriesTM, combined with its consumer-focused Built-to-OrderTM operating model will compete well in meeting the region’s growing demand for affordable, high-quality new homes.
“The housing market overall remains in a transition where it will likely be some time before we see meaningful improvement in the economic conditions that are essential to our industry’s future growth,” said Jeff Mezger, president and chief executive officer. “While tentative indications are that some negative economic trends are slowing or leveling out to varying degrees in certain markets, the ongoing impact of and the potential for increased foreclosures and mortgage delinquencies, higher unemployment, tighter credit standards, and relatively weak consumer confidence make the timing and extent of a sustained rebound still uncertain.”
“In this challenging environment, we significantly narrowed our third quarter net loss from a year ago through the disciplined execution of our strategic initiatives,” said Mezger. “Restoring the profitability of our homebuilding business remains our highest priority, and we continue to take actions to achieve this objective. These include our ongoing implementation of initiatives to generate cost reductions and operating efficiencies, carefully managing our inventory and developing innovative new products. Our new product line, The Open Series, embodies many of these strategies and was a primary contributor to the year-over-year increase in net orders we achieved in the third quarter. This product meets the preferences and needs of our core customer—the first-time homebuyer—in a cost-effective manner.”
FORT WORTH, Texas, Sept. 25 /PRNewswire-FirstCall/ — AZZ incorporated (NYSE: AZZ – News), a manufacturer of electrical products and a provider of galvanizing services today announced unaudited financial results for the three and six-month periods ended August 31, 2009. Revenues for the second quarter were $95.2 million compared to $103.3 million for the same quarter last year, a decrease of 7.8 percent. Net income for the second quarter was $11.1 million, or $0.89 per diluted share, compared to net income of $11.3 million, or $0.92 per share, in last year’s second quarter.
For the six-month period, the Company reported revenues of $190.6 million compared to $203.2 million for the comparable period last year, a decrease of 6.2 percent. Net income for the six months was $21.0 million, or $1.69 per share, compared to $21.4 million, or $1.74 per share in the comparable period of last year.
Backlog at the end of our second quarter ending August 31, 2009 was $139.4 million. Backlog at the end of the second quarter of fiscal 2009 was $190.8 million and $174.8 million at February 28, 2009. Incoming orders for the second quarter totaled $84.5 million while shipments totaled $95.2 million resulting in a book to ship ratio of 89 percent. For the first six months, orders totaled $155.2 million while shipments totaled $190.6 million, resulting in a year-to-date book to ship ratio of 81 percent. Based upon current customer requested delivery dates and our planned production schedule, 65 percent of our backlog is expected to ship in the current fiscal year. Of our $139.4 million backlog, 43 percent is to be delivered outside of the U.S.
Revenues for the Electrical and Industrial Products Segment increased 7 percent to $55.6 million for the second quarter ending August 31, 2009, compared to $52 million in the previous year’s second quarter. Operating income for the second quarter ending August 31, 2009, was $12.1 million, compared to $9.8 million in the second quarter of last year, an increase of 23 percent. Operating margins were 22 percent for the second quarter of fiscal 2010. For the first six months, revenues increased 7 percent to $111 million and operating income increased 28 percent to $22.6 million compared to $104 million and $17.7 million, respectively, for the first six months of the prior year. Operating margins for the first six months were 20 percent.
David H. Dingus, president and chief executive officer, commented, “The operating results for our Electrical and Industrial Products Segment continued at a very strong pace. The increase in domestic and international quotation activity which we reported in the first quarter of fiscal 2010 has continued into the second quarter. The primary increases have been in our power generation, transmission and distribution markets. While some of the increase can be attributed to the budgetary quotations of new projects that have yet to be released, it is still encouraging that overall project activity has increased. The release of the orders for new and existing projects remains sluggish and we have not seen any decrease in the extended evaluation period we have witnessed for the past nine months. We anticipate the slow and selective release of orders continuing into our third quarter. While it is difficult to forecast timing of order releases in current market conditions, we would anticipate that it will be the first quarter of our fiscal 2011 before we start seeing a rebuilding of our backlog. Our international quotations are strong and we did secure two significant international orders in the second quarter.”
Revenues for the Company’s Galvanizing Service Segment decreased 23 percent to $39.6 million for the second quarter ending August 31, 2009, compared to $51.3 million in the previous year’s comparable quarter. Operating income for this segment was $12.3 million, compared to $15.5 million in the same quarter last year, a decrease of 21 percent. Operating margins for the second quarter ending August 31, 2009 were 31 percent. For the first six months of fiscal 2010, revenues decreased 20 percent to $79.7 million, and operating income decreased 13 percent to $25.1 million, compared to $99.3 million and $28.8 million, respectively, for the first six months of the prior year. Operating margins for the six month period was 31.5%. Volume of steel processed decreased 15 percent, while average selling price decreased 5 percent when compared to the same six months period in the prior year.
Mr. Dingus continued, “Demand for our galvanizing services continues to be below the record setting pace of last year. Our continuing commitment to quality and service, close attention to all operating performance criteria and favorable cost of commodities, led to another outstanding margin performance quarter. The strategic actions that we have taken in this segment over the past few years have broadened our customer base and geographic presence. We believe this has and should continue to help us to offset some of the economic weakness in particular market areas.”
Mr. Dingus concluded, “As a company, we are extremely well positioned to take advantage of any improving market conditions. We are looking for opportunities to better our positioning with new products and new markets, and the strength of our balance sheet with $72 million in cash should increase our chances for success in implementation of our Strategic Plans. Based upon the evaluation of information currently available to management, we are revising our previously issued guidance for fiscal year 2010. Our earnings are estimated to be within the range of $3.00 and $3.10 per diluted share and revenues to be within the range of $370 million to $380 million. The previous estimates were for earnings to be within the range of $2.70 to $2.90 and revenues to be in the range of $370 million to $390 million. Our estimates assume that we will not have any appreciable change in our current market conditions, competitive activity or significant delays or timing in the receipt of orders of our electrical and industrial products, and demand for our galvanizing services.”
AZZ incorporated will conduct a conference call to discuss financial results for the second quarter of fiscal 2010 at 11:00 a.m. ET on September 25, 2009. Interested parties can access the call by dialing (800) 860-2442 or (412) 858-4600 (international). The call will be web cast via the Internet at www.azz.com/AZZinvest.htm. A replay of the call will be available for three days at (877) 344-7529, or (412) 317-0088 (international) confirmation #434004, or for 30 days at www.azz.com/AZZinvest.htm.
AZZ incorporated is a specialty electrical equipment manufacturer serving the global markets of industrial, power generation, transmission and distributions, as well as a leading provider of hot dip galvanizing services to the steel fabrication market nationwide.
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