Deliveries down but orders up at KB Home
Los Angeles-based home builder KB Home reported revenues of $367.3 million for its third fiscal quarter, down 27% from $50 million in the third quarter of 2010.
The decrease was mainly due to a 31% year-over-year decrease in the number of homes delivered to 1,603, the company said, which was partly offset by a 6% year-over-year increase in the average selling price to $227,400.
The company reported a net loss of $9.6 million for the quarter, which ended Aug. 31, compared with a net loss of $1.4 million for the same quarter a year ago. The 2011 third quarter net loss included $1.2 million of noncash charges for inventory impairments and land-option contract abandonments, compared with $3.4 million of similar charges in the year-earlier quarter.
Net orders at KB Home increased 40% to 1,838 in the third quarter of 2011 from 1,314 in the corresponding period of 2010. By Aug. 31, the company had 2,657 homes in backlog, compared with a backlog of 2,169 homes by Aug. 31, 2010.
"We achieved encouraging operational and financial results in the third quarter despite the ongoing difficult housing environment," said Jeffrey Mezger, president and CEO. "We generated year-over-year growth in both net orders and backlog in all four of our operating regions. We also improved our bottom-line results by narrowing our net loss substantially from the second quarter.
"Our strategic actions over the past several quarters of investing in attractive land positions, opening new communities, and reducing construction and overhead costs are yielding measurable results," Mezger continued. "We remain carefully focused on extending and sustaining the positive sequential trends we have established, and ending the year with a strong fourth quarter, giving us momentum as we enter 2012."
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In August, new-home sales declined 2.3%
Sales of new single-family houses in August 2011 were at a seasonally adjusted annual rate of 295,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
The figure is 2.3% below the revised July rate of 302,000, but is 6.1% above the August 2010 estimate of 278,000.
The median sales price of new houses sold in August 2011 was $209,100; the average sales price was $246,000.
The seasonally adjusted estimate of new houses for sale at the end of August was 162,000. This represents a supply of 6.6 months at the current sales rate.
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In tough times, a company protects its people
Warroad, Minn.-based Marvin Windows and Doors has refused to fire employees during the downturn. An article in the New York Times explains the company’s reasons.
The company’s philosophy was captured in a quote in the article from Susan Marvin, the company’s president and granddaughter of the founder, George Marvin: "You can’t cut your way to prosperity," she told the newspaper. "You can’t grow if you are cutting your lifeblood — and that’s the skills and experience your force delivers."
Marvin is a privately held windows and doors manufacturer with about 4,300 employees, some 2,000 in Warrroad.
I grew up with the mantra
I grew up with the mantra that when doors close, another one will open. Although they should be applauded for not firing any of its employees, I really wonder if that is really the best course of action. Some employees might miss the chance to find better jobs elsewhere, and if the company continues making losses, in the long run, more employees might suffer in the future. Stoett
I applaud the leaders of
I applaud the leaders of Marvin Windows. It takes guts to do what they did, and their employees know that, and undoubtedly appreciate their actions many times over. It's obvious that the family cares about their employees, and kudos to them for sticking to their principles, especially when their financial team had to be telling them that they were crazy! This action will come back to them tenfold, in the form of loyal, appreciative, long time employees. Ross Riddle/President South Coast Shingle Co. Southern California