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Book Value reported at .81! link...
Look on PAGE 11 of the below link! This is a Lenders Presentation!
Kroll Zolfo Cooper Retained
Management and the Company continue to work on a detailed long-range financial and operational plan for the business
Region and Division input is required to evaluate the business on a community level
Determine "core" communities vs "Wind-down" communities
Understand land acquisition and capital needs
Plan expected to be completed following Thanksgiving
In addition to business planning, current focus on maximizing cash inflow and reducing cash outflow
Form 10Q filed on Wednesday, November 14
Detailed discussions regarding the business plan and cash needs are expected to commence in early December
Click on Nov. 16th presentation:
http://phx.corporate-ir.net/phoenix.zhtml?c=116478&p=irol-presentations
TOUSA Reports Third Quarter 2007 Results
Nov 14, 2007 (PrimeNewswire via COMTEX News Network) -- Third quarter 2007 results include the following (compared to the prior year period, unless otherwise noted):
Total revenues of $501.2 million, a 16% decrease
Net loss of $619.7 million, which includes $504.5 million of pre-tax inventory impairment and abandonment costs, $2.7 million of pre-tax goodwill impairments and a $40.7 million pre-tax loss contingency relating to the Transeastern JV settlement
Consolidated net sales orders of 892, a 33% decrease
Consolidated cancellation rate increased to 47%, compared to 33% for third quarter of 2006 and 33% for the second quarter of 2007
Consolidated controlled homesite position of 39,900, a 45% decrease
HOLLYWOOD, Fla., Nov. 14, 2007 (PRIME NEWSWIRE) -- TOUSA, Inc. (NYSE:TOA) today released financial results for the third quarter ended September 30, 2007.
The Company reported a net loss for the three months ended September 30, 2007 of $619.7 million (or a loss of $10.42 per diluted share), compared to net loss of $80.0 million (a loss $1.34 per diluted share) reported in the three months ended September 30, 2006.
The Company's results for the third quarter of 2007 include a $40.7 million increase in the pre-tax loss contingency relating to the Transeastern JV settlement based on the estimated fair value of the consideration provided and the business acquired. Also adversely impacting net income is $530.6 million of pre-tax charges resulting from goodwill impairments and the write-down of assets including, inventory impairments, impairments of investments in unconsolidated joint ventures, and write-off of deposits and abandonment costs. Of this amount, $63.3 million of inventory impairments are related to active communities, $441.2 million are related to land impairments, deposit write-offs and abandonment costs, $23.4 million are related to impairments of investments in unconsolidated joint ventures, and $2.7 million are related to goodwill impairment.
Excluding the impact of the $40.7 million loss contingency related to the Transeastern JV settlement and the $530.6 million of non-cash, pre-tax charges reflected above, the Company's net loss would have been $25.6 million (or a loss $0.43 per diluted share, assuming 59.6 million diluted shares outstanding) using an effective tax rate of 35%.
Homebuilding revenues decreased 15% to $492.9 million for the three months ended September 30, 2007, from $576.8 million for the three months ended September 30, 2006. This decrease is due to a decrease in revenue from home sales to $449.6 million for the three months ended September 30, 2007 from $563.0 million for the three months ended September 30, 2006, partially offset by an increase in revenue from land sales to $43.3 million for the three months ended September 30, 2007, from $13.8 million for the comparable period in 2006. The decrease in revenue from home sales, which is net of buyer incentives, was due to an 18% decrease in the number of deliveries to 1,459 from 1,769 for the three months ended September 30, 2006. The average price of homes delivered decreased to $308,000 for the three months ended September 30, 2007, from $318,000 for the three months ended September 30, 2006.
The Company's gross profit margin, excluding impairment and related charges, decreased to 17.7% in the third quarter of 2007 from 22.8% in the third quarter of 2006. Home sales gross profit was primarily impacted by higher incentives, which increased to $45,300 per delivery for the third quarter of 2007 from $23,700 per delivery for the third quarter of 2006.
SG&A expenses increased to $86.0 million for the three months ended September 30, 2007, from $80.8 million for the three months ended September 30, 2006. The increase in SG&A expenses is due to the following: (1) an increase of $4.7 million in compensation costs, and (2) $4.5 million in professional and consultant fees related to the Transeastern JV and the evaluation of the Company's restructuring options. The increase in expenses has been partially offset by a reduction in overhead and related expenses, including decreases in compensation and severance, as the Company continues to improve its operating efficiencies, reduce costs, and streamlines its operations. Excluding the costs of professionals and consultant fees referenced above, the Company's SG&A expenses were $81.6 million for the three months ended September 30, 2007, from $80.6 million for the three months ended September 30, 2006.
EBITDA for the third quarter of 2007 was $32.3 million compared to $101.2 million in the third quarter of 2006. Please see the financial tables below for a reconciliation of EBITDA to net income or loss for the periods presented, which has been calculated in accordance with the provisions of the Company's July 31, 2007 amended revolving credit facility.
The Company's consolidated homes in backlog decreased 26% to 3,485 in the third quarter of 2007 from 4,684 in the third quarter of 2006. The Company's consolidated sales value of homes in backlog decreased 32% to $1.1 billion in the third quarter of 2007 from $1.7 billion in the third quarter of 2006.
The Company reported consolidated net sales orders of 892 in the third quarter of 2007 compared to 1,330 in the third quarter of 2006, a 33% decrease. The sales value of the Company's consolidated sales orders was $219.6 million, compared to $419.6 million in the third quarter of 2006, a 48% decrease. The Company's average sales price on net sales orders decreased to $246,000 in the third quarter of 2007 from $315,000 in the third quarter of 2006 due to increased incentives and a change in product mix. The Company's sales orders cancellation rate was approximately 47% for the three months ended September 30, 2007 as compared to 33%, 29% and 49% for the three months ended June 30, 2007, March 31, 2007 and December 31, 2006, respectively. The Company attributes the unusually-high cancellation rate to the dramatic tightening of the credit markets, buyer's inability to sell their existing home, diminished consumer confidence, the oversupply of new and existing homes available for sale, increased foreclosures and downward pressure on home prices.
Balance Sheet and Liquidity Update
As of September 30, 2007, the Company had stockholders' equity of $48.3 million. Based on the foregoing, the Company believes there is substantial doubt about its ability to continue as a going concern. The Company is considering all available in and out of court restructuring and reorganization alternatives, including a possible Chapter 11 filing. Such alternatives include, among other things, restructuring its capital structure through the exchange of some or all of its outstanding indebtedness for equity in the Company. TOUSA's ability to continue as a going concern will depend upon its ability to restructure its capital structure including exchanging a large portion of the Company's outstanding indebtedness for equity. The Company has asked its bondholders to organize as a group in order to discuss such restructuring and reorganization alternatives and the Company has commenced discussions with its representatives, though these discussions are at a very early stage.
The additional borrowings arising from the settlement of the Transeastern JV disputes and the continuing deterioration of the housing market, including the worsening since late July 2007 due to the mortgage and credit market crisis, has had, and will continue to have for an extended period of time, a negative impact on the Company's liquidity and its ability to comply with financial and other covenants under the Company's bank loans and indentures, including interest coverage, total leverage, and tangible net worth covenants. All of these factors, and others which may arise in the future, will adversely impact the Company's financial condition and results of operations.
The Company has taken, and continues to take, actions to maximize cash receipts and minimize cash expenditures. As part of these initiatives, TOUSA continues to take steps to reduce its general and administrative costs and operations to increase efficiencies by reducing costs and streamlining its activities, including further reductions in workforce at all levels and elimination of certain consulting arrangements and indirect costs. However, some of its efforts on reducing general and administrative expenses are being offset by professional and consulting fees associated with the settlement of disputes relating to the settlement of the Transeastern joint venture (the "Transeastern JV") and TOUSA's current restructuring efforts. The Company is actively redesigning and repositioning its product in many of its markets to help increase sales velocity as well as reduce building material and other costs. In addition, the Company continues to work with its suppliers and is seeking new suppliers, through competitive bid processes, to reduce construction material and labor costs.
TOUSA is analyzing each community based on profit and sales absorption goals that include current market factors such as the oversupply of homes available for sale in most of the Company's markets, reduced demand, decreased consumer confidence, tighter mortgage loan underwriting criteria and higher foreclosures. The Company continues to review the size, geographic allocations and components of its inventory to better align these assets with estimated future deliveries. The Company has established inventory targets based on current market conditions, existing inventory levels and its historical and projected results. If the Company's inventory exceeds these targeted levels, which is currently the case, it is and will continue to take necessary actions to reduce its inventory level to these targeted levels. These actions include, to the extent possible: limiting new arrangements to acquire land; engaging in bulk sales of land and unsold homes; reducing the number of homes under construction and limiting development activities; re-negotiating terms or abandoning the Company's rights under option contracts; considering other asset dispositions including the possible sale of underperforming assets, communities, divisions, and joint venture interests; further reducing inventory target levels; and other initiatives designed to monetize the Company's assets including its deferred tax assets, which as of September 30, 2007 is classified as an income tax receivable.
In connection with its asset management efforts, the Company has reduced its consolidated controlled homesite position by approximately 35% to 39,500 homesites at September 30, 2007 from 60,600 at December 31, 2006. At September 30, 2007, the Company's consolidated controlled homesite position includes approximately 4,700 homesites acquired as part of the Transeastern acquisition, of which 3,900 are owned and 800 are optioned.
At September 30, 2007, the Company had 3,700 homes completed or under construction compared to 3,800 homes at December 31, 2006. Approximately 35% of these homes were unsold at September 30, 2007, an increase from 27% at June 30, 2007. At September 30, 2007, the Company had 452 completed unsold homes in its inventory, up 142% from 187 homes at June 30, 2007. Approximately 52% of the Company's completed, unsold homes at September 30, 2007 had been completed for more than 90 days. The Company attributes the increase in unsold homes in inventory to the increase in the third quarter cancellation rate, as well as the acquisition of 200 unsold homes in connection the Transeastern JV settlement. As part of its asset management strategy and certainly in line with its fourth quarter 2007 cash management initiatives, the Company is focusing its efforts on managing the number and geographic allocation of its speculative homes, addressing its inventory levels and timing its construction starts.
As a result of worsening market conditions since late July and the Company's liquidity constraints, during the three months ended September 30, 2007, TOUSA abandoned its rights under certain option agreements which resulted in a 9,400 unit decline in its controlled homesites. Abandonment decisions were made following in depth community by community analyses of all option contracts based on projected returns, amount and timing of incremental cash flow, and owned homesites. In connection with the abandonment of our rights under these option contracts, we forfeited cash deposits of $166.9 million and had letters of credit of $91.2 million drawn, subsequent to September 30, 3007, which increased our outstanding borrowings.
On September 25, 2007, the Company sold 317 homesites to an unrelated homebuilder for a total purchase price of $26.1 million and realized a pre-tax loss of $13.2 million. Additionally, as part of the transaction, the buyer agreed to purchase an option interest to acquire 250 homesites as well as 34 owned homesites from TOUSA once certain obligations associated with such property are met. The total purchase price for these additional homesites and the assignment of the option interest is $10.6 million. The transaction will close once the Company fulfills its continuing obligations on these properties, which it expects will take place before the end of the year.
http://phx.corporate-ir.net/phoenix.zhtml?c=116478&p=irol-newsArticle&ID=1078335&highlight=
