Avatar Reports Second Quarter Results of Operations
CORAL GABLES, Fla., Aug. 9 -- Avatar Holdings
Inc. (Nasdaq: AVTR) today reported net income of $27,183,000 ($2.62 per
share, diluted) on revenues of $170,689,000 for the three months ended June
30, 2006, an increase of 190% over net income of $9,389,000 ($0.96 per
share, diluted) on revenues of $107,419,000 for the three months ended June
30, 2005.
For the six months ended June 30, 2006, Avatar reported net income of
$51,819,000 ($5.01 per share, diluted) on revenues of $325,903,000, an
increase of 120% over net income of $23,559,000 ($2.39 per share, diluted)
on revenues of $198,642,000 for the same period in 2005.
During the three months ended June 30, 2006, we closed on 456 homes, an
8% increase over the 421 homes closed during the three months ended June
30, 2005. Dollar volume increased by 34% to $134,204,000 compared to
$100,006,000 for the three months ended June 30, 2005.
During the first six months of 2006, we closed on 972 homes, a 27%
increase over the 763 units closed during the comparable period of 2005.
Dollar volume increased by 52% to $272,732,000, compared to $179,885,000
for the first six months of 2005.
The number of housing contracts signed during the three months ended
June 30, 2006 declined by 45% to 242, compared to 441 for the three months
ended June 30, 2005. The dollar volume of contracts signed declined by 43%
compared to the three months ended June 30, 2005, to $83,074,000 compared
to $145,211,000.
The number of housing contracts signed for the six months ended June
30, 2006 declined by 40% to 670, compared to 1,117 for the first six months
of 2005. The dollar volume of contracts signed declined by 26% compared to
the first six months of 2005, to $239,597,000 compared to $324,950,000.
The number of units in backlog was 1,763 at June 30, 2006, compared to
2,542 at June 30, 2005. The aggregate dollar volume of our backlog at June
30, 2006 was $601,345,000, compared to $669,842,000 at June 30, 2005.
Our sales results reflect the softening market for new single-family
and multi-family residences in our markets. We are experiencing a further
increase in the rate of cancellations of home sales. Residential builders
including Avatar are increasingly utilizing various sales incentives in our
markets. Additionally, there remains the continued availability of an
excess of investor and speculator-owned units.
Our focus remains on managing Avatar and its assets for the long-term
benefit of its shareholders, including the identification and monetization
of commercial and industrial land from our holdings. We continue to utilize
our strong balance sheet and large portfolio of developable land for these
purposes. We do not anticipate a meaningful improvement in our markets in
the near term. It is not our intention to implement programs which may
offer some short-term earnings advantage, but which could compromise our
long-term objectives.
Results for the six months ended June 30, 2006 include pre-tax income
of $28,189,000 on revenues of $38,946,000 from commercial, industrial and
other land sales, including pre-tax income of $23,468,000 on revenues of
$25,132,000 from commercial and industrial land sales. For the six months
ended June 30, 2005, results included pre-tax income of $6,909,000 on
revenues of $8,017,000 from commercial, industrial and other land sales,
including pre-tax income of $5,383,000 on revenues of $5,932,000 from
commercial and industrial land sales.
Avatar Holdings Inc. is primarily engaged in real estate operations in
Florida and Arizona. Its principal real estate operations are conducted at
Poinciana, Solivita and Bellalago in central Florida near Orlando, Cory
Lake Isles in Tampa, Florida, and at Rio Rico, south of Tucson, AZ.
Avatar's common shares trade on The Nasdaq Stock Market under the symbol
AVTR.
Certain statements discussed herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause the
actual results, performance or achievements of results to differ materially
from any future results, performance or achievements expressed or implied
by such forward- looking statements. Such risks, uncertainties and other
important factors include, among others: the successful implementation of
Avatar's business strategy; shifts in demographic trends affecting demand
for active adult communities and other real estate development; the level
of immigration and in-migration into the areas in which Avatar conducts
real estate activities; international (in particular Latin America),
national and local economic conditions and events, including employment
levels, interest rates, consumer confidence, the availability of mortgage
financing and demand for new and existing housing; access to future
financing; geopolitical risks; competition; changes in, or the failure or
inability to comply with, government regulations; adverse weather
conditions and natural disasters; and other factors as are described in
Avatar's filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the fiscal year ended December 31, 2005.
SELECTED FINANCIAL DATA FOR THE SIX MONTHS AND THREE MONTHS ENDED
JUNE 30, 2006, AND 2005*
(Unaudited - Dollars in Thousands except per share data)
Six Months Three Months
2006 2005 2006 2005
Revenues $325,903 $198,642 $170,689 $107,419
Income from
continuing
operations before
income taxes $79,418 $34,478 $44,208 $15,002
Income Tax Expense $27,599 $10,229 $17,025 $4,762
Income from
continuing
operations after
income taxes $51,819 $24,249 $27,183 $10,240
Income (loss) from
discontinued
operations
(including loss on
disposal of $1,683
for the six and
three months
ended in 2005) $-- ($690) $-- ($851)
Net income $51,819 $23,559 $27,183 $9,389
Basic EPS:
Income from
continuing
operations after
income taxes $6.33 $3.01 $3.32 $1.27
Income (loss)
from discontinued
operations -- (0.09) -- (0.10)
Net income $6.33 $2.92 $3.32 $1.17
Diluted EPS:
Income from
continuing
operations after
income taxes $5.01 $2.45 $2.62 $1.04
Income (loss)
from discontinued
operations -- (0.06) -- (0.08)
Net income $5.01 $2.39 $2.62 $0.96
Selected Balance Sheet Data
June 30, 2006 December 31, 2005
Cash and cash equivalents $63,218 $38,479
Total assets $641,988 $626,410
Total stockholders' equity $370,486 $312,892
Book value per share $45.22 $38.25
*Results for 2005 have been reclassified to conform with 2006
presentation.
