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Washington Homes Reports Record Third Quarter Results
Earnings Up 440% On 68% Increase in Revenues
LANDOVER, Md.--(BUSINESS WIRE)--May 18, 1999--Washington Homes, Inc.- (NYSE: WHI - news) today reported third quarter net earnings of $3 million, or $0.37 a share, up 440% from $564,000, or $0.07 per share reported in the same prior year period. Homebuilding revenues for the third quarter reached $87.7 million, a 68% increase over last year's third quarter revenues of $52.3 million. Both revenues and earnings are records for any third quarter in the Company's 33-year history.
For the nine months ended April 30, 1999, the Company reported net earnings of $6.2 million or $0.75 per share, a 351% increase over $1.4 million or $0.17 per share for the same prior year period. Homebuilding revenues for the first three quarters of 1999 increased 63% to $226.2 million from $139.2 million for the same period last year. Per share net earnings for the quarter and nine month periods are stated on a fully diluted basis.
The Company's third quarter was the sixth consecutive record quarter for new orders and the fifth consecutive quarter for improved deliveries. As previously reported net new orders in the quarter rose 31% to 836 from 640 for the prior year's quarter and 30% to 1,698 for the nine months ended April 30, 1999 from 1,311 for the prior nine-month period. Deliveries rose 57% to 533 homes for the quarter and 53% to 1,367 homes for the nine months. The increased activity in new orders and deliveries is due to the favorable economic conditions and the successful execution of the Company's strategic initiatives, which have resulted in increased market share for each of the Company's markets, increased revenues and significantly improved earnings.
Gross profit margins increased from 17.7 percent in last year's third quarter to 19.6 percent for the current third quarter. Gross profit margins for the first nine months of fiscal 1999 were 19.0 percent, up from 18.0 percent last year.
Geaton A. DeCesaris, Jr., Chairman, President and Chief Executive Officer, stated, ''We are delighted with the Company's record results, which have surpassed analysts' expectations for the fourth consecutive quarter. The expansion in our gross margins by almost 200 basis points reflects the cost reduction initiatives we have taken as well as favorable market conditions which have minimized the need for seller concessions. Our excellent land position has also allowed us to take advantage of strong housing demand.''
DeCesaris added, ''We expect the momentum established in each of our markets to continue and look forward to finishing Fiscal 1999 at a record pace. The Company is committed to further strengthening its market position in each of its existing operations and on continuing to grow the backlog of sold homes under contract, but not yet delivered. Washington Homes should enter Fiscal 2000 with a record year-end backlog, positioning the Company to sustain these record operating results.''
Selling, general and administrative expenses (SG&A) for the current year's third quarter were $11.1 million or 12.7% of homebuilding revenues compared with $8.0 million, or 15.4% of homebuilding revenues in the same prior year period. In the nine-month period ended April 30, 1999, SG&A decreased from 15.3% of homebuilding revenues to 13.3% of homebuilding revenues in last year's period. The increased volume, attributable mainly to the Company's increased market share in each of its existing markets along with improved sales absorption per community, has resulted in a reduction in SG&A as a percentage of sales.
During the third quarter, the Company completed the acquisition of the homebuilding assets of Breland Homes, the leading homebuilder in Huntsville, Alabama and the Mississippi Gulf Coast. A partial quarter of operating results for the newly acquired business was included in the third quarter results, and while not significant to date, the acquisition is expected to have a favorable impact on consolidated results during the fourth quarter of the current fiscal year.
Washington Homes designs, builds, and markets single-family detached homes and townhomes. It is a leading provider of moderately priced, quality homes in Maryland, Virginia and Pennsylvania; and under the Westminster Homes name in Alabama, Mississippi, North Carolina and Tennessee. As of April 30, 1999, the Company had 81 communities open for sale compared with 69 a year earlier. NOTE: This press release contains statements, which may be construed as ''forward looking statements'' as defined in the Private Securities Litigation Reform Act of 1995. Such statements may involve unstated risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors, include, but are not limited to, change in general economic conditions, fluctuations in interest rates, increases in cost of materials, supplies and labor and general competitive conditions.
WASHINGTON HOMES, INC. AND SUBSIDIARIES
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