First Quarter Financial Highlights: * Net loss: $84.1 million * Basic and diluted EPS: loss of $2.00 * Revenues: $137.1 million -- down 59.5% * Gross new orders: 335 (up 6%); Net new orders: 183 (down 22.8%) * Backlog at March 31, 2008: $202.8 million * Net cash provided by operating activities: $67.4 million
BONITA SPRINGS, Fla., May 7, 2008 (PRIME NEWSWIRE) -- WCI Communities, Inc. (NYSE:WCI), a leading builder of traditional and tower residences in highly amenitized lifestyle communities, today reported its results for the first quarter of 2008. For the three months ended March 31, 2008, WCI reported a net loss of $84.1 million, compared with a net loss of $15.8 million in the first quarter of 2007, while diluted earnings per share (EPS) declined to a loss of $2.00 versus a loss of $0.38 in the same period a year ago. Revenues for the first quarter of 2008 were $137.1 million, compared with $338.2 million for the first quarter of 2007, a 59.5% decrease. The aggregate number of gross new Traditional and Tower Homebuilding orders increased by 6% to 335; however, the aggregate number of net new orders for the quarter declined 22.8% to 183, as contract cancellations and defaults at closing continued at higher than long-term historical rates. The aggregate value of the net new orders for the quarter fell 49.8% over the same period a year ago to $78.3 million.
"We experienced a sequential lift in traffic and new orders during the first quarter in Florida reflecting seasonal patterns, but saw a dramatic drop in traffic and new orders in the Northeast and Mid-Atlantic," said Jerry Starkey, President and CEO. "In Florida we wrote 97 new orders for Tower units compared to only 11 during the same quarter last year, but in most instances the prices were significantly discounted. Even with the sequential increase, Traditional Homebuilding gross and net orders in Florida were down 5.6% and 21.0% year-over-year. Over ninety percent of our Florida Traditional Homebuilding new orders were spec sales, with very few purchasers paying the premium for "to-be-built" homes," Starkey continued. "Beyond the seasonal lift in Florida, there are no signs that demand has firmed -- many potential purchasers continue to sit on the sidelines afraid of falling prices and the direction of the economy. Our primary focus continues to be on reducing costs and generating cash to pay down debt."
Traditional Homebuilding
First quarter 2008 revenues for Traditional Homebuilding, including lot sales, fell 56.7% to $92.7 million from $214.2 million for the first quarter of 2007. The company closed 170 homes compared with 306 for the same period a year ago. Florida revenues totaled $73.9 million, or 79.7%, of total Traditional Homebuilding revenues during the first quarter of 2008 versus $137.3 million, or 64.1%, for the first quarter of 2007. Revenues from WCI's Northeast Division accounted for 13.0% of Traditional Homebuilding revenues during the first quarter of 2008 versus 27.7% during the same period a year ago and the company's Mid-Atlantic Division accounted for 7.7% and 8.2% for the first quarters of 2008 and 2007, respectively.
Gross margin as a percentage of revenue for Traditional Homebuilding decreased to 0.4% for the first quarter of 2008 from 16.6% a year ago. The year-over-year decrease was due to lower margins achieved on the sale of finished spec inventory and also due to $6.9 million of impairment charges during the first quarter of 2008, which were primarily related to backlog orders that cancelled and as a result were marked down to the values of comparable units as they were returned to inventory. Excluding the impact of the impairment charge, the gross margin was 7.8%. Spec home closings accounted for 82% of the closings during the quarter and produced an average gross margin percentage of revenue of 4.7%.
For the first quarter of 2008, the number of gross and net orders declined 22.7% and 41.4%, respectively. The value of Traditional Homebuilding gross orders declined 44.6% to $117.7 million while the value of net orders dropped 60.7% to $62.5 million. Cancellations during the quarter totaled 92 units, up from 60 units during the same period a year ago. The average price for Traditional Homebuilding gross orders for the first quarter of 2008 fell 28.3% to $501,000 compared with $699,000 for the first quarter of 2007, due to mix changes, lower prices, and a higher percentage of discounts during the quarter -- approximately 20% compared to approximately 12% on orders in the same period a year ago. The company's total Traditional Homebuilding spec inventory at the end of the quarter, completed and in-process and including models, was 460 versus 610 at the end of the fourth quarter of 2007.
Traditional Homebuilding backlog at March 31, 2008 was $165.9 million, down 73.7% from $631.3 million at the end of the first quarter of 2007. The average projected gross margin in backlog at the end of the quarter was approximately 14.0%.
Tower Homebuilding
For the three months ended March 31, 2008, revenues in Tower Homebuilding decreased 95.6% to $3.3 million from $74.0 million for the same period a year ago. A total of 56 Tower units were closed during the quarter from our inventory of completed and unsold units representing $50.5 million of revenue. In addition, $4.4 million of revenue resulted from backlog units still under construction using the percentage of completion method, and $3.8 million resulted from retained deposits from defaults. Lastly, 52 units previously accounted for under the percentage of completion method defaulted during the period resulting in revenue reversals of $55.4 million which offset the revenue amounts discussed above. Only one tower was under construction and recognizing revenue during the first quarter of 2008 compared to 11 towers under construction and recognizing revenue during the first quarter of 2007.
Tower Homebuilding gross margin as a percentage of revenue was negative for the quarter due to the impact of defaulted units, default reserve increases and other cost adjustments, compared to 1.1% for the three months ended March 31, 2007. Gross margin from spec closings during the quarter totaled $9.1 million, or 19.0%, which was offset by the impact of a reversal of $14.0 million of gross margin from defaulting units. During each quarter, the company reviews the revenue and cost estimates for each tower under construction and makes adjustments to reflect actual increases or decreases in current and expected future revenues and costs. For the first quarter of 2008, $10.9 million of net unfavorable adjustments to estimates were made related to completed towers and towers under construction, which were recorded as additional costs of sales for the quarter. These adjustments consisted of a $2.3 million increase in the tower default reserve to absorb the effect of current period defaults in excess of those previously reserved for, and to account for higher expected defaults at One Bal Harbour -- Hotel and at The Watermark, and $8.6 million of other cost adjustments, about $6.3 million of which related to The Watermark tower project and the balance to other projects.
Tower Homebuilding gross and net orders for the first quarter of 2008 totaled 100 and 40 respectively, versus 12 and negative seven in the first quarter of 2007. Tower Homebuilding backlog at March 31, 2008 totaled $36.9 million, a 76.9% decrease from the $159.4 million backlog at March 31, 2007.
Real Estate Services
Revenues for the Real Estate Services Division for the first quarter of 2008 were $17.3 million, a 32.3% decrease from the $25.6 million recorded for the same period a year ago. The decline was primarily due to the continued slow market for new and resale homes during the quarter. Transactions for Prudential Florida WCI Realty declined 15.8% over the same period a year ago. Gross margin as a percentage of revenue for the period was 1.3% compared with 8.2% in the first quarter of 2007.
Other Income and Expense
Revenues for the Amenities Division for the first quarter 2008 were $22.6 million, which was equal to revenue for the same period a year ago. Gross margin as a percent of revenue increased to 12.4% for the first quarter of 2008 versus 5.3% in the first quarter of 2007.
Other income and expense in the first quarter included a $9.5 million non-cash mark-to-market charge on the interest rate swap agreement that the company entered into in December 2005 to hedge against interest rate fluctuations on its senior variable rate bank debt.
Selling, general, and administrative expenses including real estate taxes (SG&A) declined $7.4 million to $39.5 million for the first quarter, versus $46.9 million a year ago, due to cost reductions in salaries and benefits, as well as reductions in sales and marketing expenses. As a percentage of revenue, SG&A increased to 28.8%, up from 13.9% in the first quarter of the previous year largely due to lower revenues including the impact of revenue reversals from the 52 tower unit defaults discussed above, which lowered overall revenue by $55.4 million.
Interest incurred was $35.9 million for the first quarter of 2008 compared to $35.4 million in the first quarter of 2007, which was an increase of 1.4%. Although average loan balances were lower in the first quarter of 2008 and would have resulted in lower interest incurred, higher interest rates on variable rate bank debt more than offset the improvement from lower loan balances. Net interest expense of $30.5 million for the quarter was $14.1 million or 86.4% higher than the first quarter of 2007 primarily due to less interest capitalized as fewer projects are under development.
Income tax expense was $0.2 million for the first quarter of 2008 compared to a benefit of $10.5 million for the same period last year. The income tax benefit generated through the company's operating loss in the first quarter of 2008 would have been approximately $26.0 million; however, pursuant to FAS 109, the company was required to fully reserve against this benefit as all recognizable tax benefit under current tax law was recorded at December 31, 2007.
Cash Flow/Financial Position/Balance Sheet
For the three months ended March 31, 2008, net cash generated from operating and investing activities totaled $66.4 million compared with $94.6 million in the same period a year ago.
The company amended its senior secured tower construction facility (the "Tower Loan") on March 17, 2008. The amendments provide for consistencies with the governing provisions of, as well as cross collateralization on a subordinate basis with the Term Loan and Revolving Credit Facility. In addition, the amendment also restricts the company from requesting future advances from the Tower Loan, which is consistent with the Company's de-leveraging strategy and the upcoming maturity of the facility in December 2008.
The ratio of net debt to net capitalization increased to 83.3% compared with 65.5% at March 31, 2007 and increased from 80.5% at December 31, 2007. As of March 31, 2008, excluding $53.4 million in letters of credit, we had approximately $192.4 million available commitments under our senior secured credit facility which was further limited by borrowing base availability which was an estimated $115.0 million at March 31, 2008, plus $48.5 million of cash and cash equivalents. Due to our strategy of selling unsold completed inventory, the impact of impairments to our inventory, and the impact of significant reductions in inventory additions, our borrowing capacity may be limited by the availability determined through our borrowing base as calculated under the loan agreement, which is currently less than the available loan commitments. In addition, our lenders are currently obtaining appraisals on our properties in the borrowing base, and should the appraisals reflect values less than expected, our borrowing base capacity would be further limited, potentially resulting in the loss of additional borrowing capacity and/or mandatory prepayment obligations.
Other Items
During the first quarter we commenced closings at The Watermark in North Bergen, NJ which is comprised of 206 condominium homes. Thirty three units have closed and the remaining backlog is comprised of 126 units. During the quarter, we entered into an agreement with the State of New Jersey Department of Community Affairs that requires us to offer rescission rights to 16 individual purchasers if certain conditions are not met, and additionally to other contract purchasers if the company is not ready, willing and able to close title to the condominium residences by May 26, 2008, through no fault of the contract purchaser. Of the 16 individual purchasers, one purchaser has expressed intent to close and deposits in the aggregate amount of approximately $2.9 million have been or will be refunded to the remaining fifteen purchasers. These units are not included in the 126 unit backlog. As of May 6, 2008, the company does not have certificates of occupancy for 43 of the 126 units in backlog. In the event that some or all of the certificates of occupancy are not received before May 26, 2008 in order to schedule the units for closings, then the company may be required to offer rescission and a refund of deposits to some or all of these purchasers. Although no assurances can be made, the Company believes that it will obtain certificates of occupancy for a portion or all of these 43 units in advance of May 26, 2008. The aggregate contracted values are approximately $48.7 million and the aggregate deposits are approximately $9.7 million associated with these 43 units.
Conference Call
WCI will conduct a conference call today at 1:00 PM ET in conjunction with this release. The call will be broadcast live at http://www.wcicommunities.com in the Investor Relations area or can be accessed by telephone at (877) 454-8253 and asking for the WCI Communities conference call, reference code 46005393. A replay will be available after the call for at least the next 3 months on the company's website and for 36 hours by dialing (800) 642-1687 and entering conference code 46005393. A slide presentation will accompany the call and can be accessed on the company's website in the Investor Relations section.
About WCI
WCI Communities, Inc., named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The Company offers traditional and tower home choices with prices from the high-$100,000s to more than $10 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, and title businesses, and its recreational amenities, as well as through land sales and joint ventures. The Company currently owns and controls developable land on which the Company plans to build over 15,000 traditional and tower homes.
For more information about WCI and its residential communities visit www.wcicommunities.com
Click here to join our email list: http://www.b2i.us/irpass.asp?BzID=631&to=ea&s=0
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Forward-Looking Statement
Certain information included herein and in other company reports, Securities and Exchange Commission filings, statements and presentations is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the company's anticipated operating results, financial resources, ability to acquire land, ability to sell homes and properties, ability to deliver homes from backlog, and ability to secure materials and subcontractors. Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other company reports, filings, statements and presentations. These risks and uncertainties include WCI's ability to compete as a going concern in real estate markets where we conduct business; WCI's ability to pay principal and interest on its current and future debts; WCI's ability to amend its bank agreements and obtain waivers as needed from time to time to obtain covenant relief and to avoid bank defaults during the market downturn; WCI's ability to maintain or increase historical revenues and profit margins; WCI's ability to collect contract receivables from buyers purchasing homes as investments; the availability and cost of land in desirable areas in its geographic markets and our ability to expand successfully into those areas; WCI's ability to obtain necessary permits and approvals for the development of its lands; the availability of capital to WCI and our ability to effect growth strategies successfully; availability of labor and materials and material increases in insurance, labor and material costs; increases in interest rates and availability of mortgage financing; the ability of prospective residential buyers to obtain mortgage financing due to tightening credit markets, appraisal problems or other factors; increases in construction and homeowner insurance and availability of insurance, the continuing negative buyer sentiment and erosion of consumer confidence; the negative impact of claims for contract rescission or increasing cancellation rates by contract purchasers; the negative impact if certain Watermark purchasers elect to rescind their contracts to the extent they are entitled to any rescission rights; adverse legislation or regulations; adverse legal proceedings; the ability to retain employees; changes in generally accepted accounting principles; natural disasters; adverse weather conditions; and changes in general economic, real estate and business conditions and other factors over which the company has little or no control. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then the company's actual results, performance or achievements could differ materially from those expressed in, or implied by the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This statement is provided as permitted by the Private Securities Litigation Reform Act of 1995.
WCI Communities, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
March 31, December 31,
2008 2007
---------- ----------
Assets
Cash and cash equivalents $ 48,518 $ 188,821
Contracts receivable 203,053 358,327
Real estate inventories 1,839,469 1,848,309
Property and equipment 232,027 236,429
Other assets 257,602 259,345
---------- ----------
Total assets $2,580,669 $2,891,231
========== ==========
Liabilities and Shareholders' Equity
Accounts payable, accruals and other
liabilities $ 519,874 $ 547,597
---------- ----------
Debt obligations:
Senior revolving credit facility 457,650 545,975
Senior term note 243,750 262,500
Mortgages and notes payable 207,790 300,125
Senior subordinated notes 525,000 525,000
Junior subordinated notes 165,000 165,000
Contingent convertible senior
subordinated notes 125,000 125,000
---------- ----------
Total debt obligations 1,724,190 1,923,600
---------- ----------
Total shareholders' equity 336,605 420,034
---------- ----------
Total liabilities and shareholders'
equity $2,580,669 $2,891,231
========== ==========
Other Balance Sheet Data
Debt $1,724,190 $1,923,600
Shareholders' equity 336,605 420,034
---------- ----------
Capitalization $2,060,795 $2,343,634
========== ==========
Ratio of debt to capitalization 83.7% 82.1%
Debt, net of cash and cash equivalents $1,675,672 $1,734,779
Shareholders' equity 336,605 420,034
---------- ----------
Capitalization, net of cash and cash
equivalents $2,012,277 $2,154,813
========== ==========
Ratio of net debt to net capitalization 83.3% 80.5%
Shareholders' equity per share $ 7.98 $ 9.97
WCI Communities, Inc.
Selected Revenues and Earnings Information
(Dollars in thousands, except per share data)
For the three months ended
March 31,
-------------------------
2008 2007
---------- ----------
REVENUES
Homebuilding:
Homes $ 91,098 $ 214,073
Lots 1,621 136
---------- ----------
Total traditional 92,719 214,209
Towers 3,262 73,985
---------- ----------
Total homebuilding 95,981 288,194
Real estate services 17,341 25,621
Amenity membership and operations 22,563 22,585
Land sales -- --
Other 1,166 1,767
---------- ----------
Total revenues 137,051 338,167
---------- ----------
GROSS MARGIN
Homebuilding:
Homes (332) 35,536
Lots 736 (12)
---------- ----------
Total traditional 404 35,524
Towers (4,695) 836
---------- ----------
Total homebuilding (4,291) 36,360
Real estate services 228 2,102
Amenity membership and operations 2,790 1,189
Land sales (101) (69)
Other 266 72
---------- ----------
Total gross margin (1,108) 39,654
---------- ----------
OTHER INCOME AND EXPENSES
Equity in losses (earnings) from joint
ventures 54 (786)
Other income (2,005) (488)
Market valuation on interest rate swap 9,505 --
Hurricane recoveries -- (1,513)
Selling, general and administrative,
including real estate taxes, net 39,504 46,904
Depreciation and amortization 4,955 5,655
Interest expense, net 30,495 16,364
---------- ----------
Loss from continuing operations before
minority interests and income taxes (83,616) (26,482)
Minority interests (245) (593)
Income tax expense (benefit) 238 (10,471)
---------- ----------
Loss from continuing operations (84,099) (16,604)
Income from discontinued operations,
net of tax -- 793
---------- ----------
Net loss $ (84,099) $ (15,811)
========== ==========
(LOSS) EARNINGS PER SHARE:
Basic:
From continuing operations $ (2.00) $ (0.40)
From discontinued operations -- 0.02
---------- ----------
$ (2.00) $ (0.38)
========== ==========
Diluted:
From continuing operations $ (2.00) $ (0.40)
From discontinued operations -- 0.02
---------- ----------
$ (2.00) $ (0.38)
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES
Basic 42,148 41,920
Diluted 42,148 41,920
OPERATING DATA
Interest incurred $ 35,891 $ 35,389
Interest included in cost of sales $ 5,829 $ 13,775
WCI Communities, Inc.
Homebuilding Operational Data
(Dollars in thousands)
For the three months ended
March 31,
-------------------------
2008 2007
---------- ----------
Combined Traditional and Tower Homebuilding
Homes Closed (Units)* 309 560
Gross New Orders (Units) 335 316
Gross Contract Values of New Orders $ 204,782 $ 233,989
Net New Orders (Units) 183 237
Net Contract Values of New Orders $ 78,318 $ 156,102
Average Selling Price Per New Order,
Gross $ 611 $ 740
Traditional Homebuilding
Homes Closed (Units)
Florida 140 183
Northeast U.S. 25 110
Mid-Atlantic U.S. 5 13
---------- ----------
Total 170 306
---------- ----------
Revenues, excluding lot revenues
Florida $ 72,243 $ 137,214
Northeast U.S. 11,862 59,269
Mid-Atlantic U.S. 6,993 17,590
---------- ----------
Total $ 91,098 $ 214,073
---------- ----------
Average Selling Price Per Home Closed
Florida $ 516 $ 750
Northeast U.S. 474 539
Mid-Atlantic U.S. 1,399 1,353
---------- ----------
Total $ 536 $ 700
---------- ----------
Gross New Orders (Units)
Florida 203 215
Northeast U.S. 25 60
Mid-Atlantic U.S. 7 29
---------- ----------
Total 235 304
---------- ----------
Cancellations (Units)
Florida (71) (48)
Northeast U.S. (20) (9)
Mid-Atlantic U.S. (1) (3)
---------- ----------
Total (92) (60)
---------- ----------
Net New Orders (Units)
Florida 132 167
Northeast U.S. 5 51
Mid-Atlantic U.S. 6 26
---------- ----------
Total 143 244
---------- ----------
Gross Contract Values of New Orders
Florida $ 95,096 $ 143,068
Northeast U.S. 13,417 35,792
Mid-Atlantic U.S. 9,204 33,506
---------- ----------
Total $ 117,717 $ 212,366
---------- ----------
Contract Values of Cancellations
Florida $ (43,650) $ (43,865)
Northeast U.S. (10,742) (5,046)
Mid-Atlantic U.S. (830) (4,523)
---------- ----------
Total $ (55,222) $ (53,434)
---------- ----------
Net Contract Values of New Orders
Florida $ 51,446 $ 99,203
Northeast U.S. 2,675 30,746
Mid-Atlantic U.S. 8,374 28,983
---------- ----------
Total $ 62,495 $ 158,932
---------- ----------
Gross Average Selling Price Per New Order
Florida $ 468 $ 665
Northeast U.S. 537 597
Mid-Atlantic U.S. 1,315 1,155
---------- ----------
Total $ 501 $ 699
---------- ----------
Tower Homebuilding
Homes Closed (Units)
Florida 130 254
Northeast U.S 9 --
---------- ----------
Total 139 254
---------- ----------
Revenues
Florida $ 950 $ 55,434
Northeast U.S. 2,312 18,551
---------- ----------
Total $ 3,262 $ 73,985
---------- ----------
Gross New Orders (Units)
Florida 97 11
Northeast U.S. 3 1
---------- ----------
Total 100 12
---------- ----------
Cancellations/Defaults (Units)
Florida (56) (17)
Northeast U.S. (4) (2)
---------- ----------
Total (60) (19)
---------- ----------
Net New Orders (Units)
Florida 41 (6)
Northeast U.S. (1) (1)
---------- ----------
Total 40 (7)
---------- ----------
Gross Contract Values of New Orders
Florida $ 83,556 $ 20,510
Northeast U.S. 3,509 1,113
---------- ----------
Total $ 87,065 $ 21,623
---------- ----------
Contract Values of Cancellations/Defaults
Florida $ (67,767) $ (22,846)
Northeast U.S. (3,475) (1,607)
---------- ----------
Total $ (71,242) $ (24,453)
---------- ----------
Net Contract Values of New Orders
Florida $ 15,789 $ (2,336)
Northeast U.S. 34 (494)
---------- ----------
Total $ 15,823 $ (2,830)
---------- ----------
Gross Average Selling Price Per New Order
Florida $ 861 $ 1,865
Northeast U.S. 1,170 1,113
---------- ----------
Total $ 871 $ 1,802
---------- ----------
Towers under construction recognizing
revenue during the quarter 1 11
March 31,
-------------------------
2008 2007
---------- ----------
Combined Traditional and Tower Homebuilding
Aggregate Backlog Contract Values,
Traditional and Tower Homebuilding $ 202,762 $ 790,685
Traditional Homebuilding
Backlog (Units) 290 808
Backlog Contract Values $ 165,871 $ 631,265
Tower Homebuilding
Cumulative Units in Backlog 353 1,036
Cumulative Contract Values $ 375,290 $1,255,648
Less: Cumulative Revenues Recognized (338,399) (1,096,228)
---------- ----------
Backlog Contract Values $ 36,891 $ 159,420
========== ==========
* The Company uses the percentage of completion method to recognize
revenue on sold tower units. Accordingly, the closing of tower
homes corresponds with the collection of contracts receivable.
WCI Communities, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
For the three months ended
March 31,
-------------------------
2008 2007
---------- ----------
Cash flows from operating activities:
Net loss $ (84,099) $ (15,811)
Asset impairment losses and land
acquisition termination costs 6,769 1,059
Decrease (Increase) in real estate
inventories 1,400 (2,647)
Decrease in contracts receivable 155,274 199,001
Decrease in customer deposits (34,159) (56,084)
(Increase) Decrease in restricted cash (1,861) 15,930
Decrease in accounts payable and other
liabilities (1,740) (40,379)
All other 25,846 1,349
---------- ----------
Net cash provided by operating activities 67,430 102,418
---------- ----------
Cash flows from investing activities:
Additions to property and equipment, net (1,024) (7,749)
Other (50) (37)
---------- ----------
Net cash used in investing activities (1,074) (7,786)
---------- ----------
Cash flows from financing activities:
Net repayments under debt obligations (199,424) (96,880)
All other (7,235) (3,651)
---------- ----------
Net cash used in financing activities (206,659) (100,531)
---------- ----------
Net decrease in cash and cash equivalents $ (140,303) $ (5,899)
========== ==========
WCI Communities, Inc.
Reconciliation of Gross Margin
(Dollars in thousands)
For the three months ended
March 31,
-------------------------
2008 2007
---------- ----------
Traditional Homebuilding
Revenue $ 92,719 $ 214,209
---------- ----------
Gross margin 404 35,524
Add back impairment & other write-offs 6,866 557
---------- ----------
Gross margin excluding impairment $ 7,270 $ 36,081
---------- ----------
Gross margin % as reported 0.4% 16.6%
Gross margin % excluding impairment
& other write-offs 7.8% 16.8%
Summary of Land Controlled
March 31, 2008
Remaining Units in Value in Spec
Planned Backlog as Backlog as Units
Region Units of 3/31/08 of 3/31/08 in WIP
Traditional Homebuilding
(Including Lots)
Florida
Miami / Ft. Lauderdale 1,009 52 $ 36.5 7
Naples / Ft. Myers 4,542 80 37.4 39
Palm Beach / Indian River 162 3 5.7 2
Palm Coast / Jacksonville 22 4 2.1 2
Perdido Key 83 -- -- --
Tampa / Sarasota 2,718 57 30.6 2
Mid-Atlantic 360 9 12.2 1
Northeast 1,481 88 44.3 5
---------------------------------------------------------------------
Traditional Homebuilding
Total 10,377 293 168.7 58
Tower Homebuilding
Florida
Miami / Ft. Lauderdale 778 152 12.0 77
Naples / Ft. Myers 839 24 14.5 --
Palm Beach / Indian River 187 1 (0.0) --
Palm Coast / Jacksonville 281 2 -- --
Perdido Key 1,499 4 1.6 --
Tampa / Sarasota 663 3 2.2 --
Mid-Atlantic 284 -- -- --
Northeast 471 167 6.6 30
---------------------------------------------------------------------
Tower Homebuilding Total 5,002 353 36.9 107
Total Homebuilding
Florida
Miami / Ft. Lauderdale 1,787 204 48.5 84
Naples / Ft. Myers 5,381 104 51.9 39
Palm Beach / Indian River 349 4 5.7 2
Palm Coast / Jacksonville 303 6 2.1 2
Perdido Key 1,582 4 1.6 --
Tampa / Sarasota 3,381 60 32.8 2
Mid-Atlantic 644 9 12.2 1
Northeast 1,952 255 50.9 35
---------------------------------------------------------------------
Total Homebuilding Total 15,379 646 205.6 165
=====================================================================
Finished
Spec and Total
Model Units %
Region Units Remaining Owned
Traditional Homebuilding (Including Lots)
Florida
Miami / Ft. Lauderdale 157 793 100%
Naples / Ft. Myers 41 4,382 100%
Palm Beach / Indian River 11 146 100%
Palm Coast / Jacksonville 16 -- 100%
Perdido Key 12 71 100%
Tampa / Sarasota 112 2,547 71%
Mid-Atlantic 22 328 86%
Northeast 31 1,357 100%
---------------------------------------------------------------------
Traditional Homebuilding Total 402 9,624 92%
Tower Homebuilding
Florida
Miami / Ft. Lauderdale 52 497 100%
Naples / Ft. Myers 118 697 100%
Palm Beach / Indian River 40 146 100%
Palm Coast / Jacksonville 21 258 100%
Perdido Key 79 1,416 100%
Tampa / Sarasota 31 629 100%
Mid-Atlantic -- 284 100%
Northeast -- 274 42%
---------------------------------------------------------------------
Tower Homebuilding Total 341 4,201 95%
Total Homebuilding
Florida
Miami / Ft. Lauderdale 209 1,290 100%
Naples / Ft. Myers 159 5,079 100%
Palm Beach / Indian River 51 292 100%
Palm Coast / Jacksonville 37 258 100%
Perdido Key 91 1,487 100%
Tampa / Sarasota 143 3,176 76%
Mid-Atlantic 22 612 92%
Northeast 31 1,631 86%
---------------------------------------------------------------------
Total Homebuilding Total 743 13,825 93%
=====================================================================
Remaining Planned Units
March 31, 2008
Total
Owned Optioned Controlled
Traditional Homebuilding 9,529 848 10,377
Tower Homebuilding 4,728 274 5,002
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Total Homebuilding 14,257 1,122 15,379
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