Dominion Homes Reports Financial Results for the First Quarter of 2006.DUBLIN, Ohio Dublin is a city in Delaware, Franklin, and Union counties in the U.S. state of Ohio. The population was 31,392 at the 2000 census. In 2006, the population was estimated to be 36,565[1], and Dublin continues to be one of the fastest-growing suburbs of Columbus. -- Dominion dominion, power to rule, or that which is subject to rule. Before 1949 the term was used officially to describe the self-governing countries of the Commonwealth of Nations—e.g., Canada, Australia, or India. Homes, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DHOM) today announced financial results for the three months ended March 31, 2006. Highlights for the first quarter of 2006 compared to the first quarter of 2005 included: --A net loss of $3.9 million, or $0.49 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, versus net income of $642,000, or $0.08 per diluted share; --Revenues of $61.8 million, from the delivery of 315 homes, versus revenues of $92.6 million, from the delivery of 478 homes; --Sales of 475 homes, with a sales value of $89.3 million, versus sales of 626 homes, with a sales value of $120.8 million; --A backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of 590 sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. , with an aggregate sales value of $118.2 million, versus a backlog of 780 sales contracts, with an aggregate sales value of $157.8 million; --The sale of a majority interest in Centennial Home Mortgage, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , to Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. Bank N.A., that resulted in a $1.8 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain ($1.1 million aftertax gain) to the Company during the first quarter of 2006. The net loss for the first quarter of 2006 is principally due to the delivery of fewer homes than was expected and a decline in the gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. due to competitive pricing pressure. Home sales generally remained slow in the Company's markets. Douglas Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. G. Borror, Chief Executive Officer, commented, "Based on the level of sales we are currently experiencing, we do not expect that 2006 will be a profitable year. However, we are undertaking several initiatives to reduce the expected loss and position the Company for future success. We've we've Contraction of we have. we've have made significant progress on our product initiatives including active adult, multi-family, and first time/move up buyer series. We remain focused on reducing overhead expenses, managing land development and acquisition costs, improving sales, and operating our business and inventories at a level consistent with reduced sales levels." The Company will host a conference call on May 9, 2006, at 10:00 a.m. Eastern Time to discuss these results and other developments in the business. The analyst conference call will be webcast simultaneously in listen-only mode via Dominion Homes' website, www.dominionhomes.com. For those who cannot listen to the live webcast, an archived replay will be available at www.dominionhomes.com beginning at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4:00 p.m. Eastern Time on May 9, 2006 and continuing for approximately 70 days. Interested parties may listen in by accessing the Company's website and selecting "About Dominion Homes," and then selecting "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." Dominion Homes offers a variety of homes, which are differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: by size, price, standard features and available options. The Company's "The Best of Everything" philosophy focuses on providing its customers with unsurpassed products, quality, and customer service. Additional information about the Company is located on its website. First Quarter of 2006 Net Loss The Company recognized a net loss for the first quarter of 2006 of $3.9 million, or $0.49 per diluted share, compared to net income of $642,000 or $0.08 per diluted share for the first quarter of 2005. The loss in the first quarter of 2006 principally reflects fewer closings and a decline in the gross profit margin. Revenues Revenues for the first quarter of 2006 were $61.8 million, from the delivery of 315 homes, compared to $92.6 million, from the delivery of 478 homes, for the first quarter of 2005. Included in revenues for the first quarter of 2006 was $724,000 of other income, principally income from our mortgage financing services subsidiary, compared to $1.1 million of other income for the first quarter of 2005. The Company's average price of homes delivered during the first quarter of 2006 increased to $193,800 from $191,500 during the first quarter of 2005. Selling price increases were partially offset by an increase in the use of sales discounts in certain communities and on inventory homes. Gross Profit Gross profit for the first quarter of 2006 was $9.1 million compared to $18.7 million for the first quarter of 2005. The reduction in gross profit is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the delivery of 163 fewer homes and a 5.5% decline in the gross profit margin. We also faced pricing pressure in our markets, particularly in Columbus Columbus. 1 City (1990 pop. 178,681), seat of Muscogee co., W Ga., at the head of navigation on the Chattahoochee River; settled and inc. 1828 on the site of a Creek village. , where most of our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. were offering significant discounts in late 2005 that continued during the first quarter of 2006. Gross profit for the first quarter of 2006 and 2005 was reduced by approximately $550,000 and $956,000, respectively, related to deposits and due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. costs incurred for land we decided not to purchase and net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. reserves for land held for sale. Selling, General and Administrative Expenses Selling, general and administrative expenses for the first quarter of 2006 declined $1.2 million to $14.8 million compared to $16.0 million for the first quarter of 2005. This decrease resulted principally from continued attention to reducing all components of overhead to better align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. our operations with the current sales level. Gain on Sale of Investment in Centennial Home Mortgage, LLC On March 31, 2006 the Company, Dominion Homes Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Ltd., Wells Fargo Bank N.A. and its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. Wells Fargo Ventures, Inc. formed a new joint venture, Centennial Home Mortgage, LLC, which will operate as a full service mortgage bank for the Company's customers and the general public. The Company recognized a gain of $1.8 million as a result of a sale of a 50.1% interest in the joint venture to Wells Fargo. The Company continues to own the remaining 49.9% interest in the joint venture. The joint venture will utilize Wells Fargo's underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. expertise, quality control practices, software systems, operating policies and training programs. The Company is in the process of exiting the operations of Dominion Homes Financial Services, Ltd. and expects to complete the processing of the current pipeline of loan activity by the third quarter of 2006. Sales The Company sold 475 homes, with a sales value of $89.3 million, during the first quarter of 2006 compared to 626 homes, with a sales value of $120.8 million, during the same period the previous year. The average home sale price for the first quarter of 2006 was $188,000 compared to $193,000 for the first quarter of 2005. Backlog at March 31, 2006 was 590 sales contracts, with a sales value of $118.2 million, compared to 780 sales contracts, with a sales value of $157.8 million, at March 31, 2005. The average sales price of homes in backlog at March 31, 2006 was $200,300 compared to $202,300 at March 31, 2005. The Company had 67 active sales communities at March 31, 2006 compared to 62 at March 31, 2005. Certain statements in this news release are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements involve known and unknown 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, changes in national or local economic conditions, changes in federal lending programs, increases in raw materials and labor costs, levels of competition and other factors described in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2005. All forward-looking statements made in this press release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
FINANCIAL HIGHLIGHTS
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
Three Months Ended
March 31,
2006 2005
---------- ----------
Revenues $61,785 $92,643
Cost of real estate sold 52,711 73,949
---------- ----------
Gross profit 9,074 18,694
Selling, general and administrative 14,773 16,048
---------- ----------
Income (loss) from operations (5,699) 2,646
Gain on sale of investment in
Centennial Home Mortgage, LLC 1,800 -
Interest expense (2,308) (1,691)
---------- ----------
Income (loss) before income taxes (6,207) 955
Provision for income taxes (2,261) 313
---------- ----------
Net income (loss) $(3,946) $642
========== ==========
Earnings per share (loss)
Basic $(0.49) $0.08
========== ==========
Diluted $(0.49) $0.08
========== ==========
Weighted average shares outstanding
Basic 8,094,705 8,044,986
========== ==========
Diluted 8,094,705 8,207,768
========== ==========
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2006 2005
(unaudited)
------------------------
Assets
Cash and cash equivalents $2,442 $3,554
Accounts receivable 3,988 4,889
Real estate inventories 421,823 426,275
Prepaid expenses and other 8,827 8,792
Deferred income taxes 1,258 1,485
Net property and equipment 6,198 6,562
----------- ------------
Total assets $444,536 $451,557
=========== ============
Liabilities and Shareholders' Equity
Note payable, banks $215,424 $205,240
Term debt 9,300 9,300
Other liabilities 27,626 41,484
----------- ------------
Total liabilities 252,350 256,024
----------- ------------
Shareholders' equity 192,189 195,533
----------- ------------
Total liabilities and shareholders' equity $444,536 $451,557
=========== ============
Estimated Land Inventory as of March 31, 2006
Unimproved
Finished Lots Under Land Total
Land Inventory Lots Development Estimated Lots Estimated Lots
------------------- -------- ----------- -------------- --------------
Owned by the
Company:
Central Ohio 1,685 1,076 10,228 12,989
Kentucky 317 440 1,044 1,801
Controlled by the
Company:
Central Ohio 1,793 1,793
Kentucky 200 200
Held for sale:
Central Ohio 434 434
Kentucky 46 48 94
--------------------------------------------------
Total Land
Inventory 2,020 1,562 13,747 17,311
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