Avatar Holdings Inc. (AVTR, Financial) filed Quarterly Report for the period ended 2012-03-31.
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During the three months ended March 31, 2012 compared to the three months ended March 31, 2011, the number of homes closed increased by 90.9% and the related revenues increased by 93.3%. Our average sales price for homes closed during the three months ended March 31, 2012 increased to $233 compared to $230 for the three months ended March 31, 2011. We anticipate that we will close in excess of 80% of the homes in backlog as of March 31, 2012 during the subsequent 12-month period, subject to cancellations by purchasers prior to scheduled delivery dates. We do not anticipate a meaningful improvement in our markets in the near term.
Net loss for the three months ended March 31, 2012 was $8,451 or $0.68 per basic and diluted share compared to $10,097 or $0.81 per basic and diluted for the three months ended March 31, 2011. The decrease in net loss for the three months ended March 31, 2012 compared to the same period in 2011 was primarily due to $3,091 of profit in commercial and industrial and other land sales in the first quarter of 2012 and a $1,130 decrease in net losses from our two homebuilding segments, offset in part by $1,655 increase in gains attributable to non-controlling interests and $1,382 increase in other real estate expenses.
Revenues from active adult operations increased $1,999 or 25.6% for the three months ended March 31, 2012 compared to the same period in 2011. Expenses from active adult operations increased $2,308 or 22.8% for the three months ended March 31, 2012 compared to the same period in 2011. The increase in revenues is primarily attributable to increased closings and a change in mix of homes closed for the three months ended March 31, 2012 than for the three months ended March 31, 2011, offset in large part by the decrease of amenity revenues in 2012 due to the outsourcing of our golf and food and beverage operations. The increase in expenses is attributable to increased closings in the first quarter of 2012 as compared to the first quarter of 2011, plus a change in the mix of homes closed, specifically at CantaMia. During the three months ended March 31, 2012, we recorded impairment charges in our active adult operations of approximately $152 compared to approximately $290 for the three months ended March 31, 2011 from homes completed or under construction. The average sales price on closings from active adult homebuilding operations during the three months ended March 31, 2012 was $250 compared to $206 during the same period in 2011. The average contribution margin (excluding impairment charges) on closings from active adult homebuilding operations during the three months ended March 31, 2012 was approximately 14% compared to approximately 18% during the same period in 2011. The decrease in average contribution margins is generally attributable to a change in mix of homes closed. Specifically, in the first quarter of 2012 we closed a larger mix of homes at a high price point at CantaMia than in the same period in 2011. These higher priced, two-story homes generally have smaller profit margins. At our Seasons community, we closed speculative/model homes in the first quarter of 2011 which generated high profit margins as compared to production inventory which closed in the first quarter of 2012. Offsetting these two decreases in average contribution margins was improved margins from Solivita. During 2011, we re-engineered the current housing product at Solivita to make the homes more cost efficient. The result of this, coupled with increases in the average closing price per unit generated higher operating margins at Solivita in the first quarter of 2012 than in the first quarter of 2011. Included in the results from active adult operations are divisional overhead allocated among several communities and our amenity operations.
Revenues from primary residential operations increased $3,978 or 108.8% for the three months ended March 31, 2012 compared to the same period in 2011. Expenses from primary residential operations increased $2,539 or 51.9% for the three months ended March 31, 2012 compared to the same period in 2011. The increase in revenues is primarily attributable to 20 additional closings, offset in part by a reduction in the average price per unit closed in the first quarter of 2012 as compared to the first quarter of 2011. The increase in expenses is attributable to increased closings and a change in mix of homes closed in the three months ended March 31, 2012 as compared to the three months ended March 31, 2011. During the three months ended March 31, 2012, we did not record any impairment charges in our primary residential operations compared to approximately $7 for the three months ended March 31, 2011 from homes completed or under construction. The average sales price on closings from primary residential homebuilding operations for the three months ended March 31, 2012 was $216 compared to $278 for the same period in 2011. The average contribution margin (excluding impairment charges) on closings from primary residential homebuilding operations for the three months ended March 31, 2012 was approximately 13% compared to approximately 5% for the same period in 2011. The increase in average contribution margins is attributable to our Phoenix primary homebuilding operations generating higher margins in the first quarter of 2012 versus the first quarter of 2011, offset in part by a change in mix of closings in Florida. Phoenix operations for the three months ended March 31, 2012 generated an increased average closing price per unit with lower land and housing construction costs per unit as compared to the three months ended March 31, 2011, due to a favorable change in the mix of homes closed. In Florida, we closed speculative inventory in the first three months of 2011 which had a low cost basis, and in the first three months of 2012 we had our first closings of new product that generated lower profit margins. Included in the results from primary residential operations are divisional overhead allocated among several communities and our amenity operations.
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Highlight of Business Operations:
The number of net housing contracts signed during the three months ended March 31, 2012 compared to the same period in 2011 increased 107.8%. The dollar value of housing contracts signed increased 91.4%. Although the volume of housing contracts signed for the three months ended March 31, 2012 continue to reflect a weak market for new residences in the geographic areas where our communities are located, the increase in sales over the same period in 2011 indicates improved market conditions during the past twelve months. Our communities are located in areas of Florida and Arizona where there is an excess of units for sale, including foreclosures and houses being sold by lenders, and continued use of various sales incentives by residential builders in our markets, including AV Homes. During the three months ended March 31, 2012, cancellations of previously signed contracts totaled 35 compared to 9 during the three months ended March 31, 2011. As a percentage of the gross number of contracts signed, this represents 24.8% and 15.0%, respectively.During the three months ended March 31, 2012 compared to the three months ended March 31, 2011, the number of homes closed increased by 90.9% and the related revenues increased by 93.3%. Our average sales price for homes closed during the three months ended March 31, 2012 increased to $233 compared to $230 for the three months ended March 31, 2011. We anticipate that we will close in excess of 80% of the homes in backlog as of March 31, 2012 during the subsequent 12-month period, subject to cancellations by purchasers prior to scheduled delivery dates. We do not anticipate a meaningful improvement in our markets in the near term.
Net loss for the three months ended March 31, 2012 was $8,451 or $0.68 per basic and diluted share compared to $10,097 or $0.81 per basic and diluted for the three months ended March 31, 2011. The decrease in net loss for the three months ended March 31, 2012 compared to the same period in 2011 was primarily due to $3,091 of profit in commercial and industrial and other land sales in the first quarter of 2012 and a $1,130 decrease in net losses from our two homebuilding segments, offset in part by $1,655 increase in gains attributable to non-controlling interests and $1,382 increase in other real estate expenses.
Revenues from active adult operations increased $1,999 or 25.6% for the three months ended March 31, 2012 compared to the same period in 2011. Expenses from active adult operations increased $2,308 or 22.8% for the three months ended March 31, 2012 compared to the same period in 2011. The increase in revenues is primarily attributable to increased closings and a change in mix of homes closed for the three months ended March 31, 2012 than for the three months ended March 31, 2011, offset in large part by the decrease of amenity revenues in 2012 due to the outsourcing of our golf and food and beverage operations. The increase in expenses is attributable to increased closings in the first quarter of 2012 as compared to the first quarter of 2011, plus a change in the mix of homes closed, specifically at CantaMia. During the three months ended March 31, 2012, we recorded impairment charges in our active adult operations of approximately $152 compared to approximately $290 for the three months ended March 31, 2011 from homes completed or under construction. The average sales price on closings from active adult homebuilding operations during the three months ended March 31, 2012 was $250 compared to $206 during the same period in 2011. The average contribution margin (excluding impairment charges) on closings from active adult homebuilding operations during the three months ended March 31, 2012 was approximately 14% compared to approximately 18% during the same period in 2011. The decrease in average contribution margins is generally attributable to a change in mix of homes closed. Specifically, in the first quarter of 2012 we closed a larger mix of homes at a high price point at CantaMia than in the same period in 2011. These higher priced, two-story homes generally have smaller profit margins. At our Seasons community, we closed speculative/model homes in the first quarter of 2011 which generated high profit margins as compared to production inventory which closed in the first quarter of 2012. Offsetting these two decreases in average contribution margins was improved margins from Solivita. During 2011, we re-engineered the current housing product at Solivita to make the homes more cost efficient. The result of this, coupled with increases in the average closing price per unit generated higher operating margins at Solivita in the first quarter of 2012 than in the first quarter of 2011. Included in the results from active adult operations are divisional overhead allocated among several communities and our amenity operations.
Revenues from primary residential operations increased $3,978 or 108.8% for the three months ended March 31, 2012 compared to the same period in 2011. Expenses from primary residential operations increased $2,539 or 51.9% for the three months ended March 31, 2012 compared to the same period in 2011. The increase in revenues is primarily attributable to 20 additional closings, offset in part by a reduction in the average price per unit closed in the first quarter of 2012 as compared to the first quarter of 2011. The increase in expenses is attributable to increased closings and a change in mix of homes closed in the three months ended March 31, 2012 as compared to the three months ended March 31, 2011. During the three months ended March 31, 2012, we did not record any impairment charges in our primary residential operations compared to approximately $7 for the three months ended March 31, 2011 from homes completed or under construction. The average sales price on closings from primary residential homebuilding operations for the three months ended March 31, 2012 was $216 compared to $278 for the same period in 2011. The average contribution margin (excluding impairment charges) on closings from primary residential homebuilding operations for the three months ended March 31, 2012 was approximately 13% compared to approximately 5% for the same period in 2011. The increase in average contribution margins is attributable to our Phoenix primary homebuilding operations generating higher margins in the first quarter of 2012 versus the first quarter of 2011, offset in part by a change in mix of closings in Florida. Phoenix operations for the three months ended March 31, 2012 generated an increased average closing price per unit with lower land and housing construction costs per unit as compared to the three months ended March 31, 2011, due to a favorable change in the mix of homes closed. In Florida, we closed speculative inventory in the first three months of 2011 which had a low cost basis, and in the first three months of 2012 we had our first closings of new product that generated lower profit margins. Included in the results from primary residential operations are divisional overhead allocated among several communities and our amenity operations.
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