Question-and-Answer Session
Operator
Thank you, sir. Ladies and gentlemen, at this time we will begin the question and answer session. (Operator Instructions) Ivy Zelman with Zelman and Associates, please go ahead with your question.
Ivy Zelman - Zelman and Associates
Good afternoon guys. It would have been helpful to have the press release a little earlier so maybe—did you have technical difficulties or something, getting the press release out?
Jerry L. Starkey
Yes.
Ivy Zelman - Zelman and Associates
Okay. In any case, I’m looking at your leverage here today and I kind of want to understand, with the balance sheet as levered as it and expectations for, you know, to be challenging as it is, kind of hoping, as I understand, on a go-forward basis what you’re anticipating for absorption and some of your assumptions on pricing might enable you to get this balance sheet back in order and how you see yourself as a going concern continuing with these kind of debt levels?
Jerry L. Starkey
Sure. I think obviously the debt levels will be dependent upon selling inventory and that’s where most of our focus is for 2008 and we would expect to generate cash flow in the $300 million to $450 million area this year. And, again, that will come principally from closing the towers that we have just recently completed, principally the Watermark—we’re projecting high defaults over on Oceanside--and we’ll continue with the close out of the tower units in One Bal Harbour Hotel.
We additionally would expect to have about 400 to 450 closings out of inventory in traditional home building during the course of this year. Year-to-date our orders have been about 90% spec orders; we’re building and selling very few to-be-built homes. Our pricing is such that there’s very compelling benefit to the consumer to purchase a existing home for a quick closing and so that’s where we expect the emphasis to be and we’re seeing good progress in that area.
On the tower side we’re projecting around 275 to 300 units that are actually backlogged to close for the year with around 200 to 230 or 240 out of inventory to sell during the year. As you can imagine with the very significant write downs that we took on the standing inventory, we have, in fact, adjusted our pricing and so we are seeing good traction on moving inventory in Florida in both traditional home building and tower home building so far this year.
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