Orleans is based in PA and operates in 14 markets. Their business has severely dropped off in the Midwest and Florida experiencing 50% and 70% drops respectively when it comes to new orders. This quote is from the May 10Q :
We believe that overall economic conditions will remain difficult in the near term and these conditions may continue to have a negative impact on new orders and new order pricing, thereby further reducing revenues, gross margins and net income. We are responding to these unfavorable market conditions by attempting to maintain absorption levels through the use of sales incentives, reevaluating our individual land holdings, reducing our land expenditures and emphasizing cost reductions to adjust for lower levels of production. Further decreases in demand for our homes may require us to further increase the use of sales incentives.
Take a look at the most recent balance sheet numbers. They've got a lot of debt, but little cash. They have 58.5 million in cash and about $114 million in current liabilities. Accounts payable exceeds cash by a comfortable margin. SG&A cost them 19 million last quarter. They are going to have to unload some more land and raise cash in order to survive.
$4.15 (08/04/08)
