Profit rises despite decline in deliveries for Kaufman and Broad

Thursday, Sept. 28, 2000 | 11:18 a.m.

Kaufman and Broad Home Corp. of Los Angeles, the largest home builder in the booming Las Vegas market, today reported record financial results for its third quarter ending Aug. 31 despite a decline in revenue and home deliveries.

K&B said it earned $44.6 million or $1.14 per share, up from $38.2 million or 78 cents in the year-ago quarter. The 1999 quarter's figure included an extraordinary loss of $18.2 million on secondary mortgage trading.

Kaufman & Broad said its backlog of homes to be built totaled $2.03 billion at the end of the third quarter, up $283.3 million from a year ago.

Earnings per share in the latest quarter benefited from a decrease in selling, general and administrative expenses, a lower effective tax rate and a nearly 20 percent reduction in the number of diluted shares outstanding because of Kaufman and Broad's share repurchase program.

Quarterly revenue in the quarter of $981 million was down from $1.06 billion a year ago.

"Our KB2000 operating model, unique in our industry, continues to drive our performance," K&B Chief Executive and Chairman Bruce Karatz said in a statement. "I'm particularly pleased that we were able to lower ... expenses, despite incurring transition costs related to our various consolidation programs. With our current strong backlog levels and proven operating disciplines in place, we are on track to end fiscal 2000 with another earnings per share record."

Deliveries in the third quarter totaled 5,710 units vs. 6,103 units a year ago for Kaufman and Broad, which builds about 3,000 homes per year in the Las Vegas market.

Kaufman and Broad attributed the decline in deliveries to high sales in France in 1999 because of a special tax benefit to home buyers; and because the firm is being more selective in its investments in California, where it closed out sales in some communities that were not replaced.