From Centex Corp.'s FQ209 conference call:
We’ve combined and consolidated operations around the country for efficiency. In California, for example, we now operate two divisions with a couple of satellite offices where we once operated nine separate divisions. We’ve made similar changes in Florida and the Carolinas.
[We’re] focusing on our core home building business in the quarter. We essentially completed the wind down of our retail mortgage operation and we successfully completed the sale of two of our smaller non-core businesses. We closed on the sale of our insurance agency business and just after the end of the quarter we sold our CTX Builder Supply business.
[Our] approach [is to] pre-sell homes to a backlog and then building homes on a predictable schedule based on that backlog. Gross margins reached 15% in the second quarter and our backlog indicates that we’ll see additional improvements. Discounts and incentives have dropped, as have financing costs and sales concessions.
A lot of the land that private builders are working on just doesn’t have much value anymore. So there’s no incentive for even the builder to continue… Banks will have to reconcile that in their capital structure…Next year will have lots of opportunities [from banks].
An analyst asks: Where are all these finished lots actually? Transparency would help analysts feel more confident about where homebuilders are hurting and where they aren't:
Certainly there’s finished lots in… the more impacted [housing] markets in terms of sales rates... But frankly, we aren’t spending much in the way of development anywhere outside of Texas right now and maybe Rawley/Durham in the Carolinas. And maybe the coastal Carolinas just a bit as well because our sales rates are still holding up relatively well.
