Housing Giants - July 10, 2008 - (Page 27)

It is also critical that sales, production, financial and economic data not just be tracked but properly placed against previous numbers so that builders can spot trends. Brett Gardner is chief operating officer of Darling Homes, a Houston-based builder that is projected to finish 600 units and earn $225 million in 2008. Gardner sees internal reports as critical in steering Darling, and he starts by monitoring weekly sales reports that show traffic, conversion rates and sales units results. On a monthly basis, Gardner monitors the profit and loss performance for each individual community and then measures regional performance. He says they monitor that against an annual budget as well as financial metrics at department levels that gauge performance and productivity. “Beyond the financial performance, we do have job-level gross performance metrics. At the time of sale, we identify the margins expected from that particular job and then we monitor that performance against expected margins,” says Gardner. Mason Cave, chief financial officer of MAC Homes (formerly known as Santa Anna Homes) in Phoenix, runs a large forecasting model that takes into account all of the company’s subdivisions. Every there are multiple ways to gather data. coo Brett gardner describes what’s going on at Darling Homes. month, as the accounting department finishes with its financials, that data is rolled into the system and updates forecasts of everything from sales to cash flows and profit and loss metrics. Cave says the accurate and updated forecasting reports allow him to drive the company in the appropriate direction. He also credits the company’s constant analysis of data and reports to helping it survive the downturn. What Cave saw in the reports allowed MAC Homes to adjust prices faster, determine what projects they could cut loose and approach their lenders. “[Tracking the data] allowed us to understand what was coming down the pipeline. We were able to get in and talk www.Housinggiants.com 7.10.08.Housing giants 27 http://www.housingzone.com/giants/article/CA6557755.html?q=darlinghomes http://www.housinggiants.com

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Housing Giants - July 10, 2008 Contents Viewpoint News & Moves Tech M&A Critical Management Series Part 1

Housing Giants - July 10, 2008

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