Housing Giants - August 11, 2008 - (Page 22) ceo spotlight Professional Builder’s recent Giant 400 rankings, mostly because the firm operates on a fiscal year ending March 31. The timing of when PB gathers data for the report, early each year, ranks Drees on a year that ended the previous spring. Most of the industry is ranked on data from the previous calendar year. So Drees rose on housing revenues of nearly $1.11 billion from 3,031 closings in a year that ended in early 2007. “It’s a timing thing,” Drees admits. “We look worse than others when the market is going up, but better when it’s going down.” In its most recent fiscal year, Drees closed 2,233 homes for revenue of $833 million, so the firm is shrinking like others, but more conservatively than many — especially the big public home builders, who are slashing operations and closing divisions. cONServATIve SHrINkING “We now have 750 employees,” Drees says, “compared to about 1,050 at the peak of the market in 2005. We’ve been slow to downsize because we want to maintain an organization that can capitalize when the market comes back. We haven’t closed any divisions. Our crystal ball isn’t that good. We don’t know which will come back faster, so we wouldn’t know which ones to close, even if we decided that was the right thing to do.” Drees is downsizing by eliminating jobs in construction and field operations, but he’s keeping his sales management teams intact. “That’s one area where we continue to invest,” Drees says. “There will be a window of opportunity when the market turns — before the industry is geared back up for high production — that will create a bonanza for builders who are still standing and ready to meet that pent-up demand. And the sales operation will be critical to do it.” Drees believes his company’s geographic footprint also creates an advantage. The firm has operations in the Midwest and Southern border states, radiating from its home market of Cincinnati. It also entered into Texas, where Ralph Drees expanded in the aftermath of the 1982 national housing crash. “We’re a lot better off than a lot of our peers,” Drees offers. “We have a very small presence in Florida [Jacksonville], and we’re not in California, Arizona or Nevada, where the inventories of unsold homes are greatest. “The only other coastal market we’re in is Washington, D.C., which has a strong local economy,” Drees says. 22 HOUSING GIANTS.8.11.08 www.HOUSINGGIANTS.cOm http://www.housingzone.com/probuilder/index.asp?layout=giants http://www.housingzone.com/probuilder/index.asp?layout=giants http://www.housinggiants.com
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