3. Centex Corp.
Dallas, Texas
CEO: Tim Eller
2008 closings: 18,241
Percent change: -41
Previous rank: 3
Centex spent much of last year cutting its losses, emphasizing a made-to-order home building model. The company prefers to pre-sell its homes, holding only two to five spec homes per community, and building to a cadence. Hoping to beat its peers back to profitability, Centex aggressively reduced its footprint. It exited Detroit and Columbus, Ohio, and announced plans to exit the Denver market by this spring. Centex also sold its Builder Supply operation to ProBuild. The moves helped the company report steadily narrowing losses in its most recent quarters; $664 million for its most recent quarter (with $590 million of that coming from impairments and land-related charges) compared to a loss of $976 million during the same quarter a year earlier. Centex estimates that about half its 127 neighborhoods have been impaired so far. It continues to beat analyst expectations for cash flow, ending its most recent fiscal quarter with $1.47 billion in cash. The company hopes to be cash-flow positive in its next quarter and be in a strong position to capitalize on potential distressed opportunities.
"The depth and duration of this financial and housing correction make this a game changer for home builders like no cycle that has come before," says CEO Tim Eller. "And I believe this is going to dramatically change the competitive landscape for home builders for years to come. [This market will] test the best and eliminate the rest.