Orleans not 'going broke' The Bensalem builder offered some optimism despite quarterly losses.

Bensalem's Orleans Homebuilders Inc., a regional builder, yesterday reported deep losses for the second quarter, but its chief executive said the company "wasn't going broke."

"The good news is we're not going out of business," chief executive Jeffrey Orleans said in a telephone interview.

The company's stock price soared 17 percent, or 86 cents a share, to close at $5.85.

Orleans Homebuilders' revenue for the quarter ended Dec. 31 was $154.9 million, compared with $157.1 million in the prior-year period.

Orleans reported losses of $51.3 million, or $2.78 a share, compared with a loss of $7.5 million, or 41 cents a share, a year ago. The losses were driven by property write-downs, which have accelerated across the industry.

In its restructuring, Orleans has sold lots in areas where the housing market was weak, cut costs through employee reductions and negotiated new terms with its lenders.

Garry Herdler, chief financial officer, said an amended agreement with the company's banks had extended a $580 million credit line until December 2009.

The company eliminated about 14 percent of its employees, which will save it about $4 million a year, and cut its property holdings 19 percent to 8,500 lots, Herdler said.

"We're doing everything we're supposed to be doing," Herdler said. "We're left with a very good core of properties in our primary markets that have performed relatively well compared to other regions nationally."

Orleans Homebuilders sold property in the Chicago area, Palm Coast, Fla., and Arizona. It has refocused its operations on areas it knows well - Pennsylvania, New Jersey, North Carolina and Virginia.

The restructuring retreats from a rapid expansion during the housing boom.

The proceeds from the property sales and other cost cutting allowed Orleans to pay $75 million to its banks in December, the company said.

"We did what we had to do," Jeffrey Orleans said. "We sold stuff at a major discount, and we will get a tax refund," he said.

The mood among home buyers has improved with the interest-rate cuts last month, Orleans said. "The difference in attitude is unbelievable," he said, "but whether it holds, we don't know."