KB Home expects to use cash for 'land opportunities,' CFO says

By Aleesia Forni

Columbus, Ohio, Nov. 9 - KB Home's use of cash in the future will "depend on the environment we see," according to chief financial officer Jeff Kaminski.

If the company assumes a flat sales environment, "we'll really be looking at land opportunities," Kaminski said during the company's presentation at the UBS Building & Building Products Ninth Annual CEO Conference on Wednesday.

"We have a tremendous ability to control liquidity through reinvestment," Kaminski continued. "We're not constraining our business right now due to liquidity or due to cash concerns."

Though Kaminski said this was not guidance for next year, he continued that it is "probably a safe bet" to assume that KB Home is "not going to be burning or using cash in 2012."

Kaminski said that the company will "continue to carefully manage the capital profile" of KB Home.

Kaminski also commented on the company's plans for future lines of credit, saying KB Home would put a revolver in place "to finance growth."

"At the current time, we're pretty comfortable with our profile," Kaminski said.

As of Aug. 31, the company had a debt balance of $1.6 billion, down from $1.8 billion at Nov. 30, 2010.

"This was due in part to the repayment of $100 million of debt that matured in the third quarter as part of our balanced approach to navigating the current environment," chief executive officer Jeffrey T. Mezger said during the call.

The company's next bond maturity is in 2014.

Mezger expects to end the year with a "substantially higher" backlog than the company did when entering 2011 and believes this "hard-earned momentum" will continue into 2012.

"As we look ahead, while the markets are not necessarily getting better, we are better as a company," Mezger said.

"Although it is difficult to make predictions in a market as unpredictable as the one we've been operating in, we do believe we are well-positioned strategically and financially for today's housing market."

KB Home is a Los Angeles-based homebuilding and financial services company.

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