Company Record Homebuilding Revenues of $1.1
billion for Fourth Quarter and $3.3 billion for Full Year
2022
Net Income Up 117% For Full Year
2022
Return on Participating Equity of
49.1%
Dream Finders Homes, Inc. (the “Company”, “Dream Finders Homes”,
“Dream Finders” or “DFH”) (NYSE: DFH) announced its financial
results for the fourth quarter and full year ended December 31,
2022.
Fourth Quarter 2022 Highlights (As Compared to Fourth Quarter
2021)
- Homebuilding revenues increased 29% to $1.1 billion, a Company
record, compared to $850 million
- Gross margin as a percentage of homebuilding revenues increased
90 basis points (bps) to 17.1% from 16.2%
- Pre-tax income increased 61% to $121 million, compared to $75
million
- Net income attributable to DFH increased 51% to $86 million, or
$0.89 per basic share, compared to $57 million or $0.58 per basic
share
- Home closings increased 18% to 2,316 from 1,960
- Average sales price of homes closed increased 9% to $479,554
from $440,939
Full Year 2022 Highlights (As Compared to Full Year 2021,
unless otherwise noted)
- Homebuilding revenues increased 74% to $3.3 billion, a Company
record, compared to $1.9 billion
- Gross margin as a percentage of homebuilding revenues increased
240 bps to 18.4% from 16.0%
- Pre-tax income increased 120% to $356 million, compared to $162
million
- Net income attributable to DFH increased 117% to $262 million,
or $2.67 per basic share, compared to $121 million or $1.27 per
basic share
- Home closings increased 41% to 6,878 from 4,874
- Average sales price of homes closed increased 22% to $474,292
from $389,094
- Backlog of sold homes as of December 31, 2022 was 5,548 homes
valued at $2.5 billion
- Return on participating equity was 49.1% for the year ended
December 31, 2022, compared to 44.3% for the year ended December
31, 2021
- Total liquidity, comprised of cash and cash equivalents, and
availability under the revolving credit facility, increased to $487
million as of December 31, 2022, compared to $277 million as of
December 31, 2021
Management Commentary
“As we anticipated when we reported third quarter earnings, our
fourth quarter produced record total home closings of 2,316, an 18%
increase, record revenue of $1.1 billion, a 29% increase, and net
income of $86 million, a 51% increase compared to the prior year
quarter. Rounding out the record quarter was our basic earnings per
share of $0.89, a new quarterly high. Additionally, with a 49.1%
return on participating equity for the year, we continue to perform
in line with our record levels. Dream Finders’ second year as a
public company concluded with full year homebuilding revenues of
$3.3 billion, net income of $262 million and basic earnings per
share of $2.67, all annual records.
While I am very proud of our team’s efforts that led to this
record year for the Company, I am conscious of the economic
conditions that negatively affected demand, resulting in 1,107 net
new orders during the fourth quarter. We have seen an increase in
the net new order rate in the first quarter to date, but there are
numerous factors, chiefly higher mortgage rates, which could
continue to impact sales throughout 2023. We delivered 6,878 homes
in 2022, slightly short of our goal, but we are still pleased with
the overall results as we carry a backlog of 5,548 sold homes,
valued at $2.5 billion, into 2023. While we monitor all facets of
our business from quarter to quarter (and much more periodically
than that), we have been steadfast in building this business for
the long-term and you can rest assured that we are hard at work
implementing the necessary strategies to maintain long-term
profitable growth.
While the entire homebuilding industry was impacted by supply
chain challenges and rising mortgage rates, our Company quickly
adapted to changing market conditions during the year. Our
disciplined land-light strategy and diligent underwriting allowed
us to strengthen our balance sheet as we accumulated record cash of
$365 million and had total available liquidity of $487 million at
year-end 2022. We remain opportunistic as we continuously assess
opportunities to generate long-term value for the Company and our
shareholders,” said Patrick Zalupski, Dream Finders Homes Chairman
and CEO.
Fourth Quarter 2022 Results
Homebuilding revenues for the fourth quarter 2022 increased 29%
to $1.1 billion, compared to $850 million in the year-ago quarter.
Home closings increased 18% to 2,316, compared to 1,960 in the
year-ago quarter. Average sales price (“ASP”) of homes closed for
the fourth quarter 2022 increased to $479,554, compared to $440,939
in the year-ago quarter. The increase in homebuilding revenues was
primarily due to the increase in home closings, as well as home
price appreciation.
Homebuilding gross margin percentage in the fourth quarter 2022
increased 90 bps to 17.1%, compared to 16.2% in the year-ago
quarter. Selling, general and administrative expenses as a
percentage of homebuilding revenues was 6.8% in the fourth quarter
2022, remaining consistent when compared to the year-ago
quarter.
Net income attributable to DFH in the fourth quarter 2022 was
$86 million, or $0.89 per basic share, compared to $57 million, or
$0.58 per basic share in the fourth quarter 2021, representing
increases of 51% and 53%, respectively, when compared to the
year-ago quarter. We consider basic earnings per share (“EPS”) the
most meaningful metric of our profitability, as the diluted EPS
calculation, based on accounting guidance and the terms of the
convertible preferred stock, is impacted by the volatility of the
price of our common stock in the most recent quarter and fluctuates
outside of our control. In addition, the holders of the convertible
preferred stock cannot trigger the conversion feature until
September 29, 2026, the fifth year following its issuance. The
Company does not intend for the preferred stock to convert into
Class A common stock.
Net new orders in the fourth quarter 2022 were 1,107, compared
to 1,974 in the year-ago quarter. During the fourth quarter,
housing demand continued to moderate as a result of rising mortgage
rates and macro-economic volatility. Our cancellation rate was
32.1% for the quarter ended December 31, 2022, compared to 13.1%
for the year-ago quarter. Our cancellation rate for fiscal 2022 was
21.5%. Despite our cancellation rates through December 31, 2022, we
have been successful in finding new buyers for these homes, and our
finished spec inventory levels are in line with internal
targets.
As of December 31, 2022, DFH had a backlog of 5,548 homes,
valued at $2.5 billion, representing decreases of 13% and 14%,
respectively, compared to the prior year as of December 31, 2021.
As of December 31, 2022, the ASP in backlog was $451,075.
Return on Equity (“ROE”) for full year 2022 was 49.1%, which was
an improvement of 480 bps over the full year 2021. ROE is
calculated as net income attributable to Dream Finders for the
year, divided by average participating stockholders’ equity.
Average participating stockholders’ equity is based on beginning
and ending balances for a trailing twelve month period.
The Company ended the year with $365 million of unrestricted
operating cash and $122 million of available liquidity under its
unsecured revolving credit facility. Outstanding borrowings under
the revolving facility were $965 million as of December 31, 2022
and the Company’s debt to capitalization ratio was 45.2% as of
December 31, 2022, an improvement of 720 bps over the prior year as
of December 31, 2021.
Full Year 2023 Outlook
Dream Finders Homes expects approximately 6,000 home closings
for the full year 2023. Further deterioration of general economic
conditions, including interest rate increases and mortgage
availability, as well as any further COVID-19 governmental
restrictions on land development, home construction or home sales
or additional supply chain challenges could negatively affect the
Company’s ability to achieve this number of home closings in 2023.
As of December 31, 2022, the Company backlog was 5,548 homes,
valued at $2.5 billion, with approximately 1,070 homes in backlog
expected to be delivered in 2024 and beyond.
The following table shows the backlog units and ASP as of
December 31, 2022 by segment:
As of December 31,
2022
Backlog:
Units
Average Sales Price
Jacksonville
1,740
$
314,935
Colorado
39
604,002
Orlando
888
603,202
The Carolinas
749
314,531
Texas
1,071
712,077
Other (1)
1,061
374,325
Total
5,548
$
451,075
(1)
Austin, Washington D.C.,
Savannah, GA, Hilton Head and Bluffton, S.C., Active Adult and
Custom Homes. Austin refers to legacy DFH operations in Texas,
exclusive of MHI. Washington D.C., which was previously its own
reportable segment (“DC Metro”) comprising our homebuilding
operations in the Washington D.C. metropolitan area is being
included in “Other” due to its relative size to the Company as of
December 31, 2022.
About Dream Finders Homes, Inc.
Dream Finders Homes (NYSE: DFH) is a homebuilder based in
Jacksonville, FL. Dream Finders Homes builds single-family homes in
Florida, Texas, North Carolina, South Carolina, Georgia, Colorado,
and the Washington, D.C. metropolitan area, which includes Northern
Virginia and Maryland. Through its mortgage banking and title
insurance joint ventures, DFH also provides mortgage financing and
title services to its homebuyers. Dream Finders Homes achieves its
industry-leading growth and returns by maintaining an asset-light
homebuilding model. For more information, please visit
www.dreamfindershomes.com.
Forward-Looking Statements
This press release includes forward-looking statements regarding
future events, including projected 2023 home closings and market
conditions and possible or assumed future results of operations,
including statements regarding the Company’s strategies and
expectations as they relate to market opportunities and growth. All
forward-looking statements are based on Dream Finders Homes’
beliefs as well as assumptions made by and information currently
available to Dream Finders Homes. These statements reflect Dream
Finders Homes’ current views with respect to future events and are
subject to various risks, uncertainties and assumptions. These
risks, uncertainties and assumptions are discussed in Dream Finders
Homes’ Annual Report on Form 10-K for the year ended December 31,
2022 and other filings with the U.S. Securities and Exchange
Commission. Dream Finders Homes undertakes no obligation to update
or revise any forward-looking statement except as may be required
by applicable law.
Dream Finders Homes,
Inc.
Consolidated Statements of
Comprehensive Income and Operating Activity
(In thousands, except per
share amounts and Other Financial and Operating Data, unless
otherwise noted)
For the Three Months Ended
December 31, (unaudited)
For the Year Ended
December 31,
2022
2021
2022
2021
Revenues:
Homebuilding
$
1,096,911
$
850,069
$
3,334,559
$
1,917,301
Other
2,555
2,021
7,776
6,609
Total revenues
1,099,466
852,090
3,342,335
1,923,910
Homebuilding cost of sales
909,393
712,319
2,722,139
1,610,332
Selling, general and administrative
expense
74,476
61,046
271,040
154,405
Income from unconsolidated entities
(4,691
)
(5,198
)
(16,122
)
(9,428
)
Contingent consideration revaluation
(822
)
1,771
11,053
7,533
Other (income) expense, net
(148
)
6,732
(1,963
)
(1,653
)
Interest expense
1
—
32
672
Income before income taxes
121,257
75,420
356,156
162,049
Income tax expense
(31,283
)
(14,050
)
(81,859
)
(27,455
)
Net and comprehensive income
89,974
61,370
274,297
134,594
Net and comprehensive income attributable
to noncontrolling interests
(3,642
)
(4,067
)
(11,984
)
(13,461
)
Net and comprehensive income attributable
to Dream Finders Homes, Inc.
$
86,332
$
57,303
$
262,313
$
121,133
Earnings per share(1)
Basic
$
0.89
$
0.58
$
2.67
$
1.27
Diluted
$
0.78
$
0.58
$
2.45
$
1.27
Weighted-average number of
shares
Basic
92,760,036
92,521,482
92,745,781
92,521,482
Diluted
111,470,240
103,296,558
106,691,248
95,313,593
Other Financial and Operating Data
(unaudited)
Active communities at end of period(2)
206
205
206
205
Home closings
2,316
1,960
6,878
4,874
Average sales price of homes closed(3)
$
479,554
$
440,939
$
474,292
$
389,094
Net new orders
1,107
1,974
6,045
6,808
Cancellation rate
32.1
%
13.1
%
21.5
%
12.2
%
Backlog (as of period end) - homes
5,548
6,381
5,548
6,381
Backlog (as of period end, in thousands) -
value
$
2,502,564
$
2,913,170
$
2,502,564
$
2,913,170
Gross margin (in thousands)(4)
$
187,518
$
137,750
$
612,420
$
306,969
Gross margin %(5)
17.1
%
16.2
%
18.4
%
16.0
%
Net profit margin %
7.9
%
6.7
%
7.9
%
6.3
%
(1)
The Company calculated EPS for
the year ended December 31, 2021 prospectively for the period
subsequent to the Company’s IPO and Corporate Reorganization, based
on net income attributable to common stockholders for the period
January 21, 2021 through December 31, 2021 over the weighted
average shares outstanding for the same period, as described in
Note 1 in the Annual Report on Form 10-K for the year ended
December 31, 2022. The total outstanding shares of common stock are
made up of Class A common stock and Class B common stock, which
participate equally in their ratable ownership of the Company.
(2)
A community becomes active once
the model is completed or the community has its fifth sale. A
community becomes inactive when it has fewer than five units
remaining to sell.
(3)
Average sales price of homes
closed is calculated based on homebuilding revenues, excluding the
impact of deposit forfeitures, percentage of completion revenues
and land sales, over homes closed.
(4)
Gross margin is homebuilding
revenues less homebuilding cost of sales.
(5)
Calculated as a percentage of
homebuilding revenues.
Three Months Ended
December 31,
Year Ended
December 31,
2022
(unaudited)
2021
(unaudited)
2022
(unaudited)
2021
(unaudited)
Units
Average Sales Price
Units
Average Sales Price
Units
Average Sales Price
Units
Average Sales Price
Home Closings:
Jacksonville
528
$
443,178
372
$
397,731
1,439
$
454,496
1,237
$
363,755
Colorado
81
593,128
89
508,526
285
592,417
230
488,502
Orlando
321
419,996
173
394,962
656
443,752
604
404,035
The Carolinas
497
335,325
326
307,025
1,433
334,970
1,233
300,426
Texas (1)
669
624,362
689
532,243
2,229
584,198
689
532,243
Other (2)
220
497,422
311
436,950
836
437,837
881
400,618
Total
2,316
$
479,554
1,960
$
440,939
6,878
$
474,292
4,874
$
389,094
(1)
Texas consists of the operations
of MHI, which was acquired on October 1, 2021.
(2)
Austin, DC Metro, Savannah, GA,
Hilton Head and Bluffton, S.C., Active Adult and Custom Homes.
Austin refers to legacy DFH operations in Texas, exclusive of
MHI.
Dream Finders Homes,
Inc.
Consolidated Balance
Sheets
(In thousands, except share
and per share amounts)
December 31, 2022
December 31, 2021
Assets
Cash and cash equivalents
$
364,531
$
227,227
Restricted cash (VIE amounts of $4,372 and
$4,275)
30,599
54,095
Accounts receivable (VIE amounts of $580
and $2,684)
43,490
33,482
Inventories:
Construction in process and finished
homes
1,175,107
961,779
Company owned land and lots
196,563
83,197
VIE owned land and lots
6,515
21,686
Total inventories
1,378,185
1,066,662
Lot deposits
277,258
241,406
Other assets (VIE amounts of $1,877 and
$2,185)
49,913
43,962
Investments in unconsolidated entities
14,008
15,967
Property and equipment, net
7,337
6,789
Operating lease right-of-use assets
24,084
19,359
Deferred tax asset
4,526
4,232
Intangible assets, net of amortization
4,999
9,140
Goodwill
172,207
171,927
Total assets
$
2,371,137
$
1,894,248
Liabilities
Accounts payable (VIE amounts of $353 and
$1,309)
$
134,702
$
113,498
Accrued expenses (VIE amounts of $4,434
and $6,915)
184,051
139,508
Customer deposits
145,654
177,685
Construction lines of credit (VIE amounts
of $0 and $1,979)
966,248
763,292
Operating lease liabilities
24,661
19,826
Contingent consideration
115,128
124,056
Total liabilities
1,570,444
1,337,865
Mezzanine Equity
Preferred mezzanine equity
156,045
155,220
Stockholders’ Equity
Class A common stock, $0.01 per share,
289,000,000 authorized, 32,533,883 and 32,295,329 outstanding as of
December 31, 2022 and 2021, respectively
325
323
Class B common stock, $0.01 per share,
61,000,000 authorized, 60,226,153 outstanding as of December 31,
2022 and 2021
602
602
Additional paid-in capital
264,757
257,963
Retained earnings
365,994
118,194
Non-controlling interests
12,970
24,081
Total mezzanine and stockholders’
equity
800,693
556,383
Total liabilities, mezzanine equity and
stockholders’ equity
$
2,371,137
$
1,894,248
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230302005245/en/
Investor Contact: investors@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com
Dream Finders Homes (NYSE:DFH)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Dream Finders Homes (NYSE:DFH)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024