Dream Finders Homes, Inc. (the “Company” or “DFH”) (NASDAQ: DFH),
one of the nation’s fastest growing companies, announced financial
results for the fourth quarter and full year ended December 31,
2021.
Fourth Quarter 2021 Highlights (As
Compared to Fourth Quarter 2020)
- Backlog of sold homes increased
163.2% to 6,381 homes valued at $2.9 billion, both Company records,
compared to 2,424 homes valued at $865.1 million. McGuyer
Homebuilders, Inc. (“MHI”), acquired on October 1, 2021,
contributed 1,734 homes valued at $1.0 billion
- Home building revenues increased 84.4% to $850.1 million from
$461.0 million
- Gross margin as a percentage of home
sales revenues increased 60 basis points to 16.2% from 15.6%
- Pre-tax income attributable to DFH
increased 86.6% to $71.4 million, compared to $38.2 million
- Average sales price of homes closed
increased 28.4% to $440,939 from $343,305
- Home closings increased 46.6% to
1,960 from 1,337 homes
- Net new orders increased 42.3% to
1,974 from 1,387
Full Year 2021 Highlights (As Compared
to Full Year 2020)
- Home building revenues increased 70.0% to $1.9 billion from
$1.1 billion
- Gross margin as a percentage of home
sales revenues increased 140 basis points to 16.0% from 14.6%
- Pre-tax income attributable to DFH
increased 87.9% to $148.6 million, compared to $79.1 million
- Average sales price of homes closed
increased 8.8% to $389,094 from $357,633
- Home closings increased 54.5% to
4,874 from 3,154 homes
- Net new orders increased 62.5% to
6,804 from 4,186
- Active community count increased
62.7% to 205 from 126
- Controlled lot pipeline increased
99.7% to 38,495 as of December 31, 2021, from 19,276 at December
31, 2020
- Return on participating equity was
44.3% for the year ended December 31, 2021, compared to 47.0% for
the year ended December 31, 2020
Acquisition of MHI
On October 1, 2021, the Company completed its
acquisition of Texas based homebuilder, MHI. The acquisition
allowed the Company to expand operations in the largest housing
market in the U.S. It also provided DFH with a platform to
capitalize on its land-light acquisition strategy and to achieve
significant scale.
The following table shows MHI’s contribution to the Company for
the fourth quarter of 2021:
|
|
Q4 2021 (unaudited) |
|
Results and Operating Data (In thousands): |
|
Units: |
|
|
Revenues |
$ |
361,138 |
|
|
Net new
orders |
579 |
|
Cost of sales |
|
308,866 |
|
|
Home
closings |
689 |
|
Gross margin |
|
52,272 |
|
|
|
|
|
Gross margin % |
|
14.5% |
|
|
|
|
|
SG&A |
|
29,755 |
|
|
|
|
|
SG&A % of revenue |
|
8.2% |
|
|
|
|
|
Net income |
|
23,966 |
|
|
|
|
|
Net income % |
|
6.6% |
|
|
|
|
|
|
|
|
|
|
|
Management Commentary
Patrick Zalupski, Dream Finders Homes Chairman
and CEO, said, “We concluded the fourth quarter and full year 2021
with record results, achieving revenue growth of 85% and 70%
respectively, despite the sustained, well-known industry-wide
labor, material, and supply chain challenges that remain prevalent
to date. We closed 4,874 homes during the year, representing 33%
organic growth. Overall growth was 55%, inclusive of the strategic
MHI acquisition, which granted DFH immediate access to the robust
Texas markets. I am proud of our team and the effort they put forth
that has allowed us to achieve an outstanding year. I look forward
to a great year of execution in 2022 and to sharing additional
details in my upcoming shareholder letter.”
Fourth Quarter 2021 Results
Home building revenues for the fourth quarter
2021 increased 84.4% to $850.1 million, compared to $461.0 million
in the same year-ago quarter. Home closings increased 46.6% to
1,960, compared to 1,337 in the same year-ago quarter. Average
sales price (“ASP”) of homes closed for the fourth quarter 2021 was
$440,939, compared to $343,305 in the same year-ago quarter,
primarily due to home price appreciation and our acquisition of
MHI, which contributed 689 closings to the fourth quarter at an ASP
of $532,243.
Home building gross margin in the fourth quarter
2021 improved 60 basis points to 16.2%, compared to 15.6% in the
same year-ago quarter. The increase in gross margin percentage was
primarily attributable to home price appreciation outpacing cost
inflation as well as lower cost of funds from the legacy operations
offset by slightly lower margins on home closings contributed by
MHI in the fourth quarter of 14.5%.
SG&A as a percent of home sales revenues was
7.2% in the fourth quarter 2021, compared to 7.5% in the same
year-ago quarter, primarily as a result of economies of scale.
Net new orders in the fourth quarter 2021
increased 42.3% to 1,974, compared to 1,387 in the same year-ago
quarter, primarily due to increased community count. The
cancellation rate remains within industry averages at 12.2% for the
year ended December 31, 2021, down, when compared to 12.8% in the
same year-ago period. At the end of the fourth quarter 2021, the
Company had the largest backlog in Company history with 6,381
homes, valued at $2.9 billion, which represents record increases of
163.2% and 236.7%, respectively, when compared to the year ended
December 31, 2020. The average sales price in backlog as of
December 31, 2021, was $456,538.
Net income attributable to DFH in the fourth
quarter of 2021 was $57.3 million, or $0.55 per diluted share,
compared to net income of $38.2 million in the fourth quarter of
2020.
Full Year 2021 Commentary
For the twelve months ended December 31, 2021, the Company
incurred certain non-recurring expenses and recorded other
adjustments in relation to its business combinations that were not
operational in nature, including:
- Transaction costs of $3.0 million in relation to its initial
public offering
- Transaction costs of $1.4 million
related to the acquisition of businesses
- Fair value adjustments from business
combinations of $15.3 million, comprising contingent consideration
revaluation of $7.5 million and inventory mark-up of $7.7
million
For the same year ended, the Company successfully compelled
arbitration from a legal matter dating back to October of 2019 in
Denver, CO and settled the matter during arbitration proceedings.
The net impact to other expense was $7.5 million.
Other income related to the forgiveness of the Paycheck
Protection Program grant for the year ended December 31, 2021 was
$7.2 million.
The above non-operational items had a net impact of $19.9
million to pre-tax income. The after-tax effect to net income was a
reduction of $16.2 million or 17.0 cents per diluted share.
Full Year 2022 Outlook
Dream Finders Homes expects a minimum of 7,000
home closings for the full year 2022 for the combined Company. Any
further COVID-19 governmental restrictions on land development,
home construction or home sales or additional supply chain
challenges could negatively impact the Company’s ability to achieve
this number of home closings in 2022. As of December 31, 2021, the
combined Company backlog was 6,381 homes, with approximately 10% of
the homes in backlog expected to be delivered in 2023 and beyond.
The Company continues to believe the backlog of homes sold is the
best indicator for future growth. The following table shows the
backlog units and ASP as of December 31, 2021 by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2021(unaudited) |
|
|
|
Backlog: |
Units |
|
Average SalesPrice |
|
|
Jacksonville |
1,463 |
|
$ |
391,593 |
|
|
|
Colorado |
133 |
|
|
537,906 |
|
|
|
Orlando |
934 |
|
|
476,442 |
|
|
|
DC Metro |
16 |
|
|
644,288 |
|
|
|
The Carolinas |
1,231 |
|
|
330,087 |
|
|
|
Texas |
1,734 |
|
|
598,517 |
|
|
|
Other (1) |
870 |
|
|
424,123 |
|
|
|
Total |
6,381 |
|
$ |
456,538 |
|
|
|
|
|
|
|
|
|
|
(1) Austin, Savannah, Village Park Homes, Active Adult and Custom
Homes. Austin refers to legacy DFH operations, exclusive of
MHI. |
|
|
|
|
|
|
|
About Dream Finders Homes,
Inc.
Dream Finders Homes (NASDAQ: DFH) is based in
Jacksonville, FL, and is one of the nation’s fastest growing
homebuilding companies, with industry leading returns on
shareholder’s equity. Dream Finders Homes builds homes in Florida,
Texas, North Carolina, South Carolina, Georgia, Colorado, Virginia
and Maryland. 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 2022 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, 2021, 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) |
|
|
|
|
|
|
|
|
For the Three Months EndedDecember 31, |
For the Twelve Months EndedDecember 31, |
|
|
2021(Unaudited) |
2020(Unaudited) |
|
2021 |
2020 |
Revenues |
$ |
852,090 |
|
$ |
461,100 |
|
$ |
1,923,910 |
|
$ |
1,133,807 |
|
|
Cost of sales |
|
712,319 |
|
|
387,244 |
|
|
1,610,332 |
|
|
962,928 |
|
|
Selling, general and administrative expense |
|
61,045 |
|
|
34,591 |
|
|
154,405 |
|
|
90,359 |
|
|
Income from equity in earnings of unconsolidated entities |
|
(5,198 |
) |
|
(3,148 |
) |
|
(9,428 |
) |
|
(7,992 |
) |
|
Gain on sale of assets |
|
(14 |
) |
|
(65 |
) |
|
(87 |
) |
|
(118 |
) |
|
Loss on extinguishment of debt |
|
14 |
|
|
- |
|
|
711 |
|
|
- |
|
|
Other Income |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Other |
|
(827 |
) |
|
(150 |
) |
|
(7,827 |
) |
|
(1,322 |
) |
|
Paycheck Protection Program forgiveness |
|
- |
|
|
- |
|
|
(7,220 |
) |
|
- |
|
|
Other Expense |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Other |
|
7,560 |
|
|
216 |
|
|
12,771 |
|
|
3,188 |
|
|
Contingent consideration revaluation |
|
1,771 |
|
|
1,491 |
|
|
7,533 |
|
|
1,379 |
|
|
Interest expense |
|
0 |
|
|
747 |
|
|
672 |
|
|
871 |
|
|
Income before taxes |
$ |
75,420 |
|
$ |
40,174 |
|
$ |
162,048 |
|
$ |
84,514 |
|
|
Income tax expense |
|
(14,049 |
) |
|
- |
|
|
(27,455 |
) |
|
- |
|
|
Net and comprehensive income |
$ |
61,371 |
|
$ |
40,174 |
|
$ |
134,593 |
|
$ |
84,514 |
|
|
Net and comprehensive income attributable to non-controlling
interests |
|
(4,068 |
) |
|
(1,946 |
) |
|
(13,461 |
) |
|
(5,420 |
) |
|
Net and comprehensive income attributable to Dream Finders
Homes, Inc. |
$ |
57,303 |
|
$ |
38,228 |
|
$ |
121,132 |
|
$ |
79,094 |
|
|
|
|
|
|
|
|
Earnings per share(5) |
|
|
|
|
|
Basic |
$ |
0.58 |
|
$ |
- |
|
$ |
1.27 |
|
$ |
- |
|
|
Diluted |
$ |
0.55 |
|
$ |
- |
|
$ |
1.27 |
|
$ |
- |
|
|
Weighted-average number of shares |
|
|
|
|
|
Basic |
|
92,521 |
|
|
- |
|
|
92,521 |
|
|
- |
|
|
Diluted |
|
103,297 |
|
|
- |
|
|
95,314 |
|
|
- |
|
|
|
|
|
|
|
|
Other Financial and Operating Data |
|
|
|
|
|
Active communities at end of period(1) |
|
205 |
|
|
126 |
|
|
205 |
|
|
126 |
|
|
Home closings |
|
1,960 |
|
|
1,337 |
|
|
4,874 |
|
|
3,154 |
|
|
Average sales price for closed homes(2) |
$ |
440,939 |
|
$ |
343,305 |
|
$ |
389,094 |
|
$ |
357,633 |
|
|
Net new orders |
|
1,974 |
|
|
1,387 |
|
|
6,804 |
|
|
4,186 |
|
|
Cancellation rate |
|
13.1 |
% |
|
12.9 |
% |
|
12.2 |
% |
|
12.8 |
% |
|
Backlog (at period end) - homes |
|
6,381 |
|
|
2,424 |
|
|
6,381 |
|
|
2,424 |
|
|
Backlog (at period end, in thousands) - value |
$ |
2,913,170 |
|
$ |
865,109 |
|
$ |
2,913,170 |
|
$ |
865,109 |
|
|
Gross margin (in thousands)(3) |
$ |
137,749 |
|
$ |
71,755 |
|
$ |
306,969 |
|
$ |
165,048 |
|
|
Gross margin %(4) |
|
16.2 |
% |
|
15.6 |
% |
|
16.0 |
% |
|
14.6 |
% |
|
Net profit margin |
|
6.7 |
% |
|
8.3 |
% |
|
6.3 |
% |
|
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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. |
|
(2) Average sales price of homes closed is calculated
based on home sales revenue, excluding the impact of deposit
forfeitures and percentage of completion revenues, over homes
closed. |
|
(3) Gross margin is home sales revenue less cost of sales. Gross
margin includes commission expense. |
|
|
|
|
(4) Calculated as a percentage of home sales revenues. |
|
|
|
|
|
(5) The Company calculated earnings per share (“EPS”) based on net
income attributable to common stockholders for the period January
21, 2021 through December 31, 2021 over the weighted average
diluted shares outstanding for the same period. EPS was calculated
prospectively for the period subsequent to the Company’s initial
public offering and corporate reorganization, resulting in
92,521,482 shares of common stock outstanding as of the closing of
the initial public offering. 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 share of the
Company. Diluted shares were calculated by using the treasury stock
method for stock grants and the if‐converted method for the
convertible preferred stock and the associated preferred
dividends. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedDecember 31, |
|
Twelve Months EndedDecember 31, |
|
|
2021(unaudited) |
|
2020(unaudited) |
|
2021(unaudited) |
|
2020(unaudited) |
|
|
Units |
|
Average SalesPrice |
|
Units |
|
Average SalesPrice |
|
Units |
|
Average SalesPrice |
|
Units |
|
Average SalesPrice |
|
Home Closings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jacksonville |
372 |
|
$ |
397,731 |
|
520 |
|
$ |
311,550 |
|
1,237 |
|
$ |
363,755 |
|
1,395 |
|
$ |
318,134 |
|
Colorado |
89 |
|
|
508,526 |
|
86 |
|
|
457,672 |
|
230 |
|
|
488,502 |
|
269 |
|
|
454,802 |
|
Orlando |
173 |
|
|
394,962 |
|
149 |
|
|
360,323 |
|
604 |
|
|
404,035 |
|
355 |
|
|
356,168 |
|
DC Metro |
49 |
|
|
682,334 |
|
84 |
|
|
547,710 |
|
140 |
|
|
667,780 |
|
232 |
|
|
545,887 |
|
The Carolinas |
326 |
|
|
307,025 |
|
312 |
|
|
286,296 |
|
1,233 |
|
|
300,426 |
|
312 |
|
|
286,296 |
|
Texas |
689 |
|
|
532,243 |
|
- |
|
|
- |
|
689 |
|
|
532,243 |
|
- |
|
|
- |
|
Other (1) |
262 |
|
|
391,057 |
|
186 |
|
|
400,613 |
|
741 |
|
|
350,142 |
|
591 |
|
|
391,337 |
|
Total |
1,960 |
|
$ |
440,939 |
|
1,337 |
|
$ |
343,305 |
|
4,874 |
|
$ |
389,094 |
|
3,154 |
|
$ |
357,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Austin, Savannah, Village Park Homes, Active Adult and Custom
Homes. Austin refers to legacy DFH operations, exclusive of
MHI. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dream Finders Homes, Inc. |
|
Consolidated Balance Sheets |
|
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
2021 |
|
2020 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
227,227 |
|
$ |
43,658 |
|
|
Restricted cash (VIE amounts of $2,855 and $8,793) |
|
54,095 |
|
|
49,716 |
|
|
Accounts receivable |
|
33,482 |
|
|
16,766 |
|
|
Inventories: |
|
|
|
|
|
Construction in process and finished homes |
|
961,779 |
|
|
396,631 |
|
|
Joint venture owned land and lots |
|
|
|
|
|
|
(VIE amounts of $20,708 and $40,901) |
|
21,686 |
|
|
40,901 |
|
|
Company owned land and lots |
|
83,197 |
|
|
46,840 |
|
|
Lot deposits |
|
241,406 |
|
|
66,272 |
|
|
Equity method investments |
|
15,967 |
|
|
4,545 |
|
|
Property and equipment, net |
|
6,789 |
|
|
4,309 |
|
|
Operating lease right-of-use assets |
|
19,359 |
|
|
14,219 |
|
|
Finance lease right-of-use assets |
|
140 |
|
|
336 |
|
|
Intangible assets, net of amortization |
|
9,140 |
|
|
2,660 |
|
|
Goodwill |
|
|
171,927 |
|
|
28,566 |
|
|
Deferred tax asset |
|
4,232 |
|
|
- |
|
|
Other assets (VIE amounts of $1,289 and $1,288) |
|
43,822 |
|
|
18,262 |
|
|
|
|
|
|
Total assets |
$ |
1,894,248 |
|
$ |
733,680 |
|
Liabilities |
|
|
|
|
|
|
Accounts payable (VIE amounts of $656 and $1,316) |
$ |
113,498 |
|
$ |
37,419 |
|
|
Accrued expenses (VIE amounts of $7,284 and $9,977) |
|
139,368 |
|
|
67,401 |
|
|
Customer deposits |
|
177,685 |
|
|
59,392 |
|
|
Construction lines of credit |
|
760,000 |
|
|
289,879 |
|
|
Notes payable (VIE amounts of $2,697 and $8,821) |
|
3,291 |
|
|
29,653 |
|
|
Operating lease liabilities |
|
19,826 |
|
|
14,411 |
|
|
Finance lease liabilities |
|
140 |
|
|
345 |
|
|
Contingent consideration |
|
124,056 |
|
|
23,158 |
|
|
|
|
|
|
Total liabilities |
$ |
1,337,864 |
|
$ |
521,657 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
Mezzanine Equity |
|
|
|
|
|
Preferred mezzanine equity |
|
155,220 |
|
|
55,638 |
|
|
Common mezzanine equity |
|
- |
|
|
20,593 |
|
|
|
Total mezzanine equity |
$ |
155,220 |
|
$ |
76,231 |
|
|
|
|
|
|
|
|
|
|
|
|
Members' Equity |
|
|
|
|
|
Common members' equity |
|
- |
|
|
103,853 |
|
|
|
|
Total members' equity |
$ |
- |
|
$ |
103,853 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity - Dream Finders Homes,
Inc. |
|
|
|
|
|
Class A common stock, $0.01 per share, 289,000 |
|
|
|
|
|
|
authorized, 32,295 outstanding |
|
323 |
|
|
- |
|
|
Class B common stock, $0.01 per share, 61,000 |
|
|
|
|
|
|
authorized, 60,226 outstanding |
|
602 |
|
|
- |
|
|
Additional paid-in capital |
|
257,963 |
|
|
- |
|
|
Retained earnings |
|
118,194 |
|
|
- |
|
|
Non-controlling interests |
|
24,081 |
|
|
31,939 |
|
|
|
Total stockholders' and members' equity |
|
556,383 |
|
|
212,023 |
|
|
|
Total liabilities, mezzanine equity, members' equity and
stockholders' equity |
$ |
1,894,248 |
|
$ |
733,680 |
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:
investors@dreamfindershomes.com
Media Contact:
mediainquiries@dreamfindershomes.com
Anabel Fernandez
– Interim CFO & Senior Vice President
Robert Riva –
General Counsel & Vice President
SOURCE: Dream Finders Homes, Inc.
Dream Finders Homes (NASDAQ:DFH)
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Dream Finders Homes (NASDAQ:DFH)
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