Landsea Homes Corporation (Nasdaq: LSEA) (“Landsea Homes” or the
“Company”), a publicly traded homebuilder, reported financial
results for the first quarter ended March 31, 2024. For the
quarter, the Company reported pretax income of $0.7 million, and
net income of $0.2 million, or $0.01 per share. Excluding one-time
transaction costs of $1.7 million, net income was $1.9 million or
$0.05 per share. Reported pretax income for the prior year period
was $5.7 million with net income of $3.2 million, or $0.08 per
share. Adjusted net income (a non-GAAP measure) was $2.0 million or
$0.06 per share and adjusted gross margin of 19.4%. For the prior
year period, adjusted net income was $7.1 million, or $0.18 per
share and adjusted gross margin of 21.9%.
Management Commentary
“Landsea Homes delivered strong top-line growth
in the first quarter of 2024, as home sales revenue increased 22%
on a year-over-year basis”, said John Ho, Landsea Homes’ Chief
Executive Officer. “New home deliveries came above the high end of
our guidance range at 505, while average selling prices increased
14% year-over-year to $579,000. We also generated 612 net new
orders during the quarter on a sales pace of 3.3 homes per
community per month.”
Mr. Ho continued, “We have experienced solid
demand trends so far this spring and look to carry this momentum
into the summer and beyond. The lack of existing home inventory
continues to be a tailwind for our industry, while economic growth
and employment trends in our markets have bolstered demand. The
recent rise in interest rates has created some challenges on the
affordability front, but we have and will continue to address those
issues through the use of interest rate buydowns and other
financing incentives.”
Mr. Ho concluded, “We executed two capital
markets transactions during the quarter that greatly improved the
stability of our balance sheet. The first was another successful
equity offering from our largest shareholder, which took their
stake below 50% and removed the Controlled Company designation for
Landsea Homes as per Nasdaq listing standards. The second
transaction was our placement in April of $300 million in senior
notes due in 2029 at an interest rate of 8 7/8ths, which allowed us
to pay down a portion of the outstanding borrowings under our
revolving credit facility and provides us with longer term, fixed
rate capital to pursue our growth initiatives. Given the progress
we made from both an operational and financial standpoint this
quarter, I am confident in our ability to achieve our goals for
2024 and beyond.”
Operating Results
Total revenue was $294.0 million in the first
quarter, up 22% compared to the first quarter of 2023, primarily
driven by a 7% increase in homes closed and a 14% increase in
average sales price.
New homes delivered increased 7% to 505 homes at
an average sales price of $579,000, a 14% increase, compared to 472
homes delivered at an average sales price of $510,000 in the first
quarter of 2023.
Net new home orders were up 23% to 612 homes
with a dollar value of $341.3 million, an average sales price of
$558,000 and a monthly absorption rate of 3.3 sales per active
community. This compares to 498 homes with a dollar value of $282.5
million, an average sales price of $567,000 and a monthly
absorption rate of 2.8 sales per active community in the prior year
period. As a percentage of gross orders, cancellations equaled 10%
as compared to 16% a year ago.
Total homes in backlog were 624 homes with a
dollar value of $384.3 million and an average sales price of
$616,000 at March 31, 2024. This compares to 696 homes with a
dollar value of $422.9 million and an average sales price of
$608,000 at March 31, 2023.
Total lots owned or controlled at March 31,
2024, were 10,351 compared to 11,435 at March 31, 2023. We
continue to pursue an asset-light strategy, controlling 59% of our
lots at the end of the first quarter of 2024 and 41% were
owned.
Home sales gross margin was 14.9% compared to
18.1% in the prior year period. Adjusted home sales gross margin (a
non-GAAP measure) was 19.4% compared to 21.9% in the prior year
period. The decrease was primarily attributed to the increase in
sales discounts and incentives.
Net income attributable to Landsea Homes was
$0.2 million compared to $3.2 million in the prior year period.
Adjusted net income attributable to Landsea Homes (a non-GAAP
measure) was $2.0 million compared to $7.1 million in the prior
year period. Net income per share on a fully diluted basis was
$0.01 compared to $0.08 in the first quarter of 2023. Adjusted net
income per share (a non-GAAP measure) on a fully diluted basis was
$0.06 compared to $0.18 in the first quarter of 2023.
Adjusted EBITDA (a non-GAAP measure) was $17.0
million compared to $16.2 million in the prior year period.
Balance Sheet
As of March 31, 2024, the Company had total
liquidity of $364.1 million consisting of cash and cash equivalents
as well as cash held in escrow of $140.0 million and $224.1 million
in availability under the Company’s $675.0 million unsecured
revolving credit facility. Total debt was $585.2 million compared
to $543.8 million at December 31, 2023.
Landsea Homes’ ratio of debt to capital was
46.4% at March 31, 2024, and the Company’s net debt to total
capital (a non-GAAP measure) was 35.3% at March 31, 2024.
Second Quarter 2024 Outlook
- New home deliveries anticipated to
be in the range of 600 to 650
- Delivery ASPs expected to be in the
range of $525,000 to $530,000
- Home sales gross margin to be
between 15% and 16%
Full Year 2024 Outlook
- New home deliveries anticipated to
be in the range of 2,500 to 2,900
- Delivery ASPs expected to be in the
range of $500,000 to $525,000
- Home sales gross margin to be
between 17% and 18%
Conference Call
The Company will hold a conference call today at
9:00 a.m. Central Time (10:00 a.m. Eastern time) to discuss its
first quarter 2024 results.
- Toll-free dial-in number: 1-877-704-4453
- International dial-in number: 1-201-389-0920
The conference call will be broadcast live and
available for replay here and via the Investors section of the
Landsea Homes website at https://ir.landseahomes.com/.
A replay of the conference call will be
available after 1:00 p.m. Eastern time on the same day through the
same time on May 1, 2024.
Replay Details:
- Toll-free replay number: 1-844-512-2921
- International replay number: 1-412-317-6671
- Replay ID: 13745940
About Landsea Homes
Corporation
Landsea Homes Corporation (Nasdaq: LSEA) is a
publicly traded residential homebuilder based in Dallas, Texas that
designs and builds best-in-class homes and sustainable
master-planned communities in some of the nation's most desirable
markets. The company has developed homes and communities in New
York, Boston, New Jersey, Arizona, Colorado, Florida, Texas and
throughout California in Silicon Valley, Los Angeles, and Orange
County. Landsea Homes was honored as the Green Home Builder 2023
Builder of the Year, after being named the 2022 winner of the
prestigious Builder of the Year award, presented by BUILDER
magazine, in recognition of a historical year of
transformation.
An award-winning homebuilder that builds
suburban, single-family detached and attached homes, mid-and
high-rise properties, and master-planned communities, Landsea Homes
is known for creating inspired places that reflect modern living
and provides homebuyers the opportunity to “Live in Your Element.”
Our homes allow people to live where they want to live, how they
want to live – in a home created especially for them.
Driven by a pioneering commitment to
sustainability, Landsea Homes’ High Performance Homes are
responsibly designed to take advantage of the latest innovations
with home automation technology supported by Apple®. Homes include
features that make life easier and provide energy savings that
allow for more comfortable living at a lower cost through
sustainability features that contribute to healthier living for
both homeowners and the planet.
Led by a veteran team of industry professionals
who boast years of worldwide experience and deep local expertise,
Landsea Homes is committed to positively enhancing the lives of our
homebuyers, employees, and stakeholders by creating an unparalleled
lifestyle experience that is unmatched.
For more information on Landsea Homes, visit:
www.landseahomes.com.
Forward-Looking Statements
Certain statements in this press release may
constitute “forward-looking statements” within the meaning of the
federal securities laws, including, but not limited to, our
expectations for future financial performance, business strategies
or expectations for our business. These statements constitute
projections, forecasts, and forward-looking statements, and are not
guarantees of performance. Landsea Homes cautions that
forward-looking statements are subject to numerous assumptions,
risks and uncertainties, which change over time. Words such as
“may,” “can,” “should,” “will,” “estimate,” “plan,” “project,”
“forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,”
“target,” “look” or similar expressions may identify
forward-looking statements. Specifically, forward-looking
statements may include statements relating to the future financial
performance of Landsea Homes; changes in the market for Landsea
Homes’ products and services; and other expansion plans and
opportunities.
These forward-looking statements are based on
information available as of the date of this press release and our
management’s current expectations, forecasts, and assumptions, and
involve a number of judgments, risks and uncertainties that may
cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements.
These risks and uncertainties include, but are
not limited to, the risk factors described by Landsea Homes in its
filings with the Securities and Exchange Commission (“SEC”). These
risk factors and those identified elsewhere in this press release,
among others, could cause actual results to differ materially from
historical performance and include, but are not limited to:
- the cyclical nature of our industry
and the possibility that adverse changes in general and local
economic conditions could reduce the demand for homes;
- our ability to develop communities
successfully and in a timely manner;
- changes in the terms and
availability of mortgage financing, interest rates, federal lending
programs, and tax laws, affecting the demand for and the ability of
our homebuyers to complete the purchase of a home;
- our geographic concentration, which
could materially and adversely affect us if the homebuilding
industry in our current markets should experience a decline;
- the potential for adverse weather
and geological conditions to increase costs, cause project delays
or reduce consumer demand for housing;
- our ability to promptly sell one or
more properties for reasonable prices in response to changing
economic, financial and investment conditions, and the risk that we
may be forced to hold non-income producing properties for extended
periods of time;
- our reliance on third-party skilled
labor, suppliers and long supply chains;
- the dependence of our long-term
sustainability and growth upon our ability to acquire lots that are
either developed or have the approvals necessary for us to develop
them; and
- the other risks and uncertainties
indicated in Landsea Homes’ SEC reports or documents filed or to be
filed with the SEC by Landsea Homes.
Accordingly, forward-looking statements should
not be relied upon as representing our views as of any subsequent
date, and you should not place undue reliance on these
forward-looking statements in deciding whether to invest in our
securities. We do not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
Stock Repurchase
Purchases of common stock pursuant to this
authority may be made in open market transactions effected through
a broker-dealer at prevailing market prices, in block trades, or by
other means in accordance with federal securities laws, including
pursuant to any trading plan that may be adopted in accordance with
Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The
Company is not obligated to repurchase any specific number or
amount of shares of common stock, and it may modify, suspend or
discontinue the program at any time. The Company will determine the
timing and amount of repurchase in its discretion based on a
variety of factors, such as the market price of the Company’s
common stock, corporate requirements, general market economic
conditions and legal requirements.
Investor Relations Contact:Drew
Mackintosh, CFA Mackintosh Investor Relations,
LLCdrew@mackintoshir.com(310) 924-9036
Media Contact:Annie
NoebelCornerstone Communicationsanoebel@cornerstonecomms.com(949)
449-2527
|
March 31, 2024 |
|
December 31, 2023 |
|
(dollars in
thousands) |
Assets |
|
|
|
Cash and cash equivalents |
$ |
121,492 |
|
$ |
119,555 |
Cash held in escrow |
|
18,460 |
|
|
49,091 |
Real estate inventories |
|
1,196,506 |
|
|
1,121,726 |
Due from affiliates |
|
4,462 |
|
|
4,348 |
Goodwill |
|
68,639 |
|
|
68,639 |
Other assets |
|
133,818 |
|
|
107,873 |
Total assets |
$ |
1,543,377 |
|
$ |
1,471,232 |
|
|
|
|
Liabilities |
|
|
|
Accounts payable |
$ |
88,707 |
|
$ |
77,969 |
Accrued expenses and other liabilities |
|
192,115 |
|
|
160,256 |
Due to affiliates |
|
881 |
|
|
881 |
Line of credit facility, net |
|
348,237 |
|
|
307,631 |
Senior notes, net |
|
236,913 |
|
|
236,143 |
Total liabilities |
|
866,853 |
|
|
782,880 |
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value, 50,000,000 shares authorized,
none issued and outstanding as of March 31, 2024 and
December 31, 2023, respectively |
|
— |
|
|
— |
Common stock, $0.0001 par value, 500,000,000 shares authorized,
41,525,731 issued and 36,129,736 outstanding as of March 31,
2024, 41,382,453 issued and 36,520,894 outstanding as of
December 31, 2023 |
|
4 |
|
|
4 |
Additional paid-in capital |
|
459,521 |
|
|
465,290 |
Retained earnings |
|
187,774 |
|
|
187,584 |
Total stockholders’
equity |
|
647,299 |
|
|
652,878 |
Noncontrolling interests |
|
29,225 |
|
|
35,474 |
Total equity |
|
676,524 |
|
|
688,352 |
Total liabilities and
equity |
$ |
1,543,377 |
|
$ |
1,471,232 |
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
(dollars in thousands, except per share amounts) |
Revenue |
|
|
|
Home sales |
$ |
292,592 |
|
|
$ |
240,625 |
Lot sales and other |
|
1,449 |
|
|
|
1,115 |
Total revenues |
|
294,041 |
|
|
|
241,740 |
|
|
|
|
Cost of sales |
|
|
|
Home sales |
|
248,897 |
|
|
|
197,054 |
Lot sales and other |
|
1,683 |
|
|
|
713 |
Total
cost of sales |
|
250,580 |
|
|
|
197,767 |
|
|
|
|
Gross margin |
|
|
|
Home sales |
|
43,695 |
|
|
|
43,571 |
Lot sales and other |
|
(234 |
) |
|
|
402 |
Total
gross margin |
|
43,461 |
|
|
|
43,973 |
|
|
|
|
Sales
and marketing expenses |
|
18,488 |
|
|
|
16,408 |
General and administrative expenses |
|
26,082 |
|
|
|
22,780 |
Total
operating expenses |
|
44,570 |
|
|
|
39,188 |
|
|
|
|
(Loss) income from operations |
|
(1,109 |
) |
|
|
4,785 |
|
|
|
|
Other income, net |
|
1,813 |
|
|
|
955 |
Pretax income |
|
704 |
|
|
|
5,740 |
|
|
|
|
(Benefit) provision for income taxes |
|
(30 |
) |
|
|
1,617 |
|
|
|
|
Net income |
|
734 |
|
|
|
4,123 |
Net income attributable to
noncontrolling interests |
|
544 |
|
|
|
905 |
Net income attributable to
Landsea Homes Corporation |
$ |
190 |
|
|
$ |
3,218 |
|
|
|
|
Income per
share: |
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
0.08 |
Diluted |
$ |
0.01 |
|
|
$ |
0.08 |
|
|
|
|
Weighted average
common shares outstanding: |
|
|
|
Basic |
|
36,279,679 |
|
|
|
39,997,699 |
Diluted |
|
36,798,722 |
|
|
|
40,116,873 |
|
Home Deliveries and Home Sales Revenue
|
Three Months Ended March 31, |
|
2024 |
|
2023 |
|
% Change |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
(dollars in thousands) |
Arizona |
183 |
|
$ |
78,741 |
|
$ |
430 |
|
170 |
|
$ |
72,534 |
|
$ |
427 |
|
8 |
% |
|
9 |
% |
|
1 |
% |
California |
146 |
|
|
131,894 |
|
|
903 |
|
85 |
|
|
67,258 |
|
|
791 |
|
72 |
% |
|
96 |
% |
|
14 |
% |
Colorado |
17 |
|
|
8,854 |
|
|
521 |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
157 |
|
|
72,355 |
|
|
461 |
|
212 |
|
|
94,990 |
|
|
448 |
|
(26) |
% |
|
(24) |
% |
|
3 |
% |
Metro New York |
— |
|
|
— |
|
N/A |
|
1 |
|
|
1,649 |
|
|
1,649 |
|
N/A |
|
N/A |
|
N/A |
Texas |
2 |
|
|
748 |
|
|
374 |
|
4 |
|
|
4,194 |
|
|
1,049 |
|
(50) |
% |
|
(82) |
% |
|
(64) |
% |
Total |
505 |
|
$ |
292,592 |
|
$ |
579 |
|
472 |
|
$ |
240,625 |
|
$ |
510 |
|
7 |
% |
|
22 |
% |
|
14 |
% |
|
Net New Home Orders, Dollar Value of Orders, and Monthly
Absorption Rates
|
Three Months Ended March 31, |
|
2024 |
|
2023 |
|
% Change |
|
Homes |
Dollar Value |
ASP |
Monthly Absorption Rate |
|
Homes |
Dollar Value |
ASP |
Monthly Absorption Rate |
|
Homes |
Dollar Value |
ASP |
Monthly Absorption Rate |
|
(dollars in thousands) |
Arizona |
233 |
$ |
103,515 |
$ |
444 |
3.6 |
|
152 |
$ |
62,745 |
$ |
413 |
3.2 |
|
53 |
% |
65 |
% |
8 |
% |
13 |
% |
California |
107 |
|
108,325 |
|
1,012 |
3.7 |
|
164 |
|
136,227 |
|
831 |
4.7 |
|
(35) |
% |
(20) |
% |
22 |
% |
(21) |
% |
Colorado |
23 |
|
10,871 |
|
473 |
3.8 |
|
— |
|
— |
|
N/A |
N/A |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
|
Florida |
236 |
|
109,533 |
|
464 |
2.7 |
|
178 |
|
79,338 |
|
446 |
2.0 |
|
33 |
% |
38 |
% |
4 |
% |
35 |
% |
Metro New York |
1 |
|
4,312 |
|
N/A |
N/A |
|
— |
|
— |
|
N/A |
N/A |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
|
Texas |
12 |
|
4,695 |
|
391 |
13.3 |
|
4 |
|
4,194 |
|
1,049 |
1.3 |
|
200 |
% |
12 |
% |
(63) |
% |
923 |
% |
Total |
612 |
$ |
341,251 |
$ |
558 |
3.3 |
|
498 |
$ |
282,504 |
$ |
567 |
2.8 |
|
23 |
% |
21 |
% |
(2) |
% |
18 |
% |
|
|
Average Selling Communities
|
Three Months Ended March 31, |
|
2024 |
2023 |
% Change |
Arizona |
21.3 |
16.0 |
33% |
California |
9.7 |
11.7 |
(17) % |
Colorado |
2.0 |
— |
N/A |
Florida |
29.3 |
30.0 |
(2) % |
Metro New York |
— |
— |
—% |
Texas |
0.3 |
1.0 |
(70) % |
Total |
62.6 |
58.7 |
7% |
|
|
|
|
Backlog
|
March 31, 2024 |
|
March 31, 2023 |
|
% Change |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
(dollars in thousands) |
Arizona |
146 |
|
$ |
66,207 |
|
$ |
453 |
|
87 |
|
$ |
40,197 |
|
$ |
462 |
|
68% |
|
65% |
|
(2)% |
California |
122 |
|
|
134,601 |
|
|
1,103 |
|
158 |
|
|
147,415 |
|
|
933 |
|
(23)% |
|
(9)% |
|
18% |
Colorado |
20 |
|
|
9,557 |
|
|
478 |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
325 |
|
|
165,662 |
|
|
510 |
|
451 |
|
|
235,245 |
|
|
522 |
|
(28)% |
|
(30)% |
|
(2)% |
Metro New York |
1 |
|
|
4,312 |
|
|
4,312 |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Texas |
10 |
|
|
3,947 |
|
|
395 |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Total |
624 |
|
$ |
384,286 |
|
$ |
616 |
|
696 |
|
$ |
422,857 |
|
$ |
608 |
|
(10)% |
|
(9)% |
|
1% |
|
Lots Owned or Controlled
|
March 31, 2024 |
|
March 31, 2023 |
|
|
|
Lots Owned |
|
Lots Controlled |
|
Total |
|
Lots Owned |
|
Lots Controlled |
|
Total |
|
% Change |
Arizona |
1,505 |
|
1,462 |
|
2,967 |
|
2,118 |
|
1,491 |
|
3,609 |
|
(18)% |
California |
569 |
|
1,200 |
|
1,769 |
|
504 |
|
1,679 |
|
2,183 |
|
(19)% |
Colorado |
168 |
|
125 |
|
293 |
|
— |
|
— |
|
— |
|
N/A |
Florida |
1,800 |
|
1,770 |
|
3,570 |
|
2,376 |
|
2,098 |
|
4,474 |
|
(20)% |
Metro New York |
2 |
|
— |
|
2 |
|
2 |
|
— |
|
2 |
|
—% |
Texas |
202 |
|
1,548 |
|
1,750 |
|
— |
|
1,167 |
|
1,167 |
|
50% |
Total |
4,246 |
|
6,105 |
|
10,351 |
|
5,000 |
|
6,435 |
|
11,435 |
|
(9)% |
|
Home Sales Gross Margins
Home sales gross margin measures the price
achieved on delivered homes compared to the costs needed to build
the home. In the following table, we calculate gross margins
adjusting for interest in cost of sales, inventory impairments, and
purchase price accounting for acquired work in process inventory.
This non-GAAP financial measure should not be used as a substitute
for the Company's operating results in accordance with GAAP. An
analysis of any non-GAAP financial measure should be used in
conjunction with results presented in accordance with GAAP. We
believe the below information is meaningful as it isolates the
impact that indebtedness, impairments, and acquisitions have on our
gross margins and allows for comparability to previous periods and
competitors.
|
Three Months Ended March 31, |
|
|
2024 |
|
% |
|
|
2023 |
|
% |
|
(dollars in thousands) |
Home sales revenue |
$ |
292,592 |
|
100.0 |
% |
|
$ |
240,625 |
|
100.0 |
% |
Cost of home sales |
|
248,897 |
|
85.1 |
% |
|
|
197,054 |
|
81.9 |
% |
Home sales gross margin |
|
43,695 |
|
14.9 |
% |
|
|
43,571 |
|
18.1 |
% |
Add: Interest in cost of home sales |
|
10,557 |
|
3.6 |
% |
|
|
4,542 |
|
1.9 |
% |
Adjusted home sales gross
margin excluding interest and real estate inventories
impairment |
|
54,252 |
|
18.5 |
% |
|
|
48,113 |
|
20.0 |
% |
Add: Purchase price accounting for acquired inventory |
|
2,456 |
|
0.8 |
% |
|
|
4,485 |
|
1.9 |
% |
Adjusted home sales gross
margin excluding interest, real estate inventories impairment, and
purchase price accounting for acquired inventory |
$ |
56,708 |
|
19.4 |
% |
|
$ |
52,598 |
|
21.9 |
% |
|
EBITDA and Adjusted EBITDA
The following table presents EBITDA and Adjusted
EBITDA for the three months ended March 31, 2024 and 2023.
Adjusted EBITDA is a non-GAAP financial measure used by management
in evaluating operating performance. We define Adjusted EBITDA as
net income before (i) income tax expense (benefit), (ii) interest
expenses, (iii) depreciation and amortization, (iv) inventory
impairments, (v) purchase accounting adjustments for acquired work
in process inventory related to business combinations, (vi) loss
(gain) on debt extinguishment or forgiveness, (vii) transaction
costs related to the Merger and business combinations, (viii)
write-off of deferred offering costs, and (ix) abandoned projects
costs. We believe Adjusted EBITDA provides an indicator of general
economic performance that is not affected by fluctuations in
interest, effective tax rates, levels of depreciation and
amortization, and items considered to be non-recurring.
Accordingly, we believe this measure is useful for comparing our
core operating performance from period to period. Our presentation
of Adjusted EBITDA should not be considered as an indication that
our future results will be unaffected by unusual or non-recurring
items.
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
(dollars in thousands) |
Net income |
$ |
734 |
|
|
$ |
4,123 |
(Benefit) provision for income taxes |
|
(30 |
) |
|
|
1,617 |
Interest in cost of sales |
|
10,570 |
|
|
|
4,553 |
Depreciation and amortization expense |
|
1,320 |
|
|
|
1,418 |
EBITDA |
|
12,594 |
|
|
|
11,711 |
Purchase price accounting in cost of home sales |
|
2,456 |
|
|
|
4,485 |
Transaction costs |
|
1,728 |
|
|
|
15 |
Abandoned project costs |
|
256 |
|
|
|
— |
Adjusted EBITDA |
$ |
17,034 |
|
|
$ |
16,211 |
|
Adjusted Net Income
Adjusted Net Income attributable to Landsea
Homes is a non-GAAP financial measure that we believe is useful to
management, investors and other users of our financial information
in evaluating and understanding our operating results without the
effect of certain expenses that were historically pushed down by
our parent company and other non-recurring items. We believe
excluding these items provides a more comparable assessment of our
financial results from period to period. Adjusted Net Income
attributable to Landsea Homes is calculated by excluding the
effects of related party interest that was pushed down by our
parent company, purchase accounting adjustments for acquired work
in process inventory related to business combinations, loss (gain)
on debt extinguishment or forgiveness, and inventory impairment,
and tax-effected using a blended statutory tax rate. We also adjust
for the expense of related party interest pushed down from our
parent company as we have no obligation to repay the debt and
related interest.
|
Three Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
(dollars in thousands, except share and per share amounts) |
Net income attributable to
Landsea Homes Corporation |
$ |
190 |
|
$ |
3,218 |
|
|
|
|
Pre-Merger capitalized related party interest included in cost of
sales |
|
29 |
|
|
718 |
Purchase price accounting for acquired inventory |
|
2,456 |
|
|
4,485 |
Total adjustments |
|
2,485 |
|
|
5,203 |
Tax-effected adjustments
(1) |
|
1,843 |
|
|
3,839 |
|
|
|
|
Adjusted net income
attributable to Landsea Homes Corporation |
$ |
2,033 |
|
$ |
7,057 |
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.01 |
|
$ |
0.08 |
Diluted |
$ |
0.01 |
|
$ |
0.08 |
|
|
|
|
Adjusted earnings per
share |
|
|
|
Basic |
$ |
0.06 |
|
$ |
0.18 |
Diluted |
$ |
0.06 |
|
$ |
0.18 |
|
|
|
|
Weighted shares
outstanding |
|
|
|
Weighted average common shares outstanding used in EPS - basic |
|
36,279,679 |
|
|
39,997,699 |
Weighted average common shares outstanding used in EPS -
diluted |
|
36,798,722 |
|
|
40,116,873 |
(1) Our tax-effected adjustments are based on our federal rate and
a blended state rate adjusted for certain discrete items. |
|
|
|
|
|
|
Net Debt to Total Capital
The following table presents the ratio of debt
to capital as well as the ratio of net debt to total capital which
is a non-GAAP financial measure. The ratio of debt to capital is
computed as the quotient obtained by dividing total debt, net of
issuance costs, by total capital (sum of total debt, net of
issuance costs, plus total equity).
The non-GAAP ratio of net debt to total capital
is computed as the quotient obtained by dividing net debt (which is
total debt, net of issuance costs, less cash and cash equivalents
as well as cash held in escrow to the extent necessary to reduce
the debt balance to zero) by total capital. The most comparable
GAAP financial measure is the ratio of debt to capital. We believe
the ratio of net debt to total capital is a relevant financial
measure for investors to understand the leverage employed in our
operations and as an indicator of our ability to obtain financing.
We believe that by deducting our cash from our debt, we provide a
measure of our indebtedness that takes into account our cash
liquidity. We believe this provides useful information as the ratio
of debt to capital does not take into account our liquidity and we
believe that the ratio of net debt to total capital provides
supplemental information by which our financial position may be
considered.
See table below reconciling this non-GAAP
measure to the ratio of debt to capital.
|
March 31, 2024 |
|
December 31, 2023 |
|
(dollars in thousands) |
Total notes and other debts payable, net |
$ |
585,150 |
|
|
$ |
543,774 |
|
Total equity |
|
676,524 |
|
|
|
688,352 |
|
Total capital |
$ |
1,261,674 |
|
|
$ |
1,232,126 |
|
Ratio of debt to capital |
|
46.4 |
% |
|
|
44.1 |
% |
|
|
|
|
Total notes and other debts
payable, net |
$ |
585,150 |
|
|
$ |
543,774 |
|
Less: cash and cash
equivalents |
|
121,492 |
|
|
|
119,555 |
|
Less: cash held in escrow |
|
18,460 |
|
|
|
49,091 |
|
Net debt |
|
445,198 |
|
|
|
375,128 |
|
|
|
|
|
Total capital |
$ |
1,261,674 |
|
|
$ |
1,232,126 |
|
Ratio of net debt to total
capital |
|
35.3 |
% |
|
|
30.4 |
% |
|
Landsea Homes (NASDAQ:LSEA)
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Landsea Homes (NASDAQ:LSEA)
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