Year to Date Homebuilding Revenue of $917.3
Million, up 3%; Year to Date New Home Deliveries of 1,982
Homes, Up 9%
William Lyon Homes (NYSE: WLH), a leading homebuilder in the
Western U.S., announced results for its second quarter ended June
30, 2019.
2019 Second Quarter Highlights (Comparison to 2018 Second
Quarter)
- Adjusted net income available to common stockholders of $12.2
million, or $0.31 per diluted share, and net income available to
common stockholders of $10.5 million, or $0.27 per diluted share,
compared to $22.5 million, or $0.57 per diluted share in the prior
year
- Adjusted pre-tax income of $20.5 million, and pre-tax income of
$18.3 million; adjustments include:
- $1.0 million of transaction expenses related to the acquisition
of a mortgage company; and
- $1.2 million of one-time, non-recurring costs associated with
staff reductions
- New home deliveries of 1,033 homes, down 5%
- Home sales revenue of $463.5 million, down 11%
- Average sales price (ASP) of new homes delivered of $448,700
versus $479,100
- Homebuilding gross margin percentage of 16.0%
- Net new home orders of 1,261
- Average sales locations of 123, compared to 107
- Units in backlog of 1,423
- Dollar value of homes in backlog of $639.7 million
- SG&A percentage of 11.8%, compared to 11.1%
- Adjusted SG&A percentage of 11.6%, excluding $1.2 million
of one-time, non-recurring costs associated with staff
reductions
- Adjusted EBITDA of $37.0 million
“Our results for the second quarter were in-line with our
expectations across substantially all of our operational and
financial metrics, achieving a backlog conversion rate of 86% which
drove new home deliveries of 1,033 homes and home sales revenue of
$463.5 million with an ASP of $448,700,” stated Matthew R. Zaist,
President and Chief Executive Officer. “Our GAAP gross margins were
right where we expected them to be, and adjusted pre-tax income for
the quarter was $20.5 million, excluding certain one-time expenses
associated with our acquisition of a mortgage platform as part of
our wholly-owned financial services strategy as well as certain
reorganization costs to enhance operational efficiencies in our
Southern California operations, both of which we feel will drive
long-term improvements in profitability.”
Mr. Zaist continued, “We are encouraged by the evolution of the
Spring selling season, as the monthly absorption pace in the second
quarter reflected a sequential increase of 10% over the first
quarter to a healthy 3.4 sales per community, and with a number of
our divisions up year-over-year on total orders and absorption. We
are continuing to see strong absorption from the entry-level and
the first-time move up buyers, which are experiencing the highest
absorptions in the Company, and contributed 86% of our new home
deliveries. In addition, we delivered another strong quarter on our
spec inventory, selling and closing 39% more homes in the same
quarter than we did in the prior year period. Our focus on the
entry-level and first-time move-up homebuyers coupled with our
modified spec / start strategy has yielded significant improvement
in year-over-year backlog conversion and we expect to see the
benefits as we move through the balance of the year, allowing for
more efficient capital turns which should lead to improved returns
and the delevering of our balance sheet.”
Mr. Zaist added, “Following the volatility experienced in the
back half of last year, we are pleased to see a majority of our
markets stable to improving. While still taking a measured approach
to pricing, we have been able to reduce incentives and increase
prices in certain markets and anticipate sequential improvement in
gross margins in the back half of the year. Our anticipated full
year results now include deliveries of 4,300 to 4,500 units and
revenues of $2.0 billion to $2.075 billion for 2019.”
Operating Results
Home sales revenue for the second quarter of 2019 was $463.5
million, as compared to $518.4 million in the year-ago period, a
decrease of 11%. The decrease was driven by a 5% decrease in the
number of homes closed in 2019, as compared to the prior year
period, as well as a decrease in ASP from $479,100 in the second
quarter of 2018, to approximately $448,700 in the 2019 period. The
decrease in ASP was based on the change in product mix with a
higher concentration of deliveries from the Central Texas
division.
Homebuilding gross margin percentage during the second quarter
of 2019 was 16.0%. Interest in cost of sales was 4.3% during the
quarter, and adjusted gross margin percentage was 20.3%.
Net new home orders for the quarter were 1,261, an increase of
14% sequentially over the first quarter, and a slight decrease from
1,270 in the second quarter of 2018.
Our average community count increased 15% to 123 averages sales
location during the second quarter of 2019, compared to 107 during
the second quarter of 2018. Overall, our monthly absorption rate
for the quarter was 3.4 sales per community, compared to 3.1 sales
per community in the 2019 first quarter. During the quarter, our
monthly absorption pace was 3.5 in April, 3.1 in May and peaking at
3.6 in June. Our cancellation rate for the second quarter of 2019
was 13%, in-line with the 12% experienced in the second quarter of
last year.
Sales and marketing expense during the second quarter of 2019
improved to 5.5% of homebuilding revenue, compared to 5.6% in the
year-ago quarter, primarily due to a decrease in advertising and
model operations expense during the quarter. General and
administrative expenses increased to 6.4% of homebuilding revenue,
compared to 5.5% in the year-ago quarter. Adjusting to exclude the
one-time personnel reorganization expenses of $1.2 million in the
quarter, general and administrative expenses would have been 6.1%.
The Company believes that the long-term run-rate of this
reorganization will result in approximately $3.5 million to $4.0
million of annualized savings.
Pre-tax income was $18.3 million and adjusted pre-tax income was
$20.5 million. Provision for income tax was $3.9 million, for an
effective tax rate of 21.1%, compared to a provision of $7.8
million, or 22.2%, in the prior year.
Net income attributable to non-controlling interest was $4.0
million during the second quarter, as compared to $4.8 million in
the prior year.
Financial Services
The Company announced the formation of ClosingMark Financial
Group, LLC, a wholly-owned subsidiary under which the Company
intends to operate a full suite of financial services offerings,
including title agency, settlement and mortgage services, for the
Company’s homebuyers and other retail customers. ClosingMark has
recently commenced its title agency services in the Central Texas,
Arizona, Colorado and Nevada markets, and expects to expand its
title and settlement services operations into virtually all of the
Company’s homebuilding markets over the course of the next two
quarters.
In April 2019, we closed on the acquisition of a mortgage
platform, South Pacific Financial Corporation (“SPFC”), which has
been rebranded as ClosingMark Home Loans. We anticipate integrating
our existing mortgage joint venture operations and loan pipeline
into this platform under the ClosingMark brand during the third
quarter.
During the three and six months ended June 30, 2019, the Company
is reporting a separate financial services segment, to report the
operations, assets, and liabilities of the services mentioned above
on wholly-owned mortgage operations of ClosingMark Home Loans, our
title agency business, as well as our unconsolidated mortgage joint
ventures.
During the quarter, our unconsolidated mortgage joint ventures
recorded income of $1.4 million, our wholly-owned financial
services recorded a loss of $1.2 million, and we incurred
transaction expenses related to the acquisition of SPFC of
approximately $990,000.
We would expect to benefit from improved financial performance
out of the financial services segment for the third quarter and
remainder of the year based on operating efficiencies and earnings
capture on a wholly-owned basis.
Balance Sheet Update
At quarter end, cash and cash equivalents totaled $35.5 million,
owned real estate inventories totaled $2.3 billion, total assets
were $2.9 billion and total equity was $1.0 billion. Total debt to
book capitalization was 57.9%, and net debt to net book
capitalization was 57.3% at June 30, 2019, compared to 56.6% and
55.9% at December 31, 2018, respectively.
Senior Notes Issuance
In June 2019, the Company priced a private placement of $300.0
million in aggregate principal amount of 6.625% Senior Notes due
2027, which offering closed on July 9, 2019.
The Company is using the proceeds from the 6.625% Senior Notes
issuance to redeem $300.0 million in aggregate principal amount of
the $350.0 million of outstanding 7.00% Senior Notes due 2022. The
Company intends to repay the remaining outstanding $50.0 million of
the 7.00% Senior Notes due 2022 with free cash flow as part of its
overall deleveraging strategy.
In the third quarter and in conjunction with our refinance of
our senior notes, we amended our revolving credit facility to
extend the maturity from May 21, 2021 to May 21, 2022.
Conference Call
The Company will host a conference call to discuss these results
today, Thursday, August 1, 2019 at 9:00 a.m. Pacific Time. The call
will be available via both the telephone at (855) 851-4524 or (720)
634-2900, conference ID #4844924, or through the Company’s website
at www.lyonhomes.com in the Investor Relations section of the
site.
A replay of the call will be available through August 8, 2019 by
dialing (855) 859-2056 or (404) 537-3406, conference ID #4844924. A
webcast replay of the call will also be available on the Company’s
website approximately two hours after the broadcast.
About William Lyon Homes
William Lyon Homes is one of the largest Western U.S. regional
homebuilders. Headquartered in Newport Beach, California, the
Company is primarily engaged in the design, construction, marketing
and sale of single-family detached and attached homes in
California, Arizona, Nevada, Colorado, Washington, Oregon and
Texas. Its core markets include Orange County, Los Angeles, San
Diego, Riverside, San Bernardino, the South and East Bay Areas of
San Francisco, Phoenix, Las Vegas, Denver, Fort Collins, Portland,
Seattle, Houston, Austin and San Antonio. The Company has a
distinguished legacy of more than 60 years of homebuilding
operations, over which time it has sold in excess of 110,000 homes.
The Company markets and sells its homes under the William Lyon
Homes brand in all of its markets except for Washington and Oregon,
where the Company operates under the Polygon Northwest brand.
Forward-Looking Statements
Certain statements contained in this release and the
accompanying comments during our conference call that are not
historical information may constitute “forward-looking statements”
as defined by the Private Securities Litigation Reform Act of 1995,
including, but not limited to, forward-looking statements related
to: anticipated deliveries and revenue, gross margin performance,
backlog conversion rates, operating and financial results for the
third quarter of 2019 and full year 2019, operational synergies
from reorganization items, community count growth and project
performance, market and industry trends, average sale price of
homes to be closed in various periods, SG&A percentage, future
cash needs and liquidity, minority interest from our homebuilding
joint ventures, leverage ratios and reduction strategies, land
acquisitions, financial services and ancillary business
performance, integration and strategies. The forward-looking
statements involve risks and uncertainties and actual results may
differ materially from those projected or implied. The Company
makes no commitment, and disclaims any duty, to update or revise
any forward-looking statements to reflect future events or changes
in these expectations. Further, certain forward-looking statements
are based on assumptions of future events which may not prove to be
accurate. Factors that may impact such forward-looking statements
include, among others: changes in mortgage and other interest
rates; affordability pressures; adverse weather conditions; the
availability of labor and homebuilding materials and increased
construction cycle times; our financial leverage and level of
indebtedness and any inability to comply with financial and other
covenants under our debt instruments; timing of closings in our
joint venture operations; continued volatility and worsening in
general economic conditions either internationally, nationally or
in regions in which we operate; increased housing supply in our
markets; increased outside broker costs; increased costs of
homebuilding materials; changes in governmental laws and
regulations and compliance, increased costs, fees and delays
associated therewith; government actions, policies, programs and
regulations directed at or affecting the housing market (including
the Tax Cuts and Jobs Act (“TCJA”), the Dodd-Frank Act, tax
benefits associated with purchasing and owning a home, and the
standards, fees and size limits applicable to the purchase or
insuring of mortgage loans by government-sponsored enterprises and
government agencies), the homebuilding industry, or construction
activities; changes in existing tax laws or enacted corporate
income tax rates, including pursuant to the TCJA; worsening in
markets for residential housing; the impact of construction defect,
product liability and home warranty claims, including the adequacy
of self-insurance accruals, and the applicability and sufficiency
of our insurance coverage; the impact from additional litigation
matters; defects in manufactured products or other homebuilding
materials; decline in real estate values resulting in impairment of
our real estate assets; volatility in the banking industry, credit
and capital markets; restraints on foreign investment; terrorism or
other hostilities involving the United States and other
geopolitical risk as well as restrictive policies such as tariffs
or capital investment restrictions; building moratorium or
“slow-growth” or “no-growth” initiatives that could be implemented
in states in which we operate; conditions in the capital, credit
and financial markets, including mortgage lending standards and the
availability and timing of mortgage financing; changes in generally
accepted accounting principles or interpretations of those
principles; competition for home sales from other sellers of new
and resale homes; cancellations and our ability to realize our
backlog; the occurrence of events such as landslides, soil
subsidence and earthquakes that are uninsurable, not economically
insurable or not subject to effective indemnification agreements;
limitations on our ability to utilize our tax attributes; whether
an ownership change occurred that could, under certain
circumstances, have resulted in the limitation of our ability to
offset prior years’ taxable income with net operating losses; the
timing of receipt of regulatory approvals and the opening of
projects; the availability and cost of land for future development;
and additional factors discussed under the sections captioned “Risk
Factors” included in our annual and quarterly reports filed with
the Securities and Exchange Commission. The foregoing list is not
exhaustive. New risk factors may emerge from time to time and it is
not possible for management to predict all such risk factors or to
assess the impact of such risk factors on our business
WILLIAM LYON HOMES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands except number of
shares and per share data)
(unaudited)
Three
Three
Months
Months
Ended
Ended
June 30,
June 30,
2019
2018
Operating revenue Home sales
$
463,517
$
518,432
Construction services
1,952
1,020
465,469
519,452
Operating costs Cost of sales — homes
(389,483
)
(425,572
)
Construction services
(1,785
)
(959
)
Sales and marketing
(25,366
)
(28,848
)
General and administrative
(29,472
)
(28,507
)
Transaction expenses
-
(777
)
Other
(695
)
(621
)
(446,801
)
(485,284
)
Operating income
18,668
34,168
Financial services Equity in income of unconsolidated joint
ventures
1,378
533
(Loss) income from financial services operations
(1,222
)
-
Transaction expenses
(990
)
-
Financial services (loss) income
(834
)
533
Other income, net
453
311
Income before provision for income taxes
18,287
35,012
Provision for income taxes
(3,857
)
(7,776
)
Net income
14,430
27,236
Less: Net income attributable to noncontrolling interests
(3,979
)
(4,781
)
Net income available to common stockholders
$
10,451
$
22,455
Income per common share: Basic
$
0.28
$
0.59
Diluted
$
0.27
$
0.57
Weighted average common shares outstanding: Basic
37,818,127
38,017,211
Diluted
39,260,702
39,688,271
WILLIAM LYON HOMES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands except number of
shares and per share data)
(unaudited)
Six Months
Six Months
Ended
Ended
June 30,
June 30,
2019
2018
Operating revenue Home sales
$
917,292
$
890,817
Construction services
4,041
2,003
921,333
892,820
Operating costs Cost of sales — homes
(770,527
)
(732,880
)
Construction services
(3,754
)
(1,942
)
Sales and marketing
(50,643
)
(51,541
)
General and administrative
(58,598
)
(53,028
)
Transaction expenses
-
(3,907
)
Other
(1,039
)
(919
)
(884,561
)
(844,217
)
Operating income
36,772
48,603
Financial services Equity in income of unconsolidated joint
ventures
2,290
1,465
(Loss) income from financial services operations
(1,222
)
-
Transaction expenses
(990
)
Financial services (loss) income
78
1,465
Other income, net
1,084
346
Income before extinguishment of debt
37,934
50,414
Gain (loss) on extinguishment of debt
383
-
Income before provision for income taxes
38,317
50,414
Provision for income taxes
(8,753
)
(10,590
)
Net income
29,564
39,824
Less: Net income attributable to noncontrolling interests
(10,994
)
(9,041
)
Net income available to common stockholders
$
18,570
$
30,783
Income per common share: Basic
$
0.49
$
0.81
Diluted
$
0.48
$
0.77
Weighted average common shares outstanding: Basic
37,715,019
37,974,471
Diluted
39,051,131
39,772,437
WILLIAM LYON HOMES
CONSOLIDATED BALANCE
SHEETS
(in thousands, except number
of shares and par value per share)
June 30,
December 31,
2019
2018
(unaudited)
ASSETS Cash and cash equivalents
$
35,498
$
33,779
Receivables
16,086
13,502
Real estate inventories Owned
2,349,438
2,333,207
Not owned
240,015
315,576
Investment in unconsolidated joint ventures
6,686
5,542
Goodwill
123,695
123,695
Intangibles, net of accumulated amortization of $4,640 as of June
30, 2019 and December 31, 2018
6,700
6,700
Deferred income taxes
46,255
47,241
Lease right-of-use assets
37,493
13,561
Financial services assets
45,367
-
Other assets, net
38,889
36,971
Total assets
$
2,946,122
$
2,929,774
LIABILITIES AND EQUITY Accounts payable
$
114,026
$
128,371
Accrued expenses
122,871
150,155
Financial services liabilities
31,452
-
Liabilities from inventories not owned
240,015
315,576
Revolving credit facility
133,000
45,000
Construction notes payable
1,342
1,231
Joint venture notes payable
155,892
151,788
7% Senior Notes due August 15, 2022
347,821
347,456
6% Senior Notes due September 1, 2023
344,526
343,878
57/8% Senior Notes due January 31, 2025
428,775
431,992
1,919,720
1,915,447
Commitments and contingencies Equity: William Lyon Homes
stockholders’ equity Preferred stock, par value $0.01 per share;
10,000,000 shares authorized and no shares issued and outstanding
at June 30, 2019 and December 31, 2018
-
-
Common stock, Class A, par value $0.01 per share; 150,000,000
shares authorized; 33,972,103 and 33,904,972 shares issued,
33,009,795 and 32,690,378 shares outstanding at June 30, 2019 and
December 31, 2018, respectively
340
339
Common stock, Class B, par value $0.01 per share; 30,000,000 shares
authorized; 4,817,394 shares issued and outstanding at June 30,
2019 and December 31, 2018
48
48
Additional paid-in capital
447,910
445,545
Retained earnings
435,960
417,390
Total William Lyon Homes stockholders' equity
884,258
863,322
Noncontrolling interests
142,144
151,005
Total equity
1,026,402
1,014,327
Total liabilities and equity
$
2,946,122
$
2,929,774
WILLIAM LYON HOMES
SELECTED FINANCIAL AND
OPERATING INFORMATION
(unaudited)
Three Months Ended June
30,
2019
2018
Consolidated
Consolidated
Percentage %
Total
Total
Change
Selected Financial Information (dollars in thousands)
Homes closed
1,033
1,082
(5
%)
Home sales revenue
$
463,517
$
518,432
(11
%)
Cost of sales (excluding interest)
(369,437
)
(397,858
)
(7
%)
Adjusted homebuilding gross margin (1)
$
94,080
$
120,574
(22
%)
Adjusted homebuilding gross margin percentage (1)
20.3
%
23.3
%
(13
%)
Interest in cost of sales
(20,046
)
(22,329
)
(10
%)
Purchase accounting adjustments
-
(5,385
)
(100
%)
Gross margin
$
74,034
$
92,860
(20
%)
Gross margin percentage
16.0
%
17.9
%
(11
%)
Number of homes closed California
287
268
7
%
Arizona
105
123
(15
%)
Nevada
70
91
(23
%)
Colorado
158
145
9
%
Washington
80
138
(42
%)
Oregon
83
140
(41
%)
Texas
250
177
41
%
Total
1,033
1,082
(5
%)
Average sales price of homes closed California
$
584,700
$
650,900
(10
%)
Arizona
333,400
315,200
6
%
Nevada
493,900
507,800
(3
%)
Colorado
423,500
430,600
(2
%)
Washington
714,600
612,100
17
%
Oregon
414,600
473,000
(12
%)
Texas
270,500
259,200
4
%
Company Average
$
448,700
$
479,100
(6
%)
Number of net new home orders California
354
337
5
%
Arizona
133
118
13
%
Nevada
101
115
(12
%)
Colorado
183
160
14
%
Washington
119
136
(13
%)
Oregon
98
199
(51
%)
Texas
273
205
33
%
Total
1,261
1,270
(1
%)
Average number of sales locations during period
California
41
28
46
%
Arizona
9
6
50
%
Nevada
13
14
(7
%)
Colorado
11
15
(27
%)
Washington
10
10
0
%
Oregon
17
14
21
%
Texas
22
20
10
%
Total
123
107
15
%
(1)
Adjusted homebuilding gross margin is a
financial measure that is not prepared in accordance with U.S.
generally accepted accounting principles, or U.S. GAAP. It is used
by management in evaluating operating performance and in making
strategic decisions regarding sales pricing, construction and
development pace, product mix and other operating decisions. We
believe this information is meaningful as it isolates the impact
that interest and purchase accounting adjustments have on
homebuilding gross margin and allows investors to make better
comparisons with our competitors.
WILLIAM LYON HOMES
SELECTED FINANCIAL AND
OPERATING INFORMATION
(unaudited)
Six Months Ended June
30,
2019
2018
Consolidated
Consolidated
Percentage %
Total
Total
Change
Selected Financial Information (dollars in thousands)
Homes closed
1,982
1,822
9
%
Home sales revenue
$
917,292
$
890,817
3
%
Cost of sales (excluding interest and purchase accounting
adjustments)
(730,066
)
(685,627
)
6
%
Adjusted homebuilding gross margin (1)
$
187,226
$
205,190
(9
%)
Adjusted homebuilding gross margin percentage (1)
20.4
%
23.0
%
(11
%)
Interest in cost of sales
(40,461
)
(41,133
)
(2
%)
Purchase accounting adjustments
-
(6,120
)
(100
%)
Gross margin
$
146,765
$
157,937
(7
%)
Gross margin percentage
16.0
%
17.7
%
(10
%)
Number of homes closed California
568
478
19
%
Arizona
194
228
(15
%)
Nevada
141
165
(15
%)
Colorado
284
238
19
%
Washington
152
232
(34
%)
Oregon
203
244
(17
%)
Texas
440
237
86
%
Total
1,982
1,822
9
%
Average sales price of homes closed California
$
623,100
$
647,000
(4
%)
Arizona
333,000
310,500
7
%
Nevada
512,600
578,100
(11
%)
Colorado
432,900
430,700
1
%
Washington
651,400
599,700
9
%
Oregon
421,200
463,400
(9
%)
Texas
270,500
255,900
6
%
Company Average
$
462,800
$
488,900
(5
%)
Number of net new home orders California
644
620
4
%
Arizona
245
226
8
%
Nevada
160
224
(29
%)
Colorado
355
304
17
%
Washington
213
315
(32
%)
Oregon
210
408
(49
%)
Texas
537
279
92
%
Total
2,364
2,376
(1
%)
Average number of sales locations during period
California
38
24
58
%
Arizona
9
6
50
%
Nevada
13
13
0
%
Colorado
11
15
(27
%)
Washington
10
9
11
%
Oregon
17
14
21
%
Texas
23
13
77
%
Total
121
94
29
%
(1)
Adjusted homebuilding gross margin is a
financial measure that is not prepared in accordance with U.S.
generally accepted accounting principles, or U.S. GAAP. It is used
by management in evaluating operating performance and in making
strategic decisions regarding sales pricing, construction and
development pace, product mix and other operating decisions. We
believe this information is meaningful as it isolates the impact
that interest and purchase accounting adjustments have on
homebuilding gross margin and allows investors to make better
comparisons with our competitors.
WILLIAM LYON HOMES
SELECTED FINANCIAL AND
OPERATING INFORMATION
(unaudited)
As of June 30,
2019
2018
Consolidated
Consolidated
Percentage %
Total
Total
Change
Backlog of homes sold but not closed at end of period
California
328
457
(28
%)
Arizona
209
159
31
%
Nevada
113
145
(22
%)
Colorado
205
238
(14
%)
Washington
102
174
(41
%)
Oregon
135
236
(43
%)
Texas
331
239
38
%
Total
1,423
1,648
(14
%)
Dollar amount of homes sold but not closed at end of
period (in thousands) California
$
205,361
$
346,687
(41
%)
Arizona
73,993
50,048
48
%
Nevada
53,750
95,759
(44
%)
Colorado
96,245
99,531
(3
%)
Washington
65,729
118,863
(45
%)
Oregon
55,546
92,270
(40
%)
Texas
89,114
64,503
38
%
Total
$
639,738
$
867,661
(26
%)
Lots owned and controlled at end of period (1)
Lots owned California
3,021
3,921
(23
%)
Arizona
3,459
3,993
(13
%)
Nevada
2,485
2,822
(12
%)
Colorado
660
1,130
(42
%)
Washington
1,481
1,327
12
%
Oregon
2,719
2,623
4
%
Texas
4,997
3,398
47
%
Total
18,822
19,214
(2
%)
Lots controlled California
1,323
2,022
(35
%)
Arizona
660
651
1
%
Nevada
629
3
NM
Colorado
2,269
1,197
90
%
Washington
617
1,334
(54
%)
Oregon
1,751
1,456
20
%
Texas
2,707
3,629
(25
%)
Total
9,956
10,292
(3
%)
Total lots owned and controlled California
4,344
5,943
(27
%)
Arizona
4,119
4,644
(11
%)
Nevada
3,114
2,825
10
%
Colorado
2,929
2,327
26
%
Washington
2,098
2,661
(21
%)
Oregon
4,470
4,079
10
%
Texas
7,704
7,027
10
%
Total
28,778
29,506
(2
%)
(1)
Certain lots in California, Texas, Arizona and Washington are
consolidated on the Company’s accompanying balance sheet in
accordance with FASB ASC Topic 470, Debt (“ASC 470”). Included in
lots owned are 546 lots in California, 1,159 lots in Texas, 1,931
lots in Arizona, and 72 lots in Washington that are associated with
land banking transactions that are consolidated on the Company’s
accompanying balance sheet in accordance with ASC 470.
WILLIAM LYON HOMES
SUPPLEMENTAL FINANCIAL
INFORMATION
(dollars in thousands)
(unaudited)
Three
Three
Six
Six
Months
Months
Months
Months
Ended
Ended
Ended
Ended
June 30,
June 30,
June 30,
June 30,
2019
2018
2019
2018
Net income available to common stockholders
$
10,451
$
22,455
$
18,570
$
30,783
Interest incurred
$
23,910
$
22,808
$
47,990
$
42,066
Adjusted EBITDA (1)
$
37,031
$
62,415
$
73,627
$
104,127
Adjusted EBITDA Margin (2)
8.0
%
12.0
%
8.0
%
11.7
%
Ratio of adjusted EBITDA to interest incurred
1.5
2.7
1.5
2.5
Balance Sheet Data
June 30,
December 31,
2019
2018
Cash and cash equivalents
$
35,498
$
33,779
Total William Lyon Homes stockholders’ equity
884,258
863,322
Noncontrolling interests
142,144
151,005
Total debt
1,411,356
1,321,345
Total capital
$
2,437,758
$
2,335,672
Ratio of debt to total capital
57.9
%
56.6
%
Ratio of net debt to total capital (net of cash)
57.3
%
55.9
%
WILLIAM LYON HOMES
SUPPLEMENTAL FINANCIAL
INFORMATION
(dollars in thousands)
(unaudited)
(1)
Adjusted EBITDA means net income available
to common stockholders plus (i) provision for income taxes, (ii)
interest expense, (iii) amortization of capitalized interest
included in cost of sales, (iv) stock based compensation, (v)
depreciation and amortization, (vi) non-cash purchase accounting
adjustments, (vii) cash distributions of income from unconsolidated
joint ventures, (viii) equity in income of unconsolidated joint
ventures, (ix) transaction expenses, and (x) (gain) loss on
extinguishment of debt. Other companies may calculate adjusted
EBITDA differently. Adjusted EBITDA is not a financial measure
prepared in accordance with U.S. GAAP. Adjusted EBITDA is presented
herein because management believes the presentation of adjusted
EBITDA provides useful information to the Company’s investors
regarding the Company’s financial condition and results of
operations because adjusted EBITDA is a widely utilized indicator
of a company's operating performance. Adjusted EBITDA should not be
considered as an alternative for net income, cash flows from
operating activities and other consolidated income or cash flow
statement data prepared in accordance with accounting principles
generally accepted in the United States or as a measure of
profitability or liquidity. A reconciliation of net income
available to common stockholders to adjusted EBITDA is provided in
the following table:
Three
Three
Six
Six
Months
Months
Months
Months
Ended
Ended
Ended
Ended
June 30,
June 30,
June 30,
June 30,
2019
2018
2019
2018
Net income available to common stockholders
$
10,451
$
22,455
$
18,570
$
30,783
Provision for income taxes
3,857
7,776
8,753
10,590
Interest expense Interest incurred
23,910
22,808
47,990
42,066
Interest capitalized
(23,910
)
(22,808
)
(47,990
)
(42,066
)
Amortization of capitalized interest included in cost of sales
20,046
22,393
40,461
41,218
Stock based compensation
1,963
2,006
4,728
5,187
Depreciation and amortization
796
1,916
1,541
3,972
Non-cash purchase accounting adjustments
-
5,385
-
6,120
Cash distributions of income from unconsolidated joint ventures
306
240
1,257
3,815
Equity in income of unconsolidated joint ventures
(1,378
)
(533
)
(2,290
)
(1,465
)
Transaction expenses
990
777
990
3,907
(Gain) Loss on extinguishment of debt
-
-
(383
)
-
Adjusted EBITDA
$
37,031
$
62,415
$
73,627
$
104,127
Three
Three
Six
Six
Months
Months
Months
Months
Ended
Ended
Ended
Ended
June 30,
June 30,
June 30,
June 30,
2019
2018
2019
2018
Net income available to common stockholders
$
10,451
$
22,455
$
18,570
$
30,783
Add: Transaction expenses
990
777
990
3,907
(Less) / Add: (Gain) Loss on extinguishment of debt
-
-
(383
)
-
Add: Costs associated with staff reductions
1,173
-
1,173
-
Less: Income tax (provision) applicable to transaction expenses
(209
)
(172
)
(226
)
(820
)
Add / (Less): Income tax benefit applicable to (gain) loss on
extinguishment of debt
-
-
87
-
Less: Income tax (provision) applicable to costs associated with
staff reductions
(247
)
-
(268
)
-
Net income, adjusted for transaction expenses, (gain) loss on
extinguishment of debt, and costs associated with staff reductions,
net of tax benefit (provision)
$
12,158
$
23,060
$
19,943
$
33,870
Diluted weighted average common shares outstanding
39,260,702
39,688,271
39,051,131
39,772,437
Adjusted net income excluding noncontrolling interest per diluted
share
$
0.31
$
0.58
$
0.51
$
0.85
Three
Three
Six
Six
Months
Months
Months
Months
Ended
Ended
Ended
Ended
June 30,
June 30,
June 30,
June 30,
2019
2018
2019
2018
Income before provision for income taxes
$
18,287
$
35,012
$
38,317
$
50,414
Add / (Less): Transaction expenses
990
777
990
3,907
(Gain) Loss on extinguishment of debt
-
-
(383
)
-
Costs associated with staff reductions
1,173
-
1,173
-
Pre-tax income, adjusted for transaction expenses, (gain) loss on
extinguishment of debt, and costs associated with staff reductions
$
20,450
$
35,789
$
40,097
$
54,321
(2)
Calculated as Adjusted EBITDA as a
percentage of operating revenue.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190801005330/en/
Investor/Media Contacts: Larry Clark Financial Profiles,
Inc. (310) 622-8223 WLH@finprofiles.com
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