NEWPORT BEACH, Calif.,
Nov. 6, 2019 /PRNewswire/ -- William
Lyon Homes (NYSE: WLH), a leading homebuilder in the Western U.S.,
announced results for its third quarter ended September 30, 2019.
2019 Third Quarter Highlights
- Net income available to common stockholders of $9.5 million, or $0.24 per diluted share compared to $26.6 million, or $0.68 per diluted share in the prior year
- Adjusted net income available to common stockholders of
$16.1 million, or $0.41 per diluted share compared to $26.6 million, or $0.68 per diluted share in the prior year;
adjusted for
-
- $1.4 million loss on
extinguishment of debt (net of tax)
- $5.2 million one-time inventory
charge (net of tax)
- Pre-tax income of $22.3 million
and adjusted pre-tax income of $30.8
million
- Home sales revenue of $464.8
million, down 13%
- New home deliveries of 995 homes, down 6%
- Homebuilding gross margin percentage of 15.1%
-
- Gross margin percentage, excluding one-time inventory charge,
of 16.5%
- Adjusted gross margin percentage, excluding capitalized
interest, of 20.6%
- Average sales price (ASP) of new homes delivered of
$467,100, compared to $506,700
- Net new home orders of 940, down 6%
- Average sales locations of 114
- Units in backlog of 1,368
- SG&A percentage of 11.9%, compared to 11.0%
- Adjusted EBITDA of $41.7
million
Matthew R. Zaist, President and
Chief Executive Officer, stated, "We are pleased with our financial
results for the quarter with adjusted net income of $16.1 million, or $0.41 per diluted share. Our strong bottom
line results were driven by our homebuilding gross margins,
excluding the one-time inventory charge, of 16.5%, and the
profitability of our ancillary operations." Mr. Zaist
continued, "Income from our financial services segment was
$3.7 million, above our expectations,
as the team performed exceptionally well at fully integrating our
wholly-owned mortgage platform. Additionally, we recorded our
first multi-family apartment sale from our recently launched
mixed-use redevelopment platform, which we closed on in the third
quarter for a profit of $4.3
million."
Operating Results
Home sales revenue for the third
quarter of 2019 was $464.8 million,
as compared to $533.5 million in the
year-ago period, a decrease of 13%. The decrease was driven
by a 6% decrease in the number of homes closed in 2019, as compared
to the prior year period, as well as a decrease in ASP from
$506,700 in the third quarter of
2018, to approximately $467,100 in
2019.
Net new home orders for the quarter were 940, a decrease of 6%
from 1,001 in the third quarter of 2018. Our average
community count decreased 2% to 114 averages sales location during
the third quarter of 2019, compared to 116 during the third quarter
of 2018. Overall, our monthly absorption rate for the quarter
was 2.7 sales per community, compared to 2.9 sales per community in
the third quarter of last year. Our monthly absorption pace
during the quarter was 2.8 in July, 2.5 in August and 2.8 in
September.
Adjusted gross margin percentage was 20.6% during the quarter,
excluding capitalized interest and a one-time inventory charge of
$6.6 million ($5.2 million, net of tax), related to costs
associated with certain previously closed out projects.
Sales and marketing expense during the third quarter of 2019 was
5.4% of homebuilding revenue. This was consistent with the
prior year quarter and reflected 10 basis points of sequential
improvement from the second quarter. General and
administrative expenses increased to 6.5% of homebuilding revenue,
compared to 5.6% in the year-ago quarter. The increase in
general and administrative expense percentage over the prior year
is primarily due to lower revenue as our general and administrative
dollars were consistent with the prior year.
Pre-tax income was $22.3 million
and adjusted pre-tax income was $30.8
million. Provision for income tax was $4.8 million, for an effective tax rate of 21.5%,
compared to a provision of $9.0
million, or 22.0%, in the prior year. Net income
attributable to non-controlling interest was $8.0 million during the third quarter, as
compared to $5.3 million in the prior
year.
Financial Services
In July
2019, we announced the formation of ClosingMark Financial
Group, LLC, a wholly-owned subsidiary operating a full suite of
financial services offerings, including title agency, settlement,
and mortgage services for our homebuyers and other retail
customers, which operates as ClosingMark Home Loans. During
the third quarter, we completed the integration of our previous
mortgage joint venture operations and loan pipeline into this
platform under the ClosingMark Home Loans brand.
During the quarter, our wholly-owned financial services
operations recorded income of $3.4
million and our unconsolidated mortgage joint ventures
recorded income of $0.3
million. Going forward, we have ceased further
business operations out of our unconsolidated mortgage joint
ventures and would expect to benefit from improved financial
performance out of the financial services segment for the fourth
quarter based on operating efficiencies and earnings capture on an
exclusively wholly-owned basis.
Senior Notes Issuance
On July
9, 2019, we closed on a $300
million Senior Notes offering at a coupon of 6.625%.
The proceeds from the offering were used to redeem the majority of
the $350 million 7% Senior Notes due
2022 on August 15, 2019. In
conjunction with the transaction, the company recorded a loss on
extinguishment of debt, net, of $1.4
million.
Balance Sheet Update
At quarter end, cash and cash
equivalents totaled $42.1 million,
owned real estate inventories totaled $2.3
billion, total assets were $3.0
billion and total equity was $1.0
billion. Total debt to book capitalization was 57.7%, and
net debt to net book capitalization was 56.9% at September 30, 2019, compared to 56.6% and 55.9%
at December 31, 2018,
respectively.
Conference Call Postponement
The Company is postponing
its previously scheduled conference call, which was scheduled for
today, Wednesday, November 6, 2019
due to a forthcoming announcement. It now expects to hold the
conference call to discuss its third quarter 2019 results on a
later date to be announced.
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 111,000 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, 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
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; 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; 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.
Investor/Media Contacts:
Larry
Clark
Financial Profiles, Inc.
(310) 622-8223
WLH@finprofiles.com
WILLIAM LYON
HOMES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands
except number of shares and per share data)
(unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Operating
revenue
|
|
|
|
|
|
|
|
Home
sales
|
$
464,765
|
|
$
533,514
|
|
$
1,382,057
|
|
$
1,424,331
|
Construction
services
|
2,124
|
|
1,190
|
|
6,165
|
|
3,193
|
|
466,889
|
|
534,704
|
|
1,388,222
|
|
1,427,524
|
Operating
costs
|
|
|
|
|
|
|
|
Cost of
sales — homes
|
(394,658)
|
|
(436,311)
|
|
(1,165,185)
|
|
(1,169,191)
|
Construction
services
|
(1,978)
|
|
(1,121)
|
|
(5,732)
|
|
(3,063)
|
Sales and
marketing
|
(25,244)
|
|
(28,879)
|
|
(75,887)
|
|
(80,420)
|
General and
administrative
|
(30,292)
|
|
(30,039)
|
|
(88,890)
|
|
(83,067)
|
Transaction
expenses
|
-
|
|
-
|
|
-
|
|
(3,907)
|
Other
|
(600)
|
|
(591)
|
|
(1,639)
|
|
(1,510)
|
|
(452,772)
|
|
(496,941)
|
|
(1,337,333)
|
|
(1,341,158)
|
Operating
income
|
14,117
|
|
37,763
|
|
50,889
|
|
86,366
|
|
|
|
|
|
|
|
|
Financial
services
|
|
|
|
|
|
|
|
Equity in income of
unconsolidated joint ventures
|
353
|
|
531
|
|
2,643
|
|
1,996
|
Income (loss) from
financial services operations
|
3,390
|
|
-
|
|
2,168
|
|
-
|
Transaction
expenses
|
-
|
|
-
|
|
(990)
|
|
-
|
Financial services
income (loss)
|
3,743
|
|
531
|
|
3,821
|
|
1,996
|
|
|
|
|
|
|
|
|
Other (expense)
income, net
|
6,261
|
|
2,510
|
|
7,345
|
|
2,856
|
Income before
extinguishment of debt
|
24,121
|
|
40,804
|
|
62,055
|
|
91,218
|
(Loss) gain on
extinguishment of debt
|
(1,816)
|
|
-
|
|
(1,433)
|
|
-
|
Income before
provision for income taxes
|
22,305
|
|
40,804
|
|
60,622
|
|
91,218
|
Provision for income
taxes
|
(4,795)
|
|
(8,990)
|
|
(13,548)
|
|
(19,580)
|
Net income
|
17,510
|
|
31,814
|
|
47,074
|
|
71,638
|
Less: Net income
attributable to noncontrolling interests
|
(8,030)
|
|
(5,256)
|
|
(19,024)
|
|
(14,297)
|
Net income available
to common stockholders
|
$
9,480
|
|
$
26,558
|
|
$
28,050
|
|
$
57,341
|
|
|
|
|
|
|
|
|
Income per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.25
|
|
$
0.70
|
|
$
0.74
|
|
$
1.51
|
Diluted
|
$
0.24
|
|
$
0.68
|
|
$
0.72
|
|
$
1.45
|
Weighted
average common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
37,836,265
|
|
37,847,743
|
|
37,755,879
|
|
37,931,764
|
Diluted
|
39,171,746
|
|
39,160,894
|
|
38,944,008
|
|
39,581,986
|
WILLIAM LYON
HOMES
CONSOLIDATED
BALANCE SHEETS
(in thousands
except number of shares and per share data)
(unaudited)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
42,118
|
|
$
33,779
|
Receivables
|
|
12,569
|
|
13,502
|
Escrow proceeds
receivable
|
|
2,764
|
|
-
|
Real estate
inventories
|
|
|
|
|
Owned
|
|
2,327,582
|
|
2,333,207
|
Not
owned
|
|
215,541
|
|
315,576
|
Investment in
unconsolidated joint ventures
|
|
1,552
|
|
5,542
|
Goodwill
|
|
123,695
|
|
123,695
|
Intangibles, net of
accumulated amortization of $4,640 as of September 30, 2019 and
December 31, 2018
|
|
6,700
|
|
6,700
|
Deferred income
taxes
|
|
46,254
|
|
47,241
|
Lease right-of-use
assets
|
|
37,000
|
|
13,561
|
Financial services
assets
|
|
168,093
|
|
-
|
Other assets,
net
|
|
35,136
|
|
36,971
|
Total
assets
|
|
$
3,019,004
|
|
$
2,929,774
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Accounts
payable
|
|
$
114,810
|
|
$
128,371
|
Accrued
expenses
|
|
102,263
|
|
150,155
|
Financial services
liabilities
|
|
146,836
|
|
-
|
Liabilities from
inventories not owned
|
|
215,541
|
|
315,576
|
Revolving credit
facility
|
|
150,000
|
|
45,000
|
Construction notes
payable
|
|
1,252
|
|
1,231
|
Joint venture notes
payable
|
|
137,729
|
|
151,788
|
7% Senior Notes due
August 15, 2022
|
|
49,762
|
|
347,456
|
6% Senior Notes due
September 1, 2023
|
|
344,654
|
|
343,878
|
5.875% Senior Notes
due January 31, 2025
|
|
429,121
|
|
431,992
|
6.625% Senior Notes
due July 15, 2027
|
|
294,673
|
|
-
|
|
|
1,986,641
|
|
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 September 30, 2019 and December 31,
2018
|
|
-
|
|
-
|
Common stock,
Class A, par value $0.01 per share; 150,000,000 shares
authorized; 33,983,093 and 33,904,972 shares issued, 33,029,026 and
32,690,378 shares outstanding at September 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 September 30, 2019 and
December 31, 2018
|
|
48
|
|
48
|
Additional paid-in
capital
|
|
450,137
|
|
445,545
|
Retained
earnings
|
|
445,440
|
|
417,390
|
Total William Lyon
Homes stockholders' equity
|
|
895,965
|
|
863,322
|
Noncontrolling
interests
|
|
136,398
|
|
151,005
|
Total
equity
|
|
1,032,363
|
|
1,014,327
|
Total liabilities and
equity
|
|
$
3,019,004
|
|
$
2,929,774
|
WILLIAM LYON
HOMES
SELECTED FINANCIAL
AND OPERATING INFORMATION
(unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2019
|
|
2018
|
|
%
Chg
|
|
2019
|
|
2018
|
|
%
Chg
|
Selected Financial
Information
|
|
|
|
|
|
|
|
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Homes
closed
|
995
|
|
1,053
|
|
(6%)
|
|
2,977
|
|
2,875
|
|
4%
|
|
Home sales
revenue
|
$ 464,765
|
|
$ 533,514
|
|
(13%)
|
|
$
1,382,057
|
|
$
1,424,331
|
|
(3%)
|
|
Cost of sales
(excluding interest, purchase accounting adjustments, and one-time
inventory charge)
|
(368,878)
|
|
(410,908)
|
|
(10%)
|
|
(1,098,944)
|
|
(1,096,535)
|
|
0%
|
|
Adjusted homebuilding
gross margin (1)
|
$
95,887
|
|
$ 122,606
|
|
(22%)
|
|
$
283,113
|
|
$
327,796
|
|
(14%)
|
|
Adjusted homebuilding
gross margin percentage (1)
|
20.6%
|
|
23.0%
|
|
(10%)
|
|
20.5%
|
|
23.0%
|
|
(11%)
|
|
Interest in cost of
sales
|
(19,149)
|
|
(21,548)
|
|
(11%)
|
|
(59,610)
|
|
(62,681)
|
|
(5%)
|
|
Purchase accounting
adjustments
|
-
|
|
(3,855)
|
|
(100%)
|
|
-
|
|
(9,975)
|
|
(100%)
|
|
Gross margin,
exlcuding one-time inventory charge
|
$
76,738
|
|
$
97,203
|
|
(21%)
|
|
$
223,503
|
|
$
255,140
|
|
(12%)
|
|
Gross margin
percentage, excluding one-time inventory charge
|
16.5%
|
|
18.2%
|
|
(9%)
|
|
16.2%
|
|
17.9%
|
|
(10%)
|
|
One-time inventory
charge
|
$
(6,631)
|
|
-
|
|
-
|
|
$
(6,631)
|
|
-
|
|
-
|
|
Gross
margin
|
$
70,107
|
|
$
97,203
|
|
(28%)
|
|
$
216,872
|
|
$
255,140
|
|
(15%)
|
|
Gross margin
percentage
|
15.1%
|
|
18.2%
|
|
(17%)
|
|
15.7%
|
|
17.9%
|
|
(12%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of homes
closed
|
|
|
|
|
|
|
|
|
|
|
|
|
California
|
292
|
|
301
|
|
(3%)
|
|
860
|
|
779
|
|
10%
|
|
Arizona
|
128
|
|
108
|
|
19%
|
|
322
|
|
336
|
|
(4%)
|
|
Nevada
|
78
|
|
80
|
|
(3%)
|
|
219
|
|
245
|
|
(11%)
|
|
Colorado
|
92
|
|
124
|
|
(26%)
|
|
376
|
|
362
|
|
4%
|
|
Washington
|
90
|
|
118
|
|
(24%)
|
|
242
|
|
350
|
|
(31%)
|
|
Oregon
|
110
|
|
159
|
|
(31%)
|
|
313
|
|
403
|
|
(22%)
|
|
Texas
|
205
|
|
163
|
|
26%
|
|
645
|
|
400
|
|
61%
|
|
Total
|
995
|
|
1,053
|
|
(6%)
|
|
2,977
|
|
2,875
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales
price of homes closed
|
|
|
|
|
|
|
|
|
|
|
|
|
California
|
$ 614,800
|
|
$ 668,800
|
|
(8%)
|
|
$
620,300
|
|
$
655,400
|
|
(5%)
|
|
Arizona
|
352,600
|
|
317,500
|
|
11%
|
|
340,800
|
|
312,800
|
|
9%
|
|
Nevada
|
506,600
|
|
622,700
|
|
(19%)
|
|
510,500
|
|
592,700
|
|
(14%)
|
|
Colorado
|
460,300
|
|
440,100
|
|
5%
|
|
439,600
|
|
433,900
|
|
1%
|
|
Washington
|
665,400
|
|
686,300
|
|
(3%)
|
|
656,600
|
|
628,900
|
|
4%
|
|
Oregon
|
394,000
|
|
436,700
|
|
(10%)
|
|
411,600
|
|
452,900
|
|
(9%)
|
|
Texas
|
268,400
|
|
264,400
|
|
2%
|
|
269,800
|
|
259,400
|
|
4%
|
|
Average
|
$ 467,100
|
|
$ 506,700
|
|
(8%)
|
|
$
464,200
|
|
$
495,400
|
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of net new
home orders
|
|
|
|
|
|
|
|
|
|
|
|
|
California
|
279
|
|
295
|
|
(5%)
|
|
923
|
|
915
|
|
1%
|
|
Arizona
|
125
|
|
118
|
|
6%
|
|
370
|
|
344
|
|
8%
|
|
Nevada
|
90
|
|
94
|
|
(4%)
|
|
250
|
|
318
|
|
(21%)
|
|
Colorado
|
104
|
|
100
|
|
4%
|
|
459
|
|
404
|
|
14%
|
|
Washington
|
64
|
|
77
|
|
(17%)
|
|
277
|
|
392
|
|
(29%)
|
|
Oregon
|
85
|
|
145
|
|
(41%)
|
|
295
|
|
553
|
|
(47%)
|
|
Texas
|
193
|
|
172
|
|
12%
|
|
730
|
|
451
|
|
62%
|
|
Total
|
940
|
|
1,001
|
|
(6%)
|
|
3,304
|
|
3,377
|
|
(2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
sales locations
|
|
|
|
|
|
|
|
|
|
|
|
|
California
|
35
|
|
36
|
|
(3%)
|
|
37
|
|
29
|
|
28%
|
|
Arizona
|
9
|
|
6
|
|
50%
|
|
9
|
|
6
|
|
50%
|
|
Nevada
|
13
|
|
15
|
|
(13%)
|
|
13
|
|
13
|
|
0%
|
|
Colorado
|
11
|
|
12
|
|
(8%)
|
|
11
|
|
14
|
|
(21%)
|
|
Washington
|
9
|
|
10
|
|
(10%)
|
|
9
|
|
9
|
|
0%
|
|
Oregon
|
16
|
|
15
|
|
7%
|
|
17
|
|
15
|
|
13%
|
|
Texas
|
21
|
|
22
|
|
(5%)
|
|
22
|
|
16
|
|
38%
|
|
Total
|
114
|
|
116
|
|
(2%)
|
|
118
|
|
102
|
|
16%
|
|
|
(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 September
30,
|
|
2019
|
|
2018
|
|
%
Chg
|
|
|
|
|
|
|
Backlog of homes
sold but not closed at end of period
|
|
|
|
|
|
California
|
315
|
|
451
|
|
(30%)
|
Arizona
|
206
|
|
169
|
|
22%
|
Nevada
|
125
|
|
159
|
|
(21%)
|
Colorado
|
217
|
|
214
|
|
1%
|
Washington
|
76
|
|
133
|
|
(43%)
|
Oregon
|
110
|
|
222
|
|
(50%)
|
Texas
|
319
|
|
248
|
|
29%
|
Total
|
1,368
|
|
1,596
|
|
(14%)
|
|
|
|
|
|
|
Dollar amount of
homes sold but not closed at end of period (in
thousands)
|
|
|
|
|
|
California
|
$196,367
|
|
$327,838
|
|
(40%)
|
Arizona
|
75,075
|
|
53,585
|
|
40%
|
Nevada
|
55,416
|
|
94,053
|
|
(41%)
|
Colorado
|
100,754
|
|
92,315
|
|
9%
|
Washington
|
48,375
|
|
83,256
|
|
(42%)
|
Oregon
|
49,755
|
|
81,270
|
|
(39%)
|
Texas
|
88,192
|
|
68,267
|
|
29%
|
Total
|
$613,934
|
|
$800,584
|
|
(23%)
|
|
|
|
|
|
|
Lots owned and
controlled at end of period (1)
|
|
|
|
|
|
|
|
|
|
|
|
Lots
owned
|
|
|
|
|
|
California
|
2,886
|
|
3,648
|
|
(21%)
|
Arizona
|
3,331
|
|
3,756
|
|
(11%)
|
Nevada
|
2,407
|
|
2,745
|
|
(12%)
|
Colorado
|
578
|
|
1,006
|
|
(43%)
|
Washington
|
1,391
|
|
1,538
|
|
(10%)
|
Oregon
|
2,588
|
|
2,613
|
|
(1%)
|
Texas
|
4,468
|
|
3,199
|
|
40%
|
Total
|
17,649
|
|
18,505
|
|
(5%)
|
|
|
|
|
|
|
Lots
controlled
|
|
|
|
|
|
California
|
1,322
|
|
1,709
|
|
(23%)
|
Arizona
|
660
|
|
651
|
|
1%
|
Nevada
|
629
|
|
-
|
|
NM
|
Colorado
|
2,260
|
|
2,368
|
|
(5%)
|
Washington
|
617
|
|
710
|
|
(13%)
|
Oregon
|
1,665
|
|
1,307
|
|
27%
|
Texas
|
4,440
|
|
3,885
|
|
14%
|
Total
|
11,593
|
|
10,630
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total lots owned
and controlled
|
|
|
|
|
|
California
|
4,208
|
|
5,357
|
|
(21%)
|
Arizona
|
3,991
|
|
4,407
|
|
(9%)
|
Nevada
|
3,036
|
|
2,745
|
|
11%
|
Colorado
|
2,838
|
|
3,374
|
|
(16%)
|
Washington
|
2,008
|
|
2,248
|
|
(11%)
|
Oregon
|
4,253
|
|
3,920
|
|
8%
|
Texas
|
8,908
|
|
7,084
|
|
26%
|
Total
|
29,242
|
|
29,135
|
|
0%
|
|
|
(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 425 lots in
California, 1,007 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 Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Net income available
to common stockholders
|
|
$
9,480
|
|
$
26,558
|
|
$
28,050
|
|
$
57,341
|
Interest
incurred
|
|
$
25,449
|
|
$
24,725
|
|
$
73,439
|
|
$
66,791
|
Adjusted EBITDA
(1)
|
|
$
41,746
|
|
$
66,175
|
|
$
115,373
|
|
$
170,302
|
Adjusted EBITDA
Margin (2)
|
|
8.9%
|
|
12.4%
|
|
8.3%
|
|
11.9%
|
Ratio of adjusted
EBITDA to interest incurred
|
|
1.6
|
|
2.7
|
|
1.6
|
|
2.5
|
|
|
(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:
|
|
|
(2)
|
Calculated as
Adjusted EBITDA as a percentage of operating revenue.
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
Reconciliation of
Adjusted EBITDA:
|
|
September
30, 2019
|
|
September
30, 2018
|
|
September
30, 2019
|
|
September
30, 2018
|
Net income available
to common stockholders
|
|
$
9,480
|
|
$
26,558
|
|
$
28,050
|
|
$
57,341
|
Provision for income
taxes
|
|
4,795
|
|
8,990
|
|
13,548
|
|
19,580
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
Interest
incurred
|
|
25,449
|
|
24,725
|
|
73,439
|
|
66,791
|
|
Interest
capitalized
|
|
(25,449)
|
|
(24,725)
|
|
(73,439)
|
|
(66,791)
|
Amortization of
capitalized interest included in
cost of sales
|
|
19,149
|
|
22,009
|
|
59,610
|
|
63,227
|
Stock based
compensation
|
|
2,233
|
|
2,406
|
|
6,961
|
|
7,593
|
Depreciation and
amortization
|
|
815
|
|
1,807
|
|
2,356
|
|
5,779
|
Non-cash purchase
accounting adjustments
|
|
-
|
|
3,855
|
|
-
|
|
9,975
|
Cash distributions of
income from unconsolidated joint ventures
|
|
3,811
|
|
1,081
|
|
5,068
|
|
4,896
|
Equity in income of
unconsolidated joint ventures
|
|
(353)
|
|
(531)
|
|
(2,643)
|
|
(1,996)
|
Transaction
expenses
|
|
-
|
|
-
|
|
990
|
|
3,907
|
Loss on
extinguishment of debt
|
|
1,816
|
|
-
|
|
1,433
|
|
-
|
Adjusted
EBITDA
|
|
$
41,746
|
|
$
66,175
|
|
$
115,373
|
|
$
170,302
|
WILLIAM LYON
HOMES
SUPPLEMENTAL
FINANCIAL INFORMATION
(dollars in
thousands)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
Reconcilation of
Adjusted Net Income:
|
|
September 30, 2019
|
|
September 30, 2018
|
|
September
30, 2019
|
|
September
30, 2018
|
Net income available
to common stockholders
|
|
$
9,480
|
|
$
26,558
|
|
$
28,050
|
|
$
57,341
|
Add: Transaction
expenses
|
|
-
|
|
-
|
|
990
|
|
3,907
|
Add: Loss on
extinguishment of debt
|
|
1,816
|
|
-
|
|
1,433
|
|
-
|
Add: One-time
inventory charge
|
|
6,631
|
|
-
|
|
6,631
|
|
-
|
Add: Costs associated
with staff reductions
|
|
-
|
|
-
|
|
1,173
|
|
-
|
Less: Income tax
(provision) applicable to transaction expenses
|
|
-
|
|
-
|
|
(221)
|
|
(840)
|
Less: Income tax
benefit applicable to loss on extinguishment of debt
|
|
(390)
|
|
-
|
|
(320)
|
|
-
|
Less: Income tax
(provision) applicable to one-time inventory charge
|
|
(1,426)
|
|
-
|
|
(1,482)
|
|
-
|
Less: Income tax
(provision) applicable to costs associated with staff
reductions
|
|
-
|
|
-
|
|
(262)
|
|
-
|
Net income, adjusted
for transaction expenses, loss on extinguishment of debt, one-time
inventory charge, and costs associated with staff reductions, net
of tax benefit (provision)
|
|
$
16,111
|
|
$
26,558
|
|
$
35,991
|
|
$
60,408
|
Diluted weighted
average common shares outstanding
|
|
39,171,746
|
|
39,160,894
|
|
38,944,008
|
|
39,581,986
|
Adjusted net income
per diluted share
|
|
$
0.41
|
|
$
0.68
|
|
$
0.92
|
|
$
1.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
Reconcilation of
Adjusted Pre-Tax Income:
|
|
September
30, 2019
|
|
September
30, 2018
|
|
September
30, 2019
|
|
September
30, 2018
|
Income before
provision for income taxes
|
|
$
22,305
|
|
$
40,804
|
|
$
60,622
|
|
$
91,218
|
Add: Transaction
expenses
|
|
-
|
|
-
|
|
990
|
|
3,907
|
Loss on extinguishment
of debt
|
|
1,816
|
|
-
|
|
1,433
|
|
-
|
One-time inventory
charge
|
|
6,631
|
|
-
|
|
6,631
|
|
-
|
Staff reorganization
costs
|
|
-
|
|
-
|
|
1,173
|
|
-
|
Pre-tax income,
adjusted for transaction expenses, loss on extinguishment of debt,
and costs associated with staff reductions
|
|
$
30,752
|
|
$
40,804
|
|
$
70,849
|
|
$
95,125
|
Balance Sheet
Data
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
42,118
|
|
$
33,779
|
|
|
|
|
|
Total William Lyon
Homes stockholders' equity
|
|
895,965
|
|
863,322
|
Noncontrolling
interests
|
|
136,398
|
|
151,005
|
Total debt
|
|
1,407,191
|
|
1,321,345
|
Total
capital
|
|
$
2,439,554
|
|
$
2,335,672
|
|
|
|
|
|
Ratio of debt to
total capital
|
|
57.7%
|
|
56.6%
|
Ratio of net debt to
total capital (net of cash)
|
|
56.9%
|
|
55.9%
|
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SOURCE William Lyon Homes