Landsea Homes Corporation (Nasdaq: LSEA) (“Landsea Homes” or the
“Company”) announced today financial results for the second quarter
ended June 30, 2024. For the quarter, the Company reported
pretax income of $4.6 million, and net income of $2.9 million, or
$0.08 per share. Reported income for the quarter includes a
$5.2 million or $0.10 per diluted share impact related to a
non-cash deferred financing cost write-off associated with the
re-cast of the Company’s unsecured revolving credit facility.
Excluding the loss from the deferred financing cost write-off, net
income was $6.5 million or $0.18 per share. Adjusted net
income (a non-GAAP measure) was $13.3 million or $0.36 per share
and adjusted gross margin was 21.1%. Reported pretax income for the
prior year period was $7.5 million with net income of $4.9 million,
or $0.12 per share. For the prior year period, adjusted net income
was $13.0 million, or $0.33 per share and adjusted gross margin was
23.5%.
Management Commentary
“Landsea Homes posted another quarter of strong
top-line growth in the second quarter of 2024, generating home
sales revenue of $418.2 million, which represented an increase of
43.5% over the second quarter of 2023”, said John Ho, Landsea
Homes’ Chief Executive Officer. “New home deliveries totaled 760
units for the quarter, well in excess of our stated guidance, as
our teams did an excellent job of accelerating build schedules and
closing homes in a timely manner. We also generated 760 net new
orders for the quarter, 34.5% more than second quarter of 2023, on
a sales pace of 3.0 homes per community per month.”
Mr. Ho continued, “The strong year-over-year
growth we experienced in both sales and closings this quarter was
the direct result of our strategic efforts to grow our company and
achieve better economies of scale. Average community count for the
quarter was up 47% year-over-year, thanks to the investments we’ve
made in our markets and the acquisitions we’ve completed to grow
our company. We are a much bigger and more diversified company than
we were a year ago, and we expect to reap the benefits of our
larger homebuilding platform as our volumes increase.”
Mr. Ho concluded, “As we turn our attention to
the latter half of 2024, we remain focused on achieving our
delivery goals for the year and generating cash to bring our
leverage ratios down from current levels. Given the improvements
we’ve seen in build times and the number of homes we currently have
in backlog, I believe we are on track to achieve those goals. I am
proud of the way our teams executed in the second quarter and
continue to believe that Landsea Homes has a bright future
ahead.”
Operating Results
Total revenue was $431.1 million in the second
quarter, up 47.0% compared to the second quarter of 2023, primarily
driven by a 41% increase in homes closed and a 2% increase in
average sales price.
New homes delivered increased 41.0% to 760 homes
at an average sales price of $550,000, a 2% increase, compared to
539 homes delivered at an average sales price of $541,000 in the
second quarter of 2023.
Net new home orders were up 34.5% to 760 homes
with a dollar value of $389.8 million, an average sales price of
$513,000 and a monthly absorption rate of 3.0 sales per active
community. This compares to 565 homes with a dollar value of $324.4
million, an average sales price of $574,000 and a monthly
absorption rate of 3.3 sales per active community in the prior year
period. As a percentage of gross orders, cancellations equaled 11%
as compared to 11% a year ago.
Total homes in backlog were 694 homes with a
dollar value of $391.1 million and an average sales price of
$564,000 at June 30, 2024. This compares to 722 homes with a
dollar value of $455.8 million and an average sales price of
$631,000 at June 30, 2023.
Total lots owned or controlled at June 30,
2024, were 12,357 compared to 11,008 at June 30, 2023. We
continue to pursue an asset-light strategy, controlling 57% of our
lots at the end of the second quarter of 2024 and 43% owned.
Home sales gross margin was 14.9% compared to
17.4% in the prior year period. Adjusted home sales gross margin (a
non-GAAP measure) was 21.1% compared to 23.5% 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
$2.9 million compared to $4.9 million in the prior year period.
Adjusted net income attributable to Landsea Homes (a non-GAAP
measure) was $13.3 million compared to $13.0 million in the prior
year period. Net income per share on a fully diluted basis was
$0.08 compared to $0.12 in the second quarter of 2023. Adjusted net
income per share (a non-GAAP measure) on a fully diluted basis was
$0.36 compared to $0.33 in the second quarter of 2023.
Adjusted EBITDA (a non-GAAP measure) was $42.8
million compared to $27.0 million in the prior year period.
Balance Sheet
As of June 30, 2024, the Company had total
liquidity of $330.2 million consisting of cash and cash equivalents
as well as cash held in escrow of $106.2 million and $224.0 million
in availability under the Company’s $455.0 million unsecured
revolving credit facility. Total debt was $754.1 million compared
to $543.8 million at December 31, 2023.
Landsea Homes’ ratio of debt to capital was
52.8% at June 30, 2024, and the Company’s net debt to total
capital (a non-GAAP measure) was 45.4% at June 30, 2024.
Third Quarter 2024 Outlook
- New home deliveries anticipated to
be in the range of 625 to 700
- Delivery ASPs expected to be in the
range of $495,000 to $510,000
- Adjusted home sales gross margin to
be between 20% and 21%
- Home sales gross margin to be
approximately 15%
Fourth Quarter 2024 Outlook
- New home deliveries anticipated to
be in the range of 1,000 to 1,100
- Delivery ASPs expected to be in the
range of $495,000 to $510,000
- Adjusted home sales gross margin to
be between 23% and 24%
- Home sales gross margin to be
between 18% and 19%
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
second quarter 2024 results.
- Toll-free dial-in number: 1-800-274-8461
- International dial-in number: 1-203-518-9814
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 approximately three hours after conference end time
through August 15, 2024.
Replay Details:
- Toll-free replay number: 1-844-512-2921
- International replay number: 1-412-317-6671
- Replay ID: 11156580
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
Under its stock repurchase program, Landsea
Homes may purchase its common stock 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
|
Landsea Homes CorporationConsolidated Balance Sheets -
Unaudited |
|
|
June 30, 2024 |
|
December 31, 2023 |
|
(dollars in thousands) |
Assets |
|
|
|
Cash and cash equivalents |
$ |
82,150 |
|
|
$ |
119,555 |
|
Cash held in escrow |
|
24,071 |
|
|
|
49,091 |
|
Real estate inventories |
|
1,350,165 |
|
|
|
1,121,726 |
|
Due from affiliates |
|
4,569 |
|
|
|
4,348 |
|
Goodwill |
|
152,322 |
|
|
|
68,639 |
|
Other assets |
|
129,633 |
|
|
|
107,873 |
|
Total assets |
$ |
1,742,910 |
|
|
$ |
1,471,232 |
|
|
|
|
|
Liabilities |
|
|
|
Accounts payable |
$ |
95,471 |
|
|
$ |
77,969 |
|
Accrued expenses and other liabilities |
|
219,569 |
|
|
|
160,256 |
|
Due to affiliates |
|
881 |
|
|
|
881 |
|
Line of credit facility, net |
|
225,655 |
|
|
|
307,631 |
|
Senior notes, net |
|
528,452 |
|
|
|
236,143 |
|
Total liabilities |
|
1,070,028 |
|
|
|
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 June 30, 2024 and
December 31, 2023, respectively |
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 500,000,000 shares authorized,
41,671,387 issued and 36,275,392 outstanding as of June 30,
2024, 41,382,453 issued and 36,520,894 outstanding as of
December 31, 2023 |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
460,001 |
|
|
|
465,290 |
|
Retained earnings |
|
190,659 |
|
|
|
187,584 |
|
Total stockholders’
equity |
|
650,664 |
|
|
|
652,878 |
|
Noncontrolling interests |
|
22,218 |
|
|
|
35,474 |
|
Total equity |
|
672,882 |
|
|
|
688,352 |
|
Total liabilities and
equity |
$ |
1,742,910 |
|
|
$ |
1,471,232 |
|
|
Landsea Homes CorporationConsolidated Statements of
Operations - Unaudited |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(dollars in thousands, except per share amounts) |
Revenue |
|
|
|
|
|
|
|
Home sales |
$ |
418,182 |
|
|
$ |
291,512 |
|
|
$ |
710,774 |
|
|
$ |
532,137 |
|
Lot sales and other |
|
12,961 |
|
|
|
1,732 |
|
|
|
14,410 |
|
|
|
2,847 |
|
Total
revenues |
|
431,143 |
|
|
|
293,244 |
|
|
|
725,184 |
|
|
|
534,984 |
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
|
|
|
|
|
Home sales |
|
355,736 |
|
|
|
240,835 |
|
|
|
604,633 |
|
|
|
437,889 |
|
Lot sales and other |
|
11,231 |
|
|
|
1,748 |
|
|
|
12,914 |
|
|
|
2,461 |
|
Total cost of sales |
|
366,967 |
|
|
|
242,583 |
|
|
|
617,547 |
|
|
|
440,350 |
|
|
|
|
|
|
|
|
|
Gross
margin |
|
|
|
|
|
|
|
Home sales |
|
62,446 |
|
|
|
50,677 |
|
|
|
106,141 |
|
|
|
94,248 |
|
Lot sales and other |
|
1,730 |
|
|
|
(16 |
) |
|
|
1,496 |
|
|
|
386 |
|
Total gross margin |
|
64,176 |
|
|
|
50,661 |
|
|
|
107,637 |
|
|
|
94,634 |
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses |
|
24,663 |
|
|
|
18,334 |
|
|
|
43,151 |
|
|
|
34,742 |
|
General and administrative
expenses |
|
29,555 |
|
|
|
25,980 |
|
|
|
55,637 |
|
|
|
48,760 |
|
Total operating expenses |
|
54,218 |
|
|
|
44,314 |
|
|
|
98,788 |
|
|
|
83,502 |
|
|
|
|
|
|
|
|
|
Income from
operations |
|
9,958 |
|
|
|
6,347 |
|
|
|
8,849 |
|
|
|
11,132 |
|
|
|
|
|
|
|
|
|
Other (expense) income,
net |
|
(5,353 |
) |
|
|
1,159 |
|
|
|
(3,540 |
) |
|
|
2,114 |
|
Pretax
income |
|
4,605 |
|
|
|
7,506 |
|
|
|
5,309 |
|
|
|
13,246 |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
1,370 |
|
|
|
1,640 |
|
|
|
1,340 |
|
|
|
3,257 |
|
|
|
|
|
|
|
|
|
Net
income |
|
3,235 |
|
|
|
5,866 |
|
|
|
3,969 |
|
|
|
9,989 |
|
Net income attributable to
noncontrolling interests |
|
350 |
|
|
|
919 |
|
|
|
894 |
|
|
|
1,824 |
|
Net income attributable to
Landsea Homes Corporation |
$ |
2,885 |
|
|
$ |
4,947 |
|
|
$ |
3,075 |
|
|
$ |
8,165 |
|
|
|
|
|
|
|
|
|
Income per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.08 |
|
|
$ |
0.12 |
|
|
$ |
0.08 |
|
|
$ |
0.20 |
|
Diluted |
$ |
0.08 |
|
|
$ |
0.12 |
|
|
$ |
0.08 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
36,199,850 |
|
|
|
39,891,982 |
|
|
|
36,239,765 |
|
|
|
39,944,549 |
|
Diluted |
|
36,369,827 |
|
|
|
39,971,731 |
|
|
|
36,558,862 |
|
|
|
40,059,731 |
|
Home Deliveries and Home Sales Revenue
|
Three Months Ended June 30, |
|
2024 |
|
2023 |
|
% Change |
|
Homes |
|
DollarValue |
|
ASP |
|
Homes |
|
DollarValue |
|
ASP |
|
Homes |
|
DollarValue |
|
ASP |
|
(dollars in thousands) |
Arizona |
213 |
|
|
$ |
96,251 |
|
|
$ |
452 |
|
|
160 |
|
|
$ |
70,590 |
|
|
$ |
441 |
|
|
33 |
% |
|
36 |
% |
|
2 |
% |
California |
139 |
|
|
|
134,211 |
|
|
|
966 |
|
|
115 |
|
|
|
99,516 |
|
|
|
865 |
|
|
21 |
% |
|
35 |
% |
|
12 |
% |
Colorado |
24 |
|
|
|
10,201 |
|
|
|
425 |
|
|
— |
|
|
|
— |
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
285 |
|
|
|
130,010 |
|
|
|
456 |
|
|
264 |
|
|
|
121,406 |
|
|
|
460 |
|
|
8 |
% |
|
7 |
% |
|
(1 |
)% |
Metro New York |
1 |
|
|
|
4,475 |
|
|
|
4,475 |
|
|
— |
|
|
|
— |
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Texas |
98 |
|
|
|
43,034 |
|
|
|
439 |
|
|
— |
|
|
|
— |
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Total |
760 |
|
|
$ |
418,182 |
|
|
$ |
550 |
|
|
539 |
|
|
$ |
291,512 |
|
|
$ |
541 |
|
|
41 |
% |
|
43 |
% |
|
2 |
% |
|
Six Months Ended June 30, |
|
2024 |
|
2023 |
|
% Change |
|
Homes |
|
DollarValue |
|
ASP |
|
Homes |
|
DollarValue |
|
ASP |
|
Homes |
|
DollarValue |
|
ASP |
|
(dollars in thousands) |
Arizona |
396 |
|
|
$ |
174,992 |
|
|
$ |
442 |
|
|
330 |
|
|
$ |
143,124 |
|
|
$ |
434 |
|
|
20 |
% |
|
22 |
% |
|
2 |
% |
California |
285 |
|
|
|
266,105 |
|
|
|
934 |
|
|
200 |
|
|
|
166,774 |
|
|
|
834 |
|
|
43 |
% |
|
60 |
% |
|
12 |
% |
Colorado |
41 |
|
|
|
19,055 |
|
|
|
465 |
|
|
— |
|
|
|
— |
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
442 |
|
|
|
202,365 |
|
|
|
458 |
|
|
476 |
|
|
|
216,396 |
|
|
|
455 |
|
|
(7 |
)% |
|
(6 |
)% |
|
1 |
% |
Metro New York |
1 |
|
|
|
4,475 |
|
|
|
4,475 |
|
|
1 |
|
|
|
1,649 |
|
|
|
1,649 |
|
|
— |
% |
|
171 |
% |
|
171 |
% |
Texas |
100 |
|
|
|
43,782 |
|
|
|
438 |
|
|
4 |
|
|
|
4,194 |
|
|
|
1,049 |
|
|
2,400 |
% |
|
944 |
% |
|
(58 |
)% |
Total |
1,265 |
|
|
$ |
710,774 |
|
|
$ |
562 |
|
|
1,011 |
|
|
$ |
532,137 |
|
|
$ |
526 |
|
|
25 |
% |
|
34 |
% |
|
7 |
% |
Net New Home Orders, Dollar Value of Orders, and Monthly
Absorption Rates
|
Three Months Ended June 30, |
|
2024 |
|
2023 |
|
% Change |
|
Homes |
DollarValue |
ASP |
Monthly Absorption Rate |
|
Homes |
DollarValue |
ASP |
Monthly Absorption Rate |
|
Homes |
DollarValue |
ASP |
Monthly Absorption Rate |
|
(dollars in thousands) |
Arizona |
219 |
$ |
100,448 |
$ |
459 |
3.5 |
|
186 |
$ |
79,263 |
$ |
426 |
3.6 |
|
18 |
% |
27 |
% |
8 |
% |
(3 |
)% |
California |
128 |
|
102,158 |
|
798 |
4.4 |
|
216 |
|
181,466 |
|
840 |
5.9 |
|
(41 |
)% |
(44 |
)% |
(5 |
)% |
(25 |
)% |
Colorado |
34 |
|
14,920 |
|
439 |
3.8 |
|
— |
|
— |
N/A |
N/A |
|
N/A |
N/A |
N/A |
N/A |
Florida |
286 |
|
133,078 |
|
465 |
3.2 |
|
163 |
|
63,686 |
|
391 |
1.9 |
|
75 |
% |
109 |
% |
19 |
% |
68 |
% |
Metro New York |
— |
|
— |
N/A |
N/A |
|
— |
|
— |
N/A |
N/A |
|
N/A |
N/A |
N/A |
N/A |
Texas |
93 |
|
39,146 |
|
421 |
1.5 |
|
— |
|
— |
N/A |
N/A |
|
N/A |
N/A |
N/A |
N/A |
Total |
760 |
|
389,750 |
$ |
513 |
3.0 |
|
565 |
|
324,415 |
$ |
574 |
3.3 |
|
35 |
% |
20 |
% |
(11 |
)% |
(9 |
)% |
|
Six Months Ended June 30, |
|
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 |
452 |
$ |
203,963 |
$ |
451 |
3.6 |
|
338 |
$ |
142,008 |
$ |
420 |
3.4 |
|
34 |
% |
44 |
% |
7 |
% |
6 |
% |
California |
235 |
|
210,483 |
|
896 |
4.0 |
|
380 |
|
317,693 |
|
836 |
5.3 |
|
(38 |
)% |
(34 |
)% |
7 |
% |
(25 |
)% |
Colorado |
57 |
|
25,791 |
|
452 |
3.8 |
|
— |
|
— |
N/A |
N/A |
|
N/A |
N/A |
N/A |
N/A |
Florida |
522 |
|
242,611 |
|
465 |
3.0 |
|
341 |
|
143,024 |
|
419 |
2.0 |
|
53 |
% |
70 |
% |
11 |
% |
50 |
% |
Metro New York |
1 |
|
4,475 |
|
4,475 |
N/A |
|
— |
|
— |
N/A |
N/A |
|
N/A |
N/A |
N/A |
N/A |
Texas |
105 |
|
43,841 |
|
418 |
1.6 |
|
4 |
|
4,194 |
|
1,049 |
1.3 |
|
2,525 |
% |
945 |
% |
(60 |
)% |
23 |
% |
Total |
1,372 |
$ |
731,164 |
$ |
533 |
3.1 |
|
1,063 |
$ |
606,919 |
$ |
571 |
3.1 |
|
29 |
% |
20 |
% |
(7 |
)% |
— |
% |
Average Selling Communities
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
2023 |
% Change |
|
2024 |
2023 |
% Change |
Arizona |
|
20.7 |
17.0 |
22 |
% |
|
21.0 |
16.5 |
27 |
% |
California |
|
9.7 |
12.3 |
(21 |
)% |
|
9.7 |
12.0 |
(19 |
)% |
Colorado |
|
3.0 |
— |
N/A |
|
2.5 |
— |
N/A |
Florida |
|
29.6 |
28.0 |
6 |
% |
|
29.4 |
28.8 |
2 |
% |
Metro New York |
|
— |
— |
N/A |
|
— |
— |
N/A |
Texas |
|
21.0 |
— |
N/A |
|
10.7 |
0.5 |
2,040 |
% |
Total |
|
84.0 |
57.3 |
47 |
% |
|
73.3 |
57.8 |
27 |
% |
Backlog
|
June 30, 2024 |
|
June 30, 2023 |
|
% Change |
|
Homes |
|
DollarValue |
|
ASP |
|
Homes |
|
DollarValue |
|
ASP |
|
Homes |
|
DollarValue |
|
ASP |
|
(dollars in thousands) |
Arizona |
152 |
|
|
$ |
70,404 |
|
|
$ |
463 |
|
|
113 |
|
|
$ |
48,871 |
|
|
$ |
432 |
|
|
35 |
% |
|
44 |
% |
|
7 |
% |
California |
111 |
|
|
|
102,548 |
|
|
|
924 |
|
|
259 |
|
|
|
229,365 |
|
|
|
886 |
|
|
(57 |
)% |
|
(55 |
)% |
|
4 |
% |
Colorado |
30 |
|
|
|
14,276 |
|
|
|
476 |
|
|
— |
|
|
|
— |
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
326 |
|
|
|
168,730 |
|
|
|
518 |
|
|
350 |
|
|
|
177,525 |
|
|
|
507 |
|
|
(7 |
)% |
|
(5 |
)% |
|
2 |
% |
Metro New York |
— |
|
|
|
— |
|
|
N/A |
|
— |
|
|
|
— |
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Texas |
75 |
|
|
|
35,177 |
|
|
|
469 |
|
|
— |
|
|
|
— |
|
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Total |
694 |
|
|
$ |
391,135 |
|
|
$ |
564 |
|
|
722 |
|
|
$ |
455,761 |
|
|
$ |
631 |
|
|
(4 |
)% |
|
(14 |
)% |
|
(11 |
)% |
(1) Backlog acquired in Texas at the date of the
Antares acquisition was 70 homes with a value of $35,118
thousand.
Lots Owned or Controlled
|
June 30, 2024 |
|
June 30, 2023 |
|
|
|
LotsOwned |
|
LotsControlled |
|
Total |
|
LotsOwned |
|
LotsControlled |
|
Total |
|
% Change |
Arizona |
1,767 |
|
|
1,249 |
|
|
3,016 |
|
|
2,040 |
|
|
1,389 |
|
|
3,429 |
|
|
(12 |
)% |
California |
586 |
|
|
1,128 |
|
|
1,714 |
|
|
574 |
|
|
1,708 |
|
|
2,282 |
|
|
(25 |
)% |
Colorado |
175 |
|
|
573 |
|
|
748 |
|
|
— |
|
|
— |
|
|
— |
|
|
N/A |
Florida |
1,680 |
|
|
1,507 |
|
|
3,187 |
|
|
2,366 |
|
|
1,687 |
|
|
4,053 |
|
|
(21 |
)% |
Metro New York |
1 |
|
|
— |
|
|
1 |
|
|
2 |
|
|
— |
|
|
2 |
|
|
(50 |
)% |
Texas |
1,138 |
|
|
2,553 |
|
|
3,691 |
|
|
38 |
|
|
1,204 |
|
|
1,242 |
|
|
197 |
% |
Total |
5,347 |
|
|
7,010 |
|
|
12,357 |
|
|
5,020 |
|
|
5,988 |
|
|
11,008 |
|
|
12 |
% |
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 June 30, |
|
|
2024 |
|
|
% |
|
|
2023 |
|
|
% |
|
(dollars in thousands) |
Home sales revenue |
$ |
418,182 |
|
|
100.0 |
% |
|
$ |
291,512 |
|
|
100.0 |
% |
Cost of home sales |
|
355,736 |
|
|
85.1 |
% |
|
|
240,835 |
|
|
82.6 |
% |
Home sales gross margin |
|
62,446 |
|
|
14.9 |
% |
|
|
50,677 |
|
|
17.4 |
% |
Add: Interest in cost of home sales |
|
17,074 |
|
|
4.1 |
% |
|
|
7,276 |
|
|
2.5 |
% |
Add: Real estate inventories impairment |
|
— |
|
|
— |
% |
|
|
4,700 |
|
|
1.6 |
% |
Adjusted home sales gross
margin excluding interest and real estate inventories
impairment |
|
79,520 |
|
|
19.0 |
% |
|
|
62,653 |
|
|
21.5 |
% |
Add: Purchase price accounting for acquired inventory |
|
8,619 |
|
|
2.1 |
% |
|
|
5,710 |
|
|
2.0 |
% |
Adjusted home sales gross
margin excluding interest, real estate inventories impairment, and
purchase price accounting for acquired inventory |
$ |
88,139 |
|
|
21.1 |
% |
|
$ |
68,363 |
|
|
23.5 |
% |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
% |
|
|
2023 |
|
|
% |
|
(dollars in thousands) |
Home sales revenue |
$ |
710,774 |
|
|
100.0 |
% |
|
$ |
532,137 |
|
|
100.0 |
% |
Cost of home sales |
|
604,633 |
|
|
85.1 |
% |
|
|
437,889 |
|
|
82.3 |
% |
Home sales gross margin |
|
106,141 |
|
|
14.9 |
% |
|
|
94,248 |
|
|
17.7 |
% |
Add: Interest in cost of home sales |
|
27,631 |
|
|
3.9 |
% |
|
|
11,818 |
|
|
2.2 |
% |
Add: Real estate inventories impairment |
|
— |
|
|
— |
% |
|
|
4,700 |
|
|
0.9 |
% |
Adjusted home sales gross
margin excluding interest and real estate inventories
impairment |
|
133,772 |
|
|
18.8 |
% |
|
|
110,766 |
|
|
20.8 |
% |
Add: Purchase price accounting for acquired inventory |
|
11,075 |
|
|
1.6 |
% |
|
|
10,195 |
|
|
1.9 |
% |
Adjusted home sales gross
margin excluding interest, real estate inventories impairment, and
purchase price accounting for acquired inventory |
$ |
144,847 |
|
|
20.4 |
% |
|
$ |
120,961 |
|
|
22.7 |
% |
EBITDA and Adjusted EBITDA
The following table presents EBITDA and Adjusted
EBITDA for the three months ended June 30, 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 on
debt modification, (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 June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
(dollars in thousands) |
Net income |
$ |
3,235 |
|
|
$ |
5,866 |
|
Provision for income taxes |
|
1,370 |
|
|
|
1,640 |
|
Interest in cost of sales |
|
18,011 |
|
|
|
7,319 |
|
Depreciation and amortization expense |
|
1,850 |
|
|
|
1,139 |
|
EBITDA |
|
24,466 |
|
|
|
15,964 |
|
Real estate inventories impairment |
|
— |
|
|
|
4,700 |
|
Purchase price accounting in cost of home sales |
|
8,619 |
|
|
|
5,710 |
|
Transaction costs |
|
2,861 |
|
|
|
18 |
|
Write-off of offering costs |
|
— |
|
|
|
436 |
|
Abandoned project costs |
|
1,698 |
|
|
|
197 |
|
Loss on debt modification |
|
5,180 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
42,824 |
|
|
$ |
27,025 |
|
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
(dollars in thousands) |
Net income |
$ |
3,969 |
|
|
$ |
9,989 |
|
Provision for income taxes |
|
1,340 |
|
|
|
3,257 |
|
Interest in cost of sales |
|
28,581 |
|
|
|
11,872 |
|
Depreciation and amortization expense |
|
3,170 |
|
|
|
2,557 |
|
EBITDA |
|
37,060 |
|
|
|
27,675 |
|
Real estate inventories impairment |
|
— |
|
|
|
4,700 |
|
Purchase price accounting in cost of home sales |
|
11,075 |
|
|
|
10,195 |
|
Transaction costs |
|
4,589 |
|
|
|
33 |
|
Write-off of offering costs |
|
— |
|
|
|
436 |
|
Abandoned project costs |
|
1,954 |
|
|
|
312 |
|
Loss on debt modification |
|
5,180 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
59,858 |
|
|
$ |
43,351 |
|
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 on debt
modification, 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 June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
(dollars in thousands, except share and per share amounts) |
Net income attributable to
Landsea Homes Corporation |
$ |
2,885 |
|
|
$ |
4,947 |
|
|
|
|
|
Real estate inventories impairment |
|
— |
|
|
|
4,700 |
|
Pre-Merger capitalized related party interest included in cost of
sales |
|
90 |
|
|
|
545 |
|
Purchase price accounting for acquired inventory |
|
8,619 |
|
|
|
5,710 |
|
Loss on debt modification |
|
5,180 |
|
|
|
— |
|
Total adjustments |
|
13,889 |
|
|
|
10,955 |
|
Tax-effected adjustments (1) |
|
10,380 |
|
|
|
8,075 |
|
|
|
|
|
Adjusted net income
attributable to Landsea Homes Corporation |
$ |
13,265 |
|
|
$ |
13,022 |
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.08 |
|
|
$ |
0.12 |
|
Diluted |
$ |
0.08 |
|
|
$ |
0.12 |
|
|
|
|
|
Adjusted earnings per
share |
|
|
|
Basic |
$ |
0.37 |
|
|
$ |
0.33 |
|
Diluted |
$ |
0.36 |
|
|
$ |
0.33 |
|
|
|
|
|
Weighted average common shares
outstanding used in EPS - basic |
|
36,199,850 |
|
|
|
39,891,982 |
|
Weighted average common shares
outstanding used in EPS - diluted |
|
36,369,827 |
|
|
|
39,971,731 |
|
(1) Our tax-effected
adjustments are based on our federal rate and a blended state rate
adjusted for certain discrete items.
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
(dollars in thousands, except share and per share amounts) |
Net income attributable to
Landsea Homes Corporation |
$ |
3,075 |
|
|
$ |
8,165 |
|
|
|
|
|
Real estate inventories impairment |
|
— |
|
|
|
4,700 |
|
Pre-Merger capitalized related party interest included in cost of
sales |
|
119 |
|
|
|
1,263 |
|
Purchase price accounting for acquired inventory |
|
11,075 |
|
|
|
10,195 |
|
Loss on debt modification |
|
5,180 |
|
|
|
— |
|
Total adjustments |
|
16,374 |
|
|
|
16,158 |
|
Tax-effected adjustments
(1) |
|
12,237 |
|
|
|
11,910 |
|
|
|
|
|
Adjusted net income
attributable to Landsea Homes Corporation |
$ |
15,312 |
|
|
$ |
20,075 |
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.08 |
|
|
$ |
0.20 |
|
Diluted |
$ |
0.08 |
|
|
$ |
0.20 |
|
|
|
|
|
Adjusted earnings per
share |
|
|
|
Basic |
$ |
0.42 |
|
|
$ |
0.50 |
|
Diluted |
$ |
0.42 |
|
|
$ |
0.50 |
|
|
|
|
|
Weighted shares
outstanding |
|
|
|
Weighted average common shares outstanding used in EPS - basic |
|
36,239,765 |
|
|
|
39,944,549 |
|
Weighted average common shares outstanding used in EPS -
diluted |
|
36,558,862 |
|
|
|
40,059,731 |
|
(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.
|
June 30, 2024 |
|
December 31, 2023 |
|
(dollars in thousands) |
Total notes and other debts payable, net |
$ |
754,107 |
|
|
$ |
543,774 |
|
Total equity |
|
672,882 |
|
|
|
688,352 |
|
Total capital |
$ |
1,426,989 |
|
|
$ |
1,232,126 |
|
Ratio of debt to capital |
|
52.8 |
% |
|
|
44.1 |
% |
|
|
|
|
Total notes and other debts
payable, net |
$ |
754,107 |
|
|
$ |
543,774 |
|
Less: cash and cash
equivalents |
|
82,150 |
|
|
|
119,555 |
|
Less: cash held in escrow |
|
24,071 |
|
|
|
49,091 |
|
Net debt |
|
647,886 |
|
|
|
375,128 |
|
|
|
|
|
Total capital |
$ |
1,426,989 |
|
|
$ |
1,232,126 |
|
Ratio of net debt to total
capital |
|
45.4 |
% |
|
|
30.4 |
% |
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