Homebuilding Revenues up 94%, Gross Margin Improvement of 380 Basis Points to 18.7%,
Backlog of Sold Homes Increases to 7,413 Homes, Valued at $3.4 Billion

JACKSONVILLE, Fla., May 10, 2022 (GLOBE NEWSWIRE) -- Dream Finders Homes, Inc. (the “Company”, “Dream Finders” or “DFH”) (NASDAQ: DFH), one of the nation’s fastest-growing companies, announced its financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Highlights (As Compared to First Quarter 2021)

  • Backlog of sold homes increased 105.2% to 7,413 homes valued at $3.4 billion, both Company records, compared to 3,612 homes valued at $1.4 billion
  • Homebuilding revenues increased 93.6% to $662.5 million from $342.2 million
  • Gross margin as a percentage of homebuilding revenues increased 380 basis points to 18.7% from 14.9%
  • Pre-tax income increased 182.1% to $63.2 million, compared to $22.4 million
  • Net income attributable to DFH was $43.7 million, or $0.42 per diluted share, compared to $16.1 million, or $0.18 per diluted share
  • Average sales price of homes closed increased 40.0% to $470,218 from $335,986
  • Home closings increased 36.8% to 1,371 from 1,002 homes
  • Net new orders increased 19.5% to 2,402 from 2,010
  • Active community count increased 71.7% to 206 from 120
  • Return on participating equity was 40.9% for the trailing twelve months ended March 31, 2022, compared to 37.4% for the trailing twelve months ended March 31, 2021
  • Controlled lot pipeline increased 74.7% to 39,474 as of March 31, 2022, compared to 22,591 as of March 31, 2021

Management Commentary

Patrick Zalupski, Dream Finders Homes Chairman and CEO, said, “Our team has worked extremely hard to manage through supply chain challenges, identify efficiencies and deliver great results to shareholders. I am most proud of the improved margins and EPS growth. Margins improved year over year to 18.7%, a record for the Company, however, there is still a long way to go to meet our expectations. EPS grew 133% versus the year-ago quarter with a record first quarter net earnings of $43.7 million, or $0.42 per diluted share. We delivered homebuilding revenue growth of 94% compared to the prior year-ago quarter. Despite the increasing rate environment, we continue to experience strong demand for our product and have built this Company on a strategy that allows us to be nimble and adjust quickly to market conditions. We believe we are well-positioned for another strong year of growth at Dream Finders.”

First Quarter 2022 Results

Homebuilding revenues for the first quarter 2022 increased 93.6% to $662.5 million, compared to $342.2 million in the year-ago quarter. Home closings increased 36.8% to 1,371, compared to 1,002 in the year-ago quarter. Average sales price (“ASP”) of homes closed for the first quarter 2022 was $470,218, compared to $335,986 in the year-ago quarter. The ASP increase was primarily due to the MHI acquisition as well as home price appreciation.

Homebuilding gross margin percentage in the first quarter 2022 improved 380 basis points to 18.7%, compared to 14.9% in the year-ago quarter. The gross margin improvement was attributable to our team’s ability to increase prices while managing cost inflation, as well as lower cost of funds.

Selling, general and administrative expenses as a percentage of homebuilding revenues was 9.3% in the first quarter 2022, compared to 8.6% in the year-ago quarter; the slight increase is due to increased infrastructure to support the Company’s record backlog that will deliver in 2022 and beyond.

Net new orders in the first quarter 2022 increased 19.5% to 2,402, compared to 2,010 in the year-ago quarter, primarily due to increased community count as a result of the MHI acquisition. The cancellation rate remains within the Company’s historical averages at 13.4% for the quarter ended March 31, 2022, compared to 8.1% in the year-ago period. At the end of the first quarter 2022, DFH had the largest backlog in Company’s history with 7,413 homes, valued at $3.4 billion, which represents record increases of 105.2% and 142.9%, respectively, when compared to the year-ago quarter. As of March 31, 2022, the ASP in backlog was $464,550.

Net income attributable to DFH in the first quarter 2022 was $43.7 million, or $0.42 per diluted share, compared to $16.1 million, or $0.18 per diluted share in the first quarter 2021.

Full Year 2022 Outlook

Dream Finders Homes maintains its guidance of a minimum of 7,000 home closings for the full year 2022. Any further COVID-19 governmental restrictions on land development, home construction or home sales or additional supply chain challenges could negatively impact the Company’s ability to achieve this number of home closings in 2022. As of March 31, 2022, the Company backlog was 7,413 homes, with approximately 20.0% of the homes in backlog expected to be delivered in 2023 and beyond. The Company continues to believe the backlog of homes sold is the best indicator for future growth. The following table shows the backlog units and ASP as of March 31, 2022 by segment:

   
 As of March 31, 2022
(unaudited)
Backlog:UnitsAverage Sales
Price
Jacksonville1,826$       372,744
Colorado149592,211
Orlando957527,355
DC Metro64649,231
The Carolinas1,132331,703
Texas2,068626,520
Other (1)1,217375,905
Total      7,413$        464,550

(1) Austin, Savannah, Village Park Homes, Active Adult and Custom Homes. Austin refers to legacy DFH operations, exclusive of MHI.

About Dream Finders Homes, Inc.

Dream Finders Homes (NASDAQ: DFH) is based in Jacksonville, FL, and is one of the nation’s fastest-growing companies, with industry-leading returns on shareholders’ equity. Dream Finders Homes builds single-family homes in Florida, Texas, North Carolina, South Carolina, Georgia, Colorado, Virginia, Maryland, and the DC Metro area. Through its mortgage and title joint ventures, DFH also provides mortgage financing and title services to its homebuyers. Dream Finders Homes achieves its industry-leading growth and returns by maintaining an asset-light homebuilding model. For more information, please visit www.dreamfindershomes.com.

Forward-Looking Statements

This press release includes forward-looking statements regarding future events, including projected 2022 home closings and market conditions and possible or assumed future results of operations, including statements regarding the Company’s strategies and expectations as they relate to market opportunities and growth. All forward-looking statements are based on Dream Finders Homes’ beliefs as well as assumptions made by and information currently available to Dream Finders Homes. These statements reflect Dream Finders Homes’ current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in Dream Finders Homes’ Annual Report on Form 10-K for the year ended December 31, 2021, and other filings with the U.S. Securities and Exchange Commission. Dream Finders Homes undertakes no obligation to update or revise any forward-looking statement except as may be required by applicable law.

 
Dream Finders Homes, Inc.
Consolidated Statements of Comprehensive Income and Operating Activity
(In thousands, except per share amounts and Other Financial and Operating Data unless otherwise noted)
     
 For the Three Months Ended
March 31,
(unaudited)		 
 2022 2021 
Revenues:    
Homebuilding$                   662,473 $                   342,167 
Other1,593 1,393 
Total revenues664,066 343,560 
Homebuilding cost of sales538,868 291,037 
Selling, general and administrative expense61,710 29,315 
Income from equity in earnings of unconsolidated entities(2,960)(1,732)
Contingent consideration revaluation4,192 1,183 
Other (income) expense, net(969)703 
Interest expense13 642 
Income before taxes63,212 22,412 
Income tax expense(16,878)(4,816)
Net and comprehensive income46,334 17,596 
Net and comprehensive income attributable to non-controlling interests(2,618)(1,475)
Net and comprehensive income attributable to Dream Finders Homes, Inc.$                     43,716 $                     16,121 
     
Earnings per share(1)    
Basic$                         0.43 $                         0.18 
Diluted$                         0.42 $                         0.18 
Weighted-average number of shares    
Basic92,758,939 92,521,482 
Diluted102,496,876 92,596,960 
Other Financial and Operating Data     
Active communities at end of period(2)206 120 
Home closings1,371 1,002 
Average sales price of homes closed(3)$                   470,218 $                   335,986 
Net new orders2,402 2,010 
Cancellation rate13.4%8.1%
Backlog (at period end) - homes7,413 3,612 
Backlog (at period end, in thousands) - value$                3,443,709 $                1,356,436 
Gross margin (in thousands)(4)$                   123,605 $                     51,130 
Gross margin %(5)18.7%14.9%
Net profit margin %6.6%4.7%

(1) The Company calculated earnings per share (“EPS”) based on net income attributable to common stockholders for the period January 21, 2021 through March 31, 2021 over the weighted average diluted shares outstanding for the same period. EPS was calculated prospectively for the period subsequent to the Company’s initial public offering and corporate reorganization as described in Note 1. Nature of Business and Significant Accounting Policies, resulting in 92,521,482 shares of common stock outstanding as of the closing of the initial public offering. The total outstanding shares of common stock are made up of Class A common stock and Class B common stock, which participate equally in their ratable ownership share of the Company. Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the convertible preferred stock and the associated preferred dividends.
(2) A community becomes active once the model is completed or the community has its fifth sale. A community becomes inactive when it has fewer than five units remaining to sell.
(3) Average sales price of homes closed is calculated based on homebuilding revenues, excluding the impact of deposit forfeitures, percentage of completion revenues and land sales, over homes closed.
(4) Gross margin is homebuilding revenues less homebuilding cost of sales.
(5) Calculated as a percentage of homebuilding revenues.

     
 Three Months Ended
March 31,
 2022
(unaudited)		2021
(unaudited)
 UnitsAverage Sales
Price		UnitsAverage Sales
Price
Home Closings:    
Jacksonville             269$            453,134        295$            326,023
Colorado               70              557,092          34              445,239
Orlando             106              436,542        161              400,050
DC Metro               15              791,901          24              579,653
The Carolinas              252              331,425        343              287,172
Texas (1)             483              570,236 -  - 
Other (2)             176              378,889        145              334,646
Total        1,371$         470,218   1,002$         335,986

(1) Texas consists of the operations of MHI, which was acquired on October 1, 2021.
(2) Austin, Savannah, Village Park Homes, Active Adult and Custom Homes. Austin refers to legacy DFH operations, exclusive of MHI.

Dream Finders Homes, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)

 March 31, December 31, 
 2022 2021
    
Assets   
Cash and cash equivalents$100,140 $227,227
Restricted cash (VIE amounts of $3,759 and $4,275)60,875 54,095
Accounts receivable (VIE amounts of $3,621 and $2,684)33,534 33,482
Inventories:   
Construction in process and finished homes1,112,085 961,779
Company owned land and lots104,407 83,197
VIE owned land and lots15,564 21,686
Total inventories1,232,056 1,066,662
Lot deposits275,354 241,406
Other assets (VIE amounts of $1,965 and $2,185)57,401 43,962
Equity method investments14,480 15,967
Property and equipment, net6,620 6,789
Operating lease right-of-use assets26,581 19,359
Deferred tax asset5,386 4,232
Intangible assets, net of amortization8,112 9,140
Goodwill171,927 171,927
Total assets$1,992,466 $1,894,248
Liabilities    
Accounts payable (VIE amounts of $1,429 and $1,309)$136,665 $113,498
Accrued expenses (VIE amounts of $6,062 and $6,915)126,906 139,508
Customer deposits206,065 177,685
Construction lines of credit770,000 760,000
Notes payable (VIE amounts of $125 and $1,979)1,725 3,292
Operating lease liabilities27,065 19,826
Contingent consideration128,248 124,056
Total liabilities$1,396,674 $1,337,865
Commitments and contingencies    
Mezzanine Equity   
Preferred mezzanine equity155,417 155,220
    
Stockholders' Equity   
Class A common stock, $0.01 per share, 289,000,000   
authorized, 32,295,329 outstanding323 323
Class B common stock, $0.01 per share, 61,000,000   
authorized, 60,226,153 outstanding602 602
Additional paid-in capital259,328 257,963
Retained earnings158,611 118,194
Non-controlling interests21,511 24,081
Total mezzanine and stockholders' equity595,792 556,383
Total liabilities, mezzanine equity, and stockholders' equity$1,992,466 $1,894,248
    

SOURCE: Dream Finders Homes, Inc.

Investor Contact: investors@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com

Anabel Fernandez – Chief Financial Officer
Robert Riva – General Counsel


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Source: Dream Finders Homes, Inc.

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