Second Quarter 2022 Highlights (As Compared to Second Quarter 2021, unless otherwise noted)
- Homebuilding revenues increased 118% to
$791 million from$364 million - Gross margin as a percentage of homebuilding revenues increased 320 basis points to 19.7% from 16.5%
- Pre-tax income increased 145% to
$90 million , compared to$37 million - Net income attributable to DFH increased 119% to
$63 million , or$0.60 per diluted share, compared to$29 million , or$0.31 per diluted share - Home closings increased 66% to 1,649 from 996
- Average sales price of homes closed increased 29% to
$463,447 from$358,604 - Net new orders decreased 6% to 1,426 from 1,521
- Active community count increased 74% to 203 from 117
- Backlog of sold homes increased 74% to 7,190 homes valued at
$3.3 billion , compared to 4,137 homes valued at$1.6 billion - Return on participating equity was 44.0% for the trailing twelve months ended
June 30, 2022 , compared to 44.3% for the trailing twelve months endedJune 30, 2021 - Controlled lot pipeline increased 66% to 37,983 as of
June 30, 2022 , compared to 22,923 as ofJune 30, 2021 - Commitment on the revolving credit facility increased to
$1.1 billion as ofJune 30, 2022 , compared to $818 million as ofDecember 31, 2021 - Total liquidity, comprised of cash and cash equivalents, and availability under the revolving credit facility, increased 21% to
$334 million as ofJune 30, 2022 , compared to$277 million as ofDecember 31, 2021
Management Commentary
More specific to the quarter, our homebuilding margin improved to 19.7%, another Company record, as our team continues to closely manage sales prices, cost inflation, supply chain challenges and mortgage rates in a quickly changing macro environment. While we acknowledge the rapid increase in mortgage rates and appreciation in home values pose headwinds, we believe the overall shortage of homes available will perpetuate the supply-demand gap. Our net new orders were up year over year in both May and June, however, we were limiting sales across most communities in April to ensure pricing was appropriately placed during a period of enhanced market volatility. This limitation contributed to an overall 6% quarterly decrease in net new orders, however, excluding cancellations, our total gross sales were up year over year.
Our land-light operating model allows us to navigate temporary housing market challenges and quickly change course in light of macroeconomic conditions. We continue to be strategically positioned in high growth markets, providing affordable homes to the entry-level, first and second-time move up homebuyers. Our build-for-rent platform provides a consistent home deliveries pipeline, which is less susceptible to temporary changes in demand from individual homebuyers. While the short-term may be uncertain, we are committed to our business model and focused on generating long-term earnings growth.”
Second Quarter 2022 Results
Homebuilding revenues for the second quarter 2022 increased 118% to
Homebuilding gross margin percentage in the second quarter 2022 improved 320 basis points to 19.7%, compared to 16.5% in the year-ago quarter. The gross margin improvement was attributable to our ability to increase prices while managing cost inflation.
Selling, general and administrative expenses as a percentage of homebuilding revenues was 8% in the second quarter 2022, remaining consistent when compared to 8% in the year-ago quarter.
Net new orders in the second quarter 2022 decreased 6% to 1,426, compared to 1,521 in the year-ago quarter. During the first month of the quarter, the Company delayed the sale of homes until later stages in the construction cycle. Later in June, demand tightened in response to the rapid rise in mortgage rates coupled with continued home price appreciation. The market's reaction to the quickly changing economic conditions negatively impacted new orders for the quarter and drove an uptick in cancellations for the Company and the industry as a whole. Our cancellation rate remains within the Company’s pre-pandemic historical averages at 21.0% for the quarter ended
Net income attributable to DFH in the second quarter 2022 was
Full Year 2022 Outlook
The following table shows the backlog units and ASP as of
As of (unaudited) | ||||
Backlog: | Units | Average Sales Price | ||
1,734 | $ | 364,137 | ||
135 | 619,289 | |||
1,016 | 550,965 | |||
DC Metro | 124 | 502,018 | ||
The Carolinas | 1,110 | 330,399 | ||
1,859 | 633,287 | |||
Other (1) | 1,212 | 374,484 | ||
Total | 7,190 | $ | 463,831 |
(1) |
About
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
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 (unaudited) | For the Six Months Ended (unaudited) | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenues: | ||||||||||||||||
Homebuilding | $ | 791,230 | $ | 363,743 | $ | 1,453,703 | $ | 705,910 | ||||||||
Other | 1,904 | 1,533 | 3,497 | 2,926 | ||||||||||||
Total revenues | 793,134 | 365,276 | 1,457,200 | 708,836 | ||||||||||||
Homebuilding cost of sales | 635,422 | 303,589 | 1,174,290 | 594,626 | ||||||||||||
Selling, general and administrative expense | 66,015 | 30,137 | 127,725 | 59,452 | ||||||||||||
Income from equity in earnings of unconsolidated entities | (3,334 | ) | (1,125 | ) | (6,294 | ) | (2,857 | ) | ||||||||
Contingent consideration revaluation | 5,042 | 3,977 | 9,234 | 5,160 | ||||||||||||
Other (income) expense, net | 278 | (7,856 | ) | (691 | ) | (7,153 | ) | |||||||||
Interest expense | 13 | 16 | 26 | 658 | ||||||||||||
Income before taxes | 89,698 | 36,538 | 152,910 | 58,950 | ||||||||||||
Income tax expense | (23,327 | ) | (4,479 | ) | (40,205 | ) | (9,295 | ) | ||||||||
Net and comprehensive income | 66,371 | 32,059 | 112,705 | 49,655 | ||||||||||||
Net and comprehensive income attributable to non-controlling interests | (3,747 | ) | (3,486 | ) | (6,365 | ) | (4,961 | ) | ||||||||
Net and comprehensive income attributable to | $ | 62,624 | $ | 28,573 | $ | 106,340 | $ | 44,694 | ||||||||
Earnings per share(1) | ||||||||||||||||
Basic | $ | 0.64 | $ | 0.31 | $ | 1.07 | $ | 0.49 | ||||||||
Diluted | $ | 0.60 | $ | 0.31 | $ | 1.02 | $ | 0.49 | ||||||||
Weighted-average number of shares | ||||||||||||||||
Basic | 92,758,939 | 92,521,482 | 92,758,939 | 92,521,482 | ||||||||||||
Diluted | 104,566,243 | 92,670,727 | 103,531,560 | 92,641,222 | ||||||||||||
Other Financial and Operating Data | ||||||||||||||||
Active communities at end of period(2) | 203 | 117 | 203 | 117 | ||||||||||||
Home closings | 1,649 | 996 | 3,020 | 1,998 | ||||||||||||
Average sales price of homes closed(3) | $ | 463,447 | $ | 358,604 | $ | 463,318 | $ | 347,261 | ||||||||
Net new orders | 1,426 | 1,521 | 3,828 | 3,531 | ||||||||||||
Cancellation rate | 21.0 | % | 14.4 | % | 16.4 | % | 10.9 | % | ||||||||
Backlog (at period end) - homes | 7,190 | 4,137 | 7,190 | 4,137 | ||||||||||||
Backlog (at period end, in thousands) - value | $ | 3,334,945 | $ | 1,646,725 | $ | 3,334,945 | $ | 1,646,725 | ||||||||
Gross margin (in thousands)(4) | $ | 155,808 | $ | 60,154 | $ | 279,413 | $ | 111,284 | ||||||||
Gross margin %(5) | 19.7 | % | 16.5 | % | 19.2 | % | 15.8 | % | ||||||||
Net profit margin % | 7.9 | % | 7.8 | % | 7.3 | % | 6.3 | % |
(1) | The Company calculated earnings per share (“EPS”) based on net income attributable to common stockholders for the period |
(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 | Six Months Ended | ||||||||||||||||||
2022 (unaudited) | 2021 (unaudited) | 2022 (unaudited) | 2021 (unaudited) | ||||||||||||||||
Units | Average Sales Price | Units | Average Sales Price | Units | Average Sales Price | Units | Average Sales Price | ||||||||||||
Home Closings: | |||||||||||||||||||
377 | $ | 472,065 | 265 | $ | 351,496 | 646 | $ | 464,182 | 560 | $ | 338,077 | ||||||||
69 | 584,356 | 47 | 494,604 | 139 | 570,443 | 81 | 473,882 | ||||||||||||
100 | 481,968 | 147 | 409,362 | 206 | 458,593 | 308 | 404,494 | ||||||||||||
DC Metro | 21 | 584,930 | 35 | 681,706 | 36 | 671,168 | 59 | 640,193 | |||||||||||
The Carolinas | 351 | 330,195 | 315 | 301,033 | 603 | 330,709 | 658 | 293,807 | |||||||||||
527 | 559,770 | — | — | 1,010 | 555,270 | — | — | ||||||||||||
Other (2) | 204 | 365,479 | 187 | 331,101 | 380 | 371,562 | 332 | 332,649 | |||||||||||
Total | 1,649 | $ | 463,447 | 996 | $ | 358,604 | 3,020 | $ | 463,318 | 1,998 | $ | 347,261 |
(1) | |
(2) |
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
Assets | |||||
Cash and cash equivalents | $ | 84,097 | $ | 227,227 | |
Restricted cash (VIE amounts of | 45,296 | 54,095 | |||
Accounts receivable (VIE amounts of | 30,280 | 33,482 | |||
Inventories: | |||||
Construction in process and finished homes | 1,254,199 | 961,779 | |||
Company owned land and lots | 93,404 | 83,197 | |||
VIE owned land and lots | 8,414 | 21,686 | |||
Total inventories | 1,356,017 | 1,066,662 | |||
Lot deposits | 288,426 | 241,406 | |||
Other assets (VIE amounts of | 78,946 | 43,962 | |||
Equity method investments | 14,188 | 15,967 | |||
Property and equipment, net | 6,511 | 6,789 | |||
Operating lease right-of-use assets | 25,108 | 19,359 | |||
Deferred tax asset | 4,905 | 4,232 | |||
Intangible assets, net of amortization | 7,085 | 9,140 | |||
171,927 | 171,927 | ||||
Total assets | $ | 2,112,786 | $ | 1,894,248 | |
Liabilities | |||||
Accounts payable (VIE amounts of | $ | 130,115 | $ | 113,498 | |
Accrued expenses (VIE amounts of | 126,823 | 139,508 | |||
Customer deposits | 190,945 | 177,685 | |||
Construction lines of credit | 875,000 | 760,000 | |||
Notes payable (VIE amounts of | 1,568 | 3,292 | |||
Operating lease liabilities | 25,625 | 19,826 | |||
Contingent consideration | 115,555 | 124,056 | |||
Total liabilities | $ | 1,465,631 | $ | 1,337,865 | |
Commitments and contingencies | |||||
Mezzanine Equity | |||||
Preferred mezzanine equity | 155,621 | 155,220 | |||
Stockholders’ Equity | |||||
Class A common stock, | 323 | 323 | |||
Class B common stock, | 602 | 602 | |||
Additional paid-in capital | 261,207 | 257,963 | |||
Retained earnings | 217,346 | 118,194 | |||
Non-controlling interests | 12,056 | 24,081 | |||
Total mezzanine and stockholders’ equity | 647,155 | 556,383 | |||
Total liabilities, mezzanine equity, and stockholders’ equity | $ | 2,112,786 | $ | 1,894,248 |
SOURCE:
Investor Contact: investors@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com
Source:
2022 GlobeNewswire, Inc., source