Q4 Record Residential Units Revenue Of
Q4 Income Before Taxes Of
Full Year Income Before Taxes of
Q4 SG&A Expense 8.8%, Improved 350 Bps
Record Lots Owned and Controlled Up, 97.8%
“Our fourth quarter year-over-year total revenue growth of 78% reflected not just a record quarter for closings, but also a continuation of our dynamic growth which has now seen us grow total revenue by a compounded annual growth rate of 33% over the last two years and 29% over the past 6 years,” said
Results for the Year Ended
For the year ended
(Dollars in thousands, except per share data) | Twelve Months Ended | |||||||||
2021 | 2020 | Change | ||||||||
New homes delivered | 2,834 | 2,208 | 28.4 | % | ||||||
Total revenues | $ | 1,402,876 | $ | 976,021 | 43.7 | % | ||||
Total cost of revenues | 1,040,817 | 741,417 | 40.4 | % | ||||||
Total gross profit | $ | 362,059 | $ | 234,604 | 54.3 | % | ||||
Income before income taxes | $ | 256,986 | $ | 142,813 | 79.9 | % | ||||
Net income attributable to | $ | 190,210 | $ | 113,693 | 67.3 | % | ||||
Diluted net income attributable to | $ | 3.72 | $ | 2.24 | 66.1 | % | ||||
Residential units revenue | $ | 1,309,687 | $ | 930,176 | 40.8 | % | ||||
Average sales price of homes delivered | $ | 460.7 | $ | 418.4 | 10.1 | % | ||||
Homebuilding gross margin percentage | 26.4 | % | 24.2 | % | 220 bps | |||||
Selling, general and administrative expenses as a percentage of residential units revenue | 10.3 | % | 12.1 | % | -180 bps | |||||
Backlog | $ | 869,856 | $ | 686,861 | 26.6 | % | ||||
Lots owned and controlled | 28,621 | 14,468 | 97.8 | % | ||||||
Homes under construction | 2,278 | 1,780 | 28.0 | % |
Results for the Quarter Ended
For the quarter ended
(Dollars in thousands, except per share data) | Three Months Ended | |||||||||
2021 | 2020 | Change | ||||||||
New homes delivered | 823 | 585 | 40.7 | % | ||||||
Total revenues | $ | 452,251 | $ | 254,100 | 78.0 | % | ||||
Total cost of revenues | 341,493 | 190,246 | 79.5 | % | ||||||
Total gross profit | $ | 110,758 | $ | 63,854 | 73.5 | % | ||||
Income before income taxes | $ | 82,589 | $ | 37,949 | 117.6 | % | ||||
Net income attributable to | $ | 63,471 | $ | 29,310 | 116.6 | % | ||||
Diluted net income attributable to | $ | 1.24 | $ | 0.58 | 113.8 | % | ||||
Residential units revenue | $ | 420,051 | $ | 246,437 | 70.4 | % | ||||
Average sales price of homes delivered | $ | 509.3 | $ | 419.7 | 21.3 | % | ||||
Homebuilding gross margin percentage | 26.2 | % | 25.1 | % | 110 bps | |||||
Selling, general and administrative expenses as a percentage of residential units revenue | 8.8 | % | 12.3 | % | - 350 bps |
“By metering sales, we have kept our pipeline of backlog revenues filled while successfully increasing spec inventory. From a low of 28% spec units under construction at the end of the first quarter of 2021, we have increased that percentage to 39%. We believe that increasing our spec levels will lead to more efficient operations, higher margins and returns, and less risk of construction costs,” said
Earnings Conference Call:
We will host our earnings conference call to discuss our fourth quarter ended
A replay of the call will be available from approximately
Non-GAAP Financial Measures and Key Financial Metrics:
In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Residential units revenue | $ | 420,051 | $ | 246,437 | $ | 1,309,687 | $ | 930,176 | ||||||||
Land and lots revenue | 32,200 | 7,663 | 93,189 | 45,845 | ||||||||||||
Total revenues | 452,251 | 254,100 | 1,402,876 | 976,021 | ||||||||||||
Cost of residential units | 310,228 | 184,534 | 964,364 | 705,866 | ||||||||||||
Cost of land and lots | 31,265 | 5,712 | 76,453 | 35,551 | ||||||||||||
Total cost of revenues | 341,493 | 190,246 | 1,040,817 | 741,417 | ||||||||||||
Total gross profit | 110,758 | 63,854 | 362,059 | 234,604 | ||||||||||||
Selling, general and administrative expenses | (37,087 | ) | (30,416 | ) | (134,269 | ) | (112,134 | ) | ||||||||
Change in fair value of contingent consideration | — | (158 | ) | — | (368 | ) | ||||||||||
Equity in income of unconsolidated entities | 5,674 | 3,616 | 19,713 | 16,654 | ||||||||||||
Other income, net | 3,244 | 1,053 | 9,483 | 4,057 | ||||||||||||
Income before income taxes | 82,589 | 37,949 | 256,986 | 142,813 | ||||||||||||
Income tax expense | 15,512 | 7,659 | 52,605 | 25,016 | ||||||||||||
Net income | 67,077 | 30,290 | 204,381 | 117,797 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 3,606 | 980 | 14,171 | 4,104 | ||||||||||||
Net income attributable to | $ | 63,471 | $ | 29,310 | $ | 190,210 | $ | 113,693 | ||||||||
Net income attributable to | ||||||||||||||||
Basic | $ | 1.25 | $ | 0.58 | $ | 3.75 | $ | 2.25 | ||||||||
Diluted | $ | 1.24 | $ | 0.58 | $ | 3.72 | $ | 2.24 | ||||||||
Weighted average common shares used in the calculation of net income attributable to | ||||||||||||||||
Basic | 50,732 | 50,617 | 50,700 | 50,568 | ||||||||||||
Diluted | 51,104 | 50,967 | 51,060 | 50,795 |
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
ASSETS | |||||||
Cash and cash equivalents | $ | 78,696 | $ | 19,479 | |||
Restricted cash | 14,858 | 14,156 | |||||
Receivables | 6,871 | 5,224 | |||||
Inventory | 1,203,743 | 844,635 | |||||
Investments in unconsolidated entities | 55,616 | 46,443 | |||||
Right-of-use assets - operating leases | 4,596 | 2,538 | |||||
Property and equipment, net | 2,812 | 3,595 | |||||
Earnest money deposits | 26,008 | 22,242 | |||||
Deferred income tax assets, net | 15,741 | 15,376 | |||||
Intangible assets, net | 537 | 622 | |||||
680 | 680 | ||||||
Other assets | 11,709 | 13,857 | |||||
Total assets | $ | 1,421,867 | $ | 988,847 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Accounts payable | $ | 45,682 | $ | 24,521 | |||
Accrued expenses | 61,351 | 40,416 | |||||
Customer and builder deposits | 64,610 | 38,131 | |||||
Lease liabilities - operating leases | 4,745 | 2,591 | |||||
Borrowings on lines of credit, net | (738 | ) | 106,687 | ||||
Senior unsecured notes, net | 335,446 | 111,056 | |||||
Notes payable | 210 | 2,125 | |||||
Contingent consideration | — | 368 | |||||
Total liabilities | 511,306 | 325,895 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interest in equity of consolidated subsidiary | 21,867 | 13,543 | |||||
Equity: | |||||||
Preferred stock, | 47,696 | — | |||||
Common stock, | 512 | 511 | |||||
(3,167 | ) | (3,167 | ) | ||||
Additional paid-in capital | 289,641 | 293,242 | |||||
Retained earnings | 539,866 | 349,656 | |||||
874,548 | 640,242 | ||||||
Noncontrolling interests | 14,146 | 9,167 | |||||
Total equity | 888,694 | 649,409 | |||||
Total liabilities and equity | $ | 1,421,867 | $ | 988,847 |
SUPPLEMENTAL INFORMATION
(Unaudited)
Residential Units Revenue and New Homes Delivered (dollars in thousands) | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
2021 | 2020 | Change | % | 2021 | 2020 | Change | % | ||||||||||||||||||
Home closings revenue | $ | 419,132 | $ | 245,549 | $ | 173,583 | 70.7 | % | $ | 1,305,620 | $ | 923,901 | $ | 381,719 | 41.3 | % | |||||||||
Mechanic’s lien contracts revenue | 919 | 888 | 31 | 3.5 | % | 4,067 | 6,275 | (2,208 | ) | (35.2 | )% | ||||||||||||||
Residential units revenue | $ | 420,051 | $ | 246,437 | $ | 173,614 | 70.4 | % | $ | 1,309,687 | $ | 930,176 | $ | 379,511 | 40.8 | % | |||||||||
New homes delivered | 823 | 585 | 238 | 40.7 | % | 2,834 | 2,208 | 626 | 28.4 | % | |||||||||||||||
Average sales price of homes delivered | $ | 509.3 | $ | 419.7 | $ | 89.6 | 21.3 | % | $ | 460.7 | $ | 418.4 | $ | 42.3 | 10.1 | % |
Land and Lots Revenue (dollars in thousands) | Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||
2021 | 2020 | Change | % | 2021 | 2020 | Change | % | |||||||||||||||||||
Lots revenue | $ | 9,682 | $ | 7,663 | $ | 2,019 | 26.3 | % | $ | 24,866 | $ | 45,461 | $ | (20,595 | ) | (45.3 | )% | |||||||||
Land revenue | 22,518 | — | 22,518 | 100.0 | % | 68,323 | 384 | 67,939 | 17,692.4 | % | ||||||||||||||||
Land and lots revenue | $ | 32,200 | $ | 7,663 | $ | 24,537 | 320.2 | % | $ | 93,189 | $ | 45,845 | $ | 47,344 | 103.3 | % | ||||||||||
Lots closed | 150 | 73 | 77 | 105.5 | % | 323 | 375 | (52 | ) | (13.9 | )% | |||||||||||||||
Average sales price of lots closed | $ | 64.5 | $ | 105.0 | $ | (40.5 | ) | (38.6 | )% | $ | 77.0 | $ | 121.2 | $ | (44.2 | ) | (36.5 | )% |
New Home Orders and Backlog (dollars in thousands) | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
2021 | 2020 | Change | % | 2021 | 2020 | Change | % | ||||||||||||||||||||
Net new home orders | 476 | 848 | (372 | ) | (43.9 | )% | 2,851 | 2,885 | (34 | ) | (1.2 | )% | |||||||||||||||
Cancellation rate | 12.3 | % | 8.6 | % | 3.7 | % | 43.0 | % | 7.7 | % | 13.0 | % | (5.3 | )% | (40.8 | )% | |||||||||||
Absorption rate per average active selling community per quarter | 6.2 | 8.3 | (2.1 | ) | (25.3 | )% | 8.2 | 7.5 | 0.7 | 9.3 | % | ||||||||||||||||
Average active selling communities | 77 | 102 | (25 | ) | (24.5 | )% | 87 | 96 | (9 | ) | (9.4 | )% | |||||||||||||||
Active selling communities at end of period | 74 | 103 | (29 | ) | (28.2 | )% | |||||||||||||||||||||
Backlog | $ | 869,856 | $ | 686,861 | $ | 182,995 | 26.6 | % | |||||||||||||||||||
Backlog (units) | 1,480 | 1,463 | 17 | 1.2 | % | ||||||||||||||||||||||
Average sales price of backlog | $ | 587.7 | $ | 469.5 | $ | 118.2 | 25.2 | % |
Lots owned (1) | ||||||
Central | 17,767 | 6,823 | ||||
Southeast | 2,472 | 2,097 | ||||
Total lots owned | 20,239 | 8,920 | ||||
Lots controlled (1) | ||||||
Central | 7,321 | 4,398 | ||||
Southeast | 1,061 | 1,150 | ||||
Total lots controlled | 8,382 | 5,548 | ||||
Total lots owned and controlled (1) | 28,621 | 14,468 | ||||
Percentage of lots owned | 70.7 | % | 61.7 | % |
(1) Excludes lots with homes under construction.
SUPPLEMENTAL INFORMATION
(Unaudited)
The following table presents additional information on the lots we owned as of
Total lots owned | 20,239 | 8,920 | |||
Add certain lots included in Total Lots Controlled | |||||
Land under option for future acquisition and development | 3,826 | 740 | |||
Lots under option through unconsolidated development joint ventures | 1,816 | 1,838 | |||
Total lots self-developed | 25,881 | 11,498 | |||
Self-developed lots as a percentage of total lots owned and controlled | 90.4 | % | 79.5 | % |
Reconciliation of Non-GAAP Financial Measures
The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and twelve months ended
(Unaudited, in thousands): | Three Months Ended | Twelve Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Residential units revenue | $ | 420,051 | $ | 246,437 | $ | 1,309,687 | $ | 930,176 | ||||||||
Less: Mechanic’s lien contracts revenue | (919 | ) | (888 | ) | (4,067 | ) | (6,275 | ) | ||||||||
Home closings revenue | $ | 419,132 | $ | 245,549 | $ | 1,305,620 | $ | 923,901 | ||||||||
Homebuilding gross margin | $ | 109,671 | $ | 61,680 | $ | 344,505 | $ | 223,130 | ||||||||
Homebuilding gross margin percentage | 26.2 | % | 25.1 | % | 26.4 | % | 24.2 | % | ||||||||
Homebuilding gross margin | 109,671 | 61,680 | 344,505 | 223,130 | ||||||||||||
Add back: Capitalized interest charged to cost of revenues | 3,326 | 2,380 | 10,241 | 10,182 | ||||||||||||
Adjusted homebuilding gross margin | $ | 112,997 | $ | 64,060 | $ | 354,746 | $ | 233,312 | ||||||||
Adjusted homebuilding gross margin percentage | 27.0 | % | 26.1 | % | 27.2 | % | 25.3 | % |
The following table presents the pre-tax income for the three and twelve months ended
(Unaudited, in thousands): | Three Months Ended | Twelve Months Ended | ||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Net income attributable to | $ | 63,471 | $ | 29,310 | $ | 190,210 | $ | 113,693 | ||||
Income tax expense attributable to | 15,510 | 7,656 | 52,599 | 25,010 | ||||||||
Pre-tax income attributable to | $ | 78,981 | $ | 36,966 | $ | 242,809 | $ | 138,703 |
About
Forward-Looking and Cautionary Statements:
This press release and our earnings call contain “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “feel,” “intend,” “plan,” “predict,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this press release include statements regarding (i) our belief that our land position and back-log will position us to grow our business in 2022 and beyond, (ii) our intent to increase the number of spec homes in our portfolio and the impact of that strategy on our ability to capture the most current price increases and to maximize profitability, (iv) impact of increased demand for labor and the raw materials, products and appliances for new homes on our costs, markets and delivery time of our home, (v) our strategy for growth, the drivers and acceleration of that growth, and the impact on our results during 2022, and (vi) our ability to capitalize on market opportunities and the impact on our results. These forward-looking statements reflect our current views about future events and involve estimates and assumptions which may be affected by risks and uncertainties in our business, as well as other external factors, which could cause future results to materially differ from those expressed or implied in any forward-looking statement. These risks include, but are not limited to: (1) continuing impacts from the COVID-19 pandemic; (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) changes in macroeconomic conditions, including interest rates and unemployment rates, that could adversely impact demand for new homes or the ability of potential buyers to qualify; (4) shortages, delays or increased costs of raw materials, especially in light of COVID-19 and increased demand for materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (5) a shortage of labor; (6) an inability to acquire land in our markets at anticipated prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including an inability to grow our operations or expand our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) government regulation risks; (10) a lack of availability or volatility of mortgage financing or a rise in interest rates; (11) severe weather events or natural disasters; (12) difficulty in obtaining sufficient capital to fund our growth; (13) our ability to meet our debt service obligations; (14) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (15) changes in accounting standards that adversely affect our reported earnings or financial condition. For a more detailed discussion of these and other risks and uncertainties applicable to
Contact:
Chief Financial Officer
(469) 573-6755
Source:
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