ARLINGTON, Va., July 27, 2017 /PRNewswire/ -- CalAtlantic Group,
Inc. (NYSE: CAA) today announced results for the second quarter
ended June 30, 2017.
"The second quarter was a productive one for the Company," said
Larry Nicholson, President and Chief
Executive Officer of CalAtlantic Group, Inc. "In addition to
our solid operating results, I am pleased with the significant
progress we made with our growth initiative, expanding into the
robust Seattle and Salt Lake City markets. Our entry into
these strong "top 20" markets offer us great growth and earnings
opportunities going forward in sustainable, long-term markets."
2017 CalAtlantic Second Quarter Highlights and Comparisons to
2016 Second Quarter
- Net new orders of 4,078, up 4%; Dollar value of net new orders
up 7%
- 557 average active selling communities, down 2%
- 3,653 new home deliveries, up 5%
- Average selling price of $444
thousand, down 1%
- Home sale revenues of $1.6
billion, up 4%
- Gross margin from home sales of 20.0%, compared to 21.9%
- SG&A rate from home sales of 10.7%, compared to 10.6%
- Operating margin from home sales of $149.4 million, or 9.2%, compared to $175.2 million, or 11.2%
- Net income of $99.0 million, or
$0.75 per diluted share, vs. net
income of $112.8 million, or
$0.83 per diluted share
- $406.1 million of land purchases
and development costs, compared to $394.8
million
Orders. Net new orders for the 2017 second quarter
were up 4% from the 2016 second quarter, to 4,078 homes, with the
dollar value of these orders up 7%. The Company's monthly
sales absorption rate was 2.4 per community for the 2017 second
quarter, up 6% compared to the 2016 second quarter and down 4% from
the 2017 first quarter. The Company's cancellation rate for
the 2017 second quarter was 14%, down compared to 15% for the 2016
second quarter and up slightly from 13% for the 2017 first
quarter.
Backlog. The dollar value of homes in backlog
increased 4% to $3.6 billion, or
7,534 homes, compared to $3.4
billion, or 7,456, homes, for the 2016 second quarter, and
increased 9% compared to $3.3
billion, or 7,109 homes, for the 2017 first quarter.
The increase in year-over-year backlog value was driven by the 3%
increase in the average home price in our backlog, to $473 thousand and a 1% increase in units in
backlog. As of June 30, 2017,
the average gross margin of the 7,534 total homes in backlog was
20.8%, up 40 basis points compared to the total homes in
backlog as of March 31, 2017.
Revenue. Revenues from home sales for the 2017
second quarter increased 4% to $1.6
billion, as compared to the 2016 second quarter, resulting
from a 5% increase in deliveries, partially offset by a 1% decrease
in the Company's average home price to $444
thousand. The decrease in average home price was
primarily driven by a 5% decrease in the West region, attributable
to a shift in product mix.
Gross Margin. The Company achieved gross margin
from homes sales of 20.0% for the 2017 second quarter. The
Company's 2017 gross margin was negatively impacted by a shift in
product mix and an increase in direct construction costs per
home.
SG&A Expenses. Selling, general and
administrative expenses for the 2017 second quarter were
$174.0 million, or 10.7%, as compared
to $165.7 million, or 10.6%, for the
2016 second quarter. This 10 basis point increase was
primarily the result of an increase in co-broker commissions.
Land. During the 2017 second quarter, the Company
spent $406.1 million on land
purchases and development costs, compared to $394.8 million for the 2016 second quarter. The
Company purchased $262.4 million of
land, consisting of 3,576 homesites, of which 33% (based on
homesites) is located in the North region, 24% in the Southeast
region, 11% in the Southwest region, and 32% in the West
region. As of June 30, 2017,
the Company owned or controlled 67,622 homesites, of which 46,788
were owned and actively selling or under development, 16,502 were
controlled or under option, and the remaining 4,332 homesites were
held for future development or for sale.
Liquidity. The Company ended the quarter with
$823.1 million of available
liquidity, including $167.8 million
of unrestricted homebuilding cash and $655.3
million available to borrow under its $750 million revolving credit facility. The
Company's homebuilding debt to book capitalization as of
June 30, 2017 and 2016 was 47.0% and
47.9%, respectively, and adjusted net homebuilding debt to adjusted
book capitalization was 45.7%* and 45.9%*, respectively. In
addition, the Company's homebuilding debt to adjusted homebuilding
EBITDA for the LTM period ending June 30,
2017 and 2016 was 3.8x* and 4.4x*, respectively.
Share Repurchases. During the 2017 second quarter,
the Company repurchased 4.4 million shares at an average price of
$33.90 for a total spend of
approximately $150.0 million.
As of the end of the quarter, the Company had $217.4 million remaining under its 2016 share
repurchase authorization.
Debt Refinancing Activities. On April 4, 2017 the Company issued $125 million of 5.875% senior notes due
November 2024 and $100 million of 5.25% senior notes due June
2026. On their May 15, 2017
maturity date, the Company repaid in full its $230 million 8.4% senior notes. On
June 9, 2017 the Company issued
$350 million of 5.0% senior notes due
June 2027. On June 8, 2017 the
Company issued a "Notice to Repurchase at Holder's Option" and a
"Notice of Redemption" to the holders of its 1.25% convertible
senior notes due 2032. The Company intends to repurchase the
entire $253 million principal balance
of the 1.25% convertible notes on August 7,
2017, unless such notes are earlier repurchased or
converted. If the $253 million
of convertible notes are repurchased as planned, the fully diluted
share count of the Company will be reduced by approximately 6.3
million shares.
Earnings Conference Call
A conference call to discuss the Company's 2017 second quarter
results will be held at 10:00 a.m. Eastern
time July 28, 2017. The
call will be broadcast live over the internet and can be accessed
through the Company's website at
http://investors.calatlantichomes.com. The call will also be
accessible via telephone by dialing (888) 283-6901 (domestic) or
(719) 325-2412 (international); Passcode: 2625889.
The audio transmission with the slide presentation will be
available on our website for replay within 2 to 3 hours following
the live broadcast, and can be accessed by dialing (888) 203-1112
(domestic) or (719) 457-0820 (international); Passcode: 2625889.
About CalAtlantic Group, Inc.
CalAtlantic Group, Inc. (NYSE: CAA), one of the nation's largest
and most respected homebuilders, offers well-crafted homes in
thoughtfully designed communities that meet the desires of
customers across the homebuilding spectrum, from entry level to
luxury, in 43 Metropolitan Statistical Areas spanning 19
states. With a trusted reputation for quality craftsmanship,
an outstanding customer experience and exceptional architectural
design earned over its 50 year history, CalAtlantic Group, Inc.
utilizes its over five decades of land acquisition, development and
homebuilding expertise to acquire and build desirable communities
in locations that meet the high expectations of the company's
homebuyers. We invite you to learn more about us by visiting
www.calatlantichomes.com.
This news release and the referenced earnings conference call
contain forward-looking statements. These statements include
but are not limited to new home orders; deliveries;
backlog; absorption rates; cancellation
rates; average home price; revenue;
profitability; cash flow;
liquidity; gross
margin; operating margin; product
mix; land supply; our liquidity; our ability to execute our
business; our positioning, growth and earnings opportunities
arising from our entry into the Seattle and Utah markets; the amount and timing of
share repurchases; and the planned repurchase of the Company's
convertible notes due 2032 and the resulting approximately 6.3
million share reduction in the Company's fully diluted share
count. Forward-looking statements are
based on our current expectations or beliefs regarding future
events or circumstances, and you should not place undue reliance on
these statements. Such statements involve known and unknown
risks, uncertainties, assumptions and other factors many of which
are out of the Company's control and difficult to forecast that may
cause actual results to differ materially from those that may be
described or implied. Such factors include but are not
limited to: local and general economic and market conditions,
including consumer confidence, employment rates, interest rates,
the cost and availability of mortgage financing, and stock market,
home and land valuations; the impact on economic conditions,
terrorist attacks or the outbreak or escalation of armed conflict
involving the United States; the
cost and availability of suitable undeveloped land, building
materials and labor; the cost and availability of construction
financing and corporate debt and equity capital; our significant
amount of debt and the impact of restrictive covenants in our debt
agreements; our ability to repay our debt as it comes due; changes
in our credit rating or outlook; the demand for and affordability
of single-family homes; the supply of housing for sale;
cancellations of purchase contracts by homebuyers; the cyclical and
competitive nature of the Company's business; governmental
regulation, including the impact of "slow growth" or similar
initiatives; delays in the land entitlement process, development,
construction, or the opening of new home communities; adverse
weather conditions and natural disasters; environmental matters;
risks relating to the Company's financial services
operations; future business decisions and the Company's ability
to successfully implement the Company's operational and other
strategies; litigation and warranty claims; and other risks
discussed in the Company's filings with the Securities and Exchange
Commission, including in the Company's Annual Report on Form 10-K
for the year ended December 31, 2016 and subsequent
Quarterly Reports on Form 10-Q. The Company assumes no, and
hereby disclaims any, obligation to update any of the foregoing or
any other forward-looking statements. The Company nonetheless
reserves the right to make such updates from time to time by press
release, periodic report or other method of public disclosure
without the need for specific reference to this press
release. No such update shall be deemed to indicate that
other statements not addressed by such update remain correct or
create an obligation to provide any other updates.
Contact:
Jeff McCall, EVP & CFO (240)
532-3888, jeff.mccall@calatl.com
*Please see "Reconciliation of Non-GAAP Financial Measures" at
the end of this release.
(Note: Tables Follow)
KEY STATISTICS AND
FINANCIAL DATA1
|
|
|
|
|
As of or For the
Three Months Ended
|
|
|
|
June
30,
|
|
June
30,
|
|
Percentage
|
|
March
31,
|
|
Percentage
|
|
|
|
2017
|
|
2016
|
|
or %
Change
|
|
2017
|
|
or %
Change
|
Select Operating
Data
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deliveries
|
|
3,653
|
|
|
3,484
|
|
5%
|
|
|
3,012
|
|
21%
|
Average selling
price
|
$
|
444
|
|
$
|
447
|
|
(1%)
|
|
$
|
444
|
|
―
|
Home sale
revenues
|
$
|
1,620,614
|
|
$
|
1,558,701
|
|
4%
|
|
$
|
1,337,699
|
|
21%
|
Gross margin %
(including land sales)
|
|
20.0%
|
|
|
21.6%
|
|
(1.6%)
|
|
|
20.5%
|
|
(0.5%)
|
Gross margin % from
home sales
|
|
20.0%
|
|
|
21.9%
|
|
(1.9%)
|
|
|
20.5%
|
|
(0.5%)
|
Adjusted gross margin
% from home sales (excluding purchase accounting adjustments
included in cost of home sales)*
|
|
20.0%
|
|
|
22.2%
|
|
(2.2%)
|
|
|
20.5%
|
|
(0.5%)
|
Adjusted gross margin
% from home sales (excluding purchase accounting adjustments
and interest amortized to cost of home sales)*
|
|
23.2%
|
|
|
24.8%
|
|
(1.6%)
|
|
|
23.5%
|
|
(0.3%)
|
Incentive and
stock-based compensation expense
|
$
|
16,401
|
|
$
|
17,275
|
|
(5%)
|
|
$
|
14,925
|
|
10%
|
Selling
expenses
|
$
|
87,867
|
|
$
|
81,396
|
|
8%
|
|
$
|
73,592
|
|
19%
|
G&A expenses
(excluding incentive and stock-based compensation
expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
69,729
|
|
$
|
67,023
|
|
4%
|
|
$
|
67,759
|
|
3%
|
SG&A
expenses
|
$
|
173,997
|
|
$
|
165,694
|
|
5%
|
|
$
|
156,276
|
|
11%
|
SG&A % from home
sales
|
|
10.7%
|
|
|
10.6%
|
|
0.1%
|
|
|
11.7%
|
|
(1.0%)
|
Operating margin from
home sales
|
$
|
149,368
|
|
$
|
175,214
|
|
(15%)
|
|
$
|
118,568
|
|
26%
|
Operating margin %
from home sales
|
|
9.2%
|
|
|
11.2%
|
|
(2.0%)
|
|
|
8.9%
|
|
0.3%
|
Adjusted operating
margin from home sales*
|
$
|
149,368
|
|
$
|
181,072
|
|
(18%)
|
|
$
|
118,568
|
|
26%
|
Adjusted operating
margin % from home sales*
|
|
9.2%
|
|
|
11.6%
|
|
(2.4%)
|
|
|
8.9%
|
|
0.3%
|
Net new
orders
|
|
4,078
|
|
|
3,921
|
|
4%
|
|
|
4,304
|
|
(5%)
|
Net new orders
(dollar value)
|
$
|
1,874,782
|
|
$
|
1,749,217
|
|
7%
|
|
$
|
1,915,601
|
|
(2%)
|
Average active
selling communities
|
|
557
|
|
|
567
|
|
(2%)
|
|
|
562
|
|
(1%)
|
Monthly sales
absorption rate per community
|
|
2.44
|
|
|
2.31
|
|
6%
|
|
|
2.55
|
|
(4%)
|
Cancellation
rate
|
|
14%
|
|
|
15%
|
|
(1%)
|
|
|
13%
|
|
1%
|
Gross
cancellations
|
|
677
|
|
|
711
|
|
(5%)
|
|
|
650
|
|
4%
|
Backlog
(homes)
|
|
7,534
|
|
|
7,456
|
|
1%
|
|
|
7,109
|
|
6%
|
Backlog (dollar
value)
|
$
|
3,561,471
|
|
$
|
3,428,713
|
|
4%
|
|
$
|
3,259,168
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land purchases (incl.
seller financing)
|
$
|
262,411
|
|
$
|
237,925
|
|
10%
|
|
$
|
165,269
|
|
59%
|
Adjusted Homebuilding
EBITDA*
|
$
|
220,500
|
|
$
|
243,048
|
|
(9%)
|
|
$
|
178,864
|
|
23%
|
Adjusted Homebuilding
EBITDA Margin %*
|
|
13.6%
|
|
|
15.4%
|
|
(1.8%)
|
|
|
13.4%
|
|
0.2%
|
Homebuilding interest
incurred
|
$
|
52,168
|
|
$
|
55,610
|
|
(6%)
|
|
$
|
51,705
|
|
1%
|
Homebuilding interest
capitalized to inventories owned
|
$
|
51,338
|
|
$
|
54,564
|
|
(6%)
|
|
$
|
50,875
|
|
1%
|
Homebuilding interest
capitalized to investments in JVs
|
$
|
830
|
|
$
|
1,046
|
|
(21%)
|
|
$
|
830
|
|
―
|
Interest amortized to
cost of sales (incl. cost of land sales)
|
$
|
52,347
|
|
$
|
41,830
|
|
25%
|
|
$
|
39,428
|
|
33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
June
30,
|
|
December
31,
|
|
Percentage
|
|
|
|
|
2017
|
|
2016
|
|
or %
Change
|
|
Select Balance
Sheet Data
|
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding cash
(including restricted cash)
|
$
|
200,200
|
|
$
|
219,407
|
|
(9%)
|
|
Inventories
owned
|
$
|
6,654,990
|
|
$
|
6,438,792
|
|
3%
|
|
Goodwill
|
$
|
985,185
|
|
$
|
970,185
|
|
2%
|
|
Homesites owned and
controlled
|
|
67,622
|
|
|
65,424
|
|
3%
|
|
Homes under
construction
|
|
7,775
|
|
|
5,792
|
|
34%
|
|
Completed
specs
|
|
986
|
|
|
1,255
|
|
(21%)
|
|
Homebuilding
debt
|
$
|
3,762,273
|
|
$
|
3,419,787
|
|
10%
|
|
Stockholders'
equity
|
$
|
4,235,706
|
|
$
|
4,207,586
|
|
1%
|
|
Stockholders' equity
per share
|
$
|
38.44
|
|
$
|
36.77
|
|
5%
|
|
Total consolidated
debt to book capitalization
|
|
48.0%
|
|
|
46.6%
|
|
1.4%
|
|
Adjusted net
homebuilding debt to total adjusted book
capitalization*
|
|
45.7%
|
|
|
43.2%
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
1All
statistical numbers exclude unconsolidated joint ventures unless
noted otherwise.
|
*Please see
"Reconciliation of Non-GAAP Financial Measures" at the end of this
release.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
(Dollars in
thousands, except per share amounts)
|
|
|
|
|
(Unaudited)
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,620,614
|
|
$
|
1,558,701
|
|
$
|
2,958,313
|
|
$
|
2,737,866
|
|
Land sale
revenues
|
|
500
|
|
|
19,661
|
|
|
500
|
|
|
26,179
|
|
|
Total
revenues
|
|
1,621,114
|
|
|
1,578,362
|
|
|
2,958,813
|
|
|
2,764,045
|
|
Cost of home
sales
|
|
(1,297,249)
|
|
|
(1,217,793)
|
|
|
(2,360,104)
|
|
|
(2,149,921)
|
|
Cost of land
sales
|
|
(7)
|
|
|
(19,212)
|
|
|
(7)
|
|
|
(25,579)
|
|
|
Total cost of
sales
|
|
(1,297,256)
|
|
|
(1,237,005)
|
|
|
(2,360,111)
|
|
|
(2,175,500)
|
|
|
|
Gross
margin
|
|
323,858
|
|
|
341,357
|
|
|
598,702
|
|
|
588,545
|
|
|
|
Gross margin
%
|
|
20.0%
|
|
|
21.6%
|
|
|
20.2%
|
|
|
21.3%
|
|
Selling, general and
administrative expenses
|
|
(173,997)
|
|
|
(165,694)
|
|
|
(330,273)
|
|
|
(302,395)
|
|
Income (loss) from
unconsolidated joint ventures
|
|
446
|
|
|
223
|
|
|
4,334
|
|
|
1,412
|
|
Other income
(expense)
|
|
(2,675)
|
|
|
(4,415)
|
|
|
(2,844)
|
|
|
(7,823)
|
|
|
|
Homebuilding pretax
income
|
|
147,632
|
|
|
171,471
|
|
|
269,919
|
|
|
279,739
|
Financial
Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
20,277
|
|
|
20,539
|
|
|
40,233
|
|
|
38,091
|
|
Expenses
|
|
(11,661)
|
|
|
(12,393)
|
|
|
(24,036)
|
|
|
(23,009)
|
|
|
|
Financial services
pretax income
|
|
8,616
|
|
|
8,146
|
|
|
16,197
|
|
|
15,082
|
Income before
taxes
|
|
156,248
|
|
|
179,617
|
|
|
286,116
|
|
|
294,821
|
Provision for income
taxes
|
|
(57,254)
|
|
|
(66,857)
|
|
|
(104,502)
|
|
|
(109,400)
|
Net
income
|
|
98,994
|
|
|
112,760
|
|
|
181,614
|
|
|
185,421
|
Less: Net
income allocated to unvested restricted stock
|
|
(408)
|
|
|
(251)
|
|
|
(705)
|
|
|
(350)
|
Net income available
to common stockholders
|
$
|
98,586
|
|
$
|
112,509
|
|
$
|
180,909
|
|
$
|
185,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common
Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.87
|
|
$
|
0.95
|
|
$
|
1.59
|
|
$
|
1.55
|
|
Diluted
|
$
|
0.75
|
|
$
|
0.83
|
|
$
|
1.38
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
113,689,435
|
|
|
118,419,937
|
|
|
114,086,136
|
|
|
119,617,438
|
|
Diluted
|
|
131,636,412
|
|
|
136,088,146
|
|
|
132,079,976
|
|
|
137,277,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends
Declared Per Common Share
|
$
|
0.04
|
|
$
|
0.04
|
|
$
|
0.08
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
(Dollars in
thousands)
|
ASSETS
|
(Unaudited)
|
|
|
|
Homebuilding:
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
167,833
|
|
$
|
191,086
|
|
Restricted
cash
|
|
|
32,367
|
|
|
28,321
|
|
Inventories:
|
|
|
|
|
|
|
|
|
|
Owned
|
|
|
|
6,654,990
|
|
|
6,438,792
|
|
|
Not owned
|
|
|
86,618
|
|
|
66,267
|
|
Investments in
unconsolidated joint ventures
|
|
125,768
|
|
|
127,127
|
|
Deferred income
taxes, net
|
|
312,471
|
|
|
330,378
|
|
Goodwill
|
|
|
|
985,185
|
|
|
970,185
|
|
Other
assets
|
|
|
|
233,785
|
|
|
204,489
|
|
|
|
Total Homebuilding
Assets
|
|
8,599,017
|
|
|
8,356,645
|
Financial
Services:
|
|
|
|
|
|
|
Cash and
equivalents
|
|
47,861
|
|
|
17,041
|
|
Restricted
cash
|
|
|
21,375
|
|
|
21,710
|
|
Mortgage loans held
for sale, net
|
|
155,180
|
|
|
262,058
|
|
Mortgage loans held
for investment, net
|
|
25,613
|
|
|
24,924
|
|
Other
assets
|
|
|
|
17,750
|
|
|
26,666
|
|
|
|
Total Financial
Services Assets
|
|
267,779
|
|
|
352,399
|
|
|
|
|
Total
Assets
|
$
|
8,866,796
|
|
$
|
8,709,044
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Homebuilding:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
146,383
|
|
$
|
211,780
|
|
Accrued
liabilities
|
|
|
542,568
|
|
|
599,905
|
|
Secured project debt
and other notes payable
|
|
27,041
|
|
|
27,579
|
|
Senior notes
payable
|
|
3,735,232
|
|
|
3,392,208
|
|
|
|
Total Homebuilding
Liabilities
|
|
4,451,224
|
|
|
4,231,472
|
Financial
Services:
|
|
|
|
|
|
|
Accounts payable and
other liabilities
|
|
19,374
|
|
|
22,559
|
|
Mortgage credit
facility
|
|
149,828
|
|
|
247,427
|
|
|
|
Total Financial
Services Liabilities
|
|
169,202
|
|
|
269,986
|
|
|
|
|
Total
Liabilities
|
|
4,620,426
|
|
|
4,501,458
|
Equity:
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
―
|
|
|
―
|
|
|
Common
stock
|
|
1,102
|
|
|
1,144
|
|
|
Additional paid-in
capital
|
|
3,060,402
|
|
|
3,204,835
|
|
|
Accumulated
earnings
|
|
1,174,374
|
|
|
1,001,779
|
|
|
Accumulated other
comprehensive income (loss), net of tax
|
|
(172)
|
|
|
(172)
|
|
|
Total
Stockholders' Equity
|
|
4,235,706
|
|
|
4,207,586
|
|
Noncontrolling
Interest
|
|
10,664
|
|
|
―
|
|
|
|
Total
Equity
|
|
4,246,370
|
|
|
4,207,586
|
|
|
|
|
Total Liabilities and
Equity
|
$
|
8,866,796
|
|
$
|
8,709,044
|
|
|
|
|
|
|
|
|
|
|
|
INVENTORIES
|
|
|
June
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
(Dollars in
thousands)
|
Inventories
Owned:
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Land and land under
development
|
|
$
3,156,378
|
|
$
3,627,740
|
Homes completed and under
construction
|
|
3,041,557
|
|
2,304,109
|
Model homes
|
|
457,055
|
|
506,943
|
Total
inventories owned
|
|
$
6,654,990
|
|
$
6,438,792
|
|
|
|
|
|
Inventories Owned
by Segment:
|
|
|
|
|
|
|
|
|
|
North
|
|
$
930,156
|
|
$
851,972
|
Southeast
|
|
1,998,997
|
|
1,896,552
|
Southwest
|
|
1,438,224
|
|
1,421,669
|
West
|
|
2,287,613
|
|
2,268,599
|
Total
inventories owned
|
|
$
6,654,990
|
|
$
6,438,792
|
|
|
|
|
|
REGIONAL OPERATING
DATA
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
New homes
delivered:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
914
|
|
$
|
362
|
|
|
711
|
|
$
|
339
|
|
|
29%
|
|
|
7%
|
|
|
Southeast
|
|
|
1,075
|
|
|
399
|
|
|
983
|
|
|
392
|
|
|
9%
|
|
|
2%
|
|
|
Southwest
|
|
|
907
|
|
|
448
|
|
|
1,003
|
|
|
432
|
|
|
(10%)
|
|
|
4%
|
|
|
West
|
|
|
757
|
|
|
600
|
|
|
787
|
|
|
634
|
|
|
(4%)
|
|
|
(5%)
|
|
|
|
|
Consolidated
total
|
|
|
3,653
|
|
$
|
444
|
|
|
3,484
|
|
$
|
447
|
|
|
5%
|
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
New homes
delivered:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
1,597
|
|
$
|
354
|
|
|
1,272
|
|
$
|
336
|
|
|
26%
|
|
|
5%
|
|
|
Southeast
|
|
|
1,956
|
|
|
399
|
|
|
1,696
|
|
|
391
|
|
|
15%
|
|
|
2%
|
|
|
Southwest
|
|
|
1,693
|
|
|
439
|
|
|
1,857
|
|
|
418
|
|
|
(9%)
|
|
|
5%
|
|
|
West
|
|
|
1,419
|
|
|
613
|
|
|
1,386
|
|
|
629
|
|
|
2%
|
|
|
(3%)
|
|
|
|
|
Consolidated
total
|
|
|
6,665
|
|
$
|
444
|
|
|
6,211
|
|
$
|
441
|
|
|
7%
|
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
Net new
orders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
923
|
|
$
|
355
|
|
|
933
|
|
$
|
331
|
|
|
(1%)
|
|
|
7%
|
|
|
Southeast
|
|
|
1,252
|
|
|
402
|
|
|
1,112
|
|
|
377
|
|
|
13%
|
|
|
7%
|
|
|
Southwest
|
|
|
940
|
|
|
445
|
|
|
945
|
|
|
431
|
|
|
(1%)
|
|
|
3%
|
|
|
West
|
|
|
963
|
|
|
649
|
|
|
931
|
|
|
659
|
|
|
3%
|
|
|
(2%)
|
|
|
|
|
Consolidated
total
|
|
|
4,078
|
|
$
|
460
|
|
|
3,921
|
|
$
|
446
|
|
|
4%
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
Homes
|
|
ASP
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
Net new
orders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
1,979
|
|
$
|
349
|
|
|
1,824
|
|
$
|
331
|
|
|
8%
|
|
|
5%
|
|
|
Southeast
|
|
|
2,535
|
|
|
394
|
|
|
2,313
|
|
|
374
|
|
|
10%
|
|
|
5%
|
|
|
Southwest
|
|
|
1,927
|
|
|
445
|
|
|
2,076
|
|
|
429
|
|
|
(7%)
|
|
|
4%
|
|
|
West
|
|
|
1,941
|
|
|
640
|
|
|
1,843
|
|
|
645
|
|
|
5%
|
|
|
(1%)
|
|
|
|
|
Consolidated
total
|
|
|
8,382
|
|
$
|
452
|
|
|
8,056
|
|
$
|
440
|
|
|
4%
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
2017
|
|
2016
|
|
%
Change
|
Average number of
selling
communities during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
138
|
|
126
|
|
10%
|
|
139
|
|
121
|
|
15%
|
|
Southeast
|
|
181
|
|
179
|
|
1%
|
|
184
|
|
180
|
|
2%
|
|
Southwest
|
|
156
|
|
169
|
|
(8%)
|
|
155
|
|
172
|
|
(10%)
|
|
West
|
|
82
|
|
93
|
|
(12%)
|
|
82
|
|
94
|
|
(13%)
|
|
|
|
Consolidated
total
|
|
557
|
|
567
|
|
(2%)
|
|
560
|
|
567
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June
30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
|
|
|
|
|
Homes
|
|
Dollar
Value
|
|
Homes
|
|
Dollar
Value
|
|
Homes
|
|
Dollar
Value
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
Backlog:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
1,680
|
|
$
|
603,968
|
|
|
1,555
|
|
$
|
524,001
|
|
|
8%
|
|
|
15%
|
|
|
Southeast
|
|
|
2,372
|
|
|
1,018,178
|
|
|
2,238
|
|
|
923,385
|
|
|
6%
|
|
|
10%
|
|
|
Southwest
|
|
|
1,848
|
|
|
896,335
|
|
|
2,121
|
|
|
970,020
|
|
|
(13%)
|
|
|
(8%)
|
|
|
West
|
|
|
1,634
|
|
|
1,042,990
|
|
|
1,542
|
|
|
1,011,307
|
|
|
6%
|
|
|
3%
|
|
|
|
|
Consolidated
total
|
|
|
7,534
|
|
$
|
3,561,471
|
|
|
7,456
|
|
$
|
3,428,713
|
|
|
1%
|
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June
30,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
%
Change
|
|
Homesites owned
and controlled:
|
|
|
|
|
|
|
|
|
North
|
|
14,759
|
|
15,636
|
|
(6%)
|
|
|
Southeast
|
|
23,402
|
|
23,033
|
|
2%
|
|
|
Southwest
|
|
13,982
|
|
15,006
|
|
(7%)
|
|
|
West
|
|
|
15,479
|
|
14,066
|
|
10%
|
|
|
|
Total (including
joint ventures)
|
|
67,622
|
|
67,741
|
|
(0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homesites
owned
|
|
51,120
|
|
50,947
|
|
0%
|
|
|
Homesites optioned or
subject to contract
|
|
15,042
|
|
15,412
|
|
(2%)
|
|
|
Joint venture
homesites
|
|
1,460
|
|
1,382
|
|
6%
|
|
|
|
Total (including
joint ventures)
|
|
67,622
|
|
67,741
|
|
(0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homesites
owned:
|
|
|
|
|
|
|
|
|
Raw lots
|
|
9,860
|
|
8,325
|
|
18%
|
|
|
Homesites under
development
|
|
13,694
|
|
12,344
|
|
11%
|
|
|
Finished
homesites
|
|
12,761
|
|
14,296
|
|
(11%)
|
|
|
Under construction or
completed homes
|
|
10,473
|
|
10,015
|
|
5%
|
|
|
Held for future
development/for sale
|
|
4,332
|
|
5,967
|
|
(27%)
|
|
|
|
Total
|
|
51,120
|
|
50,947
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Each of the below measures are non-GAAP financial measures and
other companies may calculate such non-GAAP measures
differently. Due to the significance of the GAAP components
excluded, such measures should not be considered in isolation or as
an alternative to operating performance measures prescribed by
GAAP.
The table set forth below reconciles the Company's gross margin
percentage from home sales to adjusted gross margin percentage from
home sales, excluding extraordinary purchase accounting adjustments
related to the merger and interest amortized to cost of home
sales. The table set forth below also calculates adjusted
operating margin percentage from home sales, excluding
extraordinary purchase accounting adjustments related to the
merger. We believe these measures are useful to management
and investors as they provide perspective on the underlying
operating performance of the business excluding these charges and
provide comparability with the Company's peer group.
|
Three Months
Ended
|
|
|
June 30,
2017
|
|
Gross
Margin %
|
|
June 30,
2016
|
|
Gross
Margin %
|
|
March 31,
2017
|
|
Gross
Margin %
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,620,614
|
|
|
|
$
|
1,558,701
|
|
|
|
$
|
1,337,699
|
|
|
|
Less: Cost of home
sales
|
|
(1,297,249)
|
|
|
|
|
(1,217,793)
|
|
|
|
|
(1,062,855)
|
|
|
|
Gross margin from
home sales
|
|
323,365
|
|
20.0%
|
|
|
340,908
|
|
21.9%
|
|
|
274,844
|
|
20.5%
|
|
Add: Purchase
accounting adjustments included in cost of home sales
|
|
―
|
|
n/a
|
|
|
5,858
|
|
0.3%
|
|
|
―
|
|
n/a
|
|
Adjusted gross margin
from home sales, excluding purchase accounting adjustments included
in cost of home sales
|
|
323,365
|
|
20.0%
|
|
|
346,766
|
|
22.2%
|
|
|
274,844
|
|
20.5%
|
|
Add: Capitalized
interest included in cost of home sales
|
|
52,347
|
|
3.2%
|
|
|
40,528
|
|
2.6%
|
|
|
39,428
|
|
3.0%
|
|
Adjusted gross margin
from home sales, excluding purchase accounting adjustments and
interest amortized to cost of home sales
|
$
|
375,712
|
|
23.2%
|
|
$
|
387,294
|
|
24.8%
|
|
$
|
314,272
|
|
23.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
from home sales, excluding purchase accounting adjustments included
in cost of home sales
|
$
|
323,365
|
|
20.0%
|
|
$
|
346,766
|
|
22.2%
|
|
$
|
274,844
|
|
20.5%
|
|
Less: Selling,
general and administrative expenses
|
|
(173,997)
|
|
(10.7%)
|
|
|
(165,694)
|
|
(10.6%)
|
|
|
(156,276)
|
|
(11.7%)
|
|
Adjusted operating
margin from home sales, excluding purchase accounting
adjustments
|
$
|
149,368
|
|
9.2%
|
|
$
|
181,072
|
|
11.6%
|
|
$
|
118,568
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table set forth below reconciles the Company's total
consolidated debt to adjusted net homebuilding debt and provides
the Company's total consolidated debt to book capitalization and
adjusted net homebuilding debt to total adjusted book
capitalization ratios. In addition, the table set forth below
calculates homebuilding debt to adjusted homebuilding EBITDA.
We believe these ratios are useful to management and investors as a
measure of the Company's ability to obtain financing. For
purposes of the ratio of adjusted net homebuilding debt to total
adjusted book capitalization, total adjusted book capitalization is
adjusted net homebuilding debt plus stockholders' equity.
Adjusted net homebuilding debt excludes indebtedness of the
Company's financial services subsidiary and additionally reflects
the offset of cash and equivalents.
|
|
|
June 30,
2017
|
|
March 31,
2017
|
|
December 31,
2016
|
|
June 30,
2016
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
debt
|
$
|
3,912,101
|
|
$
|
3,572,368
|
|
$
|
3,667,214
|
|
$
|
3,890,212
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial services
indebtedness
|
|
(149,828)
|
|
|
(154,467)
|
|
|
(247,427)
|
|
|
(174,514)
|
|
Homebuilding cash,
including restricted cash
|
|
(200,200)
|
|
|
(174,187)
|
|
|
(219,407)
|
|
|
(286,840)
|
Adjusted net
homebuilding debt
|
|
3,562,073
|
|
|
3,243,714
|
|
|
3,200,380
|
|
|
3,428,858
|
Stockholders'
equity
|
|
4,235,706
|
|
|
4,287,373
|
|
|
4,207,586
|
|
|
4,039,955
|
Total adjusted book
capitalization
|
$
|
7,797,779
|
|
$
|
7,531,087
|
|
$
|
7,407,966
|
|
$
|
7,468,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
debt to book capitalization
|
|
48.0%
|
|
|
45.5%
|
|
|
46.6%
|
|
|
49.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
homebuilding debt to total adjusted book capitalization
|
|
45.7%
|
|
|
43.1%
|
|
|
43.2%
|
|
|
45.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding
debt
|
$
|
3,762,273
|
|
$
|
3,417,901
|
|
$
|
3,419,787
|
|
$
|
3,715,698
|
LTM adjusted
homebuilding EBITDA
|
$
|
981,269
|
|
$
|
1,003,817
|
|
$
|
996,183
|
|
$
|
842,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding debt to
adjusted homebuilding EBITDA
|
|
3.8x
|
|
|
3.4x
|
|
|
3.4x
|
|
|
4.4x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table set forth below calculates EBITDA and Adjusted
Homebuilding EBITDA. Adjusted Homebuilding EBITDA means net
income (plus cash distributions of income from unconsolidated joint
ventures) before (a) income taxes, (b) homebuilding interest
expense, (c) expensing of previously capitalized interest included
in cost of sales, (d) impairment charges, (e) (gain) loss on early
extinguishment of debt, (f) homebuilding depreciation and
amortization, including amortization of capitalized model costs,
(g) amortization of stock-based compensation, (h) income (loss)
from unconsolidated joint ventures, (i) income (loss) from
financial services subsidiaries, (j) extraordinary purchase
accounting adjustments and (k) merger and other one-time
transaction related costs. Other companies may calculate
Adjusted Homebuilding EBITDA (or similarly titled measures)
differently. We believe Adjusted Homebuilding EBITDA
information is useful to management and investors as it provides
perspective on the underlying performance of the business.
Adjusted Homebuilding EBITDA is a non-GAAP financial measure and
due to the significance of the GAAP components excluded, should not
be considered in isolation or as an alternative to net income, cash
flow from operations or any other operating or liquidity
performance measure prescribed by GAAP.
|
|
|
Three Months
Ended
|
|
LTM Ended June
30,
|
|
|
|
June 30,
2017
|
|
June 30,
2016
|
|
March 31,
2017
|
|
2017
|
|
2016
|
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
98,994
|
|
$
|
112,760
|
|
$
|
82,620
|
|
$
|
480,923
|
|
$
|
310,127
|
|
Provision for income
taxes
|
|
57,254
|
|
|
66,857
|
|
|
47,248
|
|
|
263,488
|
|
|
189,165
|
|
Homebuilding interest
amortized to cost of sales
|
|
52,347
|
|
|
41,830
|
|
|
39,428
|
|
|
191,264
|
|
|
152,392
|
|
Homebuilding
depreciation and amortization
|
|
14,915
|
|
|
15,381
|
|
|
12,676
|
|
|
61,750
|
|
|
53,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
223,510
|
|
|
236,828
|
|
|
181,972
|
|
|
997,425
|
|
|
705,144
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
stock-based compensation
|
|
4,922
|
|
|
3,726
|
|
|
4,294
|
|
|
19,498
|
|
|
18,052
|
|
Cash distributions of
income from unconsolidated joint ventures
|
|
193
|
|
|
―
|
|
|
3,081
|
|
|
3,495
|
|
|
2,688
|
|
Purchase accounting
adjustments included in cost of home sales
|
|
―
|
|
|
5,858
|
|
|
―
|
|
|
―
|
|
|
82,705
|
|
Merger and other
one-time transaction related costs
|
|
937
|
|
|
5,005
|
|
|
986
|
|
|
8,559
|
|
|
65,914
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
unconsolidated joint ventures
|
|
446
|
|
|
223
|
|
|
3,888
|
|
|
6,979
|
|
|
3,880
|
|
Income from financial
services subsidiaries
|
|
8,616
|
|
|
8,146
|
|
|
7,581
|
|
|
40,729
|
|
|
27,995
|
Adjusted Homebuilding
EBITDA
|
$
|
220,500
|
|
$
|
243,048
|
|
$
|
178,864
|
|
$
|
981,269
|
|
$
|
842,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding
revenues
|
$
|
1,621,114
|
|
$
|
1,578,362
|
|
$
|
1,337,699
|
|
$
|
6,582,808
|
|
$
|
5,090,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Homebuilding
EBITDA Margin %
|
|
13.6%
|
|
|
15.4%
|
|
|
13.4%
|
|
|
14.9%
|
|
|
16.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/calatlantic-group-inc-reports-2017-second-quarter-results-300495641.html
SOURCE CalAtlantic Group, Inc.