Landsea Homes Corporation (Nasdaq: LSEA) (“Landsea Homes” or the
“Company”), a publicly traded homebuilder, reported financial
results for the fourth quarter and full year ended
December 31, 2023. For the quarter, the Company reported
pretax income of $18.8 million, net income of $12.5 million, or
$0.33 per diluted share and adjusted net income (a non-GAAP
measure) of $16.1 million or $0.43 per diluted share. For the full
year, pretax income was $44.5 million, net income was $29.2
million, or $0.75 per diluted share and adjusted net income was
$47.9 million or $1.22 per diluted share.
Management Commentary
“Landsea Homes ended 2023 on a strong note, as
the company posted healthy profits and a significant year-over-year
increase in net new orders in the fourth quarter”, said John Ho,
Landsea Homes’ Chief Executive Officer. “Net income for the quarter
came in at $12.5 million, or $0.33 per diluted share on an adjusted
gross margin of 20.8%, while orders increased by 352% as compared
to the fourth quarter of 2022. We also grew our year-end book value
per share to $17.88, representing an 11% increase over year-end
2022.”
Mr. Ho continued, “2023 was a pivotal year for
Landsea Homes, as many of the actions we took during the year will
have a lasting impact on our company. From entering new markets to
executing several capital markets transactions, Landsea Homes laid
the foundation for continued growth and increased stability for our
shareholder base and capital structure. We believe these
achievements make us better equipped to succeed as a public
homebuilder and will bear fruit well into the future.”
Mr. Ho added, “Following the close of the
quarter, we entered into a definitive agreement to buy DFW-based
Antares Homes, which will give us approximately 19 actively selling
communities and a strong pipeline of over 2,000 lots in the market.
We believe Antares fits perfectly within our organization, both
from a pricing and product standpoint, and gives us a great
platform from which to grow our presence in this high-growth
market. We look forward to the Antares team joining the Landsea
family upon the closing of the deal.”
Fourth Quarter Operating
Results
Net new home orders increased 352% to 398 homes
with a dollar value of $218.9 million, an average sales price of
$550,000 and a monthly absorption rate of 2.2 sales per active
community. This compares to 88 homes with a dollar value of $57.5
million, an average sales price of $653,000 and a monthly
absorption rate of 0.5 sales per active community in the prior year
period. Cancellation rate was 13% compared to 72% in fourth quarter
2022.
The 7% decrease in total revenue to $397.6
million compared to $426.0 million in the fourth quarter of 2022
was primarily driven by increased financing incentives and
geographic mix as the New York and Texas operations delivered $29.1
million in the fourth quarter of 2022.
The company ended the year with 11,176 lots
owned and controlled, representing approximately 5 years of supply
based on 2023 home closings. 41% of the lots were owned and 59% of
the lots were controlled through contracts and option
agreements.
Total homes delivered decreased 6% to 664 homes
at an average sales price of $572,000 compared to 703 homes at an
average sales price of $594,000 in the fourth quarter of 2022.
Home sales gross margin was 15.9% in the fourth
quarter of 2023, compared to 19.0% in the prior year period.
Adjusted home sales gross margin (a non-GAAP measure) decreased to
20.8% compared to 23.4% in the fourth quarter 2022. The decrease
was primarily the result of additional sales incentives used to
close homes during the quarter.
Net income attributable to Landsea Homes was
$12.5 million or $0.33 per diluted share compared to $25.6 million
or $0.62 per diluted share in the prior year period. Adjusted net
income (a non-GAAP measure) attributable to Landsea Homes was $16.1
million compared to $33.3 million in the prior year period.
Adjusted EBITDA (a non-GAAP measure) was $40.3
million compared to $53.9 million in the prior year period.
Full Year 2023
Operating Results
Net new home orders were 1,947 homes with a
dollar value of $1.1 billion, an average sales price of $571,000,
and a monthly absorption rate of 2.8 sales per active community.
This compares to 1,520 homes with a dollar value of $959.6 million,
an average sales price of $631,000 and a monthly absorption rate of
2.4 sales per active community in the prior year. The increase in
new home orders was primarily from a doubling of orders in the
Arizona segment and a 51% increase in California, partially offset
by a 5% decrease in the Florida segment.
Total revenue decreased 16% to $1.2 billion
compared to $1.4 billion for the full year 2022, primarily driven
by the decrease from New York and Texas along with increased
incentives across the operating divisions related to higher
mortgage rates, partially offset by the relatively steady
performance of the Florida division.
Total homes delivered for the year totaled 2,123
homes at an average sales price of $551,000 compared to 2,370 homes
delivered at an average sales price of $588,000 for the full year
2022.
Total homes in backlog at the end of 2023 was
517 homes with a dollar value of $335.6 million and an average
sales price of $649,000 compared to 670 homes with a dollar value
of $380.9 million and an average sales price of $569,000 at
December 31, 2022.
Home sales gross margin decreased to 17.3% from
20.4% in the prior year. Adjusted home sales gross margin (a
non-GAAP measure) decreased to 22.4% compared to 26.9% in the prior
year. The decrease was primarily due to increased closing
incentives across the operating segments.
Net income attributable to Landsea Homes was
$29.2 million or $0.75 per diluted share compared to $73.6 million
and $1.70 per diluted share in the prior year period. Adjusted net
income attributable to Landsea Homes (a non-GAAP measure) was
$47.9 million or $1.22 per diluted share compared to $123.3
million and $2.85 in the prior year.
Adjusted EBITDA (a non-GAAP measure) was $112.3
million compared to $208.0 million in the prior year.
Balance Sheet
As of December 31, 2023, the Company had
total liquidity of $431.3 million consisting of cash and cash
equivalents and cash held in escrow of $168.6 million as well as
$262.6 million in availability under the Company’s $675.0 million
unsecured revolving credit facility. Total debt, net of issuance
costs, was $543.8 million at December 31, 2023 compared to
$505.4 million at December 31, 2022.
Landsea Homes’ ratio of debt to capital was
44.1% at December 31, 2023 and the Company’s net debt to total
capital (a non-GAAP measure) was 30.4% at December 31, 2023.
This compares to a debt to capital ratio of 41.6% and a net debt to
total capital ratio of 30.0% at December 31, 2022.
During 2023, the Company repurchased 9% or 3.6
million of its outstanding shares for a total value of $34.4
million. The book value per share at December 31, 2023 was
$17.88, an 11.4% increase over December 31, 2022.
Mr. Ho concluded, “Landsea Homes is well
positioned to take advantage of the favorable homebuilding
fundamentals, thanks to our strong market positioning and the
appeal of our High Performance Homes. In addition, our asset light
land portfolio, improving asset turns and entry-level focus have
our company primed to generate improving returns on capital. As a
result, I am very optimistic about the future of Landsea
Homes.”
2024
Outlook
First quarter
2024
- New home deliveries anticipated to
be in a range of 480 to 500
- Delivery ASPs expected to be in a
range of $560,000 to $575,000
- Home sales gross margins between
15% and 16% on a GAAP basis and between 20% and 21% on an adjusted
basis
Full Year
2024
- New home deliveries anticipated to
be in a range of 2,500 to 2,900
- Delivery ASPs expected to be in a
range of $500,000 to $525,000
- Home sales gross margins between
17% and 18% on a GAAP basis and between 21% and 23% on an adjusted
basis
Conference Call
The Company will hold a conference call today at
10:00 a.m. Eastern Time to discuss its fourth quarter 2023
results.
- Toll-free dial-in number: 1-877-704-4453
- International dial-in number: 1-201-389-0920
The conference call will also be broadcast live
and available for replay in the Investors section of the Landsea
Homes website at https://ir.landseahomes.com/.
A replay of the conference call will be
available after 2:00 p.m. Eastern time on the same day through
March 14, 2024 at 11:59 PM.
Replay Details:
- Toll-free replay number: 1-844-512-2921
- International replay number: 1-412-317-6671
- Replay ID: 13744526
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, including as they relate to
anticipated effects of the business combination with LF Capital
Acquisition Corporation on January 7, 2021 (the “Business
Combination”). 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 benefits of the Business Combination and the acquisitions
of Vintage Estate and Hanover (the “Acquisitions”);
- the future financial performance of
the Company;
- 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 not
are 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 ability to recognize the
anticipated benefits of the Acquisitions, which may be affected by,
among other things, competition, the ability to integrate the
combined businesses and the acquired business, and the ability of
the combined business and the acquired business to grow and manage
growth profitably;
- costs related to continuing as a
public company;
- the ability to maintain the listing
of Landsea Homes’ securities on Nasdaq;
- the outcome of any legal
proceedings that may be instituted against the Company;
- changes in applicable laws or
regulations;
- the inability to launch new Landsea
Homes products or services or to profitably expand into new
markets;
- the possibility that the Company
may be adversely affected by other economic, business, and/or
competitive factors;
- risks and uncertainties relating to
the material weaknesses in our internal controls over financial
reporting;
- the possibility that additional
information may arise that would require us to make further
adjustments or revisions to our historical financial statements,
report additional material weaknesses or delay the filing of our
current financial statements; and
- 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.
Media Contact:Annie
NoebelCornerstone Communicationsanoebel@cornerstonecomms.com(949)
449-2527
Investor Relations Contact:Drew
Mackintosh, CFAMackintosh Investor Relations,
LLCdrew@mackintoshir.com(310) 924-9036
Landsea Homes CorporationConsolidated
Balance Sheets(in thousands, except share and per share
amounts) |
|
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
Cash and cash equivalents |
$ |
119,555 |
|
|
$ |
123,634 |
|
Cash held in escrow |
|
49,091 |
|
|
|
17,101 |
|
Real estate inventories |
|
1,121,726 |
|
|
|
1,093,369 |
|
Due from affiliates |
|
4,348 |
|
|
|
3,744 |
|
Goodwill |
|
68,639 |
|
|
|
68,639 |
|
Other assets |
|
107,873 |
|
|
|
134,009 |
|
Total assets |
$ |
1,471,232 |
|
|
$ |
1,440,496 |
|
|
|
|
|
Liabilities |
|
|
|
Accounts payable |
$ |
77,969 |
|
|
$ |
74,445 |
|
Accrued expenses and other liabilities |
|
160,256 |
|
|
|
149,426 |
|
Due to affiliates |
|
881 |
|
|
|
884 |
|
Line of credit facility, net |
|
307,631 |
|
|
|
505,422 |
|
Senior notes, net |
|
236,143 |
|
|
|
— |
|
Total liabilities |
|
782,880 |
|
|
|
730,177 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.0001 par value, 50,000,000 shares authorized,
none issued and outstanding as of December 31, 2023 and
December 31, 2022, respectively |
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 500,000,000 shares authorized,
41,382,453 issued and 36,520,894 outstanding as of
December 31, 2023, 42,110,794 issued and 40,884,268
outstanding as of December 31, 2022 |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
465,290 |
|
|
|
497,598 |
|
Retained earnings |
|
187,584 |
|
|
|
158,348 |
|
Total stockholders’
equity |
|
652,878 |
|
|
|
655,950 |
|
Noncontrolling interests |
|
35,474 |
|
|
|
54,369 |
|
Total equity |
|
688,352 |
|
|
|
710,319 |
|
Total liabilities and
equity |
$ |
1,471,232 |
|
|
$ |
1,440,496 |
|
Landsea Homes CorporationConsolidated
Statements of Operations(in thousands, except share and
per share amounts) |
|
|
Three Months Ended December 31, |
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
|
|
|
|
|
|
Home sales |
$ |
379,668 |
|
|
$ |
417,481 |
|
|
$ |
1,169,867 |
|
|
$ |
1,392,750 |
|
Lot sales and other |
|
17,947 |
|
|
|
8,477 |
|
|
|
40,080 |
|
|
|
53,699 |
|
Total revenue |
|
397,615 |
|
|
|
425,958 |
|
|
|
1,209,947 |
|
|
|
1,446,449 |
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
|
|
|
|
|
Home sales |
|
319,392 |
|
|
|
337,984 |
|
|
|
967,034 |
|
|
|
1,108,204 |
|
Lot sales and other |
|
12,169 |
|
|
|
10,775 |
|
|
|
27,939 |
|
|
|
51,321 |
|
Total cost of sales |
|
331,561 |
|
|
|
348,759 |
|
|
|
994,973 |
|
|
|
1,159,525 |
|
|
|
|
|
|
|
|
|
Gross
margin |
|
|
|
|
|
|
|
Home sales |
|
60,276 |
|
|
|
79,497 |
|
|
|
202,833 |
|
|
|
284,546 |
|
Lot sales and other |
|
5,778 |
|
|
|
(2,298 |
) |
|
|
12,141 |
|
|
|
2,378 |
|
Total gross margin |
|
66,054 |
|
|
|
77,199 |
|
|
|
214,974 |
|
|
|
286,924 |
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses |
|
21,576 |
|
|
|
24,939 |
|
|
|
73,248 |
|
|
|
89,305 |
|
General and administrative
expenses |
|
27,219 |
|
|
|
18,591 |
|
|
|
101,442 |
|
|
|
89,325 |
|
Total operating expenses |
|
48,795 |
|
|
|
43,530 |
|
|
|
174,690 |
|
|
|
178,630 |
|
|
|
|
|
|
|
|
|
Income from
operations |
|
17,259 |
|
|
|
33,669 |
|
|
|
40,284 |
|
|
|
108,294 |
|
|
|
|
|
|
|
|
|
Other income, net |
|
1,491 |
|
|
|
740 |
|
|
|
4,261 |
|
|
|
86 |
|
Loss on remeasurement of
warrant liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,315 |
) |
Pretax
income |
|
18,750 |
|
|
|
34,409 |
|
|
|
44,545 |
|
|
|
101,065 |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
5,572 |
|
|
|
7,940 |
|
|
|
11,895 |
|
|
|
25,400 |
|
|
|
|
|
|
|
|
|
Net
income |
|
13,178 |
|
|
|
26,469 |
|
|
|
32,650 |
|
|
|
75,665 |
|
Net income attributable to
noncontrolling interests |
|
703 |
|
|
|
888 |
|
|
|
3,414 |
|
|
|
2,114 |
|
Net income attributable to
Landsea Homes Corporation |
$ |
12,475 |
|
|
$ |
25,581 |
|
|
$ |
29,236 |
|
|
$ |
73,551 |
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.33 |
|
|
$ |
0.63 |
|
|
$ |
0.75 |
|
|
$ |
1.71 |
|
Diluted |
$ |
0.33 |
|
|
$ |
0.62 |
|
|
$ |
0.75 |
|
|
$ |
1.70 |
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
37,349,364 |
|
|
|
39,929,310 |
|
|
|
38,885,003 |
|
|
|
42,052,696 |
|
Diluted |
|
37,537,270 |
|
|
|
40,065,480 |
|
|
|
39,076,322 |
|
|
|
42,199,462 |
|
Home Deliveries and Home Sales Revenue
|
Three Months Ended December 31, |
|
2023 |
|
2022 |
|
% Change |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
(dollars in thousands) |
Arizona |
162 |
|
$ |
70,629 |
|
$ |
436 |
|
162 |
|
$ |
73,631 |
|
$ |
455 |
|
—% |
|
(4)% |
|
(4)% |
California |
199 |
|
|
169,183 |
|
|
850 |
|
183 |
|
|
160,366 |
|
|
876 |
|
9% |
|
5% |
|
(3)% |
Colorado |
11 |
|
|
7,410 |
|
|
674 |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
292 |
|
|
132,446 |
|
|
454 |
|
340 |
|
|
154,348 |
|
|
454 |
|
(14)% |
|
(14)% |
|
—% |
Metro New York |
— |
|
|
— |
|
N/A |
|
4 |
|
|
15,666 |
|
|
3,917 |
|
N/A |
|
N/A |
|
N/A |
Texas |
— |
|
|
— |
|
N/A |
|
14 |
|
|
13,470 |
|
|
962 |
|
N/A |
|
N/A |
|
N/A |
Total |
664 |
|
$ |
379,668 |
|
$ |
572 |
|
703 |
|
$ |
417,481 |
|
$ |
594 |
|
(6)% |
|
(9)% |
|
(4)% |
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
% Change |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
(dollars in thousands) |
Arizona |
607 |
|
$ |
264,067 |
|
$ |
435 |
|
613 |
|
$ |
274,512 |
|
$ |
448 |
|
(1)% |
|
(4)% |
|
(3)% |
California |
514 |
|
|
439,939 |
|
|
856 |
|
572 |
|
|
502,583 |
|
|
879 |
|
(10)% |
|
(12)% |
|
(3)% |
Colorado |
11 |
|
|
7,410 |
|
|
674 |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
986 |
|
|
452,608 |
|
|
459 |
|
1,106 |
|
|
473,059 |
|
|
428 |
|
(11)% |
|
(4)% |
|
7% |
Metro New York |
1 |
|
|
1,649 |
|
|
1,649 |
|
47 |
|
|
111,424 |
|
|
2,371 |
|
(98)% |
|
(99)% |
|
(30)% |
Texas |
4 |
|
|
4,194 |
|
|
1,049 |
|
32 |
|
|
31,172 |
|
|
974 |
|
(88)% |
|
(87)% |
|
8% |
Total |
2,123 |
|
$ |
1,169,867 |
|
$ |
551 |
|
2,370 |
|
$ |
1,392,750 |
|
$ |
588 |
|
(10)% |
|
(16)% |
|
(6) % |
Net New Home Orders, Dollar Value of Orders, and Monthly
Absorption Rates
|
Three Months Ended December 31, |
|
2023 |
|
2022 |
|
|
% 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 |
124 |
$ |
54,061 |
$ |
436 |
2.2 |
|
(14 |
) |
$ |
(11,049 |
) |
$ |
789 |
(0.3 |
) |
|
986% |
589% |
(45)% |
833% |
California |
76 |
|
73,619 |
|
969 |
2.5 |
|
38 |
|
|
23,951 |
|
|
630 |
1.2 |
|
|
100% |
207% |
54% |
108% |
Colorado |
2 |
|
1,286 |
|
643 |
0.7 |
|
— |
|
|
— |
|
N/A |
— |
|
|
N/A |
N/A |
N/A |
N/A |
Florida |
196 |
|
89,926 |
|
459 |
2.2 |
|
58 |
|
|
30,367 |
|
|
524 |
0.6 |
|
|
238% |
196% |
(12)% |
267% |
Metro New York |
— |
|
— |
N/A |
— |
|
3 |
|
|
11,671 |
|
|
3,890 |
3.3 |
|
|
N/A |
N/A |
N/A |
N/A |
Texas |
— |
|
— |
N/A |
— |
|
3 |
|
|
2,556 |
|
|
852 |
1.0 |
|
|
N/A |
N/A |
N/A |
N/A |
Total |
398 |
$ |
218,892 |
$ |
550 |
2.2 |
|
88 |
|
$ |
57,496 |
|
$ |
653 |
0.5 |
|
|
352% |
281% |
(16)% |
340% |
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
% 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 |
598 |
$ |
255,513 |
$ |
427 |
2.9 |
|
296 |
|
$ |
143,371 |
|
$ |
484 |
1.9 |
|
|
102% |
78% |
(12)% |
53% |
California |
596 |
|
519,664 |
|
872 |
4.4 |
|
395 |
|
|
354,656 |
|
|
898 |
3.2 |
|
|
51% |
47% |
(3)% |
38% |
Colorado(1) |
2 |
|
1,286 |
|
643 |
0.7 |
|
— |
|
|
— |
|
N/A |
— |
|
|
N/A |
N/A |
N/A |
N/A |
Florida |
747 |
|
330,195 |
|
442 |
2.1 |
|
786 |
|
|
380,396 |
|
|
484 |
2.5 |
|
|
(5)% |
(13)% |
(9)% |
(16)% |
Metro New York |
— |
|
— |
N/A |
— |
|
23 |
|
|
62,333 |
|
|
2,710 |
2.4 |
|
|
N/A |
N/A |
N/A |
N/A |
Texas |
4 |
|
4,194 |
|
1,049 |
1.1 |
|
20 |
|
|
18,824 |
|
|
941 |
0.8 |
|
|
(80)% |
(78)% |
11% |
38% |
Total |
1,947 |
$ |
1,110,852 |
$ |
571 |
2.8 |
|
1,520 |
|
$ |
959,580 |
|
$ |
631 |
2.4 |
|
|
28% |
16% |
(10)% |
17% |
(1) Monthly absorption rates
for Colorado in 2023 are based on three months, for the time
subsequent to the acquisition of Richfield in October 2023.
Average Selling Communities
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
% Change |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
% Change |
|
Arizona |
|
19.0 |
|
|
|
15.7 |
|
|
|
21% |
|
|
|
17.3 |
|
|
|
12.7 |
|
|
|
36% |
|
California |
|
10.0 |
|
|
|
10.7 |
|
|
|
(7)% |
|
|
|
11.3 |
|
|
|
10.3 |
|
|
|
10% |
|
Colorado(1) |
|
1.0 |
|
|
|
— |
|
|
|
N/A |
|
|
|
1.0 |
|
|
|
— |
|
|
|
N/A |
|
Florida |
|
30.0 |
|
|
|
30.3 |
|
|
|
(1)% |
|
|
|
29.7 |
|
|
|
26.7 |
|
|
|
11% |
|
Metro New York |
|
— |
|
|
|
0.3 |
|
|
|
N/A |
|
|
|
— |
|
|
|
0.8 |
|
|
|
N/A |
|
Texas |
|
— |
|
|
|
1.0 |
|
|
|
N/A |
|
|
|
0.3 |
|
|
|
2.2 |
|
|
|
(86)% |
|
Total |
|
60.0 |
|
|
|
58.0 |
|
|
|
3% |
|
|
|
58.8 |
|
|
|
52.7 |
|
|
|
12% |
|
(1) Average selling communities calculations for
Colorado in 2023 are based on three months, for the time subsequent
to the acquisition of Richfield in October 2023.
Backlog
|
December 31, 2023 |
|
December 31, 2022 |
|
% Change |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
Homes |
|
Dollar Value |
|
ASP |
|
(dollars in thousands) |
Arizona |
96 |
|
$ |
41,433 |
|
$ |
432 |
|
105 |
|
$ |
49,986 |
|
$ |
476 |
|
(9)% |
|
(17)% |
|
(9)% |
California |
161 |
|
|
158,170 |
|
|
982 |
|
79 |
|
|
78,446 |
|
|
993 |
|
104% |
|
102% |
|
(1)% |
Colorado(1) |
14 |
|
|
7,540 |
|
|
539 |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Florida |
246 |
|
|
128,484 |
|
|
522 |
|
485 |
|
|
250,897 |
|
|
517 |
|
(49)% |
|
(49)% |
|
1% |
Metro New York |
— |
|
|
— |
|
N/A |
|
1 |
|
|
1,597 |
|
|
1,597 |
|
N/A |
|
N/A |
|
N/A |
Texas |
— |
|
|
— |
|
N/A |
|
— |
|
|
— |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Total |
517 |
|
$ |
335,627 |
|
$ |
649 |
|
670 |
|
$ |
380,926 |
|
$ |
569 |
|
(23)% |
|
(12)% |
|
14% |
(1) Backlog acquired in Colorado at the date of
the Richfield acquisition was 23 homes with a value of $13,664
thousand.
Lots Owned or Controlled
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
Lots Owned |
|
|
|
Lots Controlled |
|
|
|
Total |
|
|
|
Lots Owned |
|
|
|
Lots Controlled |
|
|
|
Total |
|
|
|
% Change |
|
Arizona |
|
1,688 |
|
|
|
1,662 |
|
|
|
3,350 |
|
|
|
2,187 |
|
|
|
1,992 |
|
|
|
4,179 |
|
|
|
(20)% |
|
California |
|
657 |
|
|
|
1,422 |
|
|
|
2,079 |
|
|
|
559 |
|
|
|
1,714 |
|
|
|
2,273 |
|
|
|
(9)% |
|
Colorado |
|
127 |
|
|
|
155 |
|
|
|
282 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
N/A |
|
Florida |
|
1,964 |
|
|
|
1,649 |
|
|
|
3,613 |
|
|
|
2,530 |
|
|
|
1,521 |
|
|
|
4,051 |
|
|
|
(11)% |
|
Metro New York |
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
(33)% |
|
Texas |
|
130 |
|
|
|
1,720 |
|
|
|
1,850 |
|
|
|
4 |
|
|
|
1,083 |
|
|
|
1,087 |
|
|
|
70% |
|
Total |
|
4,568 |
|
|
|
6,608 |
|
|
|
11,176 |
|
|
|
5,283 |
|
|
|
6,310 |
|
|
|
11,593 |
|
|
|
(4)% |
|
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 December 31, |
|
|
2023 |
|
|
% |
|
|
2022 |
|
|
% |
|
(dollars in thousands) |
Home sales revenue |
$ |
379,668 |
|
|
|
100.0 |
% |
|
$ |
417,481 |
|
|
|
100.0 |
% |
Cost of home sales |
|
319,392 |
|
|
|
84.1 |
% |
|
|
337,984 |
|
|
|
81.0 |
% |
Home sales gross margin |
|
60,276 |
|
|
|
15.9 |
% |
|
|
79,497 |
|
|
|
19.0 |
% |
Add: Interest in cost of home sales |
|
14,045 |
|
|
|
3.7 |
% |
|
|
8,968 |
|
|
|
2.1 |
% |
Add: Real estate inventories impairments |
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
— |
% |
Adjusted home sales gross
margin excluding interest and inventory impairments |
|
74,321 |
|
|
|
19.6 |
% |
|
|
88,465 |
|
|
|
21.2 |
% |
Add: Purchase price accounting for acquired inventory |
|
4,760 |
|
|
|
1.3 |
% |
|
|
9,250 |
|
|
|
2.2 |
% |
Adjusted home sales gross
margin excluding interest, inventory impairments, and purchase
price accounting for acquired inventory |
$ |
79,081 |
|
|
|
20.8 |
% |
|
$ |
97,715 |
|
|
|
23.4 |
% |
|
Year Ended December 31, |
|
|
2023 |
|
|
% |
|
|
2022 |
|
|
% |
|
(dollars in thousands) |
Home sales revenue |
$ |
1,169,867 |
|
|
|
100.0 |
% |
|
$ |
1,392,750 |
|
|
|
100.0 |
% |
Cost of home sales |
|
967,034 |
|
|
|
82.7 |
% |
|
|
1,108,204 |
|
|
|
79.6 |
% |
Home sales gross margin |
|
202,833 |
|
|
|
17.3 |
% |
|
|
284,546 |
|
|
|
20.4 |
% |
Add: Interest in cost of home sales |
|
35,576 |
|
|
|
3.0 |
% |
|
|
40,192 |
|
|
|
2.9 |
% |
Add: Real estate inventories impairments |
|
4,700 |
|
|
|
0.4 |
% |
|
|
— |
|
|
|
— |
% |
Adjusted home sales gross
margin excluding interest and inventory impairments |
|
243,109 |
|
|
|
20.8 |
% |
|
|
324,738 |
|
|
|
23.3 |
% |
Add: Purchase price accounting for acquired inventory |
|
18,820 |
|
|
|
1.6 |
% |
|
|
50,412 |
|
|
|
3.6 |
% |
Adjusted home sales gross
margin excluding interest, inventory impairments, and purchase
price accounting for acquired inventory |
$ |
261,929 |
|
|
|
22.4 |
% |
|
$ |
375,150 |
|
|
|
26.9 |
% |
EBITDA and Adjusted EBITDA
The following tables present EBITDA and Adjusted
EBITDA for the three months and years ended December 31, 2023
and 2022. 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, (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
(gain) on debt extinguishment or forgiveness, (vii) transaction
costs related to the Merger and business combinations, (viii) the
impact of income or loss allocations from our unconsolidated joint
ventures, and (ix) loss on remeasurement of warrant liability. 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. The economic activity related
to our unconsolidated joint ventures is not core to our operations
and is the reason we have excluded those amounts. 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 December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands) |
Net income |
$ |
13,178 |
|
|
$ |
26,469 |
|
Provision for income taxes |
|
5,572 |
|
|
|
7,940 |
|
Interest in cost of sales |
|
14,452 |
|
|
|
9,152 |
|
Depreciation and amortization expense |
|
1,326 |
|
|
|
1,104 |
|
EBITDA |
|
34,528 |
|
|
|
44,665 |
|
Purchase price accounting for acquired inventory |
|
4,760 |
|
|
|
9,250 |
|
Transaction costs |
|
757 |
|
|
|
— |
|
Abandoned project costs |
|
253 |
|
|
|
— |
|
Equity in net income of unconsolidated joint ventures, excluding
interest relieved |
|
— |
|
|
|
(10 |
) |
Adjusted EBITDA |
$ |
40,298 |
|
|
$ |
53,905 |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands) |
Net income |
$ |
32,650 |
|
|
$ |
75,665 |
|
Provision for income taxes |
|
11,895 |
|
|
|
25,400 |
|
Interest in cost of sales |
|
36,330 |
|
|
|
40,428 |
|
Interest relieved to equity in net income of unconsolidated joint
ventures |
|
— |
|
|
|
70 |
|
Depreciation and amortization expense |
|
5,104 |
|
|
|
5,549 |
|
EBITDA |
|
85,979 |
|
|
|
147,112 |
|
Real estate inventories impairments |
|
4,700 |
|
|
|
— |
|
Purchase price accounting for acquired inventory |
|
18,820 |
|
|
|
50,412 |
|
Transaction costs |
|
1,390 |
|
|
|
883 |
|
Write-off of offering costs |
|
436 |
|
|
|
— |
|
Abandoned project costs |
|
998 |
|
|
|
— |
|
Equity in net income of unconsolidated joint ventures, excluding
interest relieved |
|
— |
|
|
|
(219 |
) |
Loss on debt extinguishment or forgiveness |
|
— |
|
|
|
2,496 |
|
Loss on remeasurement of warrant liability |
|
— |
|
|
|
7,315 |
|
Adjusted EBITDA |
$ |
112,323 |
|
|
$ |
207,999 |
|
Adjusted Net Income
Adjusted Net Income 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 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, the impact from our
unconsolidated joint ventures, Merger related transaction costs,
loss (gain) on debt extinguishment or forgiveness, and loss on
remeasurement of warrant liability, and tax-effected using a
blended statutory tax rate. The economic activity related to our
unconsolidated joint ventures is not core to our operations and is
the reason we have excluded those amounts. 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 December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands, except share and per share amounts) |
Net income attributable to
Landsea Homes Corporation |
$ |
12,475 |
|
|
$ |
25,581 |
|
|
|
|
|
Pre-Merger capitalized related party interest included in cost of
sales |
|
131 |
|
|
|
1,299 |
|
Equity in net income of unconsolidated joint ventures |
|
— |
|
|
|
(10 |
) |
Purchase price accounting for acquired inventory |
|
4,760 |
|
|
|
9,250 |
|
Total adjustments |
|
4,891 |
|
|
|
10,539 |
|
Tax-effected adjustments(1) |
|
3,609 |
|
|
|
7,726 |
|
|
|
|
|
Adjusted net income
attributable to Landsea Homes Corporation |
$ |
16,084 |
|
|
$ |
33,307 |
|
|
|
|
|
|
|
|
|
Net income attributable to
Landsea Homes Corporation |
$ |
12,475 |
|
|
$ |
25,581 |
|
Less: undistributed earnings
allocated to participating shares |
|
— |
|
|
|
(624 |
) |
Net income attributable to
common stockholders |
$ |
12,475 |
|
|
$ |
24,957 |
|
|
|
|
|
Adjusted net income
attributable to Landsea Homes Corporation |
$ |
16,084 |
|
|
$ |
33,307 |
|
Less: adjusted undistributed
earnings allocated to participating shares |
|
— |
|
|
|
(813 |
) |
Adjusted net income
attributable to common stockholders |
$ |
16,084 |
|
|
$ |
32,494 |
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.33 |
|
|
$ |
0.63 |
|
Diluted |
$ |
0.33 |
|
|
$ |
0.62 |
|
|
|
|
|
Adjusted earnings per
share |
|
|
|
Basic |
$ |
0.43 |
|
|
$ |
0.81 |
|
Diluted |
$ |
0.43 |
|
|
$ |
0.81 |
|
|
|
|
|
Weighted shares
outstanding |
|
|
|
Weighted average common shares
outstanding used in EPS - basic |
|
37,349,364 |
|
|
|
39,929,310 |
|
Weighted average common shares
outstanding used in EPS - diluted |
|
37,537,270 |
|
|
|
40,065,480 |
|
(1) Our tax-effected
adjustments are based on our federal rate and a blended state rate
adjusted for certain discrete items.
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands, except share and per share amounts) |
Net income attributable to
Landsea Homes Corporation |
$ |
29,236 |
|
|
$ |
73,551 |
|
|
|
|
|
Real estate inventories impairment |
|
4,700 |
|
|
|
— |
|
Pre-Merger capitalized related party interest included in cost of
sales |
|
1,718 |
|
|
|
5,130 |
|
Equity in net income of unconsolidated joint ventures |
|
— |
|
|
|
(149 |
) |
Purchase price accounting for acquired inventory |
|
18,820 |
|
|
|
50,412 |
|
Loss on debt extinguishment or forgiveness |
|
— |
|
|
|
2,496 |
|
Loss on remeasurement of warrant liability |
|
— |
|
|
|
7,315 |
|
Total adjustments |
|
25,238 |
|
|
|
65,204 |
|
Tax-effected adjustments(1) |
|
18,622 |
|
|
|
49,755 |
|
|
|
|
|
Adjusted net income
attributable to Landsea Homes Corporation |
$ |
47,858 |
|
|
$ |
123,306 |
|
|
|
|
|
|
|
|
|
Net income attributable to
Landsea Homes Corporation |
$ |
29,236 |
|
|
$ |
73,551 |
|
Less: undistributed earnings
allocated to participating shares |
|
— |
|
|
|
(1,706 |
) |
Net income attributable to
common stockholders |
$ |
29,236 |
|
|
$ |
71,845 |
|
|
|
|
|
Adjusted net income
attributable to Landsea Homes Corporation |
$ |
47,858 |
|
|
$ |
123,306 |
|
Less: adjusted undistributed
earnings allocated to participating shares |
|
— |
|
|
|
(2,861 |
) |
Adjusted net income
attributable to common stockholders |
$ |
47,858 |
|
|
$ |
120,445 |
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.75 |
|
|
$ |
1.71 |
|
Diluted |
$ |
0.75 |
|
|
$ |
1.70 |
|
|
|
|
|
Adjusted earnings per
share |
|
|
|
Basic |
$ |
1.23 |
|
|
$ |
2.86 |
|
Diluted |
$ |
1.22 |
|
|
$ |
2.85 |
|
|
|
|
|
Weighted shares
outstanding |
|
|
|
Weighted average common shares
outstanding used in EPS - basic |
|
38,885,003 |
|
|
|
42,052,696 |
|
Weighted average common shares
outstanding used in EPS - diluted |
|
39,076,322 |
|
|
|
42,199,462 |
|
(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, cash equivalents, and
restricted cash as well as cash held in escrow to the extent
necessary to reduce the debt balance to zero) by total capital.
Prior to the fourth quarter of 2023, we presented the non-GAAP
ratio of net debt to net capital computed as the quotient obtained
by dividing net debt by net capital (sum of net debt plus total
equity). During the fourth quarter of 2023, we began presenting the
non-GAAP ratio of net debt to total capital, which is consistent
with the ratio presented by our peers. 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.
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands) |
Total notes and other debts
payable, net |
$ |
543,774 |
|
|
$ |
505,422 |
|
Total equity |
|
688,352 |
|
|
|
710,319 |
|
Total capital |
$ |
1,232,126 |
|
|
$ |
1,215,741 |
|
Ratio of debt to capital |
|
44.1 |
% |
|
|
41.6 |
% |
|
|
|
|
Total notes and other debts
payable, net |
$ |
543,774 |
|
|
$ |
505,422 |
|
Less: cash, cash equivalents
and restricted cash |
|
119,555 |
|
|
|
123,634 |
|
Less: cash held in escrow |
|
49,091 |
|
|
|
17,101 |
|
Net debt |
$ |
375,128 |
|
|
$ |
364,687 |
|
|
|
|
|
Total capital |
$ |
1,232,126 |
|
|
$ |
1,215,741 |
|
Ratio of net debt to total
capital |
|
30.4 |
% |
|
|
30.0 |
% |
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