First Quarter 2022 Highlights
- 15 active neighborhoods open for sale in Valencia.
- Builder sales of 211 homes in Valencia during the quarter.
- Builder sales of 94 homes in Great Park Neighborhoods during
the quarter.
- At Great Park Neighborhoods, the “Rise” neighborhood,
consisting of approximately 700 homes, as of March 31, 2022, was
nearing sell out with approximately 50 homes remaining to sell. Our
next neighborhood, “Solis Park,” consisting of approximately 850
homes, is planned to open for sale this summer.
- Reduced headcount by approximately 29% since the beginning of
the year primarily from layoffs at the end of the quarter.
- Recognized $19.4 million in restructuring expense related to
executive officer post employment compensation arrangements and
severance obligations related to layoffs.
- Consolidated revenues of $4.9 million; consolidated net loss of
$36.8 million.
- Debt to total capitalization ratio of 25.1% and liquidity of
$328.3 million as of March 31, 2022.
Five Point Holdings, LLC (“Five Point” or the “Company”)
(NYSE:FPH), an owner and developer of large mixed-use planned
communities in California, today reported its first quarter 2022
results.
Dan Hedigan, Chief Executive Officer, said, “FivePoint is
entering an important juncture in the evolution of the company. We
have taken decisive steps during the first quarter to manage costs
and to create greater efficiencies in our day-to-day operations.
With continued market demand within our supply-constrained
California markets, we remain focused on maximizing the value of
our residential assets while also seeking to capitalize on our
sizeable commercial land opportunities in order to maximize our
current cash flow and strengthen our balance sheet. Our team is
working hard to continue executing on our mission of transforming
our unique land assets into sustainable mixed-use communities,
while we keep a watchful eye on economic and market
conditions.”
Consolidated Results
Liquidity and Capital Resources
As of March 31, 2022, total liquidity of $328.3 million was
comprised of cash and cash equivalents totaling $203.6 million and
borrowing availability of $124.7 million under our $125.0 million
unsecured revolving credit facility. Total capital was $1.9
billion, reflecting $2.9 billion in assets and $1.1 billion in
liabilities and redeemable noncontrolling interests.
Results of Operations for the Three Months Ended March 31,
2022
Revenues. Revenues of $4.9 million for the three months
ended March 31, 2022 was primarily generated from management
services.
Equity in loss from unconsolidated entities. Equity in
loss from unconsolidated entities was $1.0 million for the three
months ended March 31, 2022. The Great Park Venture had no land
sales during the three months ended March 31, 2022 but did close
the sale of nine homes under its fee build program at Great Park
Neighborhoods, generating $17.2 million in revenues. The remaining
13 homes subject to the fee building agreement are expected to
close during the remainder of 2022. Net loss for the Great Park
Venture was $2.8 million. Our share of the net loss from our 37.5%
percentage interest, adjusted for basis differences, was $1.3
million. Additionally, we recognized $0.1 million in earnings from
our 75% interest in the Gateway Commercial Venture and a $0.2
million in earnings from our 10% interest in the Valencia Landbank
Venture, which was primarily a result of land sales to third-party
homebuilders by the Valencia Landbank Venture.
Selling, general, and administrative. Selling, general,
and administrative expenses were $16.8 million for the three months
ended March 31, 2022.
Restructuring. On February 9, 2022, Daniel Hedigan was
appointed as our Chief Executive Officer. Preceding Mr. Hedigan’s
appointment, Emile Haddad stepped down from his roles as Chairman,
Chief Executive Officer and President effective as of September 30,
2021 and transitioned into a senior advisory role pursuant to a
three-year advisory agreement. Mr. Haddad remains a member of the
Board of Directors serving as Chairman Emeritus. Concurrent with
Mr. Hedigan’s appointment, Lynn Jochim transitioned from her
position as President and Chief Operating Officer into an advisory
role pursuant to a three-year advisory agreement. Upon the
appointment of Mr. Hedigan as our Chief Executive Officer, we
accrued a related party liability of $15.6 million attributed to
the advisory agreements with Mr. Haddad and Ms. Jochim and
recognized approximately $3.0 million in additional restructuring
costs associated with their unvested restricted share awards.
In addition to our executive management restructuring
activities, we have had an approximately 29% reduction in headcount
since the end of 2021. Most of the reductions were the result of
company-wide layoffs that occurred at the end of the first quarter.
During the three months ended March 31, 2022, we accrued $0.9
million in restructuring costs for estimated severance benefits
from these layoffs.
Net loss. Consolidated net loss for the quarter was $36.8
million. Net loss attributable to noncontrolling interests totaled
$19.6 million, resulting in net loss attributable to the Company of
$17.1 million. Net loss attributable to noncontrolling interests
represents the portion of loss allocated to related party partners
and members that hold units of the operating company and the San
Francisco Venture. Holders of units of the operating company and
the San Francisco Venture can redeem their interests for either, at
our election, our Class A common shares on a one-for-one basis or
cash. In connection with any redemption or exchange, our ownership
of our operating subsidiaries will increase thereby reducing the
amount of income allocated to noncontrolling interests in
subsequent periods.
Conference Call
Information
In conjunction with this release, Five Point will host a
conference call on Thursday, May 12, 2022 at 5:00 p.m. Eastern
Time. Dan Hedigan, Chief Executive Officer, and Leo Kij, Interim
Chief Financial Officer, will host the call. Interested investors
and other parties can listen to a live Internet audio webcast of
the conference call that will be available on the Five Point
website at ir.fivepoint.com. The conference call can also be
accessed by dialing (800) 949-2175 (domestic) or (856) 344-9283
(international). A telephonic replay will be available starting
approximately two hours after the end of the call by dialing (844)
512-2921, or for international callers, (412) 317-6671. The
passcode for the live call and the replay is 9718621. The
telephonic replay will be available until 11:59 p.m. Eastern Time
on May 26, 2022.
About Five Point
Five Point, headquartered in Irvine, California, designs and
develops large mixed-use planned communities in Orange County, Los
Angeles County, and San Francisco County that combine residential,
commercial, retail, educational, and recreational elements with
public amenities, including civic areas for parks and open space.
Five Point’s communities include the Great Park Neighborhoods® in
Irvine, Valencia® in Los Angeles County, and Candlestick® and The
San Francisco Shipyard® in the City of San Francisco. These
communities are designed to include approximately 40,000
residential homes and approximately 23 million square feet of
commercial space.
Forward-Looking
Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties. These statements concern
expectations, beliefs, projections, plans and strategies,
anticipated events or trends and similar expressions concerning
matters that are not historical facts. When used, the words
“anticipate,” “believe,” “expect,” “intend,” “may,” “might,”
“plan,” “estimate,” “project,” “should,” “will,” “would,” “result”
and similar expressions that do not relate solely to historical
matters are intended to identify forward-looking statements. This
press release may contain forward-looking statements regarding: our
expectations of our future revenues, costs and financial
performance; future demographics and market conditions in the areas
where our communities are located; the outcome of pending
litigation and its effect on our operations; the timing of our
development activities; and the timing of future real estate
purchases or sales. We caution you that any forward-looking
statements included in this press release are based on our current
views and information currently available to us. Forward-looking
statements are subject to risks, trends, uncertainties and factors
that are beyond our control. Some of these risks and uncertainties
are described in more detail in our filings with the SEC, including
our Annual Report on Form 10-K, under the heading “Risk Factors.”
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those anticipated, estimated or projected. We
caution you therefore against relying on any of these
forward-looking statements. While forward-looking statements
reflect our good faith beliefs, they are not guarantees of future
performance. They are based on estimates and assumptions only as of
the date hereof. We undertake no obligation to update or revise any
forward-looking statement to reflect changes in underlying
assumptions or factors, new information, data or methods, future
events or other changes, except as required by applicable law.
FIVE POINT HOLDINGS,
LLC
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended March
31,
2022
2021
REVENUES:
Land sales
$
557
$
22
Land sales—related party
1
19
Management services—related party
3,547
12,439
Operating properties
781
700
Total revenues
4,886
13,180
COSTS AND EXPENSES:
Land sales
—
—
Management services
2,684
10,777
Operating properties
1,839
1,585
Selling, general, and administrative
16,791
19,538
Restructuring
19,437
—
Total costs and expenses
40,751
31,900
OTHER INCOME:
Interest income
21
27
Miscellaneous
112
1,204
Total other income
133
1,231
EQUITY IN LOSS FROM UNCONSOLIDATED
ENTITIES
(1,032
)
(3,556
)
LOSS BEFORE INCOME TAX (PROVISION)
BENEFIT
(36,764
)
(21,045
)
INCOME TAX (PROVISION) BENEFIT
(5
)
—
NET LOSS
(36,769
)
(21,045
)
LESS NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(19,639
)
(11,266
)
NET LOSS ATTRIBUTABLE TO THE COMPANY
$
(17,130
)
$
(9,779
)
NET LOSS ATTRIBUTABLE TO THE COMPANY PER
CLASS A SHARE
Basic
$
(0.25
)
$
(0.14
)
Diluted
$
(0.25
)
$
(0.14
)
WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING
Basic
68,167,586
67,288,860
Diluted
70,050,872
67,288,860
NET LOSS ATTRIBUTABLE TO THE COMPANY PER
CLASS B SHARE
Basic and diluted
$
(0.00
)
$
(0.00
)
WEIGHTED AVERAGE CLASS B SHARES
OUTSTANDING
Basic and diluted
79,233,544
79,233,544
FIVE POINT HOLDINGS,
LLC
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except
shares)
(Unaudited)
March 31, 2022
December 31, 2021
ASSETS
INVENTORIES
$
2,144,757
$
2,096,824
INVESTMENT IN UNCONSOLIDATED ENTITIES
373,022
374,553
PROPERTIES AND EQUIPMENT, NET
31,143
31,466
INTANGIBLE ASSET, NET—RELATED PARTY
51,405
51,405
CASH AND CASH EQUIVALENTS
203,647
265,462
RESTRICTED CASH AND CERTIFICATES OF
DEPOSIT
1,330
1,330
RELATED PARTY ASSETS
98,409
101,818
OTHER ASSETS
19,629
20,052
TOTAL
$
2,923,342
$
2,942,910
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$
619,500
$
619,116
Accounts payable and other liabilities
121,608
115,374
Related party liabilities
105,556
95,918
Deferred income tax liability, net
12,998
12,998
Payable pursuant to tax receivable
agreement
173,068
174,126
Total liabilities
1,032,730
1,017,532
REDEEMABLE NONCONTROLLING INTEREST
25,000
25,000
CAPITAL:
Class A common shares; No par value;
Issued and outstanding: March 31, 2022—69,068,354 shares; December
31, 2021—70,107,552 shares
Class B common shares; No par value;
Issued and outstanding: March 31, 2022—79,233,544 shares; December
31, 2021—79,233,544 shares
Contributed capital
585,606
587,587
Retained earnings
31,659
48,789
Accumulated other comprehensive loss
(1,933
)
(1,952
)
Total members’ capital
615,332
634,424
Noncontrolling interests
1,250,280
1,265,954
Total capital
1,865,612
1,900,378
TOTAL
$
2,923,342
$
2,942,910
FIVE POINT HOLDINGS,
LLC
SUPPLEMENTAL DATA
(In thousands)
(Unaudited)
Liquidity
March 31, 2022
Cash and cash equivalents
$
203,647
Borrowing capacity (1)
124,651
Total liquidity
$
328,298
(1)
As of March 31, 2022, no amounts
were drawn on the Company’s $125.0 million revolving credit
facility; however, letters of credit of approximately $0.3 million
were issued and outstanding under the revolving credit facility,
thus reducing the available capacity by the outstanding letters of
credit amount.
Debt to Total
Capitalization and Net Debt to Total Capitalization
March 31, 2022
Debt (1)
$
625,000
Total capital
1,865,612
Total capitalization
$
2,490,612
Debt to total capitalization
25.1
%
Debt (1)
$
625,000
Less: Cash and cash equivalents
203,647
Net debt
421,353
Total capital
1,865,612
Total net capitalization
$
2,286,965
Net debt to total capitalization
(2)
18.4
%
(1)
For purposes of this calculation,
debt is the amount due on the Company’s notes payable before
offsetting for capitalized deferred financing costs.
(2)
Net debt to total capitalization
is a non-GAAP financial measure defined as net debt (debt less cash
and cash equivalents) divided by total net capitalization (net debt
plus total capital). The Company believes the ratio of net debt to
total capitalization is a relevant and a useful financial measure
to investors in understanding the leverage employed in the
Company’s operations. However, because net debt to total
capitalization is not calculated in accordance with GAAP, this
financial measure should not be considered in isolation or as an
alternative to financial measures prescribed by GAAP. Rather, this
non-GAAP financial measure should be used to supplement the
Company's GAAP results.
Segment Results
The following table reconciles the results of operations of our
segments to our consolidated results for the three months ended
March 31, 2022 (in thousands):
Valencia
San Francisco
Great Park
Commercial
Total reportable
segments
Corporate and
unallocated
Total under management
Removal of unconsolidated
entities(1)
Total consolidated
REVENUES:
Land sales
$
557
$
—
$
330
$
—
$
887
$
—
$
887
$
(330
)
$
557
Land sales—related party
1
—
1,489
—
1,490
—
1,490
(1,489
)
1
Home sales
—
—
17,161
—
17,161
—
17,161
(17,161
)
—
Management services—related party(2)
—
—
3,444
103
3,547
—
3,547
—
3,547
Operating properties
601
180
—
1,938
2,719
—
2,719
(1,938
)
781
Total revenues
1,159
180
22,424
2,041
25,804
—
25,804
(20,918
)
4,886
COSTS AND EXPENSES:
Land sales
—
—
—
—
—
—
—
—
—
Home sales
—
—
12,902
—
12,902
—
12,902
(12,902
)
—
Management services(2)
—
—
2,684
—
2,684
—
2,684
—
2,684
Operating properties
1,839
—
—
440
2,279
—
2,279
(440
)
1,839
Selling, general, and administrative
4,444
849
7,561
1,079
13,933
11,498
25,431
(8,640
)
16,791
Restructuring
—
—
—
—
—
19,437
19,437
—
19,437
Management fees—related party
—
—
1,503
—
1,503
—
1,503
(1,503
)
—
Total costs and expenses
6,283
849
24,650
1,519
33,301
30,935
64,236
(23,485
)
40,751
OTHER INCOME (EXPENSE):
Interest income
—
—
155
—
155
21
176
(155
)
21
Interest expense
—
—
—
(307
)
(307
)
—
(307
)
307
—
Miscellaneous
112
—
—
—
112
—
112
—
112
Total other income (expense)
112
—
155
(307
)
(40
)
21
(19
)
152
133
EQUITY IN EARNINGS (LOSS) FROM
UNCONSOLIDATED ENTITIES
185
—
—
—
185
—
185
(1,217
)
(1,032
)
SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME
TAX PROVISION
(4,827
)
(669
)
(2,071
)
215
(7,352
)
(30,914
)
(38,266
)
1,502
(36,764
)
INCOME TAX PROVISION
—
—
—
—
—
(5
)
(5
)
—
(5
)
SEGMENT (LOSS) PROFIT/NET LOSS
$
(4,827
)
$
(669
)
$
(2,071
)
$
215
$
(7,352
)
$
(30,919
)
$
(38,271
)
$
1,502
$
(36,769
)
(1)
Represents the removal of the
Great Park Venture and Gateway Commercial Venture operating
results, which are included in the Great Park segment and
Commercial segment operating results at 100% of each venture’s
historical basis, respectively, but are not included in our
consolidated results as we account for our investment in each
venture using the equity method of accounting.
(2)
For the Great Park and Commercial
segments, represents the revenues and expenses attributable to the
management company for providing services to the Great Park Venture
and the Gateway Commercial Venture, as applicable.
The table below reconciles the Great Park segment results to the
equity in loss from our investment in the Great Park Venture that
is reflected in the condensed consolidated statement of operations
for the three months ended March 31, 2022 (in thousands):
Segment loss from operations
$
(2,071
)
Less net income of management company
attributed to the Great Park segment
760
Net loss of the Great Park Venture
(2,831
)
The Company’s share of net loss of the
Great Park Venture
(1,062
)
Basis difference amortization
(239
)
Equity in loss from the Great Park
Venture
$
(1,301
)
The table below reconciles the Commercial segment results to the
equity in earnings from our investment in the Gateway Commercial
Venture that is reflected in the condensed consolidated statement
of operations for the three months ended March 31, 2022 (in
thousands):
Segment profit from operations
$
215
Less net income of management company
attributed to the Commercial segment
103
Net income of the Gateway Commercial
Venture
112
Equity in earnings from the Gateway
Commercial Venture
$
84
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005299/en/
Investor Relations: Leo Kij, 949-349-1029
Leo.Kij@fivepoint.com
or
Media: Eric Morgan, 949-349-1088 Eric.Morgan@fivepoint.com
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