- Net Income of $4.8 Million or $0.30 per share for Year -
-
Total Revenues increase 80% to $150 Million for the Year -
-
Backlog Dollar Value increases six times to $87 Million -
-
Backlog Dollar Value of JV’s increases more than five times to $204
Million -
ALISO VIEJO, Calif. -- (Business Wire)
The New Home Company Inc. (NYSE:NWHM) today announced results for the
full year and fourth quarter ended December 31, 2014.
Fourth Quarter 2014 Highlights Compared to Fourth Quarter 2013
-
Net income of $5.3 million, an increase of 40%
-
Total revenues of $73.0 million, an increase of 194%
-
Home sales revenue grew over 200% to $33.2 million
-
Fee building revenue of $39.7 million, an increase of 186%
-
Backlog dollar value grew more than six times to $86.7 million
-
Selling, general and administrative expenses as a percent of home
sales improved to 16.2%
-
Equity in net income from unconsolidated Joint Ventures (JVs) more
than doubles to $7.4 million
-
Backlog dollar value of homebuilding JV communities grew 168% to
$115.0 million
-
Land sales at JVs begin. Revenue of $46.9 million with gross margin
percentage of 25.4%
-
Backlog dollar value of JV lot sales was $89.1 million resulting from
fourth quarter activity
Full Year 2014 Highlights Compared to Full Year 2013
-
Net income of $4.8 million, compared to a net income of $6.7 million
-
Total revenue of $149.7 million, an increase of 80%
-
Home sales revenue of $56.1 million, an increase of 57%
-
Fee building revenue grew 97% to $93.6 million
-
New home deliveries from JVs increased 86% to 275
-
Net new home orders from JVs increased 85% to 288
-
Equity in net income from JVs of $8.4 million, an increase of 78%
-
Ended year with 12 active selling communities, compared to nine
including JVs
-
Owned or controlled lots, including lots held in JVs and fee building
projects, increased 16% to 5,926
“2014 was a transitional year for the Company. As a result of our IPO in
January 2014, we significantly expanded our operations across all
project activities. We delivered another year of profitable results
while investing in our platform to meet our growth objectives in the
years ahead,” stated Larry Webb, Chief Executive Officer. “During the
fourth quarter 2014, we were especially pleased with our results, which
reflected our transformation from a private company to a public company.
This transformation resulted in strong growth in our revenues, improved
leverage of our G&A and continued progress in our JV operations, all of
which contributed to growth in our net income. We entered 2015 with a
dramatically strengthened backlog and a healthy pipeline of
well-located, premium lots in highly desirable California markets. As we
move forward, our growth strategy remains intact. We are well positioned
to continue acquiring land and opening communities across our vibrant
markets as we expand our business and further capitalize on the
attractive opportunities.”
Fourth Quarter 2014 Operating Results
Total revenues for the fourth quarter 2014 were $73.0 million, compared
to $24.8 million in the prior year period. The net income attributable
to the Company was $5.3 million, or $0.32 per diluted share, compared to
net income of $3.8 million, or $0.44 per diluted share, in the prior
year period. The change in net income was primarily due to an increase
in activity at our homebuilding and land development joint ventures and
our share of their net income. This increase more than offset an
increase in SG&A.
Wholly Owned Projects
Home sales revenue for the fourth quarter 2014 was $33.2 million,
compared to $10.9 million in the prior year period and new home
deliveries were 20, compared to 23 in the prior year period. The
decrease in new home deliveries was primarily due to reduced activity in
our Sacramento communities. The average selling price of homes delivered
was approximately $1,662,000 compared to $475,000 in the prior year
period. The expansion in average selling prices was primarily due to a
change in product mix to communities with higher average sales prices
located in Irvine, California. The Company expects that the average
selling price will continue to vary from quarter to quarter due to the
mix of product offered and the introduction of new communities.
Homebuilding gross margin percentage for the fourth quarter 2014 was
13.2%, compared to 21.4%, in the prior year period. Adjusted
homebuilding gross margin percentage*, which excludes interest in cost
of home sales, was 14.5%, compared to 23.3% in the prior year period,
attributable to the mix of deliveries which included the initial
deliveries from the Irvine, California communities noted above which had
an average sale price of $2.5 million. Revenue from these closings total
$27.5 million, or 83%, of the home sales revenue for the fourth quarter.
Due to the favorable lot acquisition structure, these deliveries produce
a lower gross margin than home deliveries on lots developed by the
Company. SG&A expense was $5.4 million, compared to $3.5 million in the
prior year period. As a percent of home sales revenue, SG&A improved to
16.3%, compared to 31.9% in the prior year period, largely attributable
to higher home sale revenue.
New home orders were 19, compared to six homes in the prior year period.
The Company had four actively selling communities at the end of the
fourth quarter, compared to three at the end of the prior year. At the
end of the fourth quarter, the number of homes in backlog was 41,
representing approximately $86.7 million of backlog dollar value,
compared to 15 homes in the prior year, representing approximately $11.9
million of backlog dollar value. The average sales price of homes in
backlog at the end of 2014 was $2,115,000, compared to $791,000 at the
end of the prior year. The increase in average selling price of homes in
backlog was primarily the result of a change in product mix, as noted
above.
Unconsolidated Joint Ventures (JVs)
The Company’s share of net income from JVs for the fourth quarter 2014
was $7.4 million, compared to $3.0 million in the prior year period. The
recognition of such income is significantly impacted by both the
quantity of homes and lots delivered as well as the point in time within
the JV lifecycle when revenue is recognized. The following sets forth
supplemental information about the Company’s JVs. Such information is
not included in the Company’s financial data for GAAP purposes.
Total revenue of the JVs during the fourth quarter 2014 was $183.2
million and net income was $33.6 million, compared to $78.0 million and
$15.7 million in the prior year quarter, respectively. Home sales
revenue of the JVs was $136.3 million, compared to $78.0 million in the
prior year period. New home deliveries increased to 129, compared to 74
in the prior year period primarily due to an increase in average selling
communities. The average selling price of homes delivered in JVs was
$1,057,000 compared to $1,055,000 in the prior year period. Revenue from
lot sales at the Land Development JVs during the fourth quarter 2014
totaled $46.9 million, primarily related to the sale of improved lots in
Foster City, California.
Homebuilding gross margin percentage generated by JVs was 23.1%,
compared to 27.5 % in the prior year period. Adjusted homebuilding gross
margin percentage* of the JVs, which excludes interest in cost of home
sales, was 24.5%, compared to 28.4% in the prior year period. The
margins for 2013 were positively impacted by the strong margins from
three communities located in Irvine, California that were nearing
close-out. The gross margin from the initial land sales by one JV was
25.4% and adjusted land gross margin percentage*, which excludes
interest in cost of land sales, was 25.8 % for the fourth quarter 2014.
New home orders in JVs were 57, compared to 45 in the prior year period.
The JVs had eight actively selling communities at the end of the fourth
quarter, compared to six at the end of the prior year period. At the end
of the quarter, the number of homes in backlog in JVs was 75,
representing approximately $115.0 million of backlog dollar value,
compared to 62 homes the end of the prior year, representing
approximately $42.6 million of backlog dollar value. The average sale
price of homes in backlog at the end of 2014 was $1,533,000 compared to
$687,000 as a result of a change in product mix. The backlog dollar
value of lots in JVs was $89.1 million. There were no JV lot sales in
the prior year.
Fee Building Projects
Fee building revenue for the fourth quarter 2014 was $39.7 million,
compared to $13.9 in the prior year period. In addition to billings to
third-party land owners for general contracting services, New Home
collects management fees from its JVs, which are also reported as fee
building revenue. Management fees from JVs were $4.1 million, compared
to $3.9 million in the prior year period. The increase in total fee
building revenue was due primarily to the increase in homes under
construction under fee building agreements with one customer. Fee
building gross margin was $2.6 million, compared to $2.2 million in the
prior year period, attributable to higher fee building revenue. This
increase more than offset the negative impact associated with the
composition of fee building revenue, which was dominated by construction
related activity.
Full Year 2014 Operating Results
Total revenue for full year 2014 was $149.7 million, compared to $83.2
million in the prior year. Net income was $4.8 million, or $0.30 per
share, compared to a net income of $6.7 million, or $0.85 per share, in
the prior year. Basic weighted average shares outstanding increased to
16.0 million from 7.9 million from 2013 to 2014.
Wholly Owned Projects
Home sales revenue for the full year 2014 was $56.1 million, compared to
$35.7 million in the prior year, primarily attributable to an increase
average selling price of homes delivered to $1,058,000 from $435,000,
partially offset by a decrease in the number of new homes delivered to
53 from 82.
Homebuilding gross margin percentage was 15.0%, compared to 18.7%, in
the prior year. Adjusted homebuilding gross margin percentage* was
16.0%, compared to 20.2% in the prior year. As noted previously, the
fourth quarter was impacted by the initial deliveries of homes from
communities in Irvine, California. Revenue from these deliveries
represented 49% of home sales revenue for 2014. SG&A expense was $15.6
million, compared to $8.9 million in the prior year. The increase in
SG&A was a result of an increase in stock-based compensation,
professional fees and other costs associated with being a publicly
traded company and increased activity related to the Company’s
communities. As a percent of home sales, SG&A was 27.8%, compared to
24.9% in the prior year, primarily due to the increase in SG&A and an
increase in sales personnel and marketing costs related to three new
communities that opened during the second quarter of 2014 and delivered
homes in the fourth quarter of 2014.
New home orders of 79 homes, compared to 72 homes in the prior year,
primarily due to an increase in average selling communities.
Unconsolidated Joint Ventures (JVs)
Equity in net income from JVs reported by the Company for the full year
2014 was $8.4 million, compared to $4.7 million in the prior year. Total
revenue of the JVs was $271.4 million and net income was $41.2 million,
compared to $183.0 million and $35.4 million in the prior year,
respectively. Home sales revenue of the JVs was $224.5 million, compared
to $183.0 million in the prior year, primarily attributable to an 86%
increase in the number of new homes delivered, which more than offset a
34% decrease in the average selling prices of homes delivered. Land
sales revenue of the JVs for the full year 2014 totaled $46.9 million.
There were no land sales in 2013.
Homebuilding gross margin percentage in JVs was 22.4%, compared to 27.2%
in the prior year. Adjusted homebuilding gross margin percentage* was
23.6%, compared to 29.0% in the prior year. The homebuilding gross
margin in 2013 was impacted by the high margins from three communities
in Irvine, California. The gross margin percentage achieved by a land
development JVs was 25.4% and adjusted land gross margin percentage* of
the JV was 25.8 % for the full year 2014.
New home orders in JVs were 288, compared to 156 homes in the prior
year, primarily due to an increase in average selling communities.
Fee Building Projects
Fee building revenue for the full year 2014 was $93.6 million, compared
to $47.6 million in the prior year. Management fees from JVs were $9.6
million, compared to $8.3 million in the prior year. The growth in fee
building revenue compared to the prior year is due to an increase in
construction activity at the 10 active fee building communities and
secondarily, management fees from JVs. Fee building gross margin was
$4.5 million, compared to $5.2 million in the prior year. The decline
resulted from an increase in overhead expenses related to the increased
fee-building activity.
* See "Reconciliation of Non-GAAP Financial Measures"
Balance Sheet and Liquidity
As of December 31, 2014, the Company had $44.1 million of cash and cash
equivalents, $144.0 million in available loan commitments and total debt
outstanding of $113.8 million. The Company ended the full year 2014 with
a net-debt-to-capital ratio of 31.9%.
Conference Call Details
The Company will host a conference call and webcast for investors and
other interested parties beginning at 11:00 a.m. Eastern Time on Friday,
March 6, 2015 to review fourth quarter results, discuss recent events,
and conduct a question-and-answer period. The conference call will be
available in the Investors section of the Company’s website at www.NWHM.com.
To listen to the broadcast live, go to the site approximately 15 minutes
prior to the scheduled start time in order to register, download and
install any necessary audio software. To participate in the telephone
conference call, dial 1-877-407-0789 (domestic) or 1-201-689-8562
(international) at least five minutes prior to start time. Replays of
the conference call will be available through April 6, 2015 and can be
accessed by dialing 1-877-870-5176 (domestic) or 1-858-384-5517
(international) and entering the pass code 13601641.
About The New Home Company
NWHM is a new generation homebuilder focused on the design, construction
and sale of innovative and consumer-driven homes in major metropolitan
areas within select growth markets in California, including coastal
Southern California, the San Francisco Bay area and metro Sacramento.
The Company is headquartered in Aliso Viejo, California. For more
information about the Company and its new home developments, please
visit the Company's website at www.NWHM.com.
Forward-Looking Statements
Various statements contained in this press release, including those that
express a belief, expectation or intention, as well as those that are
not statements of historical fact, are forward-looking statements. These
forward-looking statements may include projections and estimates
concerning the timing and success of specific projects and our future
production, our ability to execute our strategic growth objectives,
revenues, income and capital spending. Our forward-looking statements
are generally accompanied by words such as “estimate,” “project,”
“predict,” “believe,” “expect,” “intend,” “anticipate,” “potential,”
“plan,” “goal,” “will,” or other words that convey the uncertainty of
future events or outcomes. The forward-looking statements in this press
release speak only as of the date of this release, and we disclaim any
obligation to update these statements unless required by law, and we
caution you not to rely on them unduly. We have based these
forward-looking statements on our current expectations and assumptions
about future events. While our management considers these expectations
and assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other risks,
contingencies and uncertainties, most of which are difficult to predict
and many of which are beyond our control. The following factors, among
others, may cause our actual results, performance or achievements to
differ materially from any future results, performance or achievements
expressed or implied by these forward-looking statements: economic
changes either nationally or in the markets in which we operate,
including declines in employment, volatility of mortgage interest rates
and inflation; a downturn in the homebuilding industry; continued
volatility and uncertainty in the credit markets and broader financial
markets; our future operating results and financial condition; our
business operations; changes in our business and investment strategy;
availability of land to acquire and our ability to acquire such land on
favorable terms or at all; availability, terms and deployment of
capital; continued or increased disruption in the availability of
mortgage financing or the number of foreclosures in the market;
shortages of or increased prices for labor, land or raw materials used
in housing construction; delays in land development or home construction
resulting from adverse weather conditions or other events outside our
control; the cost and availability of insurance and surety bonds;
changes in, or the failure or inability to comply with, governmental
laws and regulations; the timing of receipt of regulatory approvals and
the opening of projects; the degree and nature of our competition; our
leverage and debt service obligations; availability of qualified
personnel and our ability to retain our key personnel; and additional
factors discussed under the sections captioned “Risk Factors” included
in our annual report filed with the Securities and Exchange Commission
("SEC").
|
|
|
|
KEY OPERATIONS AND FINANCIAL DATA
(dollars in thousands)
(unaudited)
| |
|
|
| |
|
| | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2014 |
| 2013 |
| Change | | | 2014 |
| 2013 |
| Change | |
Operating Data: | | | | | | | | | | | | | | | |
Total Revenues
| | |
$
|
72,985
| | |
$
|
24,804
| | |
$
|
48,181
| | | |
$
|
149,657
| | |
$
|
83,228
| | |
$
|
66,429
| | |
Home sales revenue
| | |
$
|
33,240
| | |
$
|
10,928
| | |
$
|
22,312
| | | |
$
|
56,094
| | |
$
|
35,663
| | |
$
|
20,431
| | |
Homebuilding gross margin
| | |
$
|
4,401
| | |
$
|
2,335
| | |
$
|
2,066
| | | |
$
|
8,434
| | |
$
|
6,683
| | |
$
|
1,751
| | |
Homebuilding gross margin %
| | | |
13.2
|
%
| | |
21.4
|
%
| | |
(8.2
|
)%
| | | |
15.0
|
%
| | |
18.7
|
%
| | |
(3.7
|
)%
| |
Adjusted homebuilding gross margin % *
| | | |
14.5
|
%
| | |
23.3
|
%
| | |
(8.8
|
)%
| | | |
16.0
|
%
| | |
20.2
|
%
| | |
(4.2
|
)%
| |
Fee building revenue (1) | | |
$
|
39,745
| | |
$
|
13,876
| | |
$
|
25,869
| | | |
$
|
93,562
| | |
$
|
47,566
| | |
$
|
45,996
| | |
Fee building gross margin
| | |
$
|
2,553
| | |
$
|
2,222
| | |
$
|
331
| | | |
$
|
4,507
| | |
$
|
5,248
| | |
$
|
(741
|
)
| |
Fee building gross margin %
| | | |
6.4
|
%
| | |
16.0
|
%
| | |
(9.6
|
)%
| | | |
4.8
|
%
| | |
11.0
|
%
| | |
(6.2
|
)%
| |
Equity in net income of unconsolidated joint ventures
| | |
$
|
7,448
| | |
$
|
3,046
| | |
$
|
4,402
| | | |
$
|
8,443
| | |
$
|
4,735
| | |
$
|
3,708
| | |
Net income attributable to The New Home Company Inc.
| | |
$
|
5,320
| | |
$
|
3,790
| | |
$
|
1,530
| | | |
$
|
4,787
| | |
$
|
6,706
| | |
$
|
(1,919
|
)
| |
Interest incurred and capitalized to inventory
| | |
$
|
778
| | |
$
|
246
| | |
$
|
532
| | | |
$
|
1,857
| | |
$
|
1,060
| | |
$
|
797
| | |
Interest in cost of home sales
| | |
$
|
414
| | |
$
|
202
| | |
$
|
212
| | | |
$
|
532
| | |
$
|
550
| | |
$
|
(18
|
)
| |
Other Data: | | | | | | | | | | | | | | | |
New home orders
| | | |
19
| | | |
6
| | | |
13
| | | | |
79
| | | |
72
| | | |
7
| | |
New homes delivered
| | | |
20
| | | |
23
| | | |
(3
|
)
| | | |
53
| | | |
82
| | | |
(29
|
)
| |
Average selling price of homes delivered
| | |
$
|
1,662
| | |
$
|
475
| | |
$
|
1,187
| | | |
$
|
1,058
| | |
$
|
435
| | |
$
|
623
| | |
Selling communities at end of period
| | | | | | | | | | |
4
| | | |
3
| | | |
1
| | |
Backlog (est. dollar value)
| | | | | | | | | |
$
|
86,711
| | |
$
|
11,867
| | |
$
|
74,844
| | |
Backlog (homes)
| | | | | | | | | | |
41
| | | |
15
| | | |
26
| | |
Average selling price in backlog
| | | | | | | | | |
$
|
2,115
| | |
$
|
791
| | |
$
|
1,324
| | |
| | | | | | | | | | | | | | |
|
| | | | | | | | | | December 31, | | December 31, | | | |
Balance Sheet Data: | | | | | | | | | | 2014 | | 2013 | | Change | |
Cash, cash equivalents and restricted cash
| | | | | | | | | |
$
|
44,340
| | |
$
|
9,672
| | |
$
|
34,668
| | |
Real estate inventories
| | | | | | | | | |
$
|
163,564
| | |
$
|
45,350
| | |
$
|
118,214
| | |
Lots owned and controlled (2) | | | | | | | | | | |
5,926
| | | |
5,077
| | | |
849
| | |
Notes payable
| | | | | | | | | |
$
|
113,751
| | |
$
|
17,883
| | |
$
|
95,868
| | |
Equity, exclusive of non-controlling interest
| | | | | | | | | |
$
|
148,084
| | |
$
|
64,356
| | |
$
|
83,728
| | |
Book capitalization
| | | | | | | | | |
$
|
261,835
| | |
$
|
82,239
| | |
$
|
179,596
| | |
Ratio of debt-to-capital
| | | | | | | | | | |
43.4
|
%
| | |
21.7
|
%
| | |
21.7
|
%
| |
Ratio of net debt-to-capital *
| | | | | | | | | | |
31.9
|
%
| | |
11.3
|
%
| | |
20.6
|
%
| |
|
| |
(1)
| |
Fee building revenue includes management fees from unconsolidated
joint ventures of $4.1 million and $3.9 million for the three months
ended December 31, 2014 and 2013, respectively, and $9.6 million and
$8.3 million for the year ended December 31, 2014 and 2013,
respectively.
|
(2)
| |
Includes lots owned and controlled through joint ventures and fee
building agreements.
|
*
| |
See "Reconciliation of Non-GAAP Financial Measures" beginning on
page 11.
|
|
|
|
|
KEY OPERATIONS AND FINANCIAL DATA - UNCONSOLIDATED JOINT
VENTURES
(dollars in thousands)
(unaudited)
| |
|
|
| |
|
| | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2014 |
| 2013 |
| Change | | | 2014 |
| 2013 |
| Change | |
Operating Data: | | | | | | | | | | | | | | | |
Home sales revenues
| | |
$
|
136,331
| | |
$
|
78,037
| | |
$
|
58,294
| | | |
$
|
224,498
| | |
$
|
183,038
| | |
$
|
41,460
| | |
Homebuilding gross margin
| | |
$
|
31,519
| | |
$
|
21,468
| | |
$
|
10,051
| | | |
$
|
50,196
| | |
$
|
49,728
| | |
$
|
468
| | |
Homebuilding gross margin %
| | | |
23.1
|
%
| | |
27.5
|
%
| | |
(4.4
|
)%
| | | |
22.4
|
%
| | |
27.2
|
%
| | |
(4.8
|
)%
| |
Adj homebuilding gross margin % *
| | | |
24.5
|
%
| | |
28.4
|
%
| | |
(3.9
|
)%
| | | |
23.6
|
%
| | |
29.0
|
%
| | |
(5.4
|
)%
| |
Land sales revenues
| | |
$
|
46,888
| | |
$
|
—
| | |
$
|
46,888
| | | |
$
|
46,888
| | |
$
|
—
| | |
$
|
46,888
| | |
Land gross margin
| | |
$
|
11,922
| | |
$
|
—
| | |
$
|
11,922
| | | |
$
|
11,922
| | |
$
|
—
| | |
$
|
11,922
| | |
Land gross margin %
| | | |
25.4
|
%
| | |
n/a
| | | |
n/a
| | | | |
25.4
|
%
| | |
n/a
| | | |
n/a
| | |
Adj land gross margin %*
| | | |
25.8
|
%
| | |
n/a
| | | |
n/a
| | | | |
25.8
|
%
| | |
n/a
| | | |
n/a
| | |
Net income
| | |
$
|
33,611
| | |
$
|
15,666
| | |
$
|
17,945
| | | |
$
|
41,174
| | |
$
|
35,434
| | |
$
|
5,740
| | |
Interest in cost of home sales
| | |
$
|
1,878
| | |
$
|
701
| | |
$
|
1,177
| | | |
$
|
2,885
| | |
$
|
3,257
| | |
$
|
(372
|
)
| |
Interest in cost of land sales
| | |
$
|
173
| | | |
—
| | |
$
|
173
| | | |
$
|
173
| | | |
—
| | |
$
|
173
| | |
Other Data: | | | | | | | | | | | | | | | |
New home orders
| | | |
57
| | | |
45
| | | |
12
| | | | |
288
| | | |
156
| | | |
132
| | |
New homes delivered
| | | |
129
| | | |
74
| | | |
55
| | | | |
275
| | | |
148
| | | |
127
| | |
Average selling price of homes delivered
| | |
$
|
1,057
| | |
$
|
1,055
| | |
$
|
2
| | | |
$
|
816
| | |
$
|
1,237
| | |
$
|
(421
|
)
| |
Selling communities at end of period
| | | | | | | | | | |
8
| | | |
6
| | | |
2
| | |
Backlog homes (est. dollar value)
| | | | | | | | | |
$
|
114,988
| | |
$
|
42,570
| | |
$
|
72,418
| | |
Backlog (homes)
| | | | | | | | | | |
75
| | | |
62
| | | |
13
| | |
Average selling price in backlog (homes)
| | | | | | | | | |
$
|
1,533
| | |
$
|
687
| | |
$
|
846
| | |
Backlog lots (est. dollar value)**
| | | | | | | | | |
$
|
89,103
| | |
$
|
—
| | |
$
|
89,103
| | |
Backlog (lots) **
| | | | | | | | | | |
420
| | | |
—
| | | |
420
| | |
| | | | | | | | | | | | | | |
|
| | | | | | | | | | December 31, | | December 31, | | | |
Balance Sheet Data: | | | | | | | | | | 2014 | | 2013 | | Change | |
Cash, cash equivalents and restricted cash
| | | | | | | | | |
$
|
60,018
| | |
$
|
19,650
| | |
$
|
40,368
| | |
Real estate inventories
| | | | | | | | | |
$
|
459,770
| | |
$
|
266,317
| | |
$
|
193,453
| | |
Lots owned and controlled
| | | | | | | | | | |
3,892
| | | |
2,973
| | | |
919
| | |
Notes payable
| | | | | | | | | |
$
|
87,994
| | |
$
|
68,594
| | |
$
|
19,400
| | |
The Company's equity
| | | | | | | | | |
$
|
60,564
| | |
$
|
32,270
| | |
$
|
28,294
| | |
Other partners' equity
| | | | | | | | | |
$
|
320,451
| | |
$
|
171,762
| | |
$
|
148,689
| | |
Book capitalization
| | | | | | | | | |
$
|
469,009
| | |
$
|
272,626
| | |
$
|
196,383
| | |
|
| |
*
| |
See "Reconciliation of Non-GAAP Financial Measures" beginning on
page 11.
|
**
| |
Backlog includes 145 lots and $33.9 million related to purchase
contracts between the joint venture and the Company. Lot count
excludes a retail parcel with a contract price of $8.3 million.
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS | |
|
|
|
| |
|
| | |
| | | | December 31, | |
| | | | 2014 | | | 2013 | |
| | | |
(unaudited)
| | | | |
Assets | | | | | | | | |
Cash and cash equivalents
| | | |
$
|
44,057,589
| | |
$
|
9,541,361
| |
Restricted cash
| | | | |
282,501
| | | |
130,215
| |
Contracts and accounts receivable
| | | | |
13,163,927
| | | |
7,178,241
| |
Due from affiliates
| | | | |
2,662,423
| | | |
558,421
| |
Real estate inventories
| | | | |
163,564,181
| | | |
45,350,479
| |
Investment in unconsolidated joint ventures
| | | | |
60,564,033
| | | |
32,269,546
| |
Property and equipment, net of accumulated depreciation
| | | | |
983,984
| | | |
481,506
| |
Other assets
| | | |
|
6,679,468
| | |
|
3,439,527
| |
Total assets
| | | |
$
|
291,958,106
| | |
$
|
98,949,296
| |
| | | | | | | |
|
Liabilities and equity | | | | | | | | |
Accounts payable
| | | |
$
|
16,580,629
| | |
$
|
8,687,702
| |
Accrued expenses and other liabilities
| | | | |
11,200,458
| | | |
6,851,162
| |
Notes payable
| | | |
|
113,751,334
| | |
|
17,883,338
| |
Total liabilities
| | | |
|
141,532,421
| | |
|
33,422,202
| |
Equity:
| | | | | | | | |
Stockholders' equity:
| | | | | | | | |
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no
shares outstanding
| | | | |
—
| | | |
—
| |
Common stock, $0.01 par value, 500,000,000 shares authorized,
16,448,750 shares issued and outstanding as of December 31, 2014
| | | | |
164,488
| | | |
—
| |
Additional paid-in capital
| | | | |
143,474,637
| | | |
—
| |
Retained earnings
| | | |
|
4,444,553
| | |
|
—
| |
Total The New Home Company Inc. stockholders' equity
| | | | |
148,083,678
| | | |
—
| |
Members’ equity
| | | | |
—
| | | |
64,355,719
| |
Noncontrolling interest in subsidiary
| | | |
|
2,342,007
| | |
|
1,171,375
| |
Total equity
| | | |
|
150,425,685
| | |
|
65,527,094
| |
Total liabilities and equity
| | | |
$
|
291,958,106
| | |
$
|
98,949,296
| |
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| |
|
|
| |
| |
|
| |
| | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2014 | | 2013 | | | 2014 | | 2013 | |
Revenues: | | | | | | | | | | | |
Home sales
| | |
$
|
33,239,720
| | |
$
|
10,927,899
| | |
$
|
56,094,345
| | |
$
|
35,662,980
| | |
Fee building, including management fees from unconsolidated joint
ventures of $4,058,444, $3,877,030, $9,582,442 and $8,250,764,
respectively
| | |
|
39,745,100
|
| |
|
13,875,643
| | |
|
93,562,485
|
| |
|
47,565,505
|
| |
| | |
|
72,984,820
|
| |
|
24,803,542
| | |
|
149,656,830
|
| |
|
83,228,485
|
| |
Expenses: | | | | | | | | | | | |
Cost of homes sales
| | | |
28,838,539
| | | |
8,593,168
| | | |
47,660,396
| | | |
28,979,493
| | |
Cost of fee building
| | | |
37,192,124
| | | |
11,653,839
| | | |
89,055,951
| | | |
42,317,737
| | |
Abandoned project costs
| | | |
592,107
| | | |
385,324
| | | |
753,994
| | | |
874,719
| | |
Selling and marketing
| | | |
978,375
| | | |
499,196
| | | |
3,166,142
| | | |
1,771,771
| | |
General and administrative
| | |
|
4,391,380
|
| |
|
2,985,170
| | |
|
12,419,563
|
| |
|
7,107,518
|
| |
| | |
|
71,992,525
|
| |
|
24,116,697
| | |
|
153,056,046
|
| |
|
81,051,238
|
| |
Equity in net income of unconsolidated joint ventures
| | | |
7,448,310
| | | |
3,045,565
| | | |
8,443,136
| | | |
4,735,224
| | |
Guaranty fee income
| | | |
—
| | | |
28,389
| | | |
18,927
| | | |
113,562
| | |
Other (expense) income, net
| | |
|
(88,173
|
)
| |
|
3,648
| | |
|
(59,354
|
)
| |
|
(30,142
|
)
| |
Income before taxes
| | | |
8,352,432
| | | |
3,764,447
| | | |
5,003,493
| | | |
6,995,891
| | |
(Provision) benefit for taxes
| | |
|
(2,821,876
|
)
| |
|
24,927
| | |
|
(246,422
|
)
| |
|
(290,386
|
)
| |
Net income
| | | |
5,530,556
| | | |
3,789,374
| | | |
4,757,071
| | | |
6,705,505
| | |
Net (income) loss attributable to noncontrolling interests
| | |
|
(210,914
|
)
| |
|
500
| | |
|
29,472
|
| |
|
500
|
| |
Net income attributable to The New Home Company Inc.
| | |
$
|
5,319,642
|
| |
$
|
3,789,874
| | |
$
|
4,786,543
|
| |
$
|
6,706,005
|
| |
| | | | | | | | | | |
|
Earnings per share attributable to The New Home Company Inc.
| | | | | | | | | | | |
Basic
| | |
$
|
0.32
|
| |
$
|
0.44
| | |
$
|
0.30
|
| |
$
|
0.85
|
| |
Diluted
| | |
$
|
0.32
|
| |
$
|
0.44
| | |
$
|
0.30
|
| |
$
|
0.85
|
| |
Weighted average shares outstanding:
| | | | | | | | | | | |
Basic
| | |
|
16,448,750
|
| |
|
8,636,250
| | |
|
15,927,917
|
| |
|
7,905,757
|
| |
Diluted
| | |
|
16,543,620
|
| |
|
8,636,250
| | |
|
15,969,199
|
| |
|
7,905,757
|
| |
|
| |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(unaudited)
|
| |
|
| | Year Ended |
| | December 31, |
| | 2014 |
| 2013 |
Operating activities: | | | | | | |
Net income
| |
$
|
4,757,071
| | |
$
|
6,705,505
| |
Adjustments to reconcile net income to net cash used in operating
activities:
| | | | | | |
Deferred taxes
| |
(5,818,619
|
)
| |
-
| |
Amortization of equity based compensation
| |
2,322,130
| | |
475,000
| |
Distributions of earnings from unconsolidated joint ventures
| |
6,039,606
| | |
6,930,433
| |
Equity in net income of unconsolidated joint ventures
| |
(8,443,136
|
)
| |
(4,735,224
|
)
|
Depreciation
| |
380,785
| | |
200,343
| |
Abandoned project costs
| |
753,994
| | |
874,719
| |
Net changes in operating assets and liabilities:
| | | | | | |
Restricted cash
| |
(152,286
|
)
| |
13,905
| |
Contracts and accounts receivable
| |
(5,985,686
|
)
| |
(1,128,565
|
)
|
Due from affiliates
| |
(2,104,002
|
)
| |
(507,261
|
)
|
Real estate inventories
| |
(119,605,884
|
)
| |
(21,753,355
|
)
|
Other assets
| |
3,386,223
| | |
(3,197,827
|
)
|
Accounts payable
| |
7,892,927
| | |
732,669
| |
Accrued expenses and other liabilities
| |
4,349,296
|
| |
3,592,071
|
|
Net cash used in operating activities
| |
(112,227,581
|
)
| |
(11,797,587
|
)
|
Investing activities: | | | | | | |
Purchases of property and equipment
| |
(883,263
|
)
| |
(358,710
|
)
|
Contributions to unconsolidated joint ventures
| |
(34,609,757
|
)
| |
(22,027,797
|
)
|
Distributions of equity from unconsolidated joint ventures
| |
10,609,092
|
| |
13,901,067
|
|
Net cash used in investing activities
| |
(24,883,928
|
)
| |
(8,485,440
|
)
|
Financing activities: | | | | | | |
Net proceeds from issuance of common stock
| |
87,800,022
| | |
-
| |
Repurchase of common stock
| |
(11,988,281
|
)
| |
-
| |
Cash contributions from members
| |
-
| | |
21,600,000
| |
Cash distribution to noncontrolling interest in subsidiary
| |
(52,000
|
)
| |
-
| |
Proceeds from issuance of unsecured notes to members
| |
-
| | |
1,055,000
| |
Borrowings from notes payable
| |
111,636,145
| | |
25,007,720
| |
Repayments of notes payable
| |
(15,768,149
|
)
| |
(23,846,260
|
)
|
Net cash provided by financing activities
| |
171,627,737
|
| |
23,816,460
|
|
Net increase in cash and cash equivalents
| |
34,516,228
| | |
3,533,433
| |
Cash and cash equivalents – beginning of period
| |
9,541,361
|
| |
6,007,928
|
|
Cash and cash equivalents – end of period
| |
$
|
44,057,589
|
| |
$
|
9,541,361
|
|
Supplemental disclosures of cash flow information | | | | | | |
Interest paid, net of amounts capitalized
| |
$
|
-
|
| |
$
|
-
|
|
Taxes paid
| |
$
|
1,470,000
|
| |
$
|
245,014
|
|
Supplemental disclosures of non-cash transactions | | | | | | |
Purchase of real estate with note payable to land seller
| |
$
|
17,000,000
|
| |
$
|
-
|
|
Note payable with member for equity investment
| |
$
|
-
|
| |
$
|
2,055,000
|
|
Distribution from unconsolidated joint ventures in lieu of cash
| |
$
|
-
|
| |
$
|
1,083,422
|
|
Contribution of real estate to unconsolidated joint ventures
| |
$
|
1,890,292
|
| |
$
|
17,052,218
|
|
Contribution of real estate from noncontrolling interest in
subsidiary
| |
$
|
1,252,104
|
| |
$
|
1,171,875
|
|
Deductible transaction costs and additional contribution of deferred
tax assets from IPO
| |
$
|
807,545
|
| |
$
|
-
|
|
| | | | | | | |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
In this earnings release, we utilize certain non-GAAP financial measures
as defined by the Securities and Exchange Commission. We present these
measures because we believe they, and similar measures, are useful to
management and investors in evaluating the company’s operating
performance and financing structure. We also believe these measures
facilitate the comparison of our operating performance and financing
structure with other companies in our industry. Because these measures
are not calculated in accordance with Generally Accepted Accounting
Principles (“GAAP”), they may not be comparable to other similarly
titled measures of other companies and should not be considered in
isolation or as a substitute for, or superior to, financial measures
prepared in accordance with GAAP.
The following tables reconcile homebuilding and land sales gross margin
percentage, as reported and prepared in accordance with GAAP, to the
non-GAAP measure adjusted homebuilding and land sales gross margin
percentage. We believe this information is meaningful, as it isolates
the impact leverage has on homebuilding gross margin and permits
investors to make better comparisons with our competitors, who adjust
gross margins in a similar fashion.
|
| Three Months Ended December 31, |
| | 2014 |
|
| % |
| 2013 |
|
| % |
Homebuilding | | | | | | | | | | | | |
Home sales revenue
| |
$
|
33,239,720
| | |
100.0
|
%
| |
$
|
10,927,899
| | |
100.0
|
%
|
Cost of home sales
| |
28,838,539
|
| |
86.8
|
%
| |
8,593,168
|
| |
78.6
|
%
|
Homebuilding gross margin
| |
4,401,181
| | |
13.2
|
%
| |
2,334,731
| | |
21.4
|
%
|
Add: interest in cost of home sales
| |
414,017
|
| |
1.3
|
%
| |
202,399
|
| |
1.9
|
%
|
Adjusted homebuilding gross margin
| |
$
|
4,815,198
|
| |
14.5
|
%
| |
$
|
2,537,130
|
| |
23.3
|
%
|
Homebuilding gross margin percentage
| |
13.2
|
%
| | | | |
21.4
|
%
| | | |
Adjusted homebuilding gross margin percentage
| |
14.5
|
%
| | | | |
23.3
|
%
| | | |
| | | | | | | | | | | |
|
Unconsolidated Joint Ventures - Homebuilding | | | | | | | | | | | | |
Home sales revenue
| |
$
|
136,331,124
| | |
100.0
|
%
| |
$
|
78,036,520
| | |
100.0
|
%
|
Cost of home sales
| |
104,812,394
|
| |
76.9
|
%
| |
56,568,488
|
| |
72.5
|
%
|
Homebuilding gross margin
| |
31,518,730
| | |
23.1
|
%
| |
21,468,032
| | |
27.5
|
%
|
Add: interest in cost of home sales
| |
1,877,519
|
| |
1.4
|
%
| |
701,120
|
| |
0.9
|
%
|
Adjusted homebuilding gross margin
| |
$
|
33,396,249
|
| |
24.5
|
%
| |
$
|
22,169,152
|
| |
28.4
|
%
|
Homebuilding gross margin percentage
| |
23.1
|
%
| | | | |
27.5
|
%
| | | |
Adjusted homebuilding gross margin percentage
| |
24.5
|
%
| | | | |
28.4
|
%
| | | |
| | | | | | | | | | | |
|
Unconsolidated Joint Ventures - Land | | | | | | | | | | | | |
Land sales revenue
| |
$
|
46,887,847
| | |
100.0
|
%
| |
$
|
-
| | |
n/a
|
Cost of land sales
| |
34,965,483
|
| |
74.6
|
%
| |
-
|
| |
n/a
|
Land gross margin
| |
11,922,364
| | |
25.4
|
%
| |
-
| | |
n/a
|
Add: interest in cost of land sales
| |
172,976
|
| |
0.4
|
%
| |
-
|
| |
n/a
|
Adjusted land gross margin
| |
$
|
12,095,340
|
| |
25.8
|
%
| |
$
|
-
|
| |
n/a
|
Land gross margin percentage
| |
25.4
|
%
| | | | |
n/a
| | | |
Adjusted land gross margin percentage
| |
25.8
|
%
| | | | |
n/a
| | | |
| | | | | | | | | | |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) |
(unaudited)
|
|
| Year Ended December 31, |
| | 2014 |
|
| % |
| 2013 |
|
| % |
Homebuilding | | | | | | | | | | | | |
Home sales revenue
| |
$
|
56,094,345
| | |
100.0
|
%
| |
$
|
35,662,980
| | |
100.0
|
%
|
Cost of home sales
| |
47,660,396
|
| |
85.0
|
%
| |
28,979,493
|
| |
81.3
|
%
|
Homebuilding gross margin
| |
8,433,949
| | |
15.0
|
%
| |
6,683,487
| | |
18.7
|
%
|
Add: interest in cost of home sales
| |
532,286
|
| |
1.0
|
%
| |
549,971
|
| |
1.5
|
%
|
Adjusted homebuilding gross margin
| |
$
|
8,966,235
|
| |
16.0
|
%
| |
$
|
7,233,458
|
| |
20.2
|
%
|
Homebuilding gross margin percentage
| |
15.0
|
%
| | | | |
18.7
|
%
| | | |
Adjusted homebuilding gross margin percentage
| |
16.0
|
%
| | | | |
20.2
|
%
| | | |
| | | | | | | | | | | |
|
Unconsolidated Joint Ventures - Homebuilding | | | | | | | | | | | | |
Home sales revenue
| |
$
|
224,497,517
| | |
100.0
|
%
| |
$
|
183,038,268
| | |
100.0
|
%
|
Cost of home sales
| |
174,301,905
|
| |
77.6
|
%
| |
133,310,014
|
| |
72.8
|
%
|
Homebuilding gross margin
| |
50,195,612
| | |
22.4
|
%
| |
49,728,254
| | |
27.2
|
%
|
Add: interest in cost of home sales
| |
2,885,249
|
| |
1.2
|
%
| |
3,256,806
|
| |
1.8
|
%
|
Adjusted homebuilding gross margin
| |
$
|
53,080,861
|
| |
23.6
|
%
| |
$
|
52,985,060
|
| |
29.0
|
%
|
Homebuilding gross margin percentage
| |
22.4
|
%
| | | | |
27.2
|
%
| | | |
Adjusted homebuilding gross margin percentage
| |
23.6
|
%
| | | | |
29.0
|
%
| | | |
| | | | | | | | | | | |
|
Unconsolidated Joint Ventures - Land | | | | | | | | | | | | |
Land sales revenue
| |
$
|
46,887,847
| | |
100.0
|
%
| |
-
| | |
n/a
|
Cost of land sales
| |
34,965,483
|
| |
74.6
|
%
| |
-
|
| |
n/a
|
Land gross margin
| |
11,922,364
| | |
25.4
|
%
| |
-
| | |
n/a
|
Add: interest in cost of land sales
| |
172,976
|
| |
0.4
|
%
| |
-
|
| |
n/a
|
Adjusted land gross margin
| |
$
|
12,095,340
|
| |
25.8
|
%
| |
$
|
-
|
| |
n/a
|
Land gross margin percentage
| |
25.4
|
%
| | | | |
n/a
| | | |
Adjusted land gross margin percentage
| |
25.8
|
%
| | | | |
n/a
| | | |
| | | | | | | | | | |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
The following table reconciles the Company’s ratio of debt-to-capital to
the ratio of net debt-to-capital. We believe that the ratio of net
debt-to-capital is a relevant financial measure for management and
investors to understand the leverage employed in our operations and as
an indicator of the Company’s ability to obtain financing.
|
| December 31, |
| | 2014 |
| 2013 |
Notes payable
| |
$
|
113,751,334
| | |
$
|
17,883,338
| |
Equity, exclusive of non-controlling interest
| |
148,083,678
|
| |
64,355,719
|
|
Total capital
| |
$
|
261,835,012
|
| |
$
|
82,239,057
|
|
Ratio of debt-to-capital (1) | |
43.4
|
%
| |
21.7
|
%
|
| | | | | |
|
Notes payable
| |
$
|
113,751,334
| | |
$
|
17,883,338
| |
Less: cash, cash equivalents and restricted cash
| |
44,340,090
|
| |
9,671,576
|
|
Net debt
| |
69,411,244
| | |
8,211,762
| |
Equity, exclusive of non-controlling interest
| |
148,083,678
|
| |
64,355,719
|
|
Total capital
| |
$
|
217,494,922
|
| |
$
|
72,567,481
|
|
Ratio of net debt-to-capital (2) | |
31.9
|
%
| |
11.3
|
%
|
| | | | | |
|
(1)
|
|
The ratio of debt-to-capital is computed as the quotient obtained by
dividing notes payable by the sum of total notes payable plus
equity, exclusive of non-controlling interest.
|
|
(2)
| |
The ratio of net debt-to-capital is computed as the quotient
obtained by dividing net debt (which is notes payable less cash to
the extent necessary to reduce the debt balance to zero) by total
capital, exclusive of non-controlling interest. The most directly
comparable GAAP financial measure is the ratio of debt-to-capital.
We believe the ratio of net debt-to-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 notes payable, 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 net of cash provides supplemental
information by which our financial position may be considered.
Investors may also find this to be helpful when comparing our
leverage to the leverage of our competitors that present similar
information. See the table above reconciling this non-GAAP financial
measure to the ratio of debt-to-capital.
|
Contacts:
The New Home Company
Investor Relations:
949-382-7838
investorrelations@nwhm.com
Source: The New Home Company
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