CURRENT REPORT |
Pursuant to Section 13 or 15(d) of Securities Exchange Act of 1934 |
(Exact name of registrant as specified in its charter) | ||||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) |
N/A |
(Former name or former address, if changed since last report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Exhibit No. | Description of Exhibit | |
99.1 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document).* |
By: | /s/ Ann Marie W. Hunker |
Ann Marie W. Hunker | |
Vice President, Controller and Chief Accounting Officer |
• | New contracts increased 43% to a fourth quarter record of 1,677 contracts |
• | Backlog sales value increased 18% to a fourth quarter record $1.1 billion, and backlog units increased 22% |
• | Revenue increased 3% to a fourth quarter record of $742 million |
• | Homes delivered increased 5% to an all-time quarterly record 1,921 homes |
• | Pre-tax income increased 16% to $51.3 million from $44.4 million in 2018 |
• | Net income increased 29% to a fourth quarter record $41.8 million from $32.4 million in 2018, and diluted earnings per share increased to $1.44 compared with $1.15 per diluted share. |
• | Record revenue of $2.5 billion, an increase of 9% |
• | Record homes delivered of 6,296, a 9% increase |
• | Record new contracts of 6,773, an increase of 16% |
• | Record pre-tax income of $166.0 million, an 18% increase compared to $141.3 million in 2018 |
• | Net income increased to $127.6 million compared to $107.7 million in 2018 and diluted earnings per share increased to $4.48 from $3.70 per diluted share |
• | Shareholders’ equity reached an all-time record of $1.0 billion, a 17% increase from a year ago, with book |
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
New contracts | 1,677 | 1,173 | 6,773 | 5,845 | |||||||||||
Average community count | 223 | 211 | 218 | 205 | |||||||||||
Cancellation rate | 13 | % | 18 | % | 13 | % | 15 | % | |||||||
Backlog units | 2,671 | 2,194 | 2,671 | 2,194 | |||||||||||
Backlog sales value | $ | 1,057,528 | $ | 896,714 | $ | 1,057,528 | $ | 896,714 | |||||||
Homes delivered | 1,921 | 1,825 | 6,296 | 5,778 | |||||||||||
Average home closing price | $ | 377 | $ | 383 | $ | 384 | $ | 384 | |||||||
Homebuilding revenue: | |||||||||||||||
Housing revenue | $ | 724,790 | $ | 698,919 | $ | 2,420,348 | $ | 2,217,197 | |||||||
Land revenue | 1,577 | 10,465 | 24,619 | 16,889 | |||||||||||
Total homebuilding revenue | $ | 726,367 | $ | 709,384 | $ | 2,444,967 | $ | 2,234,086 | |||||||
Financial services revenue | 15,783 | 13,101 | 55,323 | 52,196 | |||||||||||
Total revenue | $ | 742,150 | $ | 722,485 | $ | 2,500,290 | $ | 2,286,282 | |||||||
Cost of sales - operations | 594,373 | 586,039 | 2,005,222 | 1,831,557 | |||||||||||
Cost of sales - acquisition-related charges | — | 598 | 639 | 5,147 | |||||||||||
Cost of sales - impairment | 5,002 | 5,809 | 5,002 | 5,809 | |||||||||||
Gross margin | 142,775 | 130,039 | 489,427 | 443,769 | |||||||||||
General and administrative expense | 41,706 | 38,265 | 147,954 | 137,779 | |||||||||||
Selling expense | 45,234 | 42,121 | 154,384 | 142,829 | |||||||||||
Operating income | 55,835 | 49,653 | 187,089 | 163,161 | |||||||||||
Acquisition and integration costs | — | — | — | 1,700 | |||||||||||
Equity in income from joint venture arrangements | (193 | ) | (44 | ) | (311 | ) | (312 | ) | |||||||
Interest expense | 4,749 | 5,292 | 21,375 | 20,484 | |||||||||||
Income before income taxes | 51,279 | 44,405 | 166,025 | 141,289 | |||||||||||
Provision for income taxes | 9,499 | 11,998 | 38,438 | 33,626 | |||||||||||
Net income | $ | 41,780 | $ | 32,407 | $ | 127,587 | $ | 107,663 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 1.48 | $ | 1.17 | $ | 4.58 | $ | 3.81 | |||||||
Diluted | $ | 1.44 | $ | 1.15 | $ | 4.48 | $ | 3.70 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 28,297 | 27,774 | 27,846 | 28,234 | |||||||||||
Diluted | 29,049 | 28,181 | 28,475 | 29,178 |
As of | |||||||
December 31, | |||||||
2019 | 2018 | ||||||
Assets: | |||||||
Total cash, cash equivalents and restricted cash | $ | 6,083 | $ | 21,529 | |||
Mortgage loans held for sale | 155,244 | 169,651 | |||||
Inventory: | |||||||
Lots, land and land development | 858,065 | 778,943 | |||||
Land held for sale | 5,670 | 12,633 | |||||
Homes under construction | 756,998 | 730,390 | |||||
Other inventory | 148,774 | 152,494 | |||||
Total Inventory | $ | 1,769,507 | $ | 1,674,460 | |||
Property and equipment - net | 22,118 | 29,395 | |||||
Operating lease right-of-use assets | 18,415 | — | |||||
Goodwill | 16,400 | 16,400 | |||||
Investments in joint venture arrangements | 37,885 | 35,870 | |||||
Deferred income tax asset | 9,631 | 13,482 | |||||
Other assets | 70,311 | 60,794 | |||||
Total Assets | $ | 2,105,594 | $ | 2,021,581 | |||
Liabilities: | |||||||
Debt - Homebuilding Operations: | |||||||
Senior notes due 2021 - net | $ | 298,988 | $ | 297,884 | |||
Senior notes due 2025 - net | 247,092 | 246,571 | |||||
Notes payable - homebuilding | 66,000 | 117,400 | |||||
Notes payable - other | 5,828 | 5,938 | |||||
Total Debt - Homebuilding Operations | $ | 617,908 | $ | 667,793 | |||
Notes payable bank - financial services operations | 136,904 | 153,168 | |||||
Total Debt | $ | 754,812 | $ | 820,961 | |||
Accounts payable | 125,026 | 131,511 | |||||
Operating lease liabilities | 18,415 | — | |||||
Other liabilities | 203,864 | 213,806 | |||||
Total Liabilities | $ | 1,102,117 | $ | 1,166,278 | |||
Shareholders’ Equity | 1,003,477 | 855,303 | |||||
Total Liabilities and Shareholders’ Equity | $ | 2,105,594 | $ | 2,021,581 | |||
Book value per common share | $ | 35.35 | $ | 31.08 | |||
Homebuilding debt / capital ratio(1) | 38 | % | 44 | % |
(1) | The ratio of homebuilding debt to capital is calculated as the carrying value of our homebuilding debt outstanding divided by the sum of the carrying value of our homebuilding debt outstanding plus shareholders’ equity. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash provided by (used in) operating activities | $ | 64,654 | $ | 72,527 | $ | 65,631 | $ | (2,592 | ) | ||||||
Cash used in investing activities | $ | (1,884 | ) | $ | (13,655 | ) | $ | (27,594 | ) | $ | (133,957 | ) | |||
Cash (used in) provided by financing activities | $ | (90,138 | ) | $ | (73,703 | ) | $ | (53,483 | ) | $ | 6,375 | ||||
Land/lot purchases | $ | 73,619 | $ | 74,050 | $ | 332,057 | $ | 330,548 | |||||||
Land development spending | $ | 82,839 | $ | 69,667 | $ | 268,347 | $ | 221,923 | |||||||
Land sale revenue | $ | 1,577 | $ | 10,465 | $ | 24,619 | $ | 16,889 | |||||||
Land sale gross profit | $ | (32 | ) | $ | 1,493 | $ | 498 | $ | 2,045 | ||||||
Financial services pre-tax income | $ | 6,420 | $ | 5,353 | $ | 23,699 | $ | 24,213 |
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | 41,780 | $ | 32,407 | $ | 127,587 | $ | 107,663 | |||||||
Add: | |||||||||||||||
Provision for income taxes | 9,499 | 11,998 | 38,438 | 33,626 | |||||||||||
Interest expense, net of interest income | 3,727 | 4,225 | 17,515 | 16,990 | |||||||||||
Interest amortized to cost of sales | 8,802 | 8,112 | 29,411 | 25,457 | |||||||||||
Depreciation and amortization | 4,154 | 3,777 | 15,950 | 14,531 | |||||||||||
Non-cash charges | 6,762 | 8,012 | 10,848 | 11,783 | |||||||||||
Adjusted EBITDA | $ | 74,724 | $ | 68,531 | $ | 239,749 | $ | 210,050 |
Three Months Ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Income before income taxes | $ | 51,279 | $ | 44,405 | $ | 166,025 | $ | 141,289 | |||||||
Add: Impairment (2) | 5,002 | 5,809 | 5,002 | 5,809 | |||||||||||
Add: Acquisition-related charges (3) | — | 598 | 639 | 5,147 | |||||||||||
Add: Acquisition and integration costs (4) | — | — | — | 1,700 | |||||||||||
Adjusted income before income taxes | $ | 56,281 | $ | 50,812 | $ | 171,666 | $ | 153,945 | |||||||
Net income | $ | 41,780 | $ | 32,407 | $ | 127,587 | $ | 107,663 | |||||||
Add: Impairment - net of tax (2) | 3,802 | 4,415 | 3,802 | 4,415 | |||||||||||
Add: Acquisition-related charges - net of tax (3) | — | 454 | 486 | 3,912 | |||||||||||
Add: Acquisition and integration costs - net of tax (4) | — | — | — | 1,292 | |||||||||||
Adjusted net income | $ | 45,582 | $ | 37,276 | $ | 131,875 | $ | 117,282 | |||||||
Impairment - net of tax (2) | $ | 3,802 | $ | 4,415 | $ | 3,802 | $ | 4,415 | |||||||
Acquisition-related charges - net of tax (3) | $ | — | $ | 454 | $ | 486 | $ | 3,912 | |||||||
Acquisition and integration costs - net of tax (4) | $ | — | $ | — | $ | — | $ | 1,292 | |||||||
Divided by: Diluted weighted average shares outstanding | 29,049 | 28,181 | 28,475 | 29,178 | |||||||||||
Diluted earnings per share related to impairment (2) | $ | 0.13 | $ | 0.15 | $ | 0.13 | $ | 0.15 | |||||||
Diluted earnings per share related to acquisition-related charges (3) | — | 0.02 | 0.02 | 0.13 | |||||||||||
Diluted earnings per share related to acquisition and integration costs (4) | — | — | — | 0.05 | |||||||||||
Add: Diluted earnings per share | 1.44 | 1.15 | 4.48 | 3.70 | |||||||||||
Adjusted diluted earnings per share | $ | 1.57 | $ | 1.32 | $ | 4.63 | $ | 4.03 |
(1) | We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. These non-GAAP financial measures should be used to supplement our GAAP results in order to provide a greater understanding of the factors and trends affecting our operations. |
(2) | Represents the related charges divided by diluted weighted average shares outstanding during the respective period as presented in the Summary Statement of Income. |
(3) | Represents purchase accounting adjustments related to our acquisition of Pinnacle Homes in Detroit, Michigan on March 1, 2018. |
(4) | Represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses, and miscellaneous expenses related to our acquisition of Pinnacle Homes. As these costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred. |
NEW CONTRACTS | ||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
% | % | |||||||||||||||||
Region | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||
Northern | 655 | 415 | 58 | % | 2,695 | 2,306 | 17 | % | ||||||||||
Southern | 1,022 | 758 | 35 | % | 4,078 | 3,539 | 15 | % | ||||||||||
Total | 1,677 | 1,173 | 43 | % | 6,773 | 5,845 | 16 | % |
HOMES DELIVERED | ||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
% | % | |||||||||||||||||
Region | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||
Northern | 743 | 769 | (3 | )% | 2,482 | 2,317 | 7 | % | ||||||||||
Southern | 1,178 | 1,056 | 12 | % | 3,814 | 3,461 | 10 | % | ||||||||||
Total | 1,921 | 1,825 | 5 | % | 6,296 | 5,778 | 9 | % |
BACKLOG | ||||||||||||||||||||||
December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Dollars | Average | Dollars | Average | |||||||||||||||||||
Region | Units | (millions) | Sales Price | Units | (millions) | Sales Price | ||||||||||||||||
Northern | 1,143 | $ | 495 | $ | 433,000 | 930 | $ | 410 | $ | 441,000 | ||||||||||||
Southern | 1,528 | $ | 563 | $ | 368,000 | 1,264 | $ | 486 | $ | 385,000 | ||||||||||||
Total | 2,671 | $ | 1,058 | $ | 396,000 | 2,194 | $ | 897 | $ | 409,000 |
LAND POSITION SUMMARY | ||||||||||||||
December 31, 2019 | December 31, 2018 | |||||||||||||
Lots | Lots Under | Lots | Lots Under | |||||||||||
Region | Owned | Contract | Total | Owned | Contract | Total | ||||||||
Northern | 6,857 | 6,207 | 13,064 | 5,644 | 6,460 | 12,104 | ||||||||
Southern | 7,809 | 12,386 | 20,195 | 8,419 | 8,200 | 16,619 | ||||||||
Total | 14,666 | 18,593 | 33,259 | 14,063 | 14,660 | 28,723 |
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