{"id":11067,"date":"2024-03-20T13:23:08","date_gmt":"2024-03-20T18:23:08","guid":{"rendered":"https:\/\/1reason.com\/re\/landsea-homes-reports-fourth-quarter-and-full-year-2023-results\/11067\/"},"modified":"2024-03-21T08:23:08","modified_gmt":"2024-03-21T13:23:08","slug":"landsea-homes-reports-fourth-quarter-and-full-year-2023-results","status":"publish","type":"post","link":"https:\/\/1reason.com\/re\/landsea-homes-reports-fourth-quarter-and-full-year-2023-results\/11067\/","title":{"rendered":"Landsea Homes Reports Fourth Quarter and Full Year 2023 Results"},"content":{"rendered":"
29, 2024 (GLOBE NEWSWIRE) — Landsea Homes Corporation (Nasdaq: LSEA) (\u201cLandsea Homes\u201d or the \u201cCompany\u201d), a publicly traded homebuilder, reported financial results for the fourth quarter and full year ended December31, 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. <\/p>\n

Management Commentary<\/strong><\/p>\n

\u201cLandsea 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\u201d, said John Ho, Landsea Homes\u2019 Chief Executive Officer. \u201cNet 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.\u201d<\/p>\n

Mr. Ho continued, \u201c2023 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.\u201d<\/p>\n

Mr. Ho added, \u201cFollowing 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.\u201d<\/p>\n

Fourth<\/strong> Quarter Operating Results<\/strong><\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

Adjusted EBITDA (a non-GAAP measure) was $40.3 million compared to $53.9 million in the prior year period.<\/p>\n

Full Year <\/strong>2023<\/strong> Operating Results<\/strong><\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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 December31, 2022.<\/p>\n

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.<\/p>\n

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 $47.9million or $1.22 per diluted share compared to $123.3 million and $2.85 in the prior year.<\/p>\n

Adjusted EBITDA (a non-GAAP measure) was $112.3 million compared to $208.0 million in the prior year.<\/p>\n

Balance Sheet<\/strong><\/p>\n

As of December31, 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\u2019s $675.0 million unsecured revolving credit facility. Total debt, net of issuance costs, was $543.8 million at December31, 2023 compared to $505.4 million at December31, 2022.<\/p>\n

Landsea Homes\u2019 ratio of debt to capital was 44.1% at December31, 2023 and the Company\u2019s net debt to total capital (a non-GAAP measure) was 30.4% at December31, 2023. This compares to a debt to capital ratio of 41.6% and a net debt to total capital ratio of 30.0% at December31, 2022.<\/p>\n

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 December31, 2023 was $17.88, an 11.4% increase over December31, 2022.<\/p>\n

Mr. Ho concluded, \u201cLandsea 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.\u201d<\/p>\n

2024<\/strong> Outlook<\/strong><\/p>\n

First quarter<\/strong> 2024<\/strong><\/p>\n