{"id":9517,"date":"2023-09-05T00:23:37","date_gmt":"2023-09-05T05:23:37","guid":{"rendered":"https:\/\/1reason.com\/re\/landsea-homes-reports-second-quarter-2023-results\/9517\/"},"modified":"2023-09-05T19:23:38","modified_gmt":"2023-09-06T00:23:38","slug":"landsea-homes-reports-second-quarter-2023-results","status":"publish","type":"post","link":"https:\/\/1reason.com\/re\/landsea-homes-reports-second-quarter-2023-results\/9517\/","title":{"rendered":"Landsea Homes Reports Second Quarter 2023 Results"},"content":{"rendered":"
01, 2023 (GLOBE NEWSWIRE) — Landsea Homes Corporation (Nasdaq: LSEA) (\u201cLandsea Homes\u201d or the \u201cCompany\u201d), a publicly traded homebuilder, reported financial results for the second quarter ended June30, 2023. For the quarter, the Company reported pretax net income of $7.5 million, and net income of $4.9 million, or $0.12 per share. Prior year reported pretax net income was $23.2 million with net income of $14.9 million, or $0.34 per share. Adjusted net income (a non-GAAP measure) was $13.0 million or $0.33 per share. For the prior year period adjusted net income was $30.8 million, or $0.71 per share. <\/p>\n

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

\u201cLandsea Homes made solid progress on a number of fronts in the second quarter of 2023, generating healthy profits and strong order results while executing on its long-term strategy of continued market expansion\u201d, said John Ho, Landsea Homes\u2019 Chief Executive Officer. \u201cWe recorded net income of $4.9 million for the quarter, or $0.12 per diluted share, largely driven by a new home delivery total that came in well in excess of our stated guidance. We were able to sell and close homes in a more timely manner during the quarter thanks in large part to improvements we\u2019ve seen with the supply chain and product availability. We are optimistic that we\u2019ll see further improvement in the back half of the year.\u201d<\/p>\n

Mr. Ho continued, \u201cWe remain focused on scaling our operations in high-growth markets to achieve better economies of scale. To that end, we announced the closing of a $250.0 million private placement notes offering last month, which will provide us with the necessary capital to fuel the next phase of our company\u2019s growth. We have made great strides in establishing a significant presence in our markets through both acquisitions and organic growth, and we look forward to building on that success in the near future.\u201d<\/p>\n

Mr. Ho concluded, \u201cWe believe that housing industry fundamentals continue to favor the new home market due to a lack of existing home inventory, and that Landsea is well positioned to capitalize on this dynamic. We have strategically expanded into some of the best and fastest growing MSAs in the country with great long-term demand outlooks. In addition, our High-Performance Home series is designed to stand out from the competition and appeal to today\u2019s entry level and first move-up buyer. As a result, I remain confident in our company\u2019s prospects for the remainder of the year and beyond.\u201d<\/p>\n

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

Total revenue was $293.2 million in the second quarter, down 20.5% compared to the second quarter of 2022, primarily driven by a 5.8% decrease in homes closed and a 11.7% decrease in average sales price.<\/p>\n

New homes delivered totaled 539 homes at an average sales price of $541,000 compared to 572 homes delivered at an average sales price of $613,000 in the second quarter of 2022.<\/p>\n

Net new home orders were 565 homes with a dollar value of $324.4 million, an average sales price of $574,000 and a monthly absorption rate of 3.3 sales per active community. This compares to 538 homes with a dollar value of $322.5 million, an average sales price of $599,000 and a monthly absorption rate of 3.3 sales per active community in the prior year period. Strong demand continued throughout the quarter and into July. As a percentage of gross orders, cancellations equaled 11.0% as compared to 15.9% in the prior quarter and 11.1% a year ago.<\/p>\n

Total homes in backlog were 722 homes with a dollar value of $455.8 million and an average sales price of $631,000 at June30, 2023. This compares to 1,571 homes with a dollar value of $902.1 million and an average sales price of $574,000 at June30, 2022.<\/p>\n

Total lots owned or controlled at June30, 2023, was 11,008 compared to 13,017 at June30, 2022. We continue to leverage our asset-light strategy, controlling 54.4% of our lots at the end of the second quarter of 2023.<\/p>\n

Home sales gross margin was 17.4% compared to 21.3% in the prior year period. Excluding a $4.7 million inventory impairment, our home sales gross margin was 19.0%. Adjusted home sales gross margin (a non-GAAP measure) was 23.5% compared to 29.1% in the prior year period. The decrease was primarily attributed to the increase in sales discounts and incentives.<\/p>\n

Net income attributable to Landsea Homes was $4.9 million compared to $14.9 million in the prior year period. Adjusted net income attributable to Landsea Homes (a non-GAAP measure) was $13.0 million compared to $30.8 million in the prior year period. Net income per share on a fully diluted basis was $0.12 compared to $0.34 in the second quarter of 2022. Adjusted net income per share (a non-GAAP measure) on a fully diluted basis was $0.33 compared to $0.71 in the second quarter of 2022.<\/p>\n

Adjusted EBITDA (a non-GAAP measure) was $27.0 million compared to $56.6 million in the prior year period.<\/p>\n

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

As of June30, 2023, the Company had total liquidity of $261.1 million consisting of cash and cash equivalents and cash held in escrow of $76.1 million and $185.0 million in availability under the Company\u2019s $675.0 million unsecured revolving credit facility. Total debt was $482.7 million compared to $505.4 million at December31, 2022.<\/p>\n

Landsea Homes\u2019 ratio of debt to capital was 40.4% at June30, 2023 and the Company\u2019s net debt to total capital (a non-GAAP measure) was 34.0% at June30, 2023.<\/p>\n

2023 Outlook<\/strong><\/p>\n

Third quarter<\/strong> 2023<\/strong><\/p>\n