Current report Shea Homes Limited Partnership
8-K - Current report
Published: 2012-05-07 20:14:15
Submitted: 2012-05-08
Period Ending In: 2012-05-07
Submitted: 2012-05-08
Period Ending In: 2012-05-07
>
ENT> 8-K 1 d342390d8k.htm FORM 8-K
Form 8-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2012
SHEA HOMES LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
| CALIFORNIA | 333-177328 | 95-4240219 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
655 Brea Canyon Road, Walnut, California 91789
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (909) 594-9500
Not Applicable
(Former name or former address, if changed since last report):
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition |
On May 7, 2012, Shea Homes Limited Partnership issued a press release announcing its results of operations for the three months ended March 31, 2012. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein.
The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Shea Homes Limited Partnership under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act.
| Item 9.01. | Financial Statements and Exhibits |
The information contained in this Item 9.01 and in the accompanying Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Shea Homes Limited Partnership under the Securities Act or the Exchange Act.
(d) Exhibits
|
Exhibit Number |
Description |
|||
| 99.1 | Press Release dated May 7, 2012 | |||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SHEA HOMES LIMITED PARTNERSHIP | ||
| By: |
/s/ Bruce J. Varker |
|
| Name: | Bruce J. Varker | |
| Title: | Chief Financial Officer | |
Date: May 7, 2012
Exhibit Index
|
Exhibit Number |
Description |
|
| 99.1 | Press Release dated May 7, 2012 | |
ENT>
EX-99.1
2
d342390dex991.htm
PRESS RELEASE
Press Release
Exhibit 99.1
Shea Homes Reports First Quarter 2012 Results
Walnut, Calif., May 7, 2012
Shea Homes, one of America’s largest private
homebuilders, recently reported results for the first quarter ended March 31, 2012.
Three Months Ended 3/31/12 Highlights, Commentary
and Comparisons to Three Months Ended 3/31/11
• |
Total revenues were $105.6 million compared to $74.1 million, a 43% increase. |
• |
Gross margin was 19.5% compared to 14.3%, a 36% increase. |
• |
Homes closed were 238 compared to 182, a 31% increase. |
• |
House revenues were $100.9 million* compared to $71.2 million*, a 42% increase. |
• |
Average selling price of homes closed was $424,000 compared to $391,000, an 8% increase and primarily attributable to price increases in several
communities in our Southern California, Northern California and South West segments and product mix weighted to higher-priced homes in our Southern California, San Diego and Mountain West segments. |
• |
House gross margin was 20.7%* compared to 18.1%*, a 14% increase and primarily attributable to price increases in several communities in our Northern
California and South West segments and product mix weighted to higher-margin homes. |
• |
SG&A expense was $17.6 million compared to $16.4 million and primarily attributable to higher direct selling costs associated with higher house
revenues. As a percentage of revenue, SG&A expense was 16.7% compared to 22.2% in 2011. |
• |
Net loss attributable to Shea Homes was $0.4 million compared to $8.3 million. This decrease was primarily attributable to a $10.0 million increase in
homebuilding gross margin. |
• |
Interest incurred was $16.7 million compared to $19.7 million and, for the quarter, primarily attributable to a lower effective interest rate associated
with our $750.0 million senior secured notes issued in May 2011 (8.9%) compared to our previously outstanding indebtedness (11.3%) which was restructured in November 2010 and included higher yield subordinated debt, loan restructuring fees
and amortization of loan discounts. |
• |
Cash, restricted cash and investments at March 31, 2012 was $326.6 million compared to $314.5 million at December 31, 2011.
|
• |
Home sales were 499 compared to 346, a 44% increase. Active Selling Communities (ASC’s) averaged 71 and 77 in the first quarter of 2012 and 2011,
respectively. |
¡
|
Home sales per community were 7.0 homes or 2.3 per month this year compared to 4.5 homes or 1.5 per month last year, a 56% increase.
|
¡
|
Cancellation rate was 15% compared to 19%. |
• |
Backlog units at March 31, 2012 were 722 compared to 572 at March 31, 2011, a 26% increase. |
¡
|
Backlog sales value was $283.9 million at March 31, 2012 compared to $244.4 million at March 31, 2011, a 16% increase.
|
¡
|
Backlog average selling price was $393,000 at March 31, 2012 compared to $427,000 at March 31, 2011, an 8% decrease.
|
page 1
Bert Selva, President and CEO, stated: “We experienced strong first quarter results in
2012 compared to 2011, including a 44% increase in new home orders and a 56% increase in new home orders per community. In addition, house closings and revenues were up 31% and 42%, respectively, and house gross margins improved 260 basis points to
20.7%.”
“We are well positioned to take advantage of the housing market recovery. We have $313 million in cash and
investments and continue to invest in profitable land opportunities in desirable locations to supplement the favorable land positions we hold today. For the second year in a row, Shea Homes was honored as one of 50 top consumer brands in the country
to be named a JD Power “Customer Service Champion”. We believe this will further differentiate our brand in the homebuilding industry while driving lower selling costs from increased referrals.”
Redemption of Interest in Consolidated Joint Venture
In March 2012, Shea Homes Limited Partnership’s (“SHLP”) entire 58% interest in Shea Colorado, LLC (“SCLLC”), a consolidated joint venture with Shea Properties II, LLC, was redeemed
by SCLLC. The consideration received by SHLP was a distribution of cash, a secured note receivable, inventory and certain liabilities. Prior to the redemption, these distributed assets were not part of the collateral that secures our notes. The
estimated fair value of the assets received by SHLP, following the redemption and now included among the collateral securing our notes, was $30.8 million (unaudited). As a related party transaction among entities under common control, the
consideration received by SHLP was recorded at its net book value of $24.0 million. As a result of this redemption, SCLLC is excluded from SHLP’s consolidated financial statements effective March 31, 2012, which resulted in a net reduction
of $39.8 million in net assets and a corresponding reduction in total equity, of which $11.6 million was attributable to SHLP and $28.2 million to non-controlling interests.
Bert Selva stated: “As intended, this redemption transfers residential assets to Shea Homes in a fair and equitable manner while strengthening the collateral securing our notes.”
* |
See “Reconciliation of Non-GAAP Financial Measures” beginning on page 9. |
page 2
About Shea Homes
Shea Homes is one of the largest private homebuilders in the nation. Since its founding in 1968, Shea Homes has closed in excess of 88,000 homes. Shea Homes builds homes with quality craftsmanship and
designs that best fit varied lifestyles and budgets. Over the past several years, Shea Homes has been recognized as a leader in customer satisfaction with a reputation for design, quality and service. For more about Shea Homes and its communities,
visit www.sheahomes.com.
The preceding summary of the financial results of Shea Homes Limited Partnership and its subsidiaries does not
purport to be complete and is qualified in its entirety by reference to the consolidated financial statements of Shea Homes Limited Partnership and its subsidiaries, available on our website at: http://www.sheahomes.com/investor
This news release contains forward-looking statements and information relating to Shea Homes Limited Partnership and its subsidiaries that are based on
the beliefs of, as well as assumptions made by, and information currently available to, our management. When used in this document, words such as “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “plan” and “project” and similar expressions, as they relate to Shea Homes Limited Partnership and its subsidiaries are intended to identify forward-looking statements. These statements reflect our
management’s current views with respect to future events, are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Further, certain forward-looking statements are based upon assumptions of
future events that may not prove to be accurate. Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of Shea Homes Limited Partnership’s and its subsidiaries’ control and
difficult to forecast that may cause actual results to differ materially from those that may be described or implied. Such factors include but are not limited to: changes in employment levels; changes in the availability of financing for
homebuyers; changes in interest rates; changes in consumer confidence; changes in levels of new and existing homes for sale; changes in demographic trends; changes in housing demands; changes in home prices; elimination or reduction of the tax
benefits associated with owning a home; litigation risks associated with home warranty and construction defect and other claims; and various other factors, both referenced and not referenced above. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from those described as anticipated, believed, estimated, expected, intended, planned or projected. Except as required by
law, Shea Homes Limited Partnership and its subsidiaries neither intend nor assume any obligation to revise or update these forward-looking statements, which speak only as of their dates. Shea Homes Limited Partnership and its subsidiaries
nonetheless reserve the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate
that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
Contact: Bruce
Varker, CFO @ 909-594-9500 or bruce.varker@sheahomes.com
page 3
KEY OPERATIONAL AND FINANCIAL DATA
(dollars in thousands)
At or For the Three Months Ended March 31, |
||||||||||||
2012 |
2011 |
% Change |
||||||||||
(unaudited) |
(unaudited) |
|||||||||||
| Operating Data: |
||||||||||||
| Revenues |
$ |
105,603 |
$ |
74,059 |
43 |
% | ||||||
| Gross margin % |
19.5 |
% |
14.3 |
% |
36 |
% | ||||||
| Homebuilding revenues (a) * |
$ |
105,360 |
$ |
73,802 |
43 |
% | ||||||
| Homebuilding gross margin % (a) * |
19.3 |
% |
14.0 |
% |
37 |
% | ||||||
| House revenues * |
$ |
100,905 |
$ |
71,168 |
42 |
% | ||||||
| House gross margin % * |
20.7 |
% |
18.1 |
% |
14 |
% | ||||||
| Adjusted house gross margin % excluding interest in cost of sales * |
28.3 |
% |
26.2 |
% |
8 |
% | ||||||
| Inventory impairment |
$ |
— |
$ |
618 |
-100 |
% | ||||||
| SG&A expense |
$ |
17,603 |
$ |
16,441 |
7 |
% | ||||||
| SG&A % of total revenue |
16.7 |
% |
22.2 |
% |
-25 |
% | ||||||
| Net loss attributable to Shea Homes |
$ |
(411 |
) |
$ |
(8,289 |
) |
-95 |
% | ||||
| Adjusted EBITDA (b) * |
$ |
14,559 |
$ |
3,530 |
312 |
% | ||||||
| Interest incurred |
$ |
16,661 |
$ |
19,662 |
-15 |
% | ||||||
| Interest capitalized to inventory |
$ |
10,195 |
$ |
15,271 |
-33 |
% | ||||||
| Interest expense |
$ |
6,288 |
$ |
3,951 |
59 |
% | ||||||
| Interest in cost of sales (c) |
$ |
7,784 |
$ |
5,808 |
34 |
% | ||||||
| Other Data (d) : |
||||||||||||
| Home sales orders (units) |
499 |
346 |
44 |
% | ||||||||
| Homes closed (units) |
238 |
182 |
31 |
% | ||||||||
| Average selling price |
$ |
424 |
$ |
391 |
8 |
% | ||||||
| Average active selling communities |
71 |
77 |
-8 |
% | ||||||||
| Home sales orders per community |
7.0 |
4.5 |
56 |
% | ||||||||
| Cancellation rate |
15 |
% |
19 |
% |
-21 |
% | ||||||
| Backlog at end of period (units) |
722 |
572 |
26 |
% | ||||||||
| Backlog at end of period (sales value) |
$ |
283,899 |
$ |
244,390 |
16 |
% | ||||||
| Lots owned or controlled (units) |
17,803 |
16,528 |
8 |
% | ||||||||
| Homes under construction (units) (e) |
591 |
569 |
4 |
% | ||||||||
(a) |
Homebuilding revenue and gross margin include house, land and other homebuilding activities. |
(b) |
EBITDA is adjusted for non-recurring items of (1) professional fees related to debt issuance costs, modifications and waivers, (2) loss on debt
extinguishment, (3) deposit write-offs and impairment losses on real estate assets, investments in joint ventures and non-controlling interest, (4) realized (gains) losses on sales of marketable securities and other than temporary impairments
on marketable securities, and (5) restructuring costs, primarily severance. Other companies may calculate Adjusted EBITDA differently. Adjusted EBITDA information, as presented, is useful as a measure of the ability to service debt and obtain
financing; however, it is not a U.S. generally accepted accounting principle (“GAAP”) financial measure and should not be considered in isolation or as an alternative to operating performance or other liquidity measures prescribed by GAAP.
|
(c) |
As previously capitalized to house and land. |
(d) |
Represents consolidated activity only; excludes unconsolidated joint ventures. |
(e) |
Homes under construction includes completed homes. |
* |
See "Reconciliation of Non-GAAP Financial Measures" beginning on page 9. |
March 31, 2012 |
December 31, 2011 |
% Change |
||||||||||
(unaudited) |
||||||||||||
| Balance Sheet Data: |
||||||||||||
| Cash and cash equivalents, restricted cash and investments |
$ |
326,598 |
$ |
314,512 |
4 |
% | ||||||
| Inventory and investments in joint ventures |
788,292 |
801,680 |
-2 |
% | ||||||||
| Total assets |
1,292,700 |
1,328,116 |
-3 |
% | ||||||||
| Notes payable |
751,374 |
752,056 |
0 |
% | ||||||||
| Total equity |
290,831 |
328,003 |
-11 |
% | ||||||||
page 4
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2012 |
December 31, 2011 |
|||||||
(unaudited) |
||||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ |
278,338 |
$ |
268,366 |
||||
| Restricted cash |
13,886 |
13,718 |
||||||
| Investments |
34,374 |
32,428 |
||||||
| Accounts and other receivables, net |
112,267 |
120,689 |
||||||
| Receivables from related parties, net |
35,337 |
60,223 |
||||||
| Inventory |
770,734 |
783,810 |
||||||
| Investments in joint ventures |
17,558 |
17,870 |
||||||
| Other assets, net |
30,206 |
31,012 |
||||||
|
|
|
|
|
|||||
| Total assets |
$ |
1,292,700 |
$ |
1,328,116 |
||||
|
|
|
|
|
|||||
| Liabilities and equity |
||||||||
| Liabilities: |
||||||||
| Notes payable |
$ |
751,374 |
$ |
752,056 |
||||
| Other liabilities |
250,495 |
248,057 |
||||||
|
|
|
|
|
|||||
| Total liabilities |
1,001,869 |
1,000,113 |
||||||
| Total equity |
290,831 |
328,003 |
||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ |
1,292,700 |
$ |
1,328,116 |
||||
|
|
|
|
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
Three Months
Ended March 31, |
||||||||
2012 |
2011 |
|||||||
(unaudited) |
(unaudited) |
|||||||
| Revenues |
$ |
105,603 |
$ |
74,059 |
||||
| Cost of sales |
(85,035 |
) |
(63,446 |
) | ||||
|
|
|
|
|
|||||
| Gross margin |
20,568 |
10,613 |
||||||
| Selling, general and administrative expenses |
(17,603 |
) |
(16,441 |
) | ||||
| Interest and other expense, net |
(3,915 |
) |
(2,713 |
) | ||||
|
|
|
|
|
|||||
| Loss before income taxes |
(950 |
) |
(8,541 |
) | ||||
| Income tax benefit |
752 |
341 |
||||||
|
|
|
|
|
|||||
| Net loss |
(198 |
) |
(8,200 |
) | ||||
| Less: Net income attributable to non-controlling interests |
(213 |
) |
(89 |
) | ||||
|
|
|
|
|
|||||
| Net loss attributable to Shea Homes |
$ |
(411 |
) |
$ |
(8,289 |
) | ||
|
|
|
|
|
|||||
page 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months
Ended March 31, |
||||||||
2012 |
2011 |
|||||||
(unaudited) |
(unaudited) |
|||||||
| Operating activities |
||||||||
| Net loss |
$ |
(198 |
) |
$ |
(8,200 |
) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization expense |
1,812 |
1,547 |
||||||
| Impairment of inventory |
— |
618 |
||||||
| Other operating activities, net |
233 |
(186 |
) | |||||
| Changes in operating assets and liabilities: |
||||||||
| Inventory |
(3,908 |
) |
(30,576 |
) | ||||
| Payables and other liabilities |
3,240 |
(2,032 |
) | |||||
| Other operating assets |
8,581 |
659 |
||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) operating activities |
9,760 |
(38,170 |
) | |||||
| Investing activities |
||||||||
| Proceeds from sale of available-for-sale investments |
203 |
294 |
||||||
| Net (increase) decrease in promissory notes from related parties |
(108 |
) |
11,327 |
|||||
| Other investing activities, net |
(516 |
) |
(686 |
) | ||||
|
|
|
|
|
|||||
| Net cash (used in) provided by investing activities |
(421 |
) |
10,935 |
|||||
| Financing activities |
||||||||
| Net decrease in debt |
(601 |
) |
(21,287 |
) | ||||
| Amortization of notes payable discount |
— |
3,797 |
||||||
| Other financing activities, net |
1,234 |
1,278 |
||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
633 |
(16,212 |
) | |||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash and cash equivalents |
9,972 |
(43,447 |
) | |||||
| Cash and cash equivalents at beginning of period |
268,366 |
166,874 |
||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ |
278,338 |
$ |
123,427 |
||||
|
|
|
|
|
|||||
page 6
SEGMENT OPERATING DATA
(dollars in thousands)
(unaudited)
Three Months Ended March 31, |
||||||||||||||||
2012 |
2011 |
|||||||||||||||
Homes Closed |
Avg. Selling Price |
Homes Closed |
Avg. Selling Price |
|||||||||||||
| Homes closed: |
||||||||||||||||
| Southern California |
47 |
$ |
496 |
39 |
$ |
507 |
||||||||||
| San Diego |
27 |
522 |
11 |
519 |
||||||||||||
| Northern California |
57 |
453 |
34 |
465 |
||||||||||||
| Mountain West |
38 |
462 |
27 |
400 |
||||||||||||
| South West |
65 |
297 |
67 |
268 |
||||||||||||
| Other |
4 |
201 |
4 |
273 |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total consolidated |
238 |
$ |
424 |
182 |
$ |
391 |
||||||||||
| Unconsolidated joint ventures |
20 |
310 |
20 |
338 |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
258 |
$ |
415 |
202 |
$ |
386 |
||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Three Months Ended March 31, |
||||||||||||||||
2012 |
2011 |
|||||||||||||||
Home Sales Orders |
Avg.
Active Selling Communities |
Home Sales Orders |
Avg. Active Selling Communities |
|||||||||||||
| Home sales orders: |
||||||||||||||||
| Southern California |
70 |
10 |
80 |
12 |
||||||||||||
| San Diego |
53 |
11 |
40 |
10 |
||||||||||||
| Northern California |
121 |
15 |
42 |
12 |
||||||||||||
| Mountain West |
89 |
13 |
58 |
13 |
||||||||||||
| South West |
154 |
19 |
120 |
27 |
||||||||||||
| Other |
12 |
3 |
6 |
3 |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total consolidated |
499 |
71 |
346 |
77 |
||||||||||||
| Unconsolidated joint ventures |
43 |
12 |
39 |
13 |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
542 |
83 |
385 |
90 |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
At March 31, |
||||||||||||||||
2012 |
2011 |
|||||||||||||||
Backlog Units |
Backlog Sales Value |
Backlog Units |
Backlog Sales Value |
|||||||||||||
| Backlog: |
||||||||||||||||
| Southern California |
82 |
$ |
38,831 |
118 |
$ |
65,469 |
||||||||||
| San Diego |
65 |
27,037 |
71 |
36,697 |
||||||||||||
| Northern California |
169 |
85,626 |
84 |
43,483 |
||||||||||||
| Mountain West |
146 |
63,873 |
91 |
42,631 |
||||||||||||
| South West |
241 |
64,259 |
200 |
54,422 |
||||||||||||
| Other |
19 |
4,273 |
8 |
1,688 |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total consolidated |
722 |
$ |
283,899 |
572 |
$ |
244,390 |
||||||||||
| Unconsolidated joint ventures |
57 |
17,917 |
41 |
12,154 |
||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
779 |
$ |
301,816 |
613 |
$ |
256,544 |
||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
page 7
SEGMENT OPERATING DATA (continued)
(unaudited)
At March 31, |
||||||||
2012 |
2011 |
|||||||
| Lots owned or controlled: |
||||||||
| Southern California |
1,197 |
1,375 |
||||||
| San Diego |
752 |
866 |
||||||
| Northern California |
3,968 |
3,409 |
||||||
| Mountain West |
9,988 |
9,062 |
||||||
| South West |
1,846 |
1,737 |
||||||
| Other |
52 |
79 |
||||||
|
|
|
|
|
|||||
| Total consolidated |
17,803 |
16,528 |
||||||
| Unconsolidated joint ventures |
1,956 |
7,708 |
||||||
|
|
|
|
|
|||||
| Total |
19,759 |
24,236 |
||||||
|
|
|
|
|
|||||
| Lots by ownership type: |
||||||||
| Lots owned |
9,977 |
9,246 |
||||||
| Lots optioned or subject to contract |
7,826 |
7,282 |
||||||
| Joint venture lots |
1,956 |
7,708 |
||||||
|
|
|
|
|
|||||
| Total |
19,759 |
24,236 |
||||||
|
|
|
|
|
|||||
page 8
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands)
(unaudited)
In
this earnings release, we utilize certain financial measures and ratios, including Adjusted EBITDA, that in each case are not recognized under GAAP. These measures are presented as we believe they and similar measures are widely used as a means of
evaluating a company’s operating performance and financing structure and, in certain cases, because those measures could be used to determine compliance with contractual covenants. These measures are useful because they eliminate from our
operating results the impact of certain non-recurring income and expense items, which may facilitate comparability. They may not be comparable to other similarly titled measures of other companies and are not measurements under GAAP, nor should they
be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP.
The following reconciles
revenues, cost of sales and gross margins, as reported, to adjusted revenues, cost of sales and gross margins, which excludes impairment charges, interest in cost of sales, land sales and other transactions:
Three Months Ended March 31, 2012 |
Three Months Ended March 31, 2011 |
|||||||||||||||||||||||||||||||
Revenue |
Cost of Sales |
Gross Margin $ |
Gross Margin % |
Revenue |
Cost of Sales |
Gross Margin $ |
Gross Margin % |
|||||||||||||||||||||||||
| Total |
$ |
105,603 |
$ |
(85,035 |
) |
$ |
20,568 |
19.5 |
% |
$ |
74,059 |
$ |
(63,446 |
) |
$ |
10,613 |
14.3 |
% | ||||||||||||||
| Less: Other |
(243 |
) |
(243 |
) |
(257 |
) |
(257 |
) |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Homebuilding |
105,360 |
(85,035 |
) |
20,325 |
19.3 |
% |
73,802 |
(63,446 |
) |
10,356 |
14.0 |
% | ||||||||||||||||||||
| Less: Land |
(3,963 |
) |
1,749 |
(2,214 |
) |
55.9 |
% |
(1,873 |
) |
1,552 |
(321 |
) |
17.1 |
% | ||||||||||||||||||
| Less: Impairment |
— |
— |
— |
— |
618 |
618 |
||||||||||||||||||||||||||
| Less: Other homebuilding |
(492 |
) |
3,310 |
2,818 |
(761 |
) |
2,977 |
2,216 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| House |
$ |
100,905 |
$ |
(79,976 |
) |
$ |
20,929 |
20.7 |
% |
$ |
71,168 |
$ |
(58,299 |
) |
$ |
12,869 |
18.1 |
% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Add: Interest in house cost of sales (a) |
7,654 |
7,654 |
5,808 |
5,808 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted house excluding interest in cost of sales |
$ |
100,905 |
$ |
(72,322 |
) |
$ |
28,583 |
28.3 |
% |
$ |
71,168 |
$ |
(52,491 |
) |
$ |
18,677 |
26.2 |
% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(a) |
Interest incurred is generally capitalized to inventory, then expensed in cost of sales as related units close. |
page 9
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(in thousands)
(unaudited)
The following reconciles net loss to adjusted EBITDA:
Three Months Ended March 31, |
||||||||
2012 |
2011 |
|||||||
| Net loss |
$ |
(198 |
) |
$ |
(8,200 |
) | ||
| Adjustments: |
||||||||
| Income tax benefit |
(752 |
) |
(341 |
) | ||||
| Depreciation and amortization expense |
1,812 |
1,547 |
||||||
| Interest in cost of sales (a) |
7,784 |
5,808 |
||||||
| Interest in equity in income (loss) from joint ventures (b) |
177 |
243 |
||||||
| Interest expense (c) |
6,288 |
3,951 |
||||||
| Impairment
(d) |
— |
618 |
||||||
| Project write-offs and abandonments (e) |
252 |
20 |
||||||
| Realized gain on marketable securities (f) |
(22 |
) |
(139 |
) | ||||
| Restructuring costs (g) |
14 |
154 |
||||||
| Deferred gain recognition from PIC Transaction (h) |
(796 |
) |
(131 |
) | ||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
$ |
14,559 |
$ |
3,530 |
||||
|
|
|
|
|
|||||
(a) |
Interest incurred is generally capitalized to inventory, then expensed in cost of sales as related units close. |
(b) |
Interest incurred is generally capitalized to investment in joint ventures, then expensed in equity in income (loss) from joint ventures as related units close.
|
(c) |
Interest is expensed to the extent assets qualifying for interest capitalization do not exceed debt. |
(d) |
Impairment losses on real estate assets held and used in operations and investments in joint ventures. |
(e) |
Includes non-refundable deposits and costs associated with preparatory due diligence for land acquisitions subsequently abandoned. |
(f) |
Includes other than temporary gains on sale of marketable securities. |
(g) |
Costs of our restructuring plan, implemented in 2007 and continuing into 2012, comprised primarily of severance. |
(h) |
Amortization of deferred gain resulting from a series of novation and reinsurance transactions ("PIC Transaction") entered into by Partners Insurance Company ("PIC"), an
indirect, wholly-owned subsidiary. |
page 10
Additional Files
| File | Sequence | Description | Type | Size |
|---|---|---|---|---|
| 0001193125-12-215848.txt | Complete submission text file | 300965 |
© 2019 SEC.report
SEC CFR Title 17 of the Code of Federal Regulations.