CalAtlantic Group, Inc. Reports 2015 Third Quarter Results

Revenues increase to $626.0 million, up 4%

Q3 2015 backlog value of $1.7 billion, up 47% from Q3 2014

As previously announced, on October 1, 2015, Standard Pacific Corp. and The Ryland Group, Inc. completed their merger of equals, with Ryland merging into Standard Pacific and Standard Pacific continuing as the surviving corporation. At the same time: (i) Standard Pacific changed its name to "CalAtlantic Group, Inc." and effected a reverse stock split such that each five shares of common stock of Standard Pacific issued and outstanding immediately prior to the closing of the merger were combined and converted into one issued and outstanding share of CalAtlantic common stock, (ii) MP CA Homes, LLC, the sole owner of Standard Pacific's outstanding Series B Preferred Stock, converted all of its preferred stock to CalAtlantic common stock, and (iii) each outstanding share of Ryland common stock, stock options and restricted stock units were converted into the right to receive, or the option to acquire, as applicable, 1.0191 shares of CalAtlantic common stock. Cash was paid in lieu of all fractional shares.

Because the closing of the merger occurred after the third quarter was completed, the highlights and comparisons below and the other financial information included in this earnings release relate solely to Standard Pacific on a stand-alone basis and do not include Ryland's results of operations. For informational purposes, limited Ryland operating data is presented in the tables at the end of this release.

Additionally, even though the reverse stock split also occurred following completion of the third quarter, applicable accounting rules provide that the Company is required to restate per share information for all periods presented as if the reverse stock split had been implemented for such periods. Those same accounting rules, however, do not allow the Company to include the MP CA Homes, LLC conversion of its Series B Preferred Stock, which occurred at the same time as the reverse stock split, into the restated share information. Please take this into account when evaluating the per share information presented below.

Nov 04, 2015, 16:02 ET from CalAtlantic Group, Inc.

IRVINE, Calif., Nov. 4, 2015 /PRNewswire/ -- CalAtlantic Group, Inc. (NYSE: CAA) today announced results for the third quarter ended September 30, 2015.

2015 Standard Pacific Stand-Alone Third Quarter Highlights and Comparisons to 2014 Third Quarter

  • Net new orders of 1,326, up 15%; Dollar value of net new orders up 35%
  • Backlog of 2,733 homes, up 24%; Dollar value of backlog up 47%
  • 215 average active selling communities, up 16%
  • 1,165 new home deliveries, down 7%
  • Average selling price of $537 thousand, up 11%
  • Home sale revenues of $626.0 million, up 4%
  • Gross margin from home sales of 25.3%, compared to 26.3%
  • Operating margin from home sales of $85.4 million, or 13.6%, compared to $88.7 million, or 14.7%
  • Net income of $47.2 million, or $0.59 per diluted share, vs. net income of $56.6 million, or $0.70 per diluted share
    • Results include $11.2 million of transaction related costs
  • $262.2 million of land purchases and development costs, compared to $251.2 million

Orders.  Net new orders for the 2015 third quarter were up 15% from the 2014 third quarter, to 1,326 homes, with the dollar value of these orders up 35%, and the Company's monthly sales absorption rate was 2.1 per community for the 2015 third quarter, flat from the 2014 third quarter and down 20% from the 2015 second quarter, consistent with normal seasonal patterns.  The Company's cancellation rate for the 2015 third quarter was 19%, slightly below the 2014 third quarter and up from 15% for the 2015 second quarter.  Our 2015 third quarter cancellation rate remains below our average historical cancellation rate of approximately 22% over the last 10 years.

Backlog.  The dollar value of homes in backlog increased 47% to $1.7 billion, or 2,733 homes, compared to $1.1 billion, or 2,208 homes, for the 2014 third quarter, and increased 12% compared to $1.5 billion, or 2,572 homes, for the 2015 second quarter.  The increase in year-over-year backlog value was driven primarily by our continued growth in community count and the corresponding increase in orders and a 19% increase in the average selling price of the homes in backlog, reflecting the product mix shift to more move-up and luxury  homes and continued pricing power in many of our markets.

Revenue.  Revenues from home sales for the 2015 third quarter increased 4%, to $626.0 million, as compared to the prior year period, resulting from an 11% increase in the Company's average home price to $537 thousand, the highest quarterly average home price in Company history, partially offset by a 7% decrease in new home deliveries.  The increase in average home price was primarily attributable to a shift to more move-up product and general price increases within a majority of the Company's markets. 

Gross Margin.  Gross margin percentage from home sales for the 2015 third quarter was 25.3%, up 70 basis points from last quarter, consistent with the Company's expectations. 

Land.  During the 2015 third quarter, the Company spent $262.2 million on land purchases and development costs, compared to $251.2 million for the 2014 third quarter. The Company purchased $126.0 million of land, consisting of 1,831 homesites, of which 58% (based on homesites) is located in the California, 19% in the Carolinas, 12% in Texas, 10% in Florida and approximately 1% in Colorado.  As of September 30, 2015, the Company owned or controlled 35,515 homesites, of which 24,439 were owned and actively selling or under development, 7,172 were controlled or under option, and the remaining 3,904 homesites were held for future development or for sale. 

Liquidity.  The Company ended the quarter with $279 million of available liquidity, including $98 million of unrestricted homebuilding cash and $181 million available to borrow under its revolving credit facility. The revolving credit facility was replaced on October 5, 2015 with a new $750 million revolving credit facility.  The new facility has an accordion feature under which the aggregate commitment may be increased from $750 million to a maximum amount of $1.2 billion, subject to the Company's future needs and the availability of additional bank capacity.  The new facility matures on October 5, 2019.  The Company's homebuilding debt to book capitalization as of September 30, 2015 and 2014 was 56.8% and 52.9%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 55.4%* and 52.2%*, respectively.  In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the LTM period ending September 30, 2015 and 2014 was 4.9x* and 3.7x*, respectively.  

Earnings Conference Call

A conference call to discuss the Company's 2015 third quarter results will be held at 12:00 p.m. Eastern time November 5, 2015.  The call will be broadcast live over the Internet and can be accessed through the Company's website at http://investors.calatlantichomes.com.  The call will also be accessible via telephone by dialing (888) 500-6974 (domestic) or (719) 325-2199 (international); Passcode: 371721.  The audio transmission with the slide presentation will be available on our website for replay within 2 to 3 hours following the live broadcast, and can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode: 371721.  

About CalAtlantic Group, Inc.

CalAtlantic Group, Inc. (NYSE: CAA), a combination of Standard Pacific Corp. and Ryland Group, Inc., two of the nation's largest and most respected homebuilders, offers well-crafted homes in thoughtfully designed communities that meet the desires of customers across the homebuilding spectrum, from entry level to luxury, in 41 Metropolitan Statistical Areas spanning 17 states.  With a trusted reputation for quality craftsmanship, an outstanding customer experience and exceptional architectural design earned over its 50 year history, CalAtlantic Group, Inc. utilizes its over five decades of land acquisition, development and homebuilding expertise to acquire and build desirable communities in locations that meet the high expectations of the company's homebuyers.  We invite you to learn more about us by visiting www.calatlantichomes.com.

This news release contains forward-looking statements.  These statements include but are not limited to statements regarding new home orders; deliveries; backlog; absorption rates; cancellation rates; average home price; revenue; profitability; cash flow; liquidity; gross margin; operating margin; product mix; land supply; our future cash needs and the availability of additional bank commitments.  Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company's 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:  local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions, terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company's business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company's mortgage banking operations; future business decisions and the Company's ability to successfully implement the Company's operational and other strategies; litigation and warranty claims; and other risks discussed in the Company's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2014 and subsequent Quarterly Reports on Form 10-Q.  The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements.  The Company nonetheless reserves 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: Jeff McCall, EVP & CFO (949) 789-1655, jeff.mccall@calatl.com

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

(Note: Tables Follow)

 

KEY STATISTICS AND FINANCIAL DATA1

As of or For the Three Months Ended

September 30,

2015

September 30,

2014

Percentage

or % Change

June 30,

2015

Percentage

or % Change

Operating Data

(Dollars in thousands)

Deliveries

1,165

1,250

(7%)

1,305

(11%)

Average selling price

$

537

$

483

11%

$

532

1%

Home sale revenues

$

626,008

$

603,788

4%

$

694,678

(10%)

Gross margin % (including land sales)

24.5%

26.3%

(1.8%)

24.6%

(0.1%)

Gross margin % from home sales

25.3%

26.3%

(1.0%)

24.6%

0.7%

Adjusted gross margin % from home sales (excluding interest 

amortized to cost of home sales)*

30.2%

31.1%

(0.9%)

29.6%

0.6%

Incentive and stock-based compensation expense

$

5,932

$

7,527

(21%)

$

6,520

(9%)

Selling expenses

$

32,687

$

29,424

11%

$

35,873

(9%)

G&A expenses (excluding incentive and stock-based 

compensation expenses)

$

34,641

$

33,213

4%

$

37,517

(8%)

SG&A expenses

$

73,260

$

70,164

4%

$

79,910

(8%)

SG&A % from home sales

11.7%

11.6%

0.1%

11.5%

0.2%

Operating margin from home sales

$

85,390

$

88,726

(4%)

$

90,835

(6%)

Operating margin % from home sales

13.6%

14.7%

(1.1%)

13.1%

0.5%

Net new orders

1,326

1,154

15%

1,567

(15%)

Net new orders (dollar value)

$

768,557

$

568,977

35%

$

857,747

(10%)

Average active selling communities

215

185

16%

203

6%

Monthly sales absorption rate per community

2.1

2.1

(2%)

2.6

(20%)

Cancellation rate

19%

19%

0%

15%

4%

Gross cancellations

302

278

9%

268

13%

Cancellations from current quarter sales

119

107

11%

118

1%

Backlog (homes)

2,733

2,208

24%

2,572

6%

Backlog (dollar value)

$

1,655,496

$

1,126,125

47%

$

1,484,544

12%

Cash flows (uses) from operating activities

$

(104,633)

$

(115,034)

9%

$

(17,126)

(511%)

Cash flows (uses) from investing activities

$

(60,675)

$

434

$

(16,156)

(276%)

Cash flows (uses) from financing activities

$

203,717

$

(7,271)

$

17,997

1,032%

Land purchases (incl. seller financing)

$

125,982

$

155,670

(19%)

$

98,627

28%

Adjusted Homebuilding EBITDA*

$

119,553

$

127,371

(6%)

$

135,263

(12%)

Adjusted Homebuilding EBITDA Margin %*

18.3%

21.1%

(2.8%)

19.3%

(1.0%)

Homebuilding interest incurred

$

42,304

$

37,308

13%

$

41,857

1%

Homebuilding interest capitalized to inventories owned

$

41,611

$

36,927

13%

$

41,508

0%

Homebuilding interest capitalized to investments in JVs

$

693

$

381

82%

$

349

99%

Interest amortized to cost of sales (incl. cost of land sales)

$

33,323

$

28,959

15%

$

36,563

(9%)

 

As of

September 30,

2015

December 31,

2014

Percentage

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)

Homebuilding cash (including restricted cash)

$

135,279

$

218,650

(38%)

Inventories owned

$

3,805,453

$

3,255,204

17%

Homesites owned and controlled

35,515

35,430

0%

Homes under construction

3,252

2,032

60%

Completed specs

377

515

(27%)

Deferred tax asset valuation allowance

$

1,115

$

2,561

(56%)

Homebuilding debt

$

2,378,767

$

2,136,082

11%

Stockholders' equity

$

1,807,327

$

1,676,688

8%

Adjusted stockholders' equity per share (reverse split adjusted, including if-converted preferred stock)*

$

24.76

$

23.10

7%

Total consolidated debt to book capitalization

57.6%

57.0%

0.6%

Adjusted net homebuilding debt to total adjusted book capitalization*

55.4%

53.3%

2.1%

1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

2015

2014

2015

2014

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

626,008

$

603,788

$

1,789,065

$

1,642,412

Land sale revenues

26,182

1,061

33,035

15,122

Total revenues

652,190

604,849

1,822,100

1,657,534

Cost of home sales

(467,358)

(444,898)

(1,346,108)

(1,207,339)

Cost of land sales

(25,076)

(891)

(30,190)

(14,245)

Total cost of sales

(492,434)

(445,789)

(1,376,298)

(1,221,584)

Gross margin

159,756

159,060

445,802

435,950

Gross margin %

24.5%

26.3%

24.5%

26.3%

Selling, general and administrative expenses

(73,260)

(70,164)

(219,240)

(196,589)

Income (loss) from unconsolidated joint ventures

121

557

(381)

(342)

Other income (expense)

(11,170)

(69)

(16,742)

(445)

Homebuilding pretax income 

75,447

89,384

209,439

238,574

Financial Services:

Revenues

6,130

6,179

17,765

17,275

Expenses

(4,079)

(3,673)

(12,626)

(10,873)

Other income

796

231

1,734

606

Financial services pretax income

2,847

2,737

6,873

7,008

Income before taxes

78,294

92,121

216,312

245,582

Provision for income taxes

(31,117)

(35,522)

(80,332)

(94,361)

Net income 

47,177

56,599

135,980

151,221

  Less: Net income allocated to preferred shareholder

(11,342)

(13,511)

(32,818)

(36,165)

  Less: Net income allocated to unvested restricted stock

(93)

(77)

(274)

(211)

Net income available to common stockholders

$

35,742

$

43,011

$

102,888

$

114,845

Income Per Common Share:

Basic

$

0.65

$

0.77

$

1.87

$

2.06

Diluted

$

0.59

$

0.70

$

1.71

$

1.87

Weighted Average Common Shares Outstanding:

Basic

55,345,443

55,909,542

55,059,683

55,772,603

Diluted

62,292,524

63,423,385

62,152,754

63,338,361

Weighted average additional common shares outstanding if preferred shares converted to common shares

17,562,557

17,562,557

17,562,557

17,562,557

Total weighted average diluted common shares outstanding if preferred shares converted to common shares

79,855,081

80,985,942

79,715,311

80,900,918

 

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

2015

2014

(Dollars in thousands)

ASSETS

(Unaudited)

Homebuilding:

Cash and equivalents

$

97,854

$

180,428

Restricted cash

37,425

38,222

Inventories:

Owned

3,805,453

3,255,204

Not owned

47,333

85,153

Investments in unconsolidated joint ventures

121,937

50,111

Deferred income taxes, net

255,297

276,402

Other assets

52,074

61,597

Total Homebuilding Assets

4,417,373

3,947,117

Financial Services:

Cash and equivalents

28,868

31,965

Restricted cash

1,045

1,295

Mortgage loans held for sale, net

86,064

174,420

Mortgage loans held for investment, net

22,087

14,380

Other assets

5,772

5,243

Total Financial Services Assets

143,836

227,303

Total Assets

$

4,561,209

$

4,174,420

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

82,754

$

45,085

Accrued liabilities

209,872

223,783

Revolving credit facility

268,700

        ―    

Secured project debt and other notes payable

5,855

4,689

Senior notes payable

2,104,212

2,131,393

Total Homebuilding Liabilities

2,671,393

2,404,950

Financial Services:

Accounts payable and other liabilities

3,630

3,369

Mortgage credit facilities

78,859

89,413

Total Financial Services Liabilities

82,489

92,782

Total Liabilities

2,753,882

2,497,732

Equity:

Stockholders' Equity:

Preferred stock, $0.01 par value; 10,000,000 shares authorized; 53,565 shares issued and outstanding at September 30, 2015 and December 31, 2014

1

1

Common stock, $0.01 par value; 600,000,000 shares authorized; 55,444,065 and 55,028,238 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively

554

550

Additional paid-in capital

1,343,560

1,348,905

Accumulated earnings

463,212

327,232

Total Equity

1,807,327

1,676,688

Total Liabilities and Equity

$

4,561,209

$

4,174,420

 

INVENTORIES

September 30,

December 31,

2015

2014

(Dollars in thousands)

Inventories Owned:

(Unaudited)

     Land and land under development

$            2,261,197

$          2,248,289

     Homes completed and under construction

1,299,611

827,612

     Model homes

244,645

179,303

        Total inventories owned

$            3,805,453

$          3,255,204

Inventories Owned by Segment:

     Southeast

$            1,264,823

$          1,033,401

     Southwest

646,429

598,856

     West

1,894,201

1,622,947

        Total inventories owned

$            3,805,453

$          3,255,204

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended September 30,

Nine Months Ended September 30,

2015

2014

2015

2014

(Dollars in thousands)

(Unaudited)

Cash Flows From Operating Activities:

Net income

$

47,177

$

56,599

$

135,980

$

151,221

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

7,387

6,884

22,369

18,908

Amortization of stock-based compensation

3,536

2,505

8,620

7,736

Excess tax benefits from share-based payment arrangements

(2,210)

(960)

(8,573)

(960)

Deferred income tax provision

2,934

35,469

52,132

94,474

Other operating activities

(114)

(552)

1,014

2,223

Changes in cash and equivalents due to:

Mortgage loans held for sale

23,178

10,534

88,360

53,108

Inventories - owned

(179,752)

(237,201)

(521,646)

(562,812)

Inventories - not owned

(9,551)

(5,090)

(21,612)

(19,884)

Other assets

2,985

(1,537)

8,862

(14,645)

Accounts payable

3,035

8,604

37,669

14,753

Accrued liabilities

(3,238)

9,711

(19,005)

(2,668)

Net cash provided by (used in) operating activities

(104,633)

(115,034)

(215,830)

(258,546)

Cash Flows From Investing Activities:

Investments in unconsolidated homebuilding joint ventures

(62,510)

(2,271)

(83,288)

(7,948)

Distributions of capital from unconsolidated joint ventures

1,529

3,202

10,289

18,010

Net cash paid for acquisitions

       ―   

       ―   

       ―   

(33,408)

Other investing activities

306

(497)

(11,716)

(1,984)

Net cash provided by (used in) investing activities

(60,675)

434

(84,715)

(25,330)

Cash Flows From Financing Activities:

Change in restricted cash

2,289

(5,642)

1,047

(15,567)

Borrowings from revolving credit facility

332,500

       ―   

491,400

       ―   

Principal payments on revolving credit facility

(93,800)

       ―   

(222,700)

       ―   

Principal payments on secured project debt and other notes payable

(72)

(338)

(569)

(1,399)

Principal payments on senior notes payable

(29,789)

       ―   

(29,789)

(4,971)

Payment of debt issuance costs

       ―   

(2,387)

       ―   

(2,387)

Net proceeds from (payments on) mortgage credit facilities

(11,482)

(1,881)

(10,554)

(36,169)

Repurchases of common stock

       ―   

       ―   

(22,073)

       ―   

Issuance of common stock under employee stock plans, net of tax withholdings

1,861

2,017

(461)

5,786

Excess tax benefits from share-based payment arrangements

2,210

960

8,573

960

Net cash provided by (used in) financing activities

203,717

(7,271)

214,874

(53,747)

Net increase (decrease) in cash and equivalents

38,409

(121,871)

(85,671)

(337,623)

Cash and equivalents at beginning of period

88,313

147,539

212,393

363,291

Cash and equivalents at end of period

$

126,722

$

25,668

$

126,722

$

25,668

Cash and equivalents at end of period

$

126,722

$

25,668

$

126,722

$

25,668

Homebuilding restricted cash at end of period

37,425

37,027

37,425

37,027

Financial services restricted cash at end of period

1,045

1,295

1,045

1,295

Cash and equivalents and restricted cash at end of period

$

165,192

$

63,990

$

165,192

$

63,990

 

REGIONAL OPERATING DATA

During the 2015 third quarter, in connection with the transition planning related to the Merger, the Company began evaluating the business and allocating resources based on the post-merger homebuilding operating segments of CalAtlantic. The Company's homebuilding operating segments are grouped into three reportable segments: Southeast (Florida and the Carolinas); Southwest (Texas, Colorado and Nevada) and West (California and Arizona). The Company's Arizona operations were previously reported within the Company's Southwest reportable segment, and as such, the prior period operating data has been restated to conform to CalAtlantic's new presentation.

Three Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

Southeast

467

$

437

472

$

360

(1%)

21%

Southwest

282

552

272

474

4%

16%

West

416

641

506

602

(18%)

6%

Consolidated total

1,165

$

537

1,250

$

483

(7%)

11%

 

Nine Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

Southeast

1,328

$

411

1,363

$

344

(3%)

19%

Southwest

858

533

711

463

21%

15%

West

1,256

625

1,407

600

(11%)

4%

Consolidated total

3,442

$

520

3,481

$

472

(1%)

10%

 

Three Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

Southeast

429

$

463

446

$

388

(4%)

19%

Southwest

325

559

245

480

33%

16%

West

572

679

463

601

24%

13%

Consolidated total

1,326

$

580

1,154

$

493

15%

18%

 

Nine Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

Southeast

1,511

$

442

1,446

$

371

4%

19%

Southwest

1,123

523

967

463

16%

13%

West

1,830

656

1,576

591

16%

11%

Consolidated total

4,464

$

550

3,989

$

480

12%

15%

 

Three Months Ended September 30,

Nine Months Ended September 30,

2015

2014

% Change

2015

2014

% Change

Average number of selling communities during the period:

Southeast

96

74

30%

88

74

19%

Southwest

54

53

2%

54

50

8%

West

65

58

12%

63

57

11%

Consolidated total

215

185

16%

205

181

13%

 

At September 30,

2015

2014

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

Southeast

954

$

511,449

884

$

398,946

8%

28%

Southwest

811

438,753

654

324,358

24%

35%

West

968

705,294

670

402,821

44%

75%

Consolidated total

2,733

$

1,655,496

2,208

$

1,126,125

24%

47%

 

At September 30,

2015

2014

% Change

Homesites owned and controlled:

Southeast

16,098

16,961

(5%)

Southwest

6,537

7,292

(10%)

West

12,880

12,054

7%

Total (including joint ventures)

35,515

36,307

(2%)

Homesites owned

28,343

28,937

(2%)

Homesites optioned or subject to contract

5,792

7,172

(19%)

Joint venture homesites

1,380

198

597%

Total (including joint ventures)

35,515

36,307

(2%)

Homesites owned:

Raw lots

6,916

6,745

15%

Homesites under development

7,717

9,379

(18%)

Finished homesites

7,674

6,448

6%

Under construction or completed homes

4,323

3,594

20%

Held for sale

1,713

2,771

(38%)

Total

28,343

28,937

(2%)

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently. Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.

The table set forth below reconciles the Company's gross margin percentage from home sales to adjusted gross margin percentage from home sales, excluding interest amortized to cost of home sales. We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provide comparability with the Company's peer group.

Three Months Ended

September 30, 2015

Gross Margin %

September 30, 2014

Gross Margin %

June 30, 2015

Gross Margin %

(Dollars in thousands)

Home sale revenues

$

626,008

$

603,788

$

694,678

Less: Cost of home sales

(467,358)

(444,898)

(523,933)

Gross margin from home sales

158,650

25.3%

158,890

26.3%

170,745

24.6%

Add: Capitalized interest included in cost of home sales

30,275

4.9%

28,872

4.8%

35,051

5.0%

Adjusted gross margin from home sales, excluding interest amortized to cost of home sales

$

188,925

30.2%

$

187,762

31.1%

$

205,796

29.6%

 

The table set forth below reconciles the Company's total consolidated debt to adjusted net homebuilding debt and provides the Company's total consolidated debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios. In addition, the table set forth below calculates homebuilding debt to adjusted homebuilding EBITDA. We believe these ratios are useful to management and investors as a measure of the Company's ability to obtain financing. For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders' equity. Adjusted net homebuilding debt excludes indebtedness of the Company's financial services subsidiary and additionally reflects the offset of cash and equivalents.

September 30, 2015

June 30, 2015

December 31, 2014

September 30, 2014

(Dollars in thousands)

Total consolidated debt

$

2,457,626

$

2,259,379

$

2,225,495

$

1,900,012

Less:

Financial services indebtedness

(78,859)

(90,341)

(89,413)

(64,698)

Homebuilding cash

(135,279)

(116,802)

(218,650)

(52,322)

Adjusted net homebuilding debt

2,243,488

2,052,236

1,917,432

1,782,992

Stockholders' equity

1,807,327

1,752,543

1,676,688

1,634,664

Total adjusted book capitalization

$

4,050,815

$

3,804,779

$

3,594,120

$

3,417,656

Total consolidated debt to book capitalization

57.6%

56.3%

57.0%

53.8%

Adjusted net homebuilding debt to total adjusted book capitalization

55.4%

53.9%

53.3%

52.2%

Homebuilding debt

$

2,378,767

$

1,835,314

LTM adjusted homebuilding EBITDA

$

484,570

$

492,922

Homebuilding debt to adjusted homebuilding EBITDA

 4.9x 

 3.7x 

 

The table set forth below calculates adjusted stockholders' equity per common share, after giving effect to the 1-for-5 reverse stock split. The Company believes that the adjusted stockholders' equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving the pro forma effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.

September 30,

December 31,

2015

2014

Actual common shares outstanding (reverse-split adjusted)

55,444,065

55,028,238

Add: Conversion of preferred shares to common shares (reverse-split adjusted)

17,562,557

17,562,557

Pro forma common shares outstanding (reverse-split adjusted)

73,006,622

72,590,795

Stockholders' equity (Dollars in thousands)

$

1,807,327

$

1,676,688

Divided by pro forma common shares outstanding (reverse-split adjusted)

÷

73,006,622

÷

72,590,795

Adjusted stockholders' equity per common share (reverse-split adjusted)

$

24.76

$

23.10

 

The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA. Adjusted Homebuilding EBITDA means net income (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, including amortization of capitalized model costs, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiaries. Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently. We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company's ability to service debt and obtain financing. Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.

Three Months Ended

LTM Ended September 30,

September 30, 2015

September 30, 2014

June 30, 2015

2015

2014

(Dollars in thousands)

Net income 

$

47,177

$

56,599

$

57,198

$

200,624

$

216,041

Provision for income taxes

31,117

35,522

32,324

120,070

130,566

Homebuilding interest amortized to cost of sales and interest expense

33,323

28,959

36,563

131,878

116,667

Homebuilding depreciation and amortization

7,368

6,849

8,964

30,691

25,656

Amortization of stock-based compensation

3,536

2,505

2,389

9,353

10,095

EBITDA

122,521

130,434

137,438

492,616

499,025

Add:

Cash distributions of income from unconsolidated joint ventures

         ―    

         ―    

592

592

1,875

Less:

Income (loss) from unconsolidated joint ventures

121

557

(51)

(707)

(642)

Income from financial services subsidiaries

2,847

2,506

2,818

9,345

8,620

Adjusted Homebuilding EBITDA

$

119,553

$

127,371

$

135,263

$

484,570

$

492,922

Homebuilding revenues

$

652,190

$

604,849

$

699,632

$

2,575,744

$

2,263,985

Adjusted Homebuilding EBITDA Margin %

18.3%

21.1%

19.3%

18.8%

21.8%

 

The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:

Three Months Ended

LTM Ended September 30,

September 30, 2015

September 30, 2014

June 30, 2015

2015

2014

(Dollars in thousands)

Net cash provided by (used in) operating activities

$

(104,633)

$

(115,034)

$

(17,126)

$

(319,681)

$

(286,366)

Add:

Provision for income taxes, net of deferred component

28,183

53

        ―   

63,414

367

Homebuilding interest amortized to cost of sales and interest expense

33,323

28,959

36,563

131,878

116,667

Excess tax benefits from share-based payment arrangements

2,210

960

2,994

21,017

960

Less:

Income from financial services subsidiaries

2,847

2,506

2,818

9,345

8,620

Depreciation and amortization from financial services subsidiaries

19

35

25

117

134

Loss on disposal of property and equipment

7

5

15

46

7

Net changes in operating assets and liabilities:

Mortgage loans held for sale

(23,178)

(10,534)

10,542

17,586

(6,386)

Inventories-owned

179,752

237,201

137,351

623,261

669,505

Inventories-not owned

9,551

5,090

6,183

34,755

31,503

Other assets

(2,985)

1,537

(12,809)

(28,036)

8,863

Accounts payable 

(3,035)

(8,604)

(21,155)

(32,230)

(21,223)

Accrued liabilities

3,238

(9,711)

(4,422)

(17,886)

(12,207)

Adjusted Homebuilding EBITDA

$

119,553

$

127,371

$

135,263

$

484,570

$

492,922

 

RYLAND REGIONAL OPERATING DATA

On October 1, 2015, Ryland merged with and into the Company, with the Company continuing as the surviving corporation. The following operating data for Ryland has been provided as we believe this data is useful to investors for purposes of assessing the Company's operating performance on a combined basis. As noted above, during the 2015 third quarter, in connection with the transition planning related to the Merger, the Company began evaluating the business and allocating resources based on the post-merger homebuilding operating segments of CalAtlantic. Ryland's regional operating data presented below is grouped into CalAtlantic's four reportable segments: North (Baltimore, Chicago, Delaware, Indianapolis, Metro Washington, D.C., Minneapolis/St. Paul, New Jersey, Northern Virginia, Philadelphia and Atlanta); Southeast (Florida and the Carolinas); Southwest (Texas, Colorado and Nevada) and West (California and Arizona). All prior periods have been restated to conform to CalAtlantic's new presentation.

Three Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

North

768

$

339

731

$

330

5%

3%

Southeast

509

300

478

278

6%

8%

Southwest

575

341

656

319

(12%)

7%

West

194

434

153

548

27%

(21%)

Consolidated total

2,046

$

339

2,018

$

331

1%

2%

 

Nine Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

North

1,940

$

340

1,821

$

330

7%

3%

Southeast

1,261

292

1,218

269

4%

9%

Southwest

1,661

342

1,760

321

(6%)

7%

West

461

507

389

566

19%

(10%)

Consolidated total

5,323

$

344

5,188

$

330

3%

4%

 

Three Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

North

636

$

337

607

$

343

5%

(2%)

Southeast

476

298

376

304

27%

(2%)

Southwest

601

356

567

334

6%

7%

West

199

375

157

516

27%

(27%)

Consolidated total

1,912

$

337

1,707

$

347

12%

(3%)

 

Nine Months Ended September 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

North

2,201

$

336

2,171

$

338

1%

(1%)

Southeast

1,634

293

1,384

288

18%

2%

Southwest

2,191

355

2,044

329

7%

8%

West

662

416

522

537

27%

(23%)

Consolidated total

6,688

$

340

6,121

$

340

9%

        ―  

 

Three Months Ended September 30,

Nine Months Ended September 30,

2015

2014

% Change

2015

2014

% Change

Average number of selling communities 

  during the period:

North

118

116

2%

116

107

8%

Southeast

81

81

        ―  

83

79

5%

Southwest

131

101

30%

128

101

27%

West

22

16

38%

21

17

24%

Consolidated total

352

314

12%

348

304

14%

 

At September 30,

2015

2014

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

North

1,234

$

417,931

1,370

$

469,382

(10%)

(11%)

Southeast

979

293,907

780

232,914

26%

26%

Southwest

1,409

518,638

1,164

393,450

21%

32%

West

352

128,985

245

128,667

44%

0%

Consolidated total

3,974

$

1,359,461

3,559

$

1,224,413

12%

11%

 

At September 30,

2015

2014

% Change

Homesites owned and controlled:

North

16,848

16,199

4%

Southeast

10,597

10,944

(3%)

Southwest

10,686

12,130

(12%)

West

2,114

2,208

(4%)

Total (including joint ventures)

40,245

41,481

(3%)

Homesites owned

25,671

25,983

(1%)

Homesites optioned or subject to contract 

13,968

14,872

(6%)

Joint venture homesites

606

626

(3%)

Total (including joint ventures)

40,245

41,481

(3%)

Homesites owned:

Raw lots

3,418

3,116

10%

Homesites under development

15,218

16,082

(5%)

Finished homesites

1,063

989

7%

Under construction or completed homes

5,877

5,334

10%

Held for sale

95

462

(79%)

Total

25,671

25,983

(1%)

 

 

RYLAND REGIONAL QUARTERLY OPERATING DATA

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

(Dollars in thousands)

New homes delivered:

North

768

650

522

890

731

574

516

Southeast

509

425

327

575

478

386

354

Southwest

575

582

504

817

656

596

508

West

194

157

110

207

153

144

92

Consolidated total

2,046

1,814

1,463

2,489

2,018

1,700

1,470

Average selling price (deliveries):

North

$    339

$    339

$    345

$    335

$    330

$    337

$    322

Southeast

300

291

281

286

278

261

264

Southwest

341

353

332

327

319

325

319

West

434

555

566

541

548

539

638

Consolidated total

$    339

$    351

$    343

$    338

$    331

$    333

$    327

Net new orders:

North

636

747

818

493

607

820

744

Southeast

476

579

579

402

376

507

501

Southwest

601

837

753

533

567

724

753

West

199

224

239

119

157

177

188

Consolidated total

1,912

2,387

2,389

1,547

1,707

2,228

2,186

Average selling price (orders):

North

$    337

$    338

$    335

$    338

$    343

$    345

$    325

Southeast

298

292

289

288

304

283

279

Southwest

356

360

347

344

334

330

325

West

375

403

463

591

516

543

548

Consolidated total

$    337

$    341

$    340

$    347

$    347

$    342

$    334

Average number of selling communities

during the period:

North

118

113

117

117

116

109

98

Southeast

81

81

85

87

81

78

78

Southwest

131

129

123

114

101

98

102

West

22

20

21

18

16

17

17

Consolidated total

352

343

346

336

314

302

295

Backlog:

North

1,234

1,366

1,269

973

1,370

1,494

1,248

Southeast

979

1,013

859

607

780

882

761

Southwest

1,409

1,384

1,129

880

1,164

1,253

1,125

West

352

353

286

157

245

241

208

Consolidated total

3,974

4,116

3,543

2,617

3,559

3,870

3,342

 

STANDARD PACIFIC REGIONAL QUARTERLY OPERATING DATA

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

(Dollars in thousands)

New homes delivered:

Southeast

467

476

385

508

472

500

391

Southwest

282

338

238

348

272

237

202

West

416

491

349

619

506

499

402

Consolidated total

1,165

1,305

972

1,475

1,250

1,236

995

Average selling price (deliveries):

Southeast

$    437

$    414

$    377

$    382

$    360

$    339

$    329

Southwest

552

538

504

469

474

477

433

West

641

643

583

593

602

619

574

Consolidated total

$    537

$    532

$    482

$    491

$    483

$    479

$    449

Net new orders:

Southeast

429

524

558

395

446

517

483

Southwest

325

406

392

240

245

434

288

West

572

637

621

343

463

573

540

Consolidated total

1,326

1,567

1,571

978

1,154

1,524

1,311

Average selling price (orders):

Southeast

$    463

$    446

$    423

$    385

$    388

$    367

$    359

Southwest

559

509

509

509

480

452

467

West

679

655

636

641

601

572

604

Consolidated total

$    580

$    547

$    528

$    505

$    493

$    468

$    483

Average number of selling communities

during the period:

Southeast

96

88

81

73

74

76

72

Southwest

54

55

56

54

53

49

45

West

65

60

61

57

58

58

57

Consolidated total

215

203

198

184

185

183

174

Backlog:

Southeast

954

992

944

771

884

910

893

Southwest

811

768

700

546

654

681

484

West

968

812

666

394

670

713

639

Consolidated total

2,733

2,572

2,310

1,711

2,208

2,304

2,016

 

SOURCE CalAtlantic Group, Inc.



RELATED LINKS

http://www.calatlantichomes.com