Taylor Morrison Reports Fourth Quarter Revenue of $970 Million and Earnings per Share of $0.53

- Net sales orders increased 11% to 1,440 in the quarter and 17% to 6,681 for the year

- Average community count increased 30% to 286 in the quarter

- Backlog units at the end of the quarter were 2,932, a 30% increase over the prior year

- Home closings increased 5% to 2,068 in the quarter and 12% to 6,311 for the year

- Adjusted home closings gross margin was 20.9% for the quarter and 21.3% for the year

- On a GAAP basis, home closings gross margin was 18.3% for the quarter and 18.4% for the year

- Net income from continuing operations was $65 million for the quarter and $171 million for the year

Feb 03, 2016, 06:55 ET from Taylor Morrison Home Corporation

SCOTTSDALE, Ariz., Feb. 3, 2016 /PRNewswire/ -- Taylor Morrison Home Corporation (NYSE: TMHC) today reported fourth quarter total revenue of $970 million, net income of $65 million and earnings per share of $0.53.

"2015 proved to be a transformational year as expected.  Our teams delivered a solid fourth quarter and full year.  The year began with the sale of our Canadian business, which was quickly followed up with two acquisitions in 2015," said Taylor Morrison's President and CEO, Sheryl Palmer. "Through it all, we remained true to our four-pillar strategy of pursuing core locations, building distinctive communities, maintaining a cost efficient culture and balancing price and pace appropriately. And with the recent announcement of our acquisition of Acadia Homes & Neighborhoods, we enter 2016 poised to remain an industry leader."

4th Quarter 2015 Key Business Highlights

  • Average community count increased 30% from the prior year quarter to 286 average communities
  • Net sales orders increased over 11% from the prior year quarter to 1,440
  • Home closings increased over 5% from the prior year quarter to 2,068
  • Backlog of homes under contract at the end of the quarter was 2,932 units, with a sales value of $1.4 billion
  • Average price of homes closed was $452,000
  • Average monthly absorption pace per community was 1.7 for the quarter
  • Mortgage operations reported gross profit of $6.9 million on revenue of $14.3 million

Quarterly Financial Comparison*

($ millions)

Q4 2015

Q4 2014

Q4 2015 vs. Q4 2014

Total Revenue

$970

$1,012

(4.2)%

Home Closings Revenue

$935

$966

(3.2)%

Home Closings Gross Margin

$171

$187

(8.6)%

18.3%

19.4%

(110) bps

Adjusted Home Closings Gross Margin

$195

$213

(8.5)%

20.9%

22.0%

(110) bps

SG&A

% of Home Closings Revenue

$87

$78

11.5%

9.3%

8.1%

120 bps increase

 *Excludes discontinued operations in Q4 2014.

Full Year 2015 Key Business Highlights

  • Average community count increased 26% from the prior year to 259 average communities
  • Net sales orders increased 17% to 6,681
  • Home closings increased 12% to 6,311
  • Average price of homes closed was $458,000
  • Average monthly absorption pace per community was 2.15 for the year
  • Mortgage operations reported gross profit of $17.5 million on revenue of $43.1 million

Annual Financial Comparison*

($ millions)

2015

2014

2015 vs. 2014

Total Revenue

$2,977

$2,708

9.9%

Home Closings Revenue

$2,890

$2,620

10.3%

Home Closings Gross Margin

$531

$537

(1.1)%

18.4%

20.5%

(210) bps

Adjusted Home Closings Gross Margin

$614

$602

2.0%

21.3%

23.0%

(170) bps

SG&A

% of Home Closings Revenue

$294

$250

17.6%

10.2%

9.5%

70 bps increase

*Excludes discontinued operations in fiscal year 2014.

The Company ended the quarter with homebuilding inventories of $3.1 billion and 3,851 homes in inventory, compared to 2,871 homes at the end of the prior year quarter.  Homes in inventory at the end of the quarter consisted of 2,096 sold units, 438 model homes and 1,317 inventory units, of which 481 were finished.  The Company owned or controlled approximately 43,000 lots at December 31, 2015.

First Quarter and Full Year 2016 Business Outlook

First Quarter 2016:

  • Average community count – expected to be between 305 to 315
  • Home closings – expected to be between 1,250 and 1,350
  • GAAP home closings gross margin, including capitalized interest – expected to be in the mid-to-high 17% range
  • Adjusted home closings gross margin, excluding capitalized interest – expected to be in the low 20% range

Full Year 2016:

  • Average community count – expected to be between 310 to 320
  • Home closings – year-over-year growth of between 10% to 15%
  • GAAP home closings gross margin, including capitalized interest – expected to be in the low-to-mid 18% range
  • Adjusted home closings gross margin, excluding capitalized interest – expected to be in the mid-to-high 20% range
  • SG&A – expected to be around 10%
  • Income from unconsolidated joint ventures – expected to be between $10 million and $15 million
  • Land and development spend – expected to be at or just below $1 billion
  • Effective tax rate – expected to be between 33% and 35%

Earnings Call Presentation

Company management will refer to a presentation as they discuss the results for Q4 and FY 2015 on the public webcast.  This presentation can be found at the Taylor Morrison investor relations website at www.investors.taylormorrison.com under the Events tab at the top.

Earnings Webcast

A public webcast to discuss the fourth quarter 2015 earnings will be held later today at 8:30 a.m. Eastern time. The participant dial-in is 1(888)771-4371 and the confirmation number is 41610860. More information can be found on the Company's investor relations website at investors.taylormorrison.com. A webcast replay will also be available on the site later today and will be available for one year from the date of the original earnings call.

About Taylor Morrison

Taylor Morrison Home Corporation (NYSE: TMHC) is a leading national homebuilder and developer based in Scottsdale, Arizona and operates under two well-established brands, Taylor Morrison and Darling Homes. Taylor Morrison builds and develops distinctive communities from coast to coast, serving a wide array of homeowners and aimed mainly at first-time, move-up, luxury and 55 or better customers. Darling Homes builds communities in Texas primarily catering to move-up and luxury homebuyers seeking a personalized building experience.

For more information about Taylor Morrison and Darling Homes please visit www.taylormorrison.com or www.darlinghomes.com.

Forward-Looking Statements

This earnings summary includes "forward-looking statements." These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "may," "can," "could," "might," "will" and similar expressions identify forward-looking statements, including statements related to expected operating and performing results, planned transactions, planned objectives of management, future developments or conditions in the industries in which we participate and other trends, developments and uncertainties that may affect our business in the future.

Such risks, uncertainties and other factors include, among other things: interest rate changes and the availability of mortgage financing; continued volatility in the debt and equity markets; competition within the industries in which we operate; the availability and cost of land and other raw materials used by us in our homebuilding operations; the impact of any changes to our strategy in responding to continuing adverse conditions in the industry, including any changes regarding our land positions; the availability and cost of insurance covering risks associated with our businesses; shortages and the cost of labor; weather related slowdowns; slow growth initiatives and/or local building moratoria; governmental regulation directed at or affecting the housing market, the homebuilding industry or construction activities; uncertainty in the mortgage lending industry, including revisions to underwriting standards and repurchase requirements associated with the sale of mortgage loans; the interpretation of or changes to tax, labor and environmental laws; economic changes nationally or in our local markets, including inflation, deflation, changes in consumer confidence and preferences and the state of the market for homes in general; legal or regulatory proceedings or claims; our ability to successfully integrate acquired assets and businesses; required accounting changes; terrorist acts and other acts of war; and other factors of national, regional and global scale, including those of a political, economic, business and competitive nature. We undertake no duty to update any forward-looking statement, whether as a result of new information, future events or changes in our expectations, except as required by applicable law. In addition, other such risks and uncertainties may be found in Taylor Morrison Home Corporation's Form 10-K filed with the Securities and Exchange Commission (SEC).

Taylor Morrison Home Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts, unaudited

Three Months Ended December 31,

Twelve Months Ended December 31,

2015

2014

2015

2014

Home closings revenue, net

$

934,798

$

965,668

$

2,889,968

$

2,619,558

Land closings revenue

21,059

33,462

43,770

53,381

Mortgage operations revenue

14,287

12,623

43,082

35,493

Total revenues

970,144

1,011,753

2,976,820

2,708,432

Cost of home closings

764,131

778,224

2,358,823

2,082,819

Cost of land closings

11,397

23,937

24,546

39,696

Mortgage operations expenses

7,415

6,030

25,536

19,671

Total cost of revenues

782,943

808,191

2,408,905

2,142,186

Gross margin

187,201

203,562

567,915

566,246

Sales, commissions and other marketing costs

61,950

54,535

198,676

168,897

General and administrative expenses

25,063

23,574

95,235

81,153

Equity in income of unconsolidated entities

(352)

(1,937)

(1,759)

(5,405)

Interest (income) expense, net

(26)

33

(192)

1,160

Other expense, net

9

7,877

11,634

18,447

Loss on extinguishment of debt

33,317

Gain on foreign currency forward

(29,983)

Income from continuing operations before income taxes

100,557

119,480

260,987

301,994

Income tax provision

35,568

25,793

90,001

76,395

Net income from continuing operations

64,989

93,687

170,986

225,599

Discontinued operations:

Income from discontinued operations

17,243

61,786

Transaction expenses from discontinued operations

(9,043)

Gain on sale of discontinued operations

80,205

Income tax benefit/(expense) from discontinued operations

1,397

(6,399)

(13,103)

(19,884)

Net income from discontinued operations

1,397

10,844

58,059

41,902

Net income before allocation to non-controlling interests

66,386

104,531

229,045

267,501

Net income attributable to non-controlling interests - joint ventures

(254)

(1,262)

(1,681)

(1,648)

Net income before non-controlling interests - Principal Equityholders

66,132

103,269

227,364

265,853

Net income from continuing operations attributable to non-controlling interests - Principal Equityholders

(47,440)

(67,482)

(123,909)

(163,790)

Net income from discontinued operations attributable to non-controlling interests - Principal Equityholders

(1,025)

(7,912)

(42,406)

(30,594)

Net income available to Taylor Morrison Home Corporation

$

17,667

$

27,875

$

61,049

$

71,469

Earnings per common share - basic:

Income from continuing operations

$

0.53

$

0.75

$

1.38

$

1.83

Income from discontinued operations - net of tax

$

0.01

$

0.09

$

0.47

$

0.34

Net income available to Taylor Morrison Home Corporation

$

0.54

$

0.84

$

1.85

$

2.17

Earnings per common share - diluted:

Income from continuing operations

$

0.53

$

0.75

$

1.38

$

1.83

Income from discontinued operations - net of tax

$

0.01

$

0.09

$

0.47

$

0.34

Net income available to Taylor Morrison Home Corporation

$

0.54

$

0.84

$

1.85

$

2.17

Weighted average number of shares of common stock:

Basic

32,986

33,060

33,063

32,937

Diluted

122,298

122,348

122,384

122,313

 

Taylor Morrison Home Corporation

Condensed Consolidated Balance Sheets

(In thousands)

December 31, 2015

December 31, 2014

(Unaudited)

Assets

Cash and cash equivalents

$

126,188

$

234,217

Restricted cash

1,280

1,310

Real estate inventory:

Owned inventory

3,118,866

2,511,623

Real estate not owned under option agreements

7,921

6,698

Total real estate inventory

3,126,787

2,518,321

Land deposits

34,113

34,544

Mortgage loans held for sale

201,733

191,140

Prepaid expenses and other assets, net

95,191

89,210

Other receivables, net

120,729

85,274

Investments in unconsolidated entities

128,448

110,291

Deferred tax assets, net

233,488

258,190

Property and equipment, net

7,387

5,337

Intangible assets, net

4,248

5,459

Goodwill

57,698

23,375

Assets of discontinued operations

576,445

Total assets

$

4,137,290

$

4,133,113

Liabilities

Accounts payable

$

151,861

$

122,466

Accrued expenses and other liabilities

191,452

200,556

Income taxes payable

37,792

50,096

Customer deposits

92,319

70,465

Senior notes

1,250,000

1,388,840

Loans payable and other borrowings

134,824

147,516

Revolving credit facility borrowings

115,000

40,000

Mortgage warehouse borrowings

183,444

160,750

Liabilities attributable to consolidated option agreements

7,921

6,698

Liabilities of discontinued operations

168,565

Total liabilities

$

2,164,613

$

2,355,952

Stockholders' Equity

Total stockholders' equity

1,972,677

1,777,161

Total liabilities and stockholders' equity

$

4,137,290

$

4,133,113

 

Homes Closed:

Three Months Ended December 31,

2015

2014

(Dollars in thousands)

Homes

Value

Homes

Value

East

749

$

290,761

529

$

211,043

Central

654

297,249

748

343,604

West

665

346,788

690

411,021

Total

2,068

$

934,798

1,967

$

965,668

Net Sales Orders:

Three Months Ended December 31,

2015

2014

(Dollars in thousands)

Homes

Value

Homes

Value

East

526

$

208,458

373

$

143,188

Central

392

183,344

502

219,561

West

522

279,133

420

200,662

Total

1,440

$

670,935

1,295

$

563,411

Homes Closed:

Twelve Months Ended December 31,

2015

2014

(Dollars in thousands)

Homes

Value

Homes

Value

East

2,065

$

809,324

1,479

$

546,045

Central

2,140

990,925

2,099

958,096

West

2,106

1,089,719

2,064

1,115,417

Total

6,311

$

2,889,968

5,642

$

2,619,558

Net Sales Orders:

Twelve Months Ended December 31,

2015

2014

(Dollars in thousands)

Homes

Value

Homes

Value

East

2,124

$

794,356

1,521

$

564,338

Central

2,018

912,623

2,222

980,658

West

2,539

1,262,101

1,985

1,060,129

Total

6,681

$

2,969,080

5,728

$

2,605,125

Sales Order Backlog:

As of December 31,

2015

2014

(Dollars in thousands)

Homes

Value

Homes

Value

East

875

$

358,978

557

$

259,622

Central

1,030

519,251

1,152

547,226

West

1,027

514,744

543

292,919

Total

2,932

$

1,392,973

2,252

$

1,099,767

Average Active Selling Communities:

Three Months Ended December 31,

Twelve Months Ended December 31,

2015

2014

2015

2014

East

102

69

91

65

Central

106

93

98

86

West

78

58

70

55

Total

286

220

259

206

Average Selling Price of Homes Closed:

Three Months Ended December 31,

Twelve Months Ended December 31,

(Dollars in thousands)

2015

2014

2015

2014

East

$

388

$

399

$

392

$

369

Central

455

459

463

456

West

521

596

517

540

Total

$

452

$

491

$

458

$

464

 

Reconciliation of Non-GAAP Financial Measures

The following tables set forth a reconciliation between our home closings gross margin and our adjusted home closings gross margin and our net income and adjusted EBITDA. Adjusted home closings gross margin is a non-GAAP financial measure calculated based on home closings gross margin, excluding impairments, if any, and capitalized interest amortization. Adjusted EBITDA is a non-GAAP financial metric that measures performance by adjusting net income from continuing operations to exclude interest, income taxes, depreciation and amortization, and non-cash compensation expenses. Management uses these non-GAAP measures to evaluate our performance on a consolidated basis as well as the performance of our regions. In the future we may include additional adjustments in the above described non-GAAP financial measures, to the extent we deem them appropriate and useful to management and investors.

We believe adjusted home closings gross margin is useful to investors because it allows investors to evaluate the performance of our homebuilding operations without the often varying effects of interest costs capitalized. We believe adjusted EBITDA provides useful information to investors regarding our results of operations for similar reasons and also because it assists both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, or non-recurring items.

These measures are considered non-GAAP financial measures and should be considered in addition to, rather than as a substitute for, the comparable U.S. GAAP financial measures as a measure of our operating performance. Although other companies in the homebuilding industry report similar information, the methods used may differ. We urge investors to understand the methods used by other companies in the homebuilding industry to calculate net income and gross margins and any adjustments to such amounts before comparing our measures to those of such other companies.

Adjusted Home Closings Gross Margin Reconciliation — Continuing Operations

Three Months Ended December 31,

Twelve Months Ended December 31,

(Dollars in thousands)

2015

2014

2015

2014

Home closings revenue

$

934,798

$

965,668

$

2,889,968

$

2,619,558

Cost of home closings

764,131

778,224

2,358,823

2,082,819

Home closings gross margin

170,667

187,444

531,145

536,739

Capitalized interest amortization

24,560

25,382

83,163

65,098

Adjusted home closings gross margin

$

195,227

$

212,826

$

614,308

$

601,837

Home closings gross margin as a percentage of home closings revenue

18.3

%

19.4

%

18.4

%

20.5

%

Adjusted home closings gross margin as a percentage of home closings revenue

20.9

%

22.0

%

21.3

%

23.0

%

 

 

Adjusted EBITDA Reconciliation

Three Months Ended December 31,

(Dollars in thousands)

2015

2014

Net income from continuing operations

$

64,989

$

93,687

Interest expense (income), net

(26)

33

Amortization of capitalized interest

24,560

25,449

Income tax provision

35,568

25,793

Depreciation and amortization

1,180

1,084

EBITDA

$

126,271

$

146,046

Non-cash compensation expense

2,169

1,505

Adjusted EBITDA

$

128,440

$

147,551

 

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SOURCE Taylor Morrison Home Corporation



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