William Lyon Homes Reports Second Quarter 2013 Results

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William Lyon Homes Reports Second Quarter 2013 Results

NEWPORT BEACH, Calif.--(BUSINESS WIRE)-- William Lyon Homes (NYS: WLH) , a leading homebuilder in the Western U.S., announced results for its 2013 second quarter ended June 30, 2013.

2013 Second Quarter Highlights (Comparison to 2012 Second Quarter)

  • Net income available to common stockholders of $6.9 million, or $0.29 per diluted share
  • Home sales revenue of $120.6 million, up 122%
  • Homebuilding gross margin of $24.0 million, up 194%
  • Homebuilding gross margin percentage of 19.9%, up 480 basis points
  • Adjusted homebuilding gross margin percentage of 27.0%, up 450 basis points
  • New home deliveries of 345 homes, up 49%
  • Average sales price (ASP) of new homes delivered of $349,700, up 49%
  • Net new home orders of 360, up 19%
  • Average sales locations of 24, up 26%
  • Backlog of homes sold but not closed of 511, up 27%
  • Dollar amount of backlog of homes sold but not closed of $206.8 million, up 96%
  • Lots owned and controlled at end of period of 13,861, up 19%
  • Adjusted EBITDA of $18.9 million, an increase of 62%
  • Completed IPO (10,005,000 shares of common stock at $25 per share); listed on the NYSE
  • Closed a new $100 million revolving credit facility on August 7, 2013

"We achieved some significant milestones in the second quarter of 2013, including completing a successful IPO, generating positive net income in our initial quarter as a public company and delivering our sixth consecutive quarter of year over year growth in deliveries, orders and backlog," said William H. Lyon, Chief Executive Officer. "During the quarter, we experienced strong demand, as evidenced by continued price increases and a healthy sales pace per community. Looking ahead, we are well positioned with a strong balance sheet and an attractive land position in our markets to capitalize on new growth opportunities. We look forward to continuing to build upon our market leadership position and focus on delivering an unparalleled customer experience to drive growth and returns for our shareholders."

Operating Results

William Lyon Homes reported improved operating results for the second quarter ended June 30, 2013, as compared to the year-ago period. Net income available to common stockholders was $6.9 million, or $0.29 per diluted share in the second quarter of 2013, compared to net loss available to common stockholders of $2.5 million, or $0.23 per share in the year-ago quarter. Home sales revenue increased 122% to $120.6 million for the quarter, as compared to $54.3 million in the year-ago period. The increase in home sales revenue was due to a 49% increase in deliveries coupled with a 49% increase in the average sales price of homes delivered versus the year-ago period, which includes the addition of the Colorado division.

The increase in second quarter deliveries was driven by a 50% increase in the number of homes in backlog at the beginning of the quarter compared to the year-ago period and a backlog conversion rate of 69%. On a same store basis, which represents projects that were open during the comparable periods, average sales prices increased 21% from $278,500 in the second quarter of 2012 to $337,300 in the second quarter of 2013.

Net new home orders for the second quarter ended June 30, 2013 were 360, up 19%, from 302 in the year-ago quarter. The number of net new home orders was enhanced by a weekly sales rate of 1.2 per community, and an overall cancellation rate of 17%.

Homebuilding gross margins were 19.9% during the second quarter of 2013, up 480 basis points over the year-ago period. Adjusted homebuilding gross margins were 27.0% during the second quarter of 2013, as compared to 22.5% in the year-ago period. Adjusted homebuilding gross margins increased by 380 basis points from the first quarter of 2013.

As of June 30, 2013, backlog units totaled 511, a 27% increase compared to 403 units as of June 30, 2012. In addition, the dollar value of homes in backlog climbed to $206.8 million, a 96% increase over $105.7 million as of June 30, 2012.

Operating income improved to $10.3 million during the second quarter of 2013 from $1.6 million in the year-ago period. Adjusted EBITDA improved by 62% to $18.9 million during the second quarter of 2013 compared to adjusted EBITDA of $11.7 million in the year-ago period.

Matthew Zaist, President and Chief Operating Officer, commented, "We are pleased with our continued momentum in revenue and profitability and our overall operating performance for the quarter. Our same store average sales price was up 21% from last year's second quarter and 7% from the first quarter of 2013. Our ASP in backlog continues to grow and stands at $404,600 at the end of the quarter. Finally, increased volume and pricing resulted in higher profitability, which is a testament to our disciplined operating strategy and the hard work of our entire organization."

Balance Sheet Update

On May 21, 2013, William Lyon Homes completed its initial public offering ("IPO"), and full exercise of the underwriter's over-allotment option, issuing 10,005,000 shares of common stock (7,177,500 shares by the Company and 2,827,500 by a selling stockholder) at $25 per share for net proceeds to the Company of approximately $164.0 million. After the close of the IPO, the company had approximately 27.6 million Class A common shares and approximately 3.8 million Class B common shares outstanding.

At quarter end, cash, cash equivalents and restricted cash totaled $207.3 million and total debt was $376.6 million, as compared to cash, cash equivalents and restricted cash of $71.9 million and total debt of $338.3 at December 31, 2012. Net debt to net book capitalization was 33.7% at June 30, 2013, as compared to 65.0% at December 31, 2012.

On August 7, 2013, the Company entered into a $100 million, three year revolving credit facility with a banking syndicate, which has an accordion feature under which the Company may increase the total commitment to a maximum aggregate amount of $125 million, subject to certain conditions. The facility improves the Company's liquidity and access to working capital.

Conference Call

William Lyon Homes will host a conference call to discuss these results today, Thursday, August 8, 2013, at 9:00 a.m. Pacific Time. The call will be available via both the telephone at (866) 804-6929 or (857) 350-1675, passcode # 48461466, or through the Company's website at www.lyonhomes.com in the Investor Relations section of the site. A replay of the call will be available through September 5, 2013 by dialing (888) 286-8010 or (617) 801-6888, passcode #49626672. A webcast replay of the call will also be available on the Company's website approximately two hours after broadcast.

About William Lyon Homes

Headquartered in Newport Beach, California, the Company is primarily engaged in the design, construction, marketing and sale of single-family detached and attached homes in California, Arizona, Nevada and Colorado. Its core markets include Orange County, Los Angeles, San Diego, the San Francisco Bay Area, Phoenix, Las Vegas, Denver and Fort Collins. The Company has a distinguished legacy of more than 55 years of homebuilding operations, over which time it has sold in excess of 75,000 homes. The Company markets and sells its homes under the William Lyon Homes brand in all of its markets except for Colorado, where the Company operates under the Village Homes brand.

Financial data included herein includes Colorado operations from December 7, 2012 (date of acquisition) through June 30, 2013. There were no operations in the Company's Colorado division for the three or six months ended June 30, 2012; therefore, period-over-period comparisons for Colorado are not meaningful ("N/M") as indicated in the comparative tables in the schedules attached to this release.

Certain statements contained in this release that are not historical information contain forward-looking statements.The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied.Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate.Factors that may impact such forward-looking statements include, among others, changes in general economic conditions and in the markets in which the Company competes, terrorism or hostilities involving the United States, changes in mortgage and other interest rates, changes in prices of homebuilding materials, weather conditions, the occurrence of events such as landslides, soil subsidence and earthquakes that are uninsurable, not economically insurable or not subject to effective indemnification agreements, the availability of labor and homebuilding materials, changes in governmental laws and regulations, the timing of receipt of regulatory approvals and the opening of projects, and the availability and cost of land for future development, as well as the other factors discussed in the Company's reports filed with the Securities and Exchange Commission.

As a result of the consummation of the Prepackaged Joint Plan of Reorganization on February 25, 2012, the Company adopted Fresh Start Accounting in accordance with Accounting Standards Codification No. 852, Reorganizations. Accordingly, the financial statement information prior to February 25, 2012 is not comparable with the financial statement information for periods on and after February 25, 2012. Any reference hereinafter to the "Successor" reflects the operations of the Company post-emergence from February 25, 2012 through June 30, 2012 and any reference to the "Predecessor" refers to the operations of the Company pre-emergence prior to February 25, 2012.Any reference to the "Combined Total" reflects the operations of the Company in both the Predecessor and Successor periods.

WILLIAM LYON HOMES
SELECTED FINANCIAL AND OPERATING INFORMATION
(unaudited)
 
  Three Months Ended June 30,
2013  2012  
ConsolidatedConsolidatedPercentage %
TotalTotalChange
Selected Financial Information
(dollars in thousands)
Homes closed 345  231 49%
Home sales revenue$120,648$54,251122%
Cost of sales (excluding interest) (88,119) (42,063)109%
Adjusted homebuilding gross margin (1)$32,529 $12,188 167%
Adjusted homebuilding gross margin percentage (1) 27.0% 22.5%

20

%
Interest in cost of sales (8,528) (4,022)112%
Gross margin$24,001 $8,166 194%
Gross margin percentage 19.9% 15.1%32%
 
Number of homes closed
Southern California774957%
Northern California2229(24%)
Arizona1241194%
Nevada7234112%
Colorado 50  - N/M 

Total

 345  231 49%
 
Average sales price of homes closed
Southern California$573,000$392,10046%
Northern California346,800351,000(1%)
Arizona244,400148,60064%
Nevada246,400210,90017%
Colorado 417,100  - N/M 

Total

$349,700 $234,800 49%
 
Number of net new home orders
Southern California1046560%
Northern California2452(54%)
Arizona13712014%
Nevada6465(2%)
Colorado 31  - N/M 

Total

 360  302 19%
 
Average number of sales locations during period
Southern California660%
Northern California24(50%)
Arizona63100%
Nevada56(17%)
Colorado 5  - N/M 
Total 24  19 26%
(1) Adjusted homebuilding gross margin is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. It is used by management in evaluating operating performance and in making strategic decisions regarding sales pricing, construction and development pace, product mix and other operating decisions. The Company believes this information is meaningful as it isolates the impact that interest has on homebuilding gross margin and allows investors to make better comparisons with its competitors.
 
 
WILLIAM LYON HOMES
SELECTED FINANCIAL AND OPERATING INFORMATION
(unaudited)
 
  As of June 30,
2013  2012  
ConsolidatedConsolidatedPercentage %
TotalTotalChange
Backlog of homes sold but not closed at end of period
Southern California105987%
Northern California5279(34%)
Arizona17714720%
Nevada1147944%
Colorado 63 -N/M 

Total

 511 40327%
 
Dollar amount of homes sold but not closed at end of period (in thousands)
Southern California$78,541$43,12182%
Northern California20,64423,011(10%)
Arizona46,46124,80887%
Nevada35,30214,791139%
Colorado 25,809 -N/M 
Total$206,757$105,73196%
 
Lots owned and controlled at end of period
Lots owned
Southern California1,1611,02114%
Northern California368411(10%)
Arizona5,8206,371(9%)
Nevada2,7713,014(8%)
Colorado 456 -N/M 
Total 10,576 10,817(2%)
 
Lots controlled
Southern California52527790%
Northern California68956223%
Arizona1,616-100%
Nevada192-100%
Colorado 263 -N/M 
Total 3,285 839292%
 
Total lots owned and controlled
Southern California1,6861,29830%
Northern California1,0579739%
Arizona7,4366,37117%
Nevada2,9633,014(2%)
Colorado 719 - Read Full Story

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