WCI Communities Announces Second Quarter 2013 Results
WCI Communities Announces Second Quarter 2013 Results
Second Quarter 2013 Financial Highlights Versus Second Quarter 2012
- Net income of $8.2 million, or $0.45 per diluted share, versus net loss of ($16.5) million, or ($1.39) per diluted share
- Adjusted EBITDA of $11.7 million, up 213.5%
- Revenues from homes delivered of $53.8 million, up 170.0%
- Deliveries of 122 homes, up 144.0%
- Average selling price of $441,000, up 10.8%
- Adjusted gross margin from homes delivered of 33.3%, a 140 basis point improvement
- Contract value of new orders of $70.1 million, up 38.0%
- New orders of 147 homes, up 14.8%
- Average selling price per new order of $477,000, up 20.2%
- Cancellation rate of 4.5%, down from 6.6%
- Backlog contract value of $159.8 million, up 16.7%; average selling price in backlog of $469,000, up 11.9%
- $66 million in land purchases of approximately 1,900 home sites for eight future selling neighborhoods
Keith Bass, the Company's President and Chief Executive Officer commented, "The second quarter of 2013 positioned WCI Communities for a strong start as we returned to the public markets following our IPO last month. The Company's profitability for the quarter improved significantly over last year as we continue to ramp up our Homebuilding operations. These results demonstrate that we are well positioned to take advantage of the improving Florida housing market given our significant land position with its attractive cost basis in many of the state's key coastal markets." Mr. Bass added, "We will continue to focus on developing highly desirable, amenity rich, lifestyle oriented communities by leveraging the operational expertise that exists across the organization."
For the quarter ended June 30, 2013, the Company generated total revenue of $83.3 million, an improvement of $34.8 million, or 71.8%, compared to $48.5 million in the second quarter of 2012. This increase was primarily due to strength in the Homebuilding segment, attributable to significant growth in homes delivered and higher average selling prices.
Net income for the quarter ended June 30, 2013 increased to $8.2 million, or $0.45 per diluted share, an improvement from a net loss of ($16.5) million, or ($1.39) per diluted share, in the second quarter of 2012, which included $17.0 million in charges related to the early repayment of debt. Each business segment reported gross margin improvement over the second quarter of 2012, led by the incremental home deliveries in the Homebuilding segment.
Revenues from homes delivered were $53.8 million, up 170.0% from the prior year period. The average selling price was $441,000, an increase of 10.8% from the prior year period, primarily driven by shifting product mix and an improved pricing environment. The Company delivered 122 homes, an increase of 144.0% from the prior year.
Adjusted gross margin from homes delivered increased to 33.3%, compared to 31.9% in the prior year period. The 140 basis point year-over-year increase was primarily attributable to more deliveries with higher average selling prices, which more efficiently leveraged overhead.
Contract value of new orders was $70.1 million for the second quarter, an increase of 38.0% from the prior year period. New orders for the second quarter increased 14.8% to 147 homes and the average selling price per new order was $477,000, an increase of 20.2% from the prior year period. The year-over-year growth is primarily attributable to the continued improvement in the overall housing market, favorable pricing environments and a higher number of active selling neighborhoods. The cancellation rate was 4.5%, down from 6.6% in the prior year period.
Backlog contract value as of June 30, 2013 was $159.8 million, an increase of 16.7% from the prior year period and the average price in the backlog was $469,000, an increase of 11.9% from the prior year period. The increase in year-over-year backlog contract value was primarily due to continued improvement in the housing market as evidenced by the increase in new orders and average selling prices partially offset by increased deliveries during the six months ended June 30, 2013.
On July 30, 2013, the Company completed its initial public offering ("IPO") and issued 6,819,091 shares of common stock at $15.00 per share for total net proceeds of approximately $91.4 million after deducting the underwriters' discount and other IPO related expenses payable by the Company. The Company intends to use the proceeds from the IPO for general corporate purposes, including the acquisition and development of land and home construction.
On August 7, 2013, the Company completed the issuance of $200 million of 6.875% senior notes due 2021 in a private offering. The net proceeds from the offering were approximately $196.0 million after deducting the initial purchasers' discounts and other fees and expenses. The Company used $127.0 million of the net proceeds from the offering to voluntarily prepay the entire principal amount outstanding of its senior secured term notes due 2017, at a price equal to 101.0% of the principal amount, plus accrued and unpaid interest, and intends to use the remainder of proceeds for general corporate purposes, including the acquisition and development of land and home construction.
"Collectively, the IPO and senior notes offering provides us with the liquidity and capital structure to continue to execute on our strategic initiatives and grow the business," commented Mr. Bass.
As previously announced, the Company will host a conference call to discuss second quarter 2013 results before the market opens on Tuesday, August 20, 2013 at 8:30 a.m. (Eastern Time). A slide presentation for the call will be available on the Investors section of the Company's Web site at investors.WCICommunities.com. The conference call can be accessed live over the phone by dialing (877) 407-0784, or for international callers, (201) 689-8560. A replay will be available approximately two hours after the call and can be accessed by dialing (877) 870-5176, or for international callers, (858) 384-5517. The passcode for the live call and the replay is 419367. The replay will be available until 11:59 pm (Eastern Time) on September 3, 2013.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company's website at investors.WCICommunities.com. The on-line replay will be available for a limited time beginning approximately 2 hours following the call.
To learn more about WCI Communities, please visit the company's Web site at www.WCICommunities.com.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), this earnings announcement contains the non-GAAP financial measures Adjusted EBITDA and Adjusted gross margin from homes delivered. The reasons for the use of these measures, a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these measures are included below following the unaudited consolidated financial statements.
About WCI Communities, Inc.
WCI Communities is a lifestyle community developer and luxury homebuilder of single- and multi-family homes in most of coastal Florida's highest growth and largest markets. With a legacy that spans more than 60 years, WCI Communities has an established expertise in developing amenity rich, lifestyle oriented master-planned communities, catering to move-up, active adult and second-home buyers. Headquartered in Bonita Springs, Florida, WCI Communities is a fully integrated homebuilder and developer with complementary real estate brokerage and title services businesses.
Any statements made in this press release that are not statements of historical fact, including statements about the Company's beliefs and expectations, are forward-looking statements within the meaning of the federal securities laws, and should be evaluated as such. Forward-looking statements include information concerning market conditions and possible or assumed future results of operations, including descriptions of the Company's business plan and strategies. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believe," "estimate," "project," "anticipate," "expect," "seek," "predict," "contemplate," "continue," "possible," "intend," "may," "might," "will," "could," "would," "should," "forecast," or "assume" or, in each case, their negative, or other variations or comparable terminology. For more information concerning factors that could cause actual results to differ materially from those contained in the forward-looking statements please refer to the "Risk Factors" section of the final prospectus filed by the Company with the Securities and Exchange Commission on July 25, 2013 related to the Registration Statement on Form S-1 and subsequent filings by the Company. The Company bases these forward-looking statements or projections on its current expectations, plans and assumptions that it has made in light of its experience in the industry, as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances and at such time. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or projections. Although the Company believes that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect the Company's actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. If the Company does update one or more forward-looking statements, there should be no inference that it will make additional updates with respect to those or other forward-looking statements.
|WCI Communities, Inc.|
|Consolidated Balance Sheets|
|(in thousands, except share amounts)|
|June 30,||December 31,|
|Cash and cash equivalents||$||34,532||$||81,094|
|Notes and accounts receivable||2,689||5,672|
|Real estate inventories||272,408||183,168|
|Property and equipment, net||24,179||24,313|
|Income tax receivable||85||16,831|
|Liabilities and Equity|
|Accounts payable and other liabilities||$||44,564||$||40,007|
|Senior secured term notes||122,936||122,729|
|Commitments and contingencies (Note 14)|
|WCI Communities, Inc. shareholders' equity:|
|Preferred stock, $.01 par value; 20,000 shares authorized,|
|Series A $.01 par value; 10,000 shares issued and outstanding at|
|June 30, 2013 and December 31, 2012||-||-|
|Series B $.01 par value; 0 shares issued and outstanding at June 30, 2013;|
|1 share issued and outstanding at December 31, 2012||-||-|
|Common stock, $.01 par value; 150,000,000 shares authorized,|
|18,072,169 shares issued and 18,045,132 shares outstanding at June 30, 2013|
|and December 31, 2012||18||18|
|Additional paid-in capital||203,336||203,996|
|Treasury stock, at cost, 27,037 shares at June 30, 2013 and December 31, 2012||(196||)||(196||)|
|Total WCI Communities, Inc. shareholders' equity||174,986||166,154|
|Noncontrolling interest in consolidated joint ventures||2,628||2,451|
|Total liabilities and equity||$||367,358||$||347,262|
WCI Communities, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
|Three Months Ended June 30,||Six Months Ended June 30,|
Real estate services
|Cost of Sales|
Real estate services
Total cost of sales
|Selling, general and administrative||9,564||7,301||18,728||13,671|
|Expenses related to early repayment of debt||-||16,984||-||16,984|
|Income (loss) from continuing operations before income taxes||8,812||(19,110||)||9,584||(25,410||)|
|Income tax benefit from continuing operations||-||937||85||937|
|Income (loss) from continuing operations||8,812||(18,173||)||9,669||(24,473||)|
|Income from discontinued operations, net of tax||-||188||-||101|
|Gain on sale of discontinued operations, net of tax||-||1,396||-||1,396|
|Net income (loss)||8,812||(16,589||)||9,669||(22,976||)|
|Net (loss) income from continuing operations attributable to noncontrolling interests||(94||)||(131||)||177||142|
Net income (loss) attributable to WCI Communities, Inc.
|Preferred stock dividend||(700||)||-||(700||)||-|
|Net income (loss) attributable to common shareholders of WCI Communities, Inc.||$||8,206||$||(16,458||)||$||8,792||$||(23,118||)|
|Basic earnings (loss) per share of WCI Communities, Inc.:|
Earnings (loss) per share
|Diluted earnings (loss) per share of WCI Communities, Inc.:|
Earnings (loss) per share
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