CalAtlantic EPS of $0.59
Nov 4 2015, 16:37 ET | About: CalAtlantic Group, Inc. (CAA) | By: Niloofer Shaikh, SA News Editor
CalAtlantic (NYSE:CAA): Q3 EPS of $0.59 may not be comparable to consensus of $0.86.
Revenue of $652.19M (+7.8% Y/Y) misses by $66.03M.
Press Release
http://seekingalpha.com/news/2896256-calatlantic-eps-of-0_59?uprof=45#email_link
CalAtlantic Group, Inc. Reports 2015 Third Quarter Results
Wed November 4, 2015 4:02 PM|PR Newswire | About: CAA
IRVINE, Calif., Nov. 4, 2015 /PRNewswire/ -- CalAtlantic Group, Inc. (CAA) (NYSE (NYX): 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 (HHH) and can be accessed through the Company's website at 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.
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