The new home company reports second quarter 2015 results
Aliso viejo, calif.--(business wire)--the new home company inc. (nyse: nwhm) today announced results for the second quarter ended june 30, 2015. second quarter 2015 highlights compared to second quarter 2014 total revenues of $45.6 million vs. $22.5 million, up 103% average selling price of $1.6 million vs. $739,000 equity in net income from jvs of $3.3 million vs. $0.2 million backlog dollar value up 245% to $136.6 million vs. $39.6 million wholly-owned community count doubles to eight vs. four jv community count up 43% to 10 vs. seven larry webb, the company’s chief executive officer commented, “we continued to grow our diverse operating platform and further position our company to achieve our financial and operating goals for 2015. during the quarter, we increased the portion of our business dedicated to wholly-owned projects as we doubled our wholly-owned community count and more than tripled our wholly-owned backlog value to $137 million. at the same time, our joint venture business continued to expand as we doubled the dollar value of joint venture backlog which stood at $284 million at the end of the quarter.” mr. webb continued, “we are pleased with the contributions from our joint venture and fee building businesses. they continue to support our ability to leverage our capital base and overhead infrastructure as we continue to grow our wholly-owned business. in addition, to further augment our strong land pipeline, we added two unique sites located in the premier coastal master-plan of crystal cove.” mr. webb concluded, “as we move forward, we are committed to executing our operating strategy and believe we have laid the foundation for a strong finish in the second half of 2015 leading to our full year success.” second quarter 2015 operating results total revenues for the 2015 second quarter were up 103% to $45.6 million, compared to $22.5 million in the prior year period. net income attributable to the company was $0.4 million, or $0.03 per diluted share, compared to a net loss of $1.0 million, or $0.06 per diluted share, in the year earlier period. the improvement in net income was primarily due to an increase in equity in joint venture income and higher home sales and fee building revenue. wholly owned projects home sales revenue for the 2015 second quarter was $19.2 million, compared to $9.6 million in the prior year period and new home deliveries were 12, compared to 13 in the prior year period. the growth in home sales revenue was due to an increase in the average selling price of homes delivered from $1.6 million compared to $739,000 in the prior year period. the expansion in the average selling price was due to a change in product mix to communities with higher average selling prices located in irvine, california. the company expects that the average selling price will continue to vary significantly from quarter to quarter due to the mix of homes offered and the low level of wholly-owned deliveries as the company opens new communities. homebuilding gross margin percentage was 10.4%, compared to 17.6%, in the prior year period. adjusted homebuilding gross margin percentage, which excludes interest in cost of home sales, was 11.1%*, compared to 18.1%* in the prior year period. the decrease in gross margin percentage was substantially driven by the close-out of two communities in sacramento that required higher incentives, and to a lesser extent, a higher mix of deliveries from two master-planned communities in irvine with seller profit participation. selling, general and administrative ("sg&a") expenses were $5.7 million, compared to $3.4 million in the prior year period. as a percentage of home sales revenue, sg&a was 29.5% versus 35.6% in the prior year period. the improvement in the year-over-year sg&a percentage was driven by higher home sales revenue. the company's 2015 second quarter sg&a percentage increased significantly compared to the 2015 first quarter due to the reduced new home deliveries and related revenues. new home orders were up 74% to 40 homes, compared to 23 homes in the prior year period. the company doubled its active selling communities to eight communities at the end of the second quarter, compared to four at the end of the prior year period. the dollar value of the company's wholly-owned backlog at the end of the 2015 second quarter was up 245% year-over-year to $136.6 million representing 65 homes in backlog compared to 25 homes in the prior year period. the average sales price of homes in backlog at the end of the second quarter was up 33% to $2.1 million, compared to $1.6 million at the end of the prior year period. this increase was primarily due to a shift in mix to higher priced communities, including homes in irvine and our new orange county coastal community, fiano. unconsolidated joint ventures (jvs) the company’s share of income from jvs for the 2015 second quarter was $3.3 million, compared to $0.2 million in the prior year period. the increase in income from jvs was primarily due to an increase in total home and land sales revenue during the 2015 second quarter and income of $1.6 million related to the step-up in basis to the company's capital account in connection with the formation of a new jv. the following sets forth supplemental information about the company’s jvs. such information is not included in the company’s financial data for gaap purposes. total revenue of the jvs was $58.2 million and net income was $7.6 million, compared to $30.9 million and $3.0 million in the prior year period, respectively. home sales revenue of the jvs was $42.6 million, compared to $30.9 million in the prior year period. the improvement in home sales revenue was driven largely by a 35% increase in average selling price to $947,000 primarily due to a shift in regional and product mix. land sales revenue of the jvs for the 2015 second quarter totaled $15.6 million which consisted of lot sales from our foster city and cannery jvs in northern california. homebuilding gross margin percentage generated by the jvs was 20.8%, compared to 21.3% in the prior year period. adjusted homebuilding gross margin percentage of the jvs, which excludes interest in cost of home sales, was 22.5%* compared to 22.7%*. the slight change in gross margin percentage from the prior year period was the result of a product mix shift. the gross margin percentage from jv land sales was 24.7%. new home orders from jvs were up 23% over the prior year to 103 homes primarily due to the addition of three new selling communities. the jvs had 10 actively selling communities at the end of the 2015 second quarter, compared to seven at the end of the prior year period. the dollar value of backlog from unconsolidated jvs at the end of the 2015 second quarter was up 68% to $238.3 million, or 187 homes, compared to $142.2 million, or 141 homes, in the prior year period. the number of lots in jv backlog at the end of the 2015 second quarter was 140, which represented approximately $45.7 million in backlog value versus $0 in the year earlier period. fee building projects fee building revenue for the 2015 second quarter increased 105% to $26.4 million, primarily due to an increase in construction activity in the fee building communities. fee building gross margin was $1.2 million, compared to $(0.1) million in the prior year period. the growth in fee building gross margin was largely attributable to increased fee building volume. balance sheet and liquidity as of june 30, 2015, the company had $36.7 million of cash and cash equivalents, $16.5 million in available loan commitments and total debt outstanding of $175.2 million. the company ended the 2015 second quarter with a net debt-to-capital ratio of 47.3%*. conference call details the company will host a conference call and webcast for investors and other interested parties beginning at 11:00 a.m. eastern time on thursday, august 6, 2015 to review second quarter results, discuss recent events and conduct a question-and-answer period. the conference call will be available in the investors section of the company’s website at www.nwhm.com. to listen to the broadcast live, go to the site approximately 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. to participate in the telephone conference call, dial 1-855-327-6837 (domestic) or 1-631-982-4565 (international) at least five minutes prior to start time. replays of the conference call will be available through september 6, 2015 and can be accessed by dialing 1-877-870-5176 (domestic) or 1-858-384-5517 (international) and entering the pass code 115562. about the new home company nwhm is a new generation homebuilder focused on the design, construction and sale of innovative and consumer-driven homes in major metropolitan areas within select growth markets in california, including coastal southern california, the san francisco bay area and metro sacramento. the company is headquartered in aliso viejo, california. for more information about the company and its new home developments, please visit the company's website at www.nwhm.com. forward-looking statements various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. these forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, our ability to execute our strategic growth objectives, revenues, income and capital spending. our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “plan,” “goal,” “will,” or other words that convey the uncertainty of future events or outcomes. the forward-looking statements in this press release speak only as of the date of this release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. we have based these forward-looking statements on our current expectations and assumptions about future events. while our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. the following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: economic changes either nationally or in the markets in which we operate, including declines in employment, volatility of mortgage interest rates and inflation; a downturn in the homebuilding industry; continued volatility and uncertainty in the credit markets and broader financial markets; our future operating results and financial condition; our business operations; changes in our business and investment strategy; availability of land to acquire and our ability to acquire such land on favorable terms or at all; availability, terms and deployment of capital; continued or increased disruption in the availability of mortgage financing or the number of foreclosures in the market; shortages of or increased prices for labor, land or raw materials used in housing construction; delays in land development or home construction resulting from adverse weather conditions or other events outside our control; the cost and availability of insurance and surety bonds; changes in, or the failure or inability to comply with, governmental laws and regulations; the timing of receipt of regulatory approvals and the opening of projects; the degree and nature of our competition; our leverage and debt service obligations; availability of qualified personnel and our ability to retain our key personnel; and additional factors discussed under the sections captioned “risk factors” included in our annual report filed with the securities and exchange commission ("sec"). key operations and financial data (dollars in thousands) (unaudited) key operations and financial data - unconsolidated joint ventures (dollars in thousands) (unaudited) consolidated balance sheets preferred stock, $0.01 par value, 50,000,000 shares authorized, no sharesoutstanding common stock, $0.01 par value, 500,000,000 shares authorized, 16,516,546 and16,448,750, shares issued and outstanding as of june 30, 2015 and december 31,2014, respectively. consolidated statements of operations (unaudited) fee building, including management fees from unconsolidated joint ventures of $2,132,585, $1,640,226, 5,100,485 and $3,324,800, respectively consolidated statements of cash flows (unaudited) reconciliation of non-gaap financial measures (unaudited) reconciliation of non-gaap financial measures (continued) (unaudited) reconciliation of non-gaap financial measures (continued) (unaudited)
