Landsea Homes Reports Third Quarter 2024 Results

   -- Net income increased 29% to $11.1 million or $0.30 per share, a 36% 
      increase 
 
   -- Adjusted net income increased 36% to $15.9 million or $0.44 per share, a 
      47% increase 
 
   -- Home sales revenue increased 26.2% to $325.6 million 
 
   -- New home deliveries increased 40% to 629 homes 
 
   -- Net new home orders of 626 increased 28.8% 
 
   -- Home sales gross margin of 17.1%, adjusted home sales gross margin of 
      22.8% 
 
   -- Book value per share of $18.27 

DALLAS, Nov. 04, 2024 (GLOBE NEWSWIRE) -- Landsea Homes Corporation (Nasdaq: LSEA) ("Landsea Homes" or the "Company") announced today financial results for the third quarter ended September 30, 2024. For the quarter, the Company reported pretax income of $14.9 million, and net income of $11.1 million, or $0.30 per share. Adjusted net income (a non-GAAP measure) was $15.9 million or $0.44 per share and adjusted gross margin was 22.8%. Reported pretax income for the prior year period was $12.5 million with net income of $8.6 million, or $0.22 per share. For the prior year period, adjusted net income was $11.7 million, or $0.30 per share and adjusted gross margin was 24.0%.

Management Commentary

"Landsea Homes delivered strong top and bottom-line growth in the third quarter of 2024, as new home deliveries increased 40% year-over-year," said John Ho, Chief Executive Officer of Landsea Homes. "Home sales gross margin came in above our stated guidance range at 17.1%, and SG&A as a percent of home sales revenue improved 250 basis points as compared to the third quarter of 2023. The net result was earnings of $0.30 per diluted share, representing a 36% improvement over the prior year period."

Mr. Ho continued, "We saw solid demand in our markets during the quarter, as our High Performance Homes and attractive financing incentives to aid with affordability continued to appeal to homebuyers. Housing fundamentals continue to favor the public builders, driven by a lack of existing home inventory, steady demand and a resilient economy. We believe these factors serve as an excellent backdrop for our company, as we look to grow our existing operations."

Mr. Ho concluded, "We are starting to see the benefits of our increased size through better terms and pricing from our trade partners and suppliers. We believe this dynamic will continue to benefit our company at the local and national level as we become a bigger player within the industry. With an established presence in several high-growth markets, a differentiated product offering and a solid and improving balance sheet, Landsea Homes is well positioned to finish 2024 on a strong note and carry momentum into the new year."

Operating Results

Total revenue was $338.5 million in the third quarter, up 22% compared to the third quarter of 2023, primarily driven by a 40% increase in homes closed partially offset by a 10% decrease in average selling price as both Texas and Colorado contributed to our volume.

New homes delivered increased 40.4% to 629 homes at an average sales price of $518,000, a 10% decrease, compared to 448 homes delivered at an average sales price of $576,000 in the third quarter of 2023.

Net new home orders were up 28.8% to 626 homes with a dollar value of $307.6 million, an average sales price of $491,000 and a monthly absorption rate of 2.5 sales per active community. This compares to 486 homes with a dollar value of $285.0 million, an average sales price of $587,000 and a monthly absorption rate of 2.7 sales per active community in the prior year period. As a percentage of gross orders, cancellations equaled 11% as compared to 9% a year ago.

Total homes in backlog were 691 homes with a dollar value of $373.1 million and an average sales price of $540,000 at September 30, 2024. This compares to 760 homes with a dollar value of $482.7 million and an average sales price of $635,000 at September 30, 2023.

Total lots owned or controlled at September 30, 2024, were 11,868 compared to 11,203 at September 30, 2023. We continue to pursue an asset-light strategy, controlling 56% of our lots at the end of the third quarter of 2024 and 44% owned.

Home sales gross margin was 17.1% compared to 18.7% in the prior year period. Adjusted home sales gross margin (a non-GAAP measure) was 22.8% compared to 24.0% in the prior year period. The decrease was primarily attributed to an elevated level of sales discounts and incentives as well as higher interest costs.

Net income attributable to Landsea Homes increased 29% to $11.1 million compared to $8.6 million in the prior year period. Adjusted net income attributable to Landsea Homes (a non-GAAP measure) was $15.9 million compared to $11.7 million in the prior year period. Net income per share on a fully diluted basis was $0.30, a 36% increase compared to $0.22 in the third quarter of 2023. Adjusted net income per share (a non-GAAP measure) on a fully diluted basis was $0.44 compared to $0.30 in the third quarter of 2023.

Adjusted EBITDA (a non-GAAP measure) was $37.7 million compared to $28.7 million in the prior year period.

Balance Sheet

As of September 30, 2024, the Company had total liquidity of $263.0 million consisting of cash and cash equivalents as well as cash held in escrow of $36.3 million and $226.7 million in availability under the Company's $455.0 million unsecured revolving credit facility. Total debt was $732.1 million compared to $543.8 million at December 31, 2023.

Landsea Homes' ratio of debt to capital was 51.8% at September 30, 2024, and the Company's net debt to total capital (a non-GAAP measure) was 49.2% at September 30, 2024.

Full Year 2024 Outlook

   -- New home deliveries anticipated to be in the range of 2,890 to 3,000 
 
   -- Delivery ASPs expected to be in the range of $520,000 to $535,000 
 
   -- Adjusted home sales gross margin of approximately 21% 
 
   -- Home sales gross margin of approximately 15% 

Conference Call

The Company will hold a conference call today at 9:00 a.m. Central Time (10:00 a.m. Eastern time) to discuss its third quarter 2024 results and conduct a question-and-answer session.

   -- Toll-free dial-in number: 1-800-274-8461 
 
   -- International dial-in number: 1-203-518-9814 

The conference call will be broadcast live and available for replay in the Investors section of the Landsea Homes website at https://ir.landseahomes.com/.

A replay of the conference call will be available approximately three hours after conference end time through November 18, 2024.

Replay Details:

   -- Toll-free replay number: 1-844-512-2921 
 
   -- International replay number: 1-412-317-6671 
 
   -- Replay ID: 11157369 

About Landsea Homes Corporation

Landsea Homes Corporation (Nasdaq: LSEA) is a publicly traded residential homebuilder based in Dallas, Texas that designs and builds best-in-class homes and sustainable master-planned communities in some of the nation's most desirable markets. The company has developed homes and communities in New York, Boston, New Jersey, Arizona, Colorado, Florida, Texas and throughout California in Silicon Valley, Los Angeles, and Orange County. Landsea Homes was honored as the Green Home Builder 2023 Builder of the Year, after being named the 2022 winner of the prestigious Builder of the Year award, presented by BUILDER magazine, in recognition of a historical year of transformation.

An award-winning homebuilder that builds suburban, single-family detached and attached homes, mid-and high-rise properties, and master-planned communities, Landsea Homes is known for creating inspired places that reflect modern living and provides homebuyers the opportunity to "Live in Your Element." Our homes allow people to live where they want to live, how they want to live -- in a home created especially for them.

Driven by a pioneering commitment to sustainability, Landsea Homes' High Performance Homes are responsibly designed to take advantage of the latest innovations with home automation technology supported by Apple$(R)$. Homes include features that make life easier and provide energy savings that allow for more comfortable living at a lower cost through sustainability features that contribute to healthier living for both homeowners and the planet.

Led by a veteran team of industry professionals who boast years of worldwide experience and deep local expertise, Landsea Homes is committed to positively enhancing the lives of our homebuyers, employees, and stakeholders by creating an unparalleled lifestyle experience that is unmatched.

For more information on Landsea Homes, visit: www.landseahomes.com.

Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking statements" within the meaning of the federal securities laws, including, but not limited to, our expectations for future financial performance, business strategies or expectations for our business. These statements constitute projections, forecasts, and forward-looking statements, and are not guarantees of performance. Landsea Homes cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Words such as "may," "can," "should," "will," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "target," "look" or similar expressions may identify forward-looking statements. Specifically, forward-looking statements may include statements relating to the future financial performance of Landsea Homes; changes in the market for Landsea Homes' products and services; and other expansion plans and opportunities.

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