Market Overview

CalAtlantic Group, Inc. Reports 2015 Third Quarter Results

Share:

Revenues increase to $626.0 million, up 4%

Q3 2015 backlog value of $1.7 billion, up 47% from Q3 2014

As previously announced, on October 1, 2015, Standard Pacific Corp. and The Ryland Group, Inc. completed their merger of equals, with Ryland merging into Standard Pacific and Standard Pacific continuing as the surviving corporation. At the same time: (i) Standard Pacific changed its name to "CalAtlantic Group, Inc." and effected a reverse stock split such that each five shares of common stock of Standard Pacific issued and outstanding immediately prior to the closing of the merger were combined and converted into one issued and outstanding share of CalAtlantic common stock, (ii) MP CA Homes, LLC, the sole owner of Standard Pacific's outstanding Series B Preferred Stock, converted all of its preferred stock to CalAtlantic common stock, and (iii) each outstanding share of Ryland common stock, stock options and restricted stock units were converted into the right to receive, or the option to acquire, as applicable, 1.0191 shares of CalAtlantic common stock. Cash was paid in lieu of all fractional shares.

Because the closing of the merger occurred after the third quarter was completed, the highlights and comparisons below and the other financial information included in this earnings release relate solely to Standard Pacific on a stand-alone basis and do not include Ryland's results of operations. For informational purposes, limited Ryland operating data is presented in the tables at the end of this release.

Additionally, even though the reverse stock split also occurred following completion of the third quarter, applicable accounting rules provide that the Company is required to restate per share information for all periods presented as if the reverse stock split had been implemented for such periods. Those same accounting rules, however, do not allow the Company to include the MP CA Homes, LLC conversion of its Series B Preferred Stock, which occurred at the same time as the reverse stock split, into the restated share information. Please take this into account when evaluating the per share information presented below.

IRVINE, Calif., Nov. 4, 2015 /PRNewswire/ -- CalAtlantic Group, Inc. (NYSE: 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 and can be accessed through the Company's website at http://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.

(Note: Tables Follow)

 

KEY STATISTICS AND FINANCIAL DATA1









As of or For the Three Months Ended





September 30,

2015


September 30,

2014


Percentage

or % Change


June 30,

2015


Percentage

or % Change










Operating Data

(Dollars in thousands)


















Deliveries


1,165



1,250


(7%)



1,305


(11%)


Average selling price

$

537


$

483


11%


$

532


1%


Home sale revenues

$

626,008


$

603,788


4%


$

694,678


(10%)


Gross margin % (including land sales)


24.5%



26.3%


(1.8%)



24.6%


(0.1%)


Gross margin % from home sales


25.3%



26.3%


(1.0%)



24.6%


0.7%


Adjusted gross margin % from home sales (excluding interest 

amortized to cost of home sales)*















30.2%



31.1%


(0.9%)



29.6%


0.6%


Incentive and stock-based compensation expense

$

5,932


$

7,527


(21%)


$

6,520


(9%)


Selling expenses

$

32,687


$

29,424


11%


$

35,873


(9%)


G&A expenses (excluding incentive and stock-based 

compensation expenses)














$

34,641


$

33,213


4%


$

37,517


(8%)


SG&A expenses

$

73,260


$

70,164


4%


$

79,910


(8%)


SG&A % from home sales


11.7%



11.6%


0.1%



11.5%


0.2%


Operating margin from home sales

$

85,390


$

88,726


(4%)


$

90,835


(6%)


Operating margin % from home sales


13.6%



14.7%


(1.1%)



13.1%


0.5%


Net new orders


1,326



1,154


15%



1,567


(15%)


Net new orders (dollar value)

$

768,557


$

568,977


35%


$

857,747


(10%)


Average active selling communities


215



185


16%



203


6%


Monthly sales absorption rate per community


2.1



2.1


(2%)



2.6


(20%)


Cancellation rate


19%



19%


0%



15%


4%


Gross cancellations


302



278


9%



268


13%


Cancellations from current quarter sales


119



107


11%



118


1%


Backlog (homes)


2,733



2,208


24%



2,572


6%


Backlog (dollar value)

$

1,655,496


$

1,126,125


47%


$

1,484,544


12%


















Cash flows (uses) from operating activities

$

(104,633)


$

(115,034)


9%


$

(17,126)


(511%)


Cash flows (uses) from investing activities

$

(60,675)


$

434




$

(16,156)


(276%)


Cash flows (uses) from financing activities

$

203,717


$

(7,271)




$

17,997


1,032%


Land purchases (incl. seller financing)

$

125,982


$

155,670


(19%)


$

98,627


28%


Adjusted Homebuilding EBITDA*

$

119,553


$

127,371


(6%)


$

135,263


(12%)


Adjusted Homebuilding EBITDA Margin %*


18.3%



21.1%


(2.8%)



19.3%


(1.0%)


Homebuilding interest incurred

$

42,304


$

37,308


13%


$

41,857


1%


Homebuilding interest capitalized to inventories owned

$

41,611


$

36,927


13%


$

41,508


0%


Homebuilding interest capitalized to investments in JVs

$

693


$

381


82%


$

349


99%


Interest amortized to cost of sales (incl. cost of land sales)

$

33,323


$

28,959


15%


$

36,563


(9%)


 




As of





September 30,

2015


December 31,

2014


Percentage

or % Change








Balance Sheet Data

(Dollars in thousands, except per share amounts)













Homebuilding cash (including restricted cash)

$

135,279


$

218,650


(38%)


Inventories owned

$

3,805,453


$

3,255,204


17%


Homesites owned and controlled


35,515



35,430


0%


Homes under construction


3,252



2,032


60%


Completed specs


377



515


(27%)


Deferred tax asset valuation allowance

$

1,115


$

2,561


(56%)


Homebuilding debt

$

2,378,767


$

2,136,082


11%


Stockholders' equity

$

1,807,327


$

1,676,688


8%


Adjusted stockholders' equity per share (reverse split adjusted, including if-converted preferred stock)*









$

24.76


$

23.10


7%


Total consolidated debt to book capitalization


57.6%



57.0%


0.6%


Adjusted net homebuilding debt to total adjusted book capitalization*










55.4%



53.3%


2.1%


1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS












Three Months Ended
September 30,


Nine Months Ended
September 30,





2015


2014


2015


2014





(Dollars in thousands, except per share amounts)





(Unaudited)

Homebuilding:













Home sale revenues

$

626,008


$

603,788


$

1,789,065


$

1,642,412


Land sale revenues


26,182



1,061



33,035



15,122



Total revenues


652,190



604,849



1,822,100



1,657,534


Cost of home sales


(467,358)



(444,898)



(1,346,108)



(1,207,339)


Cost of land sales


(25,076)



(891)



(30,190)



(14,245)



Total cost of sales


(492,434)



(445,789)



(1,376,298)



(1,221,584)




Gross margin


159,756



159,060



445,802



435,950




Gross margin %


24.5%



26.3%



24.5%



26.3%


Selling, general and administrative expenses


(73,260)



(70,164)



(219,240)



(196,589)


Income (loss) from unconsolidated joint ventures


121



557



(381)



(342)


Other income (expense)


(11,170)



(69)



(16,742)



(445)




Homebuilding pretax income 


75,447



89,384



209,439



238,574

Financial Services:













Revenues


6,130



6,179



17,765



17,275


Expenses


(4,079)



(3,673)



(12,626)



(10,873)


Other income


796



231



1,734



606




Financial services pretax income


2,847



2,737



6,873



7,008

Income before taxes


78,294



92,121



216,312



245,582

Provision for income taxes


(31,117)



(35,522)



(80,332)



(94,361)

Net income 


47,177



56,599



135,980



151,221

  Less: Net income allocated to preferred shareholder


(11,342)



(13,511)



(32,818)



(36,165)

  Less: Net income allocated to unvested restricted stock


(93)



(77)



(274)



(211)

Net income available to common stockholders

$

35,742


$

43,011


$

102,888


$

114,845
















Income Per Common Share:













Basic


$

0.65


$

0.77


$

1.87


$

2.06


Diluted

$

0.59


$

0.70


$

1.71


$

1.87
















Weighted Average Common Shares Outstanding:













Basic



55,345,443



55,909,542



55,059,683



55,772,603


Diluted


62,292,524



63,423,385



62,152,754



63,338,361
















Weighted average additional common shares outstanding if preferred shares converted to common shares













17,562,557



17,562,557



17,562,557



17,562,557
















Total weighted average diluted common shares outstanding if preferred shares converted to common shares













79,855,081



80,985,942



79,715,311



80,900,918

 

CONDENSED CONSOLIDATED BALANCE SHEETS
















September 30,


December 31,







2015


2014







(Dollars in thousands)

ASSETS

(Unaudited)




Homebuilding:







Cash and equivalents

$

97,854


$

180,428


Restricted cash



37,425



38,222


Inventories:










Owned




3,805,453



3,255,204



Not owned



47,333



85,153


Investments in unconsolidated joint ventures


121,937



50,111


Deferred income taxes, net


255,297



276,402


Other assets




52,074



61,597




Total Homebuilding Assets


4,417,373



3,947,117

Financial Services:







Cash and equivalents


28,868



31,965


Restricted cash



1,045



1,295


Mortgage loans held for sale, net


86,064



174,420


Mortgage loans held for investment, net


22,087



14,380


Other assets




5,772



5,243




Total Financial Services Assets


143,836



227,303





Total Assets

$

4,561,209


$

4,174,420












LIABILITIES AND EQUITY






Homebuilding:







Accounts payable


$

82,754


$

45,085


Accrued liabilities



209,872



223,783


Revolving credit facility


268,700



        ―    


Secured project debt and other notes payable


5,855



4,689


Senior notes payable


2,104,212



2,131,393




Total Homebuilding Liabilities


2,671,393



2,404,950

Financial Services:







Accounts payable and other liabilities


3,630



3,369


Mortgage credit facilities


78,859



89,413




Total Financial Services Liabilities


82,489



92,782





Total Liabilities


2,753,882



2,497,732

Equity:







Stockholders' Equity:








Preferred stock, $0.01 par value; 10,000,000 shares authorized; 53,565 shares issued and outstanding at September 30, 2015 and December 31, 2014
















1



1



Common stock, $0.01 par value; 600,000,000 shares authorized; 55,444,065 and 55,028,238 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively


554



550



Additional paid-in capital


1,343,560



1,348,905



Accumulated earnings


463,212



327,232




Total Equity


1,807,327



1,676,688





Total Liabilities and Equity

$

4,561,209


$

4,174,420

 

INVENTORIES








September 30,


December 31,



2015


2014



(Dollars in thousands)

Inventories Owned:


(Unaudited)








     Land and land under development


$            2,261,197


$          2,248,289

     Homes completed and under construction


1,299,611


827,612

     Model homes


244,645


179,303

        Total inventories owned


$            3,805,453


$          3,255,204






Inventories Owned by Segment:










     Southeast


$            1,264,823


$          1,033,401

     Southwest


646,429


598,856

     West


1,894,201


1,622,947

        Total inventories owned


$            3,805,453


$          3,255,204






 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS














Three Months Ended
September 30,


Nine Months Ended
September 30,






2015


2014


2015


2014






(Dollars in thousands)






(Unaudited)

Cash Flows From Operating Activities:













Net income

$

47,177


$

56,599


$

135,980


$

151,221


Adjustments to reconcile net income to net cash provided by (used in) operating activities:



























Depreciation and amortization


7,387



6,884



22,369



18,908




Amortization of stock-based compensation


3,536



2,505



8,620



7,736




Excess tax benefits from share-based payment arrangements


(2,210)



(960)



(8,573)



(960)




Deferred income tax provision


2,934



35,469



52,132



94,474




Other operating activities


(114)



(552)



1,014



2,223




Changes in cash and equivalents due to:
















Mortgage loans held for sale


23,178



10,534



88,360



53,108





Inventories - owned


(179,752)



(237,201)



(521,646)



(562,812)





Inventories - not owned


(9,551)



(5,090)



(21,612)



(19,884)





Other assets


2,985



(1,537)



8,862



(14,645)





Accounts payable


3,035



8,604



37,669



14,753





Accrued liabilities


(3,238)



9,711



(19,005)



(2,668)



Net cash provided by (used in) operating activities


(104,633)



(115,034)



(215,830)



(258,546)

















Cash Flows From Investing Activities:













Investments in unconsolidated homebuilding joint ventures


(62,510)



(2,271)



(83,288)



(7,948)


Distributions of capital from unconsolidated joint ventures


1,529



3,202



10,289



18,010


Net cash paid for acquisitions


       ―   



       ―   



       ―   



(33,408)


Other investing activities


306



(497)



(11,716)



(1,984)



Net cash provided by (used in) investing activities


(60,675)



434



(84,715)



(25,330)

















Cash Flows From Financing Activities:













Change in restricted cash


2,289



(5,642)



1,047



(15,567)


Borrowings from revolving credit facility


332,500



       ―   



491,400



       ―   


Principal payments on revolving credit facility


(93,800)



       ―   



(222,700)



       ―   


Principal payments on secured project debt and other notes payable


(72)



(338)



(569)



(1,399)


Principal payments on senior notes payable


(29,789)



       ―   



(29,789)



(4,971)


Payment of debt issuance costs


       ―   



(2,387)



       ―   



(2,387)


Net proceeds from (payments on) mortgage credit facilities


(11,482)



(1,881)



(10,554)



(36,169)


Repurchases of common stock


       ―   



       ―   



(22,073)



       ―   


Issuance of common stock under employee stock plans, net of tax withholdings


1,861



2,017



(461)



5,786


Excess tax benefits from share-based payment arrangements


2,210



960



8,573



960



Net cash provided by (used in) financing activities


203,717



(7,271)



214,874



(53,747)

















Net increase (decrease) in cash and equivalents


38,409



(121,871)



(85,671)



(337,623)

Cash and equivalents at beginning of period


88,313



147,539



212,393



363,291

Cash and equivalents at end of period

$

126,722


$

25,668


$

126,722


$

25,668

















Cash and equivalents at end of period

$

126,722


$

25,668


$

126,722


$

25,668

Homebuilding restricted cash at end of period


37,425



37,027



37,425



37,027

Financial services restricted cash at end of period


1,045



1,295



1,045



1,295

Cash and equivalents and restricted cash at end of period

$

165,192


$

63,990


$

165,192


$

63,990

















 

REGIONAL OPERATING DATA








During the 2015 third quarter, in connection with the transition planning related to the Merger, the Company began evaluating the business and allocating resources based on the post-merger homebuilding operating segments of CalAtlantic. The Company's homebuilding operating segments are grouped into three reportable segments: Southeast (Florida and the Carolinas); Southwest (Texas, Colorado and Nevada) and West (California and Arizona). The Company's Arizona operations were previously reported within the Company's Southwest reportable segment, and as such, the prior period operating data has been restated to conform to CalAtlantic's new presentation.













Three Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


New homes delivered:





















Southeast



467


$

437



472


$

360



(1%)



21%



Southwest



282



552



272



474



4%



16%



West



416



641



506



602



(18%)



6%





Consolidated total



1,165


$

537



1,250


$

483



(7%)



11%
















































 






Nine Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


New homes delivered:





















Southeast



1,328


$

411



1,363


$

344



(3%)



19%



Southwest



858



533



711



463



21%



15%



West



1,256



625



1,407



600



(11%)



4%





Consolidated total



3,442


$

520



3,481


$

472



(1%)



10%
















































 






Three Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


Net new orders:





















Southeast



429


$

463



446


$

388



(4%)



19%



Southwest



325



559



245



480



33%



16%



West



572



679



463



601



24%



13%





Consolidated total



1,326


$

580



1,154


$

493



15%



18%
















































 






Nine Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


Net new orders:





















Southeast



1,511


$

442



1,446


$

371



4%



19%



Southwest



1,123



523



967



463



16%



13%



West



1,830



656



1,576



591



16%



11%





Consolidated total



4,464


$

550



3,989


$

480



12%



15%
















































 






Three Months Ended
September 30,


Nine Months Ended
September 30,






2015


2014


% Change


2015


2014


% Change

Average number of selling communities during the period:


























Southeast


96


74


30%


88


74


19%


Southwest


54


53


2%


54


50


8%


West


65


58


12%


63


57


11%




Consolidated total


215


185


16%


205


181


13%

















 






At September 30,







2015


2014


% Change







Homes


Dollar
Value


Homes


Dollar
Value


Homes


Dollar
Value







(Dollars in thousands)


Backlog:





















Southeast



954


$

511,449



884


$

398,946



8%



28%



Southwest



811



438,753



654



324,358



24%



35%



West



968



705,294



670



402,821



44%



75%





Consolidated total



2,733


$

1,655,496



2,208


$

1,126,125



24%



47%

























 






At September 30,








2015


2014


% Change



Homesites owned and controlled:










Southeast


16,098


16,961


(5%)




Southwest


6,537


7,292


(10%)




West



12,880


12,054


7%





Total (including joint ventures)


35,515


36,307


(2%)
















Homesites owned


28,343


28,937


(2%)




Homesites optioned or subject to contract


5,792


7,172


(19%)




Joint venture homesites


1,380


198


597%





Total (including joint ventures)


35,515


36,307


(2%)



























Homesites owned:










Raw lots


6,916


6,745


15%




Homesites under development


7,717


9,379


(18%)




Finished homesites


7,674


6,448


6%




Under construction or completed homes


4,323


3,594


20%




Held for sale


1,713


2,771


(38%)





Total


28,343


28,937


(2%)















 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES









Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently. Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.









The table set forth below reconciles the Company's gross margin percentage from home sales to adjusted gross margin percentage from home sales, excluding interest amortized to cost of home sales. We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provide comparability with the Company's peer group.










Three Months Ended





September 30,
2015


Gross
Margin %


September 30,
2014


Gross
Margin %


June 30,
2015


Gross
Margin %





(Dollars in thousands)






















Home sale revenues

$

626,008




$

603,788




$

694,678






Less: Cost of home sales


(467,358)





(444,898)





(523,933)






Gross margin from home sales


158,650


25.3%



158,890


26.3%



170,745


24.6%




Add: Capitalized interest included in cost of home sales



















30,275


4.9%



28,872


4.8%



35,051


5.0%




Adjusted gross margin from home sales, excluding interest amortized to cost of home sales


















$

188,925


30.2%


$

187,762


31.1%


$

205,796


29.6%






















 

The table set forth below reconciles the Company's total consolidated debt to adjusted net homebuilding debt and provides the Company's total consolidated debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios. In addition, the table set forth below calculates homebuilding debt to adjusted homebuilding EBITDA. We believe these ratios are useful to management and investors as a measure of the Company's ability to obtain financing. For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders' equity. Adjusted net homebuilding debt excludes indebtedness of the Company's financial services subsidiary and additionally reflects the offset of cash and equivalents.















September 30,
2015


June 30,
2015


December 31,
2014


September 30,
2014





(Dollars in thousands)

















Total consolidated debt

$

2,457,626


$

2,259,379


$

2,225,495


$

1,900,012


Less:















Financial services indebtedness


(78,859)



(90,341)



(89,413)



(64,698)



Homebuilding cash


(135,279)



(116,802)



(218,650)



(52,322)


Adjusted net homebuilding debt


2,243,488



2,052,236



1,917,432



1,782,992


Stockholders' equity


1,807,327



1,752,543



1,676,688



1,634,664


Total adjusted book capitalization

$

4,050,815


$

3,804,779


$

3,594,120


$

3,417,656

















Total consolidated debt to book capitalization


57.6%



56.3%



57.0%



53.8%

















Adjusted net homebuilding debt to total adjusted book capitalization


55.4%



53.9%



53.3%



52.2%
































Homebuilding debt

$

2,378,767








$

1,835,314


LTM adjusted homebuilding EBITDA

$

484,570








$

492,922

















Homebuilding debt to adjusted homebuilding EBITDA


 4.9x 









 3.7x 

















 

The table set forth below calculates adjusted stockholders' equity per common share, after giving effect to the 1-for-5 reverse stock split. The Company believes that the adjusted stockholders' equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving the pro forma effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.







September 30,


December 31,



2015


2014









Actual common shares outstanding (reverse-split adjusted)


55,444,065



55,028,238


Add: Conversion of preferred shares to common shares (reverse-split adjusted)


17,562,557



17,562,557


Pro forma common shares outstanding (reverse-split adjusted)


73,006,622



72,590,795









Stockholders' equity (Dollars in thousands)

$

1,807,327


$

1,676,688


Divided by pro forma common shares outstanding (reverse-split adjusted)

÷

73,006,622


÷

72,590,795


Adjusted stockholders' equity per common share (reverse-split adjusted)

$

24.76


$

23.10









 

The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA. Adjusted Homebuilding EBITDA means net income (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, including amortization of capitalized model costs, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiaries. Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently. We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company's ability to service debt and obtain financing. Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.










Three Months Ended


LTM Ended September 30,




September 30,
2015


September 30,
2014


June 30,
2015


2015


2014




(Dollars in thousands)


















Net income 

$

47,177


$

56,599


$

57,198


$

200,624


$

216,041


Provision for income taxes


31,117



35,522



32,324



120,070



130,566


Homebuilding interest amortized to cost of sales and interest expense


33,323



28,959



36,563



131,878



116,667


Homebuilding depreciation and amortization


7,368



6,849



8,964



30,691



25,656


Amortization of stock-based compensation


3,536



2,505



2,389



9,353



10,095

EBITDA


122,521



130,434



137,438



492,616



499,025

Add:
















Cash distributions of income from unconsolidated joint ventures


         ―    



         ―    



592



592



1,875

Less:

















Income (loss) from unconsolidated joint ventures


121



557



(51)



(707)



(642)


Income from financial services subsidiaries


2,847



2,506



2,818



9,345



8,620

Adjusted Homebuilding EBITDA

$

119,553


$

127,371


$

135,263


$

484,570


$

492,922


















Homebuilding revenues

$

652,190


$

604,849


$

699,632


$

2,575,744


$

2,263,985


















Adjusted Homebuilding EBITDA Margin %


18.3%



21.1%



19.3%



18.8%



21.8%



































 

The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:












Three Months Ended


LTM Ended September 30,





September 30,
2015


September 30,
2014


June 30,
2015


2015


2014





(Dollars in thousands)



















Net cash provided by (used in) operating activities


$

(104,633)


$

(115,034)


$

(17,126)


$

(319,681)


$

(286,366)

Add:
















Provision for income taxes, net of deferred component


28,183



53



        ―   



63,414



367


Homebuilding interest amortized to cost of sales and interest expense



33,323



28,959



36,563



131,878



116,667


Excess tax benefits from share-based payment arrangements



2,210



960



2,994



21,017



960

Less:

















Income from financial services subsidiaries


2,847



2,506



2,818



9,345



8,620


Depreciation and amortization from financial services subsidiaries



19



35



25



117



134


Loss on disposal of property and equipment


7



5



15



46



7

Net changes in operating assets and liabilities:

















Mortgage loans held for sale



(23,178)



(10,534)



10,542



17,586



(6,386)



Inventories-owned


179,752



237,201



137,351



623,261



669,505



Inventories-not owned



9,551



5,090



6,183



34,755



31,503



Other assets


(2,985)



1,537



(12,809)



(28,036)



8,863



Accounts payable 



(3,035)



(8,604)



(21,155)



(32,230)



(21,223)



Accrued liabilities


3,238



(9,711)



(4,422)



(17,886)



(12,207)

Adjusted Homebuilding EBITDA


$

119,553


$

127,371


$

135,263


$

484,570


$

492,922



















 

RYLAND REGIONAL OPERATING DATA








On October 1, 2015, Ryland merged with and into the Company, with the Company continuing as the surviving corporation. The following operating data for Ryland has been provided as we believe this data is useful to investors for purposes of assessing the Company's operating performance on a combined basis. As noted above, during the 2015 third quarter, in connection with the transition planning related to the Merger, the Company began evaluating the business and allocating resources based on the post-merger homebuilding operating segments of CalAtlantic. Ryland's regional operating data presented below is grouped into CalAtlantic's four reportable segments: North (Baltimore, Chicago, Delaware, Indianapolis, Metro Washington, D.C., Minneapolis/St. Paul, New Jersey, Northern Virginia, Philadelphia and Atlanta); Southeast (Florida and the Carolinas); Southwest (Texas, Colorado and Nevada) and West (California and Arizona). All prior periods have been restated to conform to CalAtlantic's new presentation.














Three Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


New homes delivered:





















North



768


$

339



731


$

330



5%



3%



Southeast



509



300



478



278



6%



8%



Southwest



575



341



656



319



(12%)



7%



West



194



434



153



548



27%



(21%)





Consolidated total



2,046


$

339



2,018


$

331



1%



2%

























 






Nine Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


New homes delivered:





















North



1,940


$

340



1,821


$

330



7%



3%



Southeast



1,261



292



1,218



269



4%



9%



Southwest



1,661



342



1,760



321



(6%)



7%



West



461



507



389



566



19%



(10%)





Consolidated total



5,323


$

344



5,188


$

330



3%



4%
















































 






Three Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


Net new orders:





















North



636


$

337



607


$

343



5%



(2%)



Southeast



476



298



376



304



27%



(2%)



Southwest



601



356



567



334



6%



7%



West



199



375



157



516



27%



(27%)





Consolidated total



1,912


$

337



1,707


$

347



12%



(3%)
















































 






Nine Months Ended September 30,







2015


2014


% Change







Homes


ASP


Homes


ASP


Homes


ASP







(Dollars in thousands)


Net new orders:





















North



2,201


$

336



2,171


$

338



1%



(1%)



Southeast



1,634



293



1,384



288



18%



2%



Southwest



2,191



355



2,044



329



7%



8%



West



662



416



522



537



27%



(23%)





Consolidated total



6,688


$

340



6,121


$

340



9%



        ―  
















































 






Three Months Ended
September 30,


Nine Months Ended
September 30,






2015


2014


% Change


2015


2014


% Change

Average number of selling communities 













  during the period:














North


118


116


2%


116


107


8%


Southeast


81


81


        ―  


83


79


5%


Southwest


131


101


30%


128


101


27%


West


22


16


38%


21


17


24%




Consolidated total


352


314


12%


348


304


14%

















 






At September 30,







2015


2014


% Change







Homes


Dollar
Value


Homes


Dollar
Value


Homes


Dollar
Value







(Dollars in thousands)


Backlog:





















North



1,234


$

417,931



1,370


$

469,382



(10%)



(11%)



Southeast



979



293,907



780



232,914



26%



26%



Southwest



1,409



518,638



1,164



393,450



21%



32%



West



352



128,985



245



128,667



44%



0%





Consolidated total



3,974


$

1,359,461



3,559


$

1,224,413



12%



11%
















































 






At September 30,








2015


2014


% Change



Homesites owned and controlled:










North


16,848


16,199


4%




Southeast


10,597


10,944


(3%)




Southwest


10,686


12,130


(12%)




West



2,114


2,208


(4%)





Total (including joint ventures)


40,245


41,481


(3%)
















Homesites owned


25,671


25,983


(1%)




Homesites optioned or subject to contract 


13,968


14,872


(6%)




Joint venture homesites


606


626


(3%)





Total (including joint ventures)


40,245


41,481


(3%)



























Homesites owned:










Raw lots


3,418


3,116


10%




Homesites under development


15,218


16,082


(5%)




Finished homesites


1,063


989


7%




Under construction or completed homes


5,877


5,334


10%




Held for sale


95


462


(79%)





Total


25,671


25,983


(1%)















 

 

RYLAND REGIONAL QUARTERLY OPERATING DATA
























Q3 2015


Q2 2015


Q1 2015


Q4 2014


Q3 2014


Q2 2014


Q1 2014






(Dollars in thousands)

New homes delivered:
















North


768


650


522


890


731


574


516


Southeast


509


425


327


575


478


386


354


Southwest


575


582


504


817


656


596


508


West


194


157


110


207


153


144


92




Consolidated total


2,046


1,814


1,463


2,489


2,018


1,700


1,470



















Average selling price (deliveries):
















North


$    339


$    339


$    345


$    335


$    330


$    337


$    322


Southeast


300


291


281


286


278


261


264


Southwest


341


353


332


327


319


325


319


West


434


555


566


541


548


539


638




Consolidated total


$    339


$    351


$    343


$    338


$    331


$    333


$    327



















Net new orders:
















North


636


747


818


493


607


820


744


Southeast


476


579


579


402


376


507


501


Southwest


601


837


753


533


567


724


753


West


199


224


239


119


157


177


188




Consolidated total


1,912


2,387


2,389


1,547


1,707


2,228


2,186



















Average selling price (orders):
















North


$    337


$    338


$    335


$    338


$    343


$    345


$    325


Southeast


298


292


289


288


304


283


279


Southwest


356


360


347


344


334


330


325


West


375


403


463


591


516


543


548




Consolidated total


$    337


$    341


$    340


$    347


$    347


$    342


$    334



















Average number of selling communities
















during the period:
















North


118


113


117


117


116


109


98


Southeast


81


81


85


87


81


78


78


Southwest


131


129


123


114


101


98


102


West


22


20


21


18


16


17


17




Consolidated total


352


343


346


336


314


302


295



















Backlog:
















North


1,234


1,366


1,269


973


1,370


1,494


1,248


Southeast


979


1,013


859


607


780


882


761


Southwest


1,409


1,384


1,129


880


1,164


1,253


1,125


West


352


353


286


157


245


241


208




Consolidated total


3,974


4,116


3,543


2,617


3,559


3,870


3,342



















 

STANDARD PACIFIC REGIONAL QUARTERLY OPERATING DATA
























Q3 2015


Q2 2015


Q1 2015


Q4 2014


Q3 2014


Q2 2014


Q1 2014






(Dollars in thousands)

New homes delivered:
















Southeast


467


476


385


508


472


500


391


Southwest


282


338


238


348


272


237


202


West


416


491


349


619


506


499


402




Consolidated total


1,165


1,305


972


1,475


1,250


1,236


995



















Average selling price (deliveries):
















Southeast


$    437


$    414


$    377


$    382


$    360


$    339


$    329


Southwest


552


538


504


469


474


477


433


West


641


643


583


593


602


619


574




Consolidated total


$    537


$    532


$    482


$    491


$    483


$    479


$    449



















Net new orders:
















Southeast


429


524


558


395


446


517


483


Southwest


325


406


392


240


245


434


288


West


572


637


621


343


463


573


540




Consolidated total


1,326


1,567


1,571


978


1,154


1,524


1,311



















Average selling price (orders):
















Southeast


$    463


$    446


$    423


$    385


$    388


$    367


$    359


Southwest


559


509


509


509


480


452


467


West


679


655


636


641


601


572


604




Consolidated total


$    580


$    547


$    528


$    505


$    493


$    468


$    483



















Average number of selling communities
















during the period:
















Southeast


96


88


81


73


74


76


72


Southwest


54


55


56


54


53


49


45


West


65


60


61


57


58


58


57




Consolidated total


215


203


198


184


185


183


174



















Backlog:
















Southeast


954


992


944


771


884


910


893


Southwest


811


768


700


546


654


681


484


West


968


812


666


394


670


713


639




Consolidated total


2,733


2,572


2,310


1,711


2,208


2,304


2,016



















 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/calatlantic-group-inc-reports-2015-third-quarter-results-300172649.html

SOURCE CalAtlantic Group, Inc.

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