Market Overview

CalAtlantic Group, Inc. Reports 2016 First Quarter Results

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On October 1, 2015, Standard Pacific Corp. ("Standard Pacific") completed its merger transaction with The Ryland Group, Inc. ("Ryland"), with Standard Pacific continuing as the surviving corporation and changing its name to CalAtlantic Group, Inc. ("CalAtlantic"). Because the closing of the merger occurred after the 2015 first quarter, the highlights and comparisons below and the other financial information included in this earnings release includes only stand-alone data for predecessor Standard Pacific for the three months ended March 31, 2015, as required by Generally Accepted Accounting Principles (GAAP). To aid analysts and other investors with year-over-year comparability for the entire merged business, we also are providing limited pro forma information, which combines the stand-alone Standard Pacific and Ryland financial and operating data for the three months ended March 31, 2015. Limited historical Ryland operating data is also presented in the tables at the end of this release for informational purposes.

IRVINE, Calif., May 5, 2016 /PRNewswire/ -- CalAtlantic Group, Inc. (NYSE: CAA) today announced results for the first quarter ended March 31, 2016.

Larry Nicholson, President and Chief Executive Officer of CalAtlantic Group, Inc. commented, "I am pleased with our first quarter results and the solid start to 2016.  With home sale revenues up 22% and adjusted pretax income up 48%*, compared to the pro forma prior year period, we are laying the foundation for what I believe will be a strong year for CalAtlantic."

2016 CalAtlantic First Quarter Highlights and Comparisons to 2015 First Quarter
2016 first quarter results are for the combined company and include merger and other one-time costs and the impact of purchase accounting. 2015 first quarter represents the stand-alone results of Standard Pacific, as required by GAAP.

  • Net new orders of 4,135, up 163%; Dollar value of net new orders up 117%
  • 571 average active selling communities, up 188%
  • 2,727 new home deliveries, up 181%
  • Average selling price of $432 thousand, down 10%
  • Home sale revenues of $1.2 billion, up 152%
  • Gross margin from home sales of 21.0%, compared to 24.2%
    • Adjusted gross margin from home sales of 22.0%* compared to 24.2% (adjusted 2016 first quarter margin excludes $12.7 million of purchase accounting impact related to the merger)
  • SG&A rate from home sales of 11.6%, compared to 14.1%
  • Operating margin from home sales of $110.3 million, or 9.4%, compared to $47.5 million, or 10.1%
    • Adjusted operating margin from home sales of $123.0 million*, or 10.4%*
  • Net income of $72.7 million, or $0.52 per diluted share, vs. net income of $31.6 million, or $0.40 per diluted share (2016 first quarter results include the impact of $4.8 million of merger and other one-time costs and $12.7 million of purchase accounting adjustments)
    • Adjusted net income of $83.7 million*, or $0.60 per diluted share*
  • $371.6 million of land purchases and development costs, compared to $160.1 million

2016 CalAtlantic First Quarter Highlights and Comparisons to Pro Forma 2015 CalAtlantic First Quarter
To aid analysts and other investors with year-over-year comparability for the entire merged business, we provide the below pro forma information.  This pro forma information is a combination of stand-alone first quarter 2015 Standard Pacific and Ryland financial and operating data, as if the merger closed on January 1, 2015, compared to actual 2016 CalAtlantic first quarter results.  Such pro forma data was not prepared to comply with Regulation S-X of the SEC Rules and Regulations.

  • Net new orders of 4,135, up 4%; Dollar value of net new orders up 9%
  • 571 average active selling communities, up 5%
  • 2,727 new home deliveries, up 12%
  • Average selling price of $432 thousand, up 9%
  • Home sale revenues of $1.2 billion, up 22%
  • Pretax income of $115.2 million vs. $89.8 million* (2016 first quarter results include the impact of $4.8 million of merger and other one-time costs and $12.7 million of purchase accounting adjustments)
    • Adjusted pretax income of $132.7 million*, up 48%
  • $371.6 million of land purchases and development costs, compared to $344.9 million

Orders.  Net new orders for the 2016 first quarter were up 4% from the pro forma 2015 first quarter, to 4,135 homes, with the dollar value of these orders up 9%, and the Company's monthly sales absorption rate was 2.4 per community for the 2016 first quarter, flat from the pro forma 2015 first quarter and up 55% from the 2015 fourth quarter, consistent with normal seasonal patterns.  The Company's cancellation rate for the 2016 first quarter was 12%, down 200 basis points compared to the pro forma 2015 first quarter and down from 22% for the 2015 fourth quarter.

Backlog.  The dollar value of homes in backlog increased 27% to $3.2 billion, or 7,019 homes, compared to $2.5 billion, or 5,853 homes, for the pro forma 2015 first quarter, and increased 25% compared to $2.6 billion, or 5,611 homes, for the 2015 fourth quarter.  The increase in pro forma year-over-year backlog value was driven primarily by our continued growth in community count and the corresponding increase in orders and a 6% increase in the average selling price of the homes in backlog on a pro forma basis, 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 2016 first quarter increased 22%, to $1.2 billion, as compared to the pro forma 2015 first quarter, resulting from a 12% increase on a pro forma basis in new home deliveries and a 9% increase on a pro forma basis in the Company's average home price to $432 thousand.  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. Excluding the impact of purchasing accounting, the Company achieved adjusted gross margin from home sales of 22.0%* for the 2016 first quarter.  Unadjusted, the gross margin from home sales was 21.0%.  The unadjusted first quarter gross margin was adversely impacted by the required fair value adjustment to homes in backlog, specs and models under construction acquired from Ryland in the merger, of which $12.7 million was recognized as an increase to cost of sales during the quarter. 

SG&A Expenses.  Selling, general and administrative expenses for the 2016 first quarter were $136.7 million, or 11.6%, as compared to $66.1 million, or 14.1%, for the 2015 first quarter.  This 250 basis point improvement was primarily the result of a 152% increase in home sale revenues and the operating leverage gained in connection with the merger.   

Land.  During the 2016 first quarter, the Company spent $371.6 million on land purchases and development costs, compared to $344.9 million for the pro forma 2015 first quarter. The Company purchased $215.4 million of land, consisting of 2,902 homesites, of which 24% (based on homesites) is located in the North region, 15% in the Southeast region, 21% in the Southwest region, and 40% in the West region.  As of March 31, 2016, the Company owned or controlled 68,892 homesites, of which 45,729 were owned and actively selling or under development, 17,075 were controlled or under option, and the remaining 6,088 homesites were held for future development or for sale. 

Liquidity.  The Company ended the quarter with $542.5 million of available liquidity, including $169.5 million of unrestricted homebuilding cash and $373.0 million available to borrow under its $750 million revolving credit facility. The Company's homebuilding debt to book capitalization as of March 31, 2016 and 2015 was 48.2% and 56.0%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 46.8%* and 54.6%*, respectively.  In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the LTM period ending March 31, 2016 and 2015 was 5.0x* and 4.4x*, respectively.  

Earnings Conference Call

A conference call to discuss the Company's 2016 first quarter results will be held at 12:00 p.m. Eastern time May 6, 2016.  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 (877) 604-9674 (domestic) or (719) 325-4778 (international); Passcode: 4605965.  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: 4605965.  

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.

The pro forma results presented above are not necessarily indicative of how the Company would have performed if Ryland and Standard Pacific were combined for and the first quarter of 2015 and are not necessarily indicative of the combined Company's future performance. This news release and the referenced earnings conference call contain forward-looking statements.  These statements include but are not limited to statements regarding the integration of the operations of Standard Pacific and Ryland, the future success of those combined operations; 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; and our liquidity.  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, 2015 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




March 31,


March 31,


Percentage


December 31,


Percentage




2016


2015


or % Change


2015


or % Change

Select Operating Data

(Dollars in thousands)
















Deliveries


2,727



972


181%



3,795


(28%)

Average selling price

$

432


$

482


(10%)


$

437


(1%)

Home sale revenues

$

1,179,165


$

468,379


152%


$

1,659,982


(29%)

Gross margin % (including land sales)


20.8%



24.3%


(3.5%)



19.7%


1.1%

Gross margin % from home sales


21.0%



24.2%


(3.2%)



19.8%


1.2%

Adjusted gross margin % from home sales (excluding purchase accounting adjustments included in cost of home sales)*


22.0%



24.2%


(2.2%)



23.7%


(1.7%)

Adjusted gross margin % from home sales (excluding purchase accounting adjustments and interest amortized to cost of home sales)*


24.6%



29.0%


(4.4%)



26.4%


(1.8%)

Incentive and stock-based compensation expense

$

10,270


$

4,422


132%


$

21,239


(52%)

Selling expenses

$

63,060


$

26,123


141%


$

79,586


(21%)

G&A expenses (excluding incentive and stock-based 

compensation expenses)

$

63,371


$

35,525


78%


$

70,645


(10%)

SG&A expenses

$

136,701


$

66,070


107%


$

171,470


(20%)

SG&A % from home sales


11.6%



14.1%


(2.5%)



10.3%


1.3%

Operating margin from home sales

$

110,336


$

47,492


132%


$

157,954


(30%)

Operating margin % from home sales


9.4%



10.1%


(0.7%)



9.5%


(0.1%)

Adjusted operating margin from home sales*

$

123,013


$

47,492


159%


$

222,124


(45%)

Adjusted operating margin % from home sales*


10.4%



10.1%


0.3%



13.4%


(3.0%)

Net new orders


4,135



1,571


163%



2,699


53%

Net new orders (dollar value)

$

1,798,050


$

829,930


117%


$

1,194,094


51%

Average active selling communities


571



198


188%



579


(1%)

Monthly sales absorption rate per community


2.4



2.6


(9%)



1.6


55%

Cancellation rate


12%



11%


1%



22%


(10%)

Gross cancellations


571



200


186%



763


(25%)

Backlog (homes)


7,019



2,310


204%



5,611


25%

Backlog (dollar value)

$

3,212,079


$

1,293,272


148%


$

2,572,092


25%
















Land purchases (incl. seller financing)

$

215,419


$

78,494


174%


$

212,210


2%

Adjusted Homebuilding EBITDA*

$

171,230


$

79,235


116%


$

297,581


(42%)

Adjusted Homebuilding EBITDA Margin %*


14.4%



16.8%


(2.4%)



17.8%


(3.4%)

Homebuilding interest incurred

$

62,725


$

41,803


50%


$

45,545


38%

Homebuilding interest capitalized to inventories owned

$

61,845


$

41,401


49%


$

44,713


38%

Homebuilding interest capitalized to investments in JVs

$

880


$

402


119%


$

832


6%

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

$

30,382


$

22,638


34%


$

46,857


(35%)

 


As of 


March 31,


December 31,


Percentage


2016


2015


or % Change

Select Balance Sheet Data

(Dollars in thousands, except per share amounts)









Homebuilding cash (including restricted cash)

$

204,180


$

187,066


9%

Inventories owned

$

6,317,066


$

6,069,959


4%

Goodwill

$

969,315


$

933,360


4%

Homesites owned and controlled


68,892



70,494


(2%)

Homes under construction


6,260



6,081


3%

Completed specs


988



1,325


(25%)

Homebuilding debt

$

3,666,812


$

3,487,699


5%

Stockholders' equity

$

3,941,969


$

3,861,436


2%

Stockholders' equity per share

$

33.20


$

31.84


4%

Total consolidated debt to book capitalization


49.3%



49.5%


(0.2%)

Adjusted net homebuilding debt to total adjusted book capitalization*


46.8%



46.1%


0.7%

 

PRO FORMA KEY STATISTICS AND FINANCIAL DATA1



As of or For the Three Months Ended



Actual
March 31,


Pro Forma
March 31,


Percentage


Actual
December 31,


Percentage



2016


2015


or % Change


2015


or % Change

Select Operating Data

(Dollars in thousands)















Deliveries


2,727



2,435


12%



3,795


(28%)

Average selling price

$

432


$

398


9%


$

437


(1%)

Home sale revenues

$

1,179,165


$

969,948*


22%


$

1,659,982


(29%)

Pretax income

$

115,204


$

89,837*


28%


$

126,177


(9%)

Pretax income (excluding purchase accounting adjustments included in cost of home sales and merger and other one-time costs)*

$

132,725


$

89,837


48%


$

235,196


(44%)

Net new orders


4,135



3,960


4%



2,699


53%

Net new orders (dollar value)

$

1,798,050


$

1,643,274


9%


$

1,194,094


51%

Average active selling communities


571



546


5%



579


(1%)

Monthly sales absorption rate per community


2.4



2.4


         ― 



1.6


55%

Cancellation rate


12%



14%


(2%)



22%


(10%)

Gross cancellations


571



626


(9%)



763


(25%)

Backlog (homes)


7,019



5,853


20%



5,611


25%

Backlog (dollar value)

$

3,212,079


$

2,524,073


27%


$

2,572,092


25%















Land purchases (incl. seller financing)

$

215,419


$

200,459


7%


$

212,210


2%

 


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 March 31,





2016


2015





(Dollars in thousands, except per share amounts)





(Unaudited)

Homebuilding:







Home sale revenues

$

1,179,165


$

468,379


Land sale revenues


6,518



1,899



Total revenues


1,185,683



470,278


Cost of home sales


(932,128)



(354,817)


Cost of land sales


(6,367)



(1,356)



Total cost of sales


(938,495)



(356,173)




Gross margin


247,188



114,105




Gross margin %


20.8%



24.3%


Selling, general and administrative expenses


(136,701)



(66,070)


Income (loss) from unconsolidated joint ventures


1,189



(451)


Other income (expense)


(3,408)



(296)




Homebuilding pretax income 


108,268



47,288

Financial Services:







Revenues


17,552



5,393


Expenses


(10,616)



(4,185)




Financial services pretax income


6,936



1,208

Income before taxes


115,204



48,496

Provision for income taxes


(42,543)



(16,891)

Net income 


72,661



31,605

  Less: Net income allocated to preferred shareholder


         ―     



(7,662)

  Less: Net income allocated to unvested restricted stock


(113)



(67)

Net income available to common stockholders

$

72,548


$

23,876










Income Per Common Share:







Basic


$

0.60


$

0.44


Diluted

$

0.52


$

0.40










Weighted Average Common Shares Outstanding:







Basic



120,814,939



54,727,121


Diluted


138,430,580



62,078,364










Weighted average additional common shares outstanding







if preferred shares converted to common shares


         ―     



17,562,557










Total weighted average diluted common shares outstanding







if preferred shares converted to common shares


138,430,580



79,640,921










Cash Dividends Per Common Share

$

0.04


$

         ―     

 

CONDENSED CONSOLIDATED BALANCE SHEETS  








March 31,


December 31,







2016


2015







(Dollars in thousands)

ASSETS

(Unaudited)




Homebuilding:







Cash and equivalents

$

169,528


$

151,076


Restricted cash



34,652



35,990


Inventories:










Owned




6,317,066



6,069,959



Not owned



69,591



83,246


Investments in unconsolidated joint ventures


137,591



132,763


Deferred income taxes, net


349,127



396,194


Goodwill




969,315



933,360


Other assets




113,204



118,768




Total Homebuilding Assets


8,160,074



7,921,356

Financial Services:







Cash and equivalents


23,691



35,518


Restricted cash



22,985



22,914


Mortgage loans held for sale, net


187,444



325,770


Mortgage loans held for investment, net


21,553



22,704


Other assets




15,990



17,243




Total Financial Services Assets


271,663



424,149





Total Assets

$

8,431,737


$

8,345,505












LIABILITIES AND EQUITY






Homebuilding:







Accounts payable


$

169,636


$

191,681


Accrued liabilities



471,810



478,793


Revolving credit facility


266,000



        ―    


Secured project debt and other notes payable


23,902



25,683


Senior notes payable


3,376,910



3,462,016




Total Homebuilding Liabilities


4,308,258



4,158,173

Financial Services:







Accounts payable and other liabilities


16,567



22,474


Mortgage credit facilities


164,943



303,422




Total Financial Services Liabilities


181,510



325,896





Total Liabilities


4,489,768



4,484,069

Equity:







Stockholders' Equity:








Preferred stock


        ―    



        ―    



Common stock


1,187



1,213



Additional paid-in capital


3,336,979



3,324,328



Accumulated earnings


603,759



535,890



Accumulated other comprehensive income, net of tax


44



5




Total Equity


3,941,969



3,861,436





Total Liabilities and Equity

$

8,431,737


$

8,345,505

 

INVENTORIES



March 31,


December 31,


2016


2015


(Dollars in thousands)

Inventories Owned:

(Unaudited)







     Land and land under development

$ 3,570,066


$   3,546,289

     Homes completed and under construction

2,239,758


2,039,597

     Model homes

507,242


484,073

        Total inventories owned

$ 6,317,066


$   6,069,959





Inventories Owned by Segment:








     North

$    751,853


$      703,651

     Southeast

1,812,698


1,753,301

     Southwest

1,429,488


1,400,524

     West

2,323,027


2,212,483

        Total inventories owned

$ 6,317,066


$   6,069,959

 

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 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 March 31,





2016


2015


% Change





Homes


ASP


Homes


ASP


Homes


ASP





(Dollars in thousands)

New homes delivered:



















North


561


$

332



 n/a


$

 n/a



n/a



n/a


Southeast


713



389



385



377



85%



3%


Southwest


854



402



238



504



259%



(20%)


West


599



622



349



583



72%



7%




Consolidated total


2,727


$

432



972


$

482



181%



(10%)




Three Months Ended March 31,




2016


2015


% Change




Homes


ASP


Homes


ASP


Homes


ASP




(Dollars in thousands)

Net new orders:


















North



891


$

330



 n/a


$

 n/a



 n/a



 n/a


Southeast


1,201



371



558



423



115%



(12%)


Southwest


1,131



428



392



509



189%



(16%)


West



912



631



621



636



47%



(1%)



Consolidated total


4,135


$

435



1,571


$

528



163%



(18%)

 






Three Months Ended March 31,






2016


2015


% Change

Average number of selling communities 







  during the period:








North


115


n/a


n/a


Southeast


183


81


126%


Southwest


177


56


216%


West


96


61


57%




Consolidated total


571


198


188%

 






At March 31,






2016


2015


% Change






Homes


Dollar
Value


Homes


Dollar
Value


Homes


Dollar
Value






(Dollars in thousands)

Backlog:




















North



1,333


$

456,243



 n/a


$

 n/a



 n/a



 n/a


Southeast



2,109



876,617



944



461,589



123%



90%


Southwest



2,179



989,226



700



373,902



211%



165%


West



1,398



889,993



666



457,781



110%



94%




Consolidated total



7,019


$

3,212,079



2,310


$

1,293,272



204%



148%

 






At March 31,






2016


2015


% Change

Homesites owned and controlled:








North


15,495


 n/a


 n/a 


Southeast


24,020


16,451


46%


Southwest


15,007


6,811


120%


West



14,370


11,921


21%



Total (including joint ventures)


68,892


35,183


96%












Homesites owned


51,817


29,184


78%


Homesites optioned or subject to contract 


15,148


5,801


161%


Joint venture homesites


1,927


198


873%



Total (including joint ventures)


68,892


35,183


96%





















Homesites owned:








Raw lots


9,765


8,221


19%


Homesites under development


19,468


7,659


154%


Finished homesites


11,196


7,654


46%


Under construction or completed homes


9,041


3,428


164%


Held for sale


2,347


2,222


6%



Total


51,817


29,184


78%

PRO FORMA REGIONAL OPERATING DATA






Three Months Ended March 31,





Actual
2016


Pro Forma
2015


% Change





Homes


ASP


Homes


ASP


Homes


ASP





(Dollars in thousands)

New homes delivered:



















North


561


$

332



522


$

345



7%



(4%)


Southeast


713



389



712



333



0%



17%


Southwest


854



402



742



387



15%



4%


West


599



622



459



579



31%



7%




Consolidated total


2,727


$

432



2,435


$

398



12%



9%

 






Three Months Ended March 31,





Actual
2016


Pro Forma
2015


% Change





Homes


ASP


Homes


ASP


Homes


ASP





(Dollars in thousands)

Net new orders:



















North


891


$

330



818


$

335



9%



(1%)


Southeast


1,201



371



1,137



355



6%



5%


Southwest


1,131



428



1,145



402



(1%)



6%


West


912



631



860



588



6%



7%




Consolidated total


4,135


$

435



3,960


$

415



4%



5%

 






Three Months Ended March 31,






Actual
2016


Pro Forma
2015


% Change

Average number of selling 







  communities during the period:








North


115


118


(3%)


Southeast


183


166


10%


Southwest


177


180


(2%)


West


96


82


17%




Consolidated total


571


546


5%

 





At March 31,





Actual
2016


Pro Forma
2015


% Change





Homes


Dollar
Value


Homes


Dollar
Value


Homes


Dollar
Value





(Dollars in thousands)

Backlog:



















North


1,333


$

456,243



1,269


$

431,731



5%



6%


Southeast


2,109



876,617



1,803



721,194



17%



22%


Southwest


2,179



989,226



1,829



777,994



19%



27%


West


1,398



889,993



952



593,154



47%



50%




Consolidated total


7,019


$

3,212,079



5,853


$

2,524,073



20%



27%

 



At March 31,



Actual
2016


Pro Forma
2015


% Change

Homesites owned and controlled:







North

15,495


16,286


(5%)


Southeast

24,020


26,659


(10%)


Southwest

15,007


17,958


(16%)


West

14,370


14,077


2%


     Total (including joint ventures)

68,892


74,980


(8%)








Homesites owned

51,817


55,073


(6%)

Homesites optioned or subject to contract 

15,148


19,092


(21%)

Joint venture homesites

1,927


815


136%


     Total (including joint ventures)

68,892


74,980


(8%)















Homesites owned:







Raw lots

9,765


12,630


(23%)


Homesites under development

19,468


23,119


(16%)


Finished homesites

11,196


10,150


10%


Under construction or completed homes

9,041


6,830


32%


Held for sale

2,347


2,344


0%


     Total

51,817


55,073


(6%)

 

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 purchase accounting adjustments related to the merger and interest amortized to cost of home sales.  The table set forth below also calculates adjusted operating margin percentage from home sales, excluding purchase accounting adjustments related to the merger.  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


March 31,
2016


Gross
Margin %


March 31,
2015


Gross
Margin %


December 31,
2015


Gross
Margin %


(Dollars in thousands)
















Home sale revenues

$

1,179,165




$

468,379




$

1,659,982



Less: Cost of home sales


(932,128)





(354,817)





(1,330,558)



Gross margin from home sales


247,037


21.0%



113,562


24.2%



329,424


19.8%

Add: Purchase accounting adjustments included in cost of home sales


12,677


1.0%



   ―  


n/a



64,170


3.9%

Adjusted gross margin from home sales, excluding purchase accounting adjustments included in cost of home sales


259,714


22.0%



113,562


24.2%



393,594


23.7%

Add: Capitalized interest included in cost of home sales


30,203


2.6%



22,395


4.8%



43,890


2.7%

Adjusted gross margin from home sales, excluding purchase accounting adjustments and interest amortized to cost of home sales

$

289,917


24.6%


$

135,957


29.0%


$

437,484


26.4%































Adjusted gross margin from home sales, excluding purchase accounting adjustments included in cost of home sales

$

259,714


22.0%


$

113,562


24.2%


$

393,594


23.7%

Less: Selling, general and administrative expenses


(136,701)


(11.6%)



(66,070)


(14.1%)



(171,470)


(10.3%)

Adjusted operating margin from home sales, excluding purchase accounting adjustments

$

123,013


10.4%


$

47,492


10.1%


$

222,124


13.4%

 

The table set forth below reconciles the Company's pretax income to adjusted pretax income and adjusted net income, excluding purchase accounting adjustments and merger and other one-time transaction related costs.  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



March 31, 2016


December 31, 2015



(Dollars in thousands, except per share amounts)








Pretax income

$

115,204


$

126,177

Add:







Purchase accounting adjustments included in cost of home sales


12,677



64,170


Merger and other one-time costs


4,844



44,849

Adjusted pretax income


132,725



235,196


Less: Tax provision associated with add back of purchase accounting 







         adjustments and merger and other one-time costs


(49,013)



(90,680)








Adjusted net income

$

83,712


$

144,516









Less: Net income allocated to unvested restricted stock


(130)



(95)


Add: Interest on convertible senior notes


(226)



97

Adjusted net income available to common stock for diluted






   earnings per share

$

83,356


$

144,518








Adjusted diluted earnings per share

$

0.60


$

1.04








Total weighted average diluted common shares outstanding


138,430,580



138,971,598

 

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. 



March 31,
2016


December 31,
2015


March 31,
2015



(Dollars in thousands)











Total consolidated debt

$

3,831,755


$

3,791,121


$

2,243,144

Less:










Financial services indebtedness


(164,943)



(303,422)



(91,537)


Homebuilding cash, including restricted cash


(204,180)



(187,066)



(120,167)

Adjusted net homebuilding debt


3,462,632



3,300,633



2,031,440

Stockholders' equity


3,941,969



3,861,436



1,688,355

Total adjusted book capitalization

$

7,404,601


$

7,162,069


$

3,719,795











Total consolidated debt to book capitalization


49.3%



49.5%



57.1%











Adjusted net homebuilding debt to total adjusted book capitalization


46.8%



46.1%



54.6%





















Homebuilding debt

$

3,666,812


$

3,487,699


$

2,151,607

LTM adjusted homebuilding EBITDA

$

740,308


$

648,313


$

488,626











Homebuilding debt to adjusted homebuilding EBITDA


 5.0x 



 5.4x 



 4.4x 

 

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, (i) income (loss) from financial services subsidiaries, (j) purchase accounting adjustments and (k) merger and other one-time transaction related costs.  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 it provides perspective on the underlying performance of the business.  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 March 31,



March 31,
2016


March 31,
2015


December 31,
2015


2016


2015



(Dollars in thousands)

















Net income 

$

72,661


$

31,605


$

77,529


$

254,565


$

209,311


Provision for income taxes


42,543



16,891



48,648



154,632



127,534


Homebuilding interest amortized to cost of sales and interest expense


30,382



22,638



46,857



147,125



120,767


Homebuilding depreciation and amortization


12,012



5,956



18,699



47,043



27,996


Amortization of stock-based compensation


3,786



2,695



7,004



16,715



8,792

EBITDA


161,384



79,785



198,737



620,080



494,400

Add:
















Cash distributions of income from unconsolidated joint ventures


450



         ―    



2,238



3,280



1,875


Purchase accounting adjustments included in cost of home sales


12,677



         ―    



64,170



76,847



         ―    


Merger and other one-time costs


4,844



207



44,849



66,374



207

Less:
















Income (loss) from unconsolidated joint ventures


1,189



(451)



2,347



3,606



(682)


Income from financial services subsidiaries


6,936



1,208



10,066



22,667



8,538

Adjusted Homebuilding EBITDA

$

171,230


$

79,235


$

297,581


$

740,308


$

488,626

















Homebuilding revenues

$

1,185,683


$

470,278


$

1,674,311


$

4,211,816


$

2,421,257

















Adjusted Homebuilding EBITDA Margin %


14.4%



16.8%



17.8%



17.6%



20.2%

 

Because the closing of the merger occurred after the 2015 first quarter, financial statement information for the three months ended March 31, 2015 required by GAAP includes only stand-alone data for predecessor Standard Pacific Corp.  The table set forth below reconciles the Company's reported home sale revenues and pretax income to comparative financial measures on a combined basis for prior periods not required by GAAP.  Certain adjustments, including those related to conforming accounting policies and adjusting acquired inventory to fair value, have not been reflected in the pro forma financial measures below due to the impracticability of estimating such impacts.  Such pro forma data was not prepared to comply with Regulation S-X of the SEC Rules and Regulations.  The following non-GAAP financial measures have been provided as we believe this data is useful to investors for purposes of assessing the Company's operating performance on a combined basis for year-over-year comparison purposes.


Three Months Ended


March 31, 2015


(Dollars in thousands)




Home sale revenues

$

468,379

Add: Ryland home sale revenues


501,569

Pro forma combined home sale revenues

$

969,948







Pretax income

$

48,496

Add: Ryland pretax income


41,341

Pro forma combined pretax income

$

89,837

 

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-2016-first-quarter-results-300264031.html

SOURCE CalAtlantic Group, Inc.

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