Dream Finders Homes, Inc. (the “Company”, “Dream Finders” or “DFH”)
(NASDAQ: DFH), one of the nation’s fastest-growing companies,
announced its financial results for the first quarter ended March
31, 2022.
First Quarter 2022 Highlights
(As Compared to First Quarter 2021)
- Backlog of sold homes increased 105.2% to 7,413 homes valued at
$3.4 billion, both Company records, compared to 3,612 homes valued
at $1.4 billion
- Homebuilding revenues increased 93.6% to $662.5 million from
$342.2 million
- Gross margin as a percentage of homebuilding revenues increased
380 basis points to 18.7% from 14.9%
- Pre-tax income increased 182.1% to $63.2 million, compared to
$22.4 million
- Net income attributable to DFH was $43.7 million, or $0.42 per
diluted share, compared to $16.1 million, or $0.18 per diluted
share
- Average sales price of homes closed increased 40.0% to $470,218
from $335,986
- Home closings increased 36.8% to 1,371 from 1,002 homes
- Net new orders increased 19.5% to 2,402 from 2,010
- Active community count increased 71.7% to 206 from 120
- Return on participating equity was 40.9% for the trailing
twelve months ended March 31, 2022, compared to 37.4% for the
trailing twelve months ended March 31, 2021
- Controlled lot pipeline increased 74.7% to 39,474 as of March
31, 2022, compared to 22,591 as of March 31, 2021
Management Commentary
Patrick Zalupski, Dream Finders Homes Chairman
and CEO, said, “Our team has worked extremely hard to manage
through supply chain challenges, identify efficiencies and deliver
great results to shareholders. I am most proud of the improved
margins and EPS growth. Margins improved year over year to 18.7%, a
record for the Company, however, there is still a long way to go to
meet our expectations. EPS grew 133% versus the year-ago quarter
with a record first quarter net earnings of $43.7 million, or $0.42
per diluted share. We delivered homebuilding revenue growth of 94%
compared to the prior year-ago quarter. Despite the increasing rate
environment, we continue to experience strong demand for our
product and have built this Company on a strategy that allows us to
be nimble and adjust quickly to market conditions. We believe we
are well-positioned for another strong year of growth at Dream
Finders.”
First Quarter 2022 Results
Homebuilding revenues for the first quarter 2022
increased 93.6% to $662.5 million, compared to $342.2 million in
the year-ago quarter. Home closings increased 36.8% to 1,371,
compared to 1,002 in the year-ago quarter. Average sales price
(“ASP”) of homes closed for the first quarter 2022 was $470,218,
compared to $335,986 in the year-ago quarter. The ASP increase was
primarily due to the MHI acquisition as well as home price
appreciation.
Homebuilding gross margin percentage in the
first quarter 2022 improved 380 basis points to 18.7%, compared to
14.9% in the year-ago quarter. The gross margin improvement was
attributable to our team’s ability to increase prices while
managing cost inflation, as well as lower cost of funds.
Selling, general and administrative expenses as
a percentage of homebuilding revenues was 9.3% in the first quarter
2022, compared to 8.6% in the year-ago quarter; the slight increase
is due to increased infrastructure to support the Company’s record
backlog that will deliver in 2022 and beyond.
Net new orders in the first quarter 2022
increased 19.5% to 2,402, compared to 2,010 in the year-ago
quarter, primarily due to increased community count as a result of
the MHI acquisition. The cancellation rate remains within the
Company’s historical averages at 13.4% for the quarter ended March
31, 2022, compared to 8.1% in the year-ago period. At the end of
the first quarter 2022, DFH had the largest backlog in Company’s
history with 7,413 homes, valued at $3.4 billion, which represents
record increases of 105.2% and 142.9%, respectively, when compared
to the year-ago quarter. As of March 31, 2022, the ASP in backlog
was $464,550.
Net income attributable to DFH in the first
quarter 2022 was $43.7 million, or $0.42 per diluted share,
compared to $16.1 million, or $0.18 per diluted share in the first
quarter 2021.
Full Year 2022 Outlook
Dream Finders Homes maintains its guidance of a
minimum of 7,000 home closings for the full year 2022. Any further
COVID-19 governmental restrictions on land development, home
construction or home sales or additional supply chain challenges
could negatively impact the Company’s ability to achieve this
number of home closings in 2022. As of March 31, 2022, the Company
backlog was 7,413 homes, with approximately 20.0% of the homes in
backlog expected to be delivered in 2023 and beyond. The Company
continues to believe the backlog of homes sold is the best
indicator for future growth. The following table shows the backlog
units and ASP as of March 31, 2022 by segment:
|
|
|
|
As of March 31, 2022 (unaudited) |
Backlog: |
Units |
Average SalesPrice |
Jacksonville |
1,826 |
$ |
372,744 |
Colorado |
149 |
592,211 |
Orlando |
957 |
527,355 |
DC Metro |
64 |
649,231 |
The Carolinas |
1,132 |
331,703 |
Texas |
2,068 |
626,520 |
Other (1) |
1,217 |
375,905 |
Total |
7,413 |
$ |
464,550 |
(1) Austin, Savannah, Village Park Homes, Active
Adult and Custom Homes. Austin refers to legacy DFH operations,
exclusive of MHI.
About Dream Finders Homes,
Inc.
Dream Finders Homes (NASDAQ: DFH) is based in
Jacksonville, FL, and is one of the nation’s fastest-growing
companies, with industry-leading returns on shareholders’ equity.
Dream Finders Homes builds single-family homes in Florida, Texas,
North Carolina, South Carolina, Georgia, Colorado, Virginia,
Maryland, and the DC Metro area. Through its mortgage and title
joint ventures, DFH also provides mortgage financing and title
services to its homebuyers. Dream Finders Homes achieves its
industry-leading growth and returns by maintaining an asset-light
homebuilding model. For more information, please visit
www.dreamfindershomes.com.
Forward-Looking Statements
This press release includes forward-looking
statements regarding future events, including projected 2022 home
closings and market conditions and possible or assumed future
results of operations, including statements regarding the Company’s
strategies and expectations as they relate to market opportunities
and growth. All forward-looking statements are based on Dream
Finders Homes’ beliefs as well as assumptions made by and
information currently available to Dream Finders Homes. These
statements reflect Dream Finders Homes’ current views with respect
to future events and are subject to various risks, uncertainties
and assumptions. These risks, uncertainties and assumptions are
discussed in Dream Finders Homes’ Annual Report on Form 10-K for
the year ended December 31, 2021, and other filings with the U.S.
Securities and Exchange Commission. Dream Finders Homes undertakes
no obligation to update or revise any forward-looking statement
except as may be required by applicable law.
|
Dream Finders Homes, Inc. |
Consolidated Statements of Comprehensive Income and Operating
Activity |
(In thousands, except per share amounts and Other Financial and
Operating Data unless otherwise noted) |
|
|
|
|
|
|
For the Three Months Ended March
31, (unaudited) |
|
|
2022 |
|
2021 |
|
Revenues: |
|
|
|
|
Homebuilding |
$ |
662,473 |
|
$ |
342,167 |
|
Other |
1,593 |
|
1,393 |
|
Total revenues |
664,066 |
|
343,560 |
|
Homebuilding cost of sales |
538,868 |
|
291,037 |
|
Selling, general and
administrative expense |
61,710 |
|
29,315 |
|
Income from equity in earnings of unconsolidated entities |
(2,960 |
) |
(1,732 |
) |
Contingent consideration
revaluation |
4,192 |
|
1,183 |
|
Other (income) expense, net |
(969 |
) |
703 |
|
Interest expense |
13 |
|
642 |
|
Income before taxes |
63,212 |
|
22,412 |
|
Income tax expense |
(16,878 |
) |
(4,816 |
) |
Net and comprehensive income |
46,334 |
|
17,596 |
|
Net and comprehensive income
attributable to non-controlling interests |
(2,618 |
) |
(1,475 |
) |
Net and comprehensive income attributable to Dream Finders Homes,
Inc. |
$ |
43,716 |
|
$ |
16,121 |
|
|
|
|
|
|
Earnings per share(1) |
|
|
|
|
Basic |
$ |
0.43 |
|
$ |
0.18 |
|
Diluted |
$ |
0.42 |
|
$ |
0.18 |
|
Weighted-average
number of shares |
|
|
|
|
Basic |
92,758,939 |
|
92,521,482 |
|
Diluted |
102,496,876 |
|
92,596,960 |
|
Other Financial and Operating Data |
|
|
|
|
Active communities at end of
period(2) |
206 |
|
120 |
|
Home closings |
1,371 |
|
1,002 |
|
Average sales price of homes
closed(3) |
$ |
470,218 |
|
$ |
335,986 |
|
Net new orders |
2,402 |
|
2,010 |
|
Cancellation rate |
13.4 |
% |
8.1 |
% |
Backlog (at period end) - homes |
7,413 |
|
3,612 |
|
Backlog (at period end, in
thousands) - value |
$ |
3,443,709 |
|
$ |
1,356,436 |
|
Gross margin (in thousands)(4) |
$ |
123,605 |
|
$ |
51,130 |
|
Gross margin %(5) |
18.7 |
% |
14.9 |
% |
Net profit margin % |
6.6 |
% |
4.7 |
% |
(1) The Company calculated earnings per share
(“EPS”) based on net income attributable to common stockholders for
the period January 21, 2021 through March 31, 2021 over the
weighted average diluted shares outstanding for the same period.
EPS was calculated prospectively for the period subsequent to the
Company’s initial public offering and corporate reorganization as
described in Note 1. Nature of Business and Significant Accounting
Policies, resulting in 92,521,482 shares of common stock
outstanding as of the closing of the initial public offering. The
total outstanding shares of common stock are made up of Class A
common stock and Class B common stock, which participate equally in
their ratable ownership share of the Company. Diluted shares were
calculated by using the treasury stock method for stock grants and
the if-converted method for the convertible preferred stock and the
associated preferred dividends.(2) A community becomes active once
the model is completed or the community has its fifth sale. A
community becomes inactive when it has fewer than five units
remaining to sell.(3) Average sales price of homes closed is
calculated based on homebuilding revenues, excluding the impact of
deposit forfeitures, percentage of completion revenues and land
sales, over homes closed.(4) Gross margin is homebuilding revenues
less homebuilding cost of sales.(5) Calculated as a percentage of
homebuilding revenues.
|
|
|
|
|
|
Three Months Ended March 31, |
|
2022 (unaudited) |
2021 (unaudited) |
|
Units |
Average SalesPrice |
Units |
Average SalesPrice |
Home
Closings: |
|
|
|
|
Jacksonville |
269 |
$ |
453,134 |
295 |
$ |
326,023 |
Colorado |
70 |
557,092 |
34 |
445,239 |
Orlando |
106 |
436,542 |
161 |
400,050 |
DC Metro |
15 |
791,901 |
24 |
579,653 |
The Carolinas |
252 |
331,425 |
343 |
287,172 |
Texas (1) |
483 |
570,236 |
- |
- |
Other (2) |
176 |
378,889 |
145 |
334,646 |
Total |
1,371 |
$ |
470,218 |
1,002 |
$ |
335,986 |
(1) Texas consists of the operations of MHI,
which was acquired on October 1, 2021.(2) Austin, Savannah, Village
Park Homes, Active Adult and Custom Homes. Austin refers to legacy
DFH operations, exclusive of MHI.
Dream Finders Homes,
Inc.Consolidated Balance
Sheets(In thousands, except share and per share
amounts)
|
March 31, |
|
December 31, |
|
2022 |
|
2021 |
|
|
|
|
Assets |
|
|
|
Cash and cash equivalents |
$ |
100,140 |
|
$ |
227,227 |
Restricted cash (VIE amounts
of $3,759 and $4,275) |
60,875 |
|
54,095 |
Accounts receivable (VIE
amounts of $3,621 and $2,684) |
33,534 |
|
33,482 |
Inventories: |
|
|
|
Construction in process and finished homes |
1,112,085 |
|
961,779 |
Company owned land and lots |
104,407 |
|
83,197 |
VIE owned land and lots |
15,564 |
|
21,686 |
Total inventories |
1,232,056 |
|
1,066,662 |
Lot deposits |
275,354 |
|
241,406 |
Other assets (VIE amounts of
$1,965 and $2,185) |
57,401 |
|
43,962 |
Equity method investments |
14,480 |
|
15,967 |
Property and equipment,
net |
6,620 |
|
6,789 |
Operating lease right-of-use
assets |
26,581 |
|
19,359 |
Deferred tax asset |
5,386 |
|
4,232 |
Intangible assets, net of
amortization |
8,112 |
|
9,140 |
Goodwill |
171,927 |
|
171,927 |
Total assets |
$ |
1,992,466 |
|
$ |
1,894,248 |
Liabilities |
|
|
|
Accounts payable (VIE amounts
of $1,429 and $1,309) |
$ |
136,665 |
|
$ |
113,498 |
Accrued expenses (VIE amounts
of $6,062 and $6,915) |
126,906 |
|
139,508 |
Customer deposits |
206,065 |
|
177,685 |
Construction lines of
credit |
770,000 |
|
760,000 |
Notes payable (VIE amounts of
$125 and $1,979) |
1,725 |
|
3,292 |
Operating lease
liabilities |
27,065 |
|
19,826 |
Contingent consideration |
128,248 |
|
124,056 |
Total liabilities |
$ |
1,396,674 |
|
$ |
1,337,865 |
Commitments and
contingencies |
|
|
|
Mezzanine
Equity |
|
|
|
Preferred mezzanine
equity |
155,417 |
|
155,220 |
|
|
|
|
Stockholders'
Equity |
|
|
|
Class A common stock, $0.01
per share, 289,000,000 |
|
|
|
authorized, 32,295,329 outstanding |
323 |
|
323 |
Class B common stock, $0.01
per share, 61,000,000 |
|
|
|
authorized, 60,226,153 outstanding |
602 |
|
602 |
Additional paid-in
capital |
259,328 |
|
257,963 |
Retained earnings |
158,611 |
|
118,194 |
Non-controlling interests |
21,511 |
|
24,081 |
Total mezzanine and stockholders' equity |
595,792 |
|
556,383 |
Total liabilities, mezzanine
equity, and stockholders' equity |
$ |
1,992,466 |
|
$ |
1,894,248 |
|
|
|
|
SOURCE: Dream Finders Homes, Inc.
Investor Contact:
investors@dreamfindershomes.com Media Contact:
mediainquiries@dreamfindershomes.com
Anabel Fernandez – Chief Financial Officer
Robert Riva – General Counsel
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