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 second quarter ended
June 30, 2022.
Second Quarter 2022 Highlights
(As Compared to Second Quarter 2021, unless otherwise
noted)
- Homebuilding revenues increased 118% to $791 million from $364
million
- Gross margin as a percentage of homebuilding revenues increased
320 basis points to 19.7% from 16.5%
- Pre-tax income increased 145% to $90 million, compared to $37
million
- Net income attributable to DFH increased 119% to $63 million,
or $0.60 per diluted share, compared to $29 million, or $0.31 per
diluted share
- Home closings increased 66% to 1,649 from 996
- Average sales price of homes closed
increased 29% to $463,447 from $358,604
- Net new orders decreased 6% to 1,426 from 1,521
- Active community count increased 74% to 203 from 117
- Backlog of sold homes increased 74% to 7,190 homes valued at
$3.3 billion, compared to 4,137 homes valued at $1.6 billion
- Return on participating equity was 44.0% for the trailing
twelve months ended June 30, 2022, compared to 44.3% for the
trailing twelve months ended June 30, 2021
- Controlled lot pipeline increased 66% to 37,983 as of
June 30, 2022, compared to 22,923 as of June 30,
2021
- Commitment on the revolving credit facility increased to $1.1
billion as of June 30, 2022, compared to $818 million as of
December 31, 2021
- Total liquidity, comprised of cash and cash equivalents, and
availability under the revolving credit facility, increased 21% to
$334 million as of June 30, 2022, compared to $277 million as of
December 31, 2021
Management Commentary
Patrick Zalupski, Dream Finders Homes Chairman and CEO, said,
“In DFH’s sixth quarter as a public company, we continued to
outperform growth and execution expectations. For the full year
2020 (the year prior to our IPO), DFH had annual pre-tax earnings
of $85 million. Less than 18 months after going public, DFH had
quarterly pre-tax earnings of $90 million. While we are confident
that DFH earnings will continue to grow, it is important to step
back and appreciate our employees' hard work to reach this point in
a relatively short period of time. These most recent results are a
function of several years' hard work. It is rewarding to see all of
that work bearing fruit and our accomplishments reinforce the
benefits of our culture and business model.
More specific to the quarter, our homebuilding margin improved
to 19.7%, another Company record, as our team continues to closely
manage sales prices, cost inflation, supply chain challenges and
mortgage rates in a quickly changing macro environment. While we
acknowledge the rapid increase in mortgage rates and appreciation
in home values pose headwinds, we believe the overall shortage of
homes available will perpetuate the supply-demand gap. Our net new
orders were up year over year in both May and June, however, we
were limiting sales across most communities in April to ensure
pricing was appropriately placed during a period of enhanced market
volatility. This limitation contributed to an overall 6% quarterly
decrease in net new orders, however, excluding cancellations, our
total gross sales were up year over year.
Our land-light operating model allows us to navigate temporary
housing market challenges and quickly change course in light of
macroeconomic conditions. We continue to be strategically
positioned in high growth markets, providing affordable homes to
the entry-level, first and second-time move up homebuyers. Our
build-for-rent platform provides a consistent home deliveries
pipeline, which is less susceptible to temporary changes in demand
from individual homebuyers. While the short-term may be uncertain,
we are committed to our business model and focused on generating
long-term earnings growth.”
Second Quarter 2022 Results
Homebuilding revenues for the second quarter
2022 increased 118% to $791 million, compared to $364 million in
the year-ago quarter. Home closings increased 66% to 1,649,
compared to 996 in the year-ago quarter. Average sales price
(“ASP”) of homes closed for the second quarter 2022 was $463,447,
compared to $358,604 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
second quarter 2022 improved 320 basis points to 19.7%, compared to
16.5% in the year-ago quarter. The gross margin improvement was
attributable to our ability to increase prices while managing cost
inflation.
Selling, general and administrative expenses as
a percentage of homebuilding revenues was 8% in the second quarter
2022, remaining consistent when compared to 8% in the year-ago
quarter.
Net new orders in the second quarter 2022
decreased 6% to 1,426, compared to 1,521 in the year-ago quarter.
During the first month of the quarter, the Company delayed the sale
of homes until later stages in the construction cycle. Later in
June, demand tightened in response to the rapid rise in mortgage
rates coupled with continued home price appreciation. The market's
reaction to the quickly changing economic conditions negatively
impacted new orders for the quarter and drove an uptick in
cancellations for the Company and the industry as a whole. Our
cancellation rate remains within the Company’s pre-pandemic
historical averages at 21.0% for the quarter ended June 30,
2022, compared to 14.4% for the year-ago period. At the end of the
second quarter 2022, DFH's large backlog of 7,190 homes, valued at
$3.3 billion, represented record increases of 74% and 103%,
respectively, compared to the year-ago quarter. As of June 30,
2022, the ASP in backlog was $463,831.
Net income attributable to DFH in the second
quarter 2022 was $63 million, or $0.60 per diluted share, compared
to $29 million, or $0.31 per diluted share in the second quarter
2021.
Full Year 2022 Outlook
Dream Finders Homes is reaffirming its guidance
of a minimum of 7,000 home closings for the full year 2022. This
outlook considers the rapid increase in interest rates and overall
moderation of the housing market that began at the end of the
second quarter of 2022 and assumes general economic conditions,
including interest rates and mortgage availability, remain similar
to those experienced in the latter half of the second quarter of
2022. Additionally, 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
June 30, 2022, the Company backlog was 7,190 homes, with
approximately 32% 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
June 30, 2022 by segment:
|
As of June 30,
2022(unaudited) |
Backlog: |
Units |
|
Average Sales Price |
Jacksonville |
1,734 |
|
$ |
364,137 |
Colorado |
135 |
|
|
619,289 |
Orlando |
1,016 |
|
|
550,965 |
DC Metro |
124 |
|
|
502,018 |
The Carolinas |
1,110 |
|
|
330,399 |
Texas |
1,859 |
|
|
633,287 |
Other (1) |
1,212 |
|
|
374,484 |
Total |
7,190 |
|
$ |
463,831 |
(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 Quarterly Report on Form
10-Q for the quarter ended March 31, 2022, 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 EndedJune
30,(unaudited) |
|
For the Six Months EndedJune
30,(unaudited) |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
|
Homebuilding |
|
$ |
791,230 |
|
|
$ |
363,743 |
|
|
$ |
1,453,703 |
|
|
$ |
705,910 |
|
Other |
|
|
1,904 |
|
|
|
1,533 |
|
|
|
3,497 |
|
|
|
2,926 |
|
Total revenues |
|
|
793,134 |
|
|
|
365,276 |
|
|
|
1,457,200 |
|
|
|
708,836 |
|
Homebuilding cost of
sales |
|
|
635,422 |
|
|
|
303,589 |
|
|
|
1,174,290 |
|
|
|
594,626 |
|
Selling, general and
administrative expense |
|
|
66,015 |
|
|
|
30,137 |
|
|
|
127,725 |
|
|
|
59,452 |
|
Income from equity in earnings
of unconsolidated entities |
|
|
(3,334 |
) |
|
|
(1,125 |
) |
|
|
(6,294 |
) |
|
|
(2,857 |
) |
Contingent consideration
revaluation |
|
|
5,042 |
|
|
|
3,977 |
|
|
|
9,234 |
|
|
|
5,160 |
|
Other (income) expense,
net |
|
|
278 |
|
|
|
(7,856 |
) |
|
|
(691 |
) |
|
|
(7,153 |
) |
Interest expense |
|
|
13 |
|
|
|
16 |
|
|
|
26 |
|
|
|
658 |
|
Income before taxes |
|
|
89,698 |
|
|
|
36,538 |
|
|
|
152,910 |
|
|
|
58,950 |
|
Income tax expense |
|
|
(23,327 |
) |
|
|
(4,479 |
) |
|
|
(40,205 |
) |
|
|
(9,295 |
) |
Net and comprehensive
income |
|
|
66,371 |
|
|
|
32,059 |
|
|
|
112,705 |
|
|
|
49,655 |
|
Net and comprehensive income
attributable to non-controlling interests |
|
|
(3,747 |
) |
|
|
(3,486 |
) |
|
|
(6,365 |
) |
|
|
(4,961 |
) |
Net and comprehensive income
attributable to Dream Finders Homes, Inc. |
|
$ |
62,624 |
|
|
$ |
28,573 |
|
|
$ |
106,340 |
|
|
$ |
44,694 |
|
|
|
|
|
|
|
|
|
|
Earnings per
share(1) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.64 |
|
|
$ |
0.31 |
|
|
$ |
1.07 |
|
|
$ |
0.49 |
|
Diluted |
|
$ |
0.60 |
|
|
$ |
0.31 |
|
|
$ |
1.02 |
|
|
$ |
0.49 |
|
Weighted-average
number of shares |
|
|
|
|
|
|
|
|
Basic |
|
|
92,758,939 |
|
|
|
92,521,482 |
|
|
|
92,758,939 |
|
|
|
92,521,482 |
|
Diluted |
|
|
104,566,243 |
|
|
|
92,670,727 |
|
|
|
103,531,560 |
|
|
|
92,641,222 |
|
Other Financial and
Operating Data |
|
|
|
|
|
|
|
|
Active communities at end of
period(2) |
|
|
203 |
|
|
|
117 |
|
|
|
203 |
|
|
|
117 |
|
Home closings |
|
|
1,649 |
|
|
|
996 |
|
|
|
3,020 |
|
|
|
1,998 |
|
Average sales price of homes
closed(3) |
|
$ |
463,447 |
|
|
$ |
358,604 |
|
|
$ |
463,318 |
|
|
$ |
347,261 |
|
Net new orders |
|
|
1,426 |
|
|
|
1,521 |
|
|
|
3,828 |
|
|
|
3,531 |
|
Cancellation rate |
|
|
21.0 |
% |
|
|
14.4 |
% |
|
|
16.4 |
% |
|
|
10.9 |
% |
Backlog (at period end) -
homes |
|
|
7,190 |
|
|
|
4,137 |
|
|
|
7,190 |
|
|
|
4,137 |
|
Backlog (at period end, in
thousands) - value |
|
$ |
3,334,945 |
|
|
$ |
1,646,725 |
|
|
$ |
3,334,945 |
|
|
$ |
1,646,725 |
|
Gross margin (in
thousands)(4) |
|
$ |
155,808 |
|
|
$ |
60,154 |
|
|
$ |
279,413 |
|
|
$ |
111,284 |
|
Gross margin %(5) |
|
|
19.7 |
% |
|
|
16.5 |
% |
|
|
19.2 |
% |
|
|
15.8 |
% |
Net profit margin % |
|
|
7.9 |
% |
|
|
7.8 |
% |
|
|
7.3 |
% |
|
|
6.3 |
% |
(1) |
The Company calculated earnings per share (“EPS”) based on net
income attributable to common stockholders for the period January
21, 2021 through June 30, 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, 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 June 30, |
|
Six Months EndedJune 30, |
|
2022 (unaudited) |
|
2021 (unaudited) |
|
2022 (unaudited) |
|
2021 (unaudited) |
|
Units |
|
Average Sales Price |
|
Units |
|
Average Sales Price |
|
Units |
|
Average Sales Price |
|
Units |
|
Average Sales Price |
Home
Closings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jacksonville |
377 |
|
$ |
472,065 |
|
265 |
|
$ |
351,496 |
|
646 |
|
$ |
464,182 |
|
560 |
|
$ |
338,077 |
Colorado |
69 |
|
|
584,356 |
|
47 |
|
|
494,604 |
|
139 |
|
|
570,443 |
|
81 |
|
|
473,882 |
Orlando |
100 |
|
|
481,968 |
|
147 |
|
|
409,362 |
|
206 |
|
|
458,593 |
|
308 |
|
|
404,494 |
DC Metro |
21 |
|
|
584,930 |
|
35 |
|
|
681,706 |
|
36 |
|
|
671,168 |
|
59 |
|
|
640,193 |
The Carolinas |
351 |
|
|
330,195 |
|
315 |
|
|
301,033 |
|
603 |
|
|
330,709 |
|
658 |
|
|
293,807 |
Texas (1) |
527 |
|
|
559,770 |
|
— |
|
|
— |
|
1,010 |
|
|
555,270 |
|
— |
|
|
— |
Other (2) |
204 |
|
|
365,479 |
|
187 |
|
|
331,101 |
|
380 |
|
|
371,562 |
|
332 |
|
|
332,649 |
Total |
1,649 |
|
$ |
463,447 |
|
996 |
|
$ |
358,604 |
|
3,020 |
|
$ |
463,318 |
|
1,998 |
|
$ |
347,261 |
(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)(Unaudited)
|
June 30, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
84,097 |
|
$ |
227,227 |
Restricted cash (VIE amounts of $2,944 and $4,275) |
|
45,296 |
|
|
54,095 |
Accounts receivable (VIE amounts of $1,711and $2,684) |
|
30,280 |
|
|
33,482 |
Inventories: |
|
|
|
Construction in process and finished homes |
|
1,254,199 |
|
|
961,779 |
Company owned land and lots |
|
93,404 |
|
|
83,197 |
VIE owned land and lots |
|
8,414 |
|
|
21,686 |
Total inventories |
|
1,356,017 |
|
|
1,066,662 |
Lot deposits |
|
288,426 |
|
|
241,406 |
Other assets (VIE amounts of $2,727 and $2,185) |
|
78,946 |
|
|
43,962 |
Equity method investments |
|
14,188 |
|
|
15,967 |
Property and equipment, net |
|
6,511 |
|
|
6,789 |
Operating lease right-of-use assets |
|
25,108 |
|
|
19,359 |
Deferred tax asset |
|
4,905 |
|
|
4,232 |
Intangible assets, net of amortization |
|
7,085 |
|
|
9,140 |
Goodwill |
|
171,927 |
|
|
171,927 |
Total assets |
$ |
2,112,786 |
|
$ |
1,894,248 |
Liabilities |
|
|
|
Accounts payable (VIE amounts of $668 and $1,309) |
$ |
130,115 |
|
$ |
113,498 |
Accrued expenses (VIE amounts of $6,213 and $6,915) |
|
126,823 |
|
|
139,508 |
Customer deposits |
|
190,945 |
|
|
177,685 |
Construction lines of credit |
|
875,000 |
|
|
760,000 |
Notes payable (VIE amounts of $0 and $1,979) |
|
1,568 |
|
|
3,292 |
Operating lease liabilities |
|
25,625 |
|
|
19,826 |
Contingent consideration |
|
115,555 |
|
|
124,056 |
Total liabilities |
$ |
1,465,631 |
|
$ |
1,337,865 |
Commitments and contingencies |
|
|
|
Mezzanine Equity |
|
|
|
Preferred mezzanine equity |
|
155,621 |
|
|
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 |
|
261,207 |
|
|
257,963 |
Retained earnings |
|
217,346 |
|
|
118,194 |
Non-controlling interests |
|
12,056 |
|
|
24,081 |
Total mezzanine and stockholders’ equity |
|
647,155 |
|
|
556,383 |
Total liabilities, mezzanine equity, and stockholders’ equity |
$ |
2,112,786 |
|
$ |
1,894,248 |
SOURCE: Dream Finders Homes,
Inc.
Investor Contact:
investors@dreamfindershomes.comMedia Contact:
mediainquiries@dreamfindershomes.com
Anabel Fernandez – Chief Financial OfficerRobert
Riva – General Counsel
Grafico Azioni Dream Finders Homes (NASDAQ:DFH)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Dream Finders Homes (NASDAQ:DFH)
Storico
Da Giu 2023 a Giu 2024