SCOTTSDALE, Ariz. -- Taylor Morrison Home Corporation (NYSE:TMHC) today reported first quarter revenue of $509 million, net income of $96 million and earnings per share of $0.79.
"We are continuing to increase our share of the new home market, growing both organically and by acquisition," said Taylor Morrison President and CEO Sheryl Palmer. "Our recently strengthened balance sheet has allowed us to begin our expansion in the U.S. With the acquisition of JEH Homes, a regional homebuilder in Atlanta, we have purchased or controlled over 2,000 home sites. Looking ahead to the rest of 2015, we intend to continue executing on our four-pillar strategy while conscientiously evaluating opportunities to expand into other high-growth markets in order to drive the best long-term returns for our shareholders."
On January 28, 2015, the Company closed the sale of its Canadian operations resulting in a pre-tax gain on the sale of USD $80.2 million. The Company also initiated a foreign currency forward to mitigate potential currency exchange risks in connection with the transaction that resulted in a gain of nearly USD $30 million.
The Company utilized a portion of the proceeds from the Monarch transaction for the acquisition of JEH Homes in order to expand its geographic footprint and to diversify its consumer base.
1st Quarter 2015 Key Business Highlights
Average community count increased 22% to 228 average communities from 187 in the prior year quarter
Net sales orders increased over 14% to 1,729
Home closings were 1,063
Backlog of homes under contract was 2,918 units, with a sales value of $1.4 billion as of March 31, 2015
Cancellations as a percentage of gross sales orders were 11.9%, compared to 11.4% in the prior year quarter
Average price of homes closed increased 7% to $464,000
Average monthly absorption pace was 2.5
Mortgage operations reported gross profit of $2.6 million on revenue of $7.6 million
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Taylor Morrison Home Corporation |
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Condensed Consolidated Statements of Operations |
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(In thousands, except per share amounts, unaudited) |
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Three Months Ended |
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2015 |
2014 |
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Home closings revenue, net |
$ |
493,592 |
$ |
455,295 |
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Land closings revenue |
8,188 |
8,918 |
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Mortgage operations revenue |
7,635 |
6,262 |
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Total revenues |
509,415 |
470,475 |
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Cost of home closings |
405,104 |
356,300 |
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Cost of land closings |
4,666 |
6,858 |
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Mortgage operations expenses |
5,062 |
3,936 |
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Total cost of revenues |
414,832 |
367,094 |
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Gross margin |
94,583 |
103,381 |
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Sales, commissions and other marketing costs |
36,220 |
33,384 |
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General and administrative expenses |
20,704 |
19,241 |
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Equity in income of unconsolidated entities |
(303) |
(984) |
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Interest (income) expense, net |
(50) |
686 |
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Other expense, net |
5,771 |
3,098 |
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Gain on foreign currency forward |
(29,983) |
- |
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Income from continuing operations before income taxes |
62,224 |
47,956 |
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Income tax provision |
22,042 |
10,956 |
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Net income from continuing operations |
40,182 |
37,000 |
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Discontinued operations: |
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Income from discontinued operations |
- |
6,435 |
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Transaction expenses from discontinued operations |
(9,043) |
- |
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Gain on sale of discontinued operations |
80,205 |
- |
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Income tax expense from discontinued operations |
(14,500) |
(2,139) |
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Net income from discontinued operations |
56,662 |
4,296 |
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Net income before allocation to non-controlling interests |
96,844 |
41,296 |
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Net income attributable to non-controlling interests - joint ventures |
(368) |
(117) |
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Net income before non-controlling interests - Principal Equityholders |
96,476 |
41,179 |
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Net income from continuing operations attributable to non-controlling interests - Principal Equityholders |
(29,133) |
(27,105) |
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Net income from discontinued operations attributable to non-controlling interests - Principal Equityholders |
(41,381) |
(3,142) |
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Net income available to Taylor Morrison Home Corporation |
$ |
25,962 |
$ |
10,932 |
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Earnings per common share - basic: |
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Income from continuing operations |
$ 0.33 |
$ 0.30 |
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Income from discontinued operations - net of tax |
$ 0.46 |
$ 0.03 |
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Net income available to Taylor Morrison Home Corporation |
$ 0.79 |
$ 0.33 |
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Earnings per common share - diluted: |
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Income from continuing operations |
$ 0.33 |
$ 0.30 |
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Income from discontinued operations - net of tax |
$ 0.46 |
$ 0.03 |
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Net income available to Taylor Morrison Home Corporation |
$ 0.79 |
$ 0.33 |
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Weighted average number of shares of common stock: |
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Basic |
33,067 |
32,858 |
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Diluted |
122,355 |
122,344 |
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Taylor Morrison Home Corporation |
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Condensed Consolidated Balance Sheets |
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(In thousands) |
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March 31, |
December 31, |
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2015 |
2014 |
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Assets |
(Unaudited) |
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Cash and cash equivalents |
$ 399,537 |
$ 234,217 |
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Restricted cash |
655 |
1,310 |
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Real estate inventory: |
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Owned inventory |
2,750,090 |
2,511,623 |
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Real estate not owned under option agreements |
4,640 |
6,698 |
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Total real estate inventory |
2,754,730 |
2,518,321 |
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Land deposits |
31,364 |
34,544 |
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Mortgages receivable |
83,407 |
191,140 |
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Prepaid expenses and other assets, net |
101,854 |
89,210 |
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Other receivables, net |
99,354 |
85,274 |
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Investments in unconsolidated entities |
112,813 |
110,291 |
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Deferred tax assets, net |
251,392 |
258,190 |
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Property and equipment, net |
4,893 |
5,337 |
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Intangible assets, net |
6,392 |
5,459 |
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Goodwill |
23,375 |
23,375 |
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Assets of discontinued operations |
- |
576,445 |
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Total assets |
$3,869,766 |
$ 4,133,113 |
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Liabilities |
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Accounts payable |
$ 136,815 |
$ 122,466 |
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Accrued expenses and other liabilities |
179,488 |
200,556 |
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Income taxes payable |
39,772 |
50,096 |
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Customer deposits |
85,772 |
70,465 |
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Senior notes |
1,388,676 |
1,388,840 |
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Loans payable and other borrowings |
128,184 |
147,516 |
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Revolving credit facility borrowings |
- |
40,000 |
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Mortgage warehouse borrowings |
55,245 |
160,750 |
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Liabilities attributable to consolidated option agreements |
4,640 |
6,698 |
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Liabilities of discontinued operations |
- |
168,565 |
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Total liabilities |
$2,018,592 |
$ 2,355,952 |
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Stockholders' Equity |
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Total stockholders' equity |
1,851,174 |
1,777,161 |
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Total liabilities and stockholders' equity |
$3,869,766 |
$ 4,133,113 |
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Homes Closed: |
Three Months Ended March 31, |
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2015 |
2014 |
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(Dollars in thousands) |
Homes |
Value |
Homes |
Value |
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East |
692 |
$ 297,566 |
672 |
$264,334 |
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West |
371 |
196,026 |
383 |
190,961 |
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Total |
1,063 |
$ 493,592 |
1,055 |
$ 455,295 |
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Net Sales Orders: |
Three Months Ended March 31, |
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2015 |
2014 |
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(Dollars in thousands) |
Homes |
Value |
Homes |
Value |
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East |
1,042 |
$ 440,464 |
922 |
$381,220 |
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West |
687 |
331,033 |
592 |
313,108 |
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Total |
1,729 |
$ 771,497 |
1,514 |
$ 694,328 |
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Sales Order Backlog: |
As of March 31, |
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2015 |
2014 |
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(Dollars in thousands) |
Homes |
Value |
Homes |
Value |
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East |
2,059 |
$ 976,036 |
1,794 |
$811,300 |
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West |
859 |
441,092 |
831 |
451,931 |
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Total |
2,918 |
$ 1,417,128 |
2,625 |
$ 1,263,231 |
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Average Active Selling Communities: |
Three Months Ended |
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March 31, |
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2015 |
2014 |
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East |
166 |
136 |
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West |
62 |
51 |
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Total |
228 |
187 |
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Average Selling Price of Homes Closed: |
Three Months Ended |
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March 31, |
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(In thousands) |
2015 |
2014 |
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East |
$430 |
$393 |
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West |
528 |
499 |
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Total |
$464 |
$432 |
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The Company ended the quarter with homebuilding inventories of $2.8 billion and had 3,490 homes in inventory, compared to 2,949 homes at the end of the prior year quarter. Homes in inventory at the end of the quarter consisted of: 1,994 sold units, 345 model homes and 1,151 inventory units, of which 305 were finished. The Company owned or controlled approximately 39,000 lots at March 31, 2015.
The Company ended the first quarter of 2015 with $400 million of cash, excluding $0.7 million of restricted cash. On April 16, 2015, the Company issued $350 million of 5.875% senior unsecured notes due 2023 and used the offering proceeds on May 1, 2015, together with cash on hand, to redeem the entire $489 million of its outstanding 7.75% senior notes due 2020. On April 24, 2015, the Company amended its revolving credit facility to increase the capacity to $500 million from $400 million, extended the maturity approximately two years to April 24, 2019 and reduced the borrowing rate 25 basis points to Libor plus 1.75%.
Second Quarter and Full Year 2015 Business Outlook
Second Quarter 2015:
Average community count – expected to be up approximately 10 communities over Q1
Home closings – expected between 1,375 and 1,475
Adjusted home closings margin – expected to be consistent with first quarter results
Full Year 2015:
Average community count – expected to increase to 235 to 245 communities
Home closings – expected to grow approximately 10% to 15% from 2014 U.S. results
Home closings margins – expected around 22%
SG&A – expected to be in the mid 9% range
Income from unconsolidated joint ventures – expected between $2 and $4 million
Land spend – expected to be approximately $1 billion
Effective tax rate – expected to be between 32% to 35%
About Taylor Morrison
Taylor Morrison Home Corporation (NYSE:TMHC) is a leading national builder and developer based in Scottsdale, Arizona and operates under two well-established brands, Taylor Morrison and Darling Homes. Taylor Morrison builds and develops distinctive communities from coast to coast, serving a wide array of homeowners and aimed mainly at first-time, move-up, luxury and 55 or better customers. Darling Homes builds communities in Texas, catering to move-up and luxury homebuyers seeking a personalized building experience.
For more information about Taylor Morrison and Darling Homes please visit www.taylormorrison.com or www.darlinghomes.com.
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