Earnings Presentation February 2025 Disclaimer Forward-Looking Statements Certain statements in this presentation may constitute "forward-looking statements" within the meaning of the federal securities laws, including, but not limited to, our expectations for future financial performance, business strategies or expectations for our business, including as they relate to anticipated effects of the business combination pursuant to that Agreement and Plan of Merger (the "Merger Agreement") by and among Landsea ...

Financial Performance - Home sales revenue increased by 27% from $1,169.9 million in 2023 to $1,486.9 million in 2024, with home deliveries rising by 33% from 2,123 units to 2,831 units[243]. - Net income for 2024 was $18.5 million, a decrease from $32.7 million in the previous year, reflecting challenges in affordability and elevated mortgage interest rates[244]. - Total revenues for 2024 reached $1,550.3 million, up from $1,209.9 million in 2023, indicating strong growth in overall sales[232]. - The gross margin for home sales was $217.97 million in 2024, compared to $202.83 million in 2023, reflecting improved operational efficiency[232]. - Total home sales revenue for 2024 reached $1.49 billion, a 33% increase from $1.17 billion in 2023[268]. - Home sales gross margin decreased to 14.7% in 2024 from 17.3% in 2023, primarily due to increased sales discounts and higher land acquisition costs[269]. - Adjusted home sales gross margin, excluding interest and impairments, decreased to 20.3% in 2024 from 22.4% in 2023[270]. - Adjusted Net Income attributable to Landsea Homes Corporation for 2024 is $41,679,000, a decrease from $48,594,000 in 2023, reflecting a decline of approximately 14%[344]. - Net income attributable to Landsea Homes Corporation for 2024 is $17,231,000, down from $29,236,000 in 2023, representing a decrease of about 41%[344]. - Total adjustments for 2024 amount to $32,818,000, compared to $26,236,000 in 2023, indicating an increase of approximately 25%[344]. Market Expansion - The acquisition of Antares Acquisition, LLC for approximately $239.8 million added about 2,100 lots in Texas, enhancing market presence[234]. - The company expanded into Colorado by acquiring assets from Richfield Homes for $22.5 million, adding approximately 290 lots[235]. - The company is focused on expanding community count and maintaining an appropriate supply of lots to enhance operating returns and profitability[243]. - Average selling communities increased to 77.2 in 2024, a 31% increase from 58.8 in 2023[258]. Segment Performance - Arizona segment delivered 838 homes with a sales price of $0.4 million, generating $369.6 million in revenue, a 38% increase in dollar value compared to 2023[260]. - California segment delivered 518 homes with an average selling price (ASP) of $0.9 million, resulting in $456.6 million in revenue, showing a 1% increase in homes delivered[262]. - Colorado segment, operational since October 2023, delivered 118 homes with an ASP of $0.5 million, generating $54.3 million in revenue[263]. - Florida segment delivered 942 homes with an ASP of $0.5 million, resulting in $433.1 million in revenue, a 4% decrease in homes delivered compared to the prior year[264]. - Texas segment delivered 414 homes with an ASP of $0.4 million, generating $168.9 million in revenue, a significant increase due to the integration of Antares[266]. Financial Position and Debt - The debt to capital ratio increased to 51.8% as of December 31, 2024, compared to 44.1% in 2023, indicating a rise in leverage due to acquisitions[245]. - The company had outstanding borrowings of $749.0 million as of December 31, 2024, with an additional borrowing capacity of $184.5 million under its credit facility[310]. - The company entered into a line of credit agreement with a borrowing limit of up to $455.0 million, of which $199.0 million was outstanding as of December 31, 2024[314]. - The company maintains a maximum leverage ratio of 60% and a minimum liquidity balance of $50.0 million as per its financial covenants[318]. - The ratio of debt to capital increased to 51.8% in 2024 from 44.1% in 2023, indicating a rise in leverage[338]. - The ratio of net debt to total capital rose to 47.7% in 2024, up from 30.4% in 2023, reflecting increased indebtedness[338]. Cash Flow and Investments - Net cash provided by operating activities increased to $29.6 million in 2024, up from $27.2 million in 2023, primarily due to an increase in cash received from escrow related to home closings of $77.2 million[323]. - Net cash used in investing activities was $240.9 million in 2024, significantly higher than $7.5 million in 2023, mainly due to a $235.0 million payment for the acquisition of Antares in April 2024[323]. - Net cash provided by financing activities was $145.1 million in 2024, compared to a net cash used of $23.8 million in 2023, driven by the issuance of $300.0 million in senior notes[323]. Operational Challenges - Interest rates continue to pose challenges across all segments, impacting net orders and requiring elevated incentives to maintain sales pace[249]. - The company is exposed to interest rate risk primarily from variable rate debt, which may lead to downward demand and pricing pressure in home sales[347]. - Higher inflation impacts operations through increased costs in land, financing, labor, materials, and construction, affecting the affordability of mortgage financing for homebuyers[348]. - The company aims to pass on cost increases to customers through higher prices, but may struggle to do so in weak housing market conditions[348]. Tax and Other Expenses - The effective tax rate for 2024 was 30.5%, compared to 26.7% in 2023, influenced by state income taxes and limitations on executive compensation deductions[293]. - Other expense, net for 2024 was $0.8 million, a decline from other income of $4.3 million in 2023, primarily due to a $5.2 million write-off of deferred financing costs[292]. - Real estate inventories impairment and abandoned project costs for 2024 are $2,916,000, down from $5,698,000 in 2023, showing a reduction of about 49%[344]. - The company began adjusting for abandoned project costs in 2024, aligning them with real estate inventories impairment for better comparability[343].

Financial Data and Key Metrics Changes - Landsea Homes Corporation reported home sales revenue of $1.5 billion and new home deliveries of 2,831 for 2024, both records for the company [8] - The company experienced strong top-line growth of 22% year over year, driven by new home delivery growth of 41% in Q4 2024 [10] - Net income for Q4 was $3 million or $0.08 per diluted share, with adjusted net income at $9.1 million or $0.25 per share [29] Business Line Data and Key Metrics Changes - The top contributors to home deliveries were Florida, Arizona, and Texas, with Arizona seeing a 38% increase in deliveries and a 40% increase in revenues [18] - The sales pace averaged 2.7 homes per community per month, a 23% improvement over Q4 2023 [20] - Financing incentives were about 280 basis points higher in Q4 compared to Q3, impacting margins negatively [21] Market Data and Key Metrics Changes - The company closed 937 homes in Q4 2024, contributing to a record year for deliveries and revenue [18] - The construction environment remains healthy across all markets, with improved build times compared to the previous year [20] - The company owned or controlled 111,000 lots at year-end, representing over four years of supply based on the last twelve months' sales [23] Company Strategy and Development Direction - The company aims to be a top ten home builder in each of its markets, with a focus on organic expansion and M&A activity [9] - A strategic decision was made to reduce standing inventory and generate cash rather than hold onto aging specs [11] - The company is shifting towards a more land-light strategy, anticipating a change to 25% owned and 75% controlled by the end of 2026 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for the industry, citing a strong desire for homeownership and a structural lack of housing supply [16] - The company expects new home deliveries in Q1 2025 to be between 600 and 700, with an average sales price between $475,000 and $500,000 [39] - Management noted that while affordability remains an issue, there is still strong demand for homes in the markets they operate [82] Other Important Information - The company executed a secondary offering to diversify its shareholder base, reducing the stake of its largest shareholder from 54% to 17% [14] - Gross margins were reported at 12.5% for Q4 and 14.7% for the full year, slightly below guidance due to rising incentives [31] - The company generated $47.8 million in cash flow from operations during the quarter, helping to reduce leverage ratios [37] Q&A Session Summary Question: About incentives and their expected decrease - Management indicated that the expected decrease in incentives to 7% or 8% in Q1 is due to market trends and a shift towards build-to-order homes, which typically have higher margins [44][45] Question: Impact of tariffs and building costs - Management stated that there has been no significant impact from tariffs, as suppliers have diversified their sourcing and are not facing major disruptions [49][50] Question: Delivery performance relative to guidance - Management explained that the delivery performance was back-end loaded, with some deliveries shifting into early January, resulting in a record quarter [58] Question: Pathway to achieving sales goals - Management emphasized that achieving a sales pace of 3 to 3.5 homes per month per community is aspirational but reflects a natural rhythm for single-family detached communities [62][66] Question: Land coming back to market - Management noted that land deals are coming back to market at recalibrated prices, indicating a disciplined approach among builders [76][77] Question: Demand in Florida and insurance costs - Management acknowledged strong demand in Florida but highlighted challenges related to affordability and rising insurance premiums [82][86]

Group 1 - Landsea Homes reported revenue of $486.68 million for the quarter ended December 2024, reflecting a year-over-year increase of 22.4% [1] - The company's EPS was $0.25, down from $0.43 in the same quarter last year, indicating a significant decline [1] - Revenue fell short of the Zacks Consensus Estimate of $535.1 million, resulting in a surprise of -9.05% [1] Group 2 - Landsea's EPS surprise was -46.81%, with the consensus EPS estimate being $0.47 [1] - The stock has returned -0.8% over the past month, compared to the Zacks S&P 500 composite's -2.2% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance in the near term [3] Group 3 - Monthly absorption rates were reported at 2.7%, slightly above the estimated 2.6% [4] - The average sales price (ASP) was $481, lower than the estimated $501.04 [4] - Average selling communities totaled 79, compared to the estimated 86 [4] Group 4 - Home deliveries totaled 937, below the estimated 1,027 [4] - The backlog of homes was reported at 390, exceeding the average estimate of 344 [4] - Revenue from home sales was $450.55 million, compared to the estimated $514.70 million, representing a year-over-year increase of 18.7% [4] - Revenue from lot sales and other sources was $36.13 million, significantly higher than the estimated $15.10 million, marking a year-over-year increase of 101.3% [4]

Group 1 - Landsea Homes reported quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.47 per share, and down from $0.43 per share a year ago, representing an earnings surprise of -46.81% [1] - The company posted revenues of $486.68 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 9.05%, compared to year-ago revenues of $397.62 million [2] - Over the last four quarters, Landsea has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Group 2 - The stock has lost about 2.2% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current consensus EPS estimate for the coming quarter is $0.02 on revenues of $275.9 million, and for the current fiscal year, it is $1.30 on revenues of $1.64 billion [7] - The Real Estate - Development industry, to which Landsea belongs, is currently in the bottom 15% of the Zacks industries, indicating potential challenges ahead [8]

Core Insights - Landsea Homes Corporation reported strong financial results for Q4 and full year 2024, with significant growth in revenues and home deliveries, despite challenges in margins due to elevated mortgage rates and sales incentives [1][2][7] Financial Performance - Q4 2024 pretax income was $6.5 million, net income was $3.0 million, or $0.08 per diluted share; adjusted net income was $9.1 million or $0.25 per diluted share [1][9] - Full year 2024 pretax income was $26.7 million, net income was $17.2 million, or $0.47 per diluted share; adjusted net income was $41.7 million or $1.14 per diluted share [1][16] - Total revenue for Q4 2024 reached a record $486.7 million, up 22% year-over-year, while full year revenue was $1.6 billion, a 28% increase compared to 2023 [3][11] Home Deliveries and Orders - New home deliveries in Q4 2024 increased by 41% to 937 homes, with an average sales price of $481,000, compared to 664 homes at an average price of $572,000 in Q4 2023 [4][8] - For the full year, new home deliveries reached a record 2,831 homes, with an average sales price of $525,000 [12] - Net new home orders in Q4 2024 increased by 60% to 636 homes, valued at $289.8 million, with an average sales price of $456,000 [5][8] Operational Highlights - The company generated $47.8 million in cash from operations during Q4 2024 [2][8] - Home sales gross margin for Q4 2024 was 12.5%, down from 15.9% in the prior year, primarily due to higher sales incentives and mortgage rates [7][15] - Total lots owned or controlled as of December 31, 2024, were 10,944, representing a 4.2-year supply based on the last twelve months' net orders [6][19] Market Position and Strategy - The CEO highlighted the company's strong position heading into the spring selling season, emphasizing the quality and value of their High-Performance Homes [2] - The company continues to pursue an asset-light strategy, controlling 56% of lots while owning 44% [6][19] - Management remains optimistic about long-term growth prospects, driven by strategic initiatives and operational execution [2][11]

Financial Performance - Fourth quarter total revenue reached a record $486.7 million, up 22% year-over-year, driven by a 41% increase in new home deliveries[5] - Full year total revenue was a record $1.6 billion, representing a 28% increase compared to 2023[12] - Home sales revenue for the year ended December 31, 2024, was $1.487 billion, up 26.9% from $1.170 billion in 2023[42] - Total home sales revenue for the year ended December 31, 2024, was $1,486,938 thousand, a 27% increase from $1,169,867 thousand in 2023[50] Home Deliveries and Orders - New home deliveries for the fourth quarter increased 41% to 937 homes, with an average sales price of $481,000[6] - Net new home orders in the fourth quarter increased 60% to 636 homes, with a dollar value of $289.8 million and an average sales price of $456,000[7] - Home deliveries totaled 937 units in Q4 2024, a 41% increase from 664 units in Q4 2023[42] Profitability and Margins - Full year net income decreased 41.1% to $17.2 million, with net income per share at $0.47, a 37.3% decrease from 2023[17] - Home sales gross margin for the fourth quarter was 12.5%, down from 15.9% in the prior year, primarily due to elevated mortgage rates[9] - Home sales gross margin for the year ended December 31, 2024, was 14.7%, compared to 17.3% in 2023, reflecting a decrease of 1.6 percentage points[50] - The adjusted home sales gross margin excluding interest, inventory impairments, and purchase price accounting for acquired inventory was $302,078 thousand, or 20.3%, in 2024, compared to $261,929 thousand, or 22.4%, in 2023[50] Debt and Capital Structure - The ratio of debt to capital was 51.8% at year-end 2024, compared to 44.1% at the end of 2023[20] - The ratio of net debt to total capital rose to 47.7% in 2024 compared to 30.4% in 2023, reflecting increased indebtedness[61] - Total notes and other debts payable, net, increased to $725,354,000 in 2024 from $543,774,000 in 2023[61] Assets and Liabilities - Total assets increased to $1.701 billion as of December 31, 2024, up from $1.471 billion in 2023, representing a growth of 15.6%[39] - Total liabilities rose to $1.025 billion in 2024, compared to $782.9 million in 2023, marking a 31.0% increase[39] Future Outlook - The company anticipates new home deliveries in 2025 to be between 3,000 and 3,400 homes, with average sales prices expected to range from $500,000 to $525,000[22] - The company plans to continue its stock repurchase program, with discretion on timing and amount based on market conditions[36] Earnings Per Share - The company reported a basic earnings per share of $0.08 for Q4 2024, down from $0.33 in Q4 2023[41] - Adjusted basic earnings per share for the year 2024 was $1.15, down 8.0% from $1.25 in 2023[57] Inventory and Backlog - Total lots owned or controlled at year-end 2024 were 10,944, representing a 4.2-year supply based on the last twelve months' net orders[8] - The total backlog as of December 31, 2024, was 390 homes valued at $212,396 thousand, a decrease of 25% in value from $335,627 thousand in 2023[47] - The number of lots owned or controlled decreased by 2% to 10,944 lots as of December 31, 2024, from 11,176 lots in 2023[48] Regional Performance - The average selling price (ASP) of homes sold in Q4 2024 was $481, down 16% from $572 in Q4 2023[42] - The average selling communities increased by 31% to 78.7 in the three months ended December 31, 2024, compared to 60.0 in 2023[45] - The average selling price (ASP) for homes in Arizona increased by 36% to $446 thousand in 2024, while California saw a decrease of 35% to $837 thousand[44] - The number of homes sold in Florida increased by 24% to 923 homes in 2024, with a total sales value of $429,902 thousand[44]

Core Viewpoint - Landsea Homes Corporation will release its fourth quarter and full year 2024 financial results on February 27, 2025, before market opening, followed by a conference call to discuss the results [1][2]. Group 1: Financial Results Announcement - The financial results for the fourth quarter and full year of 2024 will be announced before the market opens on February 27, 2025 [1]. - A conference call is scheduled for the same day at 10:00 AM Eastern Time to discuss the financial results and conduct a Q&A session [1][2]. Group 2: Company Overview - Landsea Homes Corporation is a publicly traded residential homebuilder based in Dallas, Texas, focusing on designing and building sustainable master-planned communities [3]. - The company operates in several desirable markets across the United States, including New York, Boston, New Jersey, Arizona, Colorado, Florida, Texas, and California [3]. - Landsea Homes was recognized as the Green Home Builder 2023 Builder of the Year and previously won the 2022 Builder of the Year award from BUILDER magazine [3].

DALLAS, Jan. 22, 2025 (GLOBE NEWSWIRE) -- Landsea Homes Corporation (Nasdaq: LSEA) (“Landsea Homes” or the “Company”), a publicly traded residential homebuilder, announced today that Susan E. Lattmann has rejoined the Company’s Board of Directors effective immediately. Ms. Lattmann is rejoining the Board following Thomas Hartfield’s decision not to stand for re-election at the 2025 annual meeting of stockholders. “We want to thank Tom for his many contributions as a member of our Board of Directors over the ...

New townhomes will offer affordable high-quality housing in desirable region of Orange County PLACENTIA, Calif., Jan. 9, 2025 /PRNewswire/ -- Landsea Homes Corporation (Nasdaq: LSEA) ("Landsea Homes" or the "Company"), a publicly traded residential homebuilder, announced today that it has closed on 39 new homesites, which will serve as an extension of its existing Hudson community in Placentia in North Orange County, California. Hudson is a gated community of row and back-to-back townhomes that emulate a D ...