Landsea Homes (US:LSEA)2021-08-08 16:54Financial Data and Key Metrics Changes - Total revenue increased 163% to $250.3 million compared to $95.1 million in Q2 2020, with organic growth of 125% excluding Vintage Estate Homes [24][25] - Total home sales rose 152% to $239.6 million, with organic growth of 122% excluding Vintage Estate Homes [25] - Average selling price increased significantly to $553,000 from $401,000 in the prior year [25] - Adjusted home sales gross margin increased 530 basis points to 23.5% compared to 18.2% in the prior year [28] - Net income attributable to Landsea Homes increased to $10.7 million from a net loss of $20.3 million in the prior year [28] - Adjusted net income was $17.5 million compared to a loss of $3.8 million in the prior year [29] - Cash and cash equivalents at the end of Q2 were $147.3 million, up from $105.8 million at the end of 2020 [30] Business Line Data and Key Metrics Changes - Total home deliveries increased 79% to 425 homes, with an average sales price of $553,000 [25] - Net new home orders totaled 330 with a dollar value of $207.3 million and an average sales price of $628,000 [27] Market Data and Key Metrics Changes - The company reported a backlog of 1,197 homes, reflecting strong demand and pricing power in the housing market [14][22] - The average sales price increase was attributed to a shortage of supply compared to housing demand across operating markets [26] Company Strategy and Development Direction - The company is focused on expanding its presence in key markets, including California, Arizona, and Florida, with several new acquisitions [15][16][19] - The acquisition of Vintage Estate Homes is seen as a strategic move to enhance operations in Florida [20] - The company aims to leverage its experience in home building to identify growth opportunities and execute rapid integrations of acquired assets [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of the housing market and the company's ability to capitalize on growth opportunities [22] - The full-year 2021 revenue outlook was increased to between $960 million and $1.02 billion, reflecting strong Q2 results and organic growth [31][33] - Management noted that the operational execution has helped sustain organic sales growth despite supply chain challenges [22] Other Important Information - The company was included in the Russell 3000 index at the end of June, expanding its reach to a wider investor base [21] - The company is actively pursuing additional acquisitions, particularly in Florida and Texas, as part of its growth strategy [74][78] Q&A Session Summary Question: Sales pace and production alignment in Arizona - Management acknowledged a strategic decision to meter sales in Arizona to better align with production and manage costs [50][51] Question: Land acquisition pricing and strategy - Management indicated that they are being prudent in land acquisitions, maintaining a pipeline of approximately three years of supply [55][72] Question: Gross margin outlook - Management expressed confidence in maintaining stable gross margins, with expectations for continued upward trends [70] Question: Future M&A opportunities - Management remains interested in growth through acquisitions, particularly in Florida and Texas, and is actively engaged in discussions with potential sellers [74][78]