On August 1, 2024, Landsea Homes Corp (LSEA, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. Landsea Homes Corp is a homebuilding company that designs and builds homes and sustainable master-planned communities in some of the nation's most desirable markets. The company's segments include Arizona, California, Florida, Metro New York, and Texas, with a majority of revenue derived from home sales in Florida.
Performance Overview
Landsea Homes Corp reported a significant increase in home sales revenue, which rose by 43.5% to $418.2 million compared to the same period last year. However, the company faced challenges with net income, reporting $2.9 million or $0.08 per share, falling short of the analyst estimate of $0.10 per share. Adjusted net income was $13.3 million or $0.36 per share, a 9% increase from the previous year.
Key Financial Achievements
The company achieved a home sales gross margin of 14.9%, with an adjusted gross margin of 21.1%. The increase in revenue was driven by a 41% rise in homes closed and a 2% increase in the average sales price. New home deliveries totaled 760 units, a 34.5% increase from the previous year, with an average sales price of $550,000.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Total Revenue | $431.1 million | $293.2 million | 47.0% |
| Net Income | $2.9 million | $4.9 million | -40.8% |
| Adjusted Net Income | $13.3 million | $13.0 million | 2.3% |
| EPS | $0.08 | $0.12 | -33.3% |
| Adjusted EPS | $0.36 | $0.33 | 9.1% |
Balance Sheet and Cash Flow
As of June 30, 2024, Landsea Homes Corp had total liquidity of $330.2 million, consisting of $106.2 million in cash and cash equivalents and $224.0 million in availability under its $455.0 million unsecured revolving credit facility. Total debt stood at $754.1 million, with a debt-to-capital ratio of 52.8% and a net debt-to-total capital ratio of 45.4%.
Management Commentary
"Landsea Homes posted another quarter of strong top-line growth in the second quarter of 2024, generating home sales revenue of $418.2 million, which represented an increase of 43.5% over the second quarter of 2023," said John Ho, Landsea Homes’ Chief Executive Officer. "New home deliveries totaled 760 units for the quarter, well in excess of our stated guidance, as our teams did an excellent job of accelerating build schedules and closing homes in a timely manner."
Analysis and Outlook
Despite the impressive revenue growth, Landsea Homes Corp faced challenges in maintaining its net income levels, primarily due to increased sales discounts and incentives. The company's strategic efforts to expand its market presence and improve economies of scale have shown positive results in terms of revenue and unit deliveries. However, the decrease in net income highlights the need for continued focus on cost management and operational efficiency.
Looking ahead, Landsea Homes Corp anticipates new home deliveries in the range of 625 to 700 units for the third quarter of 2024, with delivery ASPs expected to be between $495,000 and $510,000. The company aims to achieve an adjusted home sales gross margin of 20% to 21% and a home sales gross margin of approximately 15%.
For more detailed insights and the complete earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Landsea Homes Corp for further details.
