AV Homes, Inc. Announces Fourth Quarter and 2012 Year-End Results

Thu Mar 14, 2013 8:10pm EDT

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SCOTTSDALE, Ariz., March 14, 2013 (GLOBE NEWSWIRE) -- AV Homes, Inc. (Nasdaq:AVHI), a developer
and builder of active adult and conventional home communities in Arizona and Florida, today
announced results for its fourth quarter and fiscal year ended December 31, 2012.

The Company reported a net loss of $90.2 million or $7.19 per diluted share on revenues of $107.5
million for the year ended December 31, 2012, compared to a net loss of $165.9 million or $13.33
per diluted share on revenues of $89.0 million for the year ended December 31, 2011. The 2012 and
2011 year-end results included non-cash impairments of $59.0 and $129.9 million, respectively.

For the three months ended December 31, 2012, the Company reported a net loss of $58.9 million or
$4.67 per diluted share on revenues of $33.2 million, compared to a net loss of $17.7 million or
$1.42 per diluted share on revenues of $33.7 million for the three months ended December 31, 2011.
The fourth quarter results were impacted by a $51.7 million non-cash impairment charge related
primarily to land valuations at selected properties in Arizona and Central Florida.   

For the three months ended December 31, 2012, the Company closed on 102 homes, an 82% increase
from the 56 homes closed during the three months ended December 31, 2011. Homebuilding revenues
increased 69% to $24.0 million, compared to $14.2 million for three months ended December 31,
2011. For the year ended December 31, 2012, the Company closed on 306 homes, a 76% increase
compared to 174 homes during the year ended December 31, 2011. Homebuilding revenues increased to
$69.5 million, compared to $41.3 million for the year ended December 31, 2011.  

The number of housing contracts signed, net of cancellations, during the three months ended
December 31, 2012 increased 53% to 87 contracts compared to 57 for the three months ended December
31, 2011. The dollar volume of contracts signed during the fourth quarter increased 54% to $18.6
million compared to $12.0 million for the three-months ended December 31, 2011. The number of
housing contracts signed, net of cancellations, for the year ended December 31, 2012 increased 72%
to 393, compared to 229 for the year ended December 31, 2011. The dollar volume of contracts
signed increased by 77% to $91.0 million for the year ended December 31, 2012, compared to $51.5
million for the same period in 2011. The average unit price of new contracts during the fourth
quarter of 2012 increased to $213,000 compared to $211,000 in the fourth quarter of 2011.

The backlog of homes under contract but not yet closed at December 31, 2012 increased 89% to 185
units representing a contract amount of $43.1 million, compared to 98 units with a value of $21.5
million at December 31, 2011. The average price of a unit in backlog at December 31, 2012 was
approximately $233,000.

During the year ended December 31, 2012, the Company reported $26.6 million in revenue from the
sale of commercial, industrial and other lands which generated $8.0 million in income to the
Company, compared to $31.7 million in land sales which generated $3.6 million of income for the
same period in 2011. 

President and Chief Executive Officer Roger Cregg said the 12-month operating results point to
improvements both within the Company and the industry. "During the course of 2012 we continued to
position AV Homes to take advantage of what we saw as improving market conditions. Those actions
resulted in increased sales, closings and backlog," he said. "We continued to make progress toward
regaining profitability while managing the disposition of some of our legacy assets. We are making
important progress within many areas of our operations that will drive continued improvement
throughout 2013," he added.

The Company will hold a conference call and webcast on Friday, March 15, 2013 to discuss its
fourth quarter and year-end financial results for 2012. The conference call will begin at 8:30am
(EDT). The conference call can be accessed live over the telephone by dialing (877) 643-7158, or
for international callers by dialing (914) 495-8565. Please dial-in 10 minutes before the start of
the call. A replay will be available on March 15, 2013 at 12:00 pm (EDT) and can be accessed by
dialing (855) 859-2056, or for international callers by dialing (404) 537-3406; the conference ID
is 21207555. The replay will be available until Friday, March 22, 2013. In order to access the
live webcast, please go to the Investors section of AV Homes' website at http://www.avhomesinc.com
http://www.globenewswire.com/newsroom/ctr?d=10025288&l=9&u=http%3A%2F%2Fwww.avhomesinc.com  and
click on the webcast link that will be made available. A replay will be available shortly after
the original webcast.

AV Homes, Inc. is engaged in real estate operations in Florida and Arizona. Its principle
operations are conducted at its active adult communities of Solivita near Orlando, Florida,
Vitalia at Tradition in Port St. Lucie, Florida, and CantaMia near Phoenix, Arizona. The company
also builds communities for people of all ages in the Orlando and Phoenix areas under its Joseph
Carl Homes brand. AV Homes' common shares trade on NASDAQ under the symbol AVHI. 

The AV Homes, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=15975
http://www.globenewswire.com/newsroom/ctr?d=10025288&l=11&u=http%3A%2F%2Fwww.globenewswire.com%2Fnewsroom%2Fprs%2F%3Fpkgid%3D15975


This news release, the conference call and the webcast contain "forward-looking statements" within
the meaning of the U.S. federal securities laws, which statements may include information
regarding the plans, intentions, expectations, future financial performance, or future operating
performance of AV Homes, Inc. Forward-looking statements are based on the expectations, estimates,
or projections of management as of the date of this news release. Although our management believes
these expectations, estimates, or projections to be reasonable as of the date of this news
release, the conference call and the webcast, forward-looking statements are inherently subject to
significant business risks, economic and competitive uncertainties, or other contingencies which
could cause our actual results or performance to differ materially from what may be expressed or
implied in the forward-looking statements. Important factors that could cause our actual results
or performance to differ materially from our forward-looking statements include those set forth in
the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2012
and in our other filings with the Securities and Exchange Commission, which filings are available
on www.sec.gov
http://www.globenewswire.com/newsroom/ctr?d=10025288&l=12&a=www.sec.gov&u=http%3A%2F%2Fwww.sec.gov
. At least 80% of active adult homes are intended for occupancy by at least one person 55 years or
older. AV Homes disclaims any intention or obligation to update or revise any forward-looking
statements to reflect subsequent events and circumstances, except to the extent required by
applicable law.

 AV HOMES, INC. AND SUBSIDIARIES                                                                                              
 Consolidated Balance Sheets                                                                                                  
 (in thousands, except per share amounts)                                                                                     
 Unaudited                                                                                                                    
                                                                                                                              
                                                                                                  December 31  December 31  
                                                                                                  2012         2011         
 Assets                                                                                                                     
 Cash and cash equivalents                                                                        $79,815      $124,316     
 Restricted cash                                                                                  4,682        7,872        
 Land and other inventories                                                                       171,044      180,067      
 Receivables, net                                                                                 6,730        7,729        
 Income tax receivable                                                                            1,293        1,293        
 Property and equipment, net                                                                      36,661       37,976       
 Poinciana Parkway                                                                                --           8,437        
 Investments in and notes receivable from unconsolidated entities                                 1,220        845          
 Prepaid expenses and other assets                                                                10,777       10,443       
 Assets held for sale                                                                             25,649       30,078       
 Total Assets                                                                                     $337,871     $409,056     
                                                                                                                            
 Liabilities and Equity                                                                                                     
                                                                                                                            
 Liabilities                                                                                                                
 Accounts payable                                                                                 $4,656       $3,357       
 Accrued and other liabilities                                                                    12,978       9,996        
 Customer deposits and deferred revenues                                                          1,985        1,611        
 Earn-out liability                                                                               --           --           
 Estimated development liability for sold land                                                    32,974       34,044       
 Notes Payable                                                                                    105,402      105,402      
 Total Liabilities                                                                                157,995      154,410      
                                                                                                                            
 Equity                                                                                                                     
 Common Stock, par value $1 per share                                                                                       
 Authorized: 50,000,000 shares                                                                                              
 Issued: 12,938,157 shares at December 31, 2012                                                                             
 14,194,776 shares at December 31, 2011                                                           12,938       14,195       
 Additional paid-in capital                                                                       262,363      282,953      
 Retained earnings                                                                                (106,110)    2,973        
                                                                                                  169,191      300,121      
                                                                                                                            
 Treasury stock: at cost, 110,874 shares at December 31, 2012 and 1,252,274 at December 31, 2011  (3,019)      (45,924)     
 Total AV Homes stockholders' equity                                                              166,172      254,197      
 Non-controlling interest                                                                         13,704       449          
 Total Equity                                                                                     179,876      254,646      
                                                                                                                            
 Total Liabilities and Equity                                                                     $337,871     $409,056     


$337,871

$409,056

                                                                                                                                                                 
                                                                                                                                                                 
 AV HOMES, INC. AND SUBSIDIARIES                                                                                                                                 
 Consolidated Statements of Operations and Comprehensive Income (Loss)                                                                                           
 (in thousands, except per-share amounts)                                                                                                                        
 Unaudited                                                                                                                                                       
                                                                                                                                                                 
                                                                                                                       For the year ended December 31           
                                                                                                                       2012         2011         2010         
 Revenues                                                                                                                                                     
 Real estate revenues                                                                                                  $106,161     87,583       $57,259      
 Interest income                                                                                                       127          309          580          
 Other                                                                                                                 1,199        1,090        1,299        
 Total revenues                                                                                                        107,487      88,982       59,138       
                                                                                                                                                              
 Expenses                                                                                                                                                     
 Real estate expenses                                                                                                  111,121      101,500      68,220       
 Impairment charges                                                                                                    59,043       129,947      660          
 General and administrative expenses                                                                                   16,148       17,502       20,508       
 Change in fair value of contingent consideration                                                                      --           (4,388)      --           
 Loss on extinguishment of debt                                                                                        1,144        211          --           
 Interest expense                                                                                                      7,973        9,516        5,531        
 Total expenses                                                                                                        195,429      254,288      94,919       
                                                                                                                                                              
 Income (Loss) from unconsolidated entities, net                                                                       259          (398)        (276)        
                                                                                                                                                              
 Loss before income taxes                                                                                              (87,683)     (165,704)    (36,057)     
 Income tax (expense) benefit                                                                                          --           (473)        375          
                                                                                                                                                              
 Net loss and comprehensive loss                                                                                       (87,683)     (166,177)    (35,682)     
                                                                                                                                                              
 Net (income) loss and comprehensive (income) loss attributable to non-controlling interests in consolidated entities  (2,552)      296          574          
                                                                                                                                                              
 Net loss and comprehensive loss attributable to AV Homes stockholders                                                 $(90,235)    (165,881)    $(35,108)    
                                                                                                                                                              
 Basic and Diluted Loss Per Share                                                                                      $(7.19)      (13.33)      $(3.07)      


$(3.07)

                                                                                                        
                                                                                                        
 AV HOMES, INC. AND SUBSIDIARIES                                                                        
 (in thousands, except per share amounts)                                                               
                                                                                                        
 The following table provides a comparison of certain financial data related to our operations:         
                                                                                                        
                                                              For the year ended December 31           
                                                              2012         2011         2010         
 Operating income (loss):                                                                            
 Active adult communities                                                                            
 Revenues (1)                                                 $43,032      $39,934      $36,949      
 Expenses (2)                                                 51,951       52,122       41,992       
 Net operating loss                                           (8,919)      (12,188)     (5,043)      
                                                                                                     
 Primary residential                                                                                 
 Revenues (3)                                                 35,936       15,272       14,209       
 Expenses (4)                                                 35,945       22,799       20,493       
 Net operating loss                                           (9)          (7,527)      (6,284)      
                                                                                                     
 Commercial and industrial and other land sales                                                      
 Revenues                                                     26,595       31,731       4,712        
 Expenses                                                     18,581       28,099       995          
 Net operating income (loss)                                  8,014        3,632        3,717        
                                                                                                     
 Other operations                                                                                    
 Revenues                                                     598          932          1,485        
 Expenses                                                     (33)         773          1,098        
 Net operating income                                         631          159          387          
                                                                                                     
 Operating loss                                               (283)        (15,924)     (7,223)      
                                                                                                     
 Unallocated income (expenses):                                                                      
 Interest income                                              127          309          580          
 Gain (loss) on repurchase of 4.50% Notes                     (1,144)      (211)        --           
 Equity loss from unconsolidated entities                     259          (398)        (276)        
 General and administrative expenses                          (16,148)     (17,502)     (20,508)     
 Change in fair value of contingent consideration             --           4,388        --           
 Interest expense                                             (7,973)      (9,516)      (5,531)      
 Other real estate expenses, net                              (5,113)      (1,654)      (3,099)      
 Impairment of the Poinciana Parkway                          (7,659)      --           --           
 Impairment of goodwill                                       --           (17,215)     --           
 Impairment of land developed or held for future development  (49,749)     (107,981)    --           
 Income (loss) from operations                                (87,683)     (165,704)    (36,057)     
 Income tax benefit (expense)                                 --           (473)        375          
 Net loss attributable to non-controlling interests           (2,552)      296          574          
 Net loss attributable to AV Homes                            $(90,235)    $(165,881)   $(35,108)    
                                                                                                        
 (1) Includes homebuilding revenues of $36,012, amenity revenues of $7,014, and other revenues of $6    
 (2) Includes impairment charges for inventory of approximately $1,620, $1,060 and $408 for 2012, 2011 and 2010, respectively. 
 (3) Includes homebuilding revenues of $33,460, amenity revenue of $2,447, and other revenues of $29    
 (4) Includes impairment charges of approximately $15, $467 and $252 for 2012, 2011 and 2010, respectively. 


(4) Includes impairment charges of approximately $15, $467 and $252 for 2012, 2011 and 2010,
respectively.

Data from closings for the active adult and primary residential homebuilding segments for the
years ended December 31, 2012, 2011 and 2010 is summarized as follows:

 Years ended December 31,  Number of   Revenues  Average Price   
                           Units                 Per Unit        
                                                                 
 2012                                                            
 Active adult communities  148         $36,012   $243            
 Primary residential       158         33,460    $212            
 Total                     306         $69,472   $227            
                                                                 
 2011                                                            
 Active adult communities  121         $28,537   $236            
 Primary residential       53          12,808    $242            
 Total                     174         $41,345   $238            
                                                                 
 2010                                                            
 Active adult communities  131         $25,527   $195            
 Primary residential       53          11,582    $219            
 Total                     184         $37,109   $202            


$37,109

$202

Data from contracts signed for the active adult and primary residential homebuilding segments for
the years ended December 31, 2012, 2011 and 2010 is summarized as follows:

 Years ended December 31,  Gross Number    Cancellations  Contracts         Dollar   Average      
                           of Contracts                   Signed, Net of    Value    Price Per    
                           Signed                         Cancellations              Unit         
                                                                                                  
 2012                                                                                             
 Active adult communities  221             (55)           166               $40,522  $244         
 Primary residential       275             (48)           227               50,481   $222         
 Total                     496             (103)          393               $91,003  $232         
                                                                                                  
 2011                                                                                             
 Active adult communities  178             (40)           138               $32,935  $239         
 Primary residential       109             (18)           91                18,541   $204         
 Total                     287             (58)           229               $51,476  $225         
                                                                                                  
 2010                                                                                             
 Active adult communities  148             (24)           124               $24,427  $197         
 Primary residential       52              (8)            44                10,616   $241         
 Total                     200             (32)           168               $35,043  $209         


$35,043

$209

Backlog, for the active adult and primary residential homebuilding segments as of December 31,
2012, 2011 and 2010 is summarized as follows:

 As of December 31,        Number of   Dollar   Average Price   
                           Units       Volume   Per Unit        
                                                                
 2012                                                           
 Active adult communities  63          $16,158  $256            
 Primary residential       122         26,906   $221            
 Total                     185         $43,064  $233            
                                                                
 2011                                                           
 Active adult communities  45          $11,691  $260            
 Primary residential       53          9,849    $186            
 Total                     98          $21,540  $220            
                                                                
 2010                                                           
 Active adult communities  28          $7,294   $261            
 Primary residential       15          4,115    $274            
 Total                     43          $11,409  $265            


$11,409

$265

                                                                                                            
                                                                                                            
 AV HOMES, INC. AND SUBSIDIARIES                                                                            
 Summarized quarterly financial data                                                                        
 (in thousands, except per share amounts)                                                                   
 Unaudited                                                                                                  
                                                                                                            
                                                           2012 Quarter                                    
                                                           First      Second     Third       Fourth     
 Net revenues                                              $26,710    $18,966    $28,652     $33,159    
 Expenses                                                  33,597     30,354     40,164      91,314     
 Equity earnings (losses) from unconsolidated entities     (36)       (43)       (38)        376        
                                                                                                        
 Loss before income taxes                                  (6,923)    (11,431)   (11,550)    (57,779)   
 Less: Net loss attributable to non-controlling interests  1,528      (86)       33          1,077      
                                                                                                        
 Net loss attributable to AV Homes                         $(8,451)   $(11,345)  $(11,583)   $(58,856)  
 Loss per share:                                                                                        
 Basic and Diluted                                         $(0.68)    $(0.91)    $(0.92)     $(4.67)    
                                                                                                           
                                                           2011 Quarter                                    
                                                           First      Second     Third       Fourth     
 Net revenues                                              $12,212    $28,366    $14,703     $33,701    
 Expenses                                                  22,308     45,163     135,705     51,112     
 Equity earnings (losses) from unconsolidated entities     (128)      143        (341)       (72)       
                                                                                                        
 Loss before income taxes                                  (10,224)   (16,654)   (121,343)   (17,483)   
 Less: Net loss attributable to non-controlling interests  127        128        132         (91)       
 Income tax expense                                        --         --         (350)       (123)      
                                                                                                        
 Net loss attributable to AV Homes                         $(10,097)  $(16,526)  $(121,561)  $(17,697)  
 Loss per share:                                                                                        
 Basic and Diluted                                         $(0.81)    $(1.33)    $(9.76)     $(1.42)    
                                                                                                            
 1. Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year. 
 2. During the first quarter of 2012, our impairment evaluation resulted in total impairment charges of $3,428 which included $581 in impairment charges for homes completed or under construction and $2,847 in impairment charges for land developed and/or held for future development. 
 3. During the second quarter of 2012, our impairment evaluation resulted in total impairment charges of $152 which related to impairment charges for homes completed or under construction. 
 4. During the third quarter of 2012, our impairment evaluation resulted in total impairment charges of $3,784, which included $807 in impairment charges for homes completed or under construction and $2,977 in impairment charges for land developed and/or held for future development. 
 5. During the fourth quarter of 2012, our impairment evaluation resulted in total impairment charges of $51,679, which included $95 in impairment charges for homes completed or under construction, $43,925 in impairment charges for land developed and/or held for future development, and $7,659 in impairment charges related to the Poinciana Parkway. 


CONTACT: Ken Plonski, 480-214-7408
         k.plonski@avhomesinc.com

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