AV Homes, Inc. Announces Second Quarter Results

Thu Aug 8, 2013 7:00am EDT

* Reuters is not responsible for the content in this press release.

SCOTTSDALE, Ariz., Aug. 8, 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 second quarter ended June 30, 2013.

The Company reported a net loss $4.7 million, or 36 cents per diluted share, on revenues of $29.6 million for the three months ended June 30, 2013, compared to a net loss of $11.3 million, or 91 cents per diluted share, on revenues of $19.0 million for the three months ended June 30, 2012.

For the six-month period ended June 30, 2013, the company reported a net loss of $9.4 million or 74 cents per diluted share, on revenues of $54.7 million, compared to a net loss of $19.8 million or $1.58 per diluted share, on revenues of $45.7 million for the six months ended June 30, 2012.

For the second quarter ended June 30, 2013, the Company closed on 82 homes, a 39% increase from the 59 homes closed during the second quarter of 2012. During the six months ended June 30, 2013, the Company reported 163 home closings, a 34% increase from the 122 homes closed during the first six months of 2012. The dollar volume of the closings reported in the second quarter of 2013 increased 50% to $20.1 million, compared to a dollar volume of $13.4 million during the second quarter of 2012. For the six months ended June 30, 2013, the dollar volume of closings increased to $40.3 million, a 43% increase as compared to the same period in 2012.

The number of housing contracts signed, net of cancellations, during the three months ended June 30, 2013 increased 18% to 119 units, compared to 101 units during the same period in 2012. The dollar value of the contracts signed during the first quarter increased 18% to $29.1 million, compared to $24.6 million during the same period one year ago. For the six-month period ended June 30, 2013 the Company reported 254 contracts, net of cancellations, a 23% increase over the six months ended June 30, 2012. The dollar value of the contracts signed during the first six months of 2013 increased 22% to $58.5 million as compared to $47.8 million in the same period of 2012.

The backlog of homes under contract but not yet closed at June 30, 2013 increased 51% to 276 units, representing a dollar volume of $63.2 million, compared to 183 units with a dollar volume of $41.3 million at June 30, 2012.

The overall average unit price per closing rose 7% from $228,000 in the second quarter of 2012 to $245,000 in the second quarter of 2013. For the six-month period ended June 30, 2013, the average unit price per closing was $247,000, a 7% increase from $230,000 as reported for the same period one year ago.

During the three months ended June 30, 2013, the Company reported $6.6 million in revenue from the sale of commercial, industrial and other lands, which generated $2.2 million in net income to the Company compared to $3.0 million in revenue and $1.6 million in net income during the second quarter of 2012. For the six month period ended June 30, 2013, the Company reported revenue from the sale of commercial, industrial and other lands of $8.9 million, generating $3.6 million in net income.

President and Chief Executive Officer Roger A. Cregg said the Company continues to show sequential and comparable period improvements as a result of the strengthening housing market and reductions in operating costs. "As mentioned last quarter, we continue to focus on driving margin improvement while growing our business. We are seeing increased activity in both of our homebuilding segments and across both of our primary markets, Florida and Arizona, in the form of traffic and new contracts," Cregg said. "We are benefitting from our inventory of lots and land in Central Florida and are being opportunistic with our long term land positions there by moving up development schedules to bring new stores to market sooner," Cregg added.

Mr. Cregg went on to discuss the new opportunities provided by its recent equity infusion by an affiliate of TPG Capital. "We are now in a position to more quickly capitalize on new land opportunities including finished lot positions in both of our current markets to accelerate our revenue growth ahead of bringing our new raw land positions on line. In addition, it will allow us to fill our pipeline with other potential land acquisitions including our own previously undeveloped properties that will help increase sales volumes and our return to profitability."  

The Company will hold a conference call and webcast on Thursday, August 8, 2013 to discuss its second quarter financial results. The conference call will begin at 8:30 a.m. 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 August 8, 2013 at 11:30 am and can be accessed by dialing (855) 859-2056 or for international callers by dialing (404) 537-3406; the conference ID is 27926714. The replay will be available until August 15, 2013. In order to access the live webcast, please go to the Investors section of AV Homes' website at www.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 homebuilding, community development and land sales in Florida and Arizona. Its principal operations are conducted near Orlando, Florida and in the Phoenix, Arizona markets. The company builds communities that serve active adults 55+ and people of all ages. AV Homes common shares trade on NASDAQ under the symbol AVHI. 

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, the conference call and the webcast. 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, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 and in our other filings with the Securities and Exchange Commission, which filings are available on www.sec.gov.  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
(Dollars in thousands, except per share amounts)
     
  June 30, 2013 December 31, 2012
Assets (unaudited)  
Cash and cash equivalents $ 196,399 $ 79,815
Restricted cash 4,725 4,682
Land and other inventories 188,086 171,044
Receivables, net 6,813 6,730
Income tax receivable 1,293 1,293
Property and equipment, net 36,059 36,661
Investments in and notes receivable from unconsolidated entities 1,237 1,220
Prepaid expenses and other assets 10,405 10,777
Assets held for sale 16,483 25,649
Total Assets $ 461,500 $ 337,871
Liabilities and Equity    
Liabilities    
Accounts payable $ 4,908 $ 4,656
Accrued and other liabilities 14,150 12,978
Customer deposits and deferred revenues 3,653 1,985
Estimated development liability for sold land 32,945 32,974
Notes payable 105,402 105,402
Total Liabilities 161,058 157,995
     
Contingent convertible cumulative redeemable preferred stock 93,206
     
Equity    
Common Stock, par value $1 per share    
Authorized: 50,000,000 shares    
Issued: 15,454,140 shares at June 30, 2013    
12,938,157 shares at December 31, 2012 15,454 12,938
Additional paid-in capital, Common 296,233 262,363
Retained (deficit) earnings (115,537) (106,110)
  196,150 169,191
Treasury stock: at cost, 110,874 shares at June 30, 2013 and December 31, 2012 (3,019) (3,019)
Total AV Homes stockholders' equity 193,131 166,172
Non-controlling interest 14,105 13,704
Total Equity 207,236 179,876
Total Liabilities and Equity $ 461,500 $ 337,871
 
AV HOMES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss) 
For the six and three months ended June 30, 2013 and 2012 
(unaudited) 
(Dollars in thousands except per share amounts) 
         
  Six Months Three Months
  2013 2012 2013 2012
Revenues        
Real estate revenues        
Homebuilding $ 45,253 $ 32,972 $ 22,705 $ 15,534
Commercial and industrial and other land sales 8,882 12,057 6,577 2,999
Other real estate 438 210 181 66
Total real estate revenues 54,573 45,239 29,463 18,599
Interest income 34 63 25 32
Other 68 374 68 335
Total revenues 54,675 45,676 29,556 18,966
Expenses        
Real estate expenses        
Homebuilding 45,790 38,706 23,025 18,825
Commercial and industrial and other land sales 5,257 7,344 4,392 1,377
Other real estate 1,399 3,305 692 1,251
Total real estate expenses 52,446 49,355 28,109 21,453
Impairment charges 45 3,580 45 3,428
General and administrative expenses 7,997 6,663 4,292 3,357
Interest expense 3,536 4,353 1,763 2,116
Total expenses 64,024 63,951 34,209 30,354
Loss from unconsolidated entities (78) (79) (15) (43)
Loss before income taxes (9,427) (18,354) (4,668) (11,431)
Income tax (expense) benefit
Net loss and comprehensive loss (9,427) (18,354) (4,668) (11,431)
Net income (loss) attributable to non-controlling interests in consolidated entities 1,442 (86)
Net loss and comprehensive loss attributable to AV Homes stockholders $ (9,427) $ (19,796) $ (4,668) $ (11,345)
Basic and Diluted Loss Per Share $ (0.74) $ (1.58) $ (0.36) $ (0.91)
         

RESULTS OF OPERATIONS

The following table provides a comparison of certain financial data related to our operations for the six and three months ended June 30, 2013 and 2012:

  Six Months Three Months
  2013 2012 2013 2012
Operating income (loss):        
Active adult communities        
Revenues        
Homebuilding $ 18,606 $ 16,340 $ 8,385 $ 8,307
Amenity 3,556 3,556 1,771 1,784
Expenses        
Homebuilding 15,946 14,726 7,243 7,658
Homebuilding Selling, General and Administrative 4,542 6,601 2,413 3,070
Amenity 4,107 3,827 2,054 1,974
Segment operating loss (2,433) (5,258) (1,554) (2,611)
         
Primary residential        
Revenues        
Homebuilding 21,672 11,861 11,739 4,828
Amenity 1,419 1,215 810 615
Expenses        
Homebuilding 17,718 10,837 9,545 4,670
Homebuilding Selling, General and Administrative 2,135 2,280 1,066 1,533
Amenity 1,387 1,168 749 653
Segment operating income (loss) 1,851 (1,209) 1,189 (1,413)
         
Commercial and industrial and other land sales        
Revenues 8,882 12,057 6,577 2,999
Expenses 5,257 7,344 4,392 1,377
Segment operating income 3,625 4,713 2,185 1,622
         
Other operations        
Revenues 438 210 181 66
Expenses 184 143 115 48
Segment operating income 254 67 66 18
         
Operating income (loss) 3,297 (1,687) 1,886 (2,384)
         
Unallocated income (expenses):        
Interest income 34 63 25 32
Equity loss from unconsolidated entities (79) (15) (43)
Net (gain)/loss attributable to non-controlling interests (78) (1,442) 86
Corporate general and administrative expenses (7,997) (6,663) (4,292) (3,357)
Interest expense (3,536) (4,353) (1,763) (2,116)
Other real estate expenses, net (1,147) (2,788) (509) (716)
Impairment of land developed or held for future development (2,847) (2,847)
Loss before income taxes (9,427) (19,796) (4,668) (11,345)
Income tax benefit
Net loss attributable to AV Homes $ (9,427) $ (19,796) $ (4,668) $ (11,345)
         

Data from closings for the active adult and primary residential homebuilding segments for the six and three months ended June 30, 2013 and 2012 is summarized as follows:

For the six months ended June 30, Number of
Units
Revenues Average
Price Per
Unit
2013      
Active adult communities 73 $ 18,606 $ 255
Primary residential 90 21,672 $ 241
Total 163 $ 40,278 $ 247
2012      
Active adult communities 66 $ 16,290 $ 247
Primary residential 56 11,823 $ 211
Total 122 $ 28,113 $ 230
       
For the three months ended June 30, Number of
Units
Revenues Average
Price Per
Unit
2013      
Active adult communities 34 $ 8,385 $ 247
Primary residential 48 11,739 $ 245
Total 82 $ 20,124 $ 245
2012      
Active adult communities 34 $ 8,307 $ 244
Primary residential 25 5,126 $ 205
Total 59 $ 13,433 $ 228
       

Data from contracts signed for the active adult and primary residential homebuilding segments for the six and three months ended June 30, 2013 and 2012 is summarized as follows:

For the six months ended June 30, Gross
Number
of Contracts
Signed
Cancellations Contracts
Signed,
Net of
Cancellations
Dollar
Value
Average
Price Per
Unit
2013          
Active adult communities 199 (25) 174 $ 39,531 $ 227
Primary residential 124 (44) 80 19,001 $ 238
Total 323 (69) 254 $ 58,532 $ 230
           
2012          
Active adult communities 121 (37) 84 $ 20,907 $ 249
Primary residential 147 (24) 123 26,892 $ 219
Total 268 (61) 207 $ 47,799 $ 231
           
For the three months ended June 30,          
2013          
Active adult communities 102 (12) 90 $ 20,493 $ 228
Primary residential 52 (23) 29 8,648 $ 298
Total 154 (35) 119 $ 29,141 $ 245
           
2012          
Active adult communities 55 (13) 42 $ 10,371 $ 247
Primary residential 72 (13) 59 14,224 $ 241
Total 127 (26) 101 $ 24,595 $ 244
           

Backlog for the active adult and primary residential homebuilding segments as of June 30, 2013 and 2012 is summarized as follows:

As of June 30, Number of
 Units
Dollar
Volume
Average
Price
Per Unit
2013      
Active adult communities 164 $ 38,404 $ 234
Primary residential 112 24,765 $ 221
Total 276 $ 63,169 $ 229
2012      
Active adult communities 63 $ 16,336 $ 259
Primary residential 120 24,918 $ 208
Total 183 $ 41,254 $ 225
CONTACT: Media Contact: Dave M. Gomez
         d.gomez@avhomesinc.com
         480.214.7000
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