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| 8-K - 8-K Q3 2015 - UCP, Inc. | a8-kucpq32015results.htm |
EX 99.1
UCP REPORTS THIRD QUARTER 2015 RESULTS
- Reports Earnings of $0.20 Per Share in Third Quarter 2015 -
-Backlog Units More than Double to 288 Homes in Third Quarter 2015 -
-Adjusted Homebuilding Gross Margin Improves 460 basis points to 21.1% in Third Quarter 2015 -
San Jose, California, November 9, 2015. UCP, Inc. (NYSE: UCP) today announced its results of operations for the three months ended September 30, 2015.
Third Quarter 2015 Highlights Compared to Third Quarter 2014
• | Revenue from homebuilding operations increased 100% to $70.3 million |
• | New homes deliveries grew 82% to 202 units |
• | Net new home orders improved 111.8% to 216 units |
• | Backlog on a dollar basis expanded to $121 million, compared to $38.9 million |
• | Adjusted homebuilding gross margin of 21.1%, compared to 16.5% |
• | Selling, general and administrative expense as a percentage of total revenue improved 450 basis points to 13.9%, compared to 18.4% |
• | Average selling communities of 28, compared to 27 |
“We are extremely pleased to deliver earnings of $0.20 per share in the third reflecting our vigilant efforts to control our cost of homes and overhead as we continue to expand our business,” stated Dustin Bogue, President and Chief Executive Officer of UCP. “Our increase in deliveries at improved homebuilding gross margins reflects our ongoing efforts to increase our mix of traditional dirt sales, tailor our product offerings and implement cost saving initiatives. Our G&A rationalization actions are also progressing according to plan and driving incremental improvements to our profitability. Modest demand improvement with healthier absorption paces in most of our markets helped drive a 211% increase in our backlog which positions us well into year end. As we look to 2016, we are remain committed to growing our business in a disciplined manner and further improving our results as demand improves.”
Third Quarter 2015 Operating Results
Total consolidated revenues including homebuilding, land development and other revenues, for the third quarter 2015 increased 32.1% to $73.7 million, compared to $55.8 million in the prior year period, attributable to an increase in homebuilding revenue which more than offset lower land development revenue.
Revenue from homebuilding operations in the third quarter 2015 grew 100.3% to $70.3 million, compared to $35.1 million for the prior year period. The improvement was primarily the result of an increase in the number of homes delivered to 202
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during the third quarter, compared to 111 homes during the prior year period. The growth in deliveries was partly due to an increase in the number of average selling communities to 28 in the third quarter, compared to an average of 27 selling communities in the prior year period. Active selling communities consists of those communities where we have more than 15 homes remaining to sell. The average selling price for home sales was approximately $348,000 during the third quarter of 2015, compared to approximately $316,000 during the prior year period. The increase in average selling price was primarily a result of geographic mix.
Net new home orders in the quarter increased 111.8% to 216 from 102 in the prior year period, primarily as the result of an increase in average active selling communities. Unit backlog at the end of the quarter was 288, compared to 115 at the end of prior year period and backlog on a dollar basis increased to $121 million, compared to $38.9 million at the end of prior year period.
Consolidated gross margin percentage in the third quarter 2015 was 19.0%, compared to 17.0% in the prior year period. Homebuilding gross margin percentage was 18.9%, compared to 14.9% in the prior year period. Adjusted homebuilding gross margin percentage was 21.1%, compared to 16.5% in the prior year period, due to a shift in product and regional mix of the homes sold, along with ongoing cost initiatives. Adjusted homebuilding gross margin percentage was 19.0% in the second quarter 2015.
Sales and marketing expense for the third quarter 2015 was $4.7 million, compared to $3.5 million in the same prior year period, due to the increase in homes delivered and the number of selling communities being marketed. As a percentage of total revenue, sales and marketing expense was 6.4% in the third quarter, compared to 6.3% in the prior year period, primarily as a result of a slightly higher transaction cost per home.
General and administrative expense for the current quarter was $5.5 million, compared to $6.7 million in the prior year period. As a percentage of total revenue, general and administrative expense was 7.5% for the third quarter, compared to 12.1% for the prior year period, primarily driven by higher revenue and cost rationalizations.
Net income attributable to shareholders of UCP was $1.6 million, or $0.20 per share, compared to net loss attributable to shareholders of UCP of $0.7 million, or $0.08 per share, in the prior year period. The Company’s weighted average basic and diluted shares outstanding was 8.0 million, compared to 7.9 million shares in the prior year quarter.
Total lots owned and controlled increased to 6,237, compared to 6,368 at December 31, 2014. The Company continues to actively pursue opportunities to acquire land in desirable and high growth areas in its attractive markets.
Webcast and Conference Call sustained
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The Company will host a conference call for investors and other interested parties on Monday, November 9, 2015, 12:00pm p.m. Eastern Time, 9:00am a.m. Pacific Time. Interested parties can listen to the call live on the Internet through the Investor Relations section of the Company’s website at www.unioncommunityllc.com.
Listeners are advised to log on to the website at least 15 minutes prior to the call to download and / or install any necessary audio software. The conference call can also be accessed by dialing 1-877-407-3982 for domestic participants or 1-201-493-6780 for international participants. Participants should ask for the Union Community Partners Third Quarter 2015 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start of the conference call. A replay of the conference call will be available through December 9, 2015, by dialing 1-877-870-5176 for domestic participants or 1-858-384-5517 for international participants and entering the pass code 13623988. An archive of the webcast will be available on the Company’s website for a limited time.
About UCP, Inc.
UCP is a homebuilder and land developer with land acquisition and entitlement expertise with operations in California, Washington State, North Carolina, South Carolina, and Tennessee. UCP designs, constructs and builds high-quality, sustainable single-family homes for a variety of lifestyles and budgets through its wholly-owned subsidiaries, Benchmark Communities, LLC. The Benchmark Communities brand is recognized by homebuyers for its high-quality construction and craftsmanship, cutting-edge home design, and customer-centric service and warranty programs.
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Forward-Looking Statements
This press release contains forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements include information concerning the Company's possible or assumed future results of operations, including descriptions of the Company's business strategy. These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. These statements are based on assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Although the Company believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance they will prove to be correct. Therefore, you should be aware that many factors could affect the Company's actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements.
Any forward-looking statement made by the Company herein, or elsewhere, speaks only as of the date on which it was made. New risks and uncertainties come up from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.
Homebuilding adjusted gross margin, land development adjusted gross margin and net debt to capital are non-U.S. GAAP financial measures. A reconciliation to the most comparable U.S. GAAP financial measures is presented in Appendix A hereto.
Contact:
Investor Relations:
Investorrelations@unioncommunityllc.com
408-207-9499 Ext. 476
Media:
Phil Denning/Jason Chudoba
Phil.denning@icrinc.com / Jason.chudoba@icrinc.com
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UCP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except shares and per share data)
September 30, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 22,606 | $ | 42,033 | |||
Restricted cash | 250 | 250 | |||||
Real estate inventories | 383,681 | 321,693 | |||||
Fixed assets, net | 1,444 | 1,571 | |||||
Intangible assets, net | 281 | 586 | |||||
Goodwill | 4,223 | 4,223 | |||||
Receivables | 983 | 1,291 | |||||
Other assets | 7,752 | 5,804 | |||||
Total assets | $ | 421,220 | $ | 377,451 | |||
Liabilities and equity | |||||||
Accounts payable and accrued liabilities | $ | 41,412 | $ | 30,733 | |||
Notes payable | 95,480 | 60,901 | |||||
Senior notes, net | 74,670 | 74,550 | |||||
Total liabilities | 211,562 | 166,184 | |||||
Commitments and contingencies (Note 10) | |||||||
Shareholders’ equity | |||||||
Preferred stock, par value $0.01 per share, 50,000,000 authorized, no shares issued and outstanding at September 30, 2015; no shares issued and outstanding at December 31, 2014 | — | — | |||||
Class A common stock, $0.01 par value; 500,000,000 authorized, 8,014,434 issued and outstanding at September 30, 2015; 7,922,216 issued and outstanding at December 31, 2014 | 80 | 79 | |||||
Class B common stock, $0.01 par value; 1,000,000 authorized, 100 issued and outstanding at September 30, 2015; 100 issued and outstanding at December 31, 2014 | — | — | |||||
Additional paid-in capital | 94,624 | 94,110 | |||||
Accumulated deficit | (7,803 | ) | (6,934 | ) | |||
Total UCP, Inc. stockholders’ equity | 86,901 | 87,255 | |||||
Noncontrolling interest | 122,757 | 124,012 | |||||
Total equity | 209,658 | 211,267 | |||||
Total liabilities and equity | $ | 421,220 | $ | 377,451 | |||
6
UCP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except shares and per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
REVENUE: | |||||||||||||||
Homebuilding | $ | 70,284 | $ | 35,086 | $ | 163,705 | $ | 110,542 | |||||||
Land development | 1,116 | 20,264 | 3,156 | 32,513 | |||||||||||
Other revenue | 2,272 | 400 | 5,060 | 1,918 | |||||||||||
Total revenue: | 73,672 | 55,750 | 171,921 | 144,973 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of sales - homebuilding | 57,006 | 29,845 | 134,744 | 91,721 | |||||||||||
Cost of sales - land development | 716 | 16,079 | 2,264 | 25,466 | |||||||||||
Cost of sales - other revenue | 1,958 | 352 | 4,363 | 1,681 | |||||||||||
Sales and Marketing | 4,692 | 3,486 | 13,246 | 9,807 | |||||||||||
General and Administrative | 5,539 | 6,737 | 19,311 | 19,917 | |||||||||||
Total costs and expenses | 69,911 | 56,499 | 173,928 | 148,592 | |||||||||||
Income (loss) from operations | 3,761 | (749 | ) | (2,007 | ) | (3,619 | ) | ||||||||
Other income, net | 45 | 17 | 177 | 103 | |||||||||||
Net income (loss) before income taxes | 3,806 | (732 | ) | (1,830 | ) | (3,516 | ) | ||||||||
Provision for income taxes | — | — | — | — | |||||||||||
Net income (loss) | $ | 3,806 | $ | (732 | ) | $ | (1,830 | ) | $ | (3,516 | ) | ||||
Net income (loss) attributable to noncontrolling interest | $ | 2,167 | $ | (66 | ) | $ | (961 | ) | $ | (533 | ) | ||||
Net income (loss) attributable to shareholders of UCP, Inc. | 1,639 | (666 | ) | (869 | ) | (2,983 | ) | ||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | |||||||||||
Comprehensive income (loss) | $ | 3,806 | $ | (732 | ) | $ | (1,830 | ) | $ | (3,516 | ) | ||||
Comprehensive income (loss) attributable to noncontrolling interest | $ | 2,167 | $ | (66 | ) | $ | (961 | ) | $ | (533 | ) | ||||
Comprehensive income (loss) attributable to shareholders of UCP, Inc. | $ | 1,639 | $ | (666 | ) | $ | (869 | ) | $ | (2,983 | ) | ||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | 0.21 | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.38 | ) | ||||
Diluted | $ | 0.20 | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.38 | ) | ||||
Weighted average common shares: | |||||||||||||||
Basic | 7,995,934 | 7,900,553 | 7,950,700 | 7,852,763 | |||||||||||
Diluted | 8,017,768 | 7,900,553 | 7,950,700 | 7,852,763 | |||||||||||
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UCP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Operating activities | |||||||
Net loss | $ | (1,830 | ) | $ | (3,516 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Stock-based compensation | 1,572 | 2,956 | |||||
Abandonment charges | 146 | 173 | |||||
Depreciation and amortization | 463 | 498 | |||||
Fair value adjustment of contingent consideration | (818 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Real estate inventories | (60,715 | ) | (72,789 | ) | |||
Receivables | 307 | (332 | ) | ||||
Other assets | (2,389 | ) | (4,435 | ) | |||
Accounts payable and accrued liabilities | 11,497 | 8,749 | |||||
Net cash used in operating activities | (51,767 | ) | (68,696 | ) | |||
Investing activities | |||||||
Purchases of fixed assets | (311 | ) | (788 | ) | |||
Citizens acquisition | — | (14,006 | ) | ||||
Restricted cash | — | (250 | ) | ||||
Net cash used in investing activities | (311 | ) | (15,044 | ) | |||
Financing activities | |||||||
Distribution to noncontrolling interest | (981 | ) | — | ||||
Proceeds from notes payable | 112,595 | 62,106 | |||||
Repayment of notes payable | (77,895 | ) | (33,703 | ) | |||
Debt issuance costs | (698 | ) | (200 | ) | |||
Withholding taxes paid on vested RSU's | (370 | ) | (1,619 | ) | |||
Net cash provided by financing activities | 32,651 | 26,584 | |||||
Net decrease in cash and cash equivalents | (19,427 | ) | (57,156 | ) | |||
Cash and cash equivalents – beginning of period | 42,033 | 87,503 | |||||
Cash and cash equivalents – end of period | $ | 22,606 | $ | 30,347 | |||
Supplemental disclosure of cash flow information | |||||||
Accrued offering and debt issuance costs | $ | — | $ | 450 | |||
Non-cash investing and financing activity | |||||||
Exercise of land purchase options acquired with acquisition of business | $ | 160 | $ | 141 | |||
Fair value of assets acquired from the acquisition of business | — | $ | 20,258 | ||||
Cash paid for the acquisition of business | — | $ | (14,006 | ) | |||
Contingent consideration and liabilities assumed | — | $ | 6,252 | ||||
Issuance of Class A common stock for vested restricted stock units | $ | 680 | $ | 3,999 | |||
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Appendix A
Select Operating Data by Region
Three months ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
Revenue from Homebuilding Operations (in thousands) | |||||||||||||||||||||
West | $ | 51,464 | $ | 26,275 | 95.9 | % | $ | 120,438 | $ | 93,027 | 95.9 | % | |||||||||
East | $ | 18,820 | $ | 8,811 | 113.6 | % | $ | 43,267 | $ | 17,515 | 113.6 | % | |||||||||
Total | $ | 70,284 | $ | 35,086 | 100.3 | % | $ | 163,705 | $ | 110,542 | 100.3 | % | |||||||||
Homes Delivered | |||||||||||||||||||||
West | 120 | 70 | 71.4 | % | 283 | 223 | 26.9 | % | |||||||||||||
East | 82 | 41 | 100.0 | % | 195 | 78 | 150.0 | % | |||||||||||||
Total | 202 | 111 | 82.0 | % | 478 | 301 | 58.8 | % | |||||||||||||
Average Selling Price for Home Sales (in thousands) | |||||||||||||||||||||
West | $ | 429 | $ | 375 | 14.4 | % | $ | 426 | $ | 417 | 2.2 | % | |||||||||
East | $ | 230 | $ | 215 | 7.0 | % | $ | 222 | $ | 225 | (1.3 | )% | |||||||||
Total | $ | 348 | $ | 316 | 10.1 | % | $ | 342 | $ | 367 | (6.8 | )% | |||||||||
Net New Home Orders | |||||||||||||||||||||
West | 135 | 71 | 90.1 | % | 430 | 264 | 62.9 | % | |||||||||||||
East | 81 | 31 | 161.3 | % | 246 | 55 | 347.3 | % | |||||||||||||
Total | 216 | 102 | 111.8 | % | 676 | 319 | 111.9 | % | |||||||||||||
Average Selling Communities | |||||||||||||||||||||
West | 19 | 12 | 58.3 | % | 17 | 12 | 41.7 | % | |||||||||||||
East | 9 | 15 | (40.0 | )% | 10 | 10 | — | % | |||||||||||||
Total | 28 | 27 | 3.7 | % | 27 | 22 | 22.7 | % | |||||||||||||
Backlog Units | |||||||||||||||||||||
West | 208 | 76 | 173.7 | % | |||||||||||||||||
East | 80 | 39 | 105.1 | % | |||||||||||||||||
Total | 288 | 115 | 150.4 | % | |||||||||||||||||
Backlog Dollar Basis (in thousands) | |||||||||||||||||||||
West | $ | 102,395 | $ | 30,596 | 234.7 | % | |||||||||||||||
East | $ | 18,439 | $ | 8,274 | 122.9 | % | |||||||||||||||
Total | $ | 120,834 | $ | 38,870 | 210.9 | % | |||||||||||||||
Owned Lots | |||||||||||||||||||||
West | 4,153 | 4,333 | (4.2 | )% | |||||||||||||||||
East | 941 | 304 | 209.5 | % | |||||||||||||||||
Total | 5,094 | 4,637 | 9.9 | % | |||||||||||||||||
9
Controlled Lots | |||||||||||||||||||||
West | 415 | 607 | (31.6 | )% | |||||||||||||||||
East | 728 | 720 | 1.1 | % | |||||||||||||||||
Total | 1,143 | 1,327 | (13.9 | )% | |||||||||||||||||
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Appendix B
Reconciliation of GAAP and Non-GAAP Measures
Gross Margin and Adjusted Gross Margin
Three Months Ended September 30, | |||||||||||||
2015 | % | 2014 | % | ||||||||||
(Dollars in thousands) | |||||||||||||
Consolidated Adjusted Gross Margin | |||||||||||||
Revenue | $ | 73,672 | 100.0 | % | $ | 55,750 | 100.0 | % | |||||
Cost of Sales | 59,680 | 81.0 | % | 46,276 | 83.0 | % | |||||||
Gross Margin | 13,992 | 19.0 | % | 9,474 | 17.0 | % | |||||||
Add: interest in cost of sales | 1,443 | 2.0 | % | 550 | 1.0 | % | |||||||
Add: impairment and abandonment charges | 144 | 0.2 | % | — | — | % | |||||||
Adjusted Gross Margin(1) | $ | 15,579 | 21.1 | % | $ | 10,024 | 18.0 | % | |||||
Consolidated Gross margin percentage | 19.0 | % | 17.0 | % | |||||||||
Consolidated Adjusted gross margin percentage | 21.1 | % | 18.0 | % | |||||||||
Homebuilding Adjusted Gross Margin | |||||||||||||
Homebuilding revenue | $ | 70,284 | 100.0 | % | $ | 35,086 | 100.0 | % | |||||
Cost of home sales | 57,006 | 81.1 | % | 29,845 | 85.1 | % | |||||||
Homebuilding gross margin | 13,278 | 18.9 | % | 5,241 | 14.9 | % | |||||||
Add: interest in cost of home sales | 1,443 | 2.1 | % | 550 | 1.6 | % | |||||||
Add: impairment and abandonment charges | 119 | 0.2 | % | — | — | % | |||||||
Adjusted homebuilding gross margin(1) | $ | 14,840 | 21.1 | % | $ | 5,791 | 16.5 | % | |||||
Homebuilding gross margin percentage | 18.9 | % | 14.9 | % | |||||||||
Adjusted homebuilding gross margin percentage | 21.1 | % | 16.5 | % | |||||||||
Land Development Adjusted Gross Margin | |||||||||||||
Land development revenue | $ | 1,116 | 100.0 | % | $ | 20,264 | 100.0 | % | |||||
Cost of land development | 716 | 64.2 | % | 16,079 | 79.3 | % | |||||||
Land development gross margin | 400 | 35.8 | % | 4,185 | 20.7 | % | |||||||
Add: interest in cost of land development | — | — | % | — | — | % | |||||||
Add: Impairment and abandonment charges | 25 | 2.2 | % | — | — | % | |||||||
Adjusted land development gross margin(1) | $ | 425 | 38.1 | % | $ | 4,185 | 20.7 | % | |||||
Land development gross margin percentage | 35.8 | % | 20.7 | % | |||||||||
Adjusted land development gross margin percentage | 38.1 | % | 20.7 | % | |||||||||
Other Revenue Gross and Adjusted Margin | |||||||||||||
Revenue | $ | 2,272 | 100.0 | % | $ | 400 | 100.0 | % | |||||
Cost of revenue | 1,958 | 86.2 | % | 352 | 88.0 | % | |||||||
Other revenue gross and adjusted margin | $ | 314 | 13.8 | % | $ | 48 | 12.0 | % | |||||
Other revenue gross and adjusted margin percentage | 13.8 | % | 12.0 | % | |||||||||
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Gross Margin and Adjusted Gross Margin
Nine Months Ended September 30, | |||||||||||||
2015 | % | 2014 | % | ||||||||||
(Dollars in thousands) | |||||||||||||
Consolidated Adjusted Gross Margin | |||||||||||||
Revenue | $ | 171,921 | 100.0 | % | $ | 144,973 | 100.0 | % | |||||
Cost of Sales | 141,371 | 82.2 | % | 118,868 | 82.0 | % | |||||||
Gross Margin | 30,550 | 17.8 | % | 26,105 | 18.0 | % | |||||||
Add: interest in cost of sales | 3,416 | 2.0 | % | 2,026 | 1.8 | % | |||||||
Add: impairment and abandonment charges | 146 | 0.1 | % | 173 | 0.1 | % | |||||||
Adjusted Gross Margin(1) | $ | 34,112 | 19.8 | % | $ | 28,304 | 19.5 | % | |||||
Consolidated Gross margin percentage | 17.8 | % | 18.0 | % | |||||||||
Consolidated Adjusted gross margin percentage | 19.8 | % | 19.5 | % | |||||||||
Homebuilding Adjusted Gross Margin | |||||||||||||
Homebuilding revenue | $ | 163,705 | 100.0 | % | $ | 110,542 | 100.0 | % | |||||
Cost of home sales | 134,744 | 82.3 | % | 91,721 | 83.0 | % | |||||||
Homebuilding gross margin | 28,961 | 17.7 | % | 18,821 | 17.0 | % | |||||||
Add: interest in cost of home sales | 3,367 | 2.1 | % | 2,023 | 1.8 | % | |||||||
Add: impairment and abandonment charges | 119 | — | % | — | — | % | |||||||
Adjusted homebuilding gross margin(1) | $ | 32,328 | 19.7 | % | $ | 20,844 | 18.9 | % | |||||
Homebuilding gross margin percentage | 17.7 | % | 17.0 | % | |||||||||
Adjusted homebuilding gross margin percentage | 19.7 | % | 18.9 | % | |||||||||
Land Development Adjusted Gross Margin | |||||||||||||
Land development revenue | $ | 3,156 | 100.0 | % | $ | 32,513 | 100.0 | % | |||||
Cost of land development | 2,264 | 71.7 | % | 25,466 | 78.3 | % | |||||||
Land development gross margin | 892 | 28.3 | % | 7,047 | 21.7 | % | |||||||
Add: interest in cost of land development | 49 | 1.6 | % | 3 | — | % | |||||||
Add: Impairment and abandonment charges | 146 | 4.6 | % | 173 | 0.5 | % | |||||||
Adjusted land development gross margin(1) | $ | 1,087 | 34.4 | % | $ | 7,223 | 22.2 | % | |||||
Land development gross margin percentage | 28.3 | % | 21.7 | % | |||||||||
Adjusted land development gross margin percentage | 34.4 | % | 22.2 | % | |||||||||
Other Revenue Gross and Adjusted Margin | |||||||||||||
Revenue | $ | 5,060 | 100.0 | % | $ | 1,918 | 100.0 | % | |||||
Cost of revenue | 4,363 | 86.2 | % | 1,681 | 87.6 | % | |||||||
Other revenue gross and adjusted margin | $ | 697 | 13.8 | % | $ | 237 | 12.4 | % | |||||
Other revenue gross and adjusted margin percentage | 13.8 | % | 12.4 | % | |||||||||
* Percentages may not add due to rounding.
(1) | Consolidated adjusted gross margin percentage, homebuilding adjusted gross margin percentage and land development adjusted gross margin percentage are non-U.S. GAAP financial measures. Adjusted gross margin is defined as gross margin plus capitalized interest, impairment and abandonment charges. We use adjusted gross margin information as a supplemental measure when evaluating our operating performance. We believe this information is meaningful, because it isolates the impact that leverage and non-cash impairment and abandonment charges have on gross margin. However, because adjusted gross margin information excludes interest expense and impairment and abandonment charges, all of which have real economic effects and could materially impact our results, the utility of adjusted gross margin information as a measure of our operating performance is limited. In addition, other companies may not calculate gross margin information in the same manner that we do. Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance. The table above provides a reconciliation of adjusted gross margin numbers to the most comparable U.S. GAAP financial measure. |
12
Debt-to-Capital Ratio and Net Debt-to-Capital Ratio
At September 30, 2015 | At December 31, 2014 | ||||||
Debt | $ | 170,150 | $ | 135,451 | |||
Equity | 209,658 | 211,267 | |||||
Total capital | $ | 379,808 | $ | 346,718 | |||
Ratio of debt-to-capital | 44.8 | % | 39.1 | % | |||
Debt | $ | 170,150 | $ | 135,451 | |||
Less: cash and cash equivalents | 22,606 | 42,033 | |||||
Net debt | 147,544 | 93,418 | |||||
Equity | 209,658 | 211,267 | |||||
Total capital | $ | 357,202 | $ | 304,685 | |||
Ratio of net debt-to-capital(1) | 41.3 | % | 30.7 | % | |||
(1) The ratio of net debt-to-capital is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus stockholders’ and member's equity. The most directly comparable U.S. GAAP financial measure is the ratio of debt-to-capital. We believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing. We reconcile this non-U.S. GAAP financial measure to the ratio of debt-to-capital in the table above. The Company’s calculation of net debt-to-capital ratio might not be comparable with other issuers or issuers in other industries.
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