William Lyon Homes (WLH) Tops Q1 EPS by 1c, Revenues Beat

William Lyon Homes (NYSE: WLH) reported Q1 EPS of $0.21, $0.01 better than the analyst estimate of $0.20. Revenue for the quarter came in at $453.8 million versus the consensus estimate of $410.18 million.

2019 First Quarter Highlights (Comparison to 2018 First Quarter)

• Net income available to common stockholders of $8.1 million, or $0.21 per diluted share, compared to $8.3 million, or $0.21 per diluted share in the prior year
• Pre-tax income of $20.0 million, up from $15.4 million in the prior year
• New home deliveries of 949 homes, up 28%
• Home sales revenue of $453.8 million, up 22%
• Average sales price (ASP) of new homes delivered of $478,200 versus $503,200
• Homebuilding gross margin percentage of 16.0%
• Net new home orders of 1,103
• Units in backlog of 1,195
• Dollar value of homes in backlog of $527.2 million
• SG&A percentage of 12.0%, compared to 12.7%
• Adjusted EBITDA of $36.6 million
• Average sales locations of 118

“The first quarter of 2019 played out generally as we expected, and reflected a nice rebound from the volatility experienced late last year, as interest rates have receded and consumer demand has rebounded against a backdrop of ongoing strength in the broader economy,” said Matthew R. Zaist, President and Chief Executive Officer. “One of our objectives coming into the year was to deliver on our spec inventory, and our operating teams performed well in converting these homes to sell and close during the quarter. This represented 41% of our deliveries for the quarter, highlighting the attractiveness to the entry-level consumer of inventory available to the needs-based buyer.”

“Overall our backlog conversion rate was 91% for the quarter, the highest in several years, and yielding 949 new home deliveries, an increase of 28%, and homebuilding revenues of $453.8 million, up 22% over the prior year. In addition, we had significant improvement in pre-tax income of 30% year-over-year, and SG&A leverage was better than our expectations by 100 basis points.”

Mr. Zaist continued, “Net new home orders for the first quarter were flat compared to last year’s very strong first quarter, and the order cadence accelerated each month as the quarter progressed. Our monthly order pace was 2.4 sales per community in January, improving to 2.9 in February, and picking up meaningfully in March to 4.1, bringing us back in line with historical norms. We continue to benefit from our strategy of focusing on the entry-level and first-time move-up buyer segments, which represent 83% of our deliveries and our ending backlog, and the highest absorbing segments for the Company during the quarter.”

For earnings history and earnings-related data on William Lyon Homes (WLH) click here.

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