The New Home Co. (NWHM) Reports Q4 EPS of $0.26, Revenues Beat; Offers 1Q & FY21 Revenue Guidance

February 11, 2021 6:10 AM EST

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The New Home Co. (NYSE: NWHM) reported Q4 EPS of $0.26, versus $0.15 reported last year. Revenue for the quarter came in at $145.6 million versus the consensus estimate of $124.9 million.

Fourth Quarter 2020 Financial Results

  • Net orders up 89%, monthly sales absorption rate increased 68% to 3.7 compared to 2.2 in the prior year
  • Unit backlog up 175%, dollar value of homes in backlog increased 88% compared to last year to $236.0 million
  • Total revenues of $145.6 million and home sales revenue of $135.4 million
  • Homebuilding gross margin of 14.8% compared to 7.8% in the prior year, including impairments in prior year
  • Adjusted gross margin excluding interest in cost of sales and impairments improved 260 basis points to 19.4%* compared to 16.8%* in the prior year
  • Net loss of $1.2 million, or $(0.07) per diluted share, including an $8.0 million debt refinance charge
  • Adjusted net income of $4.8 million*, or $0.26 per diluted share*, excluding the debt refinance charge
  • Ending cash balance of $107.3 million, a $28.0 million increase compared to end of 2019
  • Debt-to-capital ratio of 55.4% and a net debt-to-capital ratio of 41.0%*, an 820-basis point improvement from the end of 2019

"The New Home Company finished the year on a strong note with solid progress across many key operating metrics during the fourth quarter," stated Larry Webb, Executive Chairman of The New Home Company. "Robust demand for new housing resulted in an 89% increase in net new orders, while strong pricing power resulted in a 260-basis point* improvement in adjusted gross margins during the fourth quarter. Excluding a one-time debt refinance charge, the company generated adjusted net income of $4.8 million*, or $0.26 per diluted share*, while generating $31 million of operating cash flow. We ended the year with a net-debt-to-capital ratio of 41.0%, an 820 basis point improvement from a year ago."

Leonard Miller, President and Chief Executive Officer, stated, "We enter 2021 on solid footing with the number of homes in backlog up 175% as compared to the end of 2019. We continue to see strong demand across all our markets as December was the highest order month in the history of the Company and the trend continued into January as net orders increased 109% compared to January 2020 driven by a 4.5 monthly sales absorption pace. While our affordable product offerings continue to grow as a percentage of our total community offerings, new home demand was evident across all product segments. The faster sales pace combined with meaningful price increases at nearly all of our communities has driven gross margin improvement that we expect to continue into 2021."

Mr. Miller concluded, "We substantially improved our financial condition in the fourth quarter through the successful refinance of our Senior Notes, the extension of our revolving credit facility and by unwinding our position in a capital intensive joint venture. Moving forward, we look to execute a balanced approach of acquiring new land positions and improving our operating metrics to generate positive shareholder returns as we head into 2021. I am excited about the future of The New Home Company and look forward to building on the momentum we established in 2020."

GUIDANCE:

The New Home Co. sees Q1 2021 revenue of $84-91 million.

The New Home Co. sees FY2021 revenue of $425-460 million.

The Company's current estimate for the 2021 first quarter is as follows:

  • Home sales revenue of $80 - $85 million
  • Fee building revenue of $4 - $6 million
  • Home sales gross margin of 16.5% - 17.0%

The Company's current estimate for the 2021 full year is as follows:

  • Home sales revenue of $410 - $440 million
  • Fee building revenue of $15 - $20 million
  • Home sales gross margin of 15.5% - 16.0%

For earnings history and earnings-related data on The New Home Co. (NWHM) click here.



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