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The New Home Co. (NWHM) Reports Q1 EPS of $0.03, Revenues Miss; Offers 2Q & FY21 Revenues Guidance Below Consensus

April 30, 2021 6:08 AM EDT
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The New Home Co. (NYSE: NWHM) reported Q1 EPS of $0.03, versus ($0.42) reported last year. Revenue for the quarter came in at $99.16 million versus the consensus estimate of $124.9 million.

"The New Home Company started the year on a strong note as robust housing demand continued through the first quarter across all of our markets,” stated Larry Webb, Executive Chairman of The New Home Company. “Our net new orders and homes in backlog increased 114% and 273% year-over-year, respectively, while our gross margins from home sales increased 570 basis points resulting from strong pricing power, lower interest costs and the benefits associated with faster absorption. In addition, we expanded our geographic footprint by entering the Colorado market during the quarter through the acquisition of Epic Homes, which positions us in another strong housing market and further diversifies our operations."

Leonard Miller, President and Chief Executive Officer, stated, "The ongoing strength in our markets is broad-based and across all our product types, which resulted in a monthly sales absorption rate of 4.4 homes per community for the quarter, a company record and up 120% over the prior year. We are also focused on balancing our sales releases with construction starts and production capacity, especially in light of the demand on our trade partners and material cost pressures. As a result of the strong sales absorption rates and the meaningful price increases we have instituted over the last several quarters, we are starting to see real improvements to our profitability."

Mr. Miller concluded, "We ended the quarter with $115 million in cash on hand, nothing drawn on our unsecured revolving credit facility and a net debt-to-capital ratio of 45.5%* after giving effect to the acquisition of Epic Homes and the issuance of a $35 million tack-on to our existing senior notes. Going forward, we will strive to execute a balanced approach of growing our land pipeline, improving our operating metrics and returns, all while appropriately managing our financial position. We believe the improvement in our gross margins and our record backlog value of $423 million at the end of the quarter positions us well to improve our profitability and returns as we move through the balance of this year and beyond."

GUIDANCE:

The New Home Co. sees Q2 2021 revenue of $125-135 million, versus the consensus of $151.8 million.

The New Home Co. sees FY2021 revenue of $475-495 million, versus the consensus of $507.41 million.

The Company’s current estimate for the 2021 second quarter is as follows:

  • Home sales revenue of $125 - $135 million
  • Fee building revenue of $4 - $6 million
  • Home sales gross margin of 16.0% to 16.2%

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

  • Home sales revenue of $475 - $495 million
  • Fee building revenue of $15 - $20 million
  • Home sales gross margin of 16.0% to 16.2%

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



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