Form 8-K WILLIAM LYON HOMES For: Nov 07

FREE Breaking News Alerts from StreetInsider.com!

StreetInsider.com Top Tickers, 8/14/2026

1. AMAT
2. GLOB
3. SPY
4. RDDT
5. SNDK

6. HTFL
7. ADYEN:NA
8. ADYYF
9. WDAY
10. TPR

Top News Most Read Special Reports

November 7, 2014 8:59 AM EST

E-mail

�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

FORM 8-K

�

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November�7, 2014

�

WILLIAM LYON HOMES

(Exact name of registrant as specified in charter)

�

Delaware

�

001-31625

�

33-0864902

(State or Other Jurisdiction

of Incorporation)

�

(Commission

File Number)

�

(IRS Employer

Identification No.)

4695 MacArthur Court, 8^th Floor

Newport Beach, California 92660

(Address of principal executive offices and zip code)

(949)�833-3600

(Registrant�s telephone number, including area code)

�

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

�

�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

�

�	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

�

�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

�

Item�2.02.

Results of Operations and Financial Conditions.

On November�7, 2014, William Lyon Homes (the �Company�) issued a press release announcing its financial results for the three months ended September�30, 2014. A copy of the press release is furnished herewith as Exhibit 99.1, and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including the accompanying Exhibit 99.1, shall not be deemed �filed� for purposes of Section�18 of the Securities Exchange Act of 1934, as amended (the �Exchange Act�), or otherwise subject to liability under that section, except as specifically incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

�

Item�9.01.

Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished herewith:

�


99.1	��	Press Release issued on November�7, 2014 announcing financial results for the three months ended September�30, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

�


	�	�	WILLIAM LYON HOMES

Dated: November 7, 2014	�	�	By:	�	/S/ COLIN�T. SEVERN
	�	�		�	Colin T. Severn
	�	�		�	Vice President
	�	�		�	Chief Financial Officer

EXHIBIT INDEX

�


Exhibit	��	Description

99.1	��	Press Release issued on November 7, 2014 announcing financial results for the three months ended September 30, 2014.

Exhibit 99.1

�

LOGO

WILLIAM LYON HOMES REPORTS THIRD QUARTER 2014 RESULTS

NEWPORT BEACH, CA� November�7, 2014� William Lyon Homes (NYSE: WLH), a leading homebuilder in the Western U.S., announced results for its 2014 third quarter ended September�30, 2014. On August�12, 2014, the Company completed its acquisition of the residential homebuilding business of Polygon Northwest Homes (�Polygon Northwest�), the largest private homebuilder in the Pacific Northwest Region. The Company�s consolidated results for the third quarter ended September�30, 2014 include the financial results of Polygon Northwest from the date of acquisition, as Washington and Oregon divisions.

2014 Third Quarter Highlights (Comparison to 2013 Third Quarter)

�

Net income available to common stockholders of $5.6 million, or $0.17 per diluted share

�

Net income available to common stockholders of $10.2 million, or $0.31 per diluted share, excluding the net effect of one-time transaction expenses

�

Consolidated revenue of $206.9 million, up 37%

�

Home sales revenue of $196.1 million, up 39%

�

Average sales price (ASP) of new homes delivered of $462,500, up 16%

�

Homebuilding gross margin of $38.5 million

�

Homebuilding gross margin percentage of 19.6%

�

Adjusted homebuilding gross margin percentage of 24.6%

�

Dollar value of orders of $199.2 million, up 40%

�

Net new home orders of 422, up 35%

�

Average sales locations of 49, up 88%

�

Dollar value of homes in backlog of $382.9 million, up 84%

�

New home deliveries of 424 homes, up 19%

�

SG&A percentage of 12.9%, excluding one-time transaction expenses

�

Adjusted EBITDA of $26.7 million

Select pro forma results including Polygon Northwest for the full Third Quarter ended September�30, 2014, assuming the acquisition had closed as of July�1, 2014:

�

Homebuilding revenue of $230.0 million, up 63%

�

New Home deliveries of 518, up 46%

�

Net New Home orders of 495, up 59%

�

Dollar Value of new home orders of $225.9 million, up 59%

�This was an important quarter for the Company. Not only did we continue to improve our year-over-year performance across a number of operating and financial metrics, we also completed our acquisition of Polygon Northwest Homes, the largest private homebuilder in the Pacific Northwest,� said William H. Lyon, Chief Executive Officer. �We realized significant increases in home sales revenue, the dollar value of orders and backlog, and the number of active selling communities. Our net income was $5.6 million, or $0.17 per diluted share for the quarter ended September�30, 2014, or $10.2 million and $0.31 per diluted share as adjusted to exclude one-time transaction expenses. We are excited to welcome the Polygon team into the William Lyon Homes family as we expand our geographic footprint and increase the scale of our existing operations within the Western region of the U.S. by adding Portland, Oregon and Seattle, Washington to our operating platform. While the sales environment in some of our markets has been less robust than desired, we believe that our operating strategy of focusing on the best residential markets in the western United States will allow us to continue to drive outsized growth and shareholder value.�

Matthew R. Zaist, President and Chief Operating Officer stated, �We are extremely proud of the continued progress of our operating teams as evident in our third quarter results. On a fully combined pro forma basis for the quarter, homebuilding revenues topped $230 million, new home deliveries of 518 were up 46% and new home orders of 495 were up almost 60%. We believe that the scale of the combined company will allow us to meaningfully drive top line growth, while the cost synergies of the transaction will allow us to continue to drive efficiencies on the SG&A side of our business.� Mr.�Zaist continued, �The fourth quarter is off to a strong start, as we have seen strong growth in October, with

year-over-year increases in new home orders of 103%, new home deliveries of 47%, and homebuilding revenue of 51% as compared to October 2013. In the fourth quarter of 2014, we anticipate 650 to 700 new home deliveries and homebuilding revenue between $300 million and $330 million.�

Operating Results

Home sales revenue for the third quarter of 2014 was $196.1 million, as compared to $141.4 million in the year-ago period, an increase of 39%.�Our performance was driven by a 19% increase in the number of�deliveries to 424 homes and a 16% increase in the average sales price of homes delivered to $462,500 in the quarter, compared to 356 homes delivered and a $397,100 average sales price, respectively, in the year-ago period. Average sales price of homes delivered increased in most of our divisions, driven by price appreciation in certain communities and a 105% increase in deliveries in Southern California with ASPs of $574,500. Included in this quarter�s results, since August�12, 2014, were revenues from the newly acquired Washington and Oregon divisions of $38.9 million combined, consisting of 104 homes delivered at an average sales price of $374,100.

The dollar value of our orders for the third quarter of 2014 was $199.2 million, an increase of 40%, from $142.4 million in the year-ago period. Net new home orders for the quarter were 422, up 35% from 312 in the third quarter of 2013. The overall increase in net new home orders was driven by an increase in community count to 49 average sales locations, from 26 in the year-ago period, offset by a decrease in absorption from 4.0 sales per project per month in the year-ago period to 2.9 sales per month in the current period. Absorption was strong in the Pacific Northwest at 1.3 sales per project per week, as well as in Southern California at 0.9 sales per project per week. We ended the quarter with 55 active selling communities, a 90% increase as compared to 29 active selling communities at the end of the year-ago period.

Including the newly acquired Washington and Oregon divisions, the dollar value of homes in backlog was $382.9 million as of September�30, 2014, an increase of 84% compared to $208.1 million as of September�30, 2013. The increase was driven by a 56% increase in units in backlog to 728 from 467 in the year-ago period and an increase in the average sales price of homes in backlog to $525,900, up 18% from $445,600 in the year-ago period, and up 14% from the averages sales price of homes closed during the third quarter of 2014 of $462,500.

Homebuilding gross margins for the third quarter of 2014 were 19.6%, as compared to gross margins of 23.6% in the year-ago period. The decrease in gross margin is attributable to a lower number of homes closed during the quarter that benefit from fresh start accounting, primarily in Southern California and Nevada. In addition, with the adoption of purchase accounting related to the Polygon acquisition, GAAP margins were impacted by 200 basis points. Adjusted homebuilding gross margin percentage was 24.6% during the third quarter of 2014, as compared to 30.2% in the year-ago period.

Breaking down the components of SG&A, sales and marketing expense was 6.4% of homebuilding revenue during the third quarter of 2014, compared to 4.7% in the year-ago quarter, driven by higher advertising and model operations costs associated with the startup of new models and an increase in total selling communities. Excluding one-time transaction expenses, general administrative expenses decreased to 6.5% of homebuilding revenue, compared to 7.2% in the year-ago quarter, as we continued to leverage higher revenues with a lower relative cost structure.

Balance Sheet Update

At quarter end, cash, cash equivalents and restricted cash totaled $35.6 million, escrow proceeds receivable totaled $14.6 million, real estate inventories totaled $1,378.4 million and total debt was $1,041.7 million. Net debt to net book capitalization was 68.1%, and total debt to total book capitalization was 68.9% at September�30, 2014.

Conference Call

The Company will host a conference call to discuss these results today, Friday, November�7, 2014 at 9:00 a.m. Pacific Time. The call will be available via both the telephone at (877)�280-4957 or (857)�244-7314, passcode #67683693, or through the Company�s website at www.lyonhomes.com in the

Investor Relations section of the site. A replay of the call will be available through November�21, 2014 by dialing (888)�286-8010 or (617)�801-6888, passcode #12442501. A webcast replay of the call will also be available on the Company�s website approximately two hours after the broadcast.

About William Lyon Homes

William Lyon Homes is one of the largest Western U.S. regional homebuilders. Headquartered in Newport Beach, California, the Company is primarily engaged in the design, construction, marketing and sale of single-family detached and attached homes in California, Arizona, Nevada, Colorado, Washington and Oregon. Its core markets include Orange County, Los Angeles, San Diego, the San Francisco Bay Area, Phoenix, Las Vegas, Denver, Seattle and Portland. The Company has a distinguished legacy of more than 58 years of homebuilding operations, over which time it has sold in excess of 93,000 homes. The Company markets and sells its homes under the William Lyon Homes brand in all of its markets except for Colorado, where the Company operates under the Village Homes brand, and Washington and Oregon, where the Company operates under the Polygon Northwest brand.

Certain statements contained in this release and the accompanying comments during our conference call that are not historical information contain forward-looking statements, including, but not limited to, statements related to: anticipated fourth quarter home closing revenue and deliveries, market and industry trends, the anticipated financial and operating results from execution of the Company�s growth strategy and focus on markets in the Western United States, and the anticipated benefits to be realized from the consummation of the Polygon Northwest acquisition.�The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied.�The Company makes no commitment, and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate.�Factors that may impact such forward-looking statements include, among others: our ability to realize the anticipated benefits from the acquisition of Polygon Northwest; our ability to integrate successfully the Polygon Northwest operation with our existing operations; any adverse effect on our business operations, or those of Polygon Northwest, following consummation of the acquisition; worsening in general economic conditions either nationally or in regions in which we operate; conditions in our newly entered markets and newly acquired operations; worsening in markets for residential housing; decline in real estate values resulting in impairment of our real estate assets; volatility in the banking industry and credit markets; uncertainties in the capital and securities markets; terrorism or other hostilities involving the United States; whether an ownership change occurred that could, under certain circumstances, have resulted in the limitation of our ability to offset prior years� taxable income with net operating losses;

changes in mortgage and other interest rates; conditions in the capital, credit and financial markets, including mortgage lending standards and the availability of mortgage financing; changes in generally accepted accounting principles or interpretations of those principles; changes in prices of homebuilding materials; the availability of labor and homebuilding materials; adverse weather conditions; competition for home sales from other sellers of new and resale homes; cancellations and our ability to realize our backlog; the occurrence of events such as landslides, soil subsidence and earthquakes that are uninsurable, not economically insurable or not subject to effective indemnification agreements; changes in governmental laws and regulations; our financial leverage and level of indebtedness and any inability to comply with financial and other covenants under our debt instruments; whether we are able to refinance the outstanding balances of our debt obligations at their maturity; anticipated tax refunds; limitations on our ability to utilize our tax attributes; limitations on our ability to reverse any remaining portion of our valuation allowance with respect to our deferred tax assets; the timing of receipt of regulatory approvals and the opening of projects; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, and the applicability and sufficiency of our insurance coverage; the availability and cost of land for future development; and additional factors discussed under the sections captioned �Risk Factors� included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.

Investor/Media Contacts:

Larry Clark

Financial Profiles, Inc.

(310) 622-8223

[email protected]

Lisa Mueller

Financial Profiles, Inc.

(310) 622-8231

[email protected]

WILLIAM LYON HOMES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except number of shares and per share data)

(unaudited)

�


�	��	Three Months Ended September�30, 2014		�	�	Three Months Ended September�30, 2013		�
Operating revenue	��				�
Home sales	��	$	196,090	�	�	$	141,352	��
Lots, land and other sales	��	�	215	�	�	�	��	��
Construction services	��	�	10,593	�	�	�	9,478	��
	��	�	�	�	�	�	�	�
	��	�	206,898	�	�	�	150,830	��
	��	�	�	�	�	�	�	�
Operating costs	��				�
Cost of sales��homes	��	�	(157,565	)	�	�	(107,957	)�
Cost of sales��lots, land and other	��	�	(209	)	�	�	��	��
Construction services	��	�	(8,262	)	�	�	(8,135	)�
Sales and marketing	��	�	(12,476	)	�	�	(6,679	)�
General and administrative	��	�	(12,726	)	�	�	(10,200	)�
Transaction expenses	��	�	(5,768	)�	�	�	��	��
Amortization of intangible assets	��	�	(174	)	�	�	(191	)�
Other	��	�	(454	)	�	�	(695	)�
	��	�	�	�	�	�	�	�
	��	�	(197,634	)	�	�	(133,857	)�
	��	�	�	�	�	�	�	�
Operating income	��	�	9,264	�	�	�	16,973	��
Interest expense, net of amounts capitalized	��	�	��	��	�	�	(51	)�
Other income, net	��	�	357	�	�	�	114	��
	��	�	�	�	�	�	�	�
Income before provision for income taxes	��	�	9,621	�	�	�	17,036	��
Provision for income taxes	��	�	(1,999	)	�	�	(6,356	)�
	��	�	�	�	�	�	�	�
Net income	��	�	7,622	�	�	�	10,680	��
Less: Net income attributable to noncontrolling interest	��	�	(1,984	)	�	�	(3,118	)�
	��	�	�	�	�	�	�	�
Net income available to common stockholders	��	$	5,638	�	�	$	7,562	��
	��	�	�	�	�	�	�	�
Income per common share:	��				�
Basic	��	$	0.18	�	�	$	0.24	��
Diluted	��	$	0.17	�	�	$	0.24	��

Weighted average common shares outstanding:	��				�
Basic	��	�	31,232,655	�	�	�	30,975,160	��
Diluted	��	�	32,760,746	�	�	�	31,895,814	��

WILLIAM LYON HOMES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except number of shares and per share data)

(unaudited)

�


�	��	Nine Months Ended September�30, 2014		�	�	Nine Months Ended September�30, 2013		�
Operating revenue	��				�
Home sales	��	$	504,546	�	�	$	338,434	��
Lots, land and other sales	��	�	1,926	�	�	�	3,248	��
Construction services	��	�	30,186	�	�	�	21,439	��
	��	�	�	�	�	�	�	�
	��	�	536,658	�	�	�	363,121	��
	��	�	�	�	�	�	�	�
Operating costs	��				�
Cost of sales��homes	��	�	(392,083	)	�	�	(267,932	)�
Cost of sales��lots, land and other	��	�	(1,529	)	�	�	(2,838	)�
Construction services	��	�	(24,735	)	�	�	(17,472	)�
Sales and marketing	��	�	(27,958	)	�	�	(17,482	)�
General and administrative	��	�	(35,881	)	�	�	(28,016	)�
Transaction expenses	��	�	(5,768	)�	�	�	��	��
Amortization of intangible assets	��	�	(1,294	)	�	�	(1,173	)�
Other	��	�	(1,745	)	�	�	(1,746	)�
	��	�	�	�	�	�	�	�
	��	�	(490,993	)	�	�	(336,659	)�
	��	�	�	�	�	�	�	�
Operating income	��	�	45,665	�	�	�	26,462	��
Interest expense, net of amounts capitalized	��	�	��	��	�	�	(2,602	)�
Other income, net	��	�	830	�	�	�	257	��
	��	�	�	�	�	�	�	�
Income before reorganization items	��	�	46,495	�	�	�	24,117	��
Reorganization items, net	��	�	��	��	�	�	(464	)�
	��	�	�	�	�	�	�	�
Income before provision for income taxes	��	�	46,495	�	�	�	23,653	��
Provision for income taxes	��	�	(12,779	)	�	�	(6,366	)�
	��	�	�	�	�	�	�	�
Net income	��	�	33,716	�	�	�	17,287	��
Less: Net income attributable to noncontrolling interest	��	�	(7,096	)	�	�	(4,879	)�
	��	�	�	�	�	�	�	�
Net income attributable to William Lyon Homes	��	�	26,620	�	�	�	12,408	��
Preferred stock dividends	��	�	��	��	�	�	(1,528	)�
	��	�	�	�	�	�	�	�
Net income available to common stockholders	��	$	26,620	�	�	$	10,880	��
	��	�	�	�	�	�	�	�
Income per common share:	��				�
Basic	��	$	0.85	�	�	$	0.48	��
Diluted	��	$	0.81	�	�	$	0.46	��

Weighted average common shares outstanding:	��				�
Basic	��	�	31,184,101	�	�	�	22,569,810	��
Diluted	��	�	32,725,164	�	�	�	23,446,954	��

WILLIAM LYON HOMES

CONSOLIDATED BALANCE SHEETS

(in thousands, except number of shares and par value per share)

(unaudited)

�


�	��	September�30,		�	��	December�31,		�
�	��	2014		�	��	2013		�
�	��	(unaudited)		�	��	�		�
ASSETS	��				��
Cash and cash equivalents	��	$	35,119	��	��	$	171,672	��
Restricted cash	��	�	504	��	��	�	854	��
Receivables	��	�	19,840	��	��	�	16,459	��
Escrow proceeds receivable	��	�	14,606	��	��	�	4,380	��
Real estate inventories	��				��
Owned	��	�	1,378,432	��	��	�	671,790	��
Not owned	��	�	��	��	��	�	12,960	��
Deferred loan costs, net	��	�	25,975	��	��	�	9,575	��
Goodwill	��	�	63,128	��	��	�	14,209	��
Intangibles, net of accumulated amortization of $8,900 as of September�30, 2014 and $7,611 as of December�31, 2013	��	�	7,377	��	��	�	2,766	��
Deferred income taxes, net valuation allowance of $3,211 as of September�30, 2014 and $3,959 as of December�31, 2013.	��	�	91,055	��	��	�	95,580	��
Other assets, net	��	�	17,613	��	��	�	10,166	��
	��	�	�	�	��	�	�	�
Total assets	��	$	1,653,649	��	��	$	1,010,411	��
	��	�	�	�	��	�	�	�
LIABILITIES AND EQUITY	��				��
Accounts payable	��	$	47,898	��	��	$	17,099	��
Accrued expenses	��	�	93,642	��	��	�	60,203	��
Liabilities from inventories not owned	��	�	��	��	��	�	12,960	��
Notes payable	��	�	41,264	��	��	�	38,060	��
Senior unsecured facility	��	�	120,000	��	��	�	��	��
5^�3D₄% Senior Notes due April�15, 2019	��	�	150,000	��	��	�	��	��
8^�1D₂% Senior Notes due November�15, 2020	��	�	430,443	��	��	�	431,295	��
7% Senior Notes due August�15, 2022	��	�	300,000	��	��	�	��	��
	��	�	�	�	��	�	�	�
	��	�	1,183,247	��	��	�	559,617	��
	��	�	�	�	��	�	�	�
Commitments and contingencies	��				��
Equity:	��				��
William Lyon Homes stockholders� equity	��				��
Preferred Stock, par value $0.01 per share; 10,000,000 and no shares authorized; no shares issued and outstanding at September�30, 2014 and December�31, 2013, respectively	��	�	��	��	��	�	��	��
Common stock, Class�A, par value $0.01 per share; 150,000,000 shares authorized; 28,078,301 and 27,622,283 shares issued, 27,430,927 and 27,216,813 outstanding at September�30, 2014 and December�31, 2013, respectively	��	�	281	��	��	�	276	��
Common stock, Class B, par value $0.01 per share; 30,000,000 shares authorized; 3,813,884 shares issued and outstanding at September�30, 2014 and December�31, 2013	��	�	38	��	��	�	38	��
Additional paid-in capital	��	�	313,356	��	��	�	311,863	��
Retained earnings	��	�	142,622	��	��	�	116,002	��
	��	�	�	�	��	�	�	�
Total William Lyon Homes stockholders� equity	��	�	456,297	��	��	�	428,179	��
Noncontrolling interest	��	�	14,105	��	��	�	22,615	��
	��	�	�	�	��	�	�	�
Total equity	��	�	470,402	��	��	�	450,794	��
	��	�	�	�	��	�	�	�
Total liabilities and equity	��	$	1,653,649	��	��	$	1,010,411	��
	��	�	�	�	��	�	�	�

WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

�

��

Three Months Ended September�30,

�

��

2014

�

2013

�

��

Consolidated

�

Consolidated

�

Percentage�%

�

��

Total

�

Total

�

Change

�

Selected Financial Information

��

�

(dollars in thousands)

��

�

Homes closed

��

�

424

��

�

356

��

�

%�

��

�

Home sales revenue

��

196,090

��

�

141,352

��

�

%�

Cost of sales (excluding interest and purchase accounting adjustments)

��

�

(147,793

)�

�

(98,653

)�

�

%�

��

�

Adjusted homebuilding gross margin (1)

��

48,297

��

�

42,699

��

�

%�

��

�

Adjusted homebuilding gross margin percentage (1)

��

�

24.6

%�

�

30.2

%�

�

(18

%)�

��

�

Interest in cost of sales

��

�

(5,970

)�

�

(7,569

)�

�

(21

%)�

Purchase accounting adjustments

��

�

(3,802

)�

�

(1,735

)�

�

119

%�

��

�

Gross margin

��

38,525

��

�

33,395

��

�

%�

��

�

Gross margin percentage

��

�

19.6

%�

�

23.6

%�

�

(17

%)�

��

�

Number of homes closed

��

�

Southern California

��

�

133

��

�

��

�

105

%�

Northern California

��

�

��

�

��

�

%)�

Arizona

��

�

��

�

122

��

�

(49

%)�

Nevada

��

�

��

�

��

�

(20

%)�

Colorado

��

�

��

�

��

�

(59

%)�

Washington

��

�

��

�

��

�

��

Oregon

��

�

��

�

��

�

��

�

Total

��

�

424

��

�

356

��

�

%�

��

�

Average sales price of homes closed

��

�

Southern California

��

574,500

��

�

764,300

��

�

(25

%)�

Northern California

��

�

420,000

��

�

398,100

��

�

%�

Arizona

��

�

270,200

��

�

256,200

��

�

%�

Nevada

��

�

580,000

��

�

302,800

��

�

%�

Colorado

��

�

500,300

��

�

413,300

��

�

%�

Washington

��

�

465,000

��

�

��

�

��

Oregon

��

�

310,000

��

�

��

�

��

�

Total

��

462,500

��

�

397,100

��

�

%�

��

�

Number of net new home orders

��

�

Southern California

��

�

122

��

�

138

��

�

(12

%)�

Northern California

��

�

��

�

��

�

114

%�

Arizona

��

�

��

�

��

�

(38

%)�

Nevada

��

�

��

�

��

�

(21

%)�

Colorado

��

�

��

�

��

�

275

%�

Washington

��

�

��

�

��

�

��

Oregon

��

�

��

�

��

�

��

�

Total

��

�

422

��

�

312

��

�

%�

��

�

Average number of sales locations during period

��

�

Southern California

��

�

��

�

��

�

%�

Northern California

��

�

��

�

��

�

250

%�

Arizona

��

�

��

�

��

�

(17

%)�

Nevada

��

�

��

�

��

�

%�

Colorado

��

�

��

�

��

�

267

%�

Washington

��

�

��

�

��

�

��

Oregon

��

�

��

�

��

�

��

�

Total

��

�

��

�

��

�

%�

��

�

(1)

Adjusted homebuilding gross margin is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles (�U.S. GAAP�). It is used by management in evaluating operating performance and in making strategic decisions regarding sales pricing, construction and development pace, product mix and other operating decisions. We believe this information is meaningful as it isolates the impact that interest and purchase accounting has on homebuilding gross margin and allows investors to make better comparisons with our competitors. For comparative purposes, purchase accounting is the net adjustment in basis related to the acquisition of our Colorado, Washington and Oregon operating divisions.

WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

�

��

Nine Months Ended September�30,

�

��

2014

�

2013

�

��

Consolidated

�

Consolidated

�

Percentage�%

�

��

Total

�

Total

�

Change

�

Selected Financial Information

��

�

(dollars in thousands)

��

�

Homes closed

��

�

1,036

��

�

969

��

�

%�

��

�

Home sales revenue

��

504,546

��

�

338,434

��

�

%�

Cost of sales (excluding interest and purchase accounting adjustments)

��

�

(371,499

)�

�

(241,345

)�

�

%�

��

�

Adjusted homebuilding gross margin (1)

��

133,047

��

�

97,089

��

�

%�

��

�

Adjusted homebuilding gross margin percentage (1)

��

�

26.4

%�

�

28.7

%�

�

%)�

��

�

Interest in cost of sales

��

�

(16,496

)�

�

(20,729

)�

�

(20

%)�

Purchase accounting adjustments

��

�

(4,088

)�

�

(5,858

)�

�

(30

%)�

��

�

Gross margin

��

112,463

��

�

70,502

��

�

%�

��

�

Gross margin percentage

��

�

22.3

%�

�

20.8

%�

�

%�

��

�

Number of homes closed

��

�

Southern California

��

�

438

��

�

164

��

�

167

%�

Northern California

��

�

115

��

�

��

�

%�

Arizona

��

�

167

��

�

346

��

�

(52

%)�

Nevada

��

�

163

��

�

217

��

�

(25

%)�

Colorado

��

�

��

�

143

��

�

(66

%)�

Washington

��

�

��

�

��

�

��

Oregon

��

�

��

�

��

�

��

�

Total

��

�

1,036

��

�

969

��

�

%�

��

�

Average sales price

��

�

Southern California

��

631,700

��

�

633,800

��

�

%)�

Northern California

��

�

423,300

��

�

363,200

��

�

%�

Arizona

��

�

268,000

��

�

240,400

��

�

%�

Nevada

��

�

442,200

��

�

260,000

��

�

%�

Colorado

��

�

478,400

��

�

412,000

��

�

%�

Washington

��

�

465,000

��

�

��

�

��

Oregon

��

�

310,000

��

�

��

�

��

�

Total

��

487,000

��

�

349,300

��

�

%�

��

�

Number of net new home orders

��

�

Southern California

��

�

475

��

�

310

��

�

%�

Northern California

��

�

162

��

�

105

��

�

%�

Arizona

��

�

160

��

�

301

��

�

(47

%)�

Nevada

��

�

200

��

�

222

��

�

(10

%)�

Colorado

��

�

112

��

�

��

�

%�

Washington

��

�

��

�

��

�

��

Oregon

��

�

��

�

��

�

��

�

Total

��

�

1,210

��

�

1,030

��

�

%�

��

�

Average number of sales locations during period

��

�

Southern California

��

�

��

�

��

�

%�

Northern California

��

�

��

�

��

�

150

%�

Arizona

��

�

��

�

��

�

%�

Nevada

��

�

��

�

��

�

%�

Colorado

��

�

��

�

��

�

%�

Washington

��

�

��

�

��

�

��

Oregon

��

�

��

�

��

�

��

�

Total

��

�

��

�

��

�

%�

��

�

(1)

WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

�

��

As of September�30,

�

��

2014

�

��

2013

�

��

�

��

Consolidated

�

��

Consolidated

�

��

Percentage�%

�

��

Total

�

��

Total

�

��

Change

�

Backlog of homes sold but not closed at end of period

��

Southern California

��

�

206

��

�

178

��

�

%�

Northern California

��

�

��

�

��

�

147

%�

Arizona

��

�

��

�

127

��

�

(56

%)�

Nevada

��

�

109

��

�

��

�

%�

Colorado

��

�

��

�

��

�

190

%�

Washington

��

�

��

�

��

�

��

Oregon

��

�

102

��

�

��

�

��

�

��

�

��

�

Total

��

�

728

��

�

467

��

�

%�

��

�

��

�

��

�

Dollar amount of homes sold but not closed at end of period (in thousands)

��

Southern California

��

135,020

��

113,769

��

�

%�

Northern California

��

�

37,554

��

�

14,007

��

�

168

%�

Arizona

��

�

14,817

��

�

33,776

��

�

(56

%)�

Nevada

��

�

88,825

��

�

32,828

��

�

171

%�

Colorado

��

�

42,350

��

�

13,701

��

�

209

%�

Washington

��

�

32,301

��

�

��

�

��

Oregon

��

�

32,000

��

�

��

�

��

�

��

�

��

�

Total

��

382,867

��

208,081

��

�

%�

��

�

��

�

��

�

Lots owned and controlled at end of period

��

Lots owned

��

Southern California

��

�

1,124

��

�

1,186

��

�

%)�

Northern California

��

�

1,060

��

�

869

��

�

%�

Arizona

��

�

5,471

��

�

5,653

��

�

%)�

Nevada

��

�

2,909

��

�

2,864

��

�

%�

Colorado

��

�

1,025

��

�

546

��

�

%�

Washington

��

�

1,538

��

�

��

�

��

Oregon

��

�

1,340

��

�

��

�

��

�

��

�

��

�

Total

��

�

14,467

��

�

11,118

��

�

%�

��

�

��

�

��

�

Lots controlled

��

Southern California

��

�

1,038

��

�

577

��

�

%�

Northern California

��

�

544

��

�

684

��

�

(20

%)�

Arizona

��

�

��

�

220

��

�

(100

%)�

Nevada

��

�

215

��

�

215

��

�

%�

Colorado

��

�

186

��

�

342

��

�

(46

%)�

Washington

��

�

786

��

�

��

�

��

Oregon

��

�

839

��

�

��

�

��

�

��

�

��

�

Total

��

�

3,608

��

�

2,038

��

�

%�

��

�

��

�

��

�

Total lots owned and controlled

��

Southern California

��

�

2,162

��

�

1,763

��

�

%�

Northern California

��

�

1,604

��

�

1,553

��

�

%�

Arizona

��

�

5,471

��

�

5,873

��

�

%)�

Nevada

��

�

3,124

��

�

3,079

��

�

%�

Colorado

��

�

1,211

��

�

888

��

�

%�

Washington

��

�

2,324

��

�

��

�

��

Oregon

��

�

2,179

��

�

��

�

��

�

��

�

��

�

Total

��

�

18,075

��

�

13,156

��

�

%�

��

�

��

�

��

�

WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited)

SELECTED FINANCIAL DATA (dollars in thousands):

�

��

Three
Months�Ended
September�30,
2014

�

Three
Months
Ended
September�30,
2013

�

Nine
Months
Ended
September�30,
2014

�

Nine
Months
Ended
September�30,
2013

�

Net income attributable to William Lyon Homes

��

5,638

��

�

7,562

��

�

26,620

��

�

12,408

��

Net cash provided by/(used in) operating activities

��

21,352

��

�

(98,224

)�

�

(181,189

)�

�

(164,919

)�

Interest incurred

��

17,504

��

�

7,511

��

�

38,818

��

�

22,511

��

Adjusted EBITDA (1)

��

26,652

��

�

24,710

��

�

73,763

��

�

52,358

��

Adjusted EBITDA Margin (2)

��

�

12.9

%�

�

16.4

%�

�

13.7

%�

�

14.4

%�

Ratio of adjusted EBITDA to interest incurred

��

�

1.52

��

�

3.29

��

�

1.90

��

�

2.33

��

Balance Sheet Data

�


�	��	September�30, 2014		�	�	December�31, 2013		�
Cash, cash equivalents and restricted cash	��	$	35,623	��	�	$	172,526	��

Total William Lyon Homes stockholders� equity	��	�	456,297	��	�	�	428,179	��
Noncontrolling interest	��	�	14,105	��	�	�	22,615	��
Total debt	��	�	1,041,707	��	�	�	469,355	��
	��	�	�	�	�	�	�	�
Total book capitalization	��	$	1,512,109	��	�	$	920,149	��

Ratio of debt to total book capitalization	��	�	68.9	%�	�	�	51.0	%�
Ratio of debt to total book capitalization (net of cash)	��	�	68.1	%�	�	�	39.7	%�

�

(1)

Adjusted EBITDA means net income (loss) attributable to William Lyon Homes plus (i)�provision for income taxes, (ii)�interest expense, (iii)�amortization of capitalized interest included in cost of sales, (iv)�stock based compensation, (v)�depreciation and amortization, (vi)�one-time cash transaction expenses related to the acquisition of Polygon Northwest Homes, and (vii)�non-cash purchase accounting adjustments. Other companies may calculate adjusted EBITDA differently. Adjusted EBITDA is not a financial measure prepared in accordance with U.S. GAAP. Adjusted EBITDA is presented herein because management believes the presentation of adjusted EBITDA provides useful information to the Company�s investors regarding the Company�s financial condition and results of operations because adjusted EBITDA is a widely utilized indicator of a company�s operating performance. Adjusted EBITDA should not be considered as an alternative for net (loss) income, cash flows from operating activities and other consolidated income or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. A reconciliation of net income attributable to William Lyon Homes to adjusted EBITDA is provided as follows:

(2)	Calculated as Adjusted EBITDA as a percentage of operating revenue.

WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited)

�

��

Three

�

Three

�

Nine

�

Nine

�

��

Months

�

Months

�

Months

�

Months

�

��

Ended

�

Ended

�

Ended

�

Ended

�

��

September�30,

�

September�30,

�

September�30,

�

September�30,

�

��

2014

�

2013

�

2014

�

2013

�

Net income attributable to William Lyon Homes

��

5,638

��

�

7,562

��

�

26,620

��

�

12,408

��

Provision for income taxes

��

�

1,999

��

�

6,356

��

�

12,779

��

�

6,366

��

Interest expense

��

�

Interest incurred

��

�

17,504

��

�

7,511

��

�

38,818

��

�

22,511

��

Interest capitalized

��

�

(17,504

)�

�

(7,460

)�

�

(38,818

)�

�

(19,909

)�

Amortization of capitalized interest included in cost of sales

��

�

5,970

��

�

7,569

��

�

16,496

��

�

20,729

��

Stock based compensation

��

�

918

��

�

880

��

�

2,772

��

�

2,207

��

Loss on sale of fixed asset

��

�

��

�

��

�

��

�

��

Depreciation and amortization

��

�

2,557

��

�

557

��

�

5,240

��

�

2,184

��

Transaction expenses

��

�

5,768

��

�

��

�

5,768

��

�

��

Non-cash purchase accounting adjustments

��

�

3,802

��

�

1,735

��

�

4,088

��

�

5,858

��

�

Adjusted EBITDA

��

26,652

��

�

24,710

��

�

73,763

��

�

52,358

��

�

The following table reconciles earnings per share as reported on a GAAP basis to non-GAAP earnings per share. We believe that this non-GAAP measure provides useful information to investors regarding the ongoing performance of the Company excluding expenses that do no relate to our homebuilding operations:

�

��

Three�Months�Ended�September�30,
2014

�

Nine�Months�Ended�September�30,
2014

�

��

Net Income

�

Diluted EPS

�

Net Income

�

Diluted EPS

�

As reported

��

5,638

��

�

0.17

��

�

26,620

��

�

0.81

��

Transaction expenses

��

�

5,768

��

�

0.18

��

�

5,768

��

�

0.18

��

Tax impact of transaction expenses

��

�

(1,198

)�

�

(0.04

)�

�

(1,585

)�

�

(0.05

)�

��

�

Non-GAAP Measure

��

10,208

��

�

0.31

��

�

30,803

��

�

0.94

��

�

The following table reconciles our select operating results as presented to pro forma results including Polygon Northwest Homes for the full third quarter ended September�30, 2014, assuming the acquisition had closed as of July�1, 2014:

�

��

As�reported

�

��

Activity�from
July�1 2014
through
acquisition

�

��

Pro�Forma

�

Homebuilding revenue

��

196,090

��

33,924

��

230,014

��

New home deliveries

��

�

424

��

�

��

�

518

��

Net new home orders

��

�

422

��

�

��

�

495

��

Dollar Value of home orders

��

199,243

��

26,625

��

225,868

��

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

Create E-mail Alert Related Categories

SEC Filings

Sign up for StreetInsider Free!

Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!

Form 8-K WILLIAM LYON HOMES For: Nov 07

You May Also Be Interested In

Create E-mail Alert Related Categories

Sign up for StreetInsider Free!

Free News Feed