Dream Finders Announces Fourth Quarter 2021 Earnings and Full Year 2021 Results
Pre-tax Income Increases
Total Company Revenues Increase
Largest Backlog in Company History Valued at Nearly
JACKSONVILLE, Fla., March 16, 2022 (GLOBE NEWSWIRE) -- Dream Finders Homes, Inc. (the “Company” or “DFH”) (NASDAQ: DFH), one of the nation’s fastest growing companies, announced financial results for the fourth quarter and full year ended December 31, 2021.
Fourth Quarter 2021 Highlights (As Compared to Fourth Quarter 2020)
- Backlog of sold homes increased
163.2% to 6,381 homes valued at$2.9 billion , both Company records, compared to 2,424 homes valued at$865.1 million . McGuyer Homebuilders, Inc. (“MHI”), acquired on October 1, 2021, contributed 1,734 homes valued at$1.0 billion - Home building revenues increased
84.4% to$850.1 million from$461.0 million - Gross margin as a percentage of home sales revenues increased 60 basis points to
16.2% from15.6% - Pre-tax income attributable to DFH increased
86.6% to$71.4 million , compared to$38.2 million - Average sales price of homes closed increased
28.4% to$440,939 from$343,305 - Home closings increased
46.6% to 1,960 from 1,337 homes - Net new orders increased
42.3% to 1,974 from 1,387
Full Year 2021 Highlights (As Compared to Full Year 2020)
- Home building revenues increased
70.0% to$1.9 billion from$1.1 billion - Gross margin as a percentage of home sales revenues increased 140 basis points to
16.0% from14.6% - Pre-tax income attributable to DFH increased
87.9% to$148.6 million , compared to$79.1 million - Average sales price of homes closed increased
8.8% to$389,094 from$357,633 - Home closings increased
54.5% to 4,874 from 3,154 homes - Net new orders increased
62.5% to 6,804 from 4,186 - Active community count increased
62.7% to 205 from 126 - Controlled lot pipeline increased
99.7% to 38,495 as of December 31, 2021, from 19,276 at December 31, 2020 - Return on participating equity was
44.3% for the year ended December 31, 2021, compared to47.0% for the year ended December 31, 2020
Acquisition of MHI
On October 1, 2021, the Company completed its acquisition of Texas based homebuilder, MHI. The acquisition allowed the Company to expand operations in the largest housing market in the U.S. It also provided DFH with a platform to capitalize on its land-light acquisition strategy and to achieve significant scale.
The following table shows MHI’s contribution to the Company for the fourth quarter of 2021:
| Q4 2021 (unaudited) | |||||||
| Results and Operating Data (In thousands): | Units: | ||||||
| Revenues | $ | 361,138 | Net new orders | 579 | |||
| Cost of sales | 308,866 | Home closings | 689 | ||||
| Gross margin | 52,272 | ||||||
| Gross margin % | |||||||
| SG&A | 29,755 | ||||||
| SG&A % of revenue | |||||||
| Net income | 23,966 | ||||||
| Net income % | |||||||
Management Commentary
Patrick Zalupski, Dream Finders Homes Chairman and CEO, said, “We concluded the fourth quarter and full year 2021 with record results, achieving revenue growth of
Fourth Quarter 2021 Results
Home building revenues for the fourth quarter 2021 increased
Home building gross margin in the fourth quarter 2021 improved 60 basis points to
SG&A as a percent of home sales revenues was
Net new orders in the fourth quarter 2021 increased
Net income attributable to DFH in the fourth quarter of 2021 was
Full Year 2021 Commentary
For the twelve months ended December 31, 2021, the Company incurred certain non-recurring expenses and recorded other adjustments in relation to its business combinations that were not operational in nature, including:
- Transaction costs of
$3.0 million in relation to its initial public offering - Transaction costs of
$1.4 million related to the acquisition of businesses - Fair value adjustments from business combinations of
$15.3 million , comprising contingent consideration revaluation of$7.5 million and inventory mark-up of$7.7 million
For the same year ended, the Company successfully compelled arbitration from a legal matter dating back to October of 2019 in Denver, CO and settled the matter during arbitration proceedings. The net impact to other expense was
Other income related to the forgiveness of the Paycheck Protection Program grant for the year ended December 31, 2021 was
The above non-operational items had a net impact of
Full Year 2022 Outlook
Dream Finders Homes expects a minimum of 7,000 home closings for the full year 2022 for the combined Company. Any further COVID-19 governmental restrictions on land development, home construction or home sales or additional supply chain challenges could negatively impact the Company’s ability to achieve this number of home closings in 2022. As of December 31, 2021, the combined Company backlog was 6,381 homes, with approximately
| As of December 31, 2021 (unaudited) | |||||||
| Backlog: | Units | Average Sales Price | |||||
| Jacksonville | 1,463 | $ | 391,593 | ||||
| Colorado | 133 | 537,906 | |||||
| Orlando | 934 | 476,442 | |||||
| DC Metro | 16 | 644,288 | |||||
| The Carolinas | 1,231 | 330,087 | |||||
| Texas | 1,734 | 598,517 | |||||
| Other (1) | 870 | 424,123 | |||||
| Total | 6,381 | $ | 456,538 | ||||
| (1) Austin, Savannah, Village Park Homes, Active Adult and Custom Homes. Austin refers to legacy DFH operations, exclusive of MHI. | |||||||
About Dream Finders Homes, Inc.
Dream Finders Homes (NASDAQ: DFH) is based in Jacksonville, FL, and is one of the nation’s fastest growing homebuilding companies, with industry leading returns on shareholder’s equity. Dream Finders Homes builds homes in Florida, Texas, North Carolina, South Carolina, Georgia, Colorado, Virginia and Maryland. Dream Finders Homes achieves its industry leading growth and returns by maintaining an asset light homebuilding model. For more information, please visit www.dreamfindershomes.com.
Forward-Looking Statements
This press release includes forward-looking statements regarding future events, including projected 2022 home closings and market conditions and possible or assumed future results of operations, including statements regarding the Company’s strategies and expectations as they relate to market opportunities and growth. All forward-looking statements are based on Dream Finders Homes’ beliefs as well as assumptions made by and information currently available to Dream Finders Homes. These statements reflect Dream Finders Homes’ current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in Dream Finders Homes’ Annual Report on Form 10-K for the year ended December 31, 2021, and other filings with the U.S. Securities and Exchange Commission. Dream Finders Homes undertakes no obligation to update or revise any forward-looking statement except as may be required by applicable law.
| Dream Finders Homes, Inc. | |||||||||||||
| Consolidated Statements of Comprehensive Income and Operating Activity | |||||||||||||
| (In thousands, except per share amounts) | |||||||||||||
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | ||||||||||||
| 2021 (Unaudited) | 2020 (Unaudited) | 2021 | 2020 | ||||||||||
| Revenues | $ | 852,090 | $ | 461,100 | $ | 1,923,910 | $ | 1,133,807 | |||||
| Cost of sales | 712,319 | 387,244 | 1,610,332 | 962,928 | |||||||||
| Selling, general and administrative expense | 61,045 | 34,591 | 154,405 | 90,359 | |||||||||
| Income from equity in earnings of unconsolidated entities | (5,198 | ) | (3,148 | ) | (9,428 | ) | (7,992 | ) | |||||
| Gain on sale of assets | (14 | ) | (65 | ) | (87 | ) | (118 | ) | |||||
| Loss on extinguishment of debt | 14 | - | 711 | - | |||||||||
| Other Income | - | - | - | - | |||||||||
| Other | (827 | ) | (150 | ) | (7,827 | ) | (1,322 | ) | |||||
| Paycheck Protection Program forgiveness | - | - | (7,220 | ) | - | ||||||||
| Other Expense | - | - | - | - | |||||||||
| Other | 7,560 | 216 | 12,771 | 3,188 | |||||||||
| Contingent consideration revaluation | 1,771 | 1,491 | 7,533 | 1,379 | |||||||||
| Interest expense | 0 | 747 | 672 | 871 | |||||||||
| Income before taxes | $ | 75,420 | $ | 40,174 | $ | 162,048 | $ | 84,514 | |||||
| Income tax expense | (14,049 | ) | - | (27,455 | ) | - | |||||||
| Net and comprehensive income | $ | 61,371 | $ | 40,174 | $ | 134,593 | $ | 84,514 | |||||
| Net and comprehensive income attributable to non-controlling interests | (4,068 | ) | (1,946 | ) | (13,461 | ) | (5,420 | ) | |||||
| Net and comprehensive income attributable to Dream Finders Homes, Inc. | $ | 57,303 | $ | 38,228 | $ | 121,132 | $ | 79,094 | |||||
| Earnings per share(5) | |||||||||||||
| Basic | $ | 0.58 | $ | - | $ | 1.27 | $ | - | |||||
| Diluted | $ | 0.55 | $ | - | $ | 1.27 | $ | - | |||||
| Weighted-average number of shares | |||||||||||||
| Basic | 92,521 | - | 92,521 | - | |||||||||
| Diluted | 103,297 | - | 95,314 | - | |||||||||
| Other Financial and Operating Data | |||||||||||||
| Active communities at end of period(1) | 205 | 126 | 205 | 126 | |||||||||
| Home closings | 1,960 | 1,337 | 4,874 | 3,154 | |||||||||
| Average sales price for closed homes(2) | $ | 440,939 | $ | 343,305 | $ | 389,094 | $ | 357,633 | |||||
| Net new orders | 1,974 | 1,387 | 6,804 | 4,186 | |||||||||
| Cancellation rate | 13.1 | % | 12.9 | % | 12.2 | % | 12.8 | % | |||||
| Backlog (at period end) - homes | 6,381 | 2,424 | 6,381 | 2,424 | |||||||||
| Backlog (at period end, in thousands) - value | $ | 2,913,170 | $ | 865,109 | $ | 2,913,170 | $ | 865,109 | |||||
| Gross margin (in thousands)(3) | $ | 137,749 | $ | 71,755 | $ | 306,969 | $ | 165,048 | |||||
| Gross margin %(4) | 16.2 | % | 15.6 | % | 16.0 | % | 14.6 | % | |||||
| Net profit margin | 6.7 | % | 8.3 | % | 6.3 | % | 7.0 | % | |||||
| (1) A community becomes active once the model is completed or the community has its fifth sale. A community becomes inactive when it has fewer than five units remaining to sell. | |||||||||||||
| (2) Average sales price of homes closed is calculated based on home sales revenue, excluding the impact of deposit forfeitures and percentage of completion revenues, over homes closed. | |||||||||||||
| (3) Gross margin is home sales revenue less cost of sales. Gross margin includes commission expense. | |||||||||||||
| (4) Calculated as a percentage of home sales revenues. | |||||||||||||
| (5) The Company calculated earnings per share (“EPS”) based on net income attributable to common stockholders for the period January 21, 2021 through December 31, 2021 over the weighted average diluted shares outstanding for the same period. EPS was calculated prospectively for the period subsequent to the Company’s initial public offering and corporate reorganization, resulting in 92,521,482 shares of common stock outstanding as of the closing of the initial public offering. The total outstanding shares of common stock are made up of Class A common stock and Class B common stock, which participate equally in their ratable ownership share of the Company. Diluted shares were calculated by using the treasury stock method for stock grants and the if‐converted method for the convertible preferred stock and the associated preferred dividends. | |||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2021 (unaudited) | 2020 (unaudited) | 2021 (unaudited) | 2020 (unaudited) | |||||||||||||||||
| Units | Average Sales Price | Units | Average Sales Price | Units | Average Sales Price | Units | Average Sales Price | |||||||||||||
| Home Closings: | ||||||||||||||||||||
| Jacksonville | 372 | $ | 397,731 | 520 | $ | 311,550 | 1,237 | $ | 363,755 | 1,395 | $ | 318,134 | ||||||||
| Colorado | 89 | 508,526 | 86 | 457,672 | 230 | 488,502 | 269 | 454,802 | ||||||||||||
| Orlando | 173 | 394,962 | 149 | 360,323 | 604 | 404,035 | 355 | 356,168 | ||||||||||||
| DC Metro | 49 | 682,334 | 84 | 547,710 | 140 | 667,780 | 232 | 545,887 | ||||||||||||
| The Carolinas | 326 | 307,025 | 312 | 286,296 | 1,233 | 300,426 | 312 | 286,296 | ||||||||||||
| Texas | 689 | 532,243 | - | - | 689 | 532,243 | - | - | ||||||||||||
| Other (1) | 262 | 391,057 | 186 | 400,613 | 741 | 350,142 | 591 | 391,337 | ||||||||||||
| Total | 1,960 | $ | 440,939 | 1,337 | $ | 343,305 | 4,874 | $ | 389,094 | 3,154 | $ | 357,633 | ||||||||
| (1) Austin, Savannah, Village Park Homes, Active Adult and Custom Homes. Austin refers to legacy DFH operations, exclusive of MHI. | ||||||||||||||||||||
| Dream Finders Homes, Inc. | |||||||||||||
| Consolidated Balance Sheets | |||||||||||||
| (In thousands, except per share amounts) | |||||||||||||
| December 31, | December 31, | ||||||||||||
| 2021 | 2020 | ||||||||||||
| Assets | |||||||||||||
| Cash and cash equivalents | $ | 227,227 | $ | 43,658 | |||||||||
| Restricted cash (VIE amounts of | 54,095 | 49,716 | |||||||||||
| Accounts receivable | 33,482 | 16,766 | |||||||||||
| Inventories: | |||||||||||||
| Construction in process and finished homes | 961,779 | 396,631 | |||||||||||
| Joint venture owned land and lots | |||||||||||||
| (VIE amounts of | 21,686 | 40,901 | |||||||||||
| Company owned land and lots | 83,197 | 46,840 | |||||||||||
| Lot deposits | 241,406 | 66,272 | |||||||||||
| Equity method investments | 15,967 | 4,545 | |||||||||||
| Property and equipment, net | 6,789 | 4,309 | |||||||||||
| Operating lease right-of-use assets | 19,359 | 14,219 | |||||||||||
| Finance lease right-of-use assets | 140 | 336 | |||||||||||
| Intangible assets, net of amortization | 9,140 | 2,660 | |||||||||||
| Goodwill | 171,927 | 28,566 | |||||||||||
| Deferred tax asset | 4,232 | - | |||||||||||
| Other assets (VIE amounts of | 43,822 | 18,262 | |||||||||||
| Total assets | $ | 1,894,248 | $ | 733,680 | |||||||||
| Liabilities | |||||||||||||
| Accounts payable (VIE amounts of | $ | 113,498 | $ | 37,419 | |||||||||
| Accrued expenses (VIE amounts of | 139,368 | 67,401 | |||||||||||
| Customer deposits | 177,685 | 59,392 | |||||||||||
| Construction lines of credit | 760,000 | 289,879 | |||||||||||
| Notes payable (VIE amounts of | 3,291 | 29,653 | |||||||||||
| Operating lease liabilities | 19,826 | 14,411 | |||||||||||
| Finance lease liabilities | 140 | 345 | |||||||||||
| Contingent consideration | 124,056 | 23,158 | |||||||||||
| Total liabilities | $ | 1,337,864 | $ | 521,657 | |||||||||
| Commitments and contingencies | |||||||||||||
| Mezzanine Equity | |||||||||||||
| Preferred mezzanine equity | 155,220 | 55,638 | |||||||||||
| Common mezzanine equity | - | 20,593 | |||||||||||
| Total mezzanine equity | $ | 155,220 | $ | 76,231 | |||||||||
| Members' Equity | |||||||||||||
| Common members' equity | - | 103,853 | |||||||||||
| Total members' equity | $ | - | $ | 103,853 | |||||||||
| Stockholders' Equity - Dream Finders Homes, Inc. | |||||||||||||
| Class A common stock, | |||||||||||||
| authorized, 32,295 outstanding | 323 | - | |||||||||||
| Class B common stock, | |||||||||||||
| authorized, 60,226 outstanding | 602 | - | |||||||||||
| Additional paid-in capital | 257,963 | - | |||||||||||
| Retained earnings | 118,194 | - | |||||||||||
| Non-controlling interests | 24,081 | 31,939 | |||||||||||
| Total stockholders' and members' equity | 556,383 | 212,023 | |||||||||||
| Total liabilities, mezzanine equity, members' equity and stockholders' equity | $ | 1,894,248 | $ | 733,680 | |||||||||
Investor Contact: investors@dreamfindershomes.com
Media Contact: mediainquiries@dreamfindershomes.com
Anabel Fernandez – Interim CFO & Senior Vice President
Robert Riva – General Counsel & Vice President
SOURCE: Dream Finders Homes, Inc.
