California-based home builder William Lyon Homes (WLH, Financial) posted a net income of $18 Million in the fourth quarter ended Dec. 31, 2014. A dissected report of quarter and annual figures will help in a better understanding of the stock.
Quarter figures
The company reported consolidated revenues of $360 million in the quarter and net income of $18 million. The consolidated revenue figure has risen by 72% and the company reported $360 million in quarter sales. The revenue from home sales shot up by 93% this quarter to $352.5 million which is almost double of $182.9 million earned by WLH through home sales in the fourth quarter of 2013. As compared to the last quarter of 2013, the EPS dropped by 21% at 52 cents. The street had estimated EPS of 49 cents on a sales figure of $325.9 million. The dollar value of orders was $216.8 million, a rise of 27%.
WLH announced 83% spike in the new home deliveries and the total tally for the quarter stood at 717 homes for $491,600. The figure is 5% higher than last year’s fourth quarter wherein the company delivered 391 homes for $467,700. At the same time the orders for new homes also shot up by 60% to 467 as compared to the orders booked in the last quarter of 2013. The average sales price (ASP) of new homes delivered in the quarter stood at a 5% higher figure of $491,600.
Full year figures
WLH reported 57% increase in the consolidated revenue for the year at $896.7 million and $44.6 million in profits for the year. The figure corresponds to an EPS of $1.34. The annual revenue from home sales shot up by 64% at $857 million. 1,753 new homes were delivered in the year which is an increase of 29%. The Adjusted EBITDA figure stood at $122.7 million. The dollar value of annual orders increased by 35% standing at $810.47 million. The average sale price of new homes delivered in the entire year was up by 28% at $488,900. By end of the year, the balance sheet showed cash, cash equivalents and restricted cash total tally of $53.3 million.
Other crucial numbers
As on Dec. 31, 2014 there was $260.1 million worth of home backlog which is a 30% increase from $199.5 million on Dec. 31, 2013. The average sale price of homes in backlog stood at $544,200 as compared to $542,200 a year ago. WLH also executed a registered public offering of tangible equity units which generated net proceeds of close to $111.4 million. The company closed its balance sheet for the year with a net debt to net book canalization of 59% and total debt to total book capitalization of 61.2%
Key takeaway
Improving U.S. economy has build up customer confidence which in turn has given a boost to the residential real estate segment. WLH has a good order register to showcase a promising year ahead. The shares have climbed 13% since the beginning of the year and the stock has decreased 23% in the past twelve months. It had peaked at $31.77 in March last year but then started losing ground throughout the year, losing almost half of its value in the second half of Jan 2015. The stock is trading in the price band of $20 to $25. This indicates that the stock is trading at a lower realization point and there is a fair chance of it rising up in the favorable economic and market condition, prompting for a "Hold" guidance. The company competes with Toll Brothers Inc. (TOL, Financial), TRI Pointe Homes Inc. (TPH, Financial) and some other leading home developers in U.S.
