CalAtlantic (CAA) late Thursday reported net income of $112.8 million, or $0.83 per diluted share for the second quarter ended June 30, compared with net income of $57.2 million, or $0.72 per diluted share (2016 second quarter results include the impact of $5.0 million of merger costs assocatiated with the joining of Standard Pacific and Ryland Homes and $5.9 million of purchase accounting adjustments).
Adjusted net income was $119.6 million, or $0.88 per diluted share. Analysts were expecting a profit of $0.82.

CAA saw new net new orders jump 150% compared to 2Q 2015 to 3,921, new home deliveries rise 167% to 3,484, and adjusted gross margin from home sales fall from 24.6% to 21.2%. Those beat the 20.7% estimate from J.P. Morgan's Michael Rehaut. The dollar value of homes in backlog increased 19% to $3.4 billion, or 7,456 homes, compared to $2.9 billion, or 6,688 homes, for the pro forma 2015 second quarter.

Larry Nicholson, President and CEO commented in the release: "The CalAtlantic team delivered a strong second quarter, with home sales revenue up 17% and adjusted pretax income up 22%, compared to the pro forma prior year period. In addition, our SG&A percentage reached a second quarter decade low 10.6% that, when combined with our 21.9% gross margin, delivered an operating margin of 11.2% and EPS of $0.83." Nicholson continued, "It is gratifying to see the benefits we anticipated from our October 2015 merger showing up in our results."

Here's more from CAA's release:
Orders. Net new orders for the 2016 second quarter were down 1% from the pro forma 2015 second quarter, to 3,921 homes, with the dollar value of these orders up 5%, and the Company's monthly sales absorption rate was 2.3 per community for the 2016 second quarter, down 5% from both the pro forma 2015 second quarter and the 2016 first quarter, consistent with normal seasonal patterns. The Company's cancellation rate for the 2016 second quarter was 15%, flat compared to the pro forma 2015 second quarter and up from 12% for the 2016 first quarter.

Backlog. The dollar value of homes in backlog increased 19% to $3.4 billion, or 7,456 homes, compared to $2.9 billion, or 6,688 homes, for the pro forma 2015 second quarter, and increased 7% compared to $3.2 billion, or 7,019 homes, for the 2016 first quarter. The increase in pro forma year-over-year backlog value was driven primarily by our continued growth in community count and a 6% increase in the average selling price of the homes in backlog on a pro forma basis, reflecting product mix, geographic mix and continued pricing power in many of our markets.

Revenue. Revenues from home sales for the 2016 second quarter increased 17%, to $1.6 billion, as compared to the pro forma 2015 second quarter, resulting from a 12% increase on a pro forma basis in new home deliveries and a 5% increase on a pro forma basis in the Company's average home price to $447 thousand. The increase in average home price was primarily attributable to product mix and general price increases within select markets.

Gross Margin. Excluding the impact of purchasing accounting, the Company achieved adjusted gross margin from home sales of 22.2%* for the 2016 second quarter. Unadjusted, the gross margin from homes sales was 21.9%. The unadjusted second quarter gross margin was adversely impacted by the required fair value adjustment to homes in backlog, speculative homes and models under construction acquired from Ryland in the merger, of which $5.9 million was recognized as an increase to cost of sales during the quarter.

SG&A Expenses. Selling, general and administrative expenses for the 2016 second quarter were $165.7 million, or 10.6%, as compared to $79.9 million, or 11.5%, for the 2015 second quarter. This 90 basis point improvement was primarily the result of a 124% increase in home sale revenues and the operating leverage gained in connection with the merger.

Land. During the 2016 second quarter, the Company spent $394.8 million on land purchases and development costs, compared to $418.9 million for the pro forma 2015 second quarter. The Company purchased $237.9 million of land, consisting of 3,348 homesites, of which 32% (based on homesites) is located in the North region, 20% in the Southeast region, 19% in the Southwest region, and 29% in the West region. As of June 30, 2016, the Company owned or controlled 67,741 homesites, of which 44,980 were owned and actively selling or under development, 16,794 were controlled or under option, and the remaining 5,967 homesites were held for future development or for sale.

Liquidity. The Company ended the quarter with $892.6 million of available liquidity, including $256.0 million of unrestricted home building cash and $636.6 million available to borrow under its $750 million revolving credit facility. The Company's home building debt to book capitalization as of June 30, 2016 and 2015 was 47.9% and 55.3%, respectively, and adjusted net home building debt to adjusted book capitalization was 45.9%* and 53.9%*, respectively. In addition, the Company's home building debt to adjusted home building EBITDA for the LTM period ending June 30, 2016 and 2015 was 4.4x* and 4.4x*, respectively.

Bond Offering. During the 2016 second quarter, the Company raised $300 million in proceeds from the issuance of 5.25% Senior Notes due 2026. A portion of the proceeds were initially used to pay down the outstanding balance of the Company's revolving credit facility and will ultimately be used to repay or repurchase the Company's $280 million senior notes which mature in September 2016.

Share Repurchase Program. The Company's Board of Directors has authorized the repurchase of up to $500 million of the Company's common stock. This authorization replaces the previous February 2016 $200 million authorization. The Company's share repurchases may be made, from time to time, on the open market or otherwise. The amount of any shares purchased and the timing of the purchases will be subject to general business conditions and other factors. The share repurchase authorization will continue in effect until terminated by the Board of Directors. The Company intends to retire the repurchased shares.