CalAtlantic Group, Inc. (NYSE: CAA), Irvine, CA. after market close Thursday reported a profit of $72.7 million, or $0.52 per diluted share, for the first quarter of 2016, compared to a profit of $31.6 million, or $0.40 per diluted share in last year's quarter. Analysts polled by Dow Jones were expecting a profit of $0.50 per share.

The 2016 first-quarter results included the impact of $4.8 million of merger and other one-time costs and $12.7 million of purchase accounting adjustments resulting from the merger of Standard Pacific and Ryland Homes to form CAA in 2015. The 2015 first quarter results represent the stand-alone results of Standard Pacific, as required by GAAP, and are not directly comparable to the 2016 quarter. The company provided pro-forma data to better reflect the performance of the combined company as follows:

A CAA back yard in Florida.
A CAA back yard in Florida.
  • 571 average active selling communities, up 5%.
  • 2,727 new home deliveries, up 12%.
  • Average selling price of $432 thousand, up 9%.
  • Home sale revenues of $1.2 billion, up 22%.
  • Pretax income of $115.2 million vs. $89.8 million* (2016 first quarter results include the impact of $4.8 million of merger and other one-time costs and $12.7 million of purchase accounting adjustments)
  • Adjusted pretax income of $132.7 million*, up 48%.
  • $371.6 million of land purchases and development costs, compared to $344.9 million.
  • Net new orders for the 2016 first quarter were up 4% from the pro forma 2015 first quarter, to 4,135 homes, with the dollar value of these orders up 9%, and the company's monthly sales absorption rate was 2.4 per community for the 2016 first quarter, flat from the pro forma 2015 first quarter and up 55% from the 2015 fourth quarter, consistent with normal seasonal patterns. The company's cancellation rate for the 2016 first quarter was 12%, down 200 basis points compared to the pro forma 2015 first quarter and down from 22% for the 2015 fourth quarter.
  • Adjusted gross margin from home sales was 22.0% for the 2016 first quarter.
  • Selling, general and administrative expenses for the 2016 first quarter were $136.7 million, or 11.6%, as compared to $66.1 million, or 14.1%, for the 2015 first quarter. The company attributed the 250 basis point improvement to a 152% increase in home sale revenues and operating leverage gained in connection with the merger.

During the quarter, CAA spent $371.6 million on land purchases and development costs, compared to $344.9 million for the pro forma 2015 first quarter; $215.4 million consisting of 2,902 home sites, 24% (based on homesites) in the North region, 15% in the Southeast region, 21% in the Southwest region, and 40% in the West region. As of March 31, 2016, the Company owned or controlled 68,892 home sites, of which 45,729 were owned and actively selling or under development, 17,075 were controlled or under option, and the remaining 6,088 homesites were held for future development or for sale.

The Company ended the quarter with $169.5 million in home building cash and $373.0 million available under its $750 million revolving credit facility. CAA's debt to book capitalization as of March 31, 2016 and 2015 was 48.2% and 56.0%.

In a statement, Larry Nicholson, President and CEO called the results a "solid start to 2016." He continued, "With home sale revenues up 22% and adjusted pretax income up 48%, compared to the pro forma prior year period, we are laying the foundation for what I believe will be a strong year for CalAtlantic."