The New Home Company wrapped up another week of earnings this morning with huge increases in revenues and deliveries in the fourth quarter.
Larry Webb, the Company’s Chief Executive Officer, commented, “I am very pleased with our performance in the 2015 fourth quarter as our Wholly Owned, Fee Building and Joint Venture businesses each contributed nicely to the bottom line. I am particularly excited about our wholly owned business, which increased revenues in the quarter by 345% year over year, thanks to a 285% increase in deliveries and a 15% increase in average selling prices. This sharp increase in revenues allowed us to better leverage our SG&A costs and generate higher profits.”
Webb added, “We continue to invest in the business, and the equity capital we raised during the fourth quarter will go a long way towards supporting future growth. We have many exciting new communities opening in 2016, and we’ve identified additional land opportunities that fit nicely into our existing footprint. In short, we believe we are in a great position to build on the momentum we generated in 2015 and scale our business profitably.”
Here's more from the company:
Fourth quarter 2015 highlights compared to fourth quarter 2014
- Net income of $12.2 million, or $0.69 per diluted share vs. $5.3 million, or $0.32 per diluted share
- Total revenues of $194.6 million, up 167% from $73.0 million
- Home building gross margin of 15.1%, up 190 bps from 13.2%
- Average selling price up 15% to $1.9 million from $1.7 million
- SG&A as a percentage of home sale revenues of 7.6% vs. 16.2%, an 860 basis point improvement
- Backlog dollar value of $166.6 million, up 92%
- Wholly owned community count of 10, up 150%
J.P. Morgan's Michael Rehaut said the company beat expectations on margins and earnings per share but missed on orders. He's still optimistic about the builder going forward:
Overall, we rate NWHM Neutral, as while we remain highly impressed by NWHM management team’s long and successful track record in the industry, and believe it will continue to execute upon its strategy of building a larger and more profitable home building company over the next several years, we believe the stock’s current valuation fairly reflects the company’s earnings prospects over the next 1-2 years.