Taylor Morrison Reports First Quarter 2024 Results
Taylor Morrison Home reported its first-quarter results for 2024, showing a net income of $190 million and earnings per share of $1.75. The company experienced growth in net sales orders, home closings revenue, and homebuilding lots owned, among other positive developments. Taylor Morrison also raised its full-year guidance, expecting to deliver approximately 12,500 homes with a gross margin between 23.5% to 24.0%. The company's expansion into the Indianapolis market further diversifies its geographic footprint, reflecting strong growth potential.
Net sales orders increased by 29% to 3,686 homes, with a monthly absorption pace of 3.7 per community.
Home closings revenue reached $1.6 billion, driven by 2,731 home closings at an average price of $599,000.
Home closings gross margin improved to 24.0%.
Expansion into the Indianapolis market with the acquisition of 1,500 lots from Pyatt Builders.
Raised full-year guidance to expect 12,500 home deliveries with a gross margin between 23.5% to 24.0%.
Strong growth potential due to diversified consumer mix and efficient construction progress.
SG&A as a percentage of home closings revenue increased to 10.4% from 9.9% a year ago.
Average closing price decreased by 6% to $599,000 in the first quarter.
Homebuilding land acquisition and development spend increased to $588 million, up from $321 million a year ago.
First quarter 2024 highlights included the following, as compared to the first quarter of 2023:
- Net sales orders increased
29% to 3,686, driven by a monthly absorption pace of 3.7 per community versus 2.9 a year ago - Home closings revenue of
$1.6 billion $599,000 - Home closings gross margin of
24.0% - 74,182 homebuilding lots owned and controlled, representing 6.5 years of total supply, of which 3.1 years was owned
- Repurchased 1.5 million common shares for
$92 million - Homebuilding debt to capitalization of
26.1% on a gross basis and20.1% net of$554 million - Total liquidity of
$1.6 billion - Expansion into the attractive
Indianapolis market with acquisition of approximately 1,500 lots from Pyatt Builders, which closed after quarter-end
"In the first quarter, our team delivered a strong start to the year, including better-than-expected sales activity, upside to our gross margin expectations, and efficient construction progress that we believe has set the stage for continued success through the remainder of the year. Supported by our diversified consumer and geographic strategy, we delivered 2,731 homes at a better-than-expected home closings gross margin of
"Following this positive first quarter momentum, we are raising our full-year guidance and now expect to deliver approximately 12,500 homes at a home closings gross margin between
Palmer continued, "The diversification of our consumer mix—from entry-level through first and second move-up to resort lifestyle buyers—is the foundation of our strong performance. We further maximize our performance by optimizing our construction efficiencies and gross margin opportunity by offering both quick-move in specs and personalized to-be-built homes aligned to our targeted consumer's needs and preferences, while our geographic diversification adds another layer of risk mitigation and growth opportunity. This unique diversification, combined with our operational capabilities, provides important competitive advantages that we believe will deliver strong growth and profitability in the years ahead, as reflected in our long-term targets for
Business Highlights (All comparisons are of the current quarter to the prior-year quarter, unless indicated.)
Homebuilding
- Home closings revenue increased
2% to$1.6 billion 8% increase in home closings to 2,731, which was partially offset by a6% decrease in average closing price to$599,000 - Home closings gross margin increased ten basis points year over year to
24.0% . - Net sales orders increased
29% to 3,686, driven by a28% increase in the monthly absorption pace to 3.7 per community and a2% increase in ending community count to 331. Average net sales order price decreased3% to$608,000 - SG&A as a percentage of home closings revenue increased to
10.4% from9.9% a year ago. - Cancellations equaled just
7.0% of gross orders, down from14.0% a year ago. - Backlog at quarter end was 6,244 homes with a sales value of
$4.2 billion $57,000
Land Portfolio
- Homebuilding land acquisition and development spend totaled
$588 million $321 million 38% of the total versus68% a year ago. - Homebuilding lot supply was 74,182 owned and controlled homesites, up from 72,362 at year-end 2023.
- Controlled homebuilding lots as a share of total lot supply was
53% , unchanged from year-end 2023. - Based on trailing twelve-month home closings, total homebuilding lots represented 6.5 years of total supply, of which only 3.1 years was owned.
Financial Services
- The mortgage capture rate increased to
87% , up from82% a year ago. - Borrowers had an average credit score of 751 and debt-to-income ratio of
40% .
Balance Sheet
- At quarter end, total liquidity was approximately
$1.6 billion $554 million $1.1 billion - Subsequent to quarter end, the Company received an upgraded credit rating from Moody's to BA1 from BA2 with a Stable outlook.
- The gross homebuilding debt to capital ratio was
26.1% , down from30.9% a year ago. Including$554 million 20.1% , down from21.0% a year ago. - The Company repurchased 1.5 million shares for
$92 million $403 million
Expansion into
Following the end of the quarter, Taylor Morrison purchased approximately 1,500 homebuilding lots from privately-held Pyatt Builders in
Business Outlook
Second Quarter 2024
- Home closings are expected to be approximately 3,000
- Average closing price is expected to be around
$605,000 - Home closings gross margin is expected to be at least
23.5% - Ending active community count is expected to be between 330 to 340
- Effective tax rate is expected to be approximately
25% - Diluted share count is expected to be approximately 108 million
Full Year 2024
- Home closings are now expected to be approximately 12,500
- Average closing price is now expected to be between
$600,000 $610,000 - Home closings gross margin is now expected to be between
23.5% to24.0% - Ending active community count is now expected to be between 330 to 340
- SG&A as a percentage of home closings revenue is expected to be in the high
-9% range - Effective tax rate is expected to be approximately
25% - Diluted share count is now expected to be approximately 108 million
- Land and development spend is expected to be between
$2.3 billion $2.5 billion - Share repurchases are expected to total approximately
$300 million
Quarterly Financial Comparison
(Dollars in thousands) | Q1 2024 | Q1 2023 | Q1 2024 vs. Q1 2023 | ||
Total Revenue | $ 1,699,752 | $ 1,661,857 | 2.3 % | ||
Home Closings Revenue | $ 1,636,255 | $ 1,612,595 | 1.5 % | ||
Home Closings Gross Margin | $ 393,046 | $ 385,082 | 2.1 % | ||
24.0 % | 23.9 % | 10 bps increase | |||
SG&A | $ 170,164 | $ 159,021 | 7.0 % | ||
% of Home Closings Revenue | 10.4 % | 9.9 % | 50 bps increase |
Earnings Conference Call Webcast
A public webcast to discuss the Company's earnings will be held later today at 8:30 a.m. ET. A live audio webcast of the conference call will be available on Taylor Morrison's website at www.taylormorrison.com on the Investor Relations portion of the site under the Events & Presentations tab. For call participants, the dial-in number is (833) 470-1428 and conference ID is 544307. The call will be recorded and available for replay on the Company's website.
About Taylor Morrison
Headquartered in
Forward-Looking Statements
This earnings summary includes "forward-looking statements." These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, the words ""anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "may," "will," "can," "could," "might," "should" and similar expressions identify forward-looking statements, including statements related to expected financial, operating and performance results, planned transactions, planned objectives of management, future developments or conditions in the industries in which we participate and other trends, developments and uncertainties that may affect our business in the future.
Such risks, uncertainties and other factors include, among other things: inflation or deflation; changes in general and local economic conditions; slowdowns or severe downturns in the housing market; homebuyers' ability to obtain suitable financing; increases in interest rates, taxes or government fees; shortages in, disruptions of and cost of labor; higher cancellation rates of existing agreements of sale; competition in our industry; any increase in unemployment or underemployment; the seasonality of our business; the physical impacts of climate change and the increased focus by third-parties on sustainability issues; our ability to obtain additional performance, payment and completion surety bonds and letters of credit; significant home warranty and construction defect claims; our reliance on subcontractors; failure to manage land acquisitions, inventory and development and construction processes; availability of land and lots at competitive prices; decreases in the market value of our land inventory; new or changing government regulations and legal challenges; our compliance with environmental laws and regulations regarding climate change; our ability to sell mortgages we originate and claims on loans sold to third parties; governmental regulation applicable to our financial services and title services business; the loss of any of our important commercial lender relationships; our ability to use deferred tax assets; raw materials and building supply shortages and price fluctuations; our concentration of significant operations in certain geographic areas; risks associated with our unconsolidated joint venture arrangements; information technology failures and data security breaches; costs to engage in and the success of future growth or expansion of our operations or acquisitions or disposals of businesses; costs associated with our defined benefit and defined contribution pension schemes; damages associated with any major health and safety incident; our ownership, leasing or occupation of land and the use of hazardous materials; existing or future litigation, arbitration or other claims; negative publicity or poor relations with the residents of our communities; failure to recruit, retain and develop highly skilled, competent people; utility and resource shortages or rate fluctuations; constriction of the capital markets; risks related to instability in the banking system; risks associated with civil unrest, acts of terrorism, threats to national security, the conflicts in
In addition, other such risks and uncertainties may be found in our most recent annual report on Form 10-K and our subsequent quarterly reports filed with the Securities and Exchange Commission (SEC) as such factors may be updated from time to time in our periodic filings with the SEC. We undertake no duty to update any forward-looking statement, whether as a result of new information, future events or changes in our expectations, except as required by applicable law.
Taylor Morrison Home Corporation
| |||
Three Months Ended | |||
2024 | 2023 | ||
Home closings revenue, net | $ 1,636,255 | $ 1,612,595 | |
Land closings revenue | 7,225 | 4,520 | |
Financial services revenue | 46,959 | 35,149 | |
Amenity and other revenue | 9,313 | 9,593 | |
Total revenue | 1,699,752 | 1,661,857 | |
Cost of home closings | 1,243,209 | 1,227,513 | |
Cost of land closings | 5,202 | 4,345 | |
Financial services expenses | 25,143 | 22,148 | |
Amenity and other expenses | 9,353 | 8,285 | |
Total cost of revenue | 1,282,907 | 1,262,291 | |
Gross margin | 416,845 | 399,566 | |
Sales, commissions and other marketing costs | 102,600 | 92,760 | |
General and administrative expenses | 67,564 | 66,261 | |
Net income from unconsolidated entities | (2,751) | (1,929) | |
Interest income, net | (43) | (1,111) | |
Other expense/(income), net | 595 | (4,834) | |
Income before income taxes | 248,880 | 248,419 | |
Income tax provision | 57,719 | 57,191 | |
Net income before allocation to non-controlling interests | 191,161 | 191,228 | |
Net income attributable to non-controlling interests | (891) | (177) | |
Net income | $ 190,270 | $ 191,051 | |
Earnings per common share | |||
Basic | $ 1.79 | $ 1.76 | |
Diluted | $ 1.75 | $ 1.74 | |
Weighted average number of shares of common stock: | |||
Basic | 106,457 | 108,429 | |
Diluted | 108,564 | 110,053 | |
Taylor Morrison Home Corporation
| |||
March 31, | December 31, | ||
Assets | |||
Cash and cash equivalents | $ 554,287 | $ 798,568 | |
Restricted cash | 3,105 | 8,531 | |
Total cash | 557,392 | 807,099 | |
Owned inventory | 5,841,924 | 5,473,828 | |
Consolidated real estate not owned | 143,429 | 71,618 | |
Total real estate inventory | 5,985,353 | 5,545,446 | |
Land deposits | 199,043 | 203,217 | |
Mortgage loans held for sale | 216,633 | 193,344 | |
Lease right of use assets | 72,900 | 75,203 | |
Prepaid expenses and other assets, net | 287,507 | 290,925 | |
Other receivables, net | 189,771 | 184,518 | |
Investments in unconsolidated entities | 369,982 | 346,192 | |
Deferred tax assets, net | 67,825 | 67,825 | |
Property and equipment, net | 300,740 | 295,121 | |
Goodwill | 663,197 | 663,197 | |
Total assets | $ 8,910,343 | $ 8,672,087 | |
Liabilities | |||
Accounts payable | $ 276,093 | $ 263,481 | |
Accrued expenses and other liabilities | 459,095 | 549,074 | |
Lease liabilities | 81,138 | 84,999 | |
Income taxes payable | 45,848 | — | |
Customer deposits | 357,657 | 326,087 | |
Estimated development liabilities | 27,416 | 27,440 | |
Senior notes, net | 1,469,135 | 1,468,695 | |
Loans payable and other borrowings | 441,190 | 394,943 | |
Revolving credit facility borrowings | — | — | |
Mortgage warehouse borrowings | 183,174 | 153,464 | |
Liabilities attributable to consolidated real estate not owned | 143,429 | 71,618 | |
Total liabilities | $ 3,484,175 | $ 3,339,801 | |
Stockholders' equity | |||
Total stockholders' equity | 5,426,168 | 5,332,286 | |
Total liabilities and stockholders' equity | $ 8,910,343 | $ 8,672,087 | |
Homes Closed and Home Closings Revenue, Net: |
Three Months Ended March 31, | |||||||||||||||||
Homes Closed | Home Closings Revenue, Net | Average Selling Price | |||||||||||||||
(Dollars in thousands) | 2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||
East | 933 | 1,004 | (7.1) % | $ 541,730 | $ 601,611 | (10.0) % | $ 581 | $ 599 | (3.0 %) | ||||||||
Central | 832 | 731 | 13.8 % | 472,032 | 463,394 | 1.9 % | 567 | 634 | (10.6) % | ||||||||
West | 966 | 806 | 19.9 % | 622,493 | 547,590 | 13.7 % | 644 | 679 | (5.2) % | ||||||||
Total | 2,731 | 2,541 | 7.5 % | $ 1,636,255 | $ 1,612,595 | 1.5 % | $ 599 | $ 635 | (5.7) % | ||||||||
Net Sales Orders: |
Three Months Ended March 31, | |||||||||||||||||
Net Sales Orders | Sales Value | Average Selling Price | |||||||||||||||
(Dollars in thousands) | 2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||
East | 1,295 | 1,079 | 20.0 % | $ 776,861 | $ 644,519 | 20.5 % | 600 | 597 | 0.5 % | ||||||||
Central | 904 | 674 | 34.1 % | 478,419 | 384,830 | 24.3 % | 529 | 571 | (7.4) % | ||||||||
West | 1,487 | 1,101 | 35.1 % | 984,483 | 756,344 | 30.2 % | 662 | 687 | (3.6 %) | ||||||||
Total | 3,686 | 2,854 | 29.2 % | $ 2,239,763 | $ 1,785,693 | 25.4 % | $ 608 | $ 626 | (2.9 %) | ||||||||
Sales Order Backlog: |
Three Months Ended March 31, | |||||||||||||||||
Sold Homes in Backlog | Sales Value | Average Selling Price | |||||||||||||||
(Dollars in thousands) | 2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||
East | 2,433 | 2,658 | (8.5) % | $ 1,715,398 | $ 1,775,970 | (3.4) % | $ 705 | $ 668 | 5.5 % | ||||||||
Central | 1,371 | 1,660 | (17.4) % | 870,550 | 1,132,928 | (23.2) % | 635 | 682 | (6.9) % | ||||||||
West | 2,440 | 1,949 | 25.2 % | 1,662,190 | 1,328,187 | 25.1 % | 681 | 681 | — % | ||||||||
Total | 6,244 | 6,267 | (0.4) % | $ 4,248,138 | $ 4,237,085 | 0.3 % | $ 680 | $ 676 | 0.6 % | ||||||||
Ending Active Selling Communities: |
As of | Change | ||||
March 31, 2024 | March 31, 2023 | ||||
East | 113 | 106 | 6.6 % | ||
Central | 93 | 98 | (5.1) % | ||
West | 125 | 120 | 4.2 % | ||
Total | 331 | 324 | 2.2 % | ||
Reconciliation of Non-GAAP Financial Measures
In addition to the results reported in accordance with accounting principles generally accepted in
Adjusted net income, adjusted earnings per common share and adjusted income before income taxes and related margin are non-GAAP financial measures that reflect net income/(loss), excluding to the extent applicable in a given period, the impact of inventory impairment charges, impairment of investment in unconsolidated entities, pre-acquisition abandonment charges, gain/loss on land transfers to joint ventures and extinguishment of debt, net, and legal settlements the Company deems not to be in the ordinary course of business and in the case of adjusted net income and adjusted earnings per common share, the tax impact due to such items.
EBITDA and Adjusted EBITDA are non-GAAP financial measures that measure performance by adjusting net income before allocation to non-controlling interests to exclude, interest expense/(income), net, amortization of capitalized interest, income taxes, depreciation and amortization (EBITDA), and non-cash compensation expense, if any, inventory impairment charges, impairment of investments in unconsolidated entities, pre-acquisition abandonment charges, gain/loss on land transfers to joint ventures, extinguishment of debt, net, and legal settlements that the Company deems not to be in the ordinary course of business, in each case, as applicable in a given period.
Net homebuilding debt to capitalization ratio is a non-GAAP financial measure we calculate by dividing (i) total debt, plus unamortized debt issuance cost/(premium), net, and less mortgage warehouse borrowings, net of unrestricted cash and cash equivalents ("net homebuilding debt"), by (ii) total capitalization (the sum of net homebuilding debt and total stockholders' equity).
Management uses these non-GAAP financial measures to evaluate our performance on a consolidated basis, as well as the performance of our regions, and to set targets for performance-based compensation. We also use the ratio of net homebuilding debt to total capitalization as an indicator of overall leverage and to evaluate our performance against other companies in the homebuilding industry. In the future, we may include additional adjustments in the above-described non-GAAP financial measures to the extent we deem them appropriate and useful to management and investors.
We believe that EBITDA and adjusted EBITDA are useful for investors in order to allow them to evaluate our operations without the effects of various items we do not believe are characteristic of our ongoing operations or performance and also because such metrics assist both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted EBITDA also provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, or unusual items. Because we use the ratio of net homebuilding debt to total capitalization to evaluate our performance against other companies in the homebuilding industry, we believe this measure is also relevant and useful to investors for that reason.
These non-GAAP financial measures should be considered in addition to, rather than as a substitute for, the comparable
Because the company did not experience any material adjustments applicable to (i) adjusted net income and adjusted earnings per common share; (ii) adjusted income before income taxes and related margin; or (iii) adjusted home closings gross margin during the periods presented that would cause such measures to differ from the comparable GAAP measures, such measures have not been separately presented herein.
A reconciliation of (i) EBITDA and adjusted EBITDA and (ii) net homebuilding debt to capitalization ratio to the comparable GAAP measures is presented below.
EBITDA and Adjusted EBITDA Reconciliation
| |||
Three Months Ended | |||
(Dollars in thousands) | 2024 | 2023 | |
Net income before allocation to non-controlling interests | $ 191,161 | $ 191,228 | |
Interest income, net | (43) | (1,111) | |
Amortization of capitalized interest | 23,625 | 27,649 | |
Income tax provision | 57,719 | 57,191 | |
Depreciation and amortization | 3,138 | 1,790 | |
EBITDA | $ 275,600 | $ 276,747 | |
Non-cash compensation expense | 5,483 | 7,533 | |
Adjusted EBITDA | $ 281,083 | $ 284,280 | |
Total revenue | $ 1,699,752 | $ 1,661,857 | |
Net income before allocation to non-controlling interests as a percentage of total revenue | 11.2 % | 11.5 % | |
EBITDA as a percentage of total revenue | 16.2 % | 16.7 % | |
Adjusted EBITDA as a percentage of total revenue | 16.5 % | 17.1 % | |
Debt to Capitalization Ratios Reconciliation
| |||||
(Dollars in thousands) | As of | As of | As of | ||
Total debt | $ 2,093,499 | $ 2,017,102 | $ 2,301,878 | ||
Plus: unamortized debt issuance cost, net | 7,935 | 8,375 | 10,193 | ||
Less: mortgage warehouse borrowings | (183,174) | (153,464) | (146,334) | ||
Total homebuilding debt | $ 1,918,260 | $ 1,872,013 | $ 2,165,737 | ||
Total equity | 5,426,168 | 5,332,286 | 4,846,546 | ||
Total capitalization | $ 7,344,428 | $ 7,204,299 | $ 7,012,283 | ||
Total homebuilding debt to capitalization ratio | 26.1 % | 26.0 % | 30.9 % | ||
Total homebuilding debt | $ 1,918,260 | $ 1,872,013 | $ 2,165,737 | ||
Less: cash and cash equivalents | (554,287) | (798,568) | (877,717) | ||
Net homebuilding debt | $ 1,363,973 | $ 1,073,445 | $ 1,288,020 | ||
Total equity | 5,426,168 | 5,332,286 | 4,846,546 | ||
Total capitalization | $ 6,790,141 | $ 6,405,731 | $ 6,134,566 | ||
Net homebuilding debt to capitalization ratio | 20.1 % | 16.8 % | 21.0 % | ||
CONTACT:
Mackenzie Aron, VP Investor Relations
(480) 734-2060
investor@taylormorrison.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/taylor-morrison-reports-first-quarter-2024-results-302130655.html
SOURCE Taylor Morrison
FAQ
What was Taylor Morrison's net income for the first quarter of 2024?
What is Taylor Morrison's stock symbol?
What was the home closings gross margin in the first quarter of 2024?
How many home closings were there in the first quarter of 2024?
What was the average price of a home closing in the first quarter of 2024?
