Tue, May 13, 11:25 AM (42 days ago)
**Landsea Homes Corporation (LSEA) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Total revenue increased by 5.7% to $310.8 million, driven by a 2% rise in home sales revenue to $299.4 million and a significant increase in lot sales and other revenue to $11.4 million. - **Profit Margins:** Gross margin decreased to 13.0% from 14.9% due to higher sales discounts, incentives, and increased interest costs. Adjusted gross margin, excluding interest and impairments, improved to 20.0%. - **Net Loss:** Net loss was $7.1 million, compared to a net income of $0.7 million in Q1 2024, reflecting higher operating expenses and lower gross margins. - **Cash Flow:** Net cash used in operating activities decreased to $10.1 million from $33.2 million, primarily due to reduced spending on real estate inventories and other assets. **Segment Performance:** - **Arizona:** Pretax loss of $0.1 million, with lower net orders and ASP due to affordability challenges. - **California:** Pretax income of $1.2 million, with decreased deliveries and ASP, but lower SG&A expenses. - **Colorado:** Pretax loss of $1.8 million, with increased deliveries but higher SG&A costs. - **Florida:** Pretax income of $1.4 million, with significantly more deliveries and higher home sales revenue. - **Texas:** Pretax loss of $7.6 million, with increased deliveries and revenue but higher costs of sales and SG&A. **Trends and Uncertainties:** - **Market Conditions:** Elevated mortgage interest rates and affordability concerns continue to impact demand and absorption rates. - **Strategic Initiatives:** Focus on sales and marketing efforts to address affordability, including fixed interest rate incentive programs and purchase incentives. - **Future Operations:** Expectations of elevated interest rates and market uncertainty, with a focus on reducing leverage ratios and maintaining optimal liquidity. **Liquidity and Capital Resources:** - **Cash Position:** $52.3 million in cash, cash equivalents, and cash held in escrow as of March 31, 2025. - **Debt:** Outstanding borrowings of $750.0 million, with $204.0 million in additional borrowing capacity under the credit facility. - **Financial Covenants:** Compliance with all financial covenants under the Amended Credit Agreement and the agreements governing the Senior Notes. **Stock Information:** - **Ticker:** LSEA - **Outstanding Shares:** 36.4 million as of May 7, 2025. - **Stock Repurchases:** No shares repurchased in Q1 2025, with $2.5 million in remaining capacity. **Future Outlook:** - **Growth Strategy:** Focus on expanding community count, maintaining lot supply, and geographic diversification. - **Risk Factors:** Continued market uncertainty, interest rate volatility, and potential inflationary pressures.