First Quarter 2023 Highlights
- Great Park builder sales of 255 homes during the quarter
compared to 113 in the fourth quarter of 2022.
- Valencia builder sales of 75 homes during the quarter compared
to 49 in the fourth quarter of 2022.
- Consolidated revenues of $5.7 million; consolidated net loss of
$9.7 million.
- Consolidated selling, general and administrative expense of
$13.8 million was down 18% from first quarter 2022.
- Cash and cash equivalents of $106.6 million as of March 31,
2023.
- Debt to total capitalization ratio of 25.2% and liquidity of
$231.6 million as of March 31, 2023.
Five Point Holdings, LLC (“Five Point” or the “Company”)
(NYSE:FPH), an owner and developer of large mixed-use planned
communities in California, today reported its first quarter 2023
results.
Dan Hedigan, Chief Executive Officer, said, “During the first
quarter, we saw the housing market begin to stabilize, consistent
with our expectations as we started the year. The combination of a
moderation in mortgage rates from their peaks in the fourth quarter
of 2022, along with home buyers adjusting to the new mortgage
interest rate environment and the limited inventory in the existing
home markets, is beginning to drive increased buyer activity in new
home offerings at our master planned communities. The faster pace
of home sales in the quarter is starting to generate greater
homebuilder interest in our land. With building strength in the
residential market, coupled with the continuing interest in our
commercial land offerings, we remain optimistic in our planned land
sales over the remainder of 2023. As always, we will continue to
monitor macroeconomic factors impacting demand and will adjust our
development plans accordingly.”
Consolidated Results
Liquidity and Capital Resources
As of March 31, 2023, total liquidity of $231.6 million was
comprised of cash and cash equivalents totaling $106.6 million and
borrowing availability of $125.0 million under our unsecured
revolving credit facility. Total capital was $1.9 billion,
reflecting $2.9 billion in assets and $1.0 billion in liabilities
and redeemable noncontrolling interests.
Results of Operations for the Three Months Ended March 31,
2023
Revenues. Revenues of $5.7 million for the three months
ended March 31, 2023 were primarily generated from management
services.
Equity in earnings from unconsolidated entities. Equity
in earnings from unconsolidated entities was $1.0 million for the
three months ended March 31, 2023. The Great Park Venture generated
net income of $2.7 million during the three months ended March 31,
2023, and our share of the net income from our 37.5% percentage
interest, adjusted for basis differences, was $1.2 million.
Additionally, we recognized $0.2 million in loss from our 75%
interest in the Gateway Commercial Venture.
Selling, general, and administrative. Selling, general,
and administrative expenses were $13.8 million for the three months
ended March 31, 2023.
Net loss. Consolidated net loss for the quarter was $9.7
million. Net loss attributable to noncontrolling interests totaled
$5.2 million, resulting in net loss attributable to the Company of
$4.5 million. Net loss attributable to noncontrolling interests
represents the portion of loss allocated to related party partners
and members that hold units of the operating company and the San
Francisco Venture. Holders of units of the operating company and
the San Francisco Venture can redeem their interests for either, at
our election, our Class A common shares on a one-for-one basis or
cash. In connection with any redemption or exchange, our ownership
of our operating subsidiaries will increase thereby reducing the
amount of income allocated to noncontrolling interests in
subsequent periods.
Conference Call
Information
In conjunction with this release, Five Point will host a
conference call on Thursday, April 20, 2023 at 5:00 p.m. Eastern
Time. Dan Hedigan, Chief Executive Officer, and Leo Kij, Interim
Chief Financial Officer, will host the call. Interested investors
and other parties can listen to a live Internet audio webcast of
the conference call that will be available on the Five Point
website at ir.fivepoint.com. The conference call can also be
accessed by dialing (877) 451-6152 (domestic) or (201) 389-0879
(international). A telephonic replay will be available starting
approximately two hours after the end of the call by dialing (844)
512-2921, or for international callers, (412) 317-6671. The
passcode for the live call and the replay is 13738239. The
telephonic replay will be available until 11:59 p.m. Eastern Time
on May 4, 2023.
About Five Point
Five Point, headquartered in Irvine, California, designs and
develops large mixed-use planned communities in Orange County, Los
Angeles County, and San Francisco County that combine residential,
commercial, retail, educational, and recreational elements with
public amenities, including civic areas for parks and open space.
Five Point’s communities include the Great Park Neighborhoods® in
Irvine, Valencia® in Los Angeles County, and Candlestick® and The
San Francisco Shipyard® in the City of San Francisco. These
communities are designed to include approximately 40,000
residential homes and approximately 23 million square feet of
commercial space.
Forward-Looking
Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties. These statements concern
expectations, beliefs, projections, plans and strategies,
anticipated events or trends and similar expressions concerning
matters that are not historical facts. When used, the words
“anticipate,” “believe,” “expect,” “intend,” “may,” “might,”
“plan,” “estimate,” “project,” “should,” “will,” “would,” “result”
and similar expressions that do not relate solely to historical
matters are intended to identify forward-looking statements. This
press release may contain forward-looking statements regarding: our
expectations of our future revenues, costs and financial
performance; future demographics and market conditions in the areas
where our communities are located; the outcome of pending
litigation and its effect on our operations; the timing of our
development activities; and the timing of future real estate
purchases or sales. We caution you that any forward-looking
statements included in this press release are based on our current
views and information currently available to us. Forward-looking
statements are subject to risks, trends, uncertainties and factors
that are beyond our control. Some of these risks and uncertainties
are described in more detail in our filings with the SEC, including
our Annual Report on Form 10-K, under the heading “Risk Factors.”
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those anticipated, estimated or projected. We
caution you therefore against relying on any of these
forward-looking statements. While forward-looking statements
reflect our good faith beliefs, they are not guarantees of future
performance. They are based on estimates and assumptions only as of
the date hereof. We undertake no obligation to update or revise any
forward-looking statement to reflect changes in underlying
assumptions or factors, new information, data or methods, future
events or other changes, except as required by applicable law.
FIVE POINT HOLDINGS,
LLC
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended March
31,
2023
2022
REVENUES:
Land sales
$
(25
)
$
557
Land sales—related party
624
1
Management services—related party
4,236
3,547
Operating properties
866
781
Total revenues
5,701
4,886
COSTS AND EXPENSES:
Land sales
—
—
Management services
2,366
2,684
Operating properties
1,172
1,839
Selling, general, and administrative
13,752
16,791
Restructuring
—
19,437
Total costs and expenses
17,290
40,751
OTHER INCOME (EXPENSE):
Interest income
836
21
Miscellaneous
(21
)
112
Total other income
815
133
EQUITY IN EARNINGS (LOSS) FROM
UNCONSOLIDATED ENTITIES
1,048
(1,032
)
LOSS BEFORE INCOME TAX PROVISION
(9,726
)
(36,764
)
INCOME TAX PROVISION
(8
)
(5
)
NET LOSS
(9,734
)
(36,769
)
LESS NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(5,198
)
(19,639
)
NET LOSS ATTRIBUTABLE TO THE COMPANY
$
(4,536
)
$
(17,130
)
NET LOSS ATTRIBUTABLE TO THE COMPANY PER
CLASS A SHARE
Basic
$
(0.07
)
$
(0.25
)
Diluted
$
(0.07
)
$
(0.25
)
WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING
Basic
68,705,223
68,167,586
Diluted
68,706,164
70,050,872
NET LOSS ATTRIBUTABLE TO THE COMPANY PER
CLASS B SHARE
Basic and diluted
$
(0.00
)
$
(0.00
)
WEIGHTED AVERAGE CLASS B SHARES
OUTSTANDING
Basic and diluted
79,233,544
79,233,544
FIVE POINT HOLDINGS,
LLC
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except
shares)
(Unaudited)
March 31, 2023
December 31, 2022
ASSETS
INVENTORIES
$
2,260,595
$
2,239,125
INVESTMENT IN UNCONSOLIDATED ENTITIES
332,564
331,594
PROPERTIES AND EQUIPMENT, NET
29,955
30,243
INTANGIBLE ASSET, NET—RELATED PARTY
39,610
40,257
CASH AND CASH EQUIVALENTS
106,577
131,771
RESTRICTED CASH AND CERTIFICATES OF
DEPOSIT
992
992
RELATED PARTY ASSETS
97,114
97,126
OTHER ASSETS
11,075
14,676
TOTAL
$
2,878,482
$
2,885,784
LIABILITIES AND CAPITAL
LIABILITIES:
Notes payable, net
$
621,035
$
620,651
Accounts payable and other liabilities
100,304
94,426
Related party liabilities
90,628
93,086
Deferred income tax liability, net
11,506
11,506
Payable pursuant to tax receivable
agreement
173,208
173,068
Total liabilities
996,681
992,737
REDEEMABLE NONCONTROLLING INTEREST
25,000
25,000
CAPITAL:
Class A common shares; No par value;
Issued and outstanding: March 31, 2023—69,199,938 shares; December
31, 2022—69,068,354 shares
Class B common shares; No par value;
Issued and outstanding: March 31, 2023—79,233,544 shares; December
31, 2022—79,233,544 shares
Contributed capital
588,704
587,733
Retained earnings
28,850
33,386
Accumulated other comprehensive loss
(2,964
)
(2,988
)
Total members’ capital
614,590
618,131
Noncontrolling interests
1,242,211
1,249,916
Total capital
1,856,801
1,868,047
TOTAL
$
2,878,482
$
2,885,784
FIVE POINT HOLDINGS, LLC SUPPLEMENTAL
DATA (In thousands) (Unaudited)
Liquidity
March 31, 2023
Cash and cash equivalents
$
106,577
Borrowing capacity(1)
125,000
Total liquidity
$
231,577
(1)
As of March 31, 2023, no
borrowings or letters of credit were outstanding on the Company’s
$125.0 million revolving credit facility.
Debt to Total
Capitalization and Net Debt to Total Capitalization
March 31, 2023
Debt(1)
$
625,000
Total capital
1,856,801
Total capitalization
$
2,481,801
Debt to total capitalization
25.2
%
Debt(1)
$
625,000
Less: Cash and cash equivalents
106,577
Net debt
518,423
Total capital
1,856,801
Total net capitalization
$
2,375,224
Net debt to total
capitalization(2)
21.8
%
(1)
For purposes of this calculation,
debt is the amount due on the Company’s notes payable before
offsetting for capitalized deferred financing costs.
(2)
Net debt to total capitalization
is a non-GAAP financial measure defined as net debt (debt less cash
and cash equivalents) divided by total net capitalization (net debt
plus total capital). The Company believes the ratio of net debt to
total capitalization is a relevant and a useful financial measure
to investors in understanding the leverage employed in the
Company’s operations. However, because net debt to total
capitalization is not calculated in accordance with GAAP, this
financial measure should not be considered in isolation or as an
alternative to financial measures prescribed by GAAP. Rather, this
non-GAAP financial measure should be used to supplement the
Company's GAAP results.
Segment Results
The following table reconciles the results of operations of our
segments to our consolidated results for the three months ended
March 31, 2023 (in thousands):
Three Months Ended March 31,
2023
Valencia
San Francisco
Great Park
Commercial
Total reportable
segments
Corporate and
unallocated
Total under management
Removal of unconsolidated
entities(1)
Total consolidated
REVENUES:
Land sales
$
(25
)
$
—
$
3,133
$
—
$
3,108
$
—
$
3,108
$
(3,133
)
$
(25
)
Land sales—related party
624
—
5,467
—
6,091
—
6,091
(5,467
)
624
Management services—related party(2)
—
—
4,129
107
4,236
—
4,236
—
4,236
Operating properties
704
162
—
2,154
3,020
—
3,020
(2,154
)
866
Total revenues
1,303
162
12,729
2,261
16,455
—
16,455
(10,754
)
5,701
COSTS AND EXPENSES:
Land sales
—
—
—
—
—
—
—
—
—
Management services(2)
—
—
2,366
—
2,366
—
2,366
—
2,366
Operating properties
1,172
—
—
784
1,956
—
1,956
(784
)
1,172
Selling, general, and administrative
2,647
1,193
3,328
1,120
8,288
9,912
18,200
(4,448
)
13,752
Management fees—related party
—
—
4,460
—
4,460
—
4,460
(4,460
)
—
Total costs and expenses
3,819
1,193
10,154
1,904
17,070
9,912
26,982
(9,692
)
17,290
OTHER (EXPENSE) INCOME:
Interest income
—
1
1,301
—
1,302
835
2,137
(1,301
)
836
Interest expense
—
—
—
(533
)
(533
)
—
(533
)
533
—
Miscellaneous
(21
)
—
—
—
(21
)
—
(21
)
—
(21
)
Total other (expense) income
(21
)
1
1,301
(533
)
748
835
1,583
(768
)
815
EQUITY IN EARNINGS FROM UNCONSOLIDATED
ENTITIES
98
—
630
—
728
—
728
320
1,048
SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME
TAX PROVISION
(2,439
)
(1,030
)
4,506
(176
)
861
(9,077
)
(8,216
)
(1,510
)
(9,726
)
INCOME TAX PROVISION
—
—
—
—
—
(8
)
(8
)
—
(8
)
SEGMENT (LOSS) PROFIT/NET LOSS
$
(2,439
)
$
(1,030
)
$
4,506
$
(176
)
$
861
$
(9,085
)
$
(8,224
)
$
(1,510
)
$
(9,734
)
(1)
Represents the removal of the
Great Park Venture and Gateway Commercial Venture operating
results, which are included in the Great Park segment and
Commercial segment operating results at 100% of each venture’s
historical basis, respectively, but are not included in our
consolidated results as we account for our investment in each
venture using the equity method of accounting.
(2)
For the Great Park and Commercial
segments, represents the revenues and expenses attributable to the
management company for providing services to the Great Park Venture
and the Gateway Commercial Venture, as applicable.
The table below reconciles the Great Park segment results to the
equity in earnings from our investment in the Great Park Venture
that is reflected in the condensed consolidated statements of
operations for the three months ended March 31, 2023 (in
thousands):
Segment profit from operations
$
4,506
Less net income of management company
attributed to the Great Park segment
1,763
Net income of the Great Park Venture
2,743
The Company’s share of net income of the
Great Park Venture
1,029
Basis difference accretion
133
Equity in earnings from the Great Park
Venture
$
1,162
The table below reconciles the Commercial segment results to the
equity in loss from our investment in the Gateway Commercial
Venture that is reflected in the condensed consolidated statements
of operations for the three months ended March 31, 2023 (in
thousands):
Segment loss from operations
$
(176
)
Less net income of management company
attributed to the Commercial segment
107
Net loss of the Gateway Commercial
Venture
(283
)
Equity in loss from the Gateway Commercial
Venture
$
(212
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230420005382/en/
Investor Relations: Leo Kij, 949-349-1029 Leo.Kij@fivepoint.com
or Media: Eric Morgan, 949-349-1088 Eric.Morgan@fivepoint.com
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