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Aug. 2, 2022, 4:10 p.m. EDT

Five Point Holdings, LLC Reports Second Quarter 2022 Results

Second Quarter 2022 Highlights Valencia builder sales of 168 homes during the quarter within 18 active neighborhoods. Great Park builder sales of 37 homes during the quarter. At Great Park Neighborhoods, our newest neighborhood, “Solis Park,” consisting of approximately 850 homes began opening homes for sale with the majority of builder collections planned to open for sale in the third quarter. Extended the initial term of the development management agreement with the Great Park Venture through December 31, 2022. Consolidated revenues of $5.4 million; consolidated net loss of $11.0 million. Debt to total capitalization ratio of 25.2% and liquidity of $252.5 million as of June 30, 2022.

IRVINE, Calif., (BUSINESS WIRE) -- Five Point Holdings, LLC (“Five Point” or the “Company”) /zigman2/quotes/208628463/composite FPH -4.85% , an owner and developer of large mixed-use planned communities in California, today reported its second quarter 2022 results.

Dan Hedigan, Chief Executive Officer, said, “Our second quarter has been a pivotal quarter for FivePoint, as we have focused our attention on positioning and building for our future. We are positioned with near-term residential land closings that will be profitable and will fortify our already strong balance sheet, we have right-sized our operating platform with our ‘do more with less’ overhead strategy, and we are executing a carefully crafted commercial property strategy that will begin to produce results as well. While there is some uncertainty in the new home market, the long-term outlook remains quite favorable, given disciplined mortgage underwriting standards that have been in place, the favorable demographics that support the need for new housing, as well as the general overall shortage of housing supply.”

Consolidated Results

Liquidity and Capital Resources

As of June 30, 2022, total liquidity of $252.5 million was comprised of cash and cash equivalents totaling $127.8 million and borrowing availability of $124.7 million under our $125.0 million 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 June 30, 2022

Revenues. Revenues of $5.4 million for the three months ended June 30, 2022 were primarily generated from management services.

Equity in earnings from unconsolidated entities. Equity in earnings from unconsolidated entities was $0.6 million for the three months ended June 30, 2022. The Great Park Venture had no land sales during the three months ended June 30, 2022 but did close the sale of 13 homes under its fee build program at Great Park Neighborhoods, generating $23.3 million in revenues. Net income for the Great Park Venture was $1.5 million. Our share of the net income from our 37.5% percentage interest, adjusted for basis differences, was $0.2 million. Additionally, we recognized $0.1 million in earnings from our 75% interest in the Gateway Commercial Venture and $0.3 million in earnings from our 10% interest in the Valencia Landbank Venture, which was primarily a result of land sales to third-party homebuilders by the Valencia Landbank Venture.

Selling, general, and administrative. Selling, general, and administrative expenses were $12.7 million for the three months ended June 30, 2022.

Net loss. Consolidated net loss for the quarter was $11.0 million. Net loss attributable to noncontrolling interests totaled $5.9 million, resulting in net loss attributable to the Company of $5.1 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 Tuesday, August 2, 2022 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 (800) 458-4121 (domestic) or (856) 344-9290 (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 6902049. The telephonic replay will be available until 11:59 p.m. Eastern Time on August 16, 2022.

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
 
  Three Months Ended June 30,   Six Months Ended June 30,
    2022       2021       2022       2021  
REVENUES:              
Land sales $ 14     $ 65     $ 571     $ 87  
Land sales—related party   1,711       37       1,712       56  
Management services—related party   2,703       7,647       6,250       20,086  
Operating properties   965       555       1,746       1,255  
Total revenues   5,393       8,304       10,279       21,484  
COSTS AND EXPENSES:              
Land sales                      
Management services   2,200       5,848       4,884       16,625  
Operating properties   2,378       1,418       4,217       3,003  
Selling, general, and administrative   12,651       19,218       29,442       38,756  
Restructuring               19,437        
Total costs and expenses   17,229       26,484       57,980       58,384  
OTHER INCOME:              
Interest income   117       26       138       53  
Miscellaneous   112       1,113       224       2,317  
Total other income   229       1,139       362       2,370  
EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES   643       12,119       (389 )     8,563  
LOSS BEFORE INCOME TAX PROVISION   (10,964 )     (4,922 )     (47,728 )     (25,967 )
INCOME TAX PROVISION   (8 )     (5 )     (13 )     (5 )
NET LOSS   (10,972 )     (4,927 )     (47,741 )     (25,972 )
LESS NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS   (5,861 )     (2,638 )     (25,500 )     (13,904 )
NET LOSS ATTRIBUTABLE TO THE COMPANY $ (5,111 )   $ (2,289 )   $ (22,241 )   $ (12,068 )
               
NET LOSS ATTRIBUTABLE TO THE COMPANY PER CLASS A SHARE              
Basic $ (0.07 )   $ (0.03 )   $ (0.32 )   $ (0.18 )
Diluted $ (0.07 )   $ (0.03 )   $ (0.33 )   $ (0.18 )
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING              
Basic   68,495,523       67,410,440       68,332,460       67,349,986  
Diluted   69,635,563       67,410,440       69,472,500       67,349,986  
NET LOSS ATTRIBUTABLE TO THE COMPANY PER CLASS B SHARE              
Basic and diluted $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
WEIGHTED AVERAGE CLASS B SHARES OUTSTANDING              
Basic and diluted   79,233,544       79,233,544       79,233,544       79,233,544  
FIVE POINT HOLDINGS, LLC
 
  June 30, 2022   December 31, 2021
ASSETS      
INVENTORIES $ 2,187,647     $ 2,096,824  
INVESTMENT IN UNCONSOLIDATED ENTITIES   372,685       374,553  
PROPERTIES AND EQUIPMENT, NET   30,881       31,466  
INTANGIBLE ASSET, NET—RELATED PARTY   51,405       51,405  
CASH AND CASH EQUIVALENTS   127,820       265,462  
RESTRICTED CASH AND CERTIFICATES OF DEPOSIT   1,330       1,330  
RELATED PARTY ASSETS   98,656       101,818  
OTHER ASSETS   19,185       20,052  
TOTAL $ 2,889,609     $ 2,942,910  
       
LIABILITIES AND CAPITAL      
LIABILITIES:      
Notes payable, net $ 619,884     $ 619,116  
Accounts payable and other liabilities   100,757       115,374  
Related party liabilities   102,588       95,918  
Deferred income tax liability, net   12,998       12,998  
Payable pursuant to tax receivable agreement   173,068       174,126  
Total liabilities   1,009,295       1,017,532  
       
REDEEMABLE NONCONTROLLING INTEREST   25,000       25,000  
CAPITAL:      
Class A common shares; No par value; Issued and outstanding: June 30, 2022—69,068,354 shares; December 31, 2021—70,107,552 shares      
Class B common shares; No par value; Issued and outstanding: June 30, 2022—79,233,544 shares; December 31, 2021—79,233,544 shares      
Contributed capital   586,267       587,587  
Retained earnings   26,548       48,789  
Accumulated other comprehensive loss   (1,925 )     (1,952 )
Total members’ capital   610,890       634,424  
Noncontrolling interests   1,244,424       1,265,954  
Total capital   1,855,314       1,900,378  
TOTAL $ 2,889,609     $ 2,942,910  
FIVE POINT HOLDINGS, LLC
 
Liquidity
 
  June 30, 2022
Cash and cash equivalents $ 127,820
Borrowing capacity (1)   124,651
Total liquidity $ 252,471
(1) As of June 30, 2022, no amounts were drawn on the Company’s $125.0 million revolving credit facility; however, letters of credit of approximately $0.3 million were issued and outstanding under the revolving credit facility, thus reducing the available capacity by the outstanding letters of credit amount.
Debt to Total Capitalization and Net Debt to Total Capitalization
 
  June 30, 2022
Debt (1) $ 625,000  
Total capital   1,855,314  
Total capitalization $ 2,480,314  
Debt to total capitalization   25.2 %
   
Debt (1) $ 625,000  
Less: Cash and cash equivalents   127,820  
Net debt   497,180  
Total capital   1,855,314  
Total net capitalization $ 2,352,494  
Net debt to total capitalization (2)   21.1 %
(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 and six months ended June 30, 2022 (in thousands):

  Three Months Ended June 30, 2022
  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 $ 14     $     $ 262   $     $ 276     $     $ 276     $ (262 )   $ 14  
Land sales—related party   1,711             1,744           3,455             3,455       (1,744 )     1,711  
Home sales               23,314           23,314             23,314       (23,314 )      
Management services—related party [(2)]               2,602     101       2,703             2,703             2,703  
Operating properties   843       122           2,121       3,086             3,086       (2,121 )     965  
Total revenues   2,568       122       27,922     2,222       32,834             32,834       (27,441 )     5,393  
COSTS AND EXPENSES:                                  
Land sales               13           13             13       (13 )      
Home sales               17,882           17,882             17,882       (17,882 )      
Management services [(2)]               2,200           2,200             2,200             2,200  
Operating properties   2,378                 629       3,007             3,007       (629 )     2,378  
Selling, general, and administrative   3,582       936       4,425     1,046       9,989       8,133       18,122       (5,471 )     12,651  
Management fees—related party               1,848           1,848             1,848       (1,848 )      
Total costs and expenses   5,960       936       26,368     1,675       34,939       8,133       43,072       (25,843 )     17,229  
OTHER INCOME (EXPENSE):                                  
Interest income               89           89       117       206       (89 )     117  
Interest expense                   (313 )     (313 )           (313 )     313        
Miscellaneous   112                       112             112             112  
Total other income (expense)   112             89     (313 )     (112 )     117       5       224       229  
EQUITY IN EARNINGS FROM UNCONSOLIDATED ENTITIES   336             235           571             571       72       643  
SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME TAX PROVISION   (2,944 )     (814 )     1,878     234       (1,646 )     (8,016 )     (9,662 )     (1,302 )     (10,964 )
INCOME TAX PROVISION                               (8 )     (8 )           (8 )
SEGMENT (LOSS) PROFIT/NET LOSS $ (2,944 )   $ (814 )   $ 1,878   $ 234     $ (1,646 )   $ (8,024 )   $ (9,670 )   $ (1,302 )   $ (10,972 )
(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.
  Six Months Ended June 30, 2022
  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 $ 571     $     $ 592     $     $ 1,163     $     $ 1,163     $ (592 )   $ 571  
Land sales—related party   1,712             3,233             4,945             4,945       (3,233 )     1,712  
Home sales               40,475             40,475             40,475       (40,475 )      
Management services—related party [(2)]               6,046       204       6,250             6,250             6,250  
Operating properties   1,444       302             4,059       5,805             5,805       (4,059 )     1,746  
Total revenues   3,727       302       50,346       4,263       58,638             58,638       (48,359 )     10,279  
COSTS AND EXPENSES:                                  
Land sales               13             13             13       (13 )      
Home sales               30,784             30,784             30,784       (30,784 )      
Management services [(2)]               4,884             4,884             4,884             4,884  
Operating properties   4,217                   1,069       5,286             5,286       (1,069 )     4,217  
Selling, general, and administrative   8,026       1,785       11,986       2,125       23,922       19,631       43,553       (14,111 )     29,442  
Restructuring                                 19,437       19,437             19,437  
Management fees—related party               3,351             3,351             3,351       (3,351 )      
Total costs and expenses   12,243       1,785       51,018       3,194       68,240       39,068       107,308       (49,328 )     57,980  
OTHER INCOME (EXPENSE):                                  
Interest income               244             244       138       382       (244 )     138  
Interest expense                     (620 )     (620 )           (620 )     620        
Miscellaneous   224                         224             224             224  
Total other income (expense)   224             244       (620 )     (152 )     138       (14 )     376       362  
EQUITY IN EARNINGS (LOSS) FROM UNCONSOLIDATED ENTITIES   521             235             756             756       (1,145 )     (389 )
SEGMENT (LOSS) PROFIT/LOSS BEFORE INCOME TAX PROVISION   (7,771 )     (1,483 )     (193 )     449       (8,998 )     (38,930 )     (47,928 )     200       (47,728 )
INCOME TAX PROVISION                                 (13 )     (13 )           (13 )
SEGMENT (LOSS) PROFIT/NET LOSS $ (7,771 )   $ (1,483 )   $ (193 )   $ 449     $ (8,998 )   $ (38,943 )   $ (47,941 )   $ 200     $ (47,741 )
(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 investments 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 (loss) from our investment in the Great Park Venture that is reflected in the condensed consolidated statement of operations for the three and six months ended June 30, 2022 (in thousands):

  Three Months Ended June 30, 2022   Six Months Ended June 30, 2022
Segment profit (loss) from operations $ 1,878     $ (193 )
Less net income of management company attributed to the Great Park segment   402       1,162  
Net income (loss) of the Great Park Venture   1,476       (1,355 )
The Company’s share of net income (loss) of the Great Park Venture   554       (508 )
Basis difference amortization   (347 )     (586 )
Equity in earnings (loss) from the Great Park Venture $ 207     $ (1,094 )

The table below reconciles the Commercial segment results to the equity in earnings from our investment in the Gateway Commercial Venture that is reflected in the condensed consolidated statement of operations for the three and six months ended June 30, 2022 (in thousands):

  Three Months Ended June 30, 2022   Six Months Ended June 30, 2022
Segment profit from operations $ 234   $ 449
Less net income of management company attributed to the Commercial segment   101     204
Net income of the Gateway Commercial Venture   133     245
Equity in earnings from the Gateway Commercial Venture $ 100   $ 184

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220802005969/en/

SOURCE: Five Point Holdings, LLC

Investor Relations:
Leo Kij, 949-349-1029
Leo.Kij@fivepoint.com

or

Media:
Eric Morgan, 949-349-1088
Eric.Morgan@fivepoint.com

COMTEX_411443381/2456/2022-08-02T16:10:15

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/zigman2/quotes/208628463/composite
US : U.S.: NYSE
$ 2.16
-0.11 -4.85%
Volume: 1.05M
Nov. 30, 2022 4:00p
P/E Ratio
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Dividend Yield
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Market Cap
$336.70 million
Rev. per Employee
$1.30M
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