UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): May 10, 2022

Dream Finders Homes, Inc.
(Exact name of registrant as specified in its charter)
 

(Exact name of registrant as specified in its charter)

Delaware
 
001-39916
 
85-2983036
(State or other jurisdiction of incorporation)
 
(Commission
 File Number)
 
(I.R.S. Employer
 Identification No.)

14701 Philips Highway, Suite 300
Jacksonville, Florida
 
 
32256
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: (904) 644-7670
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock
DFH
Nasdaq Global Select Market





Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02.
Results of Operations and Financial Condition.
 
On May 10, 2022, Dream Finders Homes, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference into this Item 2.02.
 
The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
 
Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.
 
Number
 
Description
 
Earnings Press Release dated May 10, 2022
104
 
Cover Page Interactive Data File (embedded within the inline XBRL document)
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
DREAM FINDERS HOMES, INC.
     
 
By:
/s/ Robert E. Riva
     
   
Robert E. Riva
   
Vice President, General Counsel and Corporate Secretary
     
Date: May 10, 2022
   

 

 

Exhibit 99.1


Dream Finders Announces First Quarter 2022 Results

Homebuilding Revenues up 94%, Gross Margin Improvement of 380 Basis Points to 18.7%,
Backlog of Sold Homes Increases to 7,413 Homes, Valued at $3.4 Billion

Jacksonville, Fla. – May 10, 2022 — Dream Finders Homes, Inc. (the “Company”, “Dream Finders” or “DFH”) (NASDAQ: DFH), one of the nation’s fastest-growing companies, announced its financial results for the first quarter ended March 31, 2022.
 
First Quarter 2022 Highlights (As Compared to First Quarter 2021)
 

Backlog of sold homes increased 105.2% to 7,413 homes valued at $3.4 billion, both Company records, compared to 3,612 homes valued at $1.4 billion
 

Homebuilding revenues increased 93.6% to $662.5 million from $342.2 million
 

Gross margin as a percentage of homebuilding revenues increased 380 basis points to 18.7% from 14.9%
 

Pre-tax income increased 182.1% to $63.2 million, compared to $22.4 million
 

Net income attributable to DFH was $43.7 million, or $0.42 per diluted share, compared to $16.1 million, or $0.18 per diluted share
 

Average sales price of homes closed increased 40.0% to $470,218 from $335,986
 

Home closings increased 36.8% to 1,371 from 1,002 homes
 

Net new orders increased 19.5% to 2,402 from 2,010
 

Active community count increased 71.7% to 206 from 120
 

Return on participating equity was 40.9% for the trailing twelve months ended March 31, 2022, compared to 37.4% for the trailing twelve months ended March 31, 2021
 

Controlled lot pipeline increased 74.7% to 39,474 as of March 31, 2022, compared to 22,591 as of March 31, 2021
 
Management Commentary
 
Patrick Zalupski, Dream Finders Homes Chairman and CEO, said, “Our team has worked extremely hard to manage through supply chain challenges, identify efficiencies and deliver great results to shareholders. I am most proud of the improved margins and EPS growth. Margins improved year over year to 18.7%, a record for the Company, however, there is still a long way to go to meet our expectations. EPS grew 133% versus the year-ago quarter with a record first quarter net earnings of $43.7 million, or $0.42 per diluted share. We delivered homebuilding revenue growth of 94% compared to the prior year-ago quarter. Despite the increasing rate environment, we continue to experience strong demand for our product and have built this Company on a strategy that allows us to be nimble and adjust quickly to market conditions. We believe we are well-positioned for another strong year of growth at Dream Finders.”
 

First Quarter 2022 Results
 
Homebuilding revenues for the first quarter 2022 increased 93.6% to $662.5 million, compared to $342.2 million in the year-ago quarter. Home closings increased 36.8% to 1,371, compared to 1,002 in the year-ago quarter. Average sales price (“ASP”) of homes closed for the first quarter 2022 was $470,218, compared to $335,986 in the year-ago quarter. The ASP increase was primarily due to the MHI acquisition as well as home price appreciation.
 
Homebuilding gross margin percentage in the first quarter 2022 improved 380 basis points to 18.7%, compared to 14.9% in the year-ago quarter. The gross margin improvement was attributable to our team’s ability to increase prices while managing cost inflation, as well as lower cost of funds.
 
Selling, general and administrative expenses as a percentage of homebuilding revenues was 9.3% in the first quarter 2022, compared to 8.6% in the year-ago quarter; the slight increase is due to increased infrastructure to support the Company’s record backlog that will deliver in 2022 and beyond.
 
Net new orders in the first quarter 2022 increased 19.5% to 2,402, compared to 2,010 in the year-ago quarter, primarily due to increased community count as a result of the MHI acquisition. The cancellation rate remains within the Company’s historical averages at 13.4% for the quarter ended March 31, 2022, compared to 8.1% in the year-ago period. At the end of the first quarter 2022, DFH had the largest backlog in the Company’s history with 7,413 homes, valued at $3.4 billion, which represents record increases of 105.2% and 142.9%, respectively, when compared to the year-ago quarter. As of March 31, 2022, the ASP in backlog was $464,550.
 
Net income attributable to DFH in the first quarter 2022 was $43.7 million, or $0.42 per diluted share, compared to $16.1 million, or $0.18 per diluted share in the first quarter 2021.
 
Full Year 2022 Outlook
 
Dream Finders Homes maintains its guidance of a minimum of 7,000 home closings for the full year 2022. Any further COVID-19 governmental restrictions on land development, home construction or home sales or additional supply chain challenges could negatively impact the Company’s ability to achieve this number of home closings in 2022. As of March 31, 2022, the Company backlog was 7,413 homes, with approximately 20.0% of the homes in backlog expected to be delivered in 2023 and beyond. The Company continues to believe the backlog of homes sold is the best indicator for future growth.

 The following table shows the backlog units and ASP as of March 31, 2022 by segment:

 
As of March 31, 2022
(unaudited)
Backlog:
Units
13
Average Sales Price
Jacksonville
1,826
 
$          372,744
Colorado
149
 
592,211
Orlando
957
 
527,355
DC Metro
64
 
649,231
The Carolinas
1,132
 
331,703
Texas
2,068
 
626,520
Other (1)
1,217
 
375,905
Total
7,413
 
$          464,550
 
(1)
Austin, Savannah, Village Park Homes, Active Adult and Custom Homes. Austin refers to legacy DFH operations, exclusive of MHI.
 
About Dream Finders Homes, Inc.
 
Dream Finders Homes (NASDAQ: DFH) is based in Jacksonville, FL, and is one of the nation’s fastest-growing companies, with industry-leading returns on shareholders’ equity. Dream Finders Homes builds single-family homes in Florida, Texas, North Carolina, South Carolina, Georgia, Colorado, Virginia, Maryland, and the DC Metro area. Through its mortgage and title joint ventures, DFH also provides mortgage financing and title services to its homebuyers. Dream Finders Homes achieves its industry-leading growth and returns by maintaining an asset-light homebuilding model. For more information, please visit www.dreamfindershomes.com.
 
Forward-Looking Statements
 
This press release includes forward-looking statements regarding future events, including projected 2022 home closings and market conditions and possible or assumed future results of operations, including statements regarding the Company’s strategies and expectations as they relate to market opportunities and growth. All forward-looking statements are based on Dream Finders Homes’ beliefs as well as assumptions made by and information currently available to Dream Finders Homes. These statements reflect Dream Finders Homes’ current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in Dream Finders Homes’ Annual Report on Form 10-K for the year ended December 31, 2021, and other filings with the U.S. Securities and Exchange Commission. Dream Finders Homes undertakes no obligation to update or revise any forward-looking statement except as may be required by applicable law.
 

Dream Finders Homes, Inc.
Consolidated Statements of Comprehensive Income and Operating Activity
(In thousands, except per share amounts and Other Financial and Operating Data, unless otherwise noted)

   
For the Three Months Ended
March 31,
(unaudited)
 
   
2022
   
2021
 
Revenues:
           
Homebuilding
 
$
662,473
   
$
342,167
 
Other
   
1,593
     
1,393
 
Total revenues
   
664,066
     
343,560
 
Homebuilding cost of sales
   
538,868
     
291,037
 
Selling, general and administrative expense
   
61,710
     
29,315
 
Income from equity in earnings of unconsolidated entities
   
(2,960
)
   
(1,732
)
Contingent consideration revaluation
   
4,192
     
1,183
 
Other (income) expense, net
   
(969
)
   
703
 
Interest expense
   
13
     
642
 
Income before taxes
   
63,212
     
22,412
 
Income tax expense
   
(16,878
)
   
(4,816
)
Net and comprehensive income
   
46,334
     
17,596
 
Net and comprehensive income attributable to non-controlling interests
   
(2,618
)
   
(1,475
)
Net and comprehensive income attributable to Dream Finders Homes, Inc.
 
$
43,716
   
$
16,121
 
                 
Earnings per share(1)
               
Basic
 
$
0.43
   
$
0.18
 
Diluted
 
$
0.42
   
$
0.18
 
Weighted-average number of shares
               
Basic
   
92,758,939
     
92,521,482
 
Diluted
   
102,496,876
     
92,596,960
 
Other Financial and Operating Data
               
Active communities at end of period(2)
   
206
     
120
 
Home closings
   
1,371
     
1,002
 
Average sales price of homes closed(3)
 
$
470,218
   
$
335,986
 
Net new orders
   
2,402
     
2,010
 
Cancellation rate
   
13.4
%
   
8.1
%
Backlog (at period end) - homes
   
7,413
     
3,612
 
Backlog (at period end, in thousands) - value
 
$
3,443,709
   
$
1,356,436
 
Gross margin (in thousands)(4)
 
$
123,605
   
$
51,130
 
Gross margin %(5)
   
18.7
%
   
14.9
%
Net profit margin %
   
6.6
%
   
4.7
%

(1)
The Company calculated earnings per share (“EPS”) based on net income attributable to common stockholders for the period January 21, 2021 through March 31, 2021 over the weighted average diluted shares outstanding for the same period. EPS was calculated prospectively for the period subsequent to the Company’s initial public offering and corporate reorganization as described in Note 1. Nature of Business and Significant Accounting Policies, resulting in 92,521,482 shares of common stock outstanding as of the closing of the initial public offering. The total outstanding shares of common stock are made up of Class A common stock and Class B common stock, which participate equally in their ratable ownership share of the Company. Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the convertible preferred stock and the associated preferred dividends.
(2)
A community becomes active once the model is completed or the community has its fifth sale. A community becomes inactive when it has fewer than five units remaining to sell.
(3)
Average sales price of homes closed is calculated based on homebuilding revenues, excluding the impact of deposit forfeitures, percentage of completion revenues and land sales, over homes closed.
(4)
Gross margin is homebuilding revenues less homebuilding cost of sales.
(5)
Calculated as a percentage of homebuilding revenues.


 
 
Three Months Ended
March 31,
 
2022
(unaudited)
 
2021
(unaudited)
 
Units
Column2
Average Sales Price
Column1
Units 2
Units 3
Average Sales Price2
Home Closings:
             
Jacksonville
269
 
$         453,134
 
295
 
$         326,023
Colorado
70
 
557,092
 
34
 
445,239
Orlando
106
 
436,542
 
161
 
400,050
DC Metro
15
 
791,901
 
24
 
579,653
The Carolinas
252
 
331,425
 
343
 
287,172
Texas (1)
483
 
570,236
 
-
 
-
Other (2)
176
 
378,889
 
145
 
334,646
Total
1,371
 
$         470,218
 
1,002
 
$         335,986

(1)
Texas consists of the operations of MHI, which was acquired on October 1, 2021.
(2)
Austin, Savannah, Village Park Homes, Active Adult and Custom Homes. Austin refers to legacy DFH operations, exclusive of MHI.


Dream Finders Homes, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)

   
March 31,
   
December 31,
 
   
2022
   
2021
 
             
Assets
           
Cash and cash equivalents
 
$
100,140
   
$
227,227
 
Restricted cash (VIE amounts of $3,759 and $4,275)
   
60,875
     
54,095
 
Accounts receivable (VIE amounts of $3,621 and $2,684)
   
33,534
     
33,482
 
Inventories:
               
Construction in process and finished homes
   
1,112,085
     
961,779
 
Company owned land and lots
   
104,407
     
83,197
 
 VIE owned land and lots
   
15,564
     
21,686
 
Total inventories
   
1,232,056
     
1,066,662
 
Lot deposits
   
275,354
     
241,406
 
Other assets (VIE amounts of $1,965 and $2,185)
   
57,401
     
43,962
 
Equity method investments
   
14,480
     
15,967
 
Property and equipment, net
   
6,620
     
6,789
 
Operating lease right-of-use assets
   
26,581
     
19,359
 
Deferred tax asset
   
5,386
     
4,232
 
Intangible assets, net of amortization
   
8,112
     
9,140
 
Goodwill
   
171,927
     
171,927
 
Total assets
 
$
1,992,466
   
$
1,894,248
 
Liabilities
               
Accounts payable (VIE amounts of $1,429 and $1,309)
 
$
136,665
   
$
113,498
 
Accrued expenses (VIE amounts of $6,062 and $6,915)
   
126,906
     
139,508
 
Customer deposits
   
206,065
     
177,685
 
Construction lines of credit
   
770,000
     
760,000
 
Notes payable (VIE amounts of $125 and $1,979)
   
1,725
     
3,292
 
Operating lease liabilities
   
27,065
     
19,826
 
Contingent consideration
   
128,248
     
124,056
 
Total liabilities
 
$
1,396,674
   
$
1,337,865
 
Commitments and contingencies
               
Mezzanine Equity
               
Preferred mezzanine equity
   
155,417
     
155,220
 
                 
Stockholders' Equity
               
Class A common stock, $0.01 per share, 289,000,000
authorized, 32,295,329 outstanding
   
323
     
323
 
Class B common stock, $0.01 per share, 61,000,000
authorized, 60,226,153 outstanding
   
602
      602  

Additional paid-in capital
   
259,328
     
257,963
 
Retained earnings
   
158,611
     
118,194
 
Non-controlling interests
   
21,511
     
24,081
 
Total mezzanine and stockholders' equity
   
595,792
     
556,383
 
Total liabilities, mezzanine equity, and stockholders' equity
 
$
1,992,466
   
$
1,894,248
 

SOURCE: Dream Finders Homes, Inc.

Investor Contact: investors@dreamfindershomes.com 
Media Contact: mediainquiries@dreamfindershomes.com

Anabel Fernandez – Chief Financial Officer
Robert Riva – General Counsel