☒ |
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐ |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
85-2983036
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
14701 Philips Highway, Suite 300, Jacksonville, FL
|
32256
|
|
(Address of principal executive offices)
|
(Zip code)
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
Class A Common Stock, par value $0.01 per share
|
DFH
|
NASDAQ Global Select Market
|
Large accelerated filer
|
☐ |
Accelerated filer
|
☐
|
Non-accelerated filer
|
☒ |
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
3 |
||
3 |
||
3 |
||
4 |
||
5 |
||
6 |
||
7 |
||
24
|
||
41 | ||
43
|
||
44 | ||
44
|
||
44
|
||
44
|
||
44
|
||
46
|
ITEM 1. |
March 31,
2021
|
December 31,
2020
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
42,303,231
|
$
|
35,495,595
|
||||
Restricted cash (VIE amounts of $7,798,669 and $8,793,201)
|
49,432,884
|
49,715,553
|
||||||
Inventories:
|
||||||||
Construction in process and finished homes
|
477,052,901
|
396,630,945
|
||||||
Joint venture owned land and lots (VIE amounts of $19,781,033 and $40,900,552)
|
19,781,033
|
40,900,552
|
||||||
Company owned land and lots
|
53,541,065
|
46,839,616
|
||||||
Lot deposits
|
91,690,711
|
66,272,347
|
||||||
Equity method investments
|
6,197,047
|
4,545,349
|
||||||
Property and equipment, net
|
4,662,184
|
4,309,071
|
||||||
Operating lease right-of-use assets
|
13,459,344
|
14,219,248
|
||||||
Finance lease right-of-use assets
|
304,099
|
335,791
|
||||||
Intangible assets, net of amortization
|
2,327,500
|
2,660,003
|
||||||
Goodwill
|
30,360,997
|
28,566,232
|
||||||
Deferred tax asset
|
571,277
|
-
|
||||||
Other assets (VIE amounts of $708,946 and $1,288,359)
|
75,038,216
|
43,189,939
|
||||||
Total assets
|
$
|
866,722,489
|
$
|
733,680,241
|
||||
Liabilities
|
||||||||
Accounts payable (VIE amounts of $61,619 and $1,315,582)
|
$
|
53,383,908
|
$
|
37,418,693
|
||||
Accrued expenses (VIE amounts of $8,519,606 and $9,977,268)
|
73,525,827
|
67,401,055
|
||||||
Customer deposits
|
77,405,314
|
59,392,135
|
||||||
Construction lines of credit
|
319,999,950
|
289,878,716
|
||||||
Notes payable (VIE amounts of $2,888,350 and $8,821,282)
|
3,880,350
|
29,653,282
|
||||||
Operating lease liabilities
|
13,680,884
|
14,410,560
|
||||||
Finance lease liabilities
|
305,987
|
345,062
|
||||||
Contingent consideration
|
24,340,269
|
23,157,524
|
||||||
Total liabilities
|
$
|
566,522,489
|
$
|
521,657,027
|
||||
Commitments and contingencies (Note 6)
|
||||||||
Mezzanine Equity
|
||||||||
Preferred mezzanine equity
|
6,515,415
|
55,638,450
|
||||||
Common mezzanine equity
|
-
|
20,593,001
|
||||||
Total mezzanine equity
|
$
|
6,515,415
|
$
|
76,231,451
|
||||
Members' Equity
|
||||||||
Common members' equity
|
-
|
103,852,646
|
||||||
Total members' equity
|
$
|
-
|
$
|
103,852,646
|
||||
Stockholders' Equity - Dream Finders Homes, Inc.
|
||||||||
Class A common stock, $0.01 per share, 289,000,000 authorized, 32,295,329 outstanding
|
322,953
|
-
|
||||||
Class B common stock, $0.01 per share, 61,000,000 authorized, 60,226,153 outstanding
|
602,262
|
-
|
||||||
Additional paid-in capital
|
253,837,980
|
-
|
||||||
Retained earnings
|
17,224,903
|
-
|
||||||
Non-controlling interests
|
21,696,487
|
31,939,117
|
||||||
Total stockholders' and members' equity
|
300,200,000
|
212,023,214
|
||||||
Total liabilities, mezzanine equity, members' equity and stockholders' equity
|
$
|
866,722,489
|
$
|
733,680,241
|
Three Months Ended March 31,
|
||||||||
2021
|
2020
|
|||||||
Revenues
|
$
|
343,560,365
|
$
|
188,738,433
|
||||
Cost of sales
|
291,036,761
|
163,745,683
|
||||||
Selling, general and administrative expense
|
28,148,956
|
17,518,785
|
||||||
Income from equity in earnings of unconsolidated entities
|
(1,732,393
|
)
|
(1,359,388
|
)
|
||||
Gain on sale of assets
|
(65,517
|
)
|
(34,095
|
)
|
||||
Loss on extinguishment of debt
|
697,423
|
-
|
||||||
Other income
|
(482,219
|
)
|
(134,061
|
)
|
||||
Other expense
|
2,903,048
|
1,195,311
|
||||||
Interest expense
|
641,861
|
35,705
|
||||||
Income before taxes
|
22,412,445
|
7,770,493
|
||||||
Income tax benefit (expense)
|
(4,816,482
|
)
|
-
|
|||||
Net and comprehensive income
|
$
|
17,595,963
|
$
|
7,770,493
|
||||
Net and comprehensive income attributable to non-controlling interests
|
(1,475,318
|
)
|
(1,190,459
|
)
|
||||
Net and comprehensive income attributable to Dream Finders Homes, Inc.
|
$
|
16,120,645
|
$
|
6,580,034
|
||||
Earnings per share(1)
|
||||||||
Basic
|
$
|
0.18
|
$
|
-
|
||||
Diluted
|
$
|
0.18
|
$
|
-
|
||||
Weighted-average number of share
|
||||||||
Basic
|
92,521,482
|
-
|
||||||
Diluted
|
92,596,960
|
-
|
Redeemable Preferred
Units
Mezzanine
|
Redeemable Common
Units
Mezzanine
|
Common Units
Members'
|
Total
Non-Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
Units
|
Amount
|
|||||||||||||||||||||||||||
Balance at December 31, 2019
|
49,555
|
58,269,166
|
5,774
|
16,248,246
|
76,655
|
56,502,464
|
30,471,371
|
161,491,247
|
||||||||||||||||||||||||
Unit compensation
|
-
|
-
|
-
|
-
|
-
|
223,750
|
-
|
223,750
|
||||||||||||||||||||||||
Contributions
|
-
|
-
|
1,236
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Contributions from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
1,768,846
|
1,768,846
|
||||||||||||||||||||||||
Conversion of units
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Redemptions
|
(6
|
)
|
(6,000,000
|
)
|
-
|
-
|
-
|
-
|
-
|
(6,000,000
|
)
|
|||||||||||||||||||||
Distributions
|
-
|
-
|
-
|
-
|
-
|
(209,737
|
)
|
(3,339,472
|
)
|
(3,549,209
|
)
|
|||||||||||||||||||||
Net income (loss)
|
-
|
1,166,715
|
-
|
453,552
|
-
|
4,959,767
|
1,190,459
|
7,770,493
|
||||||||||||||||||||||||
Balance at March 31, 2020
|
49,549
|
$
|
53,435,881
|
7,010
|
$
|
16,701,798
|
76,655
|
$
|
61,476,244
|
$
|
30,091,204
|
$
|
161,705,127
|
Redeemable Preferred
Units
Mezzanine
|
Redeemable Common
Units
Mezzanine
|
Common Units
Members'
|
Common Stock - Class A
|
Common Stock - Class B
|
Additional Paid-in Capital
|
Retained Earnings
|
Total
Non-Controlling
Interests
|
Total Equity
|
||||||||||||||||||||||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
Units
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2020
|
48,543
|
55,638,450
|
7,010
|
20,593,001
|
76,655
|
103,852,646
|
-
|
-
|
-
|
-
|
-
|
-
|
31,939,117
|
212,023,214
|
||||||||||||||||||||||||||||||||||||||||||
Unit compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Contributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Conversion of units
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Redemptions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Distributions
|
-
|
(3,617,390
|
)
|
-
|
(1,274,690
|
)
|
-
|
(18,384,243
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,476,258
|
)
|
(26,752,581
|
)
|
|||||||||||||||||||||||||||||||||||||
Net income (loss)
|
-
|
(157,451
|
)
|
-
|
(91,043
|
)
|
-
|
(995,588
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
210,340
|
(1,033,742
|
)
|
||||||||||||||||||||||||||||||||||||||
Balance at January 20, 2021 - prior to reorganization transactions and IPO
|
48,543
|
$
|
51,863,609
|
7,010
|
$
|
19,227,268
|
76,655
|
$
|
84,472,815
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
28,673,199
|
$
|
184,236,891
|
|||||||||||||||||||||||||||||||||
Reorganization transactions
|
(15,400
|
)
|
(19,957,513
|
)
|
(7,010
|
)
|
(19,227,268
|
)
|
(76,655
|
)
|
(84,472,815
|
)
|
21,255,329
|
212,553
|
60,226,152
|
602,262
|
122,842,781
|
-
|
-
|
|||||||||||||||||||||||||||||||||||||
Issuance of common stock in IPO, net
|
-
|
-
|
-
|
-
|
-
|
-
|
11,040,000
|
110,400
|
-
|
-
|
129,886,962
|
-
|
-
|
129,997,362
|
||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,108,238
|
-
|
-
|
1,108,238
|
||||||||||||||||||||||||||||||||||||||||||
Contributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Conversion of units
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||||||||||
Redemptions
|
(26,000
|
)
|
(25,530,506
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(25,530,506
|
)
|
|||||||||||||||||||||||||||||||||||||||
Distributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(8,241,690
|
)
|
(8,241,690
|
)
|
||||||||||||||||||||||||||||||||||||||||
Net income (loss)
|
-
|
139,825
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
17,224,902
|
1,264,978
|
18,629,705
|
||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021
|
7,143
|
$
|
6,515,415
|
-
|
$
|
-
|
-
|
$
|
-
|
32,295,329
|
$
|
322,953
|
60,226,152
|
$
|
602,262
|
$
|
253,837,981
|
$
|
17,224,902
|
$
|
21,696,487
|
$
|
300,200,000
|
Three Months Ended March 31,
|
||||||||
2021
|
2020
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income (loss)
|
$
|
17,595,963
|
$
|
7,770,493
|
||||
Adjustments to Reconcile Net Income (Loss) to Net Cash Used in Operating Activities
|
||||||||
Depreciation
|
973,006
|
801,441
|
||||||
Gain (Loss) on sale of property and equipment
|
(65,517
|
)
|
(34,095
|
)
|
||||
Amortization of debt issuance costs
|
910,747
|
543,305
|
||||||
Amortization of ROU operating lease
|
759,904
|
447,421
|
||||||
Amortization of ROU financing lease
|
31,691
|
34,291
|
||||||
Stock compensation expense
|
1,108,238
|
223,750
|
||||||
Income tax expense (benefit)
|
4,816,482
|
-
|
||||||
Income from equity method investments, net distributions received
|
(1,732,393
|
)
|
(1,359,388
|
)
|
||||
Remeasurement of contingent consideration
|
1,182,745
|
-
|
||||||
Changes in Operating Assets and Liabilities
|
||||||||
Inventories
|
(36,695,361
|
)
|
(12,932,333
|
)
|
||||
Lot deposits
|
(24,975,040
|
)
|
(1,229,085
|
)
|
||||
Deferred tax asset
|
(571,277
|
)
|
-
|
|||||
Other assets
|
(31,575,067
|
)
|
2,628,678
|
|||||
Accounts payable and accrued expenses
|
8,412,371
|
(21,181,229
|
)
|
|||||
Customer deposits
|
13,071,461
|
3,374,859
|
||||||
Operating lease liabilities
|
(729,676
|
)
|
(393,800
|
)
|
||||
Net cash provided by (used in) operating activities
|
(47,481,723
|
)
|
(21,305,692
|
)
|
||||
Cash Flows from Investing Activities
|
||||||||
Purchase of property and equipment
|
(709,764
|
)
|
(1,074,158
|
)
|
||||
Proceeds from disposal of property and equipment
|
330,216
|
34,295
|
||||||
Investments in equity method investments
|
-
|
(1,464,197
|
)
|
|||||
Return of investments from equity method investments
|
80,696
|
1,380,086
|
||||||
Business combinations, net of cash acquired
|
(22,616,862
|
)
|
-
|
|||||
Net cash provided by (used in) investing activities
|
(22,915,714
|
)
|
(1,123,974
|
)
|
||||
Cash Flows from Financing Activities
|
||||||||
Proceeds from construction lines of credit
|
976,317,315
|
136,511,246
|
||||||
Principal payments on construction lines of credit
|
(946,702,546
|
)
|
(138,856,023
|
)
|
||||
Proceeds from notes payable
|
1,158,642
|
1,140,676
|
||||||
Principal payments on notes payable
|
(23,284,519
|
)
|
(6,033,237
|
)
|
||||
Payment of debt issue costs
|
-
|
(268,570
|
)
|
|||||
Payments of equity issuance costs
|
(12,571,671
|
)
|
||||||
Payments on financing leases
|
(39,075
|
)
|
(32,377
|
)
|
||||
Contributions to non-controlling interests
|
-
|
1,768,846
|
||||||
Distributions to non-controlling interests
|
(11,717,948
|
)
|
(3,339,472
|
)
|
||||
Proceeds from stock issuance
|
142,569,035
|
-
|
||||||
Distributions
|
(23,276,323
|
)
|
(209,738
|
)
|
||||
Redemptions
|
(25,530,506
|
)
|
(6,000,000
|
)
|
||||
Contribution from conversion of converted LLC units
|
123,657,596
|
-
|
||||||
Conversion of LLC units
|
(123,657,596
|
)
|
-
|
|||||
Net cash provided by (used in) financing activities
|
76,922,404
|
(15,318,649
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
6,524,967
|
(37,748,315
|
)
|
|||||
Cash, cash equivalents and restricted cash at beginning of year
|
85,211,148
|
68,728,414
|
||||||
Cash, cash equivalents and restricted cash at end of year
|
91,736,115
|
30,980,099
|
||||||
Non-cash Financing Activities
|
||||||||
Financed land payments to seller |
8,916,211
|
-
|
||||||
Leased assets obtained in exchange for new operating lease liabilities
|
-
|
-
|
||||||
Leased assets obtained in exchange for new financing lease liabilities
|
-
|
-
|
||||||
Preferred issuance
|
-
|
-
|
||||||
Accrued distributions
|
-
|
-
|
||||||
Equity issuance costs incurred
|
905,965 |
- |
||||||
Non-cash Investing Activities
|
||||||||
Investment capital reallocation
|
(3,468,731
|
)
|
-
|
|||||
Total non-cash financing and investing activities
|
6,353,445 |
-
|
||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash
|
||||||||
Cash and cash equivalents
|
42,303,231
|
11,503,283
|
||||||
Restricted cash
|
49,432,884
|
19,476,816
|
||||||
Total cash, cash equivalents and restriced cash shown on the Consolidated Statements of Cash Flows
|
$
|
91,736,115
|
$
|
30,980,099
|
1. |
Nature of Business and Significant Accounting Policies
|
2. |
Business Acquisition
|
For the Three Months Ended
March 31,
|
||||||||
Unaudited Pro Forma
|
2021
|
2020
|
||||||
Total revenue
|
$
|
350,142,959
|
$
|
247,201,240
|
||||
Net and comprehensive income attributable to Dream Finders Homes, Inc.
|
$
|
16,442,614
|
$
|
7,278,689
|
3. |
Construction Lines of Credit
|
As of
March 31,
|
As of
December 31,
|
||||||||||||||||
Renewal Date
|
Payment Terms
|
2021
|
2021
Effective Rate
|
2020
|
2020
Effective Rate
|
||||||||||||
January 25, 2024
|
Interest is payable based on the Applicable Rate per the Credit Agreement
|
320,000,000
|
3.50
|
%
|
-
|
-
|
|||||||||||
November 30, 2019
|
Interest is payable monthly, at the greater of Prime rate or 4.25%
|
-
|
-
|
545,350
|
4.25
|
%
|
|||||||||||
November 30, 2019
|
Interest is payable monthly at the greater of the Prime rate plus 1.00% or 5.50%
|
-
|
-
|
540,565
|
5.50
|
%
|
|||||||||||
February 9, 2021
|
Interest is payable monthly at 3.40% plus 30-day LIBOR
|
-
|
-
|
390,000
|
4.06
|
%
|
|||||||||||
March 31, 2021
|
Interest is payable monthly at 9.50%
|
-
|
-
|
269,030
|
10.33
|
%
|
|||||||||||
April 30, 2021
|
Interest is payable monthly at the greater of the Prime rate plus 0.50% or 3.75%
|
-
|
-
|
11,923,342
|
6.53
|
%
|
|||||||||||
April 30, 2021
|
Interest is payable monthly at the Prime rate plus 0.50%
|
-
|
-
|
3,521,203
|
3.93
|
%
|
|||||||||||
May 10, 2021
|
Interest is payable monthly at the greater of Prime rate plus 0.50% or 4.25%
|
-
|
-
|
7,391,080
|
6.39
|
%
|
|||||||||||
June 12, 2021
|
Interest is payable monthly at 3.00% plus 3-month LIBOR
|
-
|
-
|
14,457,573
|
3.96
|
%
|
|||||||||||
June 30, 2021
|
Interest is payable monthly at the greater of 3.50% plus 30-day LIBOR or 4.50%
|
-
|
-
|
17,290,107
|
4.80
|
%
|
|||||||||||
June 30, 2021
|
Interest is payable monthly at 3.75% + 1-month LIBOR
|
-
|
-
|
13,318,374
|
4.37
|
%
|
|||||||||||
August 25, 2021
|
Interest is payable monthly at the Prime rate plus 0.75%
|
-
|
-
|
1,486,800
|
3.81
|
%
|
|||||||||||
September 30, 2021
|
Interest is payable monthly at 3.00% plus 3-month LIBOR.
|
(50
|
)
|
-
|
62,127,292
|
3.91
|
%
|
||||||||||
October 1, 2021
|
Interest is payable monthly at the greater of 4.50% or 3.90% plus 1-month LIBOR.
|
-
|
-
|
11,863,043
|
6.42
|
%
|
|||||||||||
October 2, 2021
|
Interest is payable monthly at the greater of 4.00% or 3.75% plus 1-month LIBOR
|
-
|
-
|
4,361,201
|
7.75
|
%
|
|||||||||||
October 2, 2021
|
Interest is payable monthly at the greater of the Prime rate plus 1.00% or 5.00%
|
-
|
-
|
14,525,422
|
5.00
|
%
|
|||||||||||
October 5, 2021
|
Interest is payable monthly at 4.50% plus 1-month LIBOR
|
-
|
-
|
11,227,212
|
5.03
|
%
|
|||||||||||
October 25, 2021
|
Interest is payable monthly at the Prime rate plus 0.50%
|
-
|
-
|
861,909
|
4.77
|
%
|
|||||||||||
November 2, 2021
|
Interest is payable monthly at the greater of the Prime rate plus 0.75% or 4.50%
|
-
|
-
|
8,034,458
|
6.01
|
%
|
|||||||||||
December 15, 2021
|
Interest is payable monthly at the greater of the Prime rate plus 0.50% or 5.00%
|
-
|
-
|
2,205,715
|
4.24
|
%
|
|||||||||||
December 18, 2021
|
Interest is payable monthly at 3.00% plus 30-day LIBOR
|
-
|
-
|
8,468,565
|
4.17
|
%
|
|||||||||||
December 18, 2021
|
Interest is payable monthly at 3.95% plus 1-month LIBOR
|
-
|
-
|
9,558,836
|
6.00
|
%
|
|||||||||||
December 31, 2021
|
Interest is payable monthly at 9.00%
|
-
|
-
|
1,821,515
|
10.33
|
%
|
|||||||||||
December 31, 2021
|
Interest is payable monthly at 9.50%
|
-
|
-
|
259,157
|
10.33
|
%
|
|||||||||||
April 1, 2022
|
Interest is payable monthly at 9.50%.
|
-
|
-
|
2,925,686
|
10.33
|
%
|
|||||||||||
April 20, 2022
|
Interest is payable monthly at 9.50%
|
-
|
-
|
639,437
|
10.33
|
%
|
|||||||||||
April 30, 2022
|
Interest is payable monthly at 9.50%.
|
-
|
-
|
1,028,131
|
10.33
|
%
|
|||||||||||
October 5, 2022
|
Interest is payable monthly at the greater of the Prime rate plus 0.50% or 4.00%
|
-
|
-
|
5,828,931
|
4.00
|
%
|
|||||||||||
October 20, 2022
|
Interest is payable monthly at the greater of 4.00% or 2.75% plus 3-month LIBOR
|
-
|
-
|
11,289,202
|
4.51
|
%
|
|||||||||||
October 20, 2022
|
Interest is payable monthly at the greater of 4.50% or 3.90% plus 3-month LIBOR
|
-
|
-
|
13,408,970
|
6.62
|
%
|
|||||||||||
June 19, 2023
|
Interest is payable monthly at the greater of 4.00% or 2.75% plus 3-month LIBOR.
|
-
|
-
|
8,790,640
|
4.15
|
%
|
|||||||||||
June 19, 2023
|
Interest is payable monthly at the greater of 4.00% or the Prime rate plus 0.50%.
|
-
|
-
|
23,737,991
|
4.92
|
%
|
|||||||||||
November 6, 2023
|
Interest is payable monthly at the greater of the Prime rate plus 0.38% or 3.65%
|
-
|
-
|
4,043,089
|
4.64
|
%
|
|||||||||||
December 31, 2023
|
Interest is payable monthly at the greater of the Prime rate plus 0.50% or 4.00%
|
-
|
-
|
894,300
|
4.00
|
%
|
|||||||||||
Various
|
Interest is payable monthly at the greater of the Prime rate or 5.00%.
|
-
|
-
|
11,351,056
|
5.02
|
%
|
|||||||||||
Total lines of credit outstanding
|
$
|
319,999,950
|
$
|
290,385,182
|
|||||||||||||
Less: Debt issuance costs from lines of credit
|
(4,263,768
|
)
|
(506,466
|
)
|
|||||||||||||
Lines of credit, net
|
$
|
315,736,182
|
$
|
289,878,716
|
4. |
Notes Payable
|
As of
March 31,
|
As of
December 31,
|
||||||||||||||||||||
Maturity Date
|
|
Payment Terms
|
2021
|
2021
Effective Rate
|
2020
|
2020
Effective Rate
|
|||||||||||||||
May 1, 2021
|
Interest is payable monthly at 14.00%
|
$
|
-
|
14.00
|
%
|
$
|
20,000,000
|
14.00
|
%
|
||||||||||||
February 28, 2022
|
(1
|
)
|
Non-interest bearing
|
992,000
|
0.00
|
%
|
832,000
|
0.00
|
%
|
||||||||||||
April 1, 2022
|
(1
|
)
|
Interest is payable monthly at 12.50%
|
717,642
|
12.50
|
%
|
1,735,161
|
12.50
|
%
|
||||||||||||
July 31, 2022
|
(1
|
)
|
Interest is payable monthly at 9.25%
|
2,170,708
|
9.25
|
%
|
3,984,174
|
9.25
|
%
|
||||||||||||
March 25, 2023
|
(1
|
)
|
Interest is payable monthly at 5.00%
|
-
|
5.00
|
%
|
3,101,947
|
5.00
|
%
|
||||||||||||
Total notes payable
|
$
|
3,880,350
|
$
|
29,653,282
|
|||||||||||||||||
Less: Debt issuance costs from notes payable
|
-
|
(15,444
|
)
|
||||||||||||||||||
Notes payable, net of discount
|
$
|
3,880,350
|
$
|
29,637,838
|
5. |
Inventories
|
As of
March 31,
|
As of
December 31,
|
|||||||
2021
|
2020
|
|||||||
Construction in process
|
$
|
477,052,901
|
$
|
396,630,945
|
||||
Finished lots and land
|
53,541,065
|
46,839,616
|
||||||
Inventories owned by the Company
|
530,593,966
|
443,470,561
|
||||||
Inventories owned by consolidated joint ventures
|
19,781,033
|
40,900,552
|
||||||
Total inventories
|
$
|
550,374,999
|
$
|
484,371,113
|
||||
Percentage of inventories owned by the Company
|
||||||||
Construction in process
|
90
|
%
|
89
|
%
|
||||
Finished lots and land
|
10
|
%
|
11
|
%
|
For the Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Capitalized interest at the beginning of the period
|
$
|
21,091,297
|
$
|
25,335,924
|
||||
Interest incurred
|
6,667,990
|
7,040,706
|
||||||
Interest expensed
|
(641,861
|
)
|
(35,705
|
)
|
||||
Interest charged to cost of contract revenues earned
|
(8,275,683
|
)
|
(5,992,186
|
)
|
||||
Capitalized interest at the end of the period
|
$
|
18,841,743
|
$
|
26,348,739
|
6. |
Commitments and Contingencies
|
7. |
Members’ Equity, Mezzanine Equity and Shareholders’ Equity
|
8. |
Equity-Based Compensation
|
9. |
Variable Interest Entities and Investments in Other Entities
|
As of
March 31,
|
As of
December 31,
|
|||||||
Consolidated
|
2021
|
2020
|
||||||
Assets
|
$
|
28,288,648
|
$
|
50,982,111
|
||||
Liabilities
|
$
|
11,469,575
|
$
|
20,114,132
|
As of
March 31,
|
As of
December 31,
|
|||||||
Unconsolidated
|
2021
|
2020
|
||||||
Jet Home Loans
|
5,604,482
|
3,872,089
|
||||||
Total investment in unconsolidated VIEs
|
$
|
5,604,482
|
$
|
3,872,089
|
||||
Other equity method investments
|
592,565
|
673,260
|
||||||
Total equity method investments
|
$
|
6,197,047
|
$
|
4,545,349
|
10. |
Income Taxes
|
Three Months Ended
March 31,
|
||||
2021
|
||||
Current:
|
||||
Federal
|
$
|
3,514,733
|
||
State
|
1,347,719
|
|||
Deferred:
|
||||
Federal
|
(14,861
|
)
|
||
State
|
(31,109
|
)
|
||
Income tax expense
|
$
|
4,816,482
|
Three Months Ended
March 31,
|
||||
2021
|
||||
Deferred tax assets:
|
||||
Accrued warranty
|
$
|
980,897
|
||
Property and equipment
|
257,608
|
|||
Total deferred tax assets
|
1,238,505
|
|||
Less: Deferred tax liabilities
|
(667,228
|
)
|
||
Net deferred tax asset
|
$
|
571,277
|
Three Months Ended
March 31,
|
||||||||
2021
|
Effective Rate
|
|||||||
Income taxes computed at the federal statutory rate
|
$
|
4,396,797
|
21
|
%
|
||||
State income taxes, net of federal income tax benefit(1)
|
1,040,122
|
5
|
%
|
|||||
Permanent difference
|
962,723
|
5
|
%
|
|||||
Estimate of federal tax credits(1)
|
(1,583,160
|
)
|
-8
|
%
|
||||
Income tax expense
|
$
|
4,816,482
|
23
|
%
|
11. |
Segment Reporting
|
For the Three Months Ended
March 31,
|
||||||||
Revenues:
|
2021
|
2020
|
||||||
The Carolinas (H&H)
|
98,503,439
|
-
|
||||||
Jacksonville
|
96,581,156
|
78,325,635
|
||||||
Orlando
|
64,435,595
|
7,841,820
|
||||||
Colorado
|
15,210,130
|
21,661,356
|
||||||
DC Metro
|
13,948,185
|
27,520,055
|
||||||
Jet Home Loans
|
7,019,453
|
6,767,000
|
||||||
Other
|
54,881,860
|
53,389,567
|
||||||
Total segment revenues
|
$
|
350,579,818
|
$
|
195,505,433
|
||||
Reconciling items from equity method investments
|
(7,019,453
|
)
|
(6,767,000
|
)
|
||||
Consolidated revenues
|
$
|
343,560,365
|
$
|
188,738,433
|
For the Three Months Ended
March 31,
|
||||||||
Net and comprehensive income:
|
2021
|
2020
|
||||||
The Carolinas (H&H)
|
4,150,391
|
-
|
||||||
Jacksonville
|
8,208,925
|
6,372,571
|
||||||
Orlando
|
5,328,486
|
(626,648
|
)
|
|||||
Colorado
|
454,831
|
1,991,039
|
||||||
DC Metro
|
389,479
|
64,059
|
||||||
Jet Home Loans
|
2,832,285
|
2,774,128
|
||||||
Other
|
(1,965,329
|
)
|
(1,389,916
|
)
|
||||
Total segment net and comprehensive income
|
$
|
19,399,068
|
$
|
9,185,233
|
||||
Reconciling items from equity method investments
|
(3,278,423
|
)
|
(2,605,199
|
)
|
||||
Consolidated net and comprehensive income
|
$
|
16,120,645
|
$
|
6,580,034
|
As of
March 31,
|
As of
December 31,
|
|||||||
Assets:
|
2021
|
2020
|
||||||
The Carolinas (H&H)
|
180,395,236
|
161,242,384
|
||||||
Jacksonville
|
71,189,207
|
162,668,740
|
||||||
Orlando
|
115,056,816
|
77,299,028
|
||||||
Colorado
|
47,026,053
|
51,605,969
|
||||||
DC Metro
|
59,695,352
|
41,327,694
|
||||||
Jet Home Loans
|
180,591,753
|
38,696,793
|
||||||
Other (1)
|
266,775,535
|
235,664,336
|
||||||
Total segment assets
|
$
|
920,729,952
|
$
|
768,504,944
|
||||
Reconciling items from equity method investments
|
(54,007,463
|
)
|
(34,824,703
|
)
|
||||
Consolidated assets
|
$
|
866,722,489
|
$
|
733,680,241
|
(1) |
Other includes the Company’s title operations, homebuilding operations in non-reportable segments, operations of the corporate component, and corporate assets such as cash and cash equivalents, cash held in trust, prepaid insurance,
operating and financing leases, lot deposits, goodwill, as well as property and equipment.
|
12. |
Fair Value Disclosures
|
13. |
Related Party Transactions
|
14. |
Earnings per Share
|
For the Three Months Ended
March 31,
|
||||
2021
|
||||
Net and comprehensive income attributable to Dream Finders Homes, Inc.
|
16,120,645
|
|||
Less: Preferred distributions
|
855,704
|
|||
Add: Loss prior to reorganization attributable to DFH LLC members
|
(1,244,083
|
)
|
||
Net and comprehensive income attributable to common stockholders
|
16,509,024
|
|||
Weighted-average number of shares outstanding used to calculate basic EPS
|
92,521,482
|
|||
Dilutive securities:
|
||||
Restricted stock
|
75,478
|
|||
Weighted-average number of shares and share equivalents outstanding used to calculate diluted EPS
|
92,596,960
|
15. |
Subsequent Events
|
ITEM 2. |
• |
Charlotte, NC, Fayetteville, NC, Raleigh, NC, Greensboro, NC, High Point, NC and Winston-Salem, NC (“The Carolinas” or “H&H Homes”)
|
• |
Jacksonville, FL
|
• |
Orlando, FL
|
• |
Denver, CO
|
• |
Washington D.C. metropolitan area (“DC Metro”)
|
• |
Austin, TX, Savannah, GA and Village Park Homes (“Other”)
|
• |
Revenues increased 82.0% to $343.6 million from $188.7 million.
|
• |
Net new orders increased 137.0% to 2,010 net new orders from 848 net new orders.
|
• |
Homes closed increased 94.6% to 1,002 homes from 515 homes.
|
• |
Backlog of sold homes increased 212.7% to 3,612 homes from 1,155 homes.
|
• |
Average sales price of homes closed decreased 7.3% to $335,986 from $362,591.
|
• |
Gross margin as a percentage of home sales revenues increased to 14.9% from 12.8%.
|
• |
Adjusted gross margin (non-GAAP) as a percentage of home sales revenues increased to 22.2% from 20.8%.
|
• |
Net and comprehensive income increased 126.4% to $17.6 million from $7.8 million.
|
• |
Net and comprehensive income attributable to Dream Finders Homes, Inc. increased 145.0% to $16.1 million from $6.6 million.
|
• |
EBITDA (non-GAAP) as a percentage of home sales revenues increased to 9.4% from 7.5%.
|
• |
Active communities at March 31, 2021 increased to 120 from 83 at March 31, 2020.
|
• |
Total owned and controlled lots increased 18.0% to 26,438 lots at March 31, 2021 from 22,407 lots at December 31, 2020.
|
• |
Return on equity was 37.4% for the trailing twelve months ended March 31, 2021, compared to 36.7% for the same period in the prior year.
|
For the Three Months Ended
March 31,
(unaudited)
|
||||||||||||||||
2021
|
2020
|
Amount Change
|
% Change
|
|||||||||||||
Revenues
|
$
|
343,560,365
|
$
|
188,738,433
|
$
|
154,821,932
|
82.0
|
%
|
||||||||
Cost of sales
|
291,036,761
|
163,745,683
|
127,291,078
|
77.7
|
%
|
|||||||||||
Selling, general and administrative expense
|
28,148,956
|
17,518,785
|
10,630,171
|
60.7
|
%
|
|||||||||||
Income from equity in earnings of unconsolidated entities
|
(1,732,393
|
)
|
(1,359,388
|
)
|
(373,005
|
)
|
27.4
|
%
|
||||||||
Gain on sale of assets
|
(65,517
|
)
|
(34,095
|
)
|
(31,422
|
)
|
92.2
|
%
|
||||||||
Loss on extinguishment of debt
|
697,423
|
-
|
697,423
|
100.0
|
%
|
|||||||||||
Other Income
|
(482,219
|
)
|
(134,061
|
)
|
(348,159
|
)
|
259.7
|
%
|
||||||||
Other expense
|
2,903,048
|
1,195,311
|
1,707,738
|
142.9
|
%
|
|||||||||||
Interest expense
|
641,861
|
35,705
|
606,156
|
1697.7
|
%
|
|||||||||||
Income before taxes
|
$
|
22,412,445
|
$
|
7,770,493
|
$
|
14,641,952
|
188.4
|
%
|
||||||||
Income tax expense
|
4,816,482
|
-
|
4,816,482
|
100.0
|
%
|
|||||||||||
Net and comprehensive income
|
$
|
17,595,963
|
$
|
7,770,493
|
$
|
9,825,470
|
126.4
|
%
|
||||||||
|
||||||||||||||||
Net and comprehensive income attributable to non-controlling interests
|
(1,475,318
|
)
|
(1,190,459
|
)
|
(284,859
|
)
|
23.9
|
%
|
||||||||
Net and comprehensive income attributable to Dream Finders Homes, Inc.
|
16,120,645
|
6,580,034
|
9,540,611
|
145.0
|
%
|
|||||||||||
Earnings per share(6)
|
||||||||||||||||
Basic
|
$
|
0.18
|
$
|
-
|
$
|
0.18
|
100.0
|
%
|
||||||||
Diluted
|
$
|
0.18
|
$
|
-
|
$
|
0.18
|
100.0
|
%
|
||||||||
Weighted-average number of shares
|
||||||||||||||||
Basic
|
92,521,482
|
-
|
92,521,482
|
100.0
|
%
|
|||||||||||
Diluted
|
92,596,960
|
-
|
92,596,960
|
100.0
|
%
|
|||||||||||
Consolidated Balance Sheets Data (at period end):
|
||||||||||||||||
Cash and cash equivalents
|
$
|
42,303,231
|
$
|
11,503,283
|
$
|
30,799,948
|
267.7
|
%
|
||||||||
Total assets
|
$
|
866,722,489
|
$
|
489,938,177
|
$
|
376,784,312
|
76.9
|
%
|
||||||||
Long-term debt
|
$
|
323,880,300
|
$
|
225,050,866
|
$
|
94,565,666
|
42.0
|
%
|
||||||||
Finance lease liabilities
|
$
|
305,987
|
$
|
466,312
|
$
|
(160,325
|
)
|
-34.4
|
%
|
|||||||
Preferred mezzanine equity
|
$
|
6,515,415
|
$
|
53,435,881
|
$
|
(46,920,466
|
)
|
-87.8
|
%
|
|||||||
Common mezzanine equity
|
$
|
-
|
$
|
16,701,797
|
$
|
(16,701,797
|
)
|
-100.0
|
%
|
|||||||
Common members' equity
|
$
|
-
|
$
|
61,476,244
|
$
|
(61,476,244
|
)
|
-100.0
|
%
|
|||||||
Common stock - Class A
|
$
|
322,953
|
$
|
-
|
$
|
322,953
|
100.0
|
%
|
||||||||
Common stock - Class B
|
$
|
602,262
|
$
|
-
|
$
|
602,262
|
100.0
|
%
|
||||||||
Additional paid-in capital
|
$
|
253,837,981
|
$
|
-
|
$
|
253,837,981
|
100.0
|
%
|
||||||||
Retained earnings
|
$
|
17,224,902
|
$
|
-
|
$
|
17,224,902
|
100.0
|
%
|
||||||||
Non-controlling interests
|
$
|
21,696,487
|
$
|
30,091,204
|
$
|
(8,394,717
|
)
|
-27.9
|
%
|
|||||||
Other Financial and Operating Data
|
||||||||||||||||
Active communities at end of period(1)
|
120
|
83
|
37
|
44.6
|
%
|
|||||||||||
Home closings
|
1,002
|
515
|
487
|
94.6
|
%
|
|||||||||||
Average sales price of homes closed(7)
|
$
|
335,986
|
$
|
362,591
|
$
|
(26,604
|
)
|
-7.3
|
%
|
|||||||
Net new orders
|
2,010
|
848
|
1,162
|
137.0
|
%
|
|||||||||||
Cancellation rate
|
8.1
|
%
|
11.8
|
%
|
-3.7
|
%
|
-31.4
|
%
|
||||||||
Backlog (at period end) - homes
|
3,612
|
1,155
|
2,457
|
212.7
|
%
|
|||||||||||
Backlog (at period end, in thousands) - value
|
$
|
1,356,436
|
$
|
441,903
|
$
|
914,533
|
207.0
|
%
|
||||||||
Gross margin(2)
|
$
|
51,130,202
|
$
|
24,028,118
|
$
|
27,102,084
|
112.8
|
%
|
||||||||
Gross margin %(3)
|
14.9
|
%
|
12.8
|
%
|
2.1
|
%
|
16.6
|
%
|
||||||||
Net profit margin
|
4.7
|
%
|
3.5
|
%
|
1.2
|
%
|
34.6
|
%
|
||||||||
Adjusted gross margin(2)
|
$
|
75,854,588
|
$
|
39,005,221
|
$
|
36,849,367
|
94.5
|
%
|
||||||||