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Financial report summary
?Competition
Landsea Homes Corporation - Ordinary SharesRisks
- Our long-term growth depends upon our ability to identify and successfully acquire desirable land parcels at reasonable prices.
- Our quarterly results of operations may fluctuate because of the seasonal nature of our business and other factors.
- Our business is cyclical and subject to risks associated with the real estate industry, and adverse changes in general economic or business conditions could reduce the demand for homes and related financial services and materially and adversely affect us.
- Because most of our homebuyers finance the purchase of their homes, the terms and availability of mortgage financing can affect the demand for and the ability to complete the purchase of a home, which could materially and adversely affect us.
- Interest rate increases or changes in federal lending programs or other regulations could lower demand for our homes, which could materially and adversely affect us.
- Raw material shortages and price fluctuations could cause delays and increase our costs.
- Tax law changes that increase the after-tax costs of owning a home could prevent potential customers from buying our homes and adversely affect our Financial Performance.
- We face numerous risks associated with controlling, purchasing, holding and developing land.
- Adverse weather and natural disasters may increase costs, cause project delays and reduce consumer demand for housing.
- The unavailability of water in California, Arizona, and other areas in which we operate, including due to drought conditions, may negatively impact the economy, increase the risk of wildfires, cause us to incur additional costs, and delay or prevent new home deliveries.
- We may be unable to find and retain suitable contractors and subcontractors at reasonable rates.
- The supply of skilled labor may be adversely affected by changes in immigration laws and policies.
- We could be responsible for employment-related liabilities with respect to our contractors’ employees.
- We may incur costs, liabilities and reputational damage if our subcontractors engage in improper construction practices or install defective materials.
- Utility shortages or price increases could have an adverse impact on operations.
- Some of our markets have been and in the future may be adversely affected by declining oil prices.
- Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses or limit our building or other activities.
- Laws and regulations governing the residential mortgage, title insurance, and property and casualty insurance industries could materially and adversely affect our Financial Performance.
- We may be unable to obtain suitable bonding for the development of our housing projects.
- We are subject to environmental laws and regulations that may impose significant costs, delays, restrictions or liabilities.
- Changes in global or regional climate conditions and governmental response to such changes may limit, prevent or increase the costs of our planned or future growth activities.
- We may be unable to develop our communities successfully or within expected timeframes.
- Negative publicity or poor relations with our homebuyers could negatively impact our sales and reputation.
- The homebuilding industry is highly competitive, and if our competitors are more successful or offer better value to potential homebuyers, our business could decline.
- Increases in our cancellation rate could have a negative impact on our home sales revenue and homebuilding margins.
- Homebuilding is subject to products liability, home warranty and construction defect claims and other litigation in the ordinary course of business that can be significant and may not be covered by insurance.
- Our ability to promptly sell one or more properties for reasonable prices in response to changing economic, financial and investment conditions may be limited and we may be forced to hold non-income producing properties for extended periods of time.
- Fluctuations in real estate values may require us to write-down the book value of our real estate assets.
- The geographic concentration of our operations in certain regions subjects us to an increased risk of loss of revenue or decreases in the market value of our land and homes in those regions from factors which may affect any of those regions.
- Inflation could materially and adversely affect us by increasing the costs of land, raw materials and labor, negatively impacting housing demand, raising our costs of capital, and decreasing our purchasing power.
- Acts of war, terrorism, civil unrest or public health emergencies, including outbreaks of contagious disease, may seriously harm our business.
- We are subject to litigation and claims that could materially and adversely affect us.
- Information technology failures and data security breaches could harm our business.
- Tri Pointe Connect depends materially on vendors that we do not control.
- A major health and safety incident relating to our business could be costly in terms of potential liabilities and reputational damage.
- Increases in tariffs and retaliatory responses may cause increases in the prices of some of the construction materials that we use and may negatively affect the national and local economies.
- Increases in taxes or government fees could increase our costs, which could materially and adversely affect us.
- Our use of leverage in executing our business strategy exposes us to significant risks.
- We may require significant additional capital in the future and may not be able to secure adequate funds on acceptable terms.
- Our access to capital and our ability to obtain additional financing could be affected by any downgrade of our credit ratings.
- Higher interest rates on our debt may materially and adversely affect our Financial Performance.
- Failure to hedge effectively against interest rate changes may materially and adversely affect our Financial Performance.
- We are and will continue to be dependent on key personnel and certain members of our management team.
- Termination of the employment agreements with the members of our management team could be costly and prevent a change in control of our company.
- Certain anti-takeover defenses and applicable law may limit the ability of a third-party to acquire control of us.
- Selected provisions of Delaware law.
- We may change our operational policies, investment guidelines and our business and growth strategies without stockholder consent, which may subject us to different and more significant risks in the future.
- If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our stockholders could lose confidence in our financial results, which could materially and adversely affect us and the market price of our common stock.
- Changes in accounting rules, assumptions and/or judgments could delay the dissemination of our financial statements and cause us to restate prior period financial statements.
- Our joint venture investments could be materially and adversely affected by lack of sole decision making authority, reliance on co-venturers’ financial condition and disputes between us and our co-venturers.
- We do not intend to pay dividends on our common stock for the foreseeable future.
- Future sales of our common stock or other securities convertible into our common stock could cause the market value of our common stock to decline and could result in dilution of stockholders’ shares.
- Future offerings of debt securities, which would rank senior to our common stock in the event of our bankruptcy or liquidation, and future offerings of equity securities that may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our common stock.
- Non-U.S. holders may be subject to United States federal income tax on gain realized on the sale or disposition of shares of our common stock.
- There is no assurance that the existence of a stock repurchase program will result in repurchases of our common stock or enhance long term stockholder value, and repurchases, if any, could affect our stock price and increase its volatility and will diminish our cash reserves.
Management Discussion
- Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- In the fourth quarter of 2023, there was a significant shift in mortgage interest rates, initially peaking at cycle-high levels in October and subsequently declining as discussions on projected Federal Reserve policy, inflation, and interest rate expectations evolved. As mortgage rates began descending in November, we observed positive changes in consumer sentiment, with December exhibiting the strongest demand of the quarter. We remain optimistic about many aspects of our business fundamentals, including positive household formations, strong demand from Millennials and Gen-Z buyers, a more stabilized supply chain, and reduced cycle times. While each of these factors contributes to the long-term health of our industry, we are particularly optimistic about the ongoing favorable supply and demand dynamics that structurally support new home demand trends. Moreover, the resale market is constrained as numerous homeowners hold mortgages significantly below prevailing market rates, fostering ongoing strength in the homebuilding sector. The essential nature of housing, coupled with the current shortage in resale competition, reinforces our positive outlook for the future of our industry and Company.
- In line with our outlook, we believe that Tri Pointe is strategically positioning itself to capitalize on the anticipated heightened demand resulting from the scarcity of resale supply. We are taking proactive measures to increase our spec inventory, ensuring we are well-prepared to meet the anticipated elevated demand for new homes. Concurrently, our focus extends beyond immediate gains, with a commitment to sustainable growth and enhanced operational efficiency. We are dedicated to expanding our existing market scale, tapping into favorable new market opportunities, and leveraging our strong balance sheet to optimally return capital to stockholders through share repurchases.