EXHIBIT 99.1
[TOUSA LOGO] PRESS RELEASE
COMPANY CONTACT
TOMMY MCADEN
TELEPHONE: 800-542-4008
EMAIL: INVESTOR@TOUSA.COM
TECHNICAL OLYMPIC USA REPORTS INCOME FROM CONTINUING OPERATIONS OF
$17.7 MILLION FOR FIRST QUARTER ENDED MARCH 31, 2003
For Immediate Release: Wednesday, May 21, 2003
HOLLYWOOD, Fla., May 21, 2003 PRNewswire-FirstCall/ -- Technical Olympic USA,
Inc. (Nasdaq: TOUS - News), as previously announced, is releasing a more
detailed discussion of its results for the first quarter ended March 31, 2003.
Income from continuing operations increased to $17.7 million (or $0.63
per share) during the three months ended March 31, 2003 from $8.9 million (or
$0.32 per share) during the three months ended March 31, 2002; the results for
the prior year include severance expenses of $13.8 million. The increase in
income from continuing operations is attributable to an increase in
Homebuilding pretax income to $23.3 million during the three months ended March
31, 2003 from $9.5 million during the three months ended March 31, 2002.
Additionally, the Company experienced an increase in Financial Services pretax
income to $4.5 million during the three months ended March 31, 2003 from $4.2
million during the three months ended March 31, 2002. "As we previously stated,
this year is a transitional year for us as a result of the merger and balance
sheet restructuring executed during 2002. Our current results have been, and
will continue to be, impacted by the lower number of active communities at the
beginning of the year. At March 31, 2003, our active communities increased to
176 compared to 127 and 159 at June 30 and December 31, 2002, respectively. We
have addressed the community count issue and anticipate the opening of
additional communities throughout the balance of this year," said Antonio B.
Mon, President and Chief Executive Officer of the Company.
HOMEBUILDING
Homebuilding revenues increased to $315.9 million during the three
months ended March 31, 2003 from $302.5 million during the three months ended
March 31, 2002. The increase of 4% was due to an increase in home deliveries to
1,234 during the three months ended March 31, 2003 from 1,146 during the three
months ended March 31, 2002. The 8% increase in home deliveries was partially
offset by a decline in the average selling price on delivered homes to $254,000
from $264,000.
The Company's Florida region realized an increase in revenue from home
sales of $4.0 million to $121.6 million during the three months ended March 31,
2003. This increase of 3% is due to an increase of 32 home deliveries during
the three months ended March 31, 2003 from the three months ended March 31,
2002. The increase in home deliveries was primarily due to the deliveries
generated by the Company's Jacksonville division, which was acquired during the
4th quarter of 2002. This increase in home deliveries was partially offset by a
decline in the average selling price for the Florida region to $233,000 for the
three months ended March 31, 2003 from $240,000 during the three months ended
March 31, 2002. The decrease in average selling price is primarily due to a
change in product mix, including the additional deliveries generated by the
Company's Jacksonville division, which offers homes with a lower average
selling price.
The Company's Mid-Atlantic region realized a decline in revenue from
home sales of $4.7 million to $39.7 million. This decrease of 11% was due to a
reduction in the average selling price to $289,000 during the three
months ended March 31, 2003 from $333,000 during the three months ended March
31, 2002 primarily due to a change in product mix for the region, as the
Company experienced significantly less deliveries in its Virginia division and
an increase in its recently acquired Baltimore division, which has historically
had a lower average selling price. Home deliveries remained relatively flat in
the Company's Mid-Atlantic region, increasing slightly to 137 during the three
months ended March 31, 2003 from 133 during the three months ended March 31,
2002.
The Company's Texas region realized a decline in revenue from home
sales of $3.8 million to $77.9 million during the three months ended March 31,
2003. This decrease of 5% was primarily attributable to a reduction in the
average selling price to $260,000 during the quarter ended March 31, 2003 from
$269,000 during the quarter ended March 31, 2002 due to the Company's focus on
diversifying its product mix. Home deliveries remained relatively flat in the
Texas region, decreasing slightly to 300 during the quarter ended March 31,
2003 from 304 during the quarter ended March 31, 2002.
The Company's West region realized an increase in revenue from home
sales of $16.2 million to $74.7 million for the three months ended March 31,
2003. This increase of 28% was primarily due to an increase of 56 home
deliveries during the three months ended March 31, 2003 from the three months
ended March 31, 2002. The increase in home deliveries was primarily due to the
deliveries generated by the Company's recent acquisitions, Trophy Homes and
James Construction Company, during the three months ended March 31, 2003.
Additionally, the West region experienced a slight increase in its average
selling price to $270,000 during the three months ended March 31, 2003 from
$266,000 during the three months ended March 31, 2002.
Homebuilding gross profit increased to $67.8 million for the three
months ended March 31, 2003 from $62.5 million for the three months ended March
31, 2002. This increase of 8% is primarily due to an increase in revenue from
home sales and an increase in gross margin on homes sales. Gross margin on home
sales increased slightly to 21.5% during the three months ended March 31, 2003
from 20.7% during the three months ended March 31, 2002. This increase is
primarily due to a change in product mix in the Company's existing divisions
and the higher gross margins generated by the Company's recently acquired
divisions, which have all generated gross margins in excess of 21%.
SG&A expenses increased to $43.8 million during the three months ended
March 31, 2003 from $37.7 million during the three months ended March 31, 2002.
As a percentage of Homebuilding revenues, SG&A increased to 13.9% for the three
months ended March 31, 2003 from 12.5% for the three months ended March 31,
2002. Of this $6.1 million increase in SG&A expenses, approximately $4.5
million is attributable to SG&A expenses associated with recently acquired
companies. The remainder of the increase is primarily attributable to increases
in compensation, insurance and professional fees. During the three months ended
March 31, 2003, the Company incurred significant professional and other fees as
a result of the Company modifying its corporate structure to be more efficient
from an organizational, operational, and income tax standpoint. The Company
expects that certain of these expenditures will continue through the 3rd
quarter of 2003. The benefits from these expenditures will be realized through
lower income taxes and other operating costs over time.
FINANCIAL SERVICES
Financial Services revenues increased to $10.6 million during the
three months ended March 31, 2003 from $8.0 million during the three months
ended March 31, 2002. The increase of 33% is primarily attributable to an
increase in the number of closings by the Company's mortgage and title
operations. The number of closings at the Company's mortgage operations
increased to 880 for the three months ended March 31, 2003 from 817 for the
three months ended March 31, 2002. The number of closings at the Company's
title operations increased to 4,670 for the three months ended March 31, 2003
from 3,871 for the three months ended March 31, 2002. Capture ratios of the
Company's Financial Services segment have remained relatively consistent with
the corresponding quarter in the prior year. The Company's mortgage operations
capture ratio was 51% for the three months ended March 31, 2003 as compared to
55% for the three months ended March 31, 2002. However, excluding the recently
acquired markets where the Company's mortgage operations have not yet
penetrated into the marketplace, the Company's capture ratio increased by 7%
over the prior year.
EBITDA
During the three months ended March 31, 2003 we generated EBITDA of
$36.9 million as compared to $22.3 million during the three months ended March
31, 2002. The increase in EBITDA is primarily a result of $13.8 million in
severance expenses incurred during the three months ended March 31, 2002.
Excluding these unusual charges, EBITDA during the three months ended March 31,
2002 would have been $36.1 million. The increase of 2% primarily relates to the
increase in the Company's Financial Services pretax income during the three
months ended March 31, 2003 as compared to the three months ended March 31,
2002.
BACKLOG
As of March 31, 2003, the Company had 2,826 units in backlog
representing $764.0 million in revenue, as compared to 2,411 units in backlog
representing $651.3 million in revenue as of March 31, 2002. This increase in
revenue in backlog of 17% is primarily attributable to the units in backlog of
the Company's recent acquisitions. The Company's average selling price of units
in backlog is $270,000. "Our backlog at March 31 is the highest ever", said Mr.
Mon. "We expect our backlog to continue to grow as our new communities open and
begin selling."
OUTLOOK FOR 2003 AND 2004
"As discussed previously, we are expecting 2003 to be essentially flat
as we continue to ramp up our communities," stated Mr. Mon. "As a result, we
are estimating earnings per share in the range of $2.75 to $2.90" (assuming
28.2 million diluted shares). "We expect the planned opening of new communities
to generate increased sales and higher backlog during the second half of the
year. This provides us greater visibility into 2004 as the year progresses. Our
current earnings per share estimate for 2004 is in the range of $4.00 to $4.60"
(assuming 28.5 million diluted shares). "This target for 2004 is based on
current estimates of future home deliveries, average selling prices and the
opening of new communities. We understand that these targets are subject to
economic fluctuations in the current environment."
CONFERENCE CALL INFORMATION
TOUSA will hold a scheduled conference call, on Thursday, May 22nd at
11:00 A.M. EST, to discuss the quarterly results and 2003 and 2004 guidance
included in this press release. A reconciliation of the non-GAAP financial
information that will be discussed during that conference call as well as the
other required Regulation G disclosure is included in this press release and
will be filed with a Form 8-K and available on the SEC's website at
www.sec.gov.
Participants are asked to RSVP prior to the conference call by dialing
1-800-289-0579 and referencing confirmation number 764046 at which time
participants will be provided the dial-in number.
Replay Information
Time: From 3:00 P.M. May 22, 2003 to 12:00 A.M. May 29, 2003
Replay Number: 1-888-203-1112
Access Code: 764046
TOUSA is a leading homebuilder in the United States, operating in 14
metropolitan markets located in four major geographic regions: Florida, Texas,
the West and the Mid-Atlantic. TOUSA designs, builds and markets high-quality
detached single-family residences, town homes and condominiums to a diverse
group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of second or
vacation homes, active-adult homebuyers, and homebuyers with grown children who
want a smaller home ("empty-nesters"). It also provides financial services to
its homebuyers and to others through its subsidiaries, Preferred Home Mortgage
Company and Universal Land Title, Inc.
This press release contains forward-looking statements, including
statements regarding (1) continuing increases in the number of communities in
which the Company is marketing and the impact on the Company's financial
results (2) expectations that certain professional and other fees resulting
from the Company's restructuring will continue only through the third quarter
of 2003 and the impact of the restructuring on the Company's income taxes and
operating costs, (3) expectations regarding backlog and (4) financial guidance
regarding the Company's results of operations in 2003 and 2004. The Company
wishes to caution readers that certain important factors may have affected and
could in the future affect the Company's actual results and could cause the
Company's actual results for subsequent periods to differ materially from those
expressed in any forward-looking statement made by or on behalf of the Company.
With respect to statements regarding the Company's future community count,
backlog and its financial guidance for 2003 and 2004, these factors include (1)
economic or other business conditions that affect the desire or ability of the
Company's customers to purchase new homes in markets in which it conducts
business, (2) the Company's ability to identify and acquire additional
homebuilding opportunities at anticipated prices, (3) the Company's ability to
successfully integrate and to realize the expected benefits of recent
acquisitions, (4) the Company's ability to access sufficient capital to finance
its growth, (5) an increase in the cost of, or shortages in the availability
of, skilled labor or construction materials, (6) an increase in interest rates,
(7) decline in the demand for, or the prices of, housing, (8) the Company's
ability to successfully dispose of developed properties or undeveloped land or
homesites at expected prices and within anticipated time frames, (9) a decline
in the value of the land and home inventories that the Company maintains, (10)
the Company's ability to compete in its existing and future markets, and (11)
an increase or change in governmental regulations. With respect to statements
regarding fees associated with the Company's restructuring and the expected
benefits, these factors include the Company's ability to fully implement the
restructuring by the end of the third quarter of 2003 and to realize the
expected benefits. This press release is qualified in its entirety by
cautionary statements and risk factor disclosure contained in the Company's
Securities and Exchange Commission filings, including the Company's report on
Form 10-K filed with the Commission on February 12, 2003.
TECHNICAL OLYMPIC USA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31
----------------------------------
2002 2003
------------ ------------
HOMEBUILDING:
Revenues:
Home sales $ 302,155 $ 313,820
Land sales 383 2,060
------------ ------------
302,538 315,880
Cost of Sales:
Home sales 239,645 246,280
Land sales 430 1,841
------------ ------------
240,075 248,121
Gross profit 62,463 67,759
Selling, general and administrative expenses 37,704 43,790
Depreciation and amortization 1,631 1,646
Severance expenses 13,828 --
Other income, net (222) (1,019)
------------ ------------
Homebuilding pretax income 9,522 23,342
FINANCIAL SERVICES:
Revenues 7,954 10,645
Expenses 3,780 6,160
------------ ------------
Financial Services pretax income 4,174 4,485
------------ ------------
Income from continuing operations before income taxes 13,696 27,827
Income tax expense 4,767 10,171
------------ ------------
Income from continuing operations 8,929 17,656
Discontinued operations, net of income taxes 640 --
------------ ------------
Net income $ 9,569 $ 17,656
============ ============
EARNINGS PER COMMON SHARE (BASIC AND DILUTED):
From continuing operations $ 0.32 $ 0.63
From discontinued operations 0.02 --
------------ ------------
Net income $ 0.34 $ 0.63
============ ============
Weighed average shares outstanding (basic and diluted) 27,878,787 27,882,090
============ ============
OTHER DATA:
Cash flow from operating activities $ 38,153 $ 1,625
Cash flow from investing activities $ (1,550) $ (74,630)
Cash flow from financing activities $ (31,248) $ 72,873
Earnings before interest, taxes, depreciation and amortization (1) $ 22,264 $ 36,855
Gross margin on revenue from home sales 20.7% 21.5%
Ratio of SG&A expenses to Homebuilding revenues 12.5% 13.9%
Ratio of Homebuilding pretax income to Homebuilding revenues 3.1% 7.4%
Total active communities at period end 141 176
Homes delivered 1,146 1,234
Average sales price per home delivered $ 264 $ 254
Backlog at end of period in sales value $ 651,273 $ 763,965
Backlog at end of period in number of homes 2,411 2,826
- ---------
(1) EBITDA represents earnings from continuing operations before interest,
taxes, depreciation, and amortization and consists of the sum of
income from continuing operations before: (a) income taxes, (b)
amortization of capitalized interest in cost of sales, (c)
homebuilding interest expense and (d) depreciation and amortization.
We have included information concerning EBITDA because some investors
use it as a measure of a company's ability to service and incur debt.
EBITDA is not required by generally accepted accounting principles, or
GAAP, and other companies may calculate EBITDA differently. EBITDA
should not be considered as an alternative to operating income or to
cash flows from operating activities (as determined in accordance with
GAAP) and should not be construed as an indication of our operating
performance or a measure of our liquidity. We believe that EBITDA
reflects the changes in our operating results, particularly changes in
the Company's net income, and is an indication of our ability to
generate funds from operations that are available to pay income taxes,
interest and principal on debt and to meet other obligations. A
reconciliation of EBITDA to income from continuing operations, the
most directly comparable GAAP measure, is provided below (dollars in
thousands):
THREE MONTHS ENDED
MARCH 31,
----------------------
2002 2003
------- -------
Income from continuing operations $ 8,929 $17,656
Add: income taxes 4,767 10,171
Add: interest in cost of sales 6,937 7,382
Add: depreciation and amortization expense 1,631 1,646
------- -------
EBITDA $22,264 $36,855
======= =======
TECHNICAL OLYMPIC USA, INC.
SELECTED HOMEBUILDING OPERATING DATA BY REGION
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
MARCH 31,
------------------------
2002 2003
-------- --------
HOMES DELIVERED:
Florida 489 521
Mid-Atlantic 133 137
Texas 304 300
West 220 276
-------- --------
Total 1,146 1,234
======== ========
AVERAGE SALES PRICE PER HOME DELIVERED:
Florida $ 240 $ 233
Mid-Atlantic $ 333 $ 289
Texas $ 269 $ 260
West $ 266 $ 270
Company Average $ 264 $ 254
REVENUES FROM HOME SALES:
Florida $117,581 $121,574
Mid-Atlantic 44,351 39,653
Texas 81,720 77,941
West 58,503 74,652
-------- --------
Total $302,155 $313,820
======== ========
NEW SALES CONTRACTS, NET OF CANCELLATIONS:
Florida 473 642
Mid-Atlantic 192 195
Texas 440 418
West 303 377
-------- --------
Total 1,408 1,632
======== ========
BACKLOG AT END OF PERIOD IN NUMBER OF HOMES:
Florida 1,257 1,316
Mid-Atlantic 228 302
Texas 538 496
West 388 712
-------- --------
Total 2,411 2,826
======== ========
BACKLOG AT END OF PERIOD IN SALES VALUE:
Florida $328,097 $339,139
Mid-Atlantic 84,326 107,778
Texas 135,704 128,524
West 103,146 188,524
-------- --------
Total $651,273 $763,965
======== ========
TECHNICAL OLYMPIC USA, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
DECEMBER 31, MARCH 31,
2002 2003
----------- ----------
ASSETS
HOMEBUILDING:
Cash and cash equivalents:
Unrestricted $ 44,825 $ 43,298
Restricted 23,645 15,663
Inventory 753,872 853,841
Property and equipment, net 13,862 16,365
Other assets 30,681 44,451
Goodwill, net 78,252 100,525
---------- ----------
945,137 1,074,143
FINANCIAL SERVICES:
Cash and cash equivalents:
Unrestricted 4,386 5,781
Restricted 22,866 22,188
Mortgage loans held for sale 58,840 44,065
Other assets 3,659 2,746
---------- ----------
89,751 74,780
---------- ----------
Total assets $1,034,888 $1,148,923
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
HOMEBUILDING:
Accounts payable $ 12,800 $ 20,853
Accrued and other liabilities 84,020 91,973
Customer deposits 24,564 28,949
Consolidated land bank obligations 16,288 12,901
Homebuilding borrowings 413,110 505,642
---------- ----------
550,782 660,318
FINANCIAL SERVICES:
Accounts payable and other liabilities 21,560 21,802
Financial services borrowings 48,309 34,604
---------- ----------
69,869 56,406
---------- ----------
Total liabilities 620,651 716,724
Minority interest 9,092 9,238
Commitments and contingencies -- --
Stockholders' equity:
Common stock -- $.01 par value; 67,000,000 shares authorized and 27,878,787 and
27,889,036 shares issued and outstanding at December
31, 2002 and March 31, 2003, respectively 279 279
Additional paid-in capital 322,400 322,560
Retained earnings 82,466 100,122
---------- ----------
Total stockholders' equity 405,145 422,961
---------- ----------
Total liabilities and stockholders' equity $1,034,888 $1,148,923
========== ==========