Five Point (FPH) Q4 2019 earnings summary

Executive summary

• FY19 revenue rose to $184.4 million from $49.0 million, led by Valencia homesite sales; net income attributable to shareholders was $9.0 million versus a $34.7 million loss in FY18.

• Development spans three California master-planned communities, with revenue primarily from residential and commercial land sales and related management services.

Financial highlights

• Total revenue was $184.4 million; land sales contributed $140.0 million, management services $39.6 million and operating properties $3.9 million.

• Net income was $22.3 million versus a $67.9 million loss in FY18; income attributable to shareholders was $9.0 million, or $0.13 per Class A share, versus a $34.7 million loss, or $(0.53) per share.

• Cash and cash equivalents totaled $346.8 million at year-end, down from $495.7 million; operating cash used was $232.0 million versus $343.3 million in FY18.

• FY19 results included a $64.9 million noncash gain from ending the Retail Project and release from related obligations; the FY18 comparison included a $6.7 million golf-course sale gain.

Outlook and guidance

• Management expected sufficient capital for planned horizontal development for several years; near-term cash needs were expected to be funded by cash, Valencia land-sale proceeds, venture distributions and management fees.

• Remaining Valencia homesite closings were expected in H1 2020; the Candlestick and San Francisco Shipyard communities were not expected to generate significant liquidity within the following 12 months.

• COVID-19 response used a “3-6-9 Plan” to defer variable expenditures in line with revenue delays of 3, 6 or 9 months; the initial 3-month delay was being implemented.

• COVID-19-era liquidity was stated at $471 million, including $347 million cash and $124 million revolver availability; over 60% of expenditures were variable and work could be suspended or terminated on less than 30 days’ notice.