Five Point (FPH) Q4 2021 earnings summary

Executive summary

• 2021 consolidated revenue was $224.4M and net income was $13.3M; net income attributable to shareholders was $6.6M, versus a $0.4M loss in 2020.

• Strong land sales at Valencia and Great Park drove activity; development-management income and home sales also contributed.

• Leadership transitioned in late 2021 and early 2022; a comprehensive review is underway, focused on revenue growth, cost management and operating processes.

Financial highlights

• Revenue rose to $224.4M from $153.6M in 2020, primarily on higher Valencia land sales; total costs and expenses were $221.4M versus $194.9M.

• SG&A declined 7.6% to $77.1M, reflecting lower corporate employee-related costs, partly offset by higher Valencia selling and marketing expense.

• Equity earnings from unconsolidated entities were $6.2M, down from $42.4M in 2020, which included a $26.9M Great Park investment impairment and gains on commercial property sales.

• Operating cash flow was negative $81.4M; investing cash flow provided $75.3M, including a $76.6M Great Park distribution.

Outlook and guidance

• Expected 2022 cash needs include $49.2M of senior-note interest and $56.3M of related-party reimbursement principal; available cash, Valencia land-sale proceeds and venture distributions are expected to fund near-term needs.

• Significant Valencia horizontal development investment is planned over the next 12 months; available capital is expected to fund planned horizontal development for several years.

• Valencia had 14 of 18 initial neighborhoods open for sales; four more were slated to open shortly. The next Great Park neighborhood was expected to open in June 2022.

• The Great Park management agreement was extended through April 30, 2022 while renewal discussions continued; renewal terms and completion remained uncertain.