homes and the mortgage market, including lending standards and
secondary mortgage markets. We are unable to predict the extent to
which this will impact our operational and financial performance,
including the impact of future developments such as the duration
and spread of COVID-19,
corresponding governmental actions, and the impact of such on our
employees, customers and trade partners.
For more information, see “Risk Factors—Health epidemics, including
the recent COVID-19
pandemic, have had, and could in the future have, an adverse impact
on our business and operations, and the markets, states and local
communities in which we operate.”
Preliminary First Quarter Financial Results
The preliminary unaudited financial data presented below reflects
our preliminary financial results based on information available to
us as of the date of this prospectus supplement, is not a
comprehensive statement of our financial results at and for the
three months ended March 31, 2020 and has not been audited or
reviewed by KPMG LLP, our independent registered public accounting
firm, nor has any independent registered public accounting firm
performed any procedures with respect to such data or information.
During the course of the preparation of our financial statements
and related notes, additional adjustments to the preliminary
unaudited financial data presented below may be identified.
The preliminary unaudited financial data presented below are not a
comprehensive statement of our financial results for the three
months ended March 31, 2020, and should not be viewed as a
substitute for full financial statements prepared in accordance
with GAAP. Our preliminary unaudited financial data contained in
this prospectus supplement are forward-looking statements.
Accordingly, you should not place undue reliance on these
preliminary financial results, which may differ materially from
actual results. See “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” for a discussion of certain factors
that could result in differences between our preliminary unaudited
financial results reported below and our actual results.
On April 23, 2020, we reported our unaudited preliminary
financial results at and for the first quarter ended March 31,
2020. We reported net income for the first quarter ended
March 31, 2020 of $175.7 million, or $44.96 per diluted
share. Net income and diluted earnings per share for the first
quarter ended March 31, 2020 decreased 7% and 6%,
respectively, when compared to 2019 first quarter net income of
$188.4 million, or $47.64 per diluted share. Consolidated
revenues for the first quarter of 2020 totaled
$1,582.5 million, which decreased 6% from
$1,687.0 million in the first quarter of 2019.
New orders in the first quarter of 2020 decreased by 2% to 5,015
units, when compared to 5,139 units in the first quarter of 2019.
The average sales price of new orders in the first quarter of 2020
was $372,300, an increase of 1% when compared with the first
quarter of 2019. The cancellation rate in the first quarter of 2020
was 21% compared to 14% in the first quarter of 2019. At the end of
the first quarter of 2020 we controlled 103,600 lots compared to
98,300 at the end of the first quarter of 2019. In March 2020, we
experienced an increase in cancellations and a decrease in new
orders due to the impact of the COVID-19 pandemic. Settlements
decreased in the first quarter of 2020 to 4,230 units, which was 6%
lower than the first quarter of 2019. As of March 31, 2020,
our investments in lots through cash deposits with third parties
approximated $432 million (or $369 million, net of valuation
reserve). We controlled 3,450 lots through $95.9 million of
investments in undeveloped ground and joint venture arrangements as
of March 31, 2020.
Our backlog of homes sold but not settled as of March 31, 2020
of 9,018 units and $3,441.2 million was flat as compared to
the respective backlog unit and dollar balances as of
March 31, 2019. The backlog of homes sold but not settled
includes 1,178 units and $482.5 million in Pennsylvania and
New York, where the state and local governments issued various
orders that prohibited residential construction as of
March 31, 2020. Of the backlog in Pennsylvania and New York,
510 units and $203.2 million had not started construction as
of March 31, 2020.