Good afternoon, everyone, and thank you for participating in today's conference call to discuss Landsea Homes' Financial Results for the First Quarter ended March 31, 2021.

Joining us today are Landsea Homes' CEO and Interim CFO, John Ho; Chief Accounting Officer, Trenton Schreiner; President and COO, Michael Forsum; and the Company's External Director of Investor Relations, Cody Slach..

[Operator Instructions] Before we go further, I would like to turn the call over to Mr. Slach as he reads the Company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, Please go ahead. .

Thank you. This call will include forward-looking statements within the meaning of the federal securities laws, including but not limited to, our expectations for future financial performance, business strategies or expectations for our business, including as they relate to anticipated effects of the business combination.

These statements can constitute projections, forecasts, and forward-looking statements and are not guarantees of performance. Landsea Homes cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time.

Words such as may, can, should, will, estimate, plan, project, forecast, intend, expect, anticipate, believe, seek, target, look or similar expressions may identify forward-looking statements..

the benefits of the business combination and the Vintage Estate Homes acquisition, the future financial performance of the Company, changes in the market for Landsea Homes' products and services, and other expansion plans and opportunities.

These forward-looking statements are based on information available as of the date of this call and our management's current expectations, forecasts and assumptions and involve a number of judgments, risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements..

the ability to recognize the anticipated benefits of the business combination and the Vintage Estates Homes' acquisition, which may be affected by, among other things, competition, the ability to integrate the combined business and the acquired business, and the ability of the combined business and the acquired business to grow and manage growth profitably; costs related to the business combination; the ability to maintain the listing of Landsea Homes' securities on Nasdaq; the outcome of any legal proceedings that maybe instituted against the Company; changes in applicable laws or regulations; the inability to launch new Landsea Homes' products or services or to profitably expand into new markets; the possibility that the Company may be adversely affected by other economic business, and/or competitive factors; and other risks and uncertainties indicated in Landsea Homes' SEC reports or documents filed or to be filed with the SEC by Landsea Homes..

Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date and you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities.

We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws..

I'd also like to remind everyone this call will be available for replay through May 13 starting at 8:00 p.m. Eastern tonight. A webcast replay will also be available via the link provided in today's press release as well as on the Company's website at landseahomes.com.

In addition, a supplemental earnings presentation has been posted on the Investor Relations portion of the Company's site and we encourage you to view it..

Now I'd like to turn the call over to the CEO of Landsea Homes, John Ho.

John?.

Thank you, Cody, and good afternoon, everyone. We're very happy that you can join us today. To kick things off, I will provide a high-level overview of our first quarter 2021 results and our business highlights, including our recent acquisition of Vintage Estate Homes.

From there I will hand it off to Trent Schreiner, our Chief Accounting Officer to discuss our financials in more detail and then Mike Forsum, our President and COO will provide operational and market updates along with what we hope to accomplish in our recently entered markets in Florida and Texas..

But first I'd like to start off by saying how pleased we are with our financial results for the quarter. Housing market dynamics continue to remain strong and we've certainly seen that reflected in our financial results with revenue from total home sales growing 14% and our very strong backlog expanding to 874 homes.

We also continue to see our ASP rise as we capitalize on the pricing power that comes with such strong housing demand..

Our team has been incredibly busy executing on our strategy. I'd like to share some of the notable highlights from the past few months. First, we are pleased to have recently announced 2 new projects in Southern California.

The first project, which we announced a few weeks ago, was acquisition of a 132 home sites in San Juan Capistrano, a city in Orange County. We plan to build 43 2-story detached homes and 89 3-story town homes, all within walking distance from San Juan Capistrano's lively and historic downtown.

The homes will be equipped with our high-performance home features including smart home automation technology through the Apple HomeKit along with the REME HALO, whole home air purifier, state-of-the-art home purification system that mitigates indoor contaminants to keep residents safe and support healthy centric living..

We will also be building 65 homes in Orange County's largest city, Anaheim. Community will consist of 3-story townhomes, which we are quite optimistic about the type of housing given the success we've seen in our IronRidge master-planned community.

We know buyers will appreciate the contemporary, stylish and sustainable living in the heart of Orange County, and we are excited for that community to open this fall.

These 2 projects join a list of our other successful Southern California projects including IronRidge and Lake Forest, ShadeTree and Neuhouse in Ontario, and The Westerly in Simi Valley..

Moving to the East Coast. We are nearly sold out of our Avora community, contemporary waterfront condominium community located on New Jersey's Gold Coast. Manhattan sales are now underway at Förena on 14th and 6th. We're seeing great interest there with increased sales activity in the New York City metropolitan region..

Now to share our most recent announcement. We are excited that we will be entering Florida and Texas with our acquisition of Vintage Estate Homes. We purchased Vintage Estate Homes for $54.6 million in cash and they had $30 million of debt outstanding at March 31 that we assumed.

By way of background, Vintage Estate Homes has been constructing best-in-class homes over the past several decades in high growth real estate markets such as Orlando, Palm Bay and Melbourne in Florida, and San Antonio and Austin in Texas. It's about 80% of their current selling communities in the Central Florida market..

Vintage Estate Homes has earned a reputation for their attention to detail, premium building materials, and for cultivating lasting relationships with their customers. This aligns perfectly with our distinct differentiation factors in the industry.

Through this acquisition, we are thrilled to not only gain over 1,800 new lots across these high growth markets, but also to gain the knowledge of the Vintage Estate Homes team, which will be joining us at Landsea..

Additional context on the scale of this acquisition. In 2020, Vintage Estate Homes generated $157 million of revenue, $12 million of EBITDA and $9 million of pre-tax income delivering 500 -- 405 homes with an average sales price of $387,000, which falls directly in line with our targeted ASP for these markets.

Additionally, the acquisition increases Landsea Homes' backlog as of March 31, 2021 by 509 homes. Similar to our previous acquisitions in Arizona, this follows a strict financial criteria that we have outlined within our prior earnings presentations when underwriting acquisitions..

We mentioned Florida and Texas as high growth markets we planned to enter on our last earnings call. While Vintage Estate Homes provides us the opportunity to enter both markets at once, Florida and especially the Central Florida markets that Vintage Estate Homes has a presence in, are experiencing extremely high growth.

In February, the National Association of Realtors reported that local home sales in the Orlando market grew year-over-year for the eighth consecutive month with sales up nearly 20% from a year earlier, and the median sales price up 12% from the prior year..

In Texas, Vintage Estate Homes' presence in Austin and San Antonio is a great opportunity as both metro areas are listed in the top ten of new home markets. These markets have seen more and more entry in move-up level buyers, which is the buyer we have been targeting since our shift in 2018.

Mike will discuss some of the growth opportunities within these markets later on. I just want to reiterate how pleased we are with the acquisition and a strategic fit in our growth plan.

This is another step forward in our expansion plans to create communities in highly desirable locations across the United States, provide high quality homes where residents can enjoy living in their element..

With the positive momentum we experienced in our current business, which we expect to continue, along with the added benefit of this acquisition we are pleased to be raising our 2021 outlook, which Trent will address shortly.

Overall, the housing market shows no signs of slowing down and we believe we have significant runway for growth across all our markets. We look forward to sharing the success we believe we can achieve in the coming quarters and these results ultimately and driving shareholder value..

With that, I'll now turn the call over to Trent Schreiner, our Chief Accounting Officer. Trent, over to you. .

Thanks, John, and good afternoon, everyone. Jumping right into our financials for the quarter. Total revenue increased 18% to $160.4 million compared to $136.3 million in the first quarter of 2020. Within our total revenue, we generated $5.7 million from lot sales compared to no lot sales in the first quarter of 2020.

Our total home sales increased 14% to $154.8 million compared to $136.3 million in the prior year period. Before we move further down the P&L, I want to briefly discuss lot sales and clarify how seasonality affects our revenue throughout the year..

On lot sales, we are homebuilder first and foremost. But we view lot sales as an opportunistic way to capitalize on a small portion of our footprint if the right variables are in place. I'll have more to say on lot sales when I address our outlook. Next, as a growth-oriented homebuilder, we inherently experienced seasonality within our business.

We typically see a higher percentage of our revenue generated in the back half of the year. In fact, we have historically seen sales slowdown between Super Bowl Sunday and Memorial Day weekend. Then home buying patterns typically pick up throughout summer and into fall.

While we are able to produce homes year-round given the mild climates in the markets we serve, the seasonality of sales for 2020 was roughly 19% of revenue in the first quarter, 13% of revenue in the second quarter, 30% of revenue in the third quarter, and 39% of revenue in the fourth quarter.

We would expect these seasonality patterns to remain even when factoring in our acquisition of Vintage Estates Homes..

With that, let's get back to our results for the quarter. Total homes delivered during the quarter increased 11% to 301 homes at an average sales price of $514,000 compared to 270 homes delivered at an average sales price of $505,000 in the first quarter of 2020.

Our average selling price increased slightly largely due to the 21% increase in average selling price in Arizona where we have continued to capitalize our pricing power dynamics.

During the first quarter there were 426 new -- net new home orders with a dollar value of $258.7 million, an average sales price of $606,000 and a monthly absorption rate of 5.3 sales per active community.

This compares to 513 homes with a dollar value of $247 million, an average sales price of $481,000 and a monthly absorption rate of 5.8 sales per active community in the prior year periods..

Adjusted home sales gross margin in the first quarter was 17.9% compared to 19.7% in the prior year period. The decline in gross margin was primarily driven by the continued increase in raw material costs. Net loss attributable to Landsea Homes in the first quarter was $7 million compared to $2.5 million in the prior year period.

The decline was primarily due to the $4.9 million adjustment related to the accounting treatment for our private warrants. Adjusted net income attributable to Landsea Homes was $1.4 million compared to $2.4 million in the prior year period.

Adjusted EBITDA was $8 million compared to $8.8 million in the prior year quarter with the slight decline primarily driven by increases in operating expenses and the aforementioned higher raw material costs..

Looking at our liquidity, we ended the first quarter with $190.7 million in cash and cash equivalents compared to $105.8 million at December 31, 2020. The increase in cash is primarily attributed to the net proceeds from the closing of the business combination with LF Capital Acquisition Corporation on January 7, 2021..

Total debt was $319.5 million compared to $264.8 million at the end of 2020. Our ratio of debt to capital was 35.7% at March 31, 2021 compared to 33.3% at December 31, 2020. And our net debt-to-net book capitalization ratio was 18.8% compared to 22.6% at December 31, 2020.

Now as John mentioned earlier, we are increasing our full year 2021 outlook as a result of the strong organic growth we are expecting and to reflect the anticipated results of Vintage Estate Homes from our May 4 closing date through the end of the year..

For 2021, we now expect to report between $925 million to $980 million in total revenue with 1,930 to 2,030 total homes now expected to be delivered at an average sales price of $450,000 to $480,000. Out of this total, we expect between $10 million to $15 million in revenues to be generated from lot sales.

Our 2021 revenue assumption reflects an approximate 15.1% organic growth rate within our business. With the top line increases, we now expect to report adjusted net income attributable to Landsea Homes between $46 million to $56 million in 2021.

These updated numbers make it clear that we are leveraging our strong financial position, dedicated team and industry tailwinds to drive growth in 2021 and beyond..

Now, I'll pass it to our President and CEO, Mike Forsum to provide more color around our operational successes and strategic vision moving forward.

Mike?.

Thanks, Trent. Today, I would like to first discuss the current dynamics in the real estate market. Next, I will provide a quick case study of our success in Arizona and then I'll finish with our strategic plan for Vintage Estates Homes going forward. So let's jump right into it..

We continue to see robust demand and interest in our homes coming from a broad spectrum of buying groups, including millennials searching for their very first home to families seeking more space and greater functionality in their living environments.

Due to the overall lack of both resale and new home inventory, homebuyers at all home price segments remain extremely willing to pay in ever-increasing prices to secure a home. Given the favorable secular tailwinds we are experiencing at this time, we don't anticipate buyer demand correcting anytime soon.

In the meantime, we are working feverishly in keeping up with this demand in all of our markets, while remaining extremely disciplined and not overextending our production capabilities or potentially creating conditions whereby we could be negatively impacted by cost increases that can't be captured in timely sales price adjustments.

While we do not expect oversupply to meet market -- overall supply to meet market demand for at least a couple of more years, we believe our strategy is prudent as it stands now..

In addition to the supply and demand dynamics, we are still seeing low-interest rates making it an opportune time for people to buy homes across the nation. While rates have ticked up some as of late, they are still incredibly favorable compared to historic norms and we do not see this current rate environment stalling demand anytime soon.

We also have a large population of people realizing that they will continue to work from home long after the pandemic passes, whether daily or just on certain days of the week and understandably they're paying more attention to the way that they are living and their living spaces..

For Landsea this is where some of our offerings such as LiveFlex really shine. As a reminder, LiveFlex encompasses a variety of features that make living and working in the home better from enhanced wall to floor insulations to smart home technology.

Offering LiveFlex options as an add-on is just one way that our team guides our homebuyers through their journey of purchasing a home. It is our commitment to enhance the lives of our homebuyers through providing them an industry-leading purchasing experience as well as an exceptional move-in and after move-in homeowner care..

As we've grown tremendously this past year, especially in the Phoenix metro area, I wanted to share that our Arizona team has done an outstanding job producing a best-in-class environment for buyers with 90% of move-ins reporting a positive sales experience.

This is a score that is measured by Eliant is one of those 3 surveys that homeowners complete upon moving through the first year of their ownership..

There is one specific community however, that I want to talk about our 90-home Farmstead at Harvest community in Queen Creek, Arizona located in Phoenix Southeast Valley.

Our Landsea Homes' team members there have done a phenomenal job on everything from laying out the foundation of the home to handing over the keys to our new Landsea homeowner in a timely fashion. To start with some key stats.

We launched sales of the performance collection at Harvest in July 2020 and since then have seen a remarkable pace of 10 net homes sold per month.

What's even more remarkable is that we've seen base price increases of $150,000 on average since the launch, and our gross margin has grown from 22% for the first 12 closings to our current gross margin of 25% for homes in backlog. We are currently in the final closeout with just 10 homes left to sell..

Operationally, despite the overwhelming demand for our homes at Harvest, our sales team has thoughtfully managed a sales release process that promotes an enjoyable homeowner experience by staying within a single-phase and allowing the construction team to move down the line in sequence.

This is a typical in our industry as our competitors usually scatter releases and implement a lottery sales system, which leaves potential buyers very disappointed. At Harvest, sales have been strategically limited and follow a check with me after 3 sales program.

This means that the sales team release 3 lots at a time and once they have sold 3 they reevaluate timing, available lots and pricing for the next 3 sales..

During each release, the team determines price increases while also being able to effectively double premium value from phase-to-phase.

This streamlined process has dramatically lessened stress among buyers on the waiting list, which is incredibly important in the Phoenix metro area where there is a high volatility when it comes to inventory and prices. Not only has this sales program alleviated stress and angst from our homebuyers, but it has also allowed us to sell at a premium.

We are seeing a premium of upwards to $9,000 compared to our national competitors for the same square footage within Harvest..

Now that I've discussed how unique our selling process benefits our customers, I'd like to share more about the community and the features that will enhance the lives of our buyers for years to come there.

In addition to LiveFlex options, which have been chosen as an add-on for over 30% of the homes in backlog, our homes at Harvest also include REME HALO, a whole home purification system.

This state-of-the-art purification system ensures the cleanest air in your home killing up to 99% of bacteria, mold, and viruses even on surfaces while removing lingering odors..

Beyond these options our homes in this community are perfect for families as they are large -- as they have large backyards and spacious floor plans.

Overall, we are extremely proud of the homes that we continue to build across Arizona and California, and now as we gain foothold in Florida and Texas we look forward to producing best-in-class homes in those regions as well.

The key study I just shared is a great example of how we've made acquisitions in Arizona, worked with experienced teams that come -- that came from those companies and then executed our strategy to produce strong financial results and making Landsea Homes one of the largest homebuilders in that very important Arizona new home market..

With the Vintage Estates Homes acquisition, our team is motivated to expand into the strong housing markets of Florida and Texas, and we are excited to work with the knowledgeable team that is joining us to help propel our efforts.

Overall, we plan to utilize our availability of capital to expand Vintage Estates Homes operations in Central Florida and the Austin, San Antonio markets to increase scale and be able to manage further growth.

As the Great American Move continues to accelerate with a significant number of large corporations such as Tesla, Oracle, Blackstone and many others along with their employees relocating to Texas and Florida, we believe these markets will continue to experience robust demand from homebuyers for years to come..

Florida is becoming a top choice for living especially attracting young families that are seeking affordability, a better lifestyle and tax benefits. In fact, the average age in Orlando is 34 years old according to Data USA.

With this, we are going to leverage Vintage Estates Homes current presence to push expansion in the Greater Orlando region, which is centrally located to seamlessly expand into other hot markets including Tampa, Palm Bay Daytona, and the southeast portion of the state.

This market also offers substantial runway for growth with a significant amount of land available for development through nearly 20,000 vacant developed lots and almost 220,000 future lot positions and vacant land..

Looking at the Central Texas market, the Austin and San Antonio areas are among the 10 most active new home markets in the country. In fact the Austin area added an average of nearly 23,300 new households per year over the past 5 years, which has created substantial demand for new housing.

This has been fueled by strong employment, affordability and a favorable tax environment as these markets have experienced steady in-migration from less affordable states across the country.

Similar to Central Florida, there is a significant expansion potential in Austin and San Antonio regions with over 350,000 of future lot positions and vacant land. We expect Vintages Estates to be another successful acquisition and our team is eager to get started in these new markets..

As we move forward, we have proven to be and remain an acquirer of choice for smaller homebuilders that are looking to sell to the right company who will take care of their employees and expand upon their legacy.

Just as we did in Arizona and now in Florida and Texas, we will look to additional acquisition opportunities to supplement our organic growth efforts approaching the process with precision and significant due diligence. Overall, our team is incredibly proud of the success we've had in becoming one of the fastest-growing homebuilders in the country.

We remain highly optimistic that -- highly optimistic about the growth and opportunities ahead and we look forward to providing more updates along the way..

Thank you for joining us today. Operator, we are now ready for Q&A. .

[Operator Instructions] Our first question is from Matthew Bouley with Barclays. .

Congrats on the quarter and closing the acquisition there. My first one is on the organic business in Arizona specifically, really great color there around what you're doing there at Farmstead, but just looking at the ASPs overall, clearly a lot of pricing power.

My question is how much further are you willing to push pricing specifically in light of affordability because obviously, it's a heavy-entry level or first-time buyer I guess, position you have there, and just looking at the absolute levels of price presumably you're living close to FHA loan limits in certain cases and I'm curious if that has any impact on pricing or demand as you come near that?.

Matt, I'll answer that. This is Mike Forsum. For us, we want to be as aggressive as prudently possible in our attempts to increase pricing throughout all of our communities out in Arizona.

As long as the market remains active and that the buyers that are coming to our office are seeking houses, we're going to continue to do what we can, but also at the same time try to do everything we can to enhance our margin along the way. But we do recognize there are some limits you identify them with the FHA limits and such.

But one thing that's been very interesting for us is we've had this ability through our escrow tracking process that we have here internally to essentially look at all of our homes as they're going through the escrow process and the buying process.

And in that, we can see through the appraisals that are coming through because I think this is a very important thing is to understand also how homes are appraising.

And as we are looking at our go-forward backlog and as appraisals are coming through in the earlier releases, we're still seeing a lot of headroom between the actual sales price and what they are now coming in and being appraised as.

So we see a lot of lift still available for us going forward, if not a lot of opportunity to build upon our margins by encouraging the buyer to take more options because they have more room to finance them. .

Got it. No, that's really helpful color there. And then secondly, I wanted to ask on Vintage.

Just thinking about the process going forward and the lot positions that they had, I think you put in the slides there they're about 50% move-up obviously, you guys have been kind of moving towards both entry level and move-up within your own strategy, can you speak a little bit about kind of their own -- or what you're going to do with those lots going forward, is it going to stick with similar kind of mix that Vintage already had, and then just kind of I guess, the broader question is then how you then use that as a broader platform for the additional lot acquisitions in those 2 states I guess?.

Sure. So Vintage Estates Homes are great operators and they have a fantastic business and we're very excited for the opportunity to join up with them.

They have done a great job building a brand and understanding their customer, but they have done it in a way that is allowed them the best compete based upon where their capital is and how they go about financing their business, which usually pushes them to a little bit higher price point because that's sort of how it works.

However, with us, we believe that there is some great upside potential on pivoting the company towards a more approachable, affordable product and pushing up a little bit more north into the Orlando market where it's been a little more competitive with some national homebuilders in which they felt that they couldn't compete. We know we can.

We do it every day in Phoenix. We do it in California.

We know we can compete with the biggest in the business and so for us, we're going to take that platform and then apply some of our operating disciplines into their business, and then also use, what we call, library of product that we have built up over time and then have brought along with us to best optimize their existing lots going forward.

That may mean that in some cases we are going to downsize some houses' square footages but make those houses a lot more efficient, a little more approachable and then get our volume up along the way.

So it's very similar to what -- again where we've done some spots in California when we first got here and John and I were building the business and pivoting it towards a more affordable, attainable product plan. So we've already done this before and we know we can do it again in Florida and then also in the Texas market. .

Yes, understood. So it's sort of replicating what you guys have already had success doing.

Real quick if I could a third one, just knowing the deal close just a couple of days ago, is there any sense on the purchase accounting in terms of the backlog homes that you acquired, how we should think about modeling that?.

As of right now we're -- we do not -- we're looking at it. We've got in mind what we think that number would be but we've got a -- we're sending an offer valuation to get looked at. .

The next question comes from Alex Rygiel with B Riley. .

Congratulations again at your first full quarter here.

Can you talk a little bit more in bigger perspective, sort of your strategy of SPAC build versus build to order, and how that might change in a -- during a period of somewhat uncertain building material costs?.

Yes. That's a very good question and something that we're wrestling with fairly continuously in our markets as each one of them has its own individual dynamic to it.

So in some cases, particularly in California and what we're doing and what I talked about in Arizona, we are now doing more of a sequence line type of building as opposed to a scattered buildings or pick your lot, pick your house.

In so doing, it allows us to lock in our cost earlier as we build forward into that sequence as opposed to waiting for a buyer to come and then identifying the house and then having to go out and price it. So we're moving a little bit more into the vertical risk profile of the business.

But given times like this and this is my fourth cycle through and when things get active like this, this is a limited risk given the fact that where there is so much demand out there. And so most part, most home buyers are just looking for a home that's being provided as opposed to looking for a lot and then I will go get my home on top of that.

So we're very comfortable forward SPACing, if you will, to lock in our cost to make sure that when we sell -- we price our home for sale that we know what it is and where our margins are really. .

That's helpful. Sure.

And then your ASPs and backlog were significantly higher than your guidance for the full year, so it would appear that you're being somewhat conservative there on your guidance but I also suspect Vintage is layering in a lower priced ASP, so can you talk a little bit about that ASP guidance relative to backlog?.

Sure. So yes, what we're seeing is our guidance is lower on the ASP with the Vintage acquisition. We talked about a little bit earlier how the average sales price is in that mid-3 range there and as we go through some of our legacy projects we have we'll start seeing some of these average sales prices dropping down.

So that's what our guidance is based on. .

That is helpful.

And then turning to be the property in Manhattan, can you give us a little bit more color and detail on your expectations for the pace of sales that you are anticipating now that, that property has just started to be marketed?.

Yes. Alex, this is John. I'll take that question. We obviously are not coming into this year and being, let's say, prudent in terms of our underwriting about the sales and absorption of how quickly people would return to work and return to Manhattan in particular.

Quite conservative in how we would deliver those units or sell those units over the next 2, 2.5 years at approximately 1 to 2 units at absorption rate per month. We recently just opened -- soft opened at the end of April and we've seen some very strong interest come through along with a lot of activity now in the New York metro market.

So I think as the country is moving towards the reopening as the vaccinations are being delivered and rolled out, we're seeing a lot of activity come back at the Manhattan market where we feel very confident in how we modeled and underwrite that -- underwritten that project and how its modeled through in terms of our projections and guidance as we speak.

.

That's great.

And one last question, any chance you could ballpark a pro forma book value per share post the Vintage acquisition?.

Yes, we would have to -- not yet, but we will certainly get back to you on that. .

[Operator Instructions] Our next question is from Richard Shuster with Boston Partners. .

Great quarter. Great projections. I don't have a lot of questions, just a really quick one.

The question about pro forma book value per share does Vintage make it go down or up meaningfully from your last quarter?.

No, it should not. .

Okay.

So it's somewhere in the, whatever $12.50 range or something like that within $0.50 right?.

Yes. .

Okay. And then and your projection.

I guess your projection -- I apologize, I just got on late, your projection is $46 million to $52 million in net income?.

That's correct. Adjusted net income. .

Yes, and the share count is still 46 roughly?.

Yes. .

Million shares?.

Correct. .

So you're now projecting basically $1 to $1.20 from a projection before of $0.96?.

Yes. We increased. .

What -- I know I've asked you this performed but I'm just kind of curious with everything going on, do you have any -- did you have any speculation as to why with the $12.50 and $1 to $1.20 of earnings or whatever it is with the $9.5 stock, any idea -- I know this is the first or second quarter, any idea why you think the stock is held back or just it will take time for people to define the stock and just the discovery process is more evolved?.

Good question, Richard. You and I have spoken a few times about that. I think there's a couple of factors. I think first factor is we're a young company. We're not as, I think, well known. I mean we are -- this is like you said, our second quarter of being a public company and the market seeing us. It's also a lot of wait and see.

See how Landsea Homes as being a new company, new -- certainly not new in terms of management team.

We're a stock full of better and experienced people operate in homebuilding but essentially it's a new name and seeing if we can deliver on what we said we're going to deliver as part of our process in going public, and that's delivering on the year and delivering on the organic and inorganic acquisitions.

I think we've shown through this first 4 or 5 months here of the year that we were very confident and that we were able to expand into new markets like Texas and Florida and be able to identify the right builder at the right price that was going to be a great acceleration of our business, which is -- and has -- will result in the increase in both revenue, net income and ROE at the end of the day, which will drive that shareholder value.

And hopefully, at the end of the day, drive that stock price. We're also shaking off some of the SPAC, I would say, hangover as part of this going public process for us. Obviously, you know that there has been a lot of news about this particularly with SEC in the guidance that was given on warrants.

There has been a lot of I think, impact on that against SPACs or companies have de-SPACd. We've held up our own. I would say we've been pretty consistent. We also did something that certainly I think helps us as it relates to the public warrants that were previously outstanding of about $15 million.

When we closed the transaction in the first quarter of January 7, we reduced the public warrants 10:1 and amended those warrants. So that reduces a lot of that hangover.

And as we continue to move away and run this as a regular public company to really shake off any of the SPAC, I think that we'll see in the -- hopefully see in the next sequential quarters here, this improvement and hopefully, improvement in the stock price as our returns come through and we deliver on our guidance. .

Yes. And then just a couple of more numbers questions.

How many total warrants with management and from the original deal are outstanding at this point?.

On the private warrants we have roughly around $5.5 million. .

Okay. So they're -- okay.

So as you say there are 46 million shares outstanding and 5.5 million warrants, and the debt and cash right now that is what $320 million and the cash is $190 million?.

Correct. .

And when does when does Vintage close?.

It closed May 4. .

And so those numbers don't include the Vintage transaction, I'm guessing. .

Correct. .

And that costs what $55 million?.

It was $55 million, plus we assume $30 million in debt. .

Okay.

So just pro forma for the Vintage transaction, we would have $350 million of debt and roughly $135 million of cash, is that kind of in the ballpark of where we are right now?.

In the ballpark. .

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Ho for closing remarks. .

Thank you. I'd like to thank everyone for listening to today's call, and we look forward to speaking with you when we report our second quarter 2020 results in August. Thanks again for joining us. .

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation..