Le Lézard
Classified in: Business
Subjects: EARNINGS, Conference Call, Webcast

Caliber Reports First Quarter 2024 Results


Caliber (NASDAQ: CWD; "CaliberCos Inc."), a real estate investor, developer, and asset manager, today reported results for the first quarter ended on March 31, 2024.

First Quarter 2024 Financial Highlights (compared to first quarter 2023)

Management Commentary

"Caliber continues to focus on our core objective: consistent, profitable growth," said Chris Loeffler, CEO of Caliber. "Our year-over-year first quarter results were impacted by the deconsolidation of six hotels on March 7, 2024, which were included in our first quarter 2023 results. While the change negatively impacts the present performance comparisons from a financial reporting standpoint, I look forward to sharing during our call today why we believe it's a positive long-term change for Caliber."

"Following a thorough evaluation of our cost structure, we identified more than $6 million in annualized savings, which will reduce our annual operating costs to approximately $15 million. Many of these reductions have already been implemented. Reductions in non-payroll operating costs are expected to yield annualized savings of $2.5 million compared to 2023. Reduction in payroll expenses, through attrition and a reduction in force, are anticipated to produce $2 million in savings in 2024 with the full $4 million in annualized savings expected to be realized in 2025. These savings are expected to partially offset the sizeable increase in operating costs Caliber incurred between 2022 and 2023."

"While these decisions are difficult to make, we believe they are essential to restoring Caliber's profitability and ensuring a robust foundation for future growth and success. We remain confident in our medium- and long-term growth prospects, particularly as we've seen development activity pick-up in the past couple of months as well as meaningful increases in our fundraising pipeline and activity."

Business Update

The following are key milestones completed both during and subsequent to the first quarter ended March 31, 2024.

Conference Call Information

Caliber will host a conference call today, Thursday, May 9, 2024, at 5:00 p.m. Eastern Time (ET) to discuss its first quarter 2024 financial results and business outlook. To access this call, dial 1-800-672-2415 (domestic) or 1-646-307-1952 (international) with conference ID 1287647. A live webcast of the conference call will be available via the investor relations section of Caliber's website under "Financial Results." The webcast replay of the conference call will be available on Caliber's website shortly after the call concludes.

About Caliber (CaliberCos Inc.) (NASDAQ: CWD)

With more than $2.9 billion of managed assets, including estimated costs to complete assets under development, Caliber's 15-year track record of managing and developing real estate is built on a singular goal: make money in all market conditions. Our growth is fueled by our performance and our competitive advantage: we invest in projects, strategies, and geographies that global real estate institutions do not. Integral to our competitive advantage is our in-house shared services group, which offers Caliber greater control over our real estate and visibility to future investment opportunities. There are multiple ways to participate in Caliber's success: invest in Nasdaq-listed CaliberCos Inc. and/or invest directly in our Private Funds.

Forward Looking Statements

This press release contains "forward-looking statements" that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "seek," "may," "might," "plan," "potential," "predict," "project," "target," "aim," "should," "will" "would," or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company's current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate including, but not limited to, the Company's ability to adequately grow cumulative fundraising, AUM and annualized platform revenue to meet 2026 targeted goals, the closing of the transaction with L.T.D. Hospitality Group LLC and the viability of and ability of the Company to adequately access the real estate and capital markets. These and other risks and uncertainties are described more fully in the section titled "Risk Factors" in the final prospectus related to the Company's public offering filed with the SEC and other reports filed with the SEC thereafter. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

CALIBERCOS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

 

(unaudited)

Revenues

 

 

 

Asset management revenues

$

3,170

 

 

$

2,036

 

Performance allocations

 

166

 

 

 

2,426

 

Consolidated funds ? hospitality revenues

 

18,145

 

 

 

23,209

 

Consolidated funds ? other revenues

 

1,470

 

 

 

1,851

 

Total revenues

 

22,951

 

 

 

29,522

 

 

 

 

 

Expenses

 

 

 

Operating costs

 

5,262

 

 

 

4,504

 

General and administrative

 

1,940

 

 

 

1,816

 

Marketing and advertising

 

106

 

 

 

353

 

Depreciation and amortization

 

146

 

 

 

132

 

Consolidated funds ? hospitality expenses

 

16,782

 

 

 

20,283

 

Consolidated funds ? other expenses

 

3,072

 

 

 

1,925

 

Total expenses

 

27,308

 

 

 

29,013

 

 

 

 

 

Other income, net

 

272

 

 

 

519

 

Interest income

 

117

 

 

 

98

 

Interest expense

 

(1,294

)

 

 

(831

)

Net (loss) income before income taxes

 

(5,262

)

 

 

295

 

Benefit from income taxes

 

?

 

 

 

?

 

Net (loss) income

 

(5,262

)

 

 

295

 

Net (loss) income attributable to noncontrolling interests

 

(1,457

)

 

 

1,502

 

Net loss attributable to CaliberCos Inc.

 

(3,805

)

 

 

(1,207

)

Basic net loss per share attributable to common stockholders

$

(0.18

)

 

$

(0.07

)

Diluted net loss per share attributable to common stockholders

$

(0.18

)

 

$

(0.07

)

Weighted average common shares outstanding:

 

 

 

Basic

 

21,542

 

 

 

18,182

 

Diluted

 

21,542

 

 

 

18,182

 

 

CALIBERCOS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

 

 

March 31, 2024

 

December 31, 2023

Assets

 

 

 

Cash

$

679

 

$

940

Restricted cash

 

2,599

 

 

2,569

Real estate investments, net

 

21,652

 

 

21,492

Notes receivable - related parties

 

6,749

 

 

50

Due from related parties

 

9,397

 

 

9,709

Investments in unconsolidated entities

 

9,726

 

 

3,338

Operating lease - right of use assets

 

182

 

 

193

Prepaid and other assets

 

2,888

 

 

2,781

Assets of consolidated funds

 

 

 

Cash

 

1,416

 

 

2,865

Restricted cash

 

640

 

 

11,266

Real estate investments, net

 

101,037

 

 

185,636

Accounts receivable, net

 

371

 

 

1,978

Notes receivable - related parties

 

40,347

 

 

34,620

Operating lease - right of use assets

 

?

 

 

10,318

Prepaid and other assets

 

3,779

 

 

11,677

Total assets

$

201,462

 

$

299,432

 

CALIBERCOS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)

 

 

March 31, 2024

 

December 31, 2023

Liabilities and Stockholders' Equity

 

 

 

Notes payable

$

52,952

 

 

$

53,799

 

Accounts payable and accrued expenses

 

9,766

 

 

 

8,886

 

Due to related parties

 

157

 

 

 

257

 

Operating lease liabilities

 

112

 

 

 

119

 

Other liabilities

 

614

 

 

 

420

 

Liabilities of consolidated funds

 

 

 

Notes payable, net

 

47,654

 

 

 

129,684

 

Notes payable - related parties

 

?

 

 

 

12,055

 

Accounts payable and accrued expenses

 

2,723

 

 

 

11,736

 

Due to related parties

 

258

 

 

 

101

 

Operating lease liabilities

 

?

 

 

 

13,957

 

Other liabilities

 

736

 

 

 

2,400

 

Total liabilities

 

114,972

 

 

 

233,414

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

Common stock Class A, $0.001 par value; 100,000,000 shares authorized, 14,311,355 and 13,872,671 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

14

 

 

 

14

 

Common stock Class B, $0.001 par value; 15,000,000 shares authorized, 7,416,414 shares issued and outstanding as March 31, 2024 and December 31, 2023

 

7

 

 

 

7

 

Paid-in capital

 

39,869

 

 

 

39,432

 

Accumulated deficit

 

(40,635

)

 

 

(36,830

)

Stockholders' equity (deficit) attributable to CaliberCos Inc.

 

(745

)

 

 

2,623

 

Stockholders' equity attributable to noncontrolling interests

 

87,235

 

 

 

63,395

 

Total stockholders' equity

 

86,490

 

 

 

66,018

 

Total liabilities and stockholders' equity

$

201,462

 

 

$

299,432

 

 

Definitions

Assets Under Management

AUM refers to the assets we manage or sponsor. We monitor two types of information with regard to our AUM:

i.

Managed Capital ? we define this as the total capital we fundraise from our customers as investments in our funds. It also includes fundraising into our corporate note program, the proceeds of which were used, in part, to invest in or loan to our funds. We use this information to monitor, among other things, the amount of ?preferred return' that would be paid at the time of a distribution and the potential to earn a performance fee over and above the preferred return at the time of the distribution. Our fund management fees are based on a percentage of managed capital or a percentage of assets under management, and monitoring the change and composition of managed capital provides relevant data points for Caliber management to further calculate and predict future earnings.

 

ii.

Fair Value ("FV") AUM ? we define this is as the aggregate fair value of the real estate assets we manage and from which we derive management fees, performance revenues and other fees and expense reimbursements. We estimate the value of these assets quarterly to help make sale and hold decisions and to evaluate whether an existing asset would benefit from refinancing or recapitalization. This also gives us insight into the value of our carried interest at any point in time. We also utilize FV AUM to predict the percentage of our portfolio which may need development services in a given year, fund management services (such as refinance), and brokerage services. As we control the decision to hire for these services, our service income is generally predictable based upon our current portfolio AUM and our expectations for AUM growth in the year forecasted.

 

Non-GAAP Measures

We use non-GAAP financial measures to evaluate operating performance, identify trends, formulate financial projections, make strategic decisions, and for other discretionary purposes. We believe that these measures enhance the understanding of ongoing operations and comparability of current results to prior periods and may be useful for investors to analyze our financial performance because they provides investors a view of the performance attributable to CaliberCos Inc. When analyzing our operating performance, investors should use these measures in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. Our presentation of non-GAAP measures may not be comparable to similarly identified measures of other companies because not all companies use the same calculations. These measures may also differ from the amounts calculated under similarly titled definitions in our debt instruments, which amounts are further adjusted to reflect certain other cash and non-cash charges and are used by us to determine compliance with financial covenants therein and our ability to engage in certain activities, such as incurring additional debt and making certain restricted payments.

Fee-Related Earnings and Related Components

Fee-Related Earnings is a supplemental non-GAAP performance measure used to assess our ability to generate profits from fee-based revenues, focusing on whether our core revenue streams, are sufficient to cover our core operating expenses. Fee- Related Earnings represents the Company's net income (loss) before income taxes adjusted to exclude depreciation and amortization, stock-based compensation, interest expense and extraordinary or non-recurring revenue and expenses, including performance allocation revenue and gain (loss) on extinguishment of debt, public registration direct costs related to aborted or delayed offerings and our Reg A+ offering, the share repurchase costs related to the Company's Buyback Program, litigation settlements, and expenses recorded to earnings relating to investment deals which were abandoned or closed. Fee-Related Earnings is presented on a basis that deconsolidates our consolidated funds (intercompany eliminations) and eliminates noncontrolling interest. Eliminating the impact of consolidated funds and noncontrolling interest provides investors a view of the performance attributable to CaliberCos Inc. and is consistent with performance models and analysis used by management.

Distributable Earnings

Distributable Earnings is a supplemental non-GAAP performance measure equal to Fee-Related Earnings plus performance allocation revenue and less interest expenses and provision for income taxes. We believe that Distributable Earnings can be useful as a supplemental performance measure to our GAAP results assessing the amount of earnings available for distribution.

Caliber Adjusted EBITDA

Caliber Adjusted EBITDA represents the Company's Distributable Earnings adjusted for interest expense, the share repurchase costs related to the Company's Buyback Program, other income (expense), and provision for income taxes on a basis that deconsolidates our consolidated funds (intercompany eliminations), Loss on CRAF Investment Redemption, Gain on extinguishment of Payroll Protection Program loans, and eliminates noncontrolling interest. Eliminating the impact of consolidated funds and noncontrolling interest provides investors a view of the performance attributable to CaliberCos Inc. and is consistent with performance models and analysis used by management.

Consolidated Adjusted EBITDA

Consolidated Adjusted EBITDA represents the Company's and the consolidated funds' earnings before net interest expense, income taxes, depreciation and amortization, further adjusted to exclude stock-based compensation, transaction fees, expenses and other public registration direct costs related to aborted or delayed offerings and our Reg A+ offering, the share repurchase costs related to the Company's Buyback Program, litigation settlements, expenses recorded to earnings relating to investment deals which were abandoned or closed, any other non-cash expenses or losses, as further adjusted for extraordinary or non-recurring items.

NON-GAAP RECONCILIATIONS

(AMOUNTS IN THOUSANDS) (UNAUDITED)

 

 

Three Months Ended March 31,

 

2024

 

 

 

2023

 

Net income (loss) attributable to CaliberCos Inc.

$

(3,805

)

 

$

(1,207

)

Net income (loss) attributable to noncontrolling interests

 

(1,457

)

 

 

1,502

 

Net income (loss)

 

(5,262

)

 

 

295

 

Provision for income taxes

 

?

 

 

 

?

 

Net income (loss) before income taxes

 

(5,262

)

 

 

295

 

Depreciation and amortization

 

183

 

 

 

132

 

Consolidated funds' impact on fee-related earnings

 

1,361

 

 

 

(605

)

Stock-based compensation

 

400

 

 

 

702

 

Severance

 

7

 

 

 

13

 

Performance allocations

 

(166

)

 

 

(2,426

)

Other expenses (income), net

 

(272

)

 

 

(519

)

Interest expense, net

 

1,010

 

 

 

580

 

Fee-related earnings

 

(2,739

)

 

 

(1,828

)

Performance allocations

 

166

 

 

 

2,426

 

Interest expense, net

 

(1,010

)

 

 

(580

)

Provision for income taxes

 

?

 

 

 

?

 

Distributable earnings

 

(3,583

)

 

 

18

 

Interest expense

 

1,294

 

 

 

831

 

Share buy-back

 

?

 

 

 

183

 

Other expenses (income), net

 

272

 

 

 

519

 

Provision for income taxes

 

?

 

 

 

?

 

Consolidated funds' impact on Caliber adjusted EBITDA

 

348

 

 

 

(517

)

Caliber adjusted EBITDA

 

(1,669

)

 

 

1,034

 

Consolidated funds' EBITDA adjustments

 

3,856

 

 

 

7,051

 

Consolidated adjusted EBITDA

$

2,187

 

 

$

8,085

 

 

ASSET MANAGEMENT PLATFORM SEGMENT(1)

(AMOUNTS IN THOUSANDS) (UNAUDITED)

 

 

Three Months Ended March 31, 2024

 

Unconsolidated
(Wholly - Owned)

 

Impact of Consolidated Fund and Eliminations

 

Consolidated

Revenues

 

 

 

 

 

Asset management

$

4,555

 

 

$

(1,385

)

 

$

3,170

 

Performance allocations

 

171

 

 

 

(5

)

 

 

166

 

Consolidated funds ? hospitality revenue

 

?

 

 

 

18,145

 

 

 

18,145

 

Consolidated funds ? other revenue

 

?

 

 

 

1,470

 

 

 

1,470

 

Total revenues

 

4,726

 

 

 

18,225

 

 

 

22,951

 

Expenses

 

 

 

 

 

Operating costs

 

5,484

 

 

 

(222

)

 

 

5,262

 

General and administrative

 

1,949

 

 

 

(9

)

 

 

1,940

 

Marketing and advertising

 

106

 

 

 

?

 

 

 

106

 

Depreciation and amortization

 

183

 

 

 

(37

)

 

 

146

 

Consolidated funds ? hospitality expenses

 

?

 

 

 

16,782

 

 

 

16,782

 

Consolidated funds ? other expenses

 

?

 

 

 

3,072

 

 

 

3,072

 

Total expenses

 

7,722

 

 

 

19,586

 

 

 

27,308

 

 

 

 

 

 

 

Other income (expenses), net

 

452

 

 

 

(180

)

 

 

272

 

Interest income

 

285

 

 

 

(168

)

 

 

117

 

Interest expense

 

(1,295

)

 

 

1

 

 

 

(1,294

)

Net (loss) income before income taxes

$

(3,554

)

 

$

(1,708

)

 

$

(5,262

)

Provision for income taxes

 

?

 

 

 

?

 

 

 

?

 

Net loss

 

(3,554

)

 

 

(1,708

)

 

 

(5,262

)

Net loss attributable to noncontrolling interests

 

?

 

 

 

(1,457

)

 

 

(1,457

)

Net loss attributable to CaliberCos Inc.

$

(3,554

)

 

$

(251

)

 

$

(3,805

)

___________________________________________

(1)

Represents the results of our asset management platform segment, which are presented on a basis that deconsolidates our consolidated funds (intercompany eliminations) and eliminate noncontrolling interest.

REVENUE(1)

(AMOUNTS IN THOUSANDS) (UNAUDITED)

 

 

Three Months Ended March 31, 2024

 

 

2024

 

 

2023

Fund set-up fees

$

7

 

$

63

Fund management fees

 

2,562

 

 

2,308

Financing fees

 

73

 

 

327

Development and construction fees

 

1,654

 

 

956

Brokerage fees

 

259

 

 

270

Total asset management

 

4,555

 

 

3,924

Performance allocations

 

171

 

 

2,426

Total revenue

$

4,726

 

$

6,350

___________________________________________

(1)

Represents the results of our asset management platform segment, which are presented on a basis that deconsolidates our consolidated funds (intercompany eliminations) and eliminate noncontrolling interest.

FV AUM

(AMOUNTS IN THOUSANDS) (UNAUDITED)

 

Balances as of December 31, 2023

$

741,190

 

 

 

CHT Contribution

 

29,900

 

 

 

Construction and net market depreciation

 

10,971

 

 

 

Asset sold(1)

 

(12,771

)

 

 

Credit(2)

 

(781

)

 

 

Other(3)

 

(1,771

)

 

 

Balances as of March 31, 2024

$

766,738

 

 

 

 

 

 

 

 

March 31,

 

 

2024

 

 

 

2023

Real Estate

 

 

 

Hospitality

$

67,400

 

 

$

67,200

Caliber Hospitality Trust

 

231,200

 

 

 

201,600

Residential

 

138,900

 

 

 

138,000

Commercial

 

237,800

 

 

 

240,400

Total Real Estate

 

675,300

 

 

 

647,200

Credit(1)

 

83,807

 

 

 

84,588

Other(2)

 

7,631

 

 

 

9,402

Total

$

766,738

 

 

$

741,190

___________________________________________

(1)

Assets sold during the three months ended March 31, 2024 include lot sales related to a development asset in Colorado and one home from our residential fund.

(2)

Credit FV AUM represents loans made to Caliber's investment funds by our diversified credit fund.

(3)

Other FV AUM represents undeployed capital held in our diversified funds.

MANAGED CAPITAL

(AMOUNTS IN THOUSANDS) (UNAUDITED)

 

 

 

 

 

Managed Capital

Balances as of December 31, 2023

 

 

 

$

437,625

 

Originations

 

 

 

 

19,099

 

Redemptions

 

 

 

 

(2,819

)

Balances as of March 31, 2024

 

 

 

$

453,905

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2024

 

December 31, 2023

Real Estate

 

 

 

 

Hospitality

 

$

43,660

 

$

43,660

 

Caliber Hospitality Trust(1)

 

 

84,177

 

 

70,747

 

Residential

 

 

77,262

 

 

74,224

 

Commercial

 

 

157,368

 

 

155,004

 

Total Real Estate(2)

 

 

362,467

 

 

343,635

 

Credit(3)

 

 

83,807

 

 

84,588

 

Other(4)

 

 

7,631

 

 

9,402

 

Total

 

$

453,905

 

$

437,625

 

_________________________________________

(1)

The Company earns a fund management fee of 0.70% of the Caliber Hospitality Trust's enterprise value and is reimbursed for certain costs incurred on behalf of the Caliber Hospitality Trust.

(2)

Beginning during the year ended December 31, 2023, the Company includes capital raised from investors in CaliberCos Inc. through corporate note issuances that was further invested in our funds in Managed Capital. As of March 31, 2024 and December 31, 2023, the Company had invested $18.6 million and $18.3 million, respectively, in our funds.

(3)

Credit managed capital represents loans made to Caliber's investment funds by the Company and our diversified funds. As of March 31, 2024 and December 31, 2023, the Company had loaned $7.2 million and $8.5 million to our funds.

(4)

Other managed capital represents undeployed capital held in our diversified funds.

 


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