FALSE000162728200016272822024-08-122024-08-12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
November 12, 2024
CALIBERCOS INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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001-41703 | | 47-2426901 |
(Commission File Number) | | (IRS Employer Identification No.) |
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8901 E. Mountain View Rd. Ste. 150, Scottsdale, AZ | | 85258 |
(Address of Principal Executive Offices) | | (Zip Code) |
(480) 295-7600
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbols | Name of each exchange on which registered |
Class A Common Stock, par value $0.001 | CWD | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Condition.
On November 12, 2024, CaliberCos Inc. (the “Company”) issued a press release and earnings supplemental reporting third quarter financial results. A copy of the press release and earnings supplemental are attached hereto as Exhibit 99.1 and Exhibit 99.2 and the information therein is incorporated herein by reference.
The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 and Exhibit 99.2 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure.
The information under Item 2.02, above, is incorporated herein by reference.
The information reported under Items 2.02 and 7.01 in this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 attached hereto, shall not be deemed filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits
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Exhibit No. | | Exhibit |
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104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| CaliberCos Inc. |
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November 12, 2024 | | |
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| By: | /s/ John C. Loeffler, II |
| Name: | John C. Loeffler, II |
| Title: | Chairman and Chief Executive Officer |
CALIBER REPORTS THIRD QUARTER 2024 RESULTS
Platform revenue increased 98.9% compared to prior year same quarter, resulting in positive platform earnings
SCOTTSDALE, Ariz., November 12, 2024 – Caliber (NASDAQ: CWD; “CaliberCos Inc.”), a real estate investor, developer, and asset manager, today reported results for the third quarter ended on September 30, 2024.
Within this earnings release, we refer to performance results of the ‘Platform’. Platform refers to the performance of CWD itself, excluding the performance of certain assets & funds that are included in our consolidated results, as required by the United States generally accepted accounting standards (“GAAP”). Management believes that Platform performance offers the most meaningful information needed to understand the value of CWD. The assets and funds that are consolidated into our GAAP presentation are included because Caliber is a guarantor of debt held by these assets and funds.
While GAAP consolidation rules require CWD to include the performance and cash flows of these assets & funds in our consolidated financial information, CWD does not benefit from the performance of those assets & funds, except to the extent that CWD earns fees from managing the assets and funds (which are included in the Platform results). Management believes presenting Platform results, which exclude consolidated assets, directly shows the business performance that CWD stockholders benefit from.
Third Quarter 2024 Platform Financial Highlights (compared to third quarter 2023)
•Platform revenue of $7.4 million, a 98.9% increase
◦Asset management revenue of $7.2 million drove the stated results
◦Performance allocations of $0.2 million
•Platform earnings of $0.2 million, or $0.01 per diluted share, compared to Platform loss of $3.4 million, or $0.16 per diluted share
•Platform Adjusted EBITDA of $2.4 million, a 259.6% increase compared to Platform Adjusted EBITDA loss of $1.5 million
•Fair value assets under management (“FV AUM”) of $807.0 million, an 8.9% increase compared to December 31, 2023, primarily due to the acquisitions of our West Ridge property in Colorado and Canyon Corporate Plaza property in Arizona, net market appreciation, and construction activity; partially offset by land parcel sales at Johnstown, the sale of a school property, and the sale of a self-storage property
•Managed capital of $485.3 million, a 10.9% increase compared to December 31, 2023, with originations of $61.4 million, offset by redemptions of $13.8 million
Management Commentary
"We delivered strong third quarter results with a 98.9% increase nearly doubling Platform revenue, primarily driven by higher fee income from loan placements and offerings,” said Chris Loeffler, CEO of Caliber. “This top-line growth, paired with the impact of our recent cost-reduction initiatives, has boosted our performance, resulting in positive Platform adjusted EBITDA and Platform earnings during the third quarter, ahead of our fourth-quarter 2024 target.”
“While fundraising and commercial real estate remain volatile, for reasons I look forward to discussing on today’s call, our strategic and tactical progress towards consistent, profitable growth is clear.”
Business Update
The following are key milestones completed both during and subsequent to the third quarter ended September 30, 2024.
•On July 2, 2024, Caliber announced the sale of 24-7 Automated Storage, a 348-unit self-storage facility in Casa Grande, Ariz., for $4.6 million.
•On October 1, 2024, Caliber announced the launch of its innovative new Qualified Opportunity Zone Fund Roll-Up program and completed its first merger with a third-party fund resulting in a $14 million increase in managed capital in Caliber’s existing qualified opportunity zone fund (“QOF”), the Caliber Tax Advantaged Opportunity Zone Fund, LP (CTAF I).
•On October 8, 2024, Caliber announced that it reached a definitive agreement with Satori Collective where Satori will contribute seven hotel properties to Caliber subsidiary Caliber Hospitality Trust (CHT), an externally advised private hospitality corporation. The contribution, when closed, is expected to increase assets under management (“AUM”) by approximately $120 million.
Third Quarter 2024 Consolidated Financial Results (compared to third quarter 2023)
Caliber’s GAAP consolidated financial statements have been impacted by the deconsolidation of certain variable interest entities’ assets, liabilities, revenues, and expenses. These entities were deconsolidated because Caliber was no longer a guarantor on the respective entities’ third party debt. Caliber’s GAAP financial metrics are impacted by the timing of deconsolidation. As such, prior periods presented may not be comparable due to the deconsolidation of certain entities in the current period.
•Total consolidated revenue of $11.3 million, a 33.6% decrease reflecting the deconsolidation of Caliber Hospitality, LP and CHT, in March 2024. Caliber estimates total revenue would have increased had the deconsolidated asset results not been included in the Q3 2023 comparison period.
•Consolidated net income attributable to Caliber of $0.1 million, or $0.01 per diluted share, compared to net loss attributable to Caliber of $3.4 million or $0.16 per diluted share
•Consolidated Adjusted EBITDA of $4.2 million, compared to Consolidated Adjusted EBITDA loss of $3.2 million.
Conference Call Information
Caliber will host a conference call today, Tuesday, November 12, 2024, at 5:00 p.m. Eastern Time (ET) to discuss its third quarter 2024 financial results and business outlook. To access this call, dial 1-800-717-1738 (domestic) or 1-646-307-1865 (international). 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.
CONTACTS:
Caliber:
Victoria Rotondo
+1 480-295-7600
Victoria.Rotondo@caliberco.com
Investor Relations:
Lisa Fortuna, Financial Profiles
+1 310-622-8251
ir@caliberco.com
Media Relations:
Kelly McAndrew, Financial Profiles
+1 310-622-8239
KMcAndrew@finprofiles.com
NON-GAAP RECONCILIATIONS
(AMOUNTS IN THOUSANDS) (UNAUDITED)
The following information reconciles the performance of the Platform to the consolidated GAAP presentation. Management believes that the Platform view of Caliber’s performance is more meaningful to a CWD shareholder since it includes all revenues and expenses generated by Caliber and its wholly owned subsidiaries.
ASSET MANAGEMENT PLATFORM SEGMENT(1)
(AMOUNTS IN THOUSANDS) (UNAUDITED)
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| Three Months Ended September 30, 2024 | | |
| Platform | | Impact of Consolidated Fund and Eliminations | | Consolidated | | | | | | |
Revenues | | | | | | | | | | | |
Asset management | $ | 7,242 | | | $ | (712) | | | $ | 6,530 | | | | | | | |
Performance allocations | 174 | | | 1 | | | 175 | | | | | | | |
Consolidated funds – hospitality revenue | — | | | 2,494 | | | 2,494 | | | | | | | |
Consolidated funds – other revenue | — | | | 2,103 | | | 2,103 | | | | | | | |
Total revenues | 7,416 | | | 3,886 | | | 11,302 | | | | | | | |
Expenses | | | | | | | | | | | |
Operating costs | 4,727 | | | (135) | | | 4,592 | | | | | | | |
General and administrative | 1,450 | | | (9) | | | 1,441 | | | | | | | |
Marketing and advertising | 175 | | | (1) | | | 174 | | | | | | | |
Depreciation and amortization | 145 | | | 4 | | | 149 | | | | | | | |
Consolidated funds – hospitality expenses | — | | | 3,097 | | | 3,097 | | | | | | | |
Consolidated funds – other expenses | — | | | 975 | | | 975 | | | | | | | |
Total expenses | 6,497 | | | 3,931 | | | 10,428 | | | | | | | |
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Other income (expenses), net | 526 | | | (101) | | | 425 | | | | | | | |
Interest income | 59 | | | (8) | | | 51 | | | | | | | |
Interest expense | (1,348) | | | (1) | | | (1,349) | | | | | | | |
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Net income (loss) before income taxes | $ | 156 | | | $ | (155) | | | $ | 1 | | | | | | | |
Provision for income taxes | — | | | — | | | — | | | | | | | |
Net income (loss) | 156 | | | (155) | | | 1 | | | | | | | |
Net income attributable to noncontrolling interests | — | | | (145) | | | (145) | | | | | | | |
Net income (loss) attributable to CaliberCos Inc. | $ | 156 | | | $ | (10) | | | $ | 146 | | | | | | | |
Basic Platform income per share | $ | 0.01 | | | | | $ | 0.01 | | | | | | | |
Diluted Platform income per share | $ | 0.01 | | | | | $ | 0.01 | | | | | | | |
Weighted average common shares outstanding: | | | | | | | | | | | |
Basic | 22,128 | | | | | 22,128 | | | | | | |
Diluted | 24,867 | | | | | 24,867 | | | | | | |
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___________________________________________
(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.
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| Three Months Ended September 30, 2023 | | |
| Platform | | Impact of Consolidated Fund and Eliminations | | Consolidated | | | | | | |
Revenues | | | | | | | | | | | |
Asset management | $ | 3,704 | | | $ | (1,388) | | | $ | 2,316 | | | | | | | |
Performance allocations | 24 | | | 12 | | | 36 | | | | | | | |
Consolidated funds – hospitality revenue | — | | | 12,526 | | | 12,526 | | | | | | | |
Consolidated funds – other revenue | — | | | 2,147 | | | 2,147 | | | | | | | |
Total revenues | 3,728 | | | 13,297 | | | 17,025 | | | | | | | |
Expenses | | | | | | | | | | | |
Operating costs | 4,724 | | | 157 | | | 4,881 | | | | | | | |
General and administrative | 1,651 | | | 21 | | | 1,672 | | | | | | | |
Marketing and advertising | 208 | | | 2 | | | 210 | | | | | | | |
Depreciation and amortization | 73 | | | 67 | | | 140 | | | | | | | |
Consolidated funds – hospitality expenses | — | | | 18,644 | | | 18,644 | | | | | | | |
Consolidated funds – other expenses | — | | | 2,883 | | | 2,883 | | | | | | | |
Total expenses | 6,656 | | | 21,774 | | | 28,430 | | | | | | | |
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Other income (expenses), net | 149 | | | 265 | | | 414 | | | | | | | |
Interest income | 730 | | | (645) | | | 85 | | | | | | | |
Interest expense | (1,317) | | | 1 | | | (1,316) | | | | | | | |
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Net loss before income taxes | $ | (3,366) | | | $ | (8,856) | | | $ | (12,222) | | | | | | | |
Provision for income taxes | — | | | — | | | — | | | | | | | |
Net loss | (3,366) | | | (8,856) | | | (12,222) | | | | | | | |
Net loss attributable to noncontrolling interests | — | | | (8,813) | | | (8,813) | | | | | | | |
Net loss attributable to CaliberCos Inc. | $ | (3,366) | | | $ | (43) | | | $ | (3,409) | | | | | | | |
Basic and Diluted Platform loss per share | $ | (0.16) | | | | | $ | (0.16) | | | | | | | |
Weighted average common shares outstanding: | | | | | | | | | | | |
Basic and diluted | 21,238 | | | | | 21,238 | | | | | | |
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PLATFORM REVENUE(1)
(AMOUNTS IN THOUSANDS) (UNAUDITED)
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| Three Months Ended September 30, 2024 | | | | |
| 2024 | | 2023 | | | | |
Fund set-up fees | $ | 831 | | | $ | 398 | | | | | |
Fund management fees | 2,744 | | | 2,457 | | | | | |
Financing fees | 464 | | | 154 | | | | | |
Development and construction fees | 3,084 | | | 516 | | | | | |
Brokerage fees | 119 | | | 179 | | | | | |
Total asset management | 7,242 | | | 3,704 | | | | | |
Performance allocations | 174 | | | 24 | | | | | |
Total revenue | $ | 7,416 | | | $ | 3,728 | | | | | |
___________________________________________
(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.
FVAUM and Managed Capital (UNAUDITED)
The following information summarizes management’s estimates of fair value related to the entire portfolio of investments that Caliber manages and the total amount of capital that is being managed across the portfolio. The fair value of our AUM conveys an indication of the overall health of our investments and potentially how much performance allocation Caliber would earn if those assets were sold. Managed Capital is used to evaluate, among other things, the amount of asset management fees we generate from the portfolio.
FV AUM
(AMOUNTS IN THOUSANDS) (UNAUDITED)
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Balances as of December 31, 2023 | $ | 741,190 | |
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CHT contribution | 29,900 | |
Construction and net market appreciation | 10,971 | |
Assets sold(3) | (12,771) | |
Credit(1) | (781) | |
Other(2) | (1,771) | |
Balances as of March 31, 2024 | 766,738 | |
Assets acquired(4) | 14,000 | |
Construction and net market appreciation | 27,994 | |
Assets sold or disposed(3) | (22,994) | |
Credit(1) | (12,835) | |
Other(2) | 310 | |
Balances as of June 30, 2024 | 773,213 | |
Assets acquired(4) | 20,590 | |
Construction and net market appreciation | 11,910 | |
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Credit(1) | (431) | |
Other(2) | 1,679 | |
Balances as of September 30, 2024 | $ | 806,961 | |
FV AUM, by asset class
(AMOUNTS IN THOUSANDS) (UNAUDITED)
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| September 30, 2024 | | December 31, 2023 |
Real Estate | | | |
Hospitality | $ | 68,800 | | | $ | 67,200 | |
Caliber Hospitality Trust | 240,300 | | | 201,600 | |
Residential | 162,100 | | | 138,000 | |
Commercial | 255,600 | | | 240,400 | |
Total Real Estate | 726,800 | | | 647,200 | |
Credit(1) | 70,541 | | | 84,588 | |
Other(2) | 9,620 | | | 9,402 | |
Total | $ | 806,961 | | | $ | 741,190 | |
___________________________________________
(1) Other FV AUM represents undeployed capital held in our diversified funds.
(2) Credit FV AUM represents loans made to Caliber’s investment funds by our diversified credit fund.
(3) Assets sold during the nine months ended September 30, 2024 include a commercial asset, lot sales related to two development assets in Colorado, and one home from our residential fund.
(4) Assets acquired during the nine months ended September 30, 2024, include West Ridge, a 133 acre mixed-use land development in Colorado and Canyon, an office building conversion to multi-family residential..
MANAGED CAPITAL
(AMOUNTS IN THOUSANDS) (UNAUDITED)
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| | | | Managed Capital | |
Balances as of December 31, 2023 | | | | $ | 437,625 | | |
Originations | | | | 19,099 | | |
Redemptions | | | | (2,819) | | |
Balances as of March 31, 2024 | | | | 453,905 | | |
Originations | | | | 18,936 | | |
Redemptions | | | | (3,041) | | |
Balances as of June 30, 2024 | | | | 469,800 | | |
Originations | | | | 23,372 | | |
Redemptions | | | | (7,900) | | |
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Balances as of September 30, 2024 | | | | $ | 485,272 | | |
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| | September 30, 2024 | | December 31, 2023 | |
Real Estate | | | | | |
Hospitality | | $ | 47,560 | | | $ | 43,660 | | |
Caliber Hospitality Trust(1) | | 96,879 | | | 70,747 | | |
Residential | | 92,683 | | | 74,224 | | |
Commercial | | 167,989 | | | 155,004 | | |
Total Real Estate(2) | | 405,111 | | | 343,635 | | |
Credit(3) | | 70,541 | | | 84,588 | | |
Other(4) | | 9,620 | | | 9,402 | | |
Total | | $ | 485,272 | | | $ | 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 September 30, 2024 and December 31, 2023, the Company had invested $19.7 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 September 30, 2024 and December 31, 2023, the Company had loaned $0.3 million and $8.5 million to our funds.
(4) Other managed capital represents undeployed capital held in our diversified funds.
Consolidated GAAP Results
The following information presents our consolidated GAAP results which includes the performance of certain entities we manage where Caliber is the guarantor of debt owed by those entities, despite not having significant equity at risk. As a result of these guarantor commitments, Caliber is required under GAAP to include the assets, liabilities, revenues and expenses of those entities even though a shareholder of CWD stock is neither entitled to nor exposed by those entities’ benefits or obligations. This accounting outcome also removes revenues that we earn from those entities, which a shareholder of CWD stock would be entitled to. See discussion elsewhere related to CWD’s Platform performance.
CALIBERCOS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | |
| 2024 | | 2023 | | | | |
| (unaudited) | | |
Revenues | | | | | | | |
Asset management revenues | $ | 6,530 | | | $ | 2,316 | | | | | |
Performance allocations | 175 | | | 36 | | | | | |
Consolidated funds – hospitality revenues | 2,494 | | | 12,526 | | | | | |
Consolidated funds – other revenues | 2,103 | | | 2,147 | | | | | |
Total revenues | 11,302 | | | 17,025 | | | | | |
| | | | | | | |
Expenses | | | | | | | |
Operating costs | 4,592 | | | 4,881 | | | | | |
General and administrative | 1,441 | | | 1,672 | | | | | |
Marketing and advertising | 174 | | | 210 | | | | | |
Depreciation and amortization | 149 | | | 140 | | | | | |
Consolidated funds – hospitality expenses | 3,097 | | | 18,644 | | | | | |
Consolidated funds – other expenses | 975 | | | 2,883 | | | | | |
Total expenses | 10,428 | | | 28,430 | | | | | |
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Other income, net | 425 | | | 414 | | | | | |
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Interest income | 51 | | | 85 | | | | | |
Interest expense | (1,349) | | | (1,316) | | | | | |
Net income (loss) before income taxes | 1 | | | (12,222) | | | | | |
Benefit from income taxes | — | | | — | | | | | |
Net income (loss) | 1 | | | (12,222) | | | | | |
Net loss attributable to noncontrolling interests | (145) | | | (8,813) | | | | | |
Net income (loss) attributable to CaliberCos Inc. | 146 | | | (3,409) | | | | | |
Basic net income (loss) per share attributable to common stockholders | $ | 0.01 | | | $ | (0.16) | | | | | |
Diluted net income (loss) per share attributable to common stockholders | $ | 0.01 | | | $ | (0.16) | | | | | |
Weighted average common shares outstanding: | | | | | | | |
Basic | 22,128 | | 21,238 | | | | |
Diluted | 24,867 | | 21,238 | | | | |
CALIBERCOS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
| | | | | | | | | | | | | | |
| September 30, 2024 | | December 31, 2023 | |
| (unaudited) | | | |
Assets | | | | |
Cash | $ | 516 | | | $ | 940 | | |
Restricted cash | 2,534 | | | 2,569 | | |
Real estate investments, net | 21,515 | | | 21,492 | | |
| | | | |
Notes receivable - related parties | — | | | 50 | | |
Due from related parties | 12,305 | | | 9,709 | | |
Investments in unconsolidated entities | 12,723 | | | 3,338 | | |
Operating lease - right of use assets | 159 | | | 193 | | |
| | | | |
Prepaid and other assets | 2,808 | | | 2,781 | | |
Assets of consolidated funds | | | | |
Cash | 1,053 | | | 2,865 | | |
Restricted cash | — | | | 11,266 | | |
Real estate investments, net | 46,084 | | | 185,636 | | |
| | | | |
Accounts receivable, net | 184 | | | 1,978 | | |
Notes receivable - related parties | 58,233 | | | 34,620 | | |
| | | | |
Operating lease - right of use assets | — | | | 10,318 | | |
| | | | |
Prepaid and other assets | 469 | | | 11,677 | | |
Total assets | $ | 158,583 | | | $ | 299,432 | | |
CALIBERCOS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA)
| | | | | | | | | | | | | | |
| September 30, 2024 | | December 31, 2023 | |
Liabilities and Stockholders’ Equity | | | | |
Notes payable | $ | 49,673 | | | $ | 53,799 | | |
| | | | |
Accounts payable and accrued expenses | 8,638 | | | 8,886 | | |
| | | | |
Due to related parties | 210 | | | 257 | | |
Operating lease liabilities | 100 | | | 119 | | |
| | | | |
Other liabilities | 763 | | | 420 | | |
Liabilities of consolidated funds | | | | |
Notes payable, net | 33,752 | | | 129,684 | | |
Notes payable - related parties | — | | | 12,055 | | |
Accounts payable and accrued expenses | 1,444 | | | 11,736 | | |
Due to related parties | 35 | | | 101 | | |
Operating lease liabilities | — | | | 13,957 | | |
| | | | |
Other liabilities | 687 | | | 2,400 | | |
Total liabilities | 95,302 | | | 233,414 | | |
| | | | |
Commitments and Contingencies | | | | |
| | | | |
| | | | |
Common stock Class A, $0.001 par value; 100,000,000 shares authorized, 14,967,702 and 13,872,671 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 15 | | | 14 | | |
Common stock Class B, $0.001 par value; 15,000,000 shares authorized, 7,416,414 shares issued and outstanding as September 30, 2024 and December 31, 2023 | 7 | | | 7 | | |
Paid-in capital | 41,348 | | | 39,432 | | |
| | | | |
Accumulated deficit | (46,784) | | | (36,830) | | |
Stockholders’ equity (deficit) attributable to CaliberCos Inc. | (5,414) | | | 2,623 | | |
Stockholders’ equity attributable to noncontrolling interests | 68,695 | | | 63,395 | | |
Total stockholders’ equity | 63,281 | | | 66,018 | | |
Total liabilities and stockholders’ equity | $ | 158,583 | | | $ | 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.
Asset Management Platform or Platform
Platform refers to the performance of the Caliber asset management platform segment, which generates revenues and expenses from managing our investment portfolio, which does not include any consolidated assets or funds. These activities include asset management, transaction services, and performance allocations. Management believes that this is an important view of the Company because it communicates performance of the Company that would be most useful for understanding the value of CWD.
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.
Platform Earnings
Platform Earnings represents the performance of the Caliber asset management platform segment, which generates revenues and expenses from managing our investment portfolio, excluding any consolidated assets or funds.
Platform Earnings per Share
Platform Earnings per Share is calculated as Platform Earnings divided by weighted average CWD common shares outstanding.
Platform Adjusted EBITDA
Platform 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 the CaliberCos Inc. Platform 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 ADJUSTED EBITDA
(AMOUNTS IN THOUSANDS) (UNAUDITED)
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | |
2024 | | 2023 | | | | |
Net income (loss) attributable to CaliberCos Inc. | $ | 146 | | | $ | (3,409) | | | | | |
Net loss attributable to noncontrolling interests | (145) | | | (8,813) | | | | | |
Net income (loss) | 1 | | | (12,222) | | | | | |
Provision for income taxes | — | | | — | | | | | |
Net income (loss) before income taxes | 1 | | | (12,222) | | | | | |
Depreciation and amortization | 145 | | | 140 | | | | | |
Consolidated funds' impact on fee-related earnings | 45 | | | 8,477 | | | | | |
Stock-based compensation | 738 | | | 393 | | | | | |
Severance | 25 | | | 6 | | | | | |
| | | | | | | |
| | | | | | | |
Performance allocations | (175) | | | (36) | | | | | |
Other expenses (income), net | (425) | | | (414) | | | | | |
| | | | | | | |
Interest expense, net | 1,289 | | | 587 | | | | | |
Fee-related earnings | 1,643 | | | (3,069) | | | | | |
Performance allocations | 175 | | | 36 | | | | | |
Interest expense, net | (1,289) | | | (587) | | | | | |
Provision for income taxes | — | | | — | | | | | |
Distributable earnings | 529 | | | (3,620) | | | | | |
Interest expense | 1,349 | | | 1,316 | | | | | |
| | | | | | | |
Other expenses (income), net | 425 | | | 414 | | | | | |
Provision for income taxes | — | | | — | | | | | |
| | | | | | | |
| | | | | | | |
Consolidated funds' impact on Caliber adjusted EBITDA | 109 | | | 379 | | | | | |
Platform adjusted EBITDA | 2,412 | | | (1,511) | | | | | |
Consolidated funds' EBITDA adjustments | 1,836 | | | (1,646) | | | | | |
Consolidated adjusted EBITDA | $ | 4,248 | | | $ | (3,157) | | | | | |
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3Q 2024 Earnings Supplemental ©2024 Caliber Building on a 15-year track record of profitable growth and success
Forward-Looking Statements This presentation includes statements concerning CaliberCos Inc.’s (the “Company,” or “Caliber”) expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance, or growth and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, readers and the audience can identify these forward-looking statements through the use of words or phrases such as "estimate,“ "expect," "anticipate," "intend," "plan," "project," "believe," "forecast," "should," "could," and other similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. The Company's expectations, beliefs, and projections are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that management's expectations, beliefs, or projections will be achieved or accomplished. Factors that may cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to, factors affecting the Company’s ability to successfully operate and manage its business, including, among others, title disputes, weather conditions, shortages, delays, or unavailability of equipment and services, property management, brokerage, investment and fund operations, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; changes in costs of operations; loss of markets; volatility of asset prices; imprecision of asset valuations; environmental risks; competition; inability to access sufficient capital; general economic conditions; litigation; changes in regulation and legislation; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks, or pest infestation; increasing costs of insurance, changes in coverage and the ability to obtain insurance; and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made or to reflect the occurrence of unanticipated events. Past performance is not indicative of future results. There is no guarantee that any specific outcome will be achieved. Investment may be speculative and illiquid and there is a total risk of loss. There is no guarantee that any specific investment will be suitable or profitable. This presentation does not constitute an offering of, nor does it constitute the solicitation of an offer to buy, securities of the Company. This presentation is provided solely to introduce the Company to the recipient and to determine whether the recipient would like additional information regarding the Company and its anticipated plans. Any investment in the Company or sale of its securities will only take place pursuant to an appropriate, private placement memorandum and a detailed subscription agreement. Some of the information contained herein is confidential and proprietary to the Company and the presentation is provided to the recipient with the express understanding that without the prior written permission of the Issuer, such recipient will not distribute or release the information contained herein, make reproductions of, or use it for any purpose other than determining whether the recipient wishes additional information regarding the Company or its plans. By accepting delivery of this presentation, the recipient agrees to return same to the Company if the recipient does not wish to receive any further information regarding the Company. We have filed a registration statement (including a preliminary prospectus) with the SEC for the offering to which this communication relates. The registration statement has not yet become effective. Before you invest, you should read the preliminary prospectus in that registration statement (including the risk factors described therein) and other documents that we have filed with the SEC for more complete information. You may access these documents for free by visiting Edgar on the SEC website at httpp://www.sec.gov CALIBERCO.COM | 8901 E MOUNTAIN VIEW RD, STE 150, SCOTTSDALE, AZ 85258 | 480.295.7600 2 T H E W E A L T H D E V E L O P M E N T C O M P A N Y Disclaimers
Today’s Speakers 3T H E W E A L T H D E V E L O P M E N T C O M P A N Y Chris Loeffler CHIEF EXECUTIVE OFFICER Jade Leung CHIEF FINANCIAL OFFICER Chris Loeffler has served as the CEO and Chairman of Caliber’s Board of Directors since its inception. As CEO, Chris directs and executes global strategy, oversees investments and fund management, and contributes to private and public capital formation. As a Co-Founder Chris took an early role forming the Company’s financial and operational infrastructure and navigating the vertical integration of all real estate and investment services. Jade Leung is Caliber’s CFO and corporate secretary. As CFO, Jade oversees all aspects of accounting and controllership, financial planning and analysis, tax, financial reporting, and treasury functions at Caliber. Jade is also responsible for the strategic direction of Caliber’s information technology and data security initiatives. Prior to joining Caliber, Jade spent 12 years with PwC, where he managed audit and accounting advisory services. Notably, Jade participated in over $1 billion of public market transactions and financing arrangements for companies.
CEO Commentary 4T H E W E A L T H D E V E L O P M E N T C O M P A N Y
1. 15+-year history of growth across market cycles with $2.9 billion pool of assets under management and under development 2. Demonstrated track record of delivering unlevered annualized gross internal rate of return (IRR) of 19% on investments sold 3. Large and growing market opportunity with investment in alternative assets forecasted to increase 50% from 2023 to 20281 4. Sizable and loyal customer base with estimated $13 billion in net worth; successful track record of fundraising to over $710 million since inception 5. Fit for purpose business model with distinct competitive advantages including in-house services model and focus on underserved, complex, middle-market real estate in the Western U.S. 6. Poised for next level of growth with scalable infrastructure and focused value-creation model 7. Experienced, cycle tested management team with significant insider ownership Why Invest in Caliber (Nasdaq: CWD)? 5T H E W E A L T H D E V E L O P M E N T C O M P A N Y (1) Preqin Future of Alternatives 2028 report, October 2023
Caliber… In Three Numbers 6T H E W E A L T H D E V E L O P M E N T C O M P A N Y 15yrs 19% IRR $2.9 Billion* *AUD & AUM
Publicly Traded Parent Operates Investment Funds 7T H E W E A L T H D E V E L O P M E N T C O M P A N Y Caliber Nasdaq: CWD RE Fund 1 RE Fund 2 Hotel UPREIT
8 BEHAVIORAL HEALTH HOSPITAL HOSPITALITY/HOTEL MULTI-FAMILY HOUSING OPPORTUNITY ZONE ASSETS We Invest in Real Estate Where Most Others… Don’t
9T H E W E A L T H D E V E L O P M E N T C O M P A N Y The Best Opportunities are in the Middle-Market Middle-Market Assets • $5 to $50 million per project • Large opportunity set • Highly-fragmented market • Less competition • Caliber’s in-house services model enables access Middle Market Geographies • Demonstrated Population & Job Growth • Underserved in terms of financing options • Opportunity Zone tax incentives • Local tax incentives • Trends post-pandemic
10T H E W E A L T H D E V E L O P M E N T C O M P A N Y Income Lending, CORE Plus, Value Add Growth Distressed and Special Situations, Adaptive Re-Use & Development Tax Planning/Reduction Opportunity Zone Funds, 1031 Investments We Solve Our Clients’ Financial Needs Desired Outcome Caliber Product Our Job Is Simple: Deliver Returns Clients Expect In All Market Conditions Clients who invest in Caliber’s Funds seek three primary outcomes:
Our Market Is Growing Dramatically 11T H E W E A L T H D E V E L O P M E N T C O M P A N Y Source: Preqin Future of Alternatives 2028 report, October 2023 *Forecast 10.1 16.3 24.5 0 5 10 15 20 25 30 2019 2024* 2028* A ss e ts U n d e r M a n a g e m e n t ($ tr il lio n ) $24.5 Trillion in Global Alternative AUM Forecasted by 2028 CAGR: 10.3%
Performance Allocations Asset Management Revenue We Have Multiple Revenue Streams 12T H E W E A L T H D E V E L O P M E N T C O M P A N Y Note: asset services performed in-house at market rates.
Increasing The Money We Manage/Invest Is A Core Growth Driver 13T H E W E A L T H D E V E L O P M E N T C O M P A N Y High Net-Worth Investors Registered Investment Advisors & Independent Broker-Dealers Family Offices Boutique Institutions Caliber Private Client Sales Caliber Wholesale Caliber Institutional
Caliber Hospitality Trust – Another Path To Revenue Growth 14T H E W E A L T H D E V E L O P M E N T C O M P A N Y Using the Caliber infrastructure to launch public investment products
Consistent Growth – A Model We’ve Succeeded With For 15 Years 15T H E W E A L T H D E V E L O P M E N T C O M P A N Y Raise Capital Grow Assets Under Management Grow Revenue
Source: Caliber’s estimates and internal research reviewing comparable business models Caliber Earns More Per Dollar in AUM 16T H E W E A L T H D E V E L O P M E N T C O M P A N Y Caliber’s In-House Services Model: Increased Control & Multiple Revenue Streams Traditional Asset Managers: Lower Control & Fewer Revenue Opportunities Fund Management Fees Performance Allocations (Carried Interest) Fund Set-Up Fees Financing Fees Real Estate Development Fees Brokerage Fees Low-Margin, High-Volume Services In-House Revenues Outsourced Asset Management Performance Fees (Carried Interest) All Additional Services Outsourced In-House Revenues Caliber has optimized in-house and third-party services to maximize control and profitability
2026 Financial Targets* 17T H E W E A L T H D E V E L O P M E N T C O M P A N Y Cumulative Fundraising of $750M Annualized Platform Revenue of $50M Assets Under Management (AUM) of $3B * End of 2026
Path Forward for Enterprise Value Growth 18T H E W E A L T H D E V E L O P M E N T C O M P A N Y Fundraising Product Innovation Acquisitions
Our Interests Are Aligned – Insiders Own ~50% Of Our Stock 19T H E W E A L T H D E V E L O P M E N T C O M P A N Y The people who built Caliber, still manage Caliber Chris Loeffler CHIEF EXECUTIVE OFFICER Jennifer Schrader PRESIDENT Jade Leung CHIEF FINANCIAL OFFICER Roy Bade CHIEF DEVELOPMENT OFFICER With a growing team of talented executives Ignacio Martinez CHIEF OPERATING OFFICER George Pace EVP FUNDRAISING Yaron Ashkenazi HEAD OF HOSPITALITY John Hartman CHIEF INVESTMENT OFFICER
Independent Board Committed to Strong Corporate Governance 20T H E W E A L T H D E V E L O P M E N T C O M P A N Y • Chris Loeffler – Chief Executive Officer & Co-Founder • Jennifer Schrader – President & Co-Founder • Dan Hansen – Lead Independent Director • William J. Gerber – Director • Michael Trzupek – Director • Lawrence X. Taylor – Director Commitment to Corporate Governance ✓ 5+ year history of public company reporting; Big 4 auditor ✓ Established Board Committees and Charters ✓ Commitment to sustainable business practices Public Company, Asset Management, Real Estate and Public Company Experience Our Directors
3Q 2024 Financial Highlights 21T H E W E A L T H D E V E L O P M E N T C O M P A N Y
3rd Quarter – Summary Highlights 22T H E W E A L T H D E V E L O P M E N T C O M P A N Y Financial Measures Metrics Corporate • Fair value assets under management of $807.0 million • Managed capital of $485.3 million • Total revenues of $11.3 million • Platform revenue of $7.4 million, primarily driven by an increase in asset management revenue • Net loss attributable to Caliber of $1.4 million, or $0.06 per diluted share • Platform Adjusted EBITDA of $2.4 million • On July 2, 2024, Caliber announced the sale of 24-7 Automated Storage, a 348-unit self-storage facility in Casa Grande, Ariz., for $4.6 million. • On October 1, 2024, Caliber announced the launch of its innovative new Qualified Opportunity Zone Fund Roll-Up program and completed its first merger with a third-party fund resulting in a $14 million increase in managed capital in Caliber’s existing qualified opportunity zone fund (“QOF”), the Caliber Tax Advantaged Opportunity Zone Fund, LP (CTAF I). • On October 8, 2024, Caliber announced that it reached a definitive agreement with Satori Collective where Satori will contribute seven hotel properties to Caliber subsidiary Caliber Hospitality Trust (CHT), an externally advised private hospitality corporation. The contribution, when closed, is expected to increase assets under management (“AUM”) by approximately $120 million. • As of September 30, 2024, Caliber was actively developing 1,796 multifamily units, 697 single family units, 3.7 million square feet of commercial and industrial, and 3.5 million square feet of office and retail.
$17,025 $11,302 $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q3'23 Q3'24 (0 0 0 s) Total Consolidated Revenue* 3rd Quarter Summary Results 23T H E W E A L T H D E V E L O P M E N T C O M P A N Y Source: Caliber reports Net (Loss) Income (per common share) $(0.16) Q3’23 $0.01 Q3’24 $3,728 $7,416 $- $2,000 $4,000 $6,000 $8,000 $10,000 Q3'23 Q3'24 (0 0 0 s) Total Platform Revenue Asset Mgmt Fees Performance Allocations Platform Adj. EBITDA (Loss) (000’s) $(1,511) Q3’23 $2,412 Q3’24 *As previously communicated, Caliber has simplified the presentation of its financial performance by deconsolidating certain assets from the Company’s financials. As a result, the year-over-year comparisons of Caliber’s GAAP financial performance are not meaningful.
3rd Quarter – Historical Summary Results 24T H E W E A L T H D E V E L O P M E N T C O M P A N Y $383 $392 $402 $412 $438 $454 $470 $485 $- $100 $200 $300 $400 $500 $600 $700 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 (0 0 0 ,0 0 0 s) Managed Capital $(1,766) $1,034 $(2,327) $(1,511) $1,553 $(1,669) $(2,451) $2,412 $(3,000) $(2,000) $(1,000) $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 (0 0 0 s) Adjusted EBITDA $5,422 $6,350 $3,373 $3,728 $7,187 $4,726 $4,212 $7,416 $- $2,000 $4,000 $6,000 $8,000 $10,000 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 (0 0 0 s) Total Platform Revenue Asset Mgmt Performance $746 $807 $825 $823 $741 $767 $773 $807 $600 $700 $800 $900 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 (0 0 0 s) FV AUM
3Q 2024 Financial Review 25T H E W E A L T H D E V E L O P M E N T C O M P A N Y
GAAP Income Statement 26T H E W E A L T H D E V E L O P M E N T C O M P A N Y
GAAP Income Statement (concl.) 27T H E W E A L T H D E V E L O P M E N T C O M P A N Y
GAAP Balance Sheet 28T H E W E A L T H D E V E L O P M E N T C O M P A N Y CALIBERCOS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA) September 30, 2024 December 31, 2023 (unaudited) Assets Cash $ 516 $ 940 Restricted cash 2,534 2,569 Real estate investments, net 21,515 21,492 Notes receivable - related parties — 50 Due from related parties 12,305 9,709 Investments in unconsolidated entities 12,723 3,338 Operating lease - right of use assets 159 193 Prepaid and other assets 2,808 2,781 Assets of consolidated funds Cash 1,053 2,865 Restricted cash — 11,266 Real estate investments, net 46,084 185,636 Accounts receivable, net 184 1,978 Notes receivable - related parties 58,233 34,620 Operating lease - right of use assets — 10,318 Prepaid and other assets 469 11,677 Total assets $ 158,583 $ 299,432
GAAP Balance Sheet (concl.) 29T H E W E A L T H D E V E L O P M E N T C O M P A N Y September 30, 2024 December 31, 2023 Liabilities and Stockholders’ Equity Notes payable $ 49,673 $ 53,799 Accounts payable and accrued expenses 8,638 8,886 Due to related parties 210 257 Operating lease liabilities 100 119 Other liabilities 763 420 Liabilities of consolidated funds Notes payable, net 33,752 129,684 Notes payable - related parties — 12,055 Accounts payable and accrued expenses 1,444 11,736 Due to related parties 35 101 Operating lease liabilities — 13,957 Other liabilities 687 2,400 Total liabilities 95,302 233,414
GAAP Balance Sheet (cont.) 30T H E W E A L T H D E V E L O P M E N T C O M P A N Y CALIBERCOS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE DATA) Commitments and Contingencies Common stock Class A, $0.001 par value; 100,000,000 shares authorized, 14,967,702 and 13,872,671 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 15 14 Common stock Class B, $0.001 par value; 15,000,000 shares authorized, 7,416,414 shares issued and outstanding as September 30, 2024 and December 31, 2023 7 7 Paid-in capital 41,348 39,432 Accumulated deficit (46,784) (36,830) Stockholders’ equity (deficit) attributable to CaliberCos Inc. (5,414) 2,623 Stockholders’ equity attributable to noncontrolling interests 68,695 63,395 Total stockholders’ equity 63,281 66,018 Total liabilities and stockholders’ equity $ 158,583 $ 299,432
https://www.caliberco.com/ CaliberCos NASDAQ: CWD Contacts: Chris Loeffler, CEO Chris.Loeffler@CaliberCo.com Lisa Fortuna, Investor Relations, Financial Profiles lfortuna@finprofiles.com
Appendix 32T H E W E A L T H D E V E L O P M E N T C O M P A N Y
33T H E W E A L T H D E V E L O P M E N T C O M P A N Y 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. Asset Management Platform or Platform Platform refers to the performance of the Caliber asset management platform segment, which generates revenues and expenses from managing our investment portfolio, which does not include any consolidated assets or funds. These activities include asset management, transaction services, and performance allocations. Management believes that this is an important view of the Company because it communicates performance of the Company that would be most useful for understanding the value of CWD. 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. NON-GAAP Measures
34T H E W E A L T H D E V E L O P M E N T C O M P A N Y Platform Earnings Platform Earnings represents the performance of the Caliber asset management platform segment, which generates revenues and expenses from managing our investment portfolio, excluding any consolidated assets or funds. Platform Earnings per Share Platform Earnings per Share is calculated as Platform Earnings divided by weighted average CWD common shares outstanding. Platform Adjusted EBITDA Platform 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. The following tables presents a reconciliation of net (loss) income attributable to CaliberCos Inc. to Fee-Related Earnings, Distributable Earnings, Caliber Adjusted EBITDA, and Consolidated Adjusted EBITDA for the quarters ended September 30, 2024, and 2023 (in thousands): NON-GAAP Measures
NON-GAAP Reconciliations 35T H E W E A L T H D E V E L O P M E N T C O M P A N Y
NON-GAAP Reconciliations (cont.) 36T H E W E A L T H D E V E L O P M E N T C O M P A N Y
NON-GAAP Reconciliations (cont.) 37T H E W E A L T H D E V E L O P M E N T C O M P A N Y
NON-GAAP Reconciliations (cont.) 38T H E W E A L T H D E V E L O P M E N T C O M P A N Y ASSET MANAGEMENT PLATFORM SEGMENT(1) (AMOUNTS IN THOUSANDS) (UNAUDITED) PLATFORM REVENUE(1) (AMOUNTS IN THOUSANDS) (UNAUDITED) Three Months Ended September 30, 2024 2024 2023 Fund set-up fees $ 831 $ 398 Fund management fees 2,744 2,457 Financing fees 464 154 Development and construction fees 3,084 516 Brokerage fees 119 179 Total asset management 7,242 3,704 Performance allocations 174 24 Total revenue $ 7,416 $ 3,728 ___________________________________________ (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.
NON-GAAP Reconciliations (cont.) 39T H E W E A L T H D E V E L O P M E N T C O M P A N Y 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 Originations 18,936 Redemptions (3,041) Balances as of June 30, 2024 469,800 Originations 23,372 Redemptions (7,900) Balances as of September 30, 2024 $ 485,272 September 30, 2024 December 31, 2023 Real Estate Hospitality $ 47,560 $ 43,660 Caliber Hospitality Trust(1) 96,879 70,747 Residential 92,683 74,224 Commercial 167,989 155,004 Total Real Estate(2) 405,111 343,635 Credit(3) 70,541 84,588 Other(4) 9,620 9,402 Total $ 485,272 $ 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 September 30, 2024 and December 31, 2023, the Company had invested $19.7 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 September 30, 2024 and December 31, 2023, the Company had loaned $0.3 million and $8.5 million to our funds. (4) Other managed capital represents undeployed capital held in our diversified funds.
NON-GAAP Reconciliations (cont.) 40T H E W E A L T H D E V E L O P M E N T C O M P A N Y
NON-GAAP Reconciliations (concl.) 41T H E W E A L T H D E V E L O P M E N T C O M P A N Y FV AUM, by asset class (AMOUNTS IN THOUSANDS) (UNAUDITED) September 30, 2024 December 31, 2023 Real Estate Hospitality $ 68,800 $ 67,200 Caliber Hospitality Trust 240,300 201,600 Residential 162,100 138,000 Commercial 255,600 240,400 Total Real Estate 726,800 647,200 Credit(1) 70,541 84,588 Other(2) 9,620 9,402 Total $ 806,961 $ 741,190 ___________________________________________ (1) Other FV AUM represents undeployed capital held in our diversified funds. (2) Credit FV AUM represents loans made to Caliber’s investment funds by our diversified credit fund. (3) Assets sold during the nine months ended September 30, 2024 include a commercial asset, lot sales related to two development assets in Colorado, and one home from our residential fund. (4) Assets acquired during the nine months ended September 30, 2024, include West Ridge, a 133 acre mixed-use land development in Colorado and Canyon, an office building conversion to multi-family residential..
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