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

April 28, 2020

Date of report (date of earliest event reported)

 

 

FIVE POINT HOLDINGS, LLC

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-38088		27-0599397
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)
15131 Alton Parkway, 4th Floor, Irvine, California				92618
(Address of principal executive offices)				(Zip Code)

(949) 349-1000

(Registrant’s telephone number, including area code)

 

 

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):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	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:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common shares		FPH		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☒

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.  ☒

 

 

 

Item 7.01

Regulation FD Disclosure.

The Company’s Letter to Shareholders, which accompanies its Annual Report for the Year Ended December 31, 2019, is furnished as Exhibit 99.1 to this Form 8-K.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements that are subject to risks and uncertainties. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. This Current Report on Form 8-K may contain forward-looking statements regarding: the COVID-19 pandemic, including its impact on us and the real estate industry and economy overall; our business plan generally, as well as our specific plan in response to COVID-19, and our future expectations related to the foregoing; our expectations of our future revenues, costs and financial performance; future demographics and market conditions in the areas where our communities are located; the timing of our development activities and delivery of homesites; and the timing of future real estate purchases or sales and other opportunities. We caution you that any forward-looking statements included in this Current Report on Form 8-K are based on our current views and information currently available to us. Forward-looking statements are subject to risks, trends, uncertainties and factors that are beyond our control, including the impact of COVID-19. Some of these risks and uncertainties are described in more detail in our filings with the SEC, including our Annual Report on Form 10-K, under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

99.1		2019 Letter to Shareholders

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.

Date: April 28, 2020

 

Exhibit 99.1

 

April 28, 2020

Dear Shareholder:

I hope that this letter reaches you while you and your loved ones are in good health. I first want to acknowledge the unprecedented times we are all living in and share some of my thoughts about our Company’s actions in response to the COVID-19 pandemic.

Our management team has been together through several market cycles. During the Great Recession period of 2008-09, this same team repositioned the Company’s current assets through some of the most complicated work outs. As such, it is in the DNA of the Company to be prepared for unforeseen market shifts and to maintain a strong balance sheet. Our liquidity at the end of 2019 was approximately $471 million, which was comprised of $347 million in cash and $124 million of borrowing availability under our $125 million unsecured, revolving credit facility. Our senior notes do not mature until 2025, and our debt-to-capitalization ratio currently is at twenty-five percent. In addition, none of the Company’s master-planned communities is encumbered with project debt, and over sixty percent of our expenditures are variable costs. Our planning and development contracts give us the right to suspend or terminate work on less than 30-days’ notice, giving us the ability to slow down or, if needed, stop these expenditures.

While our current financial position is strong, we don’t know how long this current environment will last. As a response to the COVID-19 pandemic, we asked all of our associates to start working remotely as of March 16, 2020. Since then, the only people working regularly at the office while observing social distancing are Lynn Jochim, our COO, Erik Higgins, our CFO, Mike Alvarado, our CLO, and me. Our first order of business was to implement what we refer to as our “3-6-9 Plan.” It is simply a plan that assumes that revenues are going to be pushed back 3, 6, or 9 months and then assesses which variable expenditures should be pushed back, accordingly. We immediately started implementing the first 3-month delay. As we monitor developments related to COVID-19, we will decide whether there is a need to implement a 6 or 9-month delay. In addition, the four of us have been personally reviewing and approving every new contract and invoice prior to execution or payment.

Page 2

 

We know that it is unusual to get into these types of details in a shareholder letter, but we believe that today it is very important to let you know the following:

1. Our liquidity gives us great comfort.

2. Senior management is leading from the front.

3. Our assets are in primary markets, which we believe are less exposed to long-term job loss.

4. At our Great Park and Valencia communities, we have been focused on healthcare users/strategic partners for development opportunities on our non-residential land. Our relationship with City of Hope, which is anticipated to be an anchor for a larger healthcare campus at our Great Park community, is just one example of a blue-chip healthcare strategic partner. We believe that the current COVID-19 crisis will create more demand for healthcare innovation and uses within our communities.

Our plan, prior to the COVID-19 shutdown, was to hold a two-day investor meeting to share with you all the Company’s position and to give you an ability to understand the Company’s business plan for the next two years. Our hope is that this crisis will be over soon and that we will be able to go back to our original plan. In the meanwhile, rest assured that we believe the Company is well-positioned to weather the storm and that we will stay on top of every dollar spent and every opportunity to generate revenue.

Thank you for your continued support and participation and please stay healthy and safe. We are in this together and look forward to brighter days ahead.

 

Sincerely,

/s/ Emile Haddad

Emile Haddad

Chairman, Chief Executive Officer and President