8-K
Century Communities, Inc. (CCS)
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): October 23, 2024
____________________
CENTURY COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)
____________________
| Delaware | 001-36491 | 68-0521411 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 8390 East Crescent Parkway, Suite 650<br>Greenwood Village, Colorado | 80111 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
(303) 770-8300
(Registrant’s telephone number, including area code)
Not Applicable
(Former name of 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:
| o | 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 |
|---|---|---|
| Common Stock, par value $0.01 per share | CCS | 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, as amended, or Rule 12b-2 of the Securities Exchange Act of 1934, as amended. | |
|---|---|
| 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 2.02. Results of Operations and Financial Condition
On October 23, 2024, Century Communities, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition as of and for the three and nine months ended September 30, 2024. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K (including Exhibit 99.1) is being “furnished” in accordance with General Instruction B.2 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be incorporated by reference into any registration statement or any other document filed pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.
As discussed therein, the press release furnished as Exhibit 99.1 to this Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and, as such, may involve known and unknown risks, uncertainties and assumptions. These forward-looking statements relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the press release as well as in the Company’s other documents filed with the U.S. Securities and Exchange Commission, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements.
Item 9.01. Financial Statements and Exhibits
(d)Exhibits.
| Exhibit Number | Description |
|---|---|
| 99.1 | Press release, dated October 23, 2024, announcing Century Communities, Inc.’s results of operations and financial condition as of and for the three and nine months ended September 30, 2024. |
| 104 | The cover page from this current report on Form 8-K, formatted in Inline XBRL. |
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.
| Date: October 23, 2024 | CENTURY COMMUNITIES, INC. |
|---|---|
| By: | /s/ J. Scott Dixon |
| --- | --- |
| J. Scott Dixon | |
| Chief Financial Officer |
CCS 9.30.24 Earnings Release 8-K Exhibit 99.1
Century Communities Reports Third Quarter 2024 Results
Home Sales Revenues of $1.1 Billion Increased 29% YoY -
Deliveries of 2,834 Homes Increased 25% YoY -
Net New Home Contracts of 2,563 Increased 19% YoY -
Community Count of 305, a Company Record, Increased 21% YoY -
Greenwood Village, Colorado (October 23, 2024) – Century Communities, Inc. (NYSE: CCS), one of the nation’s largest homebuilders, today announced financial results for its third quarter ended September 30, 2024.
Third Quarter 2024 Highlights | · | Net income of $83.0 million, or $2.59 per diluted share | | --- | --- | | · | Adjusted net income of $87.0 million, or $2.72 per diluted share | | --- | --- | | · | Pre-tax income of $109.9 million | | --- | --- | | · | Total revenues of $1.1 billion | | --- | --- | | · | Community count of 305, a Company record | | --- | --- | | · | Deliveries of 2,834 homes, a Company record for the third quarter | | --- | --- | | · | Net new home contracts of 2,563 | | --- | --- | | · | Homebuilding gross margin of 21.7% | | --- | --- | | · | Adjusted homebuilding gross margin of 23.6% | | --- | --- | | · | Acquired Anglia Homes, our ninth homebuilder acquisition | | --- | --- | “We saw strong growth in our net new contracts and deliveries in the third quarter as demand for affordable new homes remains solid,” said Dale Francescon, Chairman and Co-Chief Executive Officer. “Our net new contracts of 2,563 homes increased by 19% on a year-over-year basis while our deliveries of 2,834 homes, a third quarter record for the Company, increased by 25%. We generated an adjusted homebuilding gross margin of 23.6%, which was roughly in line with second quarter 2024 levels of 24.0%, while we drove both a year-over-year and sequential decline in our selling, general, and administrative expenses as a percent of home sales revenues as we continue to leverage our fixed costs.”
Rob Francescon, Co-Chief Executive Officer and President, said, “Our total lot inventory of 80,121 increased by 17% on a year-over-year basis, with our controlled lots accounting for 55% of our total lots at the end of the third quarter. Our community count grew by 21% on a year-over-year basis to 305, a record for the Company. On July 31, we acquired Anglia Homes, our second homebuilder acquisition this year, which is consistent with our strategy of deepening our share in our existing markets in a land-light manner while also increasing our go-forward access to capital-efficient finished lots.”
Third Quarter 2024 Results
Net income for the third quarter 2024 was $83.0 million, or $2.59 per diluted share. Adjusted net income, which excludes purchase price accounting and inventory impairment, was $87.0 million, or $2.72 per diluted share.
Total revenues were $1.1 billion, with third quarter home sales revenues totaling $1.1 billion as well. Deliveries totaled 2,834 homes. The average sales price of home deliveries for the third quarter 2024 was $393,800.
Net new home contracts in the third quarter 2024 were 2,563, and at the end of the third quarter 2024, the Company had 1,580 homes in backlog, representing $671.4 million of backlog dollar value.
Adjusted homebuilding gross margin percentage, excluding interest, inventory impairment and purchase price accounting, was 23.6% in the third quarter of 2024. Homebuilding gross margin percentage in the third quarter 2024 was 21.7%. Selling, general, and administrative expenses as a percent of home sales revenues was 11.9% in the quarter. Adjusted EBITDA and EBITDA for the third quarter 2024 were $137.1 million and $132.3 million, respectively.
Financial services revenues and pre-tax income were $20.1 million and $3.1 million, respectively, in the third quarter 2024.
Our book value per share increased to a record $81.29 as of September 30, 2024.
Balance Sheet and Liquidity
The Company ended the third quarter 2024 with a strong financial position, including $2.5 billion of stockholders’ equity and $605.9 million of total liquidity, including $219.9 million of cash.
During the third quarter, the Company maintained its quarterly cash dividend of $0.26 per share.
As of September 30, 2024, homebuilding debt to capital was 35.8% compared to 31.1% at June 30, 2024 and net homebuilding debt to net capital was 32.1% compared to 28.1% at June 30, 2024.
Full Year 2024 Outlook
Scott Dixon, Chief Financial Officer of the Company, commented, “Given our progress through the first three quarters of the year, we have increased our full year 2024 guidance for home deliveries to be in the range of 10,900 to 11,300 homes and our home sales revenues to be in the range of $4.3 to $4.4 billion.”
Webcast and Conference Call
The Company will host a webcast and conference call on Wednesday, October 23, 2024, at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s third quarter 2024 results, provide commentary, and conduct a question-and-answer session. To participate in the call, please dial 833-816-1103 (domestic) or 412-317-0685 (international). The live webcast will be available at www.centurycommunities.com in the Investors section. A replay of the conference call will be available through October 30, 2024, by dialing 877-344-7529 (domestic) or 412-317-0088 (international) and entering the passcode 7570440. A replay of the webcast will be available on the Company’s website for at least one year.
About Century Communities
Century Communities, Inc. (NYSE: CCS) is one of the nation's largest homebuilders, an industry leader in online home sales, and the highest-ranked homebuilder on Newsweek's list of America's Most Trustworthy Companies 2024—consecutively awarded for a second year—and Newsweek's list of the World's Most Trustworthy Companies 2024. Through its Century Communities and Century Complete brands, Century's mission is to build attractive, high-quality homes at affordable prices to provide its valued customers with A HOME FOR EVERY DREAM®. Century is engaged in all aspects of homebuilding — including the acquisition, entitlement and development of land, along with the construction, innovative marketing and sale of quality homes designed to appeal to a wide range of homebuyers. The Company operates in 18 states and over 45 markets across the U.S., and also offers title, insurance and lending services in select markets through its Parkway Title, IHL Home Insurance Agency, and Inspire Home Loans subsidiaries. To learn more about Century Communities, please visit www.centurycommunities.com.
Non-GAAP Financial Measures
In addition to the Company’s operating results presented in accordance with United States generally accepted accounting principles (GAAP), this press release includes the following non-GAAP financial measures: adjusted net income, adjusted diluted earnings per common share, adjusted homebuilding gross margin, EBITDA, adjusted EBITDA, and ratio of net homebuilding debt to net capital. These non-GAAP financial measures should not be used as a substitute for the Company’s operating results presented in accordance with GAAP, and an analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. Please refer to the reconciliation of each of the above referenced non-GAAP financial measures following the historical financial information presented in this press release.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and assumptions. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “continue,” “will,” “may,” “potential,” “guidance” and “outlook” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward-looking statements in this release include the Company’s operating and financial guidance for 2024. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on historical information available at the time the statements are made and are based on management’s reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. The following important factors could cause actual results to differ materially from those expressed in the forward-looking statement: adverse changes in general economic conditions, including increased interest rates, inflation, and employment levels; the potential impact of global supply chain disruptions, labor, land and raw material or other resource shortages and delays, and municipal and utility delays on the Company’s business, industry and the broader economy; the ability to identify and acquire desirable land; availability and cost of financing; the effect of tax changes; reliance on contractors and key personnel; availability and pricing for land, labor and raw materials or other resources; the ability to pay dividends in the future; and the other factors included in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law.
Century Communities, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share amounts)
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | | | | | 2024 | | 2023 | | 2024 | | 2023 | | | Revenues | | | | | | | | | | Homebuilding Revenues | | | | | | | | | | Home sales revenues | $ | 1,116,125 | $ | 865,065 | $ | 3,055,941 | $ | 2,419,025 | | Land sales and other revenues | | 650 | | 722 | | 2,242 | | 3,811 | | Total homebuilding revenues | | 1,116,775 | | 865,787 | | 3,058,183 | | 2,422,836 | | Financial services revenues | | 20,091 | | 23,636 | | 66,676 | | 63,768 | | Total revenues | | 1,136,866 | | 889,423 | | 3,124,859 | | 2,486,604 | | Homebuilding Cost of Revenues | | | | | | | | | | Cost of home sales revenues | | (873,081) | | (652,411) | | (2,386,208) | | (1,910,630) | | Cost of land sales and other revenues | | (170) | | — | | (207) | | (375) | | Total homebuilding cost of revenues | | (873,251) | | (652,411) | | (2,386,415) | | (1,911,005) | | Financial services costs | | (17,021) | | (11,432) | | (47,894) | | (33,983) | | Selling, general, and administrative | | (132,972) | | (111,918) | | (373,054) | | (315,351) | | Inventory impairment | | (1,373) | | — | | (1,942) | | — | | Other expense | | (2,337) | | (1,663) | | (10,690) | | (1,509) | | Income before income tax expense | | 109,912 | | 111,999 | | 304,864 | | 224,756 | | Income tax expense | | (26,892) | | (28,849) | | (73,789) | | (56,850) | | Net income | $ | 83,020 | $ | 83,150 | $ | 231,075 | $ | 167,906 | | | | | | | | | | | | Earnings per share: | | | | | | | | | | Basic | $ | 2.65 | $ | 2.60 | $ | 7.31 | $ | 5.25 | | Diluted | $ | 2.59 | $ | 2.58 | $ | 7.19 | $ | 5.21 | | Weighted average common shares outstanding: | | | | | | | | | | Basic | | 31,336,756 | | 31,962,884 | | 31,596,995 | | 31,967,672 | | Diluted | | 32,025,015 | | 32,237,022 | | 32,117,917 | | 32,200,677 |
Century Communities, Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share amounts)
| | |||
|---|---|---|---|
| | |||
| | December 31, | ||
| | 2023 | ||
| Assets | (audited) | ||
| Cash and cash equivalents | 149,155 | $ | 226,150 |
| Cash held in escrow | 70,755 | 101,845 | |
| Accounts receivable | 73,016 | 76,213 | |
| Inventories | 3,581,099 | 3,016,641 | |
| Mortgage loans held for sale | 257,187 | 251,852 | |
| Prepaid expenses and other assets | 427,961 | 350,193 | |
| Property and equipment, net | 165,117 | 69,075 | |
| Deferred tax assets, net | 17,241 | 16,998 | |
| Goodwill | 39,434 | 30,395 | |
| Total assets | 4,780,965 | $ | 4,139,362 |
| Liabilities and stockholders' equity | |||
| Liabilities: | |||
| Accounts payable | 165,369 | $ | 147,265 |
| Accrued expenses and other liabilities | 287,937 | 303,392 | |
| Notes payable | 1,118,943 | 1,062,471 | |
| Revolving line of credit | 414,000 | — | |
| Mortgage repurchase facilities | 247,214 | 239,298 | |
| Total liabilities | 2,233,463 | 1,752,426 | |
| Stockholders' equity: | |||
| Preferred stock, 0.01 par value, 50,000,000 shares authorized, none outstanding | — | — | |
| Common stock, 0.01 par value, 100,000,000 shares authorized, 31,337,062 and 31,774,615 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively | 313 | 318 | |
| Additional paid-in capital | 547,724 | 592,989 | |
| Retained earnings | 1,999,465 | 1,793,629 | |
| Total stockholders' equity | 2,547,502 | 2,386,936 | |
| Total liabilities and stockholders' equity | 4,780,965 | $ | 4,139,362 |
All values are in US Dollars.
Century Communities, Inc.
Homebuilding Operational Data
(Unaudited)
Net New Home Contracts | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | | | | | 2024 | 2023 | % Change | | 2024 | 2023 | % Change | | | West | 365 | 269 | 35.7 | % | 1,181 | 849 | 39.1 | % | | Mountain | 463 | 395 | 17.2 | % | 1,626 | 1,174 | 38.5 | % | | Texas | 454 | 377 | 20.4 | % | 1,488 | 1,252 | 18.8 | % | | Southeast | 396 | 352 | 12.5 | % | 1,232 | 945 | 30.4 | % | | Century Complete | 885 | 756 | 17.1 | % | 2,682 | 2,268 | 18.3 | % | | Total | 2,563 | 2,149 | 19.3 | % | 8,209 | 6,488 | 26.5 | % |
Home Deliveries
(dollars in thousands) | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Three Months Ended September 30, | | | | | | | | | | | | 2024 | | | 2023 | | | % Change | | | | | | Homes | Average Sales Price | | Homes | Average Sales Price | | Homes | | Average Sales Price | | | West | 363 | $ | 662.9 | 281 | $ | 596.6 | 29.2 | % | 11.1 | % | | Mountain | 513 | $ | 528.4 | 415 | $ | 498.5 | 23.6 | % | 6.0 | % | | Texas | 530 | $ | 300.9 | 382 | $ | 292.3 | 38.7 | % | 2.9 | % | | Southeast | 427 | $ | 421.9 | 378 | $ | 435.9 | 13.0 | % | (3.2) | % | | Century Complete | 1,001 | $ | 264.6 | 808 | $ | 265.0 | 23.9 | % | (0.2) | % | | Total / Weighted Average | 2,834 | $ | 393.8 | 2,264 | $ | 382.1 | 25.2 | % | 3.1 | % | | | | | | | | | | | | | | | Nine Months Ended September 30, | | | | | | | | | | | | 2024 | | | 2023 | | | % Change | | | | | | Homes | Average Sales Price | | Homes | Average Sales Price | | Homes | | Average Sales Price | | | West | 972 | $ | 634.3 | 738 | $ | 590.5 | 31.7 | % | 7.4 | % | | Mountain | 1,494 | $ | 524.8 | 1,325 | $ | 514.4 | 12.8 | % | 2.0 | % | | Texas | 1,439 | $ | 303.4 | 1,159 | $ | 282.7 | 24.2 | % | 7.3 | % | | Southeast | 1,155 | $ | 429.1 | 851 | $ | 433.6 | 35.7 | % | (1.0) | % | | Century Complete | 2,749 | $ | 263.0 | 2,338 | $ | 258.8 | 17.6 | % | 1.6 | % | | Total / Weighted Average | 7,809 | $ | 391.3 | 6,411 | $ | 377.3 | 21.8 | % | 3.7 | % |
Century Communities, Inc.
Homebuilding Operational Data
(Unaudited)
Selling Communities | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | | | | | As of September 30, | | Increase/Decrease | | | | | 2024 | 2023 | Amount | % Change | | | West | 27 | 28 | (1) | (3.6) | % | | Mountain | 49 | 49 | — | — | % | | Texas | 74 | 42 | 32 | 76.2 | % | | Southeast | 38 | 29 | 9 | 31.0 | % | | Century Complete | 117 | 104 | 13 | 12.5 | % | | Total | 305 | 252 | 53 | 21.0 | % |
Backlog
(dollars in thousands) | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | | | | | | | As of September 30, | | | | | | | | | | | | | | | | | | 2024 | | | | | 2023 | | | | | % Change | | | | | | | | Homes | Dollar Value | | Average Sales Price | | Homes | Dollar Value | | Average Sales Price | | Homes | | Dollar Value | | Average Sales Price | | | West | 315 | $ | 196,385 | $ | 623.4 | 191 | $ | 116,721 | $ | 611.1 | 64.9 | % | 68.3 | % | 2.0 | % | | Mountain | 295 | | 171,990 | $ | 583.0 | 290 | | 146,137 | $ | 503.9 | 1.7 | % | 17.7 | % | 15.7 | % | | Texas | 315 | | 99,066 | $ | 314.5 | 248 | | 76,224 | $ | 307.4 | 27.0 | % | 30.0 | % | 2.3 | % | | Southeast | 219 | | 94,202 | $ | 430.1 | 299 | | 136,921 | $ | 457.9 | (26.8) | % | (31.2) | % | (6.1) | % | | Century Complete | 436 | | 109,761 | $ | 251.7 | 859 | | 231,166 | $ | 269.1 | (49.2) | % | (52.5) | % | (6.5) | % | | Total / Weighted Average | 1,580 | $ | 671,404 | $ | 424.9 | 1,887 | $ | 707,169 | $ | 374.8 | (16.3) | % | (5.1) | % | 13.4 | % |
Lot Inventory
| | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | | | As of September 30, | | | | | | | | | | | | | | 2024 | | | 2023 | | | % Change | | | | | | | | | | | | | | | | | | | | | | Owned | Controlled | Total | Owned | Controlled | Total | Owned | | Controlled | | Total | | | | | | | | | | | | | | | | | West | 4,445 | 3,703 | 8,148 | 4,160 | 3,991 | 8,151 | 6.9 | % | (7.2) | % | (0.0) | % | | Mountain | 8,681 | 4,808 | 13,489 | 8,751 | 4,745 | 13,496 | (0.8) | % | 1.3 | % | (0.1) | % | | Texas | 12,413 | 9,693 | 22,106 | 8,105 | 9,691 | 17,796 | 53.2 | % | 0.0 | % | 24.2 | % | | Southeast | 5,563 | 12,127 | 17,690 | 5,583 | 8,602 | 14,185 | (0.4) | % | 41.0 | % | 24.7 | % | | Century Complete | 4,584 | 14,104 | 18,688 | 3,638 | 11,304 | 14,942 | 26.0 | % | 24.8 | % | 25.1 | % | | Total | 35,686 | 44,435 | 80,121 | 30,237 | 38,333 | 68,570 | 18.0 | % | 15.9 | % | 16.8 | % | | % of Total | 44.5% | 55.5% | 100.0% | 44.1% | 55.9% | 100.0% | | | | | | |
Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Adjusted net income and adjusted diluted earnings per share (which we refer to as “Adjusted EPS”) are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating trends without the effect of certain non-recurring items. We believe excluding certain non-recurring items provides more comparable assessment of our financial results from period to period. We define adjusted net income as consolidated net income before (i) income tax expense, (ii) inventory impairment, if applicable (iii) restructuring costs, if applicable, (iv) loss on debt extinguishment, if applicable, (v) purchase price accounting for acquired work in process inventory, if applicable, and (vi) impairment on other investments, if applicable, less adjusted income tax expense, calculated using our estimated annual effective tax rate after discrete items for the applicable period. Adjusted EPS is calculated by dividing adjusted net income by weighted average common shares – diluted.
Adjusted Net Income and Adjusted Diluted Earnings Per Common Share
(in thousands, except share and per share amounts)
| | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | | | | | 2024 | | 2023 | | 2024 | | 2023 | | | Numerator | | | | | | | | | | Net income | $ | 83,020 | $ | 83,150 | $ | 231,075 | $ | 167,906 | | Denominator | | | | | | | | | | Weighted average common shares outstanding - basic | | 31,336,756 | | 31,962,884 | | 31,596,995 | | 31,967,672 | | Dilutive effect of stock-based compensation awards | | 688,259 | | 274,138 | | 520,922 | | 233,005 | | Weighted average common shares outstanding - diluted | | 32,025,015 | | 32,237,022 | | 32,117,917 | | 32,200,677 | | Earnings per share: | | | | | | | | | | Basic | $ | 2.65 | $ | 2.60 | $ | 7.31 | $ | 5.25 | | Diluted | $ | 2.59 | $ | 2.58 | $ | 7.19 | $ | 5.21 | | | | | | | | | | | | Adjusted earnings per share | | | | | | | | | | Numerator | | | | | | | | | | Net income | $ | 83,020 | $ | 83,150 | $ | 231,075 | $ | 167,906 | | Income tax expense | | 26,892 | | 28,849 | | 73,789 | | 56,850 | | Income before income tax expense | | 109,912 | | 111,999 | | 304,864 | | 224,756 | | Inventory impairment | | 1,373 | | — | | 1,942 | | — | | Impairment on other investment | | — | | — | | 7,722 | | — | | Purchase price accounting for acquired work in process inventory | | 3,446 | | — | | 5,999 | | — | | Adjusted income before income tax expense | | 114,731 | | 111,999 | | 320,527 | | 224,756 | | Adjusted income tax expense(1) | | (27,769) | | (28,849) | | (77,580) | | (56,850) | | Adjusted net income | $ | 86,962 | $ | 83,150 | $ | 242,947 | $ | 167,906 | | | | | | | | | | | | Denominator - Diluted | | 32,025,015 | | 32,237,022 | | 32,117,917 | | 32,200,677 | | | | | | | | | | | | Adjusted diluted earnings per share | $ | 2.72 | $ | 2.58 | $ | 7.56 | $ | 5.21 | | (1) | The tax rates used in calculating adjusted net income for the three and nine months ended September 30, 2024 were 24.2%, respectively, which are reflective of the Company’s GAAP tax rate for the nine months ended September 30, 2024. The tax rates used in calculating adjusted net income for the three and nine months ended September 30, 2023 were 25.8% and 25.3%, respectively, which are reflective of the Company’s GAAP tax rates for the applicable periods. | | --- | --- | | | | --- | | |
Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Adjusted homebuilding gross margin excluding inventory impairment (if applicable), interest in cost of home sales revenues, and purchase price accounting for acquired work in process inventory (if applicable) are not measurements of financial performance under GAAP; however, the Company’s management believes that this information is meaningful as it isolates the impact that inventory impairment, indebtedness, and acquisitions have on homebuilding gross margin and permits the Company’s stockholders to make better comparisons with the Company’s competitors, who adjust gross margins in a similar fashion. This non-GAAP financial measure should not be used as a substitute for the Company’s operating results. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Adjusted Homebuilding Gross Margin
(in thousands)
| | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | Three Months Ended September 30, | | | | | | | | | | 2024 | | % | | 2023 | | % | | | | | | | | | | | | | Home sales revenues | $ | 1,116,125 | 100.0 | % | $ | 865,065 | 100.0 | % | | Cost of home sales revenues | | (873,081) | (78.2) | % | | (652,411) | (75.4) | % | | Inventory impairment | | (1,373) | (0.1) | % | | — | — | % | | Homebuilding gross margin | | 241,671 | 21.7 | % | | 212,654 | 24.6 | % | | Add: Inventory impairment | | 1,373 | 0.1 | % | | — | — | % | | Add: Interest in cost of home sales revenues | | 16,492 | 1.5 | % | | 10,652 | 1.2 | % | | Adjusted homebuilding gross margin excluding interest and inventory impairment | $ | 259,536 | 23.3 | % | $ | 223,306 | 25.8 | % | | Add: Purchase price accounting for acquired work in process inventory | | 3,446 | 0.3 | % | | — | — | % | | Adjusted homebuilding gross margin excluding interest, inventory impairment and purchase price accounting for acquired work in process inventory | $ | 262,982 | 23.6 | % | $ | 223,306 | 25.8 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, | | | | | | | | | | 2024 | | % | | 2023 | | % | | | | | | | | | | | | | Home sales revenues | $ | 3,055,941 | 100.0 | % | $ | 2,419,025 | 100.0 | % | | Cost of home sales revenues | | (2,386,208) | (78.1) | % | | (1,910,630) | (79.0) | % | | Inventory impairment | | (1,942) | (0.1) | % | | — | — | % | | Homebuilding gross margin | | 667,791 | 21.9 | % | | 508,395 | 21.0 | % | | Add: Inventory impairment | | 1,942 | 0.1 | % | | — | — | % | | Add: Interest in cost of home sales revenues | | 42,117 | 1.4 | % | | 30,729 | 1.3 | % | | Adjusted homebuilding gross margin excluding interest and inventory impairment | $ | 711,850 | 23.3 | % | $ | 539,124 | 22.3 | % | | Add: Purchase price accounting for acquired work in process inventory | | 5,999 | 0.2 | % | | — | — | % | | Adjusted homebuilding gross margin excluding interest, inventory impairment and purchase price accounting for acquired work in process inventory | $ | 717,849 | 23.5 | % | $ | 539,124 | 22.3 | % |
Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are non-GAAP financial measures we use as a supplemental measure in evaluating operating performance. We define EBITDA as net income before (i) income tax expense, (ii) interest in cost of home sales revenues, (iii) other interest expense (income), and (iv) depreciation and amortization expense. We define adjusted EBITDA as EBITDA before loss on debt extinguishment (if applicable), inventory impairment (if applicable), purchase price accounting for acquired work in process inventory (if applicable), and impairment on other investments (if applicable). We believe EBITDA and adjusted EBITDA provide an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, and items considered to be non-recurring. Accordingly, our management believes that these measurements are useful for comparing general operating performance from period to period. Neither EBITDA or adjusted EBITDA should be considered in addition to, and not as a substitute for, consolidated net income in accordance with GAAP as a measure of performance. Our presentation of Adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. Each of our EBITDA and adjusted EBITDA is limited as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
(in thousands)
| | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Three Months Ended September 30, | | | | | | | Nine Months Ended September 30, | | | | | | | | | 2024 | | 2023 | | % Change | | | 2024 | | 2023 | | % Change | | | | Net income | $ | 83,020 | $ | 83,150 | | (0.2) | % | $ | 231,075 | $ | 167,906 | | 37.6 | % | | Income tax expense | | 26,892 | | 28,849 | | (6.8) | % | | 73,789 | | 56,850 | | 29.8 | % | | Interest in cost of home sales revenues | | 16,492 | | 10,652 | | 54.8 | % | | 42,117 | | 30,729 | | 37.1 | % | | Interest income | | (369) | | (1,489) | | (75.2) | % | | (2,693) | | (6,431) | | (58.1) | % | | Depreciation and amortization expense | | 6,272 | | 4,106 | | 52.8 | % | | 17,437 | | 11,019 | | 58.2 | % | | EBITDA | | 132,307 | | 125,268 | | 5.6 | % | | 361,725 | | 260,073 | | 39.1 | % | | Inventory impairment | | 1,373 | | — | | NM | | | 1,942 | | — | | NM | | | Impairment on other investment | | — | | — | | NM | | | 7,722 | | — | | NM | | | Purchase price accounting for acquired work in process inventory | | 3,446 | | — | | NM | | | 5,999 | | — | | NM | | | Adjusted EBITDA | $ | 137,126 | $ | 125,268 | | 9.5 | % | $ | 377,388 | $ | 260,073 | | 45.1 | % |
NM – Not Meaningful
Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Ratio of Net Homebuilding Debt to Net Capital
The following table presents the Company’s ratio of net homebuilding debt to net capital, which is a non-GAAP financial measure. The Company calculates this by dividing net homebuilding debt (homebuilding debt less cash and cash equivalents, and cash held in escrow) by net capital (net homebuilding debt plus total stockholders’ equity). Homebuilding debt is our total debt minus outstanding borrowings under our construction loan agreement and mortgage repurchase facilities. The most directly comparable GAAP measure is the ratio of debt to capital. The Company believes the ratio of net homebuilding debt to net capital is a relevant and useful financial measure to investors in understanding the leverage employed in its operations and as an indicator of the Company’s ability to obtain external financing.
(in thousands)
| | | | | | | --- | --- | --- | --- | --- | | | September 30, | | December 31, | | | | 2024 | | 2023 | | | Notes payable | $ | 1,118,943 | $ | 1,062,471 | | Revolving line of credit | | 414,000 | | — | | Construction loan agreements | | (110,337) | | (44,895) | | Total homebuilding debt | | 1,422,606 | | 1,017,576 | | Total stockholders' equity | | 2,547,502 | | 2,386,936 | | Total capital | $ | 3,970,108 | $ | 3,404,512 | | Homebuilding debt to capital | | 35.8% | | 29.9% | | | | | | | | Total homebuilding debt | $ | 1,422,606 | $ | 1,017,576 | | Cash and cash equivalents | | (149,155) | | (226,150) | | Cash held in escrow | | (70,755) | | (101,845) | | Net homebuilding debt | | 1,202,696 | | 689,581 | | Total stockholders' equity | | 2,547,502 | | 2,386,936 | | Net capital | $ | 3,750,198 | $ | 3,076,517 | | | | | | | | Net homebuilding debt to net capital | | 32.1% | | 22.4% |
Contact Information:
Tyler Langton, Senior Vice President of Investor Relations
303-268-8345
Investorrelations@CenturyCommunities.com
Category: Earnings