Press Release

Century Communities Reports Second Quarter 2015 Results and Updates Full Year Guidance

Company Release - 8/6/2015 4:01 PM ET

- Earnings Increase to $0.46 Per Share -

- Home Deliveries Grow 221% to 636 Homes -

- Homes in Backlog Expand 155% to 1,005 Homes -

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)-- Century Communities, Inc. (NYSE:CCS), a top-25 U.S. homebuilder of single-family homes, townhomes and flats in select markets, today announced financial results for its second quarter ending June 30, 2015.

Second Quarter 2015 Highlights Compared to Second Quarter 2014*

  • Net income of $9.8 million, an increase of 84%
  • Pre-tax income of $14.4 million, an increase of 79%
  • Total revenue of $ 189.0 million, an increase of 137%
  • Home deliveries increased 221% to 636 homes
  • Homebuilding gross margin of $36.6 million, an increase of 91%
  • Selling, General & Administrative (“SG&A”) as a percent of home sales revenues of 12.2%, an improvement of 243 basis points
  • Adjusted EBITDA of $19.0 million, an increase of 87%
  • Net new home contracts grew to 718 homes, an increase of 156%
  • Homes in backlog expanded to 1,005 homes, an increase of 155%
  • Average open communities increased 175% to 88
  • Open communities at the end of the quarter increased 147% to 89
  • Completed successful offering of an additional $60 million of its 6.875% senior notes due 2022
  • In July 2015, entered into an amended 3 year, $200 million unsecured credit facility, with a $100 million accordion feature

“We are pleased with the strong momentum in our business during the second quarter in which we improved our earnings 53% per share,” stated Dale Francescon, Chairman and Co-Chief Executive Officer. “We executed against all of our core objectives in the second quarter and set records in home sales revenues, deliveries, contracts, backlog and net income. We achieved this growth while also maintaining our homebuilding gross margin percentage sequentially and further reducing our SG&A as a percent of home sales revenues compared to a year ago on our scalable platform. Into the second half of 2015, we are excited by our prospects to further grow our business, improve our profitability and meet expectations for full year 2015.”

“Our markets continue to exhibit positive fundamentals including rising employment and favorable population growth amid a limited supply of new homes which was evident as we ended the quarter with a record backlog of 1,005 homes,” said Rob Francescon, Co-Chief Executive Officer. “The integration of our recent acquisitions are largely complete and we are now better positioned to further expand our footprint into additional attractive markets with improving economies. We enter the second half of 2015 with a solid balance sheet to support our strategic capital deployment efforts into value-enhancing opportunities as we look to increase returns for shareholders.”

Second Quarter 2015 Results*

Net income for the second quarter 2015 was $9.8 million, or $0.46 per share, compared to $5.3 million, or $0.30 per share, in the prior year quarter. The improvement in net income was primarily attributable to an increase in home sales revenues generated by a higher number of home deliveries and an improvement in SG&A as a percent of home sales revenue.

Home sales revenues for the second quarter 2015 was $186.8 million, compared to $77.3 million in the prior year quarter. The growth in home sales revenues was primarily due to home deliveries increasing 221% to 636 homes compared to 198 in the prior year quarter. The average selling price of homes delivered was $293,722, up sequentially from $284,751 and compared to $390,545 in the prior year quarter, largely due to a shift in regional and product mix from new communities and acquisitions.

Home sales gross margin percentage in the second quarter 2015 was 19.6%, compared to 24.7% in the prior year quarter. Adjusted homebuilding gross margin percentage, excluding purchase price accounting and interest in cost of homes sales revenues, was stable sequentially at 21.3% compared to 26.5% in the prior year quarter, mainly attributable to regional and product mix. SG&A as a percent of home sales revenues was 12.2% compared to 14.6% in the prior year quarter, primarily as a result of higher home sales revenues, which more than offset an increase in personnel costs and additional investments to support a higher number of communities.

Net new home contracts in the second quarter 2015 increased to 718 homes, an increase of 156% compared to 281 homes in the prior year quarter, largely attributable to a higher number of average open communities. At the end of the second quarter 2015, the Company had 1,005 homes in backlog, representing $348.0 million of backlog dollar value, compared to 394 homes, representing $167.8 million of backlog dollar value in the prior year quarter.

*Financial and operating results as of and for the three and six months ended June 30, 2014 include the results of operations from our acquisition of Las Vegas Land Holdings, LLC, from the date of acquisition, April 1, 2014. Financial and operating results as of and for the three and six months ended June 30, 2014 do not include the results of operations from our acquisitions of Grand View Builders and Peachtree Communities Group Inc., which were acquired in August 2014 and November 2014, respectively. Subsequent to the acquisitions, Las Vegas Land Holdings, LLC, Grand View Builders, and Peachtree Communities Group Inc., comprise our Nevada, Houston, and Atlanta operating segments.

Balance Sheet and Liquidity

In April 2015, the Company successfully completed an offering of an additional $60 million of its 6.875% senior notes due 2022. The senior notes were additional notes issued under the indenture pursuant to which the Company’s existing outstanding $200 million aggregate principal amount of 6.875% senior notes due 2022 were issued. The new and existing senior notes totaling $260 million have identical terms and are treated as a single class under the indenture. The proceeds of the offerings were used to repay amounts outstanding under the line of credit.

As of June 30, 2015, the Company had total assets of $781.1 million, including cash and cash equivalents totaling $32.6 million, and inventories of $661.7 million. Liabilities totaled $398.0 million, which included $304.5 million of long-term debt. At June 30, 2015, the Company’s ratio of net debt to net capital was 41.5%.

As of June 30, 2015, the Company had $80.0 million of availability on its unsecured $120 million credit facility and an undrawn $80 million accordion. In July 2015, the Company successfully amended and increased its unsecured credit facility to $200 million with a $100 million accordion feature.

Full Year 2015 Outlook

Dave Messenger, Chief Financial Officer, commented, “Given our positive results in the first half of 2015, we are increasing our full year 2015 guidance. Based on our current market outlook, for the full year 2015 we expect our home deliveries to be in the range of 2,200 to 2,600 homes and our home sales revenues to be in the range of $700 million to $800 million, excluding the impact of any future acquisitions. At the end of the full year 2015, we continue to expect our active selling community count to be in the range of 80-90 communities.”

Conference Call

The Company will host a webcast and conference call on Thursday, August 6, 2015 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s second quarter 2015 results, discuss recent events and conduct a question-and-answer period. To participate in the call, please dial 877-705-6003 (domestic) or 201-493-6725 (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 September 6, 2015, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13614388.

About Century Communities

Founded in 2002, Colorado-based Century Communities is a builder of single-family homes, townhomes and flats in select major metropolitan markets in Colorado, Texas, Nevada, and Georgia. The Company offers a wide variety of product lines and is engaged in all aspects of homebuilding, including the acquisition, entitlement and development of land and the construction, marketing and sale of homes. Century Communities is a top-25 U.S. homebuilder based on homes delivered. To learn more about Century Communities please visit www.centurycommunities.com.

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,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. 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. 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. Investors are referred to the Company’s Annual Report on Form 10-K for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.

             

Century Communities, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

(in thousands, except share and per share amounts)

 
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Revenue
Home sales revenues $ 186,808 $ 77,328 $ 341,143 $ 126,999
Land sales revenues 370 370
Golf course and other revenue   1,876     2,525     3,979     2,525  
Total revenue 189,054 79,853 345,492 129,524
Costs and expenses
Cost of home sales revenues 150,225 58,197 275,031 95,470
Cost of land sales revenues 365 365
Cost of golf course and other revenue 1,662 2,154 3,168 2,154
Selling, general, and administrative   22,812     11,320     43,744     18,323  
Total operating costs and expenses   175,064     71,671     322,308     115,947  
Operating income 13,990 8,182 23,184 13,577
Other income (expense):
Interest income 21 68 37 137
Interest expense (3 ) (11 ) (6 ) (11 )
Acquisition expense (15 ) (408 ) (15 ) (803 )
Other income 308 129 625 257
Gain on disposition of assets   130     89     130     89  
Income before income tax expense 14,431 8,049 23,955 13,246
Income tax expense   4,633     2,711     7,806     4,539  
Net income $ 9,798   $ 5,338   $ 16,149   $ 8,707  
 
Earnings per share:
Basic and diluted $ 0.46 $ 0.30 $ 0.76 $ 0.50
Weighted average common shares outstanding:
Basic and diluted 20,556,536 17,674,868 20,533,237 17,376,591
 

Financial and operating results as of and for the three and six months ended June 30, 2014 include the results of operations from our acquisition of Las Vegas Land Holdings, LLC, from the date of acquisition, April 1, 2014. Financial and operating results as of and for the three and six months ended June 30, 2014 do not include the results of operations from our acquisitions of Grand View Builders and Peachtree Communities Group Inc., which were acquired in August 2014 and November 2014, respectively. Subsequent to the acquisitions, Las Vegas Land Holdings, LLC, Grand View Builders, and Peachtree Communities Group Inc., comprise our Nevada, Houston, and Atlanta operating segments.

     

Century Communities, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

(in thousands, except share amounts)

 
June 30, December 31,
2015 2014
Assets
Cash and cash equivalents $ 32,630 $ 33,462
Accounts receivable 13,431 13,799
Inventories 661,728 556,323
Prepaid expenses and other assets 37,571 28,796
Property and equipment, net 5,374 12,471
Deferred tax asset, net 2,917 1,359
Amortizable intangible assets, net 6,103 8,632
Goodwill   21,365   21,137
Total assets $ 781,119 $ 675,979
Liabilities and stockholders' equity
Liabilities:
Accounts payable $ 9,323 $ 17,135
Accrued expenses and other liabilities 84,183 64,029
Notes payable and revolving line of credit   304,486   229,610
Total liabilities   397,992   310,774
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, 21,335,580 and 20,875,547 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively 213 209
Additional paid-in capital 338,342 336,573
Retained earnings   44,572   28,423
Total stockholders' equity   383,127   365,205
Total liabilities and stockholders' equity $ 781,119 $ 675,979
 
                       

Century Communities, Inc.

Homebuilding Operational Data

 

Net New Home Contracts

 
Three Months Ended Six Months Ended
 
2015 2014 % Change 2015 2014 % Change
Atlanta 329 NM 660 NM
Central Texas 50 40 25.0 % 112 65 72.3 %
Colorado 221 153 44.4 % 430 290 48.3 %
Houston 37 NM 64 NM
Nevada 81 88 (8.0) % 158 88 79.5 %
Total 718 281 155.5 % 1,424 443 221.4 %
 

Home Deliveries

    Three Months Ended June 30,
2015     2014     % Change
   

Average Sales

    Average Sales     Average Sales
Homes

Price

Homes Price Homes Price
Atlanta 319 $ 220.3 NM NM
Central Texas 36 $ 449.1 30 $ 415.5 20.0 % 8.1 %
Colorado 187 $ 402.7 114 $ 424.1 64.0 % (5.0) %
Houston 32 $ 221.4 NM NM
Nevada 62 $ 290.1 54 $ 305.8 14.8 % (5.1) %
Total / Weight Average 636 $ 293.7 198 $ 390.5 221.2 % (24.8) %
 
Six Months Ended June 30,
2015 2014 % Change
Average Sales Average Sales Average Sales
Homes Price Homes Price Homes Price
Atlanta 574 $ 221.1 NM NM
Central Texas 75 $ 442.7 56 $ 469.4 33.9 % (5.7) %
Colorado 330 $ 397.4 216 $ 389.8 52.8 % 1.9 %
Houston 92 $ 190.1 NM NM
Nevada 107 $ 303.0 54 $ 305.8 98.1 % (0.9) %
Total / Weight Average 1,178 $ 289.6 326 $ 389.6 261.3 % (25.7) %
 
           

Century Communities, Inc.

Homebuilding Operational Data

 

Selling Communities

 
As of June 30,
2015 2014 % Change
Atlanta 31 NM
Central Texas 13 9 44.4 %
Colorado 31 24 29.2 %
Houston 9 NM
Nevada 5 3 66.7 %
Total 89 36 147.2 %
 
 

Backlog

    As of June 30,
2015     2014     % Change
    Dollar     Average Sales     Dollar     Average Sales     Dollar     Average Sales
Homes Value Price Homes Value Price Homes Value Price
Atlanta 409 $ 94,875 $ 232.0 $   NM NM NM
Central Texas 128 60,373 $ 471.7 101 51,429 $ 509.2 26.7 % 17.4 % (7.4) %
Colorado 318 145,945 $ 458.9 202 88,325 $ 437.3 57.4 % 65.2 % 4.9 %
Houston 66 18,229 $ 276.2 NM NM NM
Nevada 84   28,549 $ 339.9 91   28,064 $ 308.4 (7.7) % 1.7 % 10.2 %
Total / Weighted Average 1,005 $ 347,970 $ 346.2 394 $ 167,818 $ 425.9 155.1 % 107.3 % (18.7) %
 
 

Lot Inventory

    As of June 30,
2015     2014     % Change
Owned     Controlled     Total Owned     Controlled     Total Owned     Controlled     Total
Atlanta 1,512 3,926 5,438 NM NM NM
Central Texas 1,232 282 1,514 815 2,295 3,110 51.2 % (87.7) % (51.3) %
Colorado 3,069 693 3,762 2,847 2,097 4,944 7.8 % (67.0) % (23.9) %
Houston 318 194 512 NM NM NM
Nevada 1,869 193 2,062 1,798 1,798 3.9 % 100.0 % 14.7 %
Total 8,000 5,288 13,288 5,460 4,392 9,852 46.5 % 20.4 % 34.9 %
 

NM – Not meaningful.

               

Century Communities, Inc.

Earnings Per Share

(Unaudited)

 

(in thousands, except share and per share amounts)

 
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Numerator
Net income $ 9,798 $ 5,338 $ 16,149 $ 8,707
Less: Undistributed earnings allocated to participating securities   (361 )   (72 )   (533 )   (105 )
Net income allocable to common stockholders $ 9,437   $ 5,266   $ 15,616   $ 8,602  
Denominator
 
Weighted average common shares outstanding - basic and diluted: 20,556,536 17,674,868 20,533,237 17,376,591
Earnings per share:
Basic and diluted $ 0.46 $ 0.30 $ 0.76 $ 0.50
 
               

Century Communities, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

 

Gross Margin from Home Sales Excluding Interest and Purchase Price Accounting for Acquired Work in Process Inventory

 

 

(in thousands)

 
Three Months Ended June 30,
2015 % 2014 %
Home sales revenues $ 186,808 100.0 % $ 77,328 100.0 %
Cost of home sales revenues   150,225 80.4 %   58,197 75.3 %
Gross margin from home sales 36,583 19.6 % 19,131 24.7 %
Add: Interest in cost of home sales revenues   2,830 1.5 %   452 0.6 %
Adjusted homebuilding gross margin excluding interest 39,413 21.1 % 19,583 25.3 %
Add: Purchase price accounting for acquired work in process inventory   414 0.2 %   919 1.2 %
Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory $ 39,827 21.3 % $ 20,502 26.5 %
 
 
Six Months Ended June 30,
2015 % 2014 %
Home sales revenues $ 341,143 100.0 % $ 126,999 100.0 %
Cost of home sales revenues   275,031 80.6 %   95,470 75.2 %
Gross margin from home sales 66,112 19.4 % 31,529 24.8 %
Add: Interest in cost of home sales revenues   4,451 1.3 %   528 0.4 %
Adjusted homebuilding gross margin excluding interest 70,563 20.7 % 32,057 25.2 %
Add: Purchase price accounting for acquired work in process inventory   2,441 0.7 %   1,107 0.9 %
Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory $ 73,004 21.4 % $ 33,164 26.1 %
 
                 

Century Communities, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

 

Adjusted EBITDA

 

(in thousands)

 
Three Months Ended June 30, Six Months Ended June 30,  
2015 2014 % Change 2015 2014 % Change
Net income $ 9,798 $ 5,338 83.6 % $ 16,149 $ 8,707 85.5 %
Income tax expense 4,633 2,711 70.9 % 7,806 4,539 72.0 %
Interest in cost of home sales revenues 2,830 452 526.1 % 4,451 528 743.0 %
Interest expense 3 11 (72.7 ) % 6 11 (45.5 ) %
Depreciation and amortization expense   1,282   707   81.3   %   2,270   1,190   90.8   %
EBITDA 18,546 9,219 101.2 % 30,682 14,975 104.9 %
Purchase price accounting for acquired work in process inventory   414   919   (55.0 ) %   2,441   1,107   120.5   %
Adjusted EBITDA $ 18,960 $ 10,138   87.0   % $ 33,123 $ 16,082   106.0   %

Century Communities, Inc.
Investor Relations:
303-268-8398
InvestorRelations@CenturyCommunities.com

Source: Century Communities, Inc.

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