Press Release

Century Communities Reports Record Third Quarter 2019 Results

Company Release - 10/29/2019 4:05 PM ET

- Net Income Increased 59% to Third Quarter Record $27.0 million -
- Net New Homes Contracts Increased 35% to Third Quarter Record of 2,046 Homes -
- Home Deliveries Grew to Third Quarter Record of 1,891 Homes -
- Home Sales Revenues Increased to Third Quarter Record of $573.9 Million -
- Improved 2019 Outlook for Revenue and Deliveries -

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)-- Century Communities, Inc. (NYSE: CCS), a leading national homebuilder, today announced financial results for its third quarter ended September 30, 2019.

Third Quarter 2019 Highlights

  • Net income increased 59% to a third quarter record $27.0 million, or $0.87 per diluted share
  • Net new home contracts increased 35% to a third quarter record 2,046 homes
  • Home sales revenues increased to a third quarter record $573.9 million
  • Home deliveries grew to a third quarter record 1,891 homes
  • Adjusted homebuilding gross margin of 20.6% and homebuilding gross margin of 18.1%
  • Homes in backlog of 2,746 with a value of $854.9 million
  • Stockholders’ equity grew to a record $951.2 million
  • Adjusted EBITDA increased to a third quarter record $52.7 million

Dale Francescon, Co-Chief Executive Officer, stated, “We experienced improving demand trends throughout the quarter driven by lower interest rates and improved affordability. We capitalized on this constructive environment by producing another strong quarter of earnings while generating a 35% year-over-year increase in net new contracts to a third quarter record 2,046 homes. As we move into the remainder of 2019, we are well positioned for continued success given expectations for interest rates to remain low along with our strong emphasis on delivering homes to the first-time buyer throughout our broad geographical platform.”

Rob Francescon, Co-Chief Executive Officer, said, “Fundamentals across our diverse national footprint remained encouraging throughout the third quarter as our markets continued to benefit from healthy local economies and positive macroeconomic trends. We experienced considerable operating momentum across all aspects of our business generating third quarter records for revenues, net income, deliveries and net new contracts. We remain focused on deepening our presence in vibrant markets to continue to grow revenue and profitability with an on-going commitment of offering homes at entry-level price points. With our strong local market operations and a robust lot pipeline of new communities, we have the resources in place to continue to grow our business and generate attractive returns on equity into 2020 and beyond.”

Third Quarter 2019 Results

Net income for the third quarter 2019 increased 59% to $27.0 million, or $0.87 per diluted share, compared to $17.0 million or $0.56 per diluted share for the prior year quarter.

Home sales revenues for the third quarter 2019 increased to $573.9 million, compared to $552.9 million for the prior year quarter. The growth in home sales revenues was primarily attributable to an increase in deliveries to 1,891 homes, compared to 1,746 homes for the prior year quarter. Average sales price of home deliveries for the third quarter 2019 was $303,500, compared to $316,700 in the prior year quarter, consistent with the Company’s expansion of its offering of lower priced homes.

Net new home contracts in the third quarter 2019 increased 35% to 2,046 homes, compared to 1,515 homes in the prior year quarter. At the end of the third quarter 2019, the Company had 2,746 homes in backlog, with a value of $854.9 million.

Homebuilding gross margin percentage in the third quarter 2019 was 18.1%, compared to 16.8% in the prior year quarter and 17.2% in the second quarter 2019. Adjusted homebuilding gross margin percentage, excluding interest and purchase price accounting, was 20.6% in the third quarter 2019, compared to 21.2% in the prior year quarter and 19.6% in the second quarter 2019. SG&A as a percent of home sales revenues was 12.7%, compared to 12.8% in the prior year quarter, even though the Company continued to incur relocation and integration costs related to its Wade Jurney Homes acquisition.

Financial services generated pre-tax income of $2.2 million in the third quarter 2019, compared to $1.7 million in the prior year quarter.

Balance Sheet and Liquidity

As of September 30, 2019, the Company had total assets of $2.5 billion, including cash of $68.9 million and inventories of $2.1 billion. Liabilities totaled $1.5 billion, which included $1.2 billion of long-term debt. As of September 30, 2019, the Company had a record $951.2 million of stockholders’ equity, a 13% increase over the prior year quarter, and $361.2 million of available capacity under its credit facility. The Company had total liquidity of $430.1 million.

Full Year 2019 Outlook

David Messenger, Chief Financial Officer of the Company, commented, “Given encouraging buyer activity within our markets and strong execution across our business year-to-date, we are raising our full year outlook for home deliveries to be in the range of 7,700 to 8,100 homes and our home sales revenues to be in the range of $2.4 billion to $2.5 billion.”

Conference Call

The Company will host a webcast and conference call on Tuesday, October 29, 2019 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s third quarter 2019 results, discuss recent events and conduct a question-and-answer period. To participate in the call, please dial 877-451-6152 (domestic) or 201-389-0879 (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 November 29, 2019, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13695293. A replay of the webcast will be available on the Company’s website through November 29, 2019.

About Century Communities

Century Communities, Inc. (NYSE: CCS) is a top 10 national homebuilder. 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 Colorado-based Company sells its Century Communities and Wade Jurney Homes in 17 states across the U.S. and offers title, insurance and lending services in select markets through its Parkway Title, IHL Insurance Agency, and Inspire Home Loan 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 generally accepted accounting principles (GAAP), this press release includes the following non-GAAP financial measures: Adjusted Diluted Earnings per Common Share (Adjusted Diluted EPS), Adjusted Homebuilding Gross Margin, Adjusted EBITDA, and Ratio of Homebuilding Net 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,” “estimate,” “plan,” “continue,” “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 in this release include the company’s operating and financial guidance for 2019. 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, ability to identify and acquire desirable land, availability of financing, the effect of interest rate and tax changes, reliance on contractors, 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.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

573,860

 

 

$

552,876

 

 

$

1,705,798

 

 

$

1,469,871

 

Land sales and other revenues

 

 

6,083

 

 

 

1,131

 

 

 

8,837

 

 

 

4,304

 

 

 

 

579,943

 

 

 

554,007

 

 

 

1,714,635

 

 

 

1,474,175

 

Financial services revenue

 

 

10,419

 

 

 

7,722

 

 

 

28,734

 

 

 

21,292

 

Total revenues

 

 

590,362

 

 

 

561,729

 

 

 

1,743,369

 

 

 

1,495,467

 

Homebuilding Cost of Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Cost of home sales revenues

 

 

(469,834

)

 

 

(460,144

)

 

 

(1,407,519

)

 

 

(1,206,924

)

Cost of land sales and other revenues

 

 

(4,624

)

 

 

(1,093

)

 

 

(6,115

)

 

 

(3,010

)

 

 

 

(474,458

)

 

 

(461,237

)

 

 

(1,413,634

)

 

 

(1,209,934

)

Financial services costs

 

 

(8,174

)

 

 

(6,056

)

 

 

(22,750

)

 

 

(15,836

)

Selling, general, and administrative

 

 

(72,834

)

 

 

(70,975

)

 

 

(216,987

)

 

 

(191,130

)

Loss on debt extinguishment

 

 

 

 

 

 

(10,832

)

 

 

Acquisition expense

 

 

 

 

(58

)

 

 

 

 

(395

)

Equity in income of unconsolidated subsidiaries

 

 

 

 

 

 

 

 

14,849

 

Other income (expense)

 

 

(56

)

 

 

(545

)

 

 

(499

)

 

 

(553

)

Income before income tax expense

 

 

34,840

 

 

 

22,858

 

 

 

78,667

 

 

 

92,468

 

Income tax expense

 

 

(7,816

)

 

 

(5,810

)

 

 

(19,031

)

 

 

(22,207

)

Net income

 

$

27,024

 

 

$

17,048

 

 

$

59,636

 

 

$

70,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

 

$

0.56

 

 

$

1.96

 

 

$

2.35

 

Diluted

 

$

0.87

 

 

$

0.56

 

 

$

1.95

 

 

$

2.33

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

30,587,487

 

 

 

30,232,376

 

 

 

30,378,860

 

 

 

29,885,858

 

Diluted

 

 

30,906,235

 

 

 

30,554,881

 

 

 

30,641,194

 

 

 

30,189,058

 

Century Communities, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

2019

 

2018

Assets

 

(unaudited)

 

 

 

Cash and cash equivalents

 

$

38,508

 

$

32,902

Cash held in escrow

 

 

30,362

 

 

24,344

Accounts receivable

 

 

17,929

 

 

13,464

Inventories

 

 

2,093,493

 

 

1,848,243

Mortgage loans held for sale

 

 

95,321

 

 

112,394

Prepaid expenses and other assets

 

 

129,925

 

 

140,397

Property and equipment, net

 

 

35,258

 

 

33,258

Deferred tax assets, net

 

 

14,277

 

 

13,763

Amortizable intangible assets, net

 

 

4,094

 

 

5,095

Goodwill

 

 

30,395

 

 

30,395

Total assets

 

$

2,489,562

 

$

2,254,255

Liabilities and stockholders' equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

78,695

 

$

89,907

Accrued expenses and other liabilities

 

 

206,818

 

 

213,157

Notes payable

 

 

896,272

 

 

784,777

Revolving line of credit

 

 

278,800

 

 

202,500

Mortgage repurchase facilities

 

 

77,798

 

 

104,555

Total liabilities

 

 

1,538,383

 

 

1,394,896

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, 31,249,373 and 30,154,791 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

 

 

312

 

 

302

Additional paid-in capital

 

 

627,211

 

 

595,037

Retained earnings

 

 

323,656

 

 

264,020

Total stockholders' equity

 

 

951,179

 

 

859,359

Total liabilities and stockholders' equity

 

$

2,489,562

 

$

2,254,255

Century Communities, Inc.

Homebuilding Operational Data

Net New Home Contracts

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

2019

 

 

2018

 

 

% Change

West

 

235

 

 

214

 

 

9.8

%

Mountain

 

419

 

 

308

 

 

36.0

%

Texas

 

260

 

 

150

 

 

73.3

%

Southeast

 

494

 

 

422

 

 

17.1

%

Wade Jurney Homes

 

638

 

 

421

 

 

51.5

%

Total

 

2,046

 

 

1,515

 

 

35.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

September 30,

 

 

2019

 

 

2018

 

 

% Change

West

 

767

 

 

616

 

 

24.5

%

Mountain

 

1,290

 

 

1,313

 

 

(1.8)

%

Texas

 

733

 

 

493

 

 

48.7

%

Southeast

 

1,250

 

 

1,449

 

 

(13.7)

%

Wade Jurney Homes

 

2,046

 

 

565

 

 

NM

 

Total

 

6,086

 

 

4,436

 

 

37.2

%

NM – Not meaningful

Home Deliveries

(dollars in thousands)

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change

 

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

West

 

228

 

$

512.4

 

193

 

$

548.6

 

18.1

%

 

(6.6)

%

Mountain

 

390

 

 

424.8

 

377

 

 

430.2

 

3.4

%

 

(1.3)

%

Texas

 

247

 

 

278.4

 

177

 

 

316.7

 

39.5

%

 

(12.1)

%

Southeast

 

341

 

 

347.8

 

424

 

 

333.2

 

(19.6)

%

 

4.4

%

Wade Jurney Homes

 

685

 

 

151.9

 

575

 

 

152.1

 

19.1

%

 

(0.1)

%

Total / Weighted Average

 

1,891

 

$

303.5

 

1,746

 

$

316.7

 

8.3

%

 

(4.2)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change

 

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

West

 

683

 

$

533.0

 

606

 

$

584.2

 

12.7

%

 

(8.8)

%

Mountain

 

1,168

 

$

430.3

 

1,141

 

$

425.5

 

2.4

%

 

1.1

%

Texas

 

626

 

$

288.6

 

491

 

$

320.2

 

27.5

%

 

(9.9)

%

Southeast

 

1,036

 

$

343.5

 

1,093

 

$

329.7

 

(5.2)

%

 

4.2

%

Wade Jurney Homes

 

2,008

 

$

150.7

 

740

 

$

152.3

 

NM

 

 

(1.1)

%

Total / Weighted Average

 

5,521

 

$

309.0

 

4,071

 

$

361.1

 

35.6

%

 

(14.4)

%

NM – Not meaningful

Century Communities, Inc.

Homebuilding Operational Data

Selling Communities

 

Selling communities at period end

 

As of September 30,

 

 

Increase/(Decrease)

 

 

2019

 

2018

 

 

Amount

 

% Change

 

 

 

 

 

 

 

 

 

 

 

West

 

21

 

17

 

 

4

 

23.5

%

Mountain

 

46

 

34

 

 

12

 

35.3

%

Texas

 

19

 

23

 

 

(4)

 

(17.4)

%

Southeast

 

43

 

51

 

 

(8)

 

(15.7)

%

Wade Jurney Homes

 

N/A

 

N/A

 

 

N/A

 

N/A

 

Total

 

129

 

125

 

 

4

 

3.2

%

N/A – Not applicable

Backlog

(dollars in thousands)

 

 

 

As of September 30,

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change

 

 

Homes

 

Dollar Value

 

Average
Sales Price

 

Homes

 

Dollar Value

 

Average
Sales Price

 

Homes

 

Dollar Value

 

Average
Sales Price

West

 

302

 

$

153,626

 

$

508.7

 

280

 

$

153,121

 

$

546.9

 

7.9

%

 

0.3

%

 

(7.0)

%

Mountain

 

523

 

 

230,203

 

$

440.2

 

627

 

 

283,534

 

$

452.0

 

(16.6)

%

 

(18.8)

%

 

(2.6)

%

Texas

 

288

 

 

79,536

 

$

276.2

 

217

 

 

75,129

 

$

346.2

 

32.7

%

 

5.9

%

 

(20.2)

%

Southeast

 

684

 

 

243,712

 

$

356.3

 

736

 

 

241,943

 

$

328.7

 

(7.1)

%

 

0.7

%

 

8.4

%

Wade Jurney Homes

 

949

 

 

147,779

 

$

155.7

 

1,128

 

 

177,224

 

$

157.1

 

(15.9)

%

 

(16.6)

%

 

(0.9)

%

Total / Weighted Average

 

2,746

 

$

854,856

 

$

311.3

 

2,988

 

$

930,951

 

$

311.5

 

(8.1)

%

 

(8.2)

%

 

(0.1)

%

Lot Inventory

 

 

 

As of September 30,

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change

 

 

 

 

 

 

 

 

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West

 

3,210

 

1,920

 

5,130

 

3,611

 

1,908

 

5,519

 

(11.1)

%

 

0.6

%

 

(7.0)

%

Mountain

 

5,011

 

6,883

 

11,894

 

5,426

 

5,479

 

10,905

 

(7.6)

%

 

25.6

%

 

9.1

%

Texas

 

3,589

 

2,663

 

6,252

 

3,883

 

2,075

 

5,958

 

(7.6)

%

 

28.3

%

 

4.9

%

Southeast

 

4,484

 

2,719

 

7,203

 

5,120

 

4,229

 

9,349

 

(12.4)

%

 

(35.7)

%

 

(23.0)

%

Wade Jurney Homes

 

3,454

 

5,382

 

8,836

 

3,088

 

3,328

 

6,416

 

11.9

%

 

61.7

%

 

37.7

%

Total

 

19,748

 

19,567

 

39,315

 

21,128

 

17,019

 

38,147

 

(6.5)

%

 

15.0

%

 

3.1

%

Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Adjusted Diluted Earnings per Common Share (Adjusted Diluted EPS) is a non-GAAP financial measure that we believe is useful to management, investors and other users of the Company’s financial information in evaluating its operating results and understanding its operating trends without the effect of certain non-recurring items. The Company believes excluding certain non-recurring items provides more comparable assessment of its financial results from period to period. Adjusted Diluted EPS is calculated by excluding loss from debt extinguishment, the effect of acquisition costs and purchase price accounting for acquired work in process and gain on previously held interest in WJH, LLC from the calculation of reported EPS.

Adjusted Net Income and Adjusted Diluted Earnings Per Common Share

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

27,024

 

 

$

17,048

 

 

$

59,636

 

 

$

70,261

 

Less: Undistributed earnings allocated to participating securities

 

 

 

 

 

 

 

 

 

 

(58

)

Net income allocable to common stockholders

 

$

27,024

 

 

$

17,048

 

 

$

59,636

 

 

$

70,203

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

 

30,587,487

 

 

 

30,232,376

 

 

 

30,378,860

 

 

 

29,885,858

 

Dilutive effect of restricted stock units

 

 

318,748

 

 

 

322,505

 

 

 

262,334

 

 

 

303,200

 

Weighted average common shares outstanding - diluted

 

 

30,906,235

 

 

 

30,554,881

 

 

 

30,641,194

 

 

 

30,189,058

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

 

$

0.56

 

 

$

1.96

 

 

$

2.35

 

Diluted

 

$

0.87

 

 

$

0.56

 

 

$

1.95

 

 

$

2.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

$

34,840

 

 

$

22,858

 

 

$

78,667

 

 

$

92,468

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

10,832

 

 

 

Purchase price accounting for acquired work in process inventory

 

 

 

 

 

11,934

 

 

 

1,724

 

 

 

28,367

 

Gain on previously held interest in WJH

 

 

 

 

 

 

 

 

 

 

(7,219

)

Acquisition expense

 

 

 

 

 

58

 

 

 

 

 

395

 

Adjusted income before income tax expense

 

 

34,840

 

 

 

34,850

 

 

 

91,223

 

 

 

114,011

 

Adjusted income tax expense(1)

 

 

(7,816

)

 

 

(8,713

)

 

 

(22,069

)

 

 

(28,503

)

Adjusted net income

 

 

27,024

 

 

 

26,137

 

 

 

69,154

 

 

 

85,508

 

Less: Adjusted undistributed earnings allocated to participating securities

 

 

 

 

 

 

 

 

 

 

(71

)

Adjusted net income allocable to common stockholders

 

$

27,024

 

 

$

26,137

 

 

$

69,154

 

 

$

85,437

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator - Diluted

 

 

30,906,235

 

 

 

30,554,881

 

 

 

30,641,194

 

 

 

30,189,058

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share

 

$

0.87

 

 

$

0.86

 

 

$

2.26

 

 

$

2.83

 

(1)

 

 

The tax rate used in calculating adjusted net income for the three and nine months ended September 30 2019 and 2018 was the estimated annual rate offset by the benefit associated with federal energy credits related to homes delivered in prior years.

Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory is not a measurement of financial performance under United States generally accepted accounting principles; however, the Company’s management believes that this information is meaningful as it isolates the impact that 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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

%

 

2018

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

573,860

 

100.0

%

 

$

552,876

 

100.0

%

Cost of home sales revenues

 

 

(469,834)

 

(81.9)

%

 

 

(460,144)

 

(83.2)

%

Gross margin from home sales

 

 

104,026

 

18.1

%

 

 

92,732

 

16.8

%

Add: Interest in cost of home sales revenues

 

 

14,258

 

2.5

%

 

 

12,334

 

2.2

%

Adjusted homebuilding gross margin excluding interest

 

 

118,284

 

20.6

%

 

 

105,066

 

19.0

%

Add: Purchase price accounting for acquired work in process inventory

 

 

 

%

 

 

11,934

 

2.2

%

Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory

 

$

118,284

 

20.6

%

 

$

117,000

 

21.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

%

 

2018

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

1,705,798

 

100.0

%

 

$

1,469,871

 

100.0

%

Cost of home sales revenues

 

 

(1,407,519)

 

(82.5)

%

 

 

(1,206,924)

 

(82.1)

%

Gross margin from home sales

 

 

298,279

 

17.5

%

 

 

262,947

 

17.9

%

Add: Interest in cost of home sales revenues

 

 

41,499

 

2.4

%

 

 

33,577

 

2.3

%

Adjusted homebuilding gross margin excluding interest

 

 

339,778

 

19.9

%

 

 

296,524

 

20.2

%

Add: Purchase price accounting for acquired work in process inventory

 

 

1,724

 

0.1

%

 

 

28,367

 

1.9

%

Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory

 

$

341,502

 

20.0

%

 

$

324,891

 

22.1

%

Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure we use as a supplemental measure in evaluating operating performance. The Company defines adjusted EBITDA as consolidated net income before (i) income tax expense, (ii) interest in cost of home sales revenues, (iii) other interest expense, (iv) depreciation and amortization expense, (v) loss on debt extinguishment; and (vi) adjustments resulting from the application of purchase accounting for acquired work in process inventory related to business combinations. The Company believes adjusted EBITDA provides 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, the Company’s management believes that this measurement is useful for comparing general operating performance from period to period. 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. The Company’s presentation of adjusted EBITDA should not be construed as an indication that its future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA is limited as an analytical tool, and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

(in thousands)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

Net income

 

$

27,024

 

$

17,048

 

 

58.5

%

 

$

59,636

 

$

70,261

 

 

(15.1)

%

Income tax expense

 

 

7,816

 

 

5,810

 

 

34.5

%

 

 

19,031

 

 

22,207

 

 

(14.3)

%

Interest in cost of home sales revenues

 

 

14,258

 

 

12,334

 

 

15.6

%

 

 

41,499

 

 

33,577

 

 

23.6

%

Interest expense (income)

 

 

 

 

(205)

 

 

N/M

 

 

 

15

 

 

(579)

 

 

N/M

 

Depreciation and amortization expense

 

 

3,597

 

 

3,291

 

 

9.3

%

 

 

9,793

 

 

8,803

 

 

11.2

%

EBITDA

 

 

52,695

 

 

38,278

 

 

37.7

%

 

 

129,974

 

 

134,269

 

 

(3.2)

%

Loss on debt extinguishment

 

 

 

 

 

 

N/M

 

 

 

10,832

 

 

 

 

N/M

 

Purchase price accounting for acquired work in process inventory

 

 

 

 

11,934

 

 

(100.0)

%

 

 

1,724

 

 

28,367

 

 

(93.9)

%

Purchase price accounting for investment in unconsolidated subsidiaries outside basis

 

 

 

 

 

 

N/M

 

 

 

 

 

60

 

 

N/M

 

Acquisition expense

 

 

 

 

58

 

 

N/M

 

 

 

 

 

395

 

 

N/M

 

Adjusted EBITDA

 

$

52,695

 

$

50,270

 

 

4.8

%

 

$

142,530

 

$

163,091

 

 

(12.6)

%

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 (senior notes payable and revolving line of credit less cash held in escrow and cash and cash equivalents) by net capital (net homebuilding debt plus total stockholders’ equity). 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,

 

 

2019

 

2018

Total homebuilding debt

 

$

1,175,072

 

$

987,277

Total stockholders' equity

 

 

951,179

 

 

859,359

Total capital

 

$

2,126,251

 

$

1,846,636

Debt to capital

 

 

55.3%

 

 

53.5%

 

 

 

 

 

 

 

Total homebuilding debt

 

$

1,175,072

 

$

987,277

Cash and cash equivalents

 

 

(38,508)

 

 

(32,902)

Cash held in escrow

 

 

(30,362)

 

 

(24,344)

Net homebuilding debt

 

 

1,106,202

 

 

930,031

Total stockholders' equity

 

 

951,179

 

 

859,359

Net capital

 

$

2,057,381

 

$

1,789,390

 

 

 

 

 

 

 

Net homebuilding debt to net capital

 

 

53.8%

 

 

52.0%

 

Investor Relations:
303-268-8398
InvestorRelations@CenturyCommunities.com

Source: Century Communities, Inc.

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The information contained herein is preliminary in nature and though deemed reliable is not guaranteed. Prices, features, locations and other content is subject to change without notice. Square footages are estimates. Models do not reflect racial preference.

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