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Century Communities Reports Increased Second Quarter 2024 Results

Trend Editor ~ 8/5/2024
- Increased 2024 Guidance for Home Sales Revenues and Deliveries - - Second Quarter Net Income Increased 63 % YoY to $ 83.7 Million , or $ 2.61 Per Diluted Share -- Home Sales Revenues of $ 1.0 Billion Increased 24 % YoY -- Deliveries of 2,617 Homes Increased 17

- Increased 2024 Guidance for Home Sales Revenues and Deliveries - - Second Quarter Net Income Increased 63% YoY to $83.7 Million, or $2.61 Per Diluted Share -- Home Sales Revenues of $1.0 Billion Increased 24% YoY -- Deliveries of 2,617 Homes Increased 17% YoY -- Net New Home Contracts of 2,780 Increased 20% YoY -- J. Scott Dixon Appointed as Chief Financial Officer -

GREENWOOD VILLAGE, Colo., July 24, 2024 /PRNewswire/ -- Century Communities, Inc. (NYSE: CCS), one of the nation's largest homebuilders, today announced financial results for its second quarter ended June 30, 2024.

Second Quarter 2024 Highlights

  • Net income of $83.7 million, or $2.61 per diluted share, a 63% YoY Increase
  • Pre-tax income of $110.6 million, a 61% YoY Increase
  • EBITDA of $129.1 million, a 61% YoY Increase
  • Total revenues of $1.0 billion, a 23% YoY Increase  
  • Community count of 266, a Company record and 14% YoY Increase
  • Deliveries of 2,617 homes, a 17% YoY Increase
  • Net new home contracts of 2,780, a 20% YoY Increase
  • Homebuilding gross margin of 22.5%
  • Adjusted homebuilding gross margin of 24.0%

"We continued to see solid demand for affordable new homes in the second quarter, with our net new contracts of 2,780 homes increasing by 20% versus the prior year quarter," said Dale Francescon, Chairman and Co-Chief Executive Officer. "Second quarter deliveries of 2,617 homes and home sales revenues of $1.0 billion increased by 17% and 24%, respectively, on a year-over-year basis. We generated an adjusted homebuilding gross margin of 24% in the quarter, an increase of 300 basis points versus second quarter 2023 levels, and adjusted net income of $85.2 million, or $2.65 per diluted share, increased by 66% on a year-over-year basis. Finally, I am pleased to announce that Century's Board of Directors appointed Scott Dixon as Chief Financial Officer, and the entire management team wants to congratulate Scott on his well-deserved promotion."

Rob Francescon, Co-Chief Executive Officer and President, said, "Our total lot inventory of 78,097 increased by 35% over the prior year with the higher lot count driven by gains in our controlled lots, which accounted for 58% of our total lots at the end of the second quarter. Our community count grew by 14% on a year-over-year basis to 266, a record for the Company. Our balance sheet remains strong with $2.5 billion in stockholders' equity and $841 million in liquidity, and, during the second quarter, we repurchased 464,980 shares of our common stock for $37 million at an average share price of $79.61. Given the strong performance we have experienced through the first half of the year, we have increased our full year 2024 guidance for home deliveries to be in the range of 10,700 to 11,300 homes and our home sales revenues to be in the range of $4.2 to $4.4 billion."

Second Quarter 2024 Results

Net income for the second quarter 2024 was $83.7 million, or $2.61 per diluted share. Adjusted net income, which excludes purchase price accounting and inventory impairment, was $85.2 million, or $2.65 per diluted share.

Total revenues were $1.0 billion, with second quarter home sales revenues totaling $1.0 billion as well. Deliveries totaled 2,617 homes. The average sales price of home deliveries for the second quarter 2024 was $388,800.

Net new home contracts in the second quarter 2024 were 2,780, and at the end of the second quarter 2024, the Company had 1,753 homes in backlog, representing $754.6 million of backlog dollar value.

Adjusted homebuilding gross margin percentage, excluding interest, inventory impairment and purchase accounting, was 24.0% in the second quarter of 2024. Homebuilding gross margin percentage in the second quarter 2024 was 22.5%. Selling, general, and administrative expenses as a percent of home sales revenues was 12.4% in the quarter. Adjusted EBITDA and EBITDA for the second quarter 2024 were $130.6 million and $129.1 million, respectively.

Financial services revenues and pre-tax income were $21.7 million and $5.7 million, respectively, in the second quarter 2024.

Our book value per share increased to a record $78.68 as of June 30, 2024.

Balance Sheet and Liquidity

The Company ended the second quarter 2024 with a strong financial position, including $2.5 billion of stockholders' equity and $840.5 million of total liquidity, including $151.5 million of cash.

During the second quarter, the Company maintained its quarterly cash dividend of $0.26 per share and repurchased 464,980 shares of its common stock for $37.0 million at an average share price of $79.61.

As of June 30, 2024, homebuilding debt to capital was 31.1% compared to 29.4% at March 31, 2024 and net homebuilding debt to net capital was 28.1% compared to 24.9% at March 31, 2024.

Stock Repurchase Program

The Company also announced that its Board of Directors approved a new stock repurchase program for up to an additional 4.5 million shares of Century common stock through open market, privately negotiated or other transactions from time to time and in such amounts as management deems appropriate.

Full Year 2024 Outlook

Scott Dixon, Chief Financial Officer of the Company, commented, "Given the strength that we have seen in our orders, deliveries and community count through the first half of the year, we have increased our full year 2024 guidance for home deliveries to be in the range of 10,700 to 11,300 homes and our home sales revenues to be in the range of $4.2 to $4.4 billion."

Scott Dixon Appointed as Chief Financial Officer

Century Communities also announced today that its Board of Directors on July 22nd appointed J. Scott Dixon as the Company's Chief Financial Officer. Mr. Dixon had been serving as the Company's Interim Chief Financial Officer since March of this year. Mr. Dixon has been with Century for over 10 years, and, prior to his role as Interim Chief Financial Officer, had been Century's Assistant Chief Financial Officer since May 2022. Prior to serving as Assistant Chief Financial Officer, Mr. Dixon served as Chief Accounting Officer of Century from November 2016 to May 2022, and prior to that position, he served as Century's Vice President of Accounting from November 2013 to November 2016. He was heavily involved in Century's initial public offering in 2014 and has been responsible for overseeing its SEC reporting, financial planning and analysis, and directly managing the finance team. Prior to joining Century, Mr. Dixon worked in Ernst & Young's audit practice, most recently as a Senior Manager in the audit and assurance practice, specializing in real estate. Mr. Dixon holds a Master of Science degree in Accounting from the University of Virginia and a Bachelor of Science degree in Finance from the University of Denver. Mr. Dixon is also a Certified Public Accountant.

Webcast and Conference Call

The Company will host a webcast and conference call on Wednesday, July 24, 2024, at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company's second 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 July 31, 2024, by dialing 877-344-7529 (domestic) or 412-317-0088 (international) and entering the passcode 1119095. 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. 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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Revenues

Homebuilding Revenues

Home sales revenues

$

1,017,414

$

818,360

$

1,939,816

$

1,553,960

Land sales and other revenues

377

1,554

1,593

3,089

Total homebuilding revenues

1,017,791

819,914

1,941,409

1,557,049

Financial services revenues

21,659

24,277

46,585

40,132

Total revenues

1,039,450

844,191

1,987,994

1,597,181

Homebuilding Cost of Revenues

Cost of home sales revenues

(787,556)

(656,834)

(1,513,127)

(1,258,219)

Cost of land sales and other revenues

(375)

(37)

(375)

Total homebuilding cost of revenues

(787,556)

(657,209)

(1,513,164)

(1,258,594)

Financial services costs

(15,996)

(11,770)

(30,873)

(22,551)

Selling, general, and administrative

(125,973)

(105,120)

(240,082)

(203,433)

Inventory impairment

(570)

(570)

Other income (expense)

1,278

(1,344)

(8,353)

154

Income before income tax expense

110,633

68,748

194,952

112,757

Income tax expense

(26,909)

(17,303)

(46,897)

(28,001)

Net income

$

83,724

$

51,445

$

148,055

$

84,756

Earnings per share:

Basic

$

2.65

$

1.61

$

4.67

$

2.65

Diluted

$

2.61

$

1.60

$

4.60

$

2.63

Weighted average common shares outstanding:

Basic

31,648,130

32,025,186

31,728,544

31,970,106

Diluted

32,092,789

32,247,396

32,165,798

32,182,545

Century Communities, Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share amounts)

June 30,

December 31,

2024

2023

Assets

(unaudited)

(audited)

Cash and cash equivalents

$

106,682

$

226,150

Cash held in escrow

44,823

101,845

Accounts receivable

78,260

76,213

Inventories

3,295,336

3,016,641

Mortgage loans held for sale

255,305

251,852

Prepaid expenses and other assets

404,315

350,193

Property and equipment, net

97,215

69,075

Deferred tax assets, net

17,426

16,998

Goodwill

32,082

30,395

Total assets

$

4,331,444

$

4,139,362

Liabilities and stockholders' equity

Liabilities:

Accounts payable

$

158,778

$

147,265

Accrued expenses and other liabilities

271,849

303,392

Notes payable

1,075,344

1,062,471

Revolving line of credit

111,000

Mortgage repurchase facilities

248,816

239,298

Total liabilities

1,865,787

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, 31,336,340 and 31,774,615 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

313

318

Additional paid-in capital

540,573

592,989

Retained earnings

1,924,771

1,793,629

Total stockholders' equity

2,465,657

2,386,936

Total liabilities and stockholders' equity

$

4,331,444

$

4,139,362

Century Communities, Inc.

Homebuilding Operational Data

(Unaudited)

Net New Home Contracts

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

% Change

2024

2023

% Change

West

376

237

58.6

%

816

580

40.7

%

Mountain

552

446

23.8

%

1,163

779

49.3

%

Texas

520

400

30.0

%

1,034

875

18.2

%

Southeast

386

351

10.0

%

836

593

41.0

%

Century Complete

946

883

7.1

%

1,797

1,512

18.8

%

Total

2,780

2,317

20.0

%

5,646

4,339

30.1

%

Home Deliveries 

(dollars in thousands)

Three Months Ended June 30,

2024

2023

% Change

Homes

Average Sales Price

Homes

Average Sales

Price

Homes

Average Sales

Price

West

325

$

626.7

254

$

548.2

28.0

%

14.3

%

Mountain

486

$

532.7

455

$

503.7

6.8

%

5.8

%

Texas

485

$

301.1

450

$

281.2

7.8

%

7.1

%

Southeast

349

$

441.3

275

$

426.5

26.9

%

3.5

%

Century Complete

972

$

262.2

801

$

257.3

21.3

%

1.9

%

Total / Weighted Average

2,617

$

388.8

2,235

$

366.2

17.1

%

6.2

%

Six Months Ended June 30,

2024

2023

% Change

Homes

Average Sales Price

Homes

Average Sales

 Price

Homes

Average Sales

 Price

West

609

$

617.3

457

$

586.7

33.3

%

5.2

%

Mountain

981

$

523.0

910

$

521.7

7.8

%

0.2

%

Texas

909

$

304.9

777

$

278.0

17.0

%

9.7

%

Southeast

728

$

433.4

473

$

431.7

53.9

%

0.4

%

Century Complete

1,748

$

262.1

1,530

$

255.5

14.2

%

2.6

%

Total / Weighted Average

4,975

$

389.9

4,147

$

374.7

20.0

%

4.1

%

Century Communities, Inc.

Homebuilding Operational Data

(Unaudited)

Selling Communities

As of June 30,

Increase

2024

2023

Amount

% Change

West

26

23

3

13.0

%

Mountain

47

41

6

14.6

%

Texas

45

38

7

18.4

%

Southeast

34

29

5

17.2

%

Century Complete

114

102

12

11.8

%

Total

266

233

33

14.2

%

Backlog

(dollars in thousands)

As of June 30,

2024

2023

% Change

Homes

Dollar Value

Average Sales Price

Homes

Dollar Value

Average Sales Price

Homes

Dollar Value

Average Sales Price

West

313

$

213,931

$

683.5

203

$

129,616

$

638.5

54.2

%

65.0

%

7.0

%

Mountain

345

198,484

$

575.3

310

149,369

$

481.8

11.3

%

32.9

%

19.4

%

Texas

293

87,826

$

299.7

253

78,360

$

309.7

15.8

%

12.1

%

(3.2)

%

Southeast

250

107,965

$

431.9

325

148,616

$

457.3

(23.1)

%

(27.4)

%

(5.6)

%

Century Complete

552

146,417

$

265.2

911

244,118

$

268.0

(39.4)

%

(40.0)

%

(1.0)

%

Total / Weighted Average

1,753

$

754,623

$

430.5

2,002

$

750,079

$

374.7

(12.4)

%

0.6

%

14.9

%

Lot Inventory

As of June 30,

2024

2023

% Change

Owned

Controlled

Total

Owned

Controlled

Total

Owned

Controlled

Total

West

4,434

3,665

8,099

4,207

1,867

6,074

5.4

%

96.3

%

33.3

%

Mountain

8,651

4,987

13,638

9,818

3,400

13,218

(11.9)

%

46.7

%

3.2

%

Texas

9,777

9,823

19,600

7,627

6,811

14,438

28.2

%

44.2

%

35.8

%

Southeast

5,461

12,446

17,907

5,769

4,079

9,848

(5.3)

%

205.1

%

81.8

%

Century Complete

4,454

14,399

18,853

3,550

10,647

14,197

25.5

%

35.2

%

32.8

%

Total

32,777

45,320

78,097

30,971

26,804

57,775

5.8

%

69.1

%

35.2

%

% of Total

42.0 %

58.0 %

100.0 %

53.6 %

46.4 %

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 June 30,

Six Months Ended June 30,

2024

2023

2024

2023

Numerator

Net income

$

83,724

$

51,445

$

148,055

$

84,756

Denominator

Weighted average common shares outstanding - basic

31,648,130

32,025,186

31,728,544

31,970,106

Dilutive effect of stock-based compensation awards

444,659

222,210

437,254

212,439

Weighted average common shares outstanding - diluted

32,092,789

32,247,396

32,165,798

32,182,545

Earnings per share:

Basic

$

2.65

$

1.61

$

4.67

$

2.65

Diluted

$

2.61

$

1.60

$

4.60

$

2.63

Adjusted earnings per share

Numerator

Net income

$

83,724

$

51,445

$

148,055

$

84,756

Income tax expense

26,909

17,303

46,897

28,001

Income before income tax expense

110,633

68,748

194,952

112,757

Inventory impairment

570

570

Impairment on other investment

7,722

Purchase price accounting for acquired work in process inventory

973

2,553

Adjusted income before income tax expense

112,176

68,748

205,797

112,757

Adjusted income tax expense(1)

(26,985)

(17,303)

(49,506)

(28,001)

Adjusted net income

$

85,191

$

51,445

$

156,291

$

84,756

Denominator - Diluted

32,092,789

32,247,396

32,165,798

32,182,545

Adjusted diluted earnings per share

$

2.65

$

1.60

$

4.86

$

2.63

(1)

The tax rates used in calculating adjusted net income for the three and six months ended June 30, 2024 were 24.1%, respectively, which are reflective of the Company's GAAP tax rate for the six months ended June 30, 2024.  The tax rates used in calculating adjusted net income for the three and six months ended June 30, 2023 were 25.2% and 24.8%, 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.