Century Communities Reports Third Quarter 2023 Results

- Increased 2023 Guidance for Deliveries and Home Sales Revenues -
- Homebuilding Gross Margins of 24.6% -
- Community Count Increased to a Record 252 -
- Net Income of $83.2 Million, $2.58 per Diluted Share -
- Controlled Lots as a Percentage of Total Lots Increased to 56% -

GREENWOOD VILLAGE, Colo., Oct. 25, 2023 /PRNewswire/ -- Century Communities, Inc. (NYSE: CCS), one of the nation's largest homebuilders, today announced financial results for its third quarter ended September 30, 2023.

Third Quarter 2023 Highlights

• Pre-tax income of $112.0 million
• Net income of $83.2 million, or $2.58 per diluted share
• Total revenues of $889.4 million  
• Deliveries of 2,264 homes
• Net new home contracts of 2,149
• Homebuilding gross margin of 24.6%
• Adjusted homebuilding gross margin of 25.8%
• Book value per share of $72.16 as of September 30, 2023, a Company record

"We generated sequential gains in our deliveries, gross margins and earnings during the third quarter," said Dale Francescon, Chairman and Co-Chief Executive Officer. "Our deliveries of 2,264 homes increased on a sequential basis for the second quarter in a row and benefitted from continued improvements in our cycle times. Our adjusted gross margins of 25.8% increased by 480 basis points from second quarter 2023 levels due to improvements in direct construction costs, reduced incentives and shorter cycle times. As a result, our diluted earnings per share of $2.58 increased by 62% over second quarter 2023 levels. At their midpoints, we have increased our full year 2023 guidance for homes deliveries to be in the range of 8,600 to 9,000 homes and our home sales revenues to be in the range of $3.2 billion to $3.4 billion."

Rob Francescon, Co-Chief Executive Officer and President, said, "Our net new home contracts of 2,149 were in line with our expectations and typical seasonality, with net orders in both August and September exceeding July levels, even with the increase in interest rates over the past several months. Our total lot inventory of 68,570 increased by 19% on a sequential basis, with the higher lot count driven almost entirely by gains in our controlled lots, which accounted for 56% of our total lots at the end of the third quarter. Our community count of 252 increased by 16% versus year ago levels, and we continue to expect our community count to be in the range of 250-260 communities by year end, which positions us well for more positive results in 2024 and beyond. Our balance sheet remains strong with $2.3 billion in stockholders' equity and $1.0 billion in liquidity, and we intend to continue investing in our business and returning capital to shareholders."

Third Quarter 2023 Results

Net income for the third quarter 2023 was $83.2 million, or $2.58 per diluted share.

Total revenues were $889.4 million, with third quarter home sales revenues totaling $865.1 million. Deliveries totaled 2,264 homes. The average sales price of home deliveries for the third quarter 2023 was $382,100.

Net new home contracts in the third quarter 2023 were 2,149, and at the end of the third quarter 2023, the Company had 1,887 homes in backlog, representing $707.2 million of backlog dollar value.

Adjusted homebuilding gross margin percentage, excluding interest, was 25.8% in the third quarter of 2023. Homebuilding gross margin percentage in the third quarter 2023 was 24.6%. Selling, general, and administrative expenses as a percent of home sales revenues was 12.9% in the quarter. EBITDA for the third quarter 2023 was $125.3 million.

Financial services revenues and pre-tax income were $23.6 million and $12.2 million, respectively, in the third quarter 2023.

Our book value per share increased to a record $72.16 as of September 30, 2023.

Balance Sheet and Liquidity

The Company ended the quarter with a strong financial position, including $2.3 billion of stockholders' equity and $1.0 billion of total liquidity, including $245.6 million of cash.

During the third quarter, the Company maintained its quarterly cash dividend of $0.23 per share.

As of September 30, 2023, homebuilding debt to capital decreased to 30.8% from 36.3% at September 30, 2022. As of September 30, 2023, net homebuilding debt to net capital decreased to 25.3% from 32.5% at September 30, 2022.

Full Year 2023 Outlook 

David Messenger, Chief Financial Officer of the Company, commented, "Given the continued strength in our deliveries which have benefitted from improved cycle times, we are increasing the midpoints of our full year 2023 guidance for home deliveries to be in the range of 8,600 to 9,000 homes and our home sales revenues to be in the range of $3.2 billion to $3.4 billion."

Webcast and Conference Call

The Company will host a webcast and conference call on Wednesday, October 25, 2023, at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company's third quarter 2023 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 November 1, 2023, by dialing 877-344-7529 (domestic) or 412-317-0088 (international) and entering the passcode 3057791. 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 2023. 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 2023, its community count expectations and its intent to continue investing in its business and returning capital to shareholders. 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.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that we believe are 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. We define adjusted net income as consolidated net income before (i) income tax expense, (ii) inventory impairment (iii) restructuring costs, and (iv) loss on debt extinguishment, less adjusted income tax expense, calculated using the Company's GAAP tax rate for the applicable period. Adjusted diluted earnings per share is calculated by dividing adjusted net income by weighted average common shares – diluted.

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

Adjusted homebuilding gross margin excluding inventory impairment and interest 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 and indebtedness 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.

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), and inventory impairment (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.

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.

Category:
Earnings

SOURCE Century Communities, Inc.