Century Communities Reports First Quarter 2015 Results

- Reports Earnings of $0.30 Per Share -

- Net New Home Contracts Increase 336% to 706 homes -

- Home Deliveries Increase 323% to 542 homes -

GREENWOOD VILLAGE, Colo.--()--Century Communities, Inc. (NYSE:CCS), a leading builder of upscale single-family homes, townhomes and flats in select markets, today announced financial results for its first quarter ending March 31, 2015.

First Quarter 2015 Highlights Compared to First Quarter 2014*

  • Net income of $6.4 million, an increase of 89%
  • Pre-tax income of $9.5 million, an increase of 83%
  • Total revenue of $156.4 million, an increase of 215%
  • Home deliveries increased 323% to 542 homes
  • Homebuilding gross margin of $29.5 million, an increase of 138%
  • Adjusted EBITDA of $14.2 million, an increase of 138%
  • Selling, General & Administrative (“SG&A”) as a percent of home sales revenues of 13.6%, an improvement of 50 basis points
  • Net new home contracts increased 336% to 706 homes
  • Homes in backlog increased 259% to 920 homes
  • Average open communities increased 261% to 83
  • Open communities at the end of the quarter increased 278% to 87

“We continued to experience strong momentum in our business during the first quarter 2015 in which we met or exceeded our expectation across nearly all of our key metrics,” stated Dale Francescon, Co-Chief Executive Officer. “The benefits of our expansion strategy into attractive markets are evident with the significant increase in our home deliveries, which more than doubled our gross margin dollars and produced another quarter of favorable leverage on our SG&A. As we look forward to the full year 2015, we remain focused on improving our profitability, growing our earnings and investing our capital opportunistically to further diversify our platform and enhance our returns.”

“Our markets continue to exhibit strong fundamentals and we are encouraged by the higher levels of traffic and an improvement in the absorption pace across our platform throughout the quarter with a record backlog of 920 homes,” said Rob Francescon, Co-Chief Executive Officer. “We are capitalizing on this increasing demand while exercising strict control of our incentives. The integration of our Peachtree Communities acquisition in the Southeast remains on track and we are committed to further expanding our geographical presence into healthy markets with improving economies. With our strong balance sheet, attractive land positions and accretive acquisition strategy in place, we look forward to expanding our business in a disciplined manner, while actively managing our costs to improve our profitability."

First Quarter 2015 Results*

Net income for the first quarter 2015 was $6.4 million, or $0.30 per share, compared to $3.4 million, or $0.20 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.

Home sales revenues for the first quarter 2015 was $154.3 million, compared to $49.7 million in the prior year quarter. The increase in home sales revenues was primarily due to home deliveries increasing 323% to 542 homes compared to 128 in the prior year quarter. The average selling price of homes delivered was $284,751, compared to $388,051 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 first quarter 2015 was 19.1%, compared to 25.0% in the prior year quarter. Adjusted homebuilding gross margin percentage, excluding purchase price accounting and interest in cost of homes sales revenues, was 21.5% compared to 25.5% in the prior year quarter, mainly attributable to regional and product mix. SG&A as a percent of home sales revenues was 13.6% compared to 14.1% 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, and an increase in costs associated with being a publicly traded company.

Net new home contracts in the first quarter 2015 increased to 706 homes, an increase of 336% compared to 162 homes in the prior year quarter, largely attributable to a higher number of average open communities. At the end of the first quarter 2015, the Company had 920 homes in backlog, representing $308.0 million of backlog dollar value, compared to 256 homes, representing $122.3 million of backlog dollar value in the prior year quarter.

*Financial and operating results as of and for the three months ended March 31, 2014 do not include the results of operations from our acquisitions of Las Vegas Land Holdings, LLC, Grand View Builders, and Peachtree Communities Group Inc., which were acquired in April 2014, 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

As of March 31, 2015, the Company had total assets of $718.2 million, including cash and cash equivalents totaling $26.6 million, and inventories of $599.7 million. Liabilities totaled $345.6 million, which included $262.3 million of long-term debt. The Company ended the quarter with $64.2 million of availability on its unsecured $120 million credit facility and an undrawn $80 million accordion. At March 31, 2015, the Company’s ratio of net debt to net capital was 38.7%.

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. Accordingly, subsequent to the offering, the line of credit is undrawn with $120 million of capacity and an unused accordion of $80 million.

Conference Call

The Company will host a webcast and conference call on Thursday, May 7, 2015 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s first 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 June 7, 2015, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13607088.

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. 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
March 31,
2015 2014
Revenue
Home sales revenues $ 154,335 $ 49,671
Golf course and other revenue   2,103      
Total revenue 156,438 49,671
Costs and expenses
Cost of home sales revenues 124,806 37,274
Cost of golf course and other revenue 1,506
Selling, general, and administrative   20,932     7,003  
Total operating costs and expenses   147,244     44,277  
Operating income 9,194 5,394
Other income (expense):
Interest income 16 69
Interest expense (3 )
Acquisition expense (395 )
Other income   317     128  
Income before tax expense 9,524 5,196
Income tax expense   3,173     1,828  
Net income $ 6,351   $ 3,368  
Earnings per share:
Basic and Diluted $ 0.30 $ 0.20
Weighted average number of common shares outstanding:
Basic and Diluted 20,509,679 17,075,000
 

Financial and operating results as of and for the three months ended March 31, 2014 do not include the results of operations from our acquisitions of Las Vegas Land Holdings, LLC, Grand View Builders, and Peachtree Communities Group Inc., which were acquired in April 2014, 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)

 
March 31, December 31,
2015 2014
Assets
Cash and cash equivalents $ 26,647 $ 33,462
Accounts receivable 18,805 13,799
Inventories 599,747 556,323
Prepaid expenses and other assets 28,203 28,796
Property and equipment, net 13,419 12,471
Deferred tax asset, net 1,812 1,359
Amortizable intangible assets, net 7,543 8,632
Goodwill   21,994   21,137
Total assets $ 718,170 $ 675,979
Liabilities and stockholders' equity
Liabilities:
Accounts payable $ 9,483 $ 17,135
Accrued expenses and other liabilities 73,753 64,029
Notes payable and revolving line of credit   262,321   229,610
Total liabilities   345,557   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, 21,360,165 and 20,875,547 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively 214 209
Additional paid-in capital 337,625 336,573
Retained earnings   34,774   28,423
Total stockholders' equity   372,613   365,205
Total liabilities and stockholders' equity $ 718,170 $ 675,979
 
           

Century Communities, Inc.

Homebuilding Operational Data

 

 

Net New Home Contracts

 
Three Months Ended March 31,
 
2015 2014 % Change
Atlanta 331 NM
Central Texas 62 25 148.0 %
Colorado 209 137 52.6 %
Houston 27 NM
Nevada 77 NM  
Total 706 162 335.8 %
 
                       

Home Deliveries

 
Three Months Ended March 31,
2015 2014 % Change
Average Sales Average Sales Average Sales
Homes Price Homes Price Homes Price
 
Atlanta 255 $ 222.1 $ NM NM
Central Texas 39 436.8 26 531.5 50.0 % (17.8) %
Colorado 143 390.3 102 351.5 40.2 % 11.0 %
Houston 60 173.4 NM NM
Nevada 45   320.8   NM   NM  
Total / W.A. 542 $ 284.8 128 $ 388.1 323.4 % (26.6) %
 
           

Selling Communities

 
As of March 31,
2015 2014 % Change
 
Atlanta 30 NM
Central Texas 14 9 55.6 %
Colorado 31 14 121.4 %
Houston 8 NM
Nevada 4 NM  
Total 87 23 278.3 %
 

NM – Not meaningful.

 
                                   

Century Communities, Inc.

Homebuilding Operational Data

 

Backlog

 
As of March 31,
2015 2014 % Change
Dollar Average Sales Average Dollar Average
Homes Value Price Homes Dollar Value Sales Price Homes Value Sales Price
 
Atlanta 399 $ 90,068 $ 225.7 $ $ NM NM NM
Central Texas 114 55,125 483.6 93 47,764 513.6 22.6 % 15.4 % (5.8) %
Colorado 284 125,961 443.5 163 74,556 457.4 74.2 % 68.9 % (3.0) %
Houston 58 17,474 301.3 NM NM NM
Nevada 65   19,345   297.6     NM   NM   NM  
Total / Weighted Average 920 $ 307,973 $ 334.8 256 $ 122,320 $ 477.8 259.4 % 151.8 % (29.9) %
 
                                   

Lot Inventory

 
As of March 31,
2015 2014 % Change
Owned Controlled Total Owned Controlled Total Owned Controlled Total
 
Atlanta 929 2,824 3,753 NM NM NM
Central Texas 1,089 918 2,007 167 2,787 2,954 552.1 % (67.1) % (32.1) %
Colorado 3,224 747 3,971 2,890 2,402 5,292 11.6 % (68.9) % (25.0) %
Houston 214 409 623 NM NM NM
Nevada 1,828 267 2,095 90 1,759 1,849 1,931.1 % (84.8) % 13.3 %
Total 7,284 5,165 12,449 3,147 6,948 10,095 131.5 % (25.7) % 23.3 %
 

NM – Not meaningful.

 
       

Century Communities, Inc.

Earnings Per Share

(Unaudited)

 

(in thousands, except share and per share amounts)

 
Three Months Ended
March 31,
2015 2014
Numerator
Net income $ 6,351 $ 3,368
Less: Undistributed earnings allocated to participating securities   (185 ) (36 )
Numerator for basic and diluted EPS $ 6,166   $ 3,332  
Denominator
Basic and diluted EPS—weighted average shares 20,509,679 17,075,000
Basic and diluted EPS $ 0.30 $ 0.20
 
               

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 March 31,
2015 % 2014 %
Home sales revenues $ 154,335 100.0 % $ 49,671 100.0 %
Cost of home sales revenues   124,806 80.9 %   37,274 75.0 %
Gross margin from home sales 29,529 19.1 % 12,397 25.0 %
Add: Interest in cost of home sales revenues   1,621 1.1 %   76 0.2 %
Adjusted homebuilding gross margin excluding interest 31,150 20.2 % 12,473 25.1 %
Add: Purchase price accounting for acquired work in process inventory   2,027 1.3 %   188 0.4 %
Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory $ 33,177 21.5 % $ 12,661 25.5 %
 
             

Century Communities, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

 

Adjusted EBITDA

 

(in thousands)

 
Three Months Ended March 31,  
 
2015 2014 % Change
Net income $ 6,351 $ 3,368 88.6 %
Income tax expense 3,173 1,828 73.6 %
Interest in cost of home sales revenues 1,621 76 2,032.9 %
Interest expense 3 100.0 %
Depreciation and amortization expense   988   483   104.6 %
EBITDA 12,136 5,755 110.9 %
Purchase price accounting for acquired work in process inventory   2,027   188   978.2 %
Adjusted EBITDA $ 14,163 $ 5,943   138.3 %

Contacts

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

Contacts

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