Century Communities Reports Record Fourth Quarter and Full Year 2019 Results

- Home Sales Revenues Increased to $775.7 Million or 21% for Fourth Quarter -
- Net New Home Contracts Increased 45% to a Record 1,775 Homes for Fourth Quarter -
- Home Deliveries Grew to a Record 2,479 Homes or 22% for Fourth Quarter -
- Home Deliveries Increased to a Record 8,000 or 31% for Full Year -
- Fourth Quarter Net Income Per Diluted Share Increased to $1.63 from $0.85 -

GREENWOOD VILLAGE, Colo.--()--Century Communities, Inc. (NYSE: CCS), a leading national homebuilder, today announced financial results for its fourth quarter and full year ended December 31, 2019.

Fourth Quarter 2019 Highlights Compared to Fourth Quarter 2018

  • Net income increased 104% to a record $53.4 million or $1.63 per diluted share
  • Home sales revenues increased to a record $775.7 million or 21%
  • Selling, general & administrative expense (“SG&A”) as a percent of home sales revenues improved by 50 basis points to 10.9%
  • Home deliveries grew to a record 2,479 homes or 22%
  • Net new home contracts increased 45% to a record 1,775 homes
  • Reduced net homebuilding debt to net capital ratio to 45.2%
  • Increased book value per share to $32.11 and stockholders’ equity to $1.1 billion

Dale Francescon, Co-Chief Executive Officer, stated, “2019 proved to be another milestone year for Century in which we closed a record 8,000 homes, grew home sales revenues to a record $2.5 billion and generated $113 million of net income, achieving our 17th consecutive year of profitability. We broadened our national footprint to 17 states, adding deliveries in Iowa, Indiana, Michigan and Ohio, not only expanding our scale and scope but strengthening our competitive position across high-potential markets. Additionally, we improved our SG&A leverage demonstrating our success in maintaining tight financial discipline and driving operational efficiencies within the business. While we are very pleased with our progress over the past year, we believe this is only the beginning of our extraordinary growth potential.”

Rob Francescon, Co-Chief Executive Officer, said, “Looking ahead, we are better positioned than ever before to capitalize on our 2019 momentum to propel our trajectory as we more deeply penetrate and increase our market share in the nation’s most robust metro environments. We are razor-focused on expanding our differentiated leadership position in the attractive, lower-priced home category, generating even further efficiencies from our substantial national platform and are encouraged that improved macro trends and positive homebuilding fundamentals are creating a positive demand environment. Furthermore, we are excited about our rebranding of Wade Jurney Homes to Century Complete announced today, a logical incorporation into the Century brand designed to maximize the potential of this important part of our business. We anticipate 2020 will be another year of outsized growth and performance and remain committed to delivering long-term value creation to our shareholders.”

Fourth Quarter 2019 Results

Net income for the fourth quarter 2019 increased 104% to $53.4 million, or $1.63 per diluted share as compared to $26.2 million or $0.85 per diluted share for the prior year quarter. Adjusted net income for the fourth quarter increased 44% to $49.4 million, or $1.50 per diluted share, as compared to $34.4 million, or $1.11 per diluted share, for the prior year quarter.

Home sales revenues for the fourth quarter 2019 increased 21% to $775.7 million, compared to $640.2 million for the prior year quarter. The growth in home sales revenues was primarily due to a 22% increase in deliveries to 2,479 homes compared to 2,028 homes for the prior year quarter. Average sales price of home deliveries for the fourth quarter 2019 decreased to $312,900, compared to $315,700 in the prior year quarter, consistent with the Company’s expansion of its offering of affordably priced homes.

Adjusted homebuilding gross margin percentage, excluding interest and impairments, increased to 21.0% in the fourth quarter 2019, as compared to 20.4% in the prior year quarter. Homebuilding gross margin percentage in the fourth quarter 2019 increased to 18.2%, as compared to 16.5% in the prior year quarter. SG&A as a percent of home sales revenues improved to 10.9%, compared to 11.4% in the prior year quarter.

Net new home contracts in the fourth quarter 2019 increased 45% to 1,775 homes, compared to 1,221 homes in the prior year quarter. At the end of the fourth quarter 2019, the Company had 2,070 homes in backlog, representing $637.8 million of backlog dollar value.

In the fourth quarter, the Company expensed an intangible asset of $2.8 million for the Wade Jurney Homes name, along with approximately $2.0 million in one time inventory impairments. The Company also incurred approximately $4.7 million of additional non-recurring items of which $3.0 million related to 45L consulting fees due to the recent extension of the energy-efficient home tax credit and $1.5 million related to various one time insurance settlements.

Financial services generated pre-tax income of $4.7 million in the fourth quarter 2019 as compared to $3.3 million in the prior year quarter, an increase of 42%.

Full Year 2019 Results

Net income for the full year 2019 was $113.0 million, or $3.62 per share compared to $96.5 million, or $3.17 per share. Adjusted net income increased to a record $126.2 million, or $4.05 per share, compared to $119.9 million, or $3.94 per share, for the prior year.

Home sales revenues for 2019 increased 18% to $2.5 billion, compared to $2.1 billion for 2018. The increase in home sales revenues was primarily due to home deliveries increasing 31% to 8,000 homes. Average selling price of homes delivered decreased to $310,200 compared to $346,000 in the prior year, consistent with the Company’s expansion of its offering of affordably priced homes.

Adjusted homebuilding gross margin percentage, excluding interest, impairments and purchase price accounting, was 20.3% compared to 21.6% in the prior year. Homebuilding gross margin percentage in 2019 was 17.7%, compared to 17.5% in 2018. SG&A as a percent of home sales revenues decreased 30 basis points to 12.2% compared to 12.5% the prior year, with tight cost controls offsetting numerous investment and integration initiatives to support growth objectives.

Net new home contracts in 2019 increased to 7,861 homes, an increase of 39%, compared to 5,657 homes in the prior year, primarily attributable to an increased absorption pace and the full year results of Wade Jurney Homes.

Financial services generated pre-tax income of $10.7 million in the full year 2019 as compared to $8.8 million in the prior year, a 22% increase.

Balance Sheet and Liquidity

Stockholders’ equity increased by $202 million or 24% during the year to end at a record $1.06 billion. As of December 31, 2019, the Company had $571.3 million of availability under its credit facility. The Company had total liquidity of $662 million.

During the fourth quarter, the Company improved its net homebuilding debt to net capital to 45.2%, down 680 basis points from 52.0% at the end of 2018 and 860 basis points from 53.8% at the end of the third quarter.

Full Year 2019 Outlook

David Messenger, Chief Financial Officer of the Company, commented, “We believe our continued momentum coupled with a strong U.S. macroeconomic environment will enable us to deliver another year of strong performance in 2020. We introduce our full year outlook for home deliveries to be in the range of 8,500 to 9,500 homes and our home sales revenues to be in the range of $2.6 billion to $3.0 billion.”

Conference Call

The Company will host a webcast and conference call on Thursday, February 6, 2020 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s fourth quarter and full year 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 March 6, 2020, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13697758. A replay of the webcast will be available on the Company’s website.

About Century Communities

Century Communities, Inc. (NYSE: CCS) is a top 10 national homebuilder. Offering new homes under the Century Communities and Century Complete brands, 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 operates 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 Net Income, 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 2020. 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.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share amounts)

 

 

Three months ended December 31,

 

Year ended December 31,

 

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

775,667

 

 

$

640,187

 

 

$

2,481,465

 

 

$

2,110,058

 

Land sales and other revenues

 

 

2,347

 

 

 

1,327

 

 

 

11,184

 

 

 

5,631

 

 

 

 

778,014

 

 

 

641,514

 

 

 

2,492,649

 

 

 

2,115,689

 

Financial services revenue

 

 

14,528

 

 

 

10,431

 

 

 

43,262

 

 

 

31,724

 

Total revenues

 

 

792,542

 

 

 

651,945

 

 

 

2,535,911

 

 

 

2,147,413

 

Homebuilding Cost of Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Cost of home sales revenues

 

 

(632,722

)

 

 

(534,695

)

 

 

(2,040,241

)

 

 

(1,741,619

)

Cost of land sales and other revenues

 

 

(2,015

)

 

 

(822

)

 

 

(8,130

)

 

 

(3,832

)

 

 

 

(634,737

)

 

 

(535,517

)

 

 

(2,048,371

)

 

 

(1,745,451

)

Financial services costs

 

 

(9,825

)

 

 

(7,122

)

 

 

(32,575

)

 

 

(22,958

)

Selling, general, and administrative

 

 

(84,538

)

 

 

(72,850

)

 

 

(301,525

)

 

 

(263,981

)

Loss on debt extinguishment

 

 

 

 

 

 

(10,832

)

 

 

Inventory impairment and other

 

 

(4,783

)

 

 

 

 

(4,783

)

 

 

Acquisition expense

 

 

 

 

(41

)

 

 

 

 

(437

)

Equity in income of unconsolidated subsidiaries

 

 

 

 

 

 

 

 

14,849

 

Other income (expense)

 

 

(4,691

)

 

 

(353

)

 

 

(5,190

)

 

 

(905

)

Income before income tax expense

 

 

53,968

 

 

 

36,062

 

 

 

132,635

 

 

 

128,530

 

Income tax expense

 

 

(610

)

 

 

(9,868

)

 

 

(19,641

)

 

 

(32,075

)

Net income

 

$

53,358

 

 

$

26,194

 

 

$

112,994

 

 

$

96,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.65

 

 

$

0.85

 

 

$

3.66

 

 

$

3.20

 

Diluted

 

$

1.63

 

 

$

0.85

 

 

$

3.62

 

 

$

3.17

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

32,392,398

 

 

 

30,675,586

 

 

 

30,886,382

 

 

 

30,084,913

 

Diluted

 

 

32,807,678

 

 

 

30,991,715

 

 

 

31,186,952

 

 

 

30,391,346

 

Century Communities, Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share amounts)

 

 

December 31,

 

December 31,

 

 

2019

 

2018

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

55,436

 

$

32,902

Cash held in escrow

 

 

35,308

 

 

24,344

Accounts receivable

 

 

27,438

 

 

13,464

Inventories

 

 

1,995,549

 

 

1,848,243

Mortgage loans held for sale

 

 

185,246

 

 

112,394

Prepaid expenses and other assets

 

 

123,800

 

 

140,397

Property and equipment, net

 

 

35,998

 

 

33,258

Deferred tax assets, net

 

 

10,589

 

 

13,763

Amortizable intangible assets, net

 

 

208

 

 

5,095

Goodwill

 

 

30,395

 

 

30,395

Total assets

 

$

2,499,967

 

$

2,254,255

Liabilities and stockholders' equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

84,794

 

$

89,907

Accrued expenses and other liabilities

 

 

213,975

 

 

213,157

Notes payable

 

 

896,704

 

 

784,777

Revolving line of credit

 

 

68,700

 

 

202,500

Mortgage repurchase facilities

 

 

174,095

 

 

104,555

Total liabilities

 

 

1,438,268

 

 

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, 33,067,375 and 30,154,791 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively

 

 

331

 

 

302

Additional paid-in capital

 

 

684,354

 

 

595,037

Retained earnings

 

 

377,014

 

 

264,020

Total stockholders' equity

 

 

1,061,699

 

 

859,359

Total liabilities and stockholders' equity

 

$

2,499,967

 

$

2,254,255

Century Communities, Inc.

Homebuilding Operational Data

Net New Home Contracts

 

 

Three Months Ended

 

 

December 31,

 

 

2019

 

 

2018

 

 

% Change

West

 

246

 

 

138

 

 

78.3

 

%

Mountain

 

347

 

 

258

 

 

34.5

 

%

Texas

 

264

 

 

161

 

 

64.0

 

%

Southeast

 

385

 

 

244

 

 

57.8

 

%

Wade Jurney Homes

 

533

 

 

420

 

 

26.9

 

%

Total

 

1,775

 

 

1,221

 

 

45.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Year ended

 

 

December 31,

 

 

2019

 

 

2018

 

 

% Change

West

 

1,013

 

 

754

 

 

34.4

 

%

Mountain

 

1,637

 

 

1,571

 

 

4.2

 

%

Texas

 

997

 

 

654

 

 

52.4

 

%

Southeast

 

1,635

 

 

1,693

 

 

(3.4

)

%

Wade Jurney Homes

 

2,579

 

 

985

 

 

161.8

 

%

Total

 

7,861

 

 

5,657

 

 

39.0

 

%

Home Deliveries

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31,

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change

 

 

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

West

 

346

 

$

492.4

 

200

 

$

524.9

 

73.0

 

%

 

(6.2

)

%

Mountain

 

497

 

 

435.0

 

484

 

 

438.2

 

2.7

 

%

 

(0.7

)

%

Texas

 

277

 

 

260.2

 

197

 

 

282.3

 

40.6

 

%

 

(7.8

)

%

Southeast

 

556

 

 

345.8

 

510

 

 

333.7

 

9.0

 

%

 

3.6

 

%

Wade Jurney Homes

 

803

 

 

155.3

 

637

 

 

152.8

 

26.1

 

%

 

1.6

 

%

Total / Weighted Average

 

2,479

 

$

312.9

 

2,028

 

$

315.7

 

22.2

 

%

 

(0.9

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31,

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change

 

 

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

 

Homes

 

Average Sales
Price

West

 

1,029

 

$

519.3

 

806

 

$

569.5

 

27.7

 

%

 

(8.8

)

%

Mountain

 

1,665

 

$

431.7

 

1,625

 

$

429.3

 

2.5

 

%

 

0.6

 

%

Texas

 

903

 

$

279.9

 

688

 

$

309.4

 

31.3

 

%

 

(9.5

)

%

Southeast

 

1,592

 

$

344.3

 

1,603

 

$

331.0

 

(0.7

)

%

 

4.0

 

%

Wade Jurney Homes

 

2,811

 

$

152.0

 

1,377

 

$

152.5

 

NM

 

 

 

NM

 

 

Total / Weighted Average

 

8,000

 

$

310.2

 

6,099

 

$

346.0

 

31.2

 

%

 

(10.3

)

%

NM – Not meaningful

 

 

Century Communities, Inc.

Homebuilding Operational Data

Selling Communities

 

 

 

 

 

 

 

 

 

 

 

Selling communities at period end

 

As of December 31,

 

 

Increase/(Decrease)

 

 

2019

 

2018

 

 

Amount

 

% Change

 

 

 

 

 

 

 

 

 

 

 

West

 

15

 

17

 

 

(2)

 

(11.8)

%

Mountain

 

37

 

38

 

 

(1)

 

(2.6)

%

Texas

 

20

 

21

 

 

(1)

 

(4.8)

%

Southeast

 

45

 

46

 

 

(1)

 

(2.2)

%

Wade Jurney Homes

 

N/A

 

N/A

 

 

N/A

 

N/A

 

Total

 

117

 

122

 

 

(5)

 

(4.1)

%

N/A – Not applicable

 
 

Backlog

 
(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change 

 

 

Homes

 

Dollar Value

 

Average
Sales Price

 

Homes

 

Dollar Value

 

Average
Sales Price

 

Homes

 

Dollar Value

 

Average
Sales Price

West

 

 202

 

$

 104,652

 

$

 518.1

 

 218

 

$

 120,042

 

$

 550.7

 

 (7.3

)

%

 

 (12.8

)

%

 

 (5.9

)

%

Mountain

 

 373

 

 

 159,248

 

$

 426.9

 

 401

 

 

 183,938

 

$

 458.3

 

 (7.0

)

%

 

 (13.4

)

%

 

 (6.9

)

%

Texas

 

 275

 

 

 72,906

 

$

 265.1

 

 181

 

 

 68,265

 

$

 377.2

 

 51.9

 

%

 

 6.8

 

%

 

 (29.7

)

%

Southeast

 

 513

 

 

 186,307

 

$

 363.2

 

 470

 

 

 156,491

 

$

 333.0

 

 9.1

 

%

 

 19.1

 

%

 

 9.1

 

%

Wade Jurney Homes

 

 707

 

 

 114,638

 

$

 162.1

 

 911

 

 

 140,790

 

$

 154.5

 

 (22.4

)

%

 

 (18.6

)

%

 

 4.9

 

%

Total / Weighted Average

 

 2,070

 

$

 637,751

 

$

 308.1

 

 2,181

 

$

 669,526

 

$

 306.9

 

 (5.1

)

%

 

 (4.7

)

%

 

 0.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lot Inventory  

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

 

% Change 

 

 

 

 

 

 

 

 

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West

 

 3,133 

 

 1,413 

 

 4,546 

 

 3,457 

 

 1,790 

 

 5,247 

 

 (9.4

)

%

 

 (21.1

)

%

 

 (13.4

)

%

Mountain

 

 4,771 

 

 7,949 

 

 12,720 

 

 5,335 

 

 5,641 

 

 10,976 

 

 (10.6

)

%

 

 40.9

 

%

 

 15.9

 

%

Texas

 

 3,326 

 

 2,278 

 

 5,604 

 

 3,943 

 

 2,616 

 

 6,559 

 

 (15.6

)

%

 

 (12.9

)

%

 

 (14.6

)

%

Southeast

 

 4,160 

 

 3,827 

 

 7,987 

 

 4,828 

 

 2,808 

 

 7,636 

 

 (13.8

)

%

 

 36.3

 

%

 

 4.6

 

%

Wade Jurney Homes

 

 3,324 

 

 4,761 

 

 8,085 

 

 3,447 

 

 4,054 

 

 7,501 

 

 (3.6

)

%

 

 17.4

 

%

 

 7.8

 

%

Total

 

 18,714 

 

 20,228 

 

 38,942 

 

 21,010 

 

 16,909 

 

 37,919 

 

 (10.9

)

%

 

 19.6

 

%

 

 2.7

 

%

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

Adjusted Net Income and 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 the effect of loss on debt extinguishment, inventory impairment, acquisition costs and purchase price accounting for acquired work in process from the calculation of reported EPS.

Adjusted Diluted Earnings Per Common Share

(in thousands, except share and per share amounts)

 

 

Three Months Ended

 

Year ended

 

 

December 31,

 

December 31,

 

 

2019

 

2018

 

2019

 

2018

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

53,358

 

 

$

26,194

 

 

$

112,994

 

 

$

96,455

 

Less: Undistributed earnings allocated to participating securities

 

 

 

 

 

 

 

 

(59

)

Net income allocable to common stockholders

 

$

53,358

 

 

$

26,194

 

 

$

112,994

 

 

$

96,396

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

 

32,392,398

 

 

 

30,675,586

 

 

 

30,886,382

 

 

 

30,084,913

 

Dilutive effect of restricted stock units

 

 

415,280

 

 

 

316,129

 

 

 

300,570

 

 

 

306,433

 

Weighted average common shares outstanding - diluted

 

 

32,807,678

 

 

 

30,991,715

 

 

 

31,186,952

 

 

 

30,391,346

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.65

 

 

$

0.85

 

 

$

3.66

 

 

$

3.20

 

Diluted

 

$

1.63

 

 

$

0.85

 

 

$

3.62

 

 

$

3.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

$

53,968

 

 

$

36,062

 

 

$

132,635

 

 

$

128,530

 

Loss on debt extinguishment

 

 

-

 

 

 

-

 

 

 

10,832

 

 

 

-

 

Inventory impairment and other

 

 

4,783

 

 

 

-

 

 

 

4,783

 

 

 

-

 

Purchase price accounting for acquired work in process inventory

 

 

-

 

 

 

9,746

 

 

 

1,724

 

 

 

38,112

 

Gain on previously held interest in WJH

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,219

)

Acquisition expense

 

 

-

 

 

 

41

 

 

 

-

 

 

 

437

 

Adjusted income before income tax expense

 

 

58,751

 

 

 

45,849

 

 

 

149,974

 

 

 

159,860

 

Adjusted income tax expense(1)

 

 

(9,400

)

 

 

(11,462

)

 

 

(23,803

)

 

 

(39,965

)

Adjusted net income

 

 

49,351

 

 

 

34,387

 

 

 

126,171

 

 

 

119,895

 

Less: Adjusted undistributed earnings allocated to participating securities

 

 

 

 

 

 

 

 

(74

)

Adjusted net income allocable to common stockholders

 

$

49,351

 

 

$

34,387

 

 

$

126,171

 

 

$

119,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator - Diluted

 

 

32,807,678

 

 

 

30,991,715

 

 

 

31,186,952

 

 

 

30,391,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share

 

$

1.50

 

 

$

1.11

 

 

$

4.05

 

 

$

3.94

 

  1. For the year ended December 31, 2019, our adjusted income tax expense is reflective of our statutory income tax rate adjusted for permanent differences between our taxable income and our income before income taxes as reported under GAAP, including the benefit of Federal Energy Credits of $17.3 million. For the year ended December 31, 2018 our adjusted income tax expense is reflected of our statutory income tax rate adjusted for permanent differences, excluding the remeasurement of our deferred tax assets of $1.5 million. For the three months ended December 31, 2019 and 2018 our adjusted income tax expense is reflective of our full year effective tax rate of approximately 15% and 25% applied to adjusted income before income tax expense.

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

Adjusted homebuilding gross margin excluding impairment, 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 December 31,

 

 

2019

 

%

 

2018

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

775,667

 

 

100.0

 

%

 

$

640,187

 

 

100.0

 

%

Cost of home sales revenues

 

 

(632,722

)

 

(81.6

)

%

 

 

(534,695

)

 

(83.5

)

%

Inventory impairment

 

 

(1,993

)

 

(0.3

)

%

 

 

 

%

Gross margin from home sales

 

 

140,952

 

 

18.2

 

%

 

 

105,492

 

 

16.5

 

%

Add: Inventory impairment

 

 

1,993

 

 

0.3

 

%

 

 

 

%

Add: Interest in cost of home sales revenues

 

 

19,651

 

 

2.5

 

%

 

 

15,115

 

 

2.4

 

%

Adjusted homebuilding gross margin excluding interest and inventory impairment

 

 

162,596

 

 

21.0

 

%

 

 

120,607

 

 

18.8

 

%

Add: Purchase price accounting for acquired work in process inventory

 

 

 

%

 

 

9,746

 

 

1.5

 

%

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

 

$

162,596

 

 

21.0

 

%

 

$

130,353

 

 

20.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31,

 

 

2019

 

%

 

2018

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

2,481,465

 

 

100.0

 

%

 

$

2,110,058

 

 

100.0

 

%

Cost of home sales revenues

 

 

(2,040,241

)

 

(82.2

)

%

 

 

(1,741,619

)

 

(82.5

)

%

Inventory impairment

 

 

(1,993

)

 

(0.1

)

%

 

 

 

%

Gross margin from home sales

 

 

439,231

 

 

17.7

 

%

 

 

368,439

 

 

17.5

 

%

Add: Inventory impairment

 

 

1,993

 

 

0.1

 

%

 

 

 

%

Add: Interest in cost of home sales revenues

 

 

61,150

 

 

2.5

 

%

 

 

48,692

 

 

2.3

 

%

Adjusted homebuilding gross margin excluding interest and inventory impairment

 

 

502,374

 

 

20.2

 

%

 

 

417,131

 

 

19.8

 

%

Add: Purchase price accounting for acquired work in process inventory

 

 

1,724

 

 

0.1

 

%

 

 

38,112

 

 

1.8

 

%

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

 

$

504,098

 

 

20.3

 

%

 

$

455,243

 

 

21.6

 

%

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) loss on debt extinguishment, (v) inventory impairment and other, (vi) depreciation and amortization expense, and (vii) 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 December 31,

 

Year ended December 31,

 

 

 

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

Net income

 

$

53,358

 

$

26,194

 

 

103.7

 

%

 

$

112,994

 

$

96,455

 

 

17.1

 

%

Income tax expense

 

 

610

 

 

9,868

 

 

(93.8

)

%

 

 

19,641

 

 

32,075

 

 

(38.8

)

%

Interest in cost of home sales revenues

 

 

19,651

 

 

15,115

 

 

30.0

 

%

 

 

61,150

 

 

48,692

 

 

25.6

 

%

Interest expense (income)

 

 

 

 

1

 

 

(100.0

)

%

 

 

16

 

 

3

 

 

433.3

 

%

Depreciation and amortization expense

 

 

3,589

 

 

3,228

 

 

11.2

 

%

 

 

13,382

 

 

12,031

 

 

11.2

 

%

EBITDA

 

 

77,208

 

 

54,406

 

 

41.9

 

%

 

 

207,183

 

 

189,256

 

 

9.5

 

%

Loss on debt extinguishment

 

 

 

 

 

 

N/M

 

 

 

 

10,832

 

 

 

 

N/M

 

 

Inventory impairment and other

 

 

4,783

 

 

 

 

N/M

 

 

 

 

4,783

 

 

 

 

N/M

 

 

Purchase price accounting for acquired work in process inventory

 

 

 

 

9,746

 

 

N/M

 

 

 

 

1,724

 

 

38,112

 

 

(95.5

)

%

Purchase price accounting for investment in unconsolidated subsidiaries outside basis

 

 

 

 

 

 

N/M

 

 

 

 

 

 

60

 

 

N/M

 

 

Acquisition expense

 

 

 

 

41

 

 

N/M

 

 

 

 

 

 

437

 

 

N/M

 

 

Adjusted EBITDA

 

$

81,991

 

$

64,193

 

 

27.7

 

%

 

$

224,522

 

$

227,865

 

 

(1.5

)

%

NM – Not meaningful

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)

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

2019

 

2018

Total homebuilding debt

 

$

965,404

 

 

$

987,277

 

Total stockholders' equity

 

 

1,061,699

 

 

 

859,359

 

Total capital

 

$

2,027,103

 

 

$

1,846,636

 

Homebuilding debt to capital

 

 

47.6

%

 

 

53.5

%

 

 

 

 

 

 

 

Total homebuilding debt

 

$

965,404

 

 

$

987,277

 

Cash and cash equivalents

 

 

(55,436

)

 

 

(32,902

)

Cash held in escrow

 

 

(35,308

)

 

 

(24,344

)

Net homebuilding debt

 

$

874,660

 

 

$

930,031

 

Total stockholders' equity

 

 

1,061,699

 

 

 

859,359

 

Net capital

 

$

1,936,359

 

 

$

1,789,390

 

 

 

 

 

 

 

 

Net homebuilding debt to net capital

 

 

45.2

%

 

 

52.0

 

 

Contacts

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

Contacts

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