Century Communities Reports Record Second Quarter 2020 Results

- Home Deliveries Grew 26% to a Company Record 2,480 Homes -
- Net New Home Contracts Increased 22% to a Company Record 2,664 Homes -
- Net Homebuilding Debt to Net Capital Improved 910 Basis Points to 37.5% -

GREENWOOD VILLAGE, Colo.--()--Century Communities, Inc. (NYSE: CCS), a leading national homebuilder, today announced financial results for its second quarter ended June 30, 2020.

Second Quarter 2020 Highlights Compared to Second Quarter 2019

  • Adjusted net income increased 71% to a record $40.3 million or $1.21 per diluted share and net income increased 148% to a record $38.5 million or $1.15 per diluted share
  • Home sales revenues increased 23% to a record $747.4 million
  • Home deliveries grew to a Company record 2,480 homes or 26%
  • Net new home contracts increased 22% to a Company record 2,664 homes
  • Homes in backlog improved to 2,778 homes with a value of $962.8 million, a 23% increase
  • Adjusted EBITDA increased 50% to a record $74.0 million
  • Quarter end total liquidity of $860 million, including cash of $220 million
  • Net homebuilding debt to net capital improved to 37.5%

Dale Francescon, Co-Chief Executive Officer, stated, “We delivered a record second quarter including the highest sales, closings and absorptions in the company’s history while further expanding our profitability despite the ongoing challenges of the COVID-19 health crisis. Our impressive results are strong evidence of a robust homebuilding environment, supported by tight resale inventory and historically-low mortgage rates, and increased demand for our affordable, new homes. Based on the strength of our year-to-date results, we remain confident that positive, industry and company specific tailwinds will continue to fuel sales growth across our diverse, geographic footprint.”

Rob Francescon, Co-Chief Executive Officer, said, “With our record double-digit sales and closings in the second quarter, we continued to execute on our strategic goal of capturing an ever increasing share of entry-level homebuyer demand. We accomplished this task while reducing our net homebuilder debt to net capital ratio to 37.5% from 46.6% at the end of the first quarter, a 910 basis point improvement. We ended the quarter with a healthy backlog of 2,778 homes valued at $963 million dollars, a 23% year-over-year increase, as we continue to create long-term value for all our stakeholders.”

Second Quarter 2020 Results

Adjusted net income for the second quarter increased 71% to $40.3 million, or $1.21 per diluted share, as compared to $23.6 million, or $0.77 per diluted share, for the prior year quarter. Net income for the second quarter 2020 increased 148% to $38.5 million, or $1.15 per diluted share as compared to $15.5 million or $0.51 per diluted share for the prior year quarter.

Home sales revenues for the second quarter 2020 increased 23% to $747.4 million, compared to $608.6 million for the prior year quarter. The growth in home sales revenues was primarily due to a 26% increase in deliveries to 2,480 homes compared to 1,967 homes for the prior year quarter. Average sales price of home deliveries for the second quarter 2020 decreased to $301,400, compared to $309,400 in the prior year quarter, consistent with the Company’s strategy of offering more affordably priced homes across its brands.

Adjusted homebuilding gross margin percentage, excluding interest and impairments, was 19.5% in the second quarter of 2020, as compared to 19.6% in the prior year quarter. Homebuilding gross margin percentage in the second quarter 2020 was 16.9%, as compared to 17.2% in the prior year quarter. SG&A as a percent of home sales revenues improved 80 basis points to 11.6%, compared to 12.4% in the prior year quarter.

Net new home contracts in the second quarter 2020 increased 22% to 2,664 homes, compared to 2,182 homes in the prior year quarter. At the end of the second quarter 2020, the Company had 2,778 homes in backlog, representing $962.8 million of backlog dollar value.

Financial services revenues increased to $25.7 million compared to $9.9 million in the prior year quarter, and financial services pretax income increased $10.8 million to $13.0 million from $2.2 million.

Strengthened Balance Sheet and Liquidity

The Company ended the quarter with a strong financial position including $1.1 billion of stockholders’ equity, $220 million of cash and $860 million of total liquidity.

As of June 30, 2020, net homebuilding debt to net capital decreased to 37.5%, an improvement of 910 basis points from 46.6% in the first quarter of 2020.

Full Year 2020 Outlook

David Messenger, Chief Financial Officer of the Company, commented, “Given the strength of our second quarter results and continued sales momentum, we are providing full year guidance of deliveries in the range of 8,800 to 9,500 homes and home sales revenues in the range of $2.7 billion to $3.0 billion. Achieving the high or low ends of our ranges will largely be determined by near-term economic conditions and our results may be impacted by factors such as national unemployment and potential, future waves of the Coronavirus.”

Conference Call

The Company will host a webcast and conference call on Tuesday, July 28, 2020 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s second quarter 2020 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 August 28, 2020, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13705810. 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,” “will,” “may,” “potential,” “looking ahead,” “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, its intent to take certain actions to successfully navigate through the current COVID-19 crisis and the success of these actions on its future operating results. 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, the potential impact of COVID-19 on the Company’s business, industry and broader economy, the 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 June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

747,415

 

 

$

608,636

 

 

$

1,320,125

 

 

$

1,131,938

 

Land sales and other revenues

 

 

3,307

 

 

 

1,399

 

 

 

23,411

 

 

 

2,754

 

Total homebuilding revenues

 

 

750,722

 

 

 

610,035

 

 

 

1,343,536

 

 

 

1,134,692

 

Financial services revenue

 

 

25,722

 

 

 

9,915

 

 

 

35,517

 

 

 

18,315

 

Total revenues

 

 

776,444

 

 

 

619,950

 

 

 

1,379,053

 

 

 

1,153,007

 

Homebuilding Cost of Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Cost of home sales revenues

 

 

(620,655

)

 

 

(503,928

)

 

 

(1,091,181

)

 

 

(937,685

)

Cost of land sales and other revenues

 

 

(2,384

)

 

 

(877

)

 

 

(16,551

)

 

 

(1,491

)

Total homebuilding cost of revenues

 

 

(623,039

)

 

 

(504,805

)

 

 

(1,107,732

)

 

 

(939,176

)

Financial services costs

 

 

(12,744

)

 

 

(7,747

)

 

 

(22,330

)

 

 

(14,576

)

Selling, general, and administrative

 

 

(86,706

)

 

 

(75,217

)

 

 

(160,325

)

 

 

(144,153

)

Loss on debt extinguishment

 

 

 

 

 

(10,832

)

 

 

 

 

 

(10,832

)

Inventory impairment and other

 

 

(910

)

 

 

 

 

 

(1,691

)

 

 

 

Other income (expense)

 

 

(2,942

)

 

 

(519

)

 

 

(2,784

)

 

 

(443

)

Income before income tax expense

 

 

50,103

 

 

 

20,830

 

 

 

84,191

 

 

 

43,827

 

Income tax expense

 

 

(11,653

)

 

 

(5,335

)

 

 

(19,615

)

 

 

(11,215

)

Net income

 

$

38,450

 

 

$

15,495

 

 

$

64,576

 

 

$

32,612

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.15

 

 

$

0.51

 

 

$

1.94

 

 

$

1.08

 

Diluted

 

$

1.15

 

 

$

0.51

 

 

$

1.93

 

 

$

1.07

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

33,340,184

 

 

 

30,341,628

 

 

 

33,274,056

 

 

 

30,272,818

 

Diluted

 

 

33,461,694

 

 

 

30,568,848

 

 

 

33,469,069

 

 

 

30,506,945

 

Century Communities, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2020

 

2019

Assets

 

(unaudited)

 

 

 

Cash and cash equivalents

 

$

173,521

 

$

55,436

Cash held in escrow

 

 

46,619

 

 

35,308

Accounts receivable

 

 

22,846

 

 

27,438

Inventories

 

 

1,898,503

 

 

1,995,549

Mortgage loans held for sale

 

 

219,615

 

 

185,246

Prepaid expenses and other assets

 

 

115,095

 

 

124,008

Property and equipment, net

 

 

33,277

 

 

35,998

Deferred tax assets, net

 

 

11,911

 

 

10,589

Goodwill

 

 

30,395

 

 

30,395

Total assets

 

$

2,551,782

 

$

2,499,967

Liabilities and stockholders' equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

49,635

 

$

84,794

Accrued expenses and other liabilities

 

 

277,526

 

 

213,975

Notes payable

 

 

897,664

 

 

896,704

Revolving line of credit

 

 

 

 

68,700

Mortgage repurchase facilities

 

 

197,469

 

 

174,095

Total liabilities

 

 

1,422,294

 

 

1,438,268

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, 33,350,633 and 33,067,375 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

 

 

334

 

 

331

Additional paid-in capital

 

 

687,564

 

 

684,354

Retained earnings

 

 

441,590

 

 

377,014

Total stockholders' equity

 

 

1,129,488

 

 

1,061,699

Total liabilities and stockholders' equity

 

$

2,551,782

 

$

2,499,967

Century Communities, Inc.

Homebuilding Operational Data

(Unaudited)

Net New Home Contracts

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

 

2020

 

 

2019

 

 

% Change

West

 

389

 

 

329

 

 

18.2

%

Mountain

 

474

 

 

417

 

 

13.7

%

Texas

 

391

 

 

244

 

 

60.2

%

Southeast

 

566

 

 

411

 

 

37.7

%

Century Complete

 

844

 

 

781

 

 

8.1

%

Total

 

2,664

 

 

2,182

 

 

22.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30,

 

 

2020

 

 

2019

 

 

% Change

West

 

725

 

 

532

 

 

36.3

%

Mountain

 

1,088

 

 

871

 

 

24.9

%

Texas

 

724

 

 

473

 

 

53.1

%

Southeast

 

1,082

 

 

756

 

 

43.1

%

Century Complete

 

1,433

 

 

1,408

 

 

1.8

%

Total

 

5,052

 

 

4,040

 

 

25.0

%

Home Deliveries

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

 

2020

 

2019

 

% Change

 

 

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

West

 

313

 

$

530.6

 

255

 

$

529.9

 

22.7

%

 

0.1

%

Mountain

 

417

 

$

418.6

 

411

 

$

433.9

 

1.5

%

 

(3.5)

%

Texas

 

400

 

$

246.4

 

213

 

$

288.7

 

87.8

%

 

(14.7)

%

Southeast

 

515

 

$

338.8

 

360

 

$

346.2

 

43.1

%

 

(2.1)

%

Century Complete

 

835

 

$

160.1

 

728

 

$

149.8

 

14.7

%

 

6.9

%

Total / Weighted Average

 

2,480

 

$

301.4

 

1,967

 

$

309.4

 

26.1

%

 

(2.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

 

 

 

 

 

2020

 

2019

 

% Change

 

 

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

West

 

546

 

$

536.0

 

455

 

$

543.3

 

20.0

%

 

(1.3)

%

Mountain

 

813

 

$

407.2

 

778

 

$

433.1

 

4.5

%

 

(6.0)

%

Texas

 

644

 

$

246.4

 

379

 

$

295.3

 

69.9

%

 

(16.6)

%

Southeast

 

883

 

$

346.4

 

695

 

$

341.3

 

27.1

%

 

1.5

%

Century Complete

 

1,458

 

$

159.0

 

1,323

 

$

150.1

 

10.2

%

 

5.9

%

Total / Weighted Average

 

4,344

 

$

303.9

 

3,630

 

$

311.8

 

19.7

%

 

(2.5)

%

Century Communities, Inc.

Homebuilding Operational Data

(Unaudited)

Selling Communities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling communities at period end

 

As of June 30,

 

 

Increase/(Decrease)

 

 

2020

 

2019

 

 

Amount

 

% Change

 

 

 

 

 

 

 

 

 

 

 

West

 

23

 

20

 

 

3

 

15.0

%

Mountain

 

38

 

42

 

 

(4)

 

(9.5)

%

Texas

 

21

 

21

 

 

 

%

Southeast

 

40

 

42

 

 

(2)

 

(4.8)

%

Century Complete

 

N/A

 

N/A

 

 

N/A

 

N/A

 

Total

 

122

 

125

 

 

(3)

 

(2.4)

%

N/A – Not applicable

Backlog

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30,

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

 

% Change

 

 

 

Homes

 

Dollar Value

 

Average Sales Price

 

Homes

 

Dollar Value

 

Average Sales Price

 

Homes

 

Dollar Value

 

Average Sales Price

West

 

381

 

$

203,395

 

$

533.8

 

295

 

$

146,071

 

$

495.2

 

29.2

%

 

39.2

%

 

7.8

%

Mountain

 

648

 

 

281,999

 

$

435.2

 

494

 

 

214,673

 

$

434.6

 

31.2

%

 

31.4

%

 

0.1

%

Texas

 

355

 

 

95,193

 

$

268.1

 

275

 

 

83,172

 

$

302.4

 

29.1

%

 

14.5

%

 

(11.3)

%

Southeast

 

712

 

 

262,096

 

$

368.1

 

531

 

 

187,306

 

$

352.7

 

34.1

%

 

39.9

%

 

4.4

%

Century Complete

 

682

 

 

120,068

 

$

176.1

 

996

 

 

152,930

 

$

153.5

 

(31.5)

%

 

(21.5)

%

 

14.7

%

Total / Weighted Average

 

2,778

 

$

962,751

 

$

346.6

 

2,591

 

$

784,152

 

$

302.6

 

7.2

%

 

22.8

%

 

14.5

%

Lot Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30,

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

 

% Change

 

 

 

 

 

 

 

 

 

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West

 

2,970

 

1,566

 

4,536

 

3,310

 

1,846

 

5,156

 

(10.3)

%

 

(15.2)

%

 

(12.0)

%

Mountain

 

6,697

 

3,740

 

10,437

 

5,011

 

5,559

 

10,570

 

33.6

%

 

(32.7)

%

 

(1.3)

%

Texas

 

2,871

 

2,272

 

5,143

 

3,829

 

1,384

 

5,213

 

(25.0)

%

 

64.2

%

 

(1.3)

%

Southeast

 

3,724

 

2,879

 

6,603

 

4,730

 

2,566

 

7,296

 

(21.3)

%

 

12.2

%

 

(9.5)

%

Century Complete

 

2,935

 

5,178

 

8,113

 

3,325

 

5,633

 

8,958

 

(11.7)

%

 

(8.1)

%

 

(9.4)

%

Total

 

19,197

 

15,635

 

34,832

 

20,205

 

16,988

 

37,193

 

(5.0)

%

 

(8.0)

%

 

(6.3)

%

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 Net Income and Adjusted Diluted Earnings Per Common Share

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2020

 

2019

 

2020

 

2019

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

38,450

 

 

$

15,495

 

 

$

64,576

 

 

$

32,612

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

 

33,340,184

 

 

 

30,341,628

 

 

 

33,274,056

 

 

 

30,272,818

 

Dilutive effect of restricted stock units

 

 

121,510

 

 

 

227,220

 

 

 

195,013

 

 

 

234,127

 

Weighted average common shares outstanding - diluted

 

 

33,461,694

 

 

 

30,568,848

 

 

 

33,469,069

 

 

 

30,506,945

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.15

 

 

$

0.51

 

 

$

1.94

 

 

$

1.08

 

Diluted

 

$

1.15

 

 

$

0.51

 

 

$

1.93

 

 

$

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

$

50,103

 

 

$

20,830

 

 

$

84,191

 

 

$

43,827

 

Inventory impairment and other

 

 

910

 

 

 

 

 

 

1,691

 

 

 

 

Restructuring costs

 

 

1,584

 

 

 

 

 

 

1,584

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

10,832

 

 

 

 

 

 

10,832

 

Purchase price accounting for acquired work in process inventory

 

 

 

 

 

 

 

 

 

 

 

1,724

 

Adjusted income before income tax expense

 

 

52,597

 

 

 

31,662

 

 

 

87,466

 

 

 

56,383

 

Adjusted income tax expense(1)

 

 

(12,254

)

 

 

(8,102

)

 

 

(20,378

)

 

 

(14,428

)

Adjusted net income

 

 

40,343

 

 

 

23,560

 

 

 

67,088

 

 

 

41,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator - Diluted

 

 

33,461,694

 

 

 

30,568,848

 

 

 

33,469,069

 

 

 

30,506,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share

 

$

1.21

 

 

$

0.77

 

 

$

2.00

 

 

$

1.38

 

(1)

The tax rate used in calculating adjusted net income for the three and six months ended June 30, 2020 was 23.3% which is reflective of the Company’s GAAP tax rate for the applicable period adjusted for certain discrete items. For the three and six months ended June 30, 2019 the tax rate utilized was our GAAP tax rate 25.6%.

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 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.

Adjusted Homebuilding Gross Margin

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

%

 

2019

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

747,415

 

 

100.0

 

%

 

$

608,636

 

 

100.0

 

%

Cost of home sales revenues

 

 

(620,655

)

 

(83.0

)

%

 

 

(503,928

)

 

(82.8

)

%

Inventory impairment and other

 

 

(910

)

 

(0.1

)

%

 

 

 

 

 

%

Gross margin from home sales

 

 

125,850

 

 

16.8

 

%

 

 

104,708

 

 

17.2

 

%

Add: Inventory impairment and other

 

 

910

 

 

0.1

 

%

 

 

 

 

 

%

Add: Interest in cost of home sales revenues

 

 

18,694

 

 

2.5

 

%

 

 

14,655

 

 

2.4

 

%

Adjusted homebuilding gross margin excluding interest and inventory impairment

 

 

145,454

 

 

19.5

 

%

 

 

119,363

 

 

19.6

 

%

Add: Purchase price accounting for acquired work in process inventory

 

 

 

 

 

%

 

 

 

 

 

%

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

 

$

145,454

 

 

19.5

 

%

 

$

119,363

 

 

19.6

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

%

 

2019

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

1,320,125

 

 

100.0

 

%

 

$

1,131,938

 

 

100.0

 

%

Cost of home sales revenues

 

 

(1,091,181

)

 

(82.7

)

%

 

 

(937,685

)

 

(82.8

)

%

Inventory impairment and other

 

 

(1,691

)

 

(0.1

)

%

 

 

 

 

 

%

Gross margin from home sales

 

 

227,253

 

 

17.2

 

%

 

 

194,253

 

 

17.2

 

%

Add: Inventory impairment and other

 

 

1,691

 

 

0.1

 

%

 

 

 

 

 

%

Add: Interest in cost of home sales revenues

 

 

32,379

 

 

2.5

 

%

 

 

27,241

 

 

2.4

 

%

Adjusted homebuilding gross margin excluding interest and inventory impairment

 

 

261,323

 

 

19.8

 

%

 

 

221,494

 

 

19.6

 

%

Add: Purchase price accounting for acquired work in process inventory

 

 

 

 

 

%

 

 

1,724

 

 

0.2

 

%

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

 

$

261,323

 

 

19.8

 

%

 

$

223,218

 

 

19.7

 

%

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 June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

Net income

 

$

38,450

 

 

$

15,495

 

 

148.1

%

 

$

64,576

 

 

$

32,612

 

 

98.0

 

%

Income tax expense

 

 

11,653

 

 

 

5,335

 

 

118.4

%

 

 

19,615

 

 

 

11,215

 

 

74.9

 

%

Interest in cost of home sales revenues

 

 

18,694

 

 

 

14,655

 

 

27.6

%

 

 

32,379

 

 

 

27,241

 

 

18.9

 

%

Interest expense (income)

 

 

(684

)

 

 

 

 

NM

 

 

 

(847

)

 

 

15

 

 

(5,746.7

)

%

Depreciation and amortization expense

 

 

3,427

 

 

 

3,122

 

 

9.8

%

 

 

6,842

 

 

 

6,196

 

 

10.4

 

%

EBITDA

 

 

71,540

 

 

 

38,607

 

 

85.3

%

 

 

122,565

 

 

 

77,279

 

 

58.6

 

%

Loss on debt extinguishment

 

 

 

 

 

10,832

 

 

NM

 

 

 

 

 

 

10,832

 

 

NM

 

 

Inventory impairment and other

 

 

910

 

 

 

 

 

NM

 

 

 

1,691

 

 

 

 

 

NM

 

 

Restructuring costs

 

 

1,584

 

 

 

 

 

NM

 

 

 

1,584

 

 

 

 

 

NM

 

 

Purchase price accounting for acquired work in process inventory

 

 

 

 

 

 

 

NM

 

 

 

 

 

 

1,724

 

 

NM

 

 

Adjusted EBITDA

 

$

74,034

 

 

$

49,439

 

 

49.7

%

 

$

125,840

 

 

$

89,835

 

 

40.1

 

%

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) 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2020

 

2019

Total homebuilding debt

 

$

897,664

 

 

$

965,404

 

Total stockholders' equity

 

 

1,129,488

 

 

 

1,061,699

 

Total capital

 

$

2,027,152

 

 

$

2,027,103

 

Homebuilding debt to capital

 

 

44.3

%

 

 

47.6

%

 

 

 

 

 

 

 

Total homebuilding debt

 

$

897,664

 

 

$

965,404

 

Cash and cash equivalents

 

 

(173,521

)

 

 

(55,436

)

Cash held in escrow

 

 

(46,619

)

 

 

(35,308

)

Net homebuilding debt

 

 

677,524

 

 

 

874,660

 

Total stockholders' equity

 

 

1,129,488

 

 

 

1,061,699

 

Net capital

 

$

1,807,012

 

 

$

1,936,359

 

 

 

 

 

 

 

 

Net homebuilding debt to net capital

 

 

37.5

%

 

 

45.2

%

Category: Earnings

Contacts

Hunter Wells, Vice President of Investor Relations
719-426-3520
Hunter.Wells@CenturyCommunities.com

Contacts

Hunter Wells, Vice President of Investor Relations
719-426-3520
Hunter.Wells@CenturyCommunities.com