Century Communities Reports Second Quarter 2023 Results

- Increased 2023 Guidance for Deliveries and Home Sales Revenues ?
- Net Income of $51.4 million, $1.60 per diluted share -
- Deliveries of 2,235 Increased 17% Quarter-Over-Quarter -
- Net New Home Contracts of 2,317 Increased 15% Quarter-Over-Quarter -
- Year End 2023 Community Count Expected to be 250 to 260 -

GREENWOOD VILLAGE, Colo., July 26, 2023 /PRNewswire/ -- Century Communities, Inc. (NYSE: CCS), a top 10 national homebuilder, today announced financial results for its second quarter ended June 30, 2023.

Second Quarter 2023 Highlights

• Pre-tax income of $68.7 million
• Net income of $51.4 million, or $1.60 per diluted share
• Total revenues of $844.2 million, a 12% sequential increase  
• Deliveries of 2,235 homes, a 17% sequential increase
• Net new home contracts of 2,317, a 15% sequential increase
• Homebuilding gross margin of 19.7%
• Adjusted homebuilding gross margin of 21.0%
• Homebuilding debt to capital of 31.2%
• Net homebuilding debt to net capital of 22.3%
• Book value per share of $69.39 as of June 30, 2023, a Company record

"We are pleased with the strong sequential gains across our business including substantial increases in net new home contracts, starts, deliveries and gross margins," said Dale Francescon, Chairman and Co-Chief Executive Officer. "Our deliveries of 2,235 homes increased 17% quarter-over-quarter and increases in our starts to 3,041 homes will lead to higher deliveries in the second half of 2023 compared to first half levels. Our adjusted homebuilding gross margin improved 140 basis points to 21.0% from first quarter 2023 levels, and we expect to generate higher gross margins sequentially in both the third and fourth quarters of the year due to improvements in direct construction costs, reduced incentives and shorter cycle times."

Rob Francescon, Co-Chief Executive Officer and President, said, "We are encouraged by the continued improvement in sales activity that we experienced in the second quarter. Our net new home contracts of 2,317 increased 15% quarter-over-quarter, with Century Complete posting a 40% sequential growth rate. We believe our spec-based model and focus on entry-level homes positions us well with homebuyers looking for affordably priced homes with near term completions in order to lock in their interest rates. Our total lot inventory increased to 57,775, and we expect our community count to be in the range of 250-260 communities by year end. Our balance sheet remains strong with $2.2 billion in stockholders' equity and $1.2 billion in liquidity, including $374 million in cash, and we intend to continue investing in our business and returning capital to shareholders."

Second Quarter 2023 Results

Net income for the second quarter 2023 was $51.4 million, or $1.60 per diluted share.

Total revenues were $844.2 million, while second quarter home sales revenues totaled $818.4 million. Deliveries totaled 2,235 homes. The average sales price of home deliveries for the second quarter 2023 was $366,200 compared to $418,200 in the prior year quarter.

Net new home contracts in the second quarter 2023 were 2,317, and at the end of the second quarter 2023, the Company had 2,002 homes in backlog, representing $750.1 million of backlog dollar value.

Adjusted homebuilding gross margin percentage, excluding interest, was 21.0% in the second quarter of 2023. Homebuilding gross margin percentage in the second quarter 2023 was 19.7%. Selling, general, and administrative expenses as a percent of home sales revenues was 12.8% in the quarter. EBITDA for the second quarter 2023 was $80.1 million.

Our book value per share increased to a record $69.39 as of June 30, 2023.

Financial services revenues and pre-tax income were $24.3 million and $12.5 million, respectively, in the second quarter 2023.

Balance Sheet and Liquidity

The Company ended the quarter with a strong financial position, including $2.2 billion of stockholders' equity and $1.2 billion of total liquidity, including $373.7 million of cash.

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

As of June 30, 2023, homebuilding debt to capital decreased to 31.2% from 32.0% at December 31, 2022. As of June 30, 2023, net homebuilding debt to net capital decreased to 22.3% from 23.5% at December 31, 2022.

Full Year 2023 Outlook 

David Messenger, Chief Financial Officer of the Company, commented, "We continue to be encouraged by the strength of our sales activity and improving cycle times. As a result, we are increasing our full year 2023 guidance for home deliveries to be in the range of 8,300 to 9,000 homes and our home sales revenues to be in the range of $3.1 billion to $3.4 billion."

Webcast and Conference Call

The Company will host a webcast and conference call on Wednesday, July 26, 2023, at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company's second 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 August 2, 2023, by dialing 877-344-7529 (domestic) or 412-317-0088 (international) and entering the passcode 1581293. 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 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 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 Diluted EPS), 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 expectations for higher deliveries and improved gross margins in the second half of 2023 compared to the first half and increased community count by year end, 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 (Adjusted Diluted EPS) 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 EPS 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.

Contact Information: 
Tyler Langton, Senior Vice President of Investor Relations
303-268-8345
Investorrelations@CenturyCommunities.com

Category:
Earnings

SOURCE Century Communities, Inc.