EX-99.1 2 ccs-20190207xex99_1.htm EX-99.1 CCS 12.31.2018 Earnings Release 8-K Exhibit 99.1



Picture 8





Century Communities Reports Fourth Quarter and Full Year 2018 Results

- Delivered Record Full Year Earnings and 16th Consecutive Year of Profitable Results -

- Home Sales Revenues Increased 24% to $640.2 Million for Fourth Quarter -

- Home deliveries grew 55% to a record 2,028 homes for Fourth Quarter -

 

Greenwood Village, Colorado (February 7, 2019) – Century Communities, Inc. (NYSE: CCS), a leading national homebuilder, today announced financial results for its fourth quarter and full year ended December 31, 2018.

Fourth Quarter 2018 Highlights Compared to Fourth Quarter 2017

·

Adjusted net income increased 20% to $34.4 million, or $1.11 per diluted share and net income increased 52% to $26.2 million, or $0.85 per diluted share 

·

Home sales revenues increased 24% to a record $640.2 million

·

Selling, general & administrative expense (“SG&A”) as a percent of home sales revenues improved by 80 basis points to 11.4%

·

Home deliveries grew 55% to a record 2,028 homes

·

Net new home contracts increased 32% to 1,221 homes

·

Backlog improved 65% to 2,181 homes

·

Backlog value increased 17% to $669.5 million



Dale Francescon, Co-Chief Executive Officer, stated, “2018 was another year of strong revenue growth and earnings acceleration for Century, leading to our 16th consecutive year of profitability. In the fourth quarter, we delivered 2,028 homes and generated $651.9 million in total revenues. That said, fourth quarter home deliveries and net new contracts were impacted by the industry-wide softening of homebuilding activity since mid-year 2018. Into 2019, we will continue to carefully monitor the homebuilding climate in each of our markets and pursue our disciplined growth strategy while taking advantage of our diversified national scale to achieve additional efficiencies in our business.” 



Rob Francescon, Co-Chief Executive Officer, said, “During 2018, we grew our business into a top-10 U.S. homebuilder through strategic positioning in attractive markets, broader product offerings and sound investments with a focus on lower price points. Additionally, we made significant progress in the ramp up of our Financial Services business, with that segment growing full year pre-tax income over six times. While we are encouraged by our progress and positive long-term housing fundamentals in our markets, demand may remain muted in 2019 due to a variety of macro factors, including higher mortgage rates and tightening affordability. In response, we plan to continue to tailor our product offerings according to evolving demand trends, expand our Wade Jurney Homes’ brand and drive operational efficiencies.”



Fourth Quarter 2018 Results

Adjusted net income for the fourth quarter increased 20% to $34.4 million, or $1.11 per diluted share, as compared to $28.6 million, or $1.01 per diluted share, for the prior year quarter. Adjusted net income excludes the impact of one-time items associated with homebuilder acquisitions. Net income for the fourth quarter 2018 increased 52% to $26.2 million, or $0.85 per diluted share as compared to $17.2 million or $0.60 per diluted share for the prior year quarter.

Home sales revenues for the fourth quarter 2018 increased 24% to $640.2 million, compared to $516.5 million for the prior year quarter. The growth in home sales revenues was primarily due to a 55% increase in deliveries to 2,028 homes compared to 1,311 homes for the prior year quarter. Average sales price of home deliveries for

 

the fourth quarter 2018 was $315,700, compared to $394,000 in the prior year quarter, consistent with the Company’s expansion of its offering of entry level homes.

Adjusted homebuilding gross margin percentage, excluding interest and purchase price accounting, was consistent with our expectations at 20.4% in the fourth quarter 2018, as compared to 21.7% in the prior year quarter. Homebuilding gross margin percentage in the fourth quarter 2018 was 16.5%, as compared to 17.6% in the prior year quarter.  SG&A as a percent of home sales revenues improved to 11.4%, compared to 12.1% in the prior year quarter.

Net new home contracts in the fourth quarter 2018 increased 32% to 1,221 homes, compared to 922 homes in the prior year quarter, attributable to stronger demand trends within the Texas Region and the benefit of our Wade Jurney Homes acquisition, partly offset by softer demand trends in the Company’s other regions. At the end of the fourth quarter 2018, the Company had 2,181 homes in backlog, representing $669.5 million of backlog dollar value, compared to 1,320 homes in backlog, representing $572.9 million of backlog dollar value in the prior year quarter, an increase of 65% in units and 17% in dollar value.

Financial services generated pre-tax income of $3.3 million in the fourth quarter 2018 as compared to $1.1 million in the prior year quarter. 



Full Year 2018 Results



Adjusted net income increased 69% to a record $119.9 million, or $3.94 per share, compared to $71.1 million, or $2.87 per share, for the prior year.  Net income for the full year 2018 was $96.5 million, or $3.17 per share compared to $50.3 million, or $2.03 per share.



Home sales revenues for 2018 increased 50% to $2.1 billion, compared to $1.4 billion for 2017. The increase in home sales revenues was primarily due to home deliveries increasing 68% to 6,099 homes. On a pro forma basis, including Wade Jurney Homes for the entire year, our revenues and deliveries would have been $2.3 billion and 7,092, respectively.  Average selling price of homes delivered decreased to $346,000 compared to $386,100 in the prior year, consistent with the Company’s expansion of its offering of entry level homes.

 

Adjusted homebuilding gross margin percentage, excluding purchase price accounting and interest in cost of home sales revenues, improved to 21.6% compared to 21.4% in the prior year. Homebuilding gross margin percentage in 2018 was 17.5%, compared to 17.9% in 2017. SG&A as a percent of home sales revenues remained constant at 12.5% compared to the prior year, with tight cost controls offsetting numerous investment initiatives to support growth objectives.

 

Net new home contracts in 2018 increased to 5,657 homes, an increase of 48%, compared to 3,814 homes in the prior year, largely attributable to a slightly higher community count and absorption pace.



At the end of full year 2018, the Company had 122 open communities in its Century Communities brand, compared to 119 open communities at the end of the prior year.



Financial services generated pre-tax income of $8.8 million in the full year 2018 as compared to $1.2 million in the prior year. 



Balance Sheet and Liquidity

 

As of December 31, 2018, the Company had $387.5 million of availability under its credit facility.





During the fourth quarter, the Company repurchased 687,061 shares of its common stock at a weighted average price of $17.99 per share. 

 



Full Year 2019 Outlook



David Messenger, Chief Financial Officer of the Company, commented, “We remain confident in our business and the long-term fundamentals in our markets. Into 2019, we will continue to focus on growing our presence in existing markets, expanding Wade Jurney Homes in existing and new markets, strengthening our balance sheet, and taking accretive actions to drive shareholder value. Given limited near-term visibility across the national housing market combined with uncertainty in the U.S. macroeconomic environment, we are not providing revenue and closing guidance for fiscal year 2019 at this time.



Conference Call



The Company will host a webcast and conference call on Thursday, February 7, 2019 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s fourth quarter and full year 2018 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 7, 2019, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13686574. A replay of the webcast will be available on the Company’s website through March 7, 2019.



About Century Communities

Century Communities, Inc. (NYSE:CCS) is a leading national U.S. homebuilder. 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 sells its Century Communities and Wade Jurney Homes in 15 states across the West, Mountain, Texas and Southeast U.S. regions 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 Diluted Earnings per Common Share (Adjusted 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 2018.  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.

 

Picture 7



Century Communities, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)



(in thousands, except share and per share amounts)





 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended December 31,

 

Year ended December 31,



 

2018

 

2017

 

2018

 

2017

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

 640,187 

 

$

 516,501 

 

$

 2,110,058 

 

$

 1,405,443 

Land sales and other revenues

 

 

 1,327 

 

 

 2,289 

 

 

 5,631 

 

 

 8,503 



 

 

 641,514 

 

 

 518,790 

 

 

 2,115,689 

 

 

 1,413,946 

Financial services revenue

 

 

 10,431 

 

 

 5,156 

 

 

 31,724 

 

 

 9,853 

Total revenues

 

 

 651,945 

 

 

 523,946 

 

 

 2,147,413 

 

 

 1,423,799 

Homebuilding Cost of Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Cost of home sales revenues

 

 

 (534,695)

 

 

 (425,782)

 

 

 (1,741,619)

 

 

 (1,153,359)

Cost of land sales and other revenues

 

 

 (822)

 

 

 (1,522)

 

 

 (3,832)

 

 

 (6,516)



 

 

 (535,517)

 

 

 (427,304)

 

 

 (1,745,451)

 

 

 (1,159,875)

Financial services costs

 

 

 (7,122)

 

 

 (4,016)

 

 

 (22,958)

 

 

 (8,664)

Selling, general, and administrative

 

 

 (72,850)

 

 

 (62,707)

 

 

 (263,981)

 

 

 (176,304)

Acquisition expense

 

 

 (41)

 

 

 (1,260)

 

 

 (437)

 

 

 (9,905)

Equity in income of unconsolidated subsidiaries

 

 

 —

 

 

 4,528 

 

 

 14,849 

 

 

 12,176 

Other income (expense)

 

 

 (353)

 

 

 662 

 

 

 (905)

 

 

 2,937 

Income before income tax expense

 

 

 36,062 

 

 

 33,848 

 

 

 128,530 

 

 

 84,164 

Income tax expense

 

 

 (9,868)

 

 

 (16,653)

 

 

 (32,075)

 

 

 (33,869)

Net income

 

$

 26,194 

 

$

 17,195 

 

$

 96,455 

 

$

 50,295 



 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.85 

 

$

 0.61 

 

$

 3.20 

 

$

 2.06 

Diluted

 

$

 0.85 

 

$

 0.60 

 

$

 3.17 

 

$

 2.03 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 30,675,586 

 

 

 27,967,797 

 

 

 30,084,913 

 

 

 24,280,871 

Diluted

 

 

 30,991,715 

 

 

 28,355,559 

 

 

 30,391,346 

 

 

 24,555,509 

































 

Picture 6



Century Communities, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)



(in thousands, except share amounts)









 

 

 

 

 

 



 

December 31,

 

December 31,



 

2018

 

2017

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

 32,902 

 

$

 88,832 

Cash held in escrow

 

 

 24,344 

 

 

 37,723 

Accounts receivable

 

 

 13,464 

 

 

 12,999 

Inventories

 

 

 1,848,243 

 

 

 1,390,354 

Mortgage loans held for sale

 

 

 114,074 

 

 

 52,327 

Prepaid expenses and other assets

 

 

 138,717 

 

 

 60,812 

Property and equipment, net

 

 

 33,258 

 

 

 27,911 

Investment in unconsolidated subsidiaries

 

 

 —

 

 

 28,208 

Deferred tax assets, net

 

 

 13,763 

 

 

 5,555 

Amortizable intangible assets, net

 

 

 5,095 

 

 

 2,938 

Goodwill

 

 

 30,395 

 

 

 27,363 

Total assets

 

$

 2,254,255 

 

$

 1,735,022 

Liabilities and stockholders' equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

 89,907 

 

$

 24,831 

Accrued expenses and other liabilities

 

 

 213,157 

 

 

 150,356 

Notes payable

 

 

 784,777 

 

 

 776,283 

Revolving line of credit

 

 

 202,500 

 

 

 —

Mortgage repurchase facilities

 

 

 104,555 

 

 

 48,319 

Total liabilities

 

 

 1,394,896 

 

 

 999,789 

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, 30,154,791 and 29,502,624 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively

 

 

 302 

 

 

 295 

Additional paid-in capital

 

 

 595,037 

 

 

 566,790 

Retained earnings

 

 

 264,020 

 

 

 168,148 

Total stockholders' equity

 

 

 859,359 

 

 

 735,233 

Total liabilities and stockholders' equity

 

$

 2,254,255 

 

$

 1,735,022 





 

Picture 5



Century Communities, Inc.

Homebuilding Operational Data



Net New Home Contracts



 

 

 

 

 

 

 

 

 



 

Three Months Ended



 

December 31,



 

2018

 

 

2017

 

 

% Change

West

 

 138 

 

 

 182 

 

 

 (24.2)

%

Mountain

 

 258 

 

 

 301 

 

 

 (14.3)

%

Texas

 

 161 

 

 

 117 

 

 

 37.6 

%

Southeast

 

 244 

 

 

 322 

 

 

 (24.2)

%

Wade Jurney Homes

 

 420 

 

 

 —

 

 

NM

 

Total

 

 1,221 

 

 

 922 

 

 

 32.4 

%



 

 

 

 

 

 

 

 

 



 

Year ended



 

December 31,



 

2018

 

 

2017

 

 

% Change

West

 

 754 

 

 

 296 

 

 

 154.7 

%

Mountain

 

 1,571 

 

 

 1,591 

 

 

 (1.3)

%

Texas

 

 654 

 

 

 477 

 

 

 37.1 

%

Southeast

 

 1,693 

 

 

 1,450 

 

 

 16.8 

%

Wade Jurney Homes

 

 985 

 

 

 —

 

 

NM

 

Total

 

 5,657 

 

 

 3,814 

 

 

 48.3 

%



NM – Not meaningful



Home Deliveries



(dollars in thousands)







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended December 31,

 

 

 

 

 

 



 

2018

 

2017

 

% Change

 



 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

West

 

 200 

 

$

 524.9 

 

 247 

 

$

 554.7 

 

 (19.0)

%

 

 (5.4)

%

Mountain

 

 484 

 

 

 438.2 

 

 419 

 

 

 410.4 

 

 15.5 

%

 

 6.8 

%

Texas

 

 197 

 

 

 282.3 

 

 147 

 

 

 353.3 

 

 34.0 

%

 

 (20.1)

%

Southeast

 

 510 

 

 

 333.7 

 

 498 

 

 

 312.5 

 

 2.4 

%

 

 6.8 

%

Wade Jurney Homes

 

 637 

 

 

 152.8 

 

 —

 

 

 —

 

NM

 

 

NM

 

Total / Weighted Average

 

 2,028 

 

$

 315.7 

 

 1,311 

 

$

 394.0 

 

 54.7 

%

 

 (19.9)

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Year ended December 31,

 

 

 

 

 

 



 

2018

 

2017

 

% Change

 



 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

West

 

 806 

 

$

 569.5 

 

 398 

 

$

 529.4 

 

 102.5 

%

 

 7.6 

%

Mountain

 

 1,625 

 

$

 429.3 

 

 1,465 

 

$

 418.0 

 

 10.9 

%

 

 2.7 

%

Texas

 

 688 

 

$

 309.4 

 

 413 

 

$

 389.6 

 

 66.6 

%

 

 (20.6)

%

Southeast

 

 1,603 

 

$

 331.0 

 

 1,364 

 

$

 309.0 

 

 17.5 

%

 

 7.1 

%

Wade Jurney Homes

 

 1,377 

 

$

 152.5 

 

 —

 

$

 —

 

NM

 

 

NM

 

Total / Weighted Average

 

 6,099 

 

$

 346.0 

 

 3,640 

 

$

 386.1 

 

 67.6 

%

 

 (10.4)

%



NM – Not meaningful

 

Picture 9 



Century Communities, Inc.

Homebuilding Operational Data



Selling Communities





 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

Selling communities at period end

 

As of December 31,

 

 

Increase/(Decrease)



 

2018

 

2017

 

 

Amount

 

% Change



 

 

 

 

 

 

 

 

 

 

West

 

 17 

 

 19 

 

 

 (2)

 

 (10.5)

%

Mountain

 

 38 

 

 33 

 

 

 5 

 

 15.2 

%

Texas

 

 21 

 

 27 

 

 

 (6)

 

 (22.2)

%

Southeast

 

 46 

 

 40 

 

 

 6 

 

 15.0 

%

Wade Jurney Homes

 

N/A

 

N/A

 

 

N/A

 

N/A

 

Total

 

 122 

 

 119 

 

 

 3 

 

 2.5 

%



N/A – Not applicable





Backlog





(dollars in thousands)





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

December 31,

 

 

 

 

 

 

 

 

 



 

2018

 

2017

 

% Change

 



 

Homes

 

Dollar Value

 

Average Sales Price

 

Homes

 

Dollar Value

 

Average Sales Price

 

Homes

 

Dollar Value

 

Average Sales Price

West

 

 218 

 

$

 120,042 

 

$

 550.7 

 

 270 

 

$

 164,071 

 

$

 607.7 

 

 (19.3)

%

 

 (26.8)

%

 

 (9.4)

%

Mountain

 

 401 

 

 

 183,938 

 

$

 458.3 

 

 455 

 

 

 200,887 

 

$

 441.2 

 

 (11.9)

%

 

 (8.4)

%

 

 3.9 

%

Texas

 

 181 

 

 

 68,265 

 

$

 377.2 

 

 215 

 

 

 82,886 

 

$

 385.5 

 

 (15.8)

%

 

 (17.6)

%

 

 (2.2)

%

Southeast

 

 470 

 

 

 156,491 

 

$

 333.0 

 

 380 

 

 

 125,044 

 

$

 329.1 

 

 23.7 

%

 

 25.1 

%

 

 1.2 

%

Wade Jurney Homes

 

 911 

 

 

 140,790 

 

$

 154.5 

 

 —

 

 

 —

 

$

 —

 

NM

 

 

NM

 

 

NM

 

Total / Weighted Average

 

 2,181 

 

$

 669,526 

 

$

 306.9 

 

 1,320 

 

$

 572,888 

 

$

 434.0 

 

 65.2 

%

 

 16.9 

%

 

 (29.3)

%



NM – Not meaningful



Lot Inventory





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

December 31,

 

 

 

 

 

 

 

 

 



 

2018

 

2017

 

% Change

 



 

 

 

 

 

 



 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West

 

 3,457 

 

 1,790 

 

 5,247 

 

 3,742 

 

 3,179 

 

 6,921 

 

 (7.6)

%

 

 (43.7)

%

 

 (24.2)

%

Mountain

 

 5,335 

 

 5,641 

 

 10,976 

 

 4,666 

 

 4,856 

 

 9,522 

 

 14.3 

%

 

 16.2 

%

 

 15.3 

%

Texas

 

 3,943 

 

 2,616 

 

 6,559 

 

 2,517 

 

 3,489 

 

 6,006 

 

 56.7 

%

 

 (25.0)

%

 

 9.2 

%

Southeast

 

 4,828 

 

 2,808 

 

 7,636 

 

 4,827 

 

 3,508 

 

 8,335 

 

 0.0 

%

 

 (20.0)

%

 

 (8.4)

%

Wade Jurney Homes

 

 3,447 

 

 4,054 

 

 7,501 

 

 —

 

 —

 

 —

 

NM

 

 

NM

 

 

NM

 

Total

 

 21,010 

 

 16,909 

 

 37,919 

 

 15,752 

 

 15,032 

 

 30,784 

 

 33.4 

%

 

 12.5 

%

 

 23.2 

%



NM – Not meaningful

 

Picture 3



Century Communities, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)



Adjusted Diluted Earnings per Common Share (Adjusted 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 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,



 

2018

 

2017

 

2018

 

2017

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 26,194 

 

$

 17,195 

 

$

 96,455 

 

$

 50,295 

Less: Undistributed earnings allocated to participating securities

 

 

 —

 

 

 (85)

 

 

 (59)

 

 

 (384)

Net income allocable to common stockholders

 

$

 26,194 

 

$

 17,110 

 

$

 96,396 

 

$

 49,911 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

 

 30,675,586 

 

 

 27,967,797 

 

 

 30,084,913 

 

 

 24,280,871 

Dilutive effect of restricted stock units

 

 

 316,129 

 

 

 387,762 

 

 

 306,433 

 

 

 274,638 

Weighted average common shares outstanding - diluted

 

 

 30,991,715 

 

 

 28,355,559 

 

 

 30,391,346 

 

 

 24,555,509 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.85 

 

$

 0.61 

 

$

 3.20 

 

$

 2.06 

Diluted

 

$

 0.85 

 

$

 0.60 

 

$

 3.17 

 

$

 2.03 



 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

$

 36,062 

 

$

 33,848 

 

$

 128,530 

 

$

 84,164 

Purchase price accounting for acquired work in process inventory

 

 

 9,746 

 

 

 9,295 

 

 

 38,112 

 

 

 15,625 

Gain on previously held interest in WJH

 

 

 -

 

 

 -

 

 

 (7,219)

 

 

 -

Acquisition expense

 

 

 41 

 

 

 1,260 

 

 

 437 

 

 

 9,905 

Adjusted income before income tax expense

 

 

 45,849 

 

 

 44,403 

 

 

 159,860 

 

 

 109,694 

Adjusted income tax expense(1)

 

 

 (11,462)

 

 

 (15,630)

 

 

 (39,965)

 

 

 (38,612)

Adjusted net income

 

 

 34,387 

 

 

 28,773 

 

 

 119,895 

 

 

 71,082 

Less: Adjusted undistributed earnings allocated to participating securities

 

 

 —

 

 

 (141)

 

 

 (74)

 

 

 (543)

Adjusted net income allocable to common stockholders

 

$

 34,387 

 

$

 28,632 

 

$

 119,821 

 

$

 70,539 



 

 

 

 

 

 

 

 

 

 

 

 

Denominator - Diluted

 

 

 30,991,715 

 

 

 28,355,559 

 

 

 30,391,346 

 

 

 24,555,509 



 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share

 

$

 1.11 

 

$

 1.01 

 

$

 3.94 

 

$

 2.87 



(1)

For the three months and year ended December 31, 2018, the tax rate used in adjusted net income was 25%.  This rate is inclusive of our estimated annual rate offset by certain discrete items not associated with acquisitions. For the three months and year ended December 31, 2017, the Company’s GAAP tax rate was utilized.







 

Picture 2

Century Communities, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)



Adjusted homebuilding gross margin excluding 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,



 

2018

 

% 

 

2017

 

% 



 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

 640,187 

 

 100.0 

%

 

$

 516,501 

 

 100.0 

%

Cost of home sales revenues

 

 

 (534,695)

 

 (83.5)

%

 

 

 (425,782)

 

 (82.4)

%

Gross margin from home sales

 

 

 105,492 

 

 16.5 

%

 

 

 90,719 

 

 17.6 

%

Add: Interest in cost of home sales revenues

 

 

 15,115 

 

 2.4 

%

 

 

 12,274 

 

 2.4 

%

Adjusted homebuilding gross margin excluding interest

 

 

 120,607 

 

 18.8 

%

 

 

 102,993 

 

 19.9 

%

Add: Purchase price accounting for acquired work in process inventory

 

 

 9,746 

 

 1.5 

%

 

 

 9,295 

 

 1.8 

%

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

 

$

 130,353 

 

 20.4 

%

 

$

 112,288 

 

 21.7 

%



 

 

 

 

 

 

 

 

 

 

 

 



 

 



 

Year ended December 31,



 

2018

 

% 

 

2017

 

% 



 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

 2,110,058 

 

 100.0 

%

 

$

 1,405,443 

 

 100.0 

%

Cost of home sales revenues

 

 

 (1,741,619)

 

 (82.5)

%

 

 

 (1,153,359)

 

 (82.1)

%

Gross margin from home sales

 

 

 368,439 

 

 17.5 

%

 

 

 252,084 

 

 17.9 

%

Add: Interest in cost of home sales revenues

 

 

 48,692 

 

 2.3 

%

 

 

 32,898 

 

 2.3 

%

Adjusted homebuilding gross margin excluding interest

 

 

 417,131 

 

 19.8 

%

 

 

 284,982 

 

 20.3 

%

Add: Purchase price accounting for acquired work in process inventory

 

 

 38,112 

 

 1.8 

%

 

 

 15,625 

 

 1.1 

%

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

 

$

 455,243 

 

 21.6 

%

 

$

 300,607 

 

 21.4 

%







 



Picture 1



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) depreciation and amortization expense, and (v) 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,

 



 

2018

 

2017

 

% Change

 

2018

 

2017

 

% Change

Net income

 

$

 26,194 

 

$

 17,195 

 

 

 52.3 

%

 

$

 96,455 

 

$

 50,295 

 

 

 91.8 

%

Income tax expense

 

 

 9,868 

 

 

 16,653 

 

 

 (40.7)

%

 

 

 32,075 

 

 

 33,869 

 

 

 (5.3)

%

Interest in cost of home sales revenues

 

 

 15,115 

 

 

 12,274 

 

 

 23.1 

%

 

 

 48,692 

 

 

 32,898 

 

 

 48.0 

%

Interest expense (income)

 

 

 1(

 

 

 (5)

 

 

 (120.0)

%

 

 

 3(

 

 

 (3)

 

 

 (200.0)

%

Depreciation and amortization expense

 

 

 3,228 

 

 

 1,900 

 

 

 69.9 

%

 

 

 12,031 

 

 

 6,973 

 

 

 72.5 

%

EBITDA

 

 

 54,406 

 

 

 48,017 

 

 

 13.3 

%

 

 

 189,256 

 

 

 124,032 

 

 

 52.6 

%

Purchase price accounting for acquired work in process inventory

 

 

 9,746 

 

 

 9,295 

 

 

 4.9 

%

 

 

 38,112 

 

 

 15,625 

 

 

 143.9 

%

Purchase price accounting for investment in unconsolidated subsidiaries outside basis

 

 

 —

 

 

 30 

 

 

 (100.0)

%

 

 

 60 

 

 

 915 

 

 

 (93.4)

%

Acquisition expense

 

 

 41 

 

 

 1,260 

 

 

 (96.7)

%

 

 

 437 

 

 

 9,905 

 

 

 (95.6)

%

Adjusted EBITDA

 

$

 64,193 

 

$

 58,602 

 

 

 9.5 

%

 

$

 227,865 

 

$

 150,477 

 

 

 51.4 

%



 

Picture 4

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,



 

2018

 

2017

Total homebuilding debt

 

$

 987,277 

 

$

 776,283 

Total stockholders' equity

 

 

 859,359 

 

 

 735,233 

Total capital

 

$

 1,846,636 

 

$

 1,511,516 

Debt to capital

 

 

 53.5% 

 

 

 51.4% 



 

 

 

 

 

 

Total homebuilding debt

 

$

 987,277 

 

$

 776,283 

Cash and cash equivalents

 

 

 (32,902)

 

 

 (88,832)

Cash held in escrow

 

 

 (24,344)

 

 

 (37,723)

Net homebuilding debt

 

 

 930,031 

 

 

 649,728 

Total stockholders' equity

 

 

 859,359 

 

 

 735,233 

Net capital

 

$

 1,789,390 

 

$

 1,384,961 



 

 

 

 

 

 

Net homebuilding debt to net capital

 

 

 52.0% 

 

 

 46.9% 







Contact Information:

Investor Relations:

303-268-8398

InvestorRelations@CenturyCommunities.com