EX-99.1 2 ccs-20200728xex99_1.htm EX-99.1 CCS 06302020 Earnings Release 8-K Exhibit 991





Picture 8





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, Colorado (July 28, 2020) – 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. 

 

Picture 7



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 



 

Picture 6



Century Communities, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)









 

 

 

 

 

 



 

June 30,

 

December 31,



 

2020

 

2019

Assets

 

(unaudited)

 

(audited)

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 





 

Picture 5



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)

%



 

Picture 10 

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)

%





 



Picture 2



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, as adjusted for certain discrete items. For the three and six months ended June 30, 2019 the tax rate utilized was our GAAP tax rate of 25.6%.



 

Picture 9



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 

 

 16.9 

%

 

 

 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 and other

 

 

 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 other 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 and other

 

 

 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 other and purchase price accounting for acquired work in process inventory

 

$

 261,323 

 

 19.8 

%

 

$

 223,218 

 

 19.7 

%







 



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) 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

 

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)



 

 

 

 

 

 



 

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% 







Contact Information:

Hunter Wells, Vice President of Investor Relations

719-426-3520

Hunter.Wells@CenturyCommunities.com



Category: 
Earnings