Century Communities Reports Record Second Quarter 2021 Results

GREENWOOD VILLAGE, Colo.–()–Century Communities, Inc. (NYSE: CCS), a leading national homebuilder, today announced financial results for its second quarter ended June 30, 2021.

Second Quarter 2021 Highlights Compared to Second Quarter 2020

  • Net income increased 207% to a Company record $117.9 million or $3.47 per diluted share
  • Home sales revenues increased 34% to a Company record $1.0 billion
  • Home deliveries increased 12% to a second quarter record of 2,771 homes
  • Net new home contracts increased 17% to a second quarter record 3,120 homes
  • Homes in backlog improved to 4,446 homes with a value of $1.8 billion, both Company records
  • Pre-tax income improved 204% to a Company record $152.1 million
  • EBITDA increased 142% to a Company record $173.2 million
  • Net homebuilding debt to net capital improved to 23.0% from 37.5%
  • Quarter end total liquidity of $1.3 billion
  • Expanded $800 million line of credit with a $200 million accordion
  • Initiated quarterly cash dividend of $0.15 per share

Dale Francescon, Chairman and Co-Chief Executive Officer, stated, “We continued our strong momentum in the second quarter and established a number of company records including home sales revenues in excess of $1 billion, $118 million of net income, pretax income of $152 million and $173 million in EBITDA. Year-to-date, we’ve delivered a record 5,568 homes, a 28% increase over last year, of which over 85% were spec builds. This meaningful focus on move-in-ready homes has enabled Century to capture additional margin expansion, culminating in a second quarter gross margin of 23.9%, the fourth consecutive quarter of sequential margin improvement and an increase of 700 basis points over last year. Our results demonstrate the continued high demand for our homes, positive industry dynamics and the strength, scale and operational excellence of our platform, further cementing us as one of the leading, entry-level national homebuilders.”

Rob Francescon, Co-Chief Executive Officer and President, said, “New sales for our more affordable, high return Century Complete brand increased 56% propelling total new contracts to 3,120 homes. These strong sales along with our record backlog of 4,446 homes valued at over $1.8 billion gives us tremendous confidence in our success for the duration of 2021 and beyond. We continued to make significant investments to support our growth initiatives, ending the quarter with a 65,610 lot pipeline, of which 66% are controlled, reflecting our ongoing commitment to an asset-light land acquisition strategy. We’re excited for Century’s continued growth and believe our strong fundamentals, extensive footprint across 30 thriving markets, healthy balance sheet and dedicated, high performing team position us better than ever to continue to increase our return on equity, as we have for nine consecutive quarters, including the 28% achieved in the most recent quarter.”

Second Quarter 2021 Results

Net income for the second quarter 2021 increased 207% to $117.9 million, or $3.47 per diluted share as compared to $38.5 million or $1.15 per diluted share for the prior year quarter. Pre-tax income was $152.1 million, representing a 14.6% margin, as compared to $50.1 million and a 6.5% margin in the prior year quarter.

Home sales revenues for the second quarter 2021 increased 34% to $1.0 billion, compared to $747.4 million for the prior year quarter. Deliveries increased 12% to 2,771 homes compared to 2,480 homes for the prior year quarter. Average sales price of home deliveries for the second quarter 2021 was $362,600, compared to $301,400 in the prior year quarter, primarily due to increased demand and home price appreciation across our markets.

Homebuilding gross margin percentage in the second quarter 2021 was 23.9%, as compared to 16.9% in the prior year quarter. Adjusted homebuilding gross margin percentage, excluding interest, was 25.7 % in the second quarter of 2021, as compared to 19.5% in the prior year quarter. SG&A as a percent of home sales revenues improved 170 basis points to 9.9%, compared to 11.6% in the prior year quarter.

Net new home contracts in the second quarter 2021 increased 17% to 3,120 homes, compared to 2,664 homes in the prior year quarter. At the end of the second quarter 2021, the Company had 4,446 homes in backlog, representing a record $1.8 billion of backlog dollar value, year-over-year increases of 60% and 83%, respectively.

Financial services revenues increased to $29.9 million compared to $25.7 million in the prior year quarter, and financial services pretax income was $11.7 million compared to $13.0 million, primarily a result of more normalized gain on sale margin and a 2020 one-time item of a $3.0 million favorable fair value adjustment on mortgage loans held for sale that was recouped from the previous first quarter.

Strengthened Balance Sheet and Liquidity

The Company ended the quarter with a strong financial position including $1.5 billion of stockholders’ equity, $457.1 million of cash and $1.3 billion of total liquidity.

As of June 30, 2021, net homebuilding debt to net capital decreased to 23.0%, a reduction of 1,450 basis points from 37.5% in the prior year quarter.

Full Year 2021 Outlook

David Messenger, Chief Financial Officer, stated, “We’re pleased with our operating and financial progress to date and remain confident in our continued success in 2021. Due to improved home price appreciation throughout the first six months of 2021, we are increasing our full year revenue guidance to be in the range of $3.8 billion to $4.1 billion. We reiterate our full year expectations for home deliveries to be in the range of 10,750 to 11,750.”

Conference Call

The Company will host a webcast and conference call on Wednesday, July 28, 2021 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s second quarter 2021 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, 2021, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13720705. 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 and 30 markets across the U.S., offering title, insurance and lending services in select markets through its Parkway Title, IHL Home 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 2021 and its expectations for continued growth and increases in its return on equity. 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, availability and pricing of labor and raw materials 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,

 

 

2021

 

2020

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

1,004,789

 

 

$

747,415

 

 

$

1,964,068

 

 

$

1,320,125

 

Land sales and other revenues

 

 

8,258

 

 

 

3,307

 

 

 

23,928

 

 

 

23,411

 

Total homebuilding revenues

 

 

1,013,047

 

 

 

750,722

 

 

 

1,987,996

 

 

 

1,343,536

 

Financial services revenues

 

 

29,865

 

 

 

25,722

 

 

 

63,485

 

 

 

35,517

 

Total revenues

 

 

1,042,912

 

 

 

776,444

 

 

 

2,051,481

 

 

 

1,379,053

 

Homebuilding Cost of Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Cost of home sales revenues

 

 

(764,668

)

 

 

(620,655

)

 

 

(1,521,175

)

 

 

(1,091,181

)

Cost of land sales and other revenues

 

 

(7,000

)

 

 

(2,384

)

 

 

(17,020

)

 

 

(16,551

)

Total homebuilding cost of revenues

 

 

(771,668

)

 

 

(623,039

)

 

 

(1,538,195

)

 

 

(1,107,732

)

Financial services costs

 

 

(18,168

)

 

 

(12,744

)

 

 

(36,469

)

 

 

(22,330

)

Selling, general, and administrative

 

 

(99,656

)

 

 

(86,706

)

 

 

(191,807

)

 

 

(160,325

)

Inventory impairment and other

 

 

(41

)

 

 

(910

)

 

 

(41

)

 

 

(1,691

)

Other income (expense)

 

 

(1,245

)

 

 

(2,942

)

 

 

(1,786

)

 

 

(2,784

)

Income before income tax expense

 

 

152,134

 

 

 

50,103

 

 

 

283,183

 

 

 

84,191

 

Income tax expense

 

 

(34,224

)

 

 

(11,653

)

 

 

(63,621

)

 

 

(19,615

)

Net income

 

$

117,910

 

 

$

38,450

 

 

$

219,562

 

 

$

64,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.49

 

 

$

1.15

 

 

$

6.52

 

 

$

1.94

 

Diluted

 

$

3.47

 

 

$

1.15

 

 

$

6.47

 

 

$

1.93

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

33,738,586

 

 

 

33,340,184

 

 

 

33,651,727

 

 

 

33,274,056

 

Diluted

 

 

33,956,638

 

 

 

33,461,694

 

 

 

33,920,939

 

 

 

33,469,069

 

Century Communities, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2021

 

2020

Assets

 

(unaudited)

 

(audited)

Cash and cash equivalents

 

$

419,416

 

$

394,001

Cash held in escrow

 

 

37,640

 

 

23,149

Accounts receivable

 

 

30,286

 

 

21,781

Inventories

 

 

1,948,769

 

 

1,929,664

Mortgage loans held for sale

 

 

235,712

 

 

282,639

Prepaid expenses and other assets

 

 

147,284

 

 

122,630

Property and equipment, net

 

 

26,359

 

 

28,384

Deferred tax assets, net

 

 

18,392

 

 

12,450

Goodwill

 

 

30,395

 

 

30,395

Total assets

 

$

2,894,253

 

$

2,845,093

Liabilities and stockholders’ equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

80,609

 

$

107,712

Accrued expenses and other liabilities

 

 

263,956

 

 

302,751

Notes payable

 

 

901,254

 

 

894,875

Revolving line of credit

 

 

 

 

Mortgage repurchase facilities

 

 

159,776

 

 

259,050

Total liabilities

 

 

1,405,595

 

 

1,564,388

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, 33,760,940 and 33,350,633 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

338

 

 

334

Additional paid-in capital

 

 

690,707

 

 

697,200

Retained earnings

 

 

797,613

 

 

583,171

Total stockholders’ equity

 

 

1,488,658

 

 

1,280,705

Total liabilities and stockholders’ equity

 

$

2,894,253

 

$

2,845,093

Century Communities, Inc.

Homebuilding Operational Data

(Unaudited)

Net New Home Contracts

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

2021

 

 

2020

 

 

% Change

West

 

497

 

 

389

 

 

27.8

%

Mountain

 

617

 

 

474

 

 

30.2

%

Texas

 

399

 

 

391

 

 

2.0

%

Southeast

 

288

 

 

566

 

 

(49.1

)%

Century Complete

 

1,319

 

 

844

 

 

56.3

%

Total

 

3,120

 

 

2,664

 

 

17.1

%

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

 

 

2021

 

 

2020

 

 

% Change

West

 

891

 

 

725

 

 

22.9

%

Mountain

 

1,564

 

 

1,088

 

 

43.8

%

Texas

 

917

 

 

724

 

 

26.7

%

Southeast

 

764

 

 

1,082

 

 

(29.4

)%

Century Complete

 

2,439

 

 

1,433

 

 

70.2

%

Total

 

6,575

 

 

5,052

 

 

30.1

%

Home Deliveries

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

2021

 

2020

 

% Change

 

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

West

 

385

 

$

616.5

 

313

 

$

530.6

 

23.0

%

 

16.2

%

Mountain

 

611

 

$

473.1

 

417

 

$

418.6

 

46.5

%

 

13.0

%

Texas

 

477

 

$

273.9

 

400

 

$

246.4

 

19.3

%

 

11.2

%

Southeast

 

429

 

$

392.7

 

515

 

$

338.8

 

(16.7

)%

 

15.9

%

Century Complete

 

869

 

$

206.3

 

835

 

$

160.1

 

4.1

%

 

28.9

%

Total / Weighted Average

 

2,771

 

$

362.6

 

2,480

 

$

301.4

 

11.7

%

 

20.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

 

 

 

 

2021

 

2020

 

% Change

 

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

 

Homes

 

Average Sales Price

West

 

704

 

$

601.1

 

546

 

$

536.0

 

28.9

%

 

12.1

%

Mountain

 

1,296

 

$

446.9

 

813

 

$

407.2

 

59.4

%

 

9.7

%

Texas

 

805

 

$

271.3

 

644

 

$

246.4

 

25.0

%

 

10.1

%

Southeast

 

997

 

$

389.7

 

883

 

$

346.4

 

12.9

%

 

12.5

%

Century Complete

 

1,766

 

$

201.0

 

1,458

 

$

159.0

 

21.1

%

 

26.4

%

Total / Weighted Average

 

5,568

 

$

352.7

 

4,344

 

$

303.9

 

28.2

%

 

16.1

%

Century Communities, Inc.

Homebuilding Operational Data

(Unaudited)

 

Selling Communities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling communities at period end

 

As of June 30,

 

 

Increase/(Decrease)

 

 

2021

 

2020

 

 

Amount

 

% Change

 

 

 

 

 

 

 

 

 

 

West

 

17

 

23

 

 

(6

)

 

(26.1

)%

Mountain

 

27

 

38

 

 

(11

)

 

(28.9

)%

Texas

 

14

 

21

 

 

(7

)

 

(33.3

)%

Southeast

 

22

 

40

 

 

(18

)

 

(45.0

)%

Century Complete

 

104

 

101

 

 

3

 

 

3.0

%

Total

 

184

 

223

 

 

(39

)

 

(17.5

)%

Backlog

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30,

 

 

 

 

 

 

 

 

 

2021

 

2020

 

% Change

 

 

Homes

 

Dollar Value

 

Average Sales Price

 

Homes

 

Dollar Value

 

Average Sales Price

 

Homes

 

Dollar Value

 

Average Sales Price

West

 

673

 

$

440,008

 

$

653.8

 

381

 

$

203,395

 

$

533.8

 

76.6

%

 

116.3

%

 

22.5

%

Mountain

 

1,057

 

 

544,365

 

$

515.0

 

648

 

 

281,999

 

$

435.2

 

63.1

%

 

93.0

%

 

18.3

%

Texas

 

497

 

 

182,080

 

$

366.4

 

355

 

 

95,193

 

$

268.1

 

40.0

%

 

91.3

%

 

36.7

%

Southeast

 

568

 

 

230,558

 

$

405.9

 

712

 

 

262,096

 

$

368.1

 

(20.2

)%

 

(12.0

)%

 

10.3

%

Century Complete

 

1,651

 

 

365,454

 

$

221.4

 

682

 

 

120,068

 

$

176.1

 

142.1

%

 

204.4

%

 

25.7

%

Total / Weighted Average

 

4,446

 

$

1,762,465

 

$

396.4

 

2,778

 

$

962,751

 

$

346.6

 

60.0

%

 

83.1

%

 

14.4

%

 

Lot Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30,

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

Owned

 

Controlled

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West

 

3,833

 

 

 

5,532

 

 

 

9,365

 

 

 

2,970

 

 

 

1,566

 

 

 

4,536

 

 

 

29.1

%

 

253.3

%

 

106.5

%

Mountain

 

7,800

 

 

 

8,046

 

 

 

15,846

 

 

 

6,697

 

 

 

3,740

 

 

 

10,437

 

 

 

16.5

%

 

115.1

%

 

51.8

%

Texas

 

3,468

 

 

 

6,767

 

 

 

10,235

 

 

 

2,871

 

 

 

2,272

 

 

 

5,143

 

 

 

20.8

%

 

197.8

%

 

99.0

%

Southeast

 

2,973

 

 

 

12,567

 

 

 

15,540

 

 

 

3,724

 

 

 

2,879

 

 

 

6,603

 

 

 

(20.2

)%

 

336.5

%

 

135.3

%

Century Complete

 

4,487

 

 

 

10,137

 

 

 

14,624

 

 

 

2,935

 

 

 

5,178

 

 

 

8,113

 

 

 

52.9

%

 

95.8

%

 

80.3

%

Total

 

22,561

 

 

 

43,049

 

 

 

65,610

 

 

 

19,197

 

 

 

15,635

 

 

 

34,832

 

 

 

17.5

%

 

175.3

%

 

88.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Total

 

34.4

%

 

 

65.6

%

 

 

100.0

%

 

 

55.1

%

 

 

44.9

%

 

 

100.0

%

 

 

 

 

 

 

 

 

 

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 and other and (iii) restructuring costs, less adjusted income tax expense, calculated using the Company’s estimated annual effective tax rate after discrete items for the applicable period. Adjusted Diluted EPS is calculated by excluding the effect of loss on inventory impairment and restructuring costs from the calculation of reported EPS.

Adjusted Net Income and Adjusted Diluted Earnings Per Share

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

117,910

 

 

$

38,450

 

 

$

219,562

 

 

$

64,576

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic

 

 

33,738,586

 

 

 

33,340,184

 

 

 

33,651,727

 

 

 

33,274,056

 

Dilutive effect of restricted stock units

 

 

218,052

 

 

 

121,510

 

 

 

269,212

 

 

 

195,013

 

Weighted average common shares outstanding – diluted

 

 

33,956,638

 

 

 

33,461,694

 

 

 

33,920,939

 

 

 

33,469,069

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.49

 

 

$

1.15

 

 

$

6.52

 

 

$

1.94

 

Diluted

 

$

3.47

 

 

$

1.15

 

 

$

6.47

 

 

$

1.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

$

152,134

 

 

$

50,103

 

 

$

283,183

 

 

$

84,191

 

Inventory impairment and other

 

 

41

 

 

 

910

 

 

 

41

 

 

 

1,691

 

Restructuring costs

 

 

 

 

 

1,584

 

 

 

 

 

 

1,584

 

Adjusted income before income tax expense

 

 

152,175

 

 

 

52,597

 

 

 

283,224

 

 

 

87,466

 

Adjusted income tax expense(1)

 

 

(34,188

)

 

 

(12,254

)

 

 

(63,630

)

 

 

(20,378

)

Adjusted net income

 

$

117,987

 

 

 

40,343

 

 

$

219,594

 

 

 

67,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator – Diluted

 

 

33,956,638

 

 

 

33,461,694

 

 

 

33,920,939

 

 

 

33,469,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share

 

$

3.47

 

 

$

1.21

 

 

$

6.47

 

 

$

2.00

 

(1)

The tax rate used in calculating adjusted net income for the three and six months ended June 30, 2021 was 22.5% which is reflective of the Company’s estimated annual effective tax rate after discrete items for the applicable period. For the three and six months ended June 30, 2020, the tax rate utilized was our estimated annual effective tax rate after discrete items of 23.3%.

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,

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

%

 

2020

 

%

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

1,004,789

 

 

100.0

%

 

$

747,415

 

 

100.0

%

Cost of home sales revenues

 

 

(764,668

)

 

(76.1

)%

 

 

(620,655

)

 

(83.0

)%

Inventory impairment and other

 

 

(41

)

 

(0.0

)%

 

 

(910

)

 

(0.1

)%

Gross margin from home sales

 

 

240,080

 

 

23.9

%

 

 

125,850

 

 

16.9

%

Add: Inventory impairment and other

 

 

41

 

 

0.0

%

 

 

910

 

 

0.1

%

Add: Interest in cost of home sales revenues

 

 

18,406

 

 

1.8

%

 

 

18,694

 

 

2.5

%

Adjusted homebuilding gross margin excluding interest and inventory impairment and other

 

$

258,527

 

 

25.7

%

 

$

145,454

 

 

19.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

%

 

2020

 

%

 

 

 

 

 

 

 

 

 

 

 

Home sales revenues

 

$

1,964,068

 

 

100.0

%

 

$

1,320,125

 

 

100.0

%

Cost of home sales revenues

 

 

(1,521,175

)

 

(77.5

)%

 

 

(1,091,181

)

 

(82.7

)%

Inventory impairment and other

 

 

(41

)

 

(0.0

)%

 

 

(1,691

)

 

(0.1

)%

Gross margin from home sales

 

 

442,852

 

 

22.5

%

 

 

227,253

 

 

17.2

%

Add: Inventory impairment and other

 

 

41

 

 

0.0

%

 

 

1,691

 

 

0.1

%

Add: Interest in cost of home sales revenues

 

 

36,783

 

 

1.9

%

 

 

32,379

 

 

2.5

%

Adjusted homebuilding gross margin excluding interest and inventory impairment and other

 

$

479,676

 

 

24.4

%

 

$

261,323

 

 

19.8

%

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,

 

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

Net income

 

$

117,910

 

 

$

38,450

 

 

 

206.7

%

 

$

219,562

 

 

$

64,576

 

 

 

240.0

%

Income tax expense

 

 

34,224

 

 

 

11,653

 

 

 

193.7

%

 

 

63,621

 

 

 

19,615

 

 

 

224.3

%

Interest in cost of home sales revenues

 

 

18,406

 

 

 

18,694

 

 

 

(1.5

)%

 

 

36,783

 

 

 

32,379

 

 

 

13.6

%

Interest expense (income)

 

 

(172

)

 

 

(684

)

 

 

(74.9

)%

 

 

(283

)

 

 

(847

)

 

 

(66.6

)%

Depreciation and amortization expense

 

 

2,849

 

 

 

3,427

 

 

 

(16.9

)%

 

 

5,655

 

 

 

6,842

 

 

 

(17.3

)%

EBITDA

 

 

173,217

 

 

 

71,540

 

 

 

142.1

%

 

 

325,338

 

 

 

122,565

 

 

 

165.4

%

Inventory impairment and other

 

 

41

 

 

 

910

 

 

 

(95.5

)%

 

 

41

 

 

 

1,691

 

 

 

(97.6

)%

Restructuring costs

 

 

 

 

 

1,584

 

 

 

NM

 

 

 

 

 

 

1,584

 

 

 

NM

 

Adjusted EBITDA

 

$

173,258

 

 

$

74,034

 

 

 

134.0

%

 

$

325,379

 

 

$

125,840

 

 

 

158.6

%

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 and cash equivalents and cash held in escrow) 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,

 

 

2021

 

2020

Total homebuilding debt

 

$

901,254

 

 

$

894,875

 

Total stockholders’ equity

 

 

1,488,658

 

 

 

1,280,705

 

Total capital

 

$

2,389,912

 

 

$

2,175,580

 

Homebuilding debt to capital

 

 

37.7

%

 

 

41.1

%

 

 

 

 

 

 

 

Total homebuilding debt

 

$

901,254

 

 

$

894,875

 

Cash and cash equivalents

 

 

(419,416

)

 

 

(394,001

)

Cash held in escrow

 

 

(37,640

)

 

 

(23,149

)

Net homebuilding debt

 

 

444,198

 

 

 

477,725

 

Total stockholders’ equity

 

 

1,488,658

 

 

 

1,280,705

 

Net capital

 

$

1,932,856

 

 

$

1,758,430

 

 

 

 

 

 

 

 

Net homebuilding debt to net capital

 

 

23.0

%

 

 

27.2

%

Category:

Earnings

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