Century Communities Reports Fourth Quarter and Full Year 2018 Results
February 7, 2019
– 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, Colo.–(BUSINESS WIRE)–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.
|
Century Communities, Inc. Condensed Consolidated Statements of Operations (Unaudited)
|
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|
(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 | ||||||||||||
|
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 | ||
|
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 |
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|
Home Deliveries
|
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|
(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 |
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|
Century Communities, Inc. Homebuilding Operational Data |
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|
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 |
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|
Backlog |
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|
(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 |
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|
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 |
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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
|
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|
(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.
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 | % | ||||||||
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.
Contacts
Investor Relations:
303-268-8398
InvestorRelations@CenturyCommunities.com