- Community Count: Increased 21% year-over-year and 15% sequentially to 305 communities.
- Home Deliveries: 2,834 homes, a 25% increase year-over-year and 8% quarter-over-quarter.
- Home Sales Revenue: $1.1 billion, up 29% year-over-year and 10% sequentially.
- Adjusted Homebuilding Gross Margin: 23.6%, roughly in line with the previous quarter.
- SG&A as a Percentage of Home Sales Revenue: Declined by 100 basis points year-over-year and 50 basis points sequentially.
- Net New Contracts: 2,563, a 19% increase year-over-year.
- Average Sales Price: $394,000.
- Lot Count: Over 80,000 owned and controlled lots, a 17% year-over-year increase.
- Home Starts: 3,141 homes, up 29% from the prior year quarter.
- Net Income: $83 million or $2.59 per diluted share.
- Adjusted Net Income: $87 million or $2.72 per diluted share.
- EBITDA: $132.3 million; Adjusted EBITDA: $137.1 million.
- Backlog of Sold Homes: 1,580 homes valued at $671.4 million.
- SG&A as a Percent of Home Sales Revenue: 11.9% in the third quarter.
- Financial Services Revenue: $20.1 million, compared to $23.6 million in the prior year quarter.
- Net Homebuilding Debt to Net Capital Ratio: 32.1%.
- Book Value Per Share: $81.29, a 13% year-over-year increase.
- Total Liquidity: $605.9 million.
- Full Year 2024 Deliveries Guidance: 10,900 to 11,300 homes.
- Full Year 2024 Home Sales Revenue Guidance: $4.3 billion to $4.4 billion.
Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Century Communities Inc (CCS, Financial) achieved a record community count of 305, marking a 21% year-over-year increase.
- Deliveries of 2,834 homes in the third quarter set a new record, with a 25% increase compared to the previous year.
- Home sales revenues reached $1.1 billion, reflecting a 29% year-over-year growth.
- The company completed two acquisitions in 2024, enhancing its market position, particularly in Houston.
- Century Communities Inc (CCS) maintained a strong financial position with $2.5 billion in stockholders' equity and no senior debt maturities until 2027.
Negative Points
- Incentives on new orders increased to approximately 800 basis points, indicating a need to maintain sales levels amid rising mortgage rates.
- The company's net debt to net capital ratio increased to 32.1%, up from 28.1% in the previous quarter, primarily due to acquisitions.
- Revenues from financial services decreased to $20.1 million from $23.6 million in the prior year quarter, impacted by a competitive mortgage market.
- Purchase price accounting reduced the third quarter gross margin by 30 basis points, with similar impacts expected in the fourth quarter.
- Orders in October moderated from September levels, attributed to seasonal factors and increased mortgage rates.
Q & A Highlights
Q: Can you provide more details on the increase in option lots and how they are distributed among different types of contracts?
A: Robert Francescon, Co-CEO, explained that the increase in option lots is a mix of finished lot option contracts with third-party developers, self-developed lots, and land bank deals. The distribution is fairly even across these categories.
Q: Regarding the 10% growth strategy, who do you anticipate taking market share from, and will there be a shift in focus from the West to Texas and the East?
A: Dale Francescon, Co-CEO, stated that the primary market share gains are expected from private homebuilders facing challenges. The strategy involves deepening market presence rather than shifting focus geographically.
Q: What is the expected impact of purchase accounting on gross margins in the upcoming quarters?
A: John Dixon, Interim CFO, noted that purchase accounting will reduce gross margins by 30 to 50 basis points in Q4 and Q1 2025, with the impact diminishing by Q2 2025.
Q: How do you view the competitive landscape in Texas and Florida, and have you seen any increased competition?
A: Dale Francescon, Co-CEO, acknowledged that Texas is competitive but emphasized the benefits of scale in Houston. Florida exposure is limited, with Jacksonville performing well despite some regional softness.
Q: What are the expectations for Anglia Homes' integration and its impact on sales pace?
A: Robert Francescon, Co-CEO, mentioned that Anglia Homes will transition to Century's product strategy over time. The sales pace is expected to be similar initially, with potential for improvement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
