10-Q 1 ccs-20230930x10q.htm 10-Q ccs-20230930x10q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

or

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36491

Century Communities, Inc.

(Exact name of registrant as specified in its charter)

Delaware

68-0521411

(State or other jurisdiction of
‎incorporation or organization)

(I.R.S. Employer
‎Identification No.)

8390 East Crescent Parkway, Suite 650
‎Greenwood Village, CO

80111

(Address of principal executive offices)

(Zip Code)

(Registrant’s telephone number, including area code): (303) 770-8300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, par value $0.01 per share

CCS

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

x

Accelerated filer

o

Non-accelerated filer

o  

Smaller reporting company

o

Emerging growth company

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x

On October 20, 2023, 31,774,615 shares of common stock, par value $0.01 per share, of the registrant were outstanding.  

CENTURY COMMUNITIES, INC.

FORM 10-Q

For the Three and Nine Months Ended September 30, 2023

Index

Page No.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022 (audited)

3

Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022

4

Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022

5

Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2023 and 2022

6

Notes to the Unaudited Condensed Consolidated Financial Statements

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3. Quantitative and Qualitative Disclosures About Market Risk

39

Item 4. Controls and Procedures

39

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

40

Item 1A. Risk Factors

40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 3. Defaults Upon Senior Securities

41

Item 4. Mine Safety Disclosures

41

Item 5. Other Information

41

Item 6. Exhibits

42

Signatures

43

PART I – FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS.

Century Communities, Inc.

Condensed Consolidated Balance Sheets

As of September 30, 2023 and December 31, 2022

(in thousands, except share and per share amounts)

 

September 30,

December 31,

2023

2022

Assets

(unaudited)

(audited)

Cash and cash equivalents

$

193,111

$

296,724

Cash held in escrow

52,488

56,569

Accounts receivable

53,878

52,797

Inventories

3,058,317

2,830,645

Mortgage loans held for sale

162,742

203,558

Prepaid expenses and other assets

345,637

250,535

Property and equipment, net

34,044

31,688

Deferred tax assets, net

18,778

20,856

Goodwill

30,395

30,395

Total assets

$

3,949,390

$

3,773,767

Liabilities and stockholders' equity

Liabilities:

Accounts payable

$

161,054

$

106,926

Accrued expenses and other liabilities

282,283

299,588

Notes payable

1,051,294

1,019,412

Revolving line of credit

—

—

Mortgage repurchase facilities

162,094

197,626

Total liabilities

1,656,725

1,623,552

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, 31,773,033 and 31,772,791 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

318

318

Additional paid-in capital

582,334

584,803

Retained earnings

1,710,013

1,565,094

Total stockholders' equity

2,292,665

2,150,215

Total liabilities and stockholders' equity

$

3,949,390

$

3,773,767

See Notes to Unaudited Condensed Consolidated Financial Statements

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2023 and 2022

(in thousands, except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2023

2022

2023

2022

Revenues

Homebuilding revenues

Home sales revenues

$

865,065

$

1,118,588

$

2,419,025

$

3,241,537

Land sales and other revenues

722

2,432

3,811

12,872

Total homebuilding revenues

865,787

1,121,020

2,422,836

3,254,409

Financial services revenues

23,636

23,271

63,768

72,373

Total revenues

889,423

1,144,291

2,486,604

3,326,782

Homebuilding cost of revenues

Cost of home sales revenues

(652,411)

(841,665)

(1,910,630)

(2,365,633)

Cost of land sales and other revenues

—

(292)

(375)

(9,151)

Total homebuilding cost of revenues

(652,411)

(841,957)

(1,911,005)

(2,374,784)

Financial services costs

(11,432)

(13,922)

(33,983)

(43,262)

Selling, general and administrative

(111,918)

(110,687)

(315,351)

(321,484)

Other income (expense)

(1,663)

(5,651)

(1,509)

(12,754)

Income before income tax expense

111,999

172,074

224,756

574,498

Income tax expense

(28,849)

(27,601)

(56,850)

(128,861)

Net income

$

83,150

$

144,473

$

167,906

$

445,637

Earnings per share:

Basic

$

2.60

$

4.49

$

5.25

$

13.57

Diluted

$

2.58

$

4.44

$

5.21

$

13.41

Weighted average common shares outstanding:

Basic

31,962,884

32,196,589

31,967,672

32,850,647

Diluted

32,237,022

32,570,335

32,200,677

33,241,764

See Notes to Unaudited Condensed Consolidated Financial Statements

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2023 and 2022

(in thousands)

Nine Months Ended September 30,

2023

2022

Operating activities

Net income

$

167,906

$

445,637

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

11,019

8,207

Stock-based compensation expense

26,517

14,950

Fair value of mortgage loans held for sale and other

(2,269)

12,174

Abandonment of lot option contracts

3,021

7,389

Deferred income taxes

2,078

(12,634)

Loss on disposition of assets

1,062

1,504

Changes in assets and liabilities:

Cash held in escrow

4,081

(31,655)

Accounts receivable

(1,081)

(24)

Inventories

(225,587)

(649,038)

Mortgage loans held for sale

36,343

142,283

Prepaid expenses and other assets

(21,179)

(33,129)

Accounts payable

54,126

9,374

Accrued expenses and other liabilities

(23,029)

17,855

Net cash provided by (used in) operating activities

33,008

(67,107)

Investing activities

Purchases of property and equipment

(14,438)

(15,395)

Expenditures related to development of rental properties

(59,812)

(18,082)

Other investing activities

(346)

(3,853)

Net cash used in investing activities

(74,596)

(37,330)

Financing activities

Borrowings under revolving credit facilities

25,000

968,000

Payments on revolving credit facilities

(25,000)

(803,000)

Borrowing under construction loan agreements

21,453

—

Proceeds from issuance of insurance premium notes and other

26,511

25,070

Principal payments on insurance premium notes and other

(17,273)

(11,627)

Net payments for mortgage repurchase facilities

(35,532)

(136,829)

Withholding of common stock upon vesting of stock-based compensation awards

(10,672)

(12,735)

Repurchases of common stock under stock repurchase program

(19,227)

(120,646)

Dividend payments

(22,074)

(19,680)

Other financing activities

—

2,941

Net cash used in financing activities

(56,814)

(108,506)

Net decrease

$

(98,402)

$

(212,943)

Cash and cash equivalents and Restricted cash

Beginning of period

308,492

322,241

End of period

$

210,090

$

109,298

Supplemental cash flow disclosure

Cash paid for income taxes

$

41,358

$

151,079

Cash and cash equivalents and Restricted cash

Cash and cash equivalents

$

193,111

$

98,203

Restricted cash (Note 5)

16,979

11,095

Cash and cash equivalents and Restricted cash

$

210,090

$

109,298

See Notes to Unaudited Condensed Consolidated Financial Statements

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Nine Months Ended September 30, 2023 and 2022

(in thousands)

For the Three Months Ended September 30, 2023 and 2022

Common Stock

Shares

Amount

Additional Paid-In Capital

Retained Earnings

Total Stockholders' Equity

Balance at June 30, 2023

32,020

$

320

$

586,856

$

1,634,741

$

2,221,917

Vesting of stock-based compensation awards

1

—

—

—

—

Withholding of common stock upon vesting of stock-based compensation awards

—

—

(29)

—

(29)

Repurchases of common stock

(248)

(2)

(17,256)

—

(17,258)

Stock-based compensation expense

—

12,226

—

12,226

Cash dividends declared and dividend equivalents

—

—

537

(7,878)

(7,341)

Net income

—

—

—

83,150

83,150

Balance at September 30, 2023

31,773

$

318

$

582,334

$

1,710,013

$

2,292,665

Balance at June 30, 2022

32,273

$

323

$

596,727

$

1,354,114

$

1,951,164

Vesting of stock-based compensation awards

—

—

—

—

—

Withholding of common stock upon vesting of stock-based compensation awards

—

—

—

—

—

Repurchases of common stock

(501)

(5)

(22,336)

(22,341)

Stock-based compensation expense

—

—

5,159

—

5,159

Cash dividends declared and dividend equivalents

—

—

147

(6,602)

(6,455)

Net income

—

—

—

144,473

144,473

Balance at September 30, 2022

31,772

$

318

$

579,697

$

1,491,985

$

2,072,000