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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
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 |