Century Communities Earnings 2020-06-30

Century Communities Earnings 2020-06-30

CCS 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

ccs-20200630x10q

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 June 30, 2020


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.

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 July 22, 2020, 33,350,633 shares of common stock, par value $0.01 per share, were outstanding.

Table of Contents

CENTURY COMMUNITIES, INC.

FORM 10-Q

For the Three and Six Months Ended June 30, 2020

Index


	Page No.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019 (audited)	3
Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019	4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019	5
Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2020 and 2019	6
Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
Item 4. Controls and Procedures	35
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	36
Item 1A. Risk Factors	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39
Signatures	41

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Century Communities, Inc.

Condensed Consolidated Balance Sheets

As of June 30, 2020 and December 31, 2019

(in thousands, except share amounts)


	June 30,		December 31,
	2020		2019
Assets	(unaudited)		(audited)
Cash and cash equivalents	$	173,521	$	55,436
Cash held in escrow		46,619		35,308
Accounts receivable		22,846		27,438
Inventories		1,898,503		1,995,549
Mortgage loans held for sale		219,615		185,246
Prepaid expenses and other assets		115,095		124,008
Property and equipment, net		33,277		35,998
Deferred tax assets, net		11,911		10,589
Goodwill		30,395		30,395
Total assets	$	2,551,782	$	2,499,967
Liabilities and stockholders' equity
Liabilities:
Accounts payable	$	49,635	$	84,794
Accrued expenses and other liabilities		277,526		213,975
Notes payable		897,664		896,704
Revolving line of credit		—		68,700
Mortgage repurchase facilities		197,469		174,095
Total liabilities		1,422,294		1,438,268
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, 33,350,633 and 33,067,375 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		334		331
Additional paid-in capital		687,564		684,354
Retained earnings		441,590		377,014
Total stockholders' equity		1,129,488		1,061,699
Total liabilities and stockholders' equity	$	2,551,782	$	2,499,967

See Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2020 and 2019

(in thousands, except share and per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenues
Homebuilding revenues
Home sales revenues	$	747,415	$	608,636	$	1,320,125	$	1,131,938
Land sales and other revenues		3,307		1,399		23,411		2,754
Total homebuilding revenues		750,722		610,035		1,343,536		1,134,692
Financial services revenue		25,722		9,915		35,517		18,315
Total revenues		776,444		619,950		1,379,053		1,153,007
Homebuilding cost of revenues
Cost of home sales revenues		(620,655)		(503,928)		(1,091,181)		(937,685)
Cost of land sales and other revenues		(2,384)		(877)		(16,551)		(1,491)
Total homebuilding cost of revenues		(623,039)		(504,805)		(1,107,732)		(939,176)
Financial services costs		(12,744)		(7,747)		(22,330)		(14,576)
Selling, general and administrative		(86,706)		(75,217)		(160,325)		(144,153)
Loss on debt extinguishment		—		(10,832)		—		(10,832)
Inventory impairment and other		(910)		—		(1,691)		—
Other expense		(2,942)		(519)		(2,784)		(443)
Income before income tax expense		50,103		20,830		84,191		43,827
Income tax expense		(11,653)		(5,335)		(19,615)		(11,215)
Net income	$	38,450	$	15,495	$	64,576	$	32,612

Earnings per share:
Basic	$	1.15	$	0.51	$	1.94	$	1.08
Diluted	$	1.15	$	0.51	$	1.93	$	1.07
Weighted average common shares outstanding:
Basic		33,340,184		30,341,628		33,274,056		30,272,818
Diluted		33,461,694		30,568,848		33,469,069		30,506,945

See Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2020 and 2019

(in thousands)


	Six Months Ended June 30,
	2020		2019
Operating activities
Net income	$	64,576	$	32,612
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		6,842		6,196
Stock-based compensation expense		8,588		7,468
Fair value of loans held for sale and other		(6,175)		(1,012)
Loss on debt extinguishment		—		10,832
Inventory impairment and other		1,691		—
Deferred income taxes		(1,322)		428
Loss on disposition of assets		914		526
Changes in assets and liabilities:
Cash held in escrow		(11,311)		(1,495)
Accounts receivable		4,592		(2,535)
Inventories		138,049		(121,734)
Mortgage loans held for sale		(30,990)		(9,152)
Prepaid expenses and other assets		13,229		(4,296)
Accounts payable		(35,158)		7,137
Accrued expenses and other liabilities		20,259		(17,974)
Net cash provided by (used in) operating activities		173,784		(92,999)
Investing activities
Purchases of property and equipment		(4,913)		(6,274)
Other investing activities		62		59
Net cash used in investing activities		(4,851)		(6,215)
Financing activities
Borrowings under revolving credit facilities		678,000		767,600
Payments on revolving credit facilities		(746,700)		(758,100)
Proceeds from issuance of senior notes due 2027		—		500,000
Extinguishment of senior notes due 2022		—		(391,942)
Proceeds from issuance of insurance premium notes and other		4,542		9,301
Principal payments on insurance notes payable		(4,220)		(17,586)
Debt issuance costs		—		(5,728)
Net proceeds from mortgage repurchase facilities		23,374		(3,805)
Net proceeds from issuances of common stock		—		2,663
Withholding of common stock upon vesting of restricted stock units		(5,145)		(3,434)
Repurchases of common stock under stock repurchase program		—		(1,439)
Other		(345)		—
Net cash provided by (used in) financing activities		(50,494)		97,530
Net increase (decrease)	$	118,439	$	(1,684)
Cash and cash equivalents and Restricted cash
Beginning of period		58,521		36,441
End of period	$	176,960	$	34,757
Supplemental cash flow disclosure
Cash paid for income taxes	$	410	$	13,111
Cash and cash equivalents and Restricted cash
Cash and cash equivalents	$	173,521	$	31,704
Restricted cash (Note 5)		3,439		3,053
Cash and cash equivalents and Restricted cash	$	176,960	$	34,757

See Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Six Months Ended June 30, 2020 and 2019

(in thousands)

Three Months Ended June 30, 2020 and 2019


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Retained Earnings		Total Stockholders' Equity
Balance at March 31, 2020	33,319	$	333	$	681,060	$	403,140	$	1,084,533
Issuance of common stock	—		—		—		—		—
Other	—		—		(230)		—		(230)
Vesting of restricted stock units	42		1		(1)		—		—
Withholding of common stock upon vesting of restricted stock units	(10)		—		(168)		—		(168)
Stock-based compensation expense	—		—		6,903		—

Price	30.26	EPS	3
Shares	31	P/E	11
MCap	946	P/FCF	-6
Net Debt	-42	EBIT	105
TEV	904	TEV/EBIT	9
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-29
10-Q	2020-03-31	Filed 2020-04-30
10-K	2019-12-31	Filed 2020-02-07
10-Q	2019-09-30	Filed 2019-10-30
10-Q	2019-06-30	Filed 2019-07-31
10-Q	2019-03-31	Filed 2019-05-03
10-K	2018-12-31	Filed 2019-02-13
10-Q	2018-09-30	Filed 2018-11-07
10-Q	2018-06-30	Filed 2018-08-03
10-Q	2018-03-31	Filed 2018-05-09
10-K	2017-12-31	Filed 2018-03-01
10-Q	2017-09-30	Filed 2017-11-03
10-Q	2017-06-30	Filed 2017-08-04
10-Q	2017-03-31	Filed 2017-05-05
10-K	2016-12-31	Filed 2017-02-15
10-Q	2016-09-30	Filed 2016-11-02
10-Q	2016-06-30	Filed 2016-08-03
10-Q	2016-03-31	Filed 2016-05-06
10-K	2015-12-31	Filed 2016-02-19
10-Q	2015-11-05	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-08
10-K	2014-12-31	Filed 2015-03-06
10-Q	2014-09-30	Filed 2014-11-14
10-Q	2014-06-30	Filed 2014-08-13

8-K	2020-07-28	Earnings, Exhibits
8-K	2020-05-12
8-K	2020-05-06
8-K	2020-04-29
8-K	2020-02-06
8-K	2019-12-13
8-K	2019-11-27
8-K	2019-10-29
8-K	2019-07-30
8-K	2019-05-23
8-K	2019-05-15
8-K	2019-05-09
8-K	2019-05-09
8-K	2019-05-08
8-K	2019-03-31
8-K	2019-02-12
8-K	2019-02-07
8-K	2018-11-15
8-K	2018-11-06
8-K	2018-10-25
8-K	2018-09-30
8-K	2018-06-30
8-K	2018-06-28
8-K	2018-06-21
8-K	2018-06-05
8-K	2018-05-09
8-K	2018-03-31
8-K	2018-01-02
8-K	2017-12-31

EX-10.1	ccs-20200630xex10_1.htm
EX-10.2	ccs-20200630xex10_2.htm
EX-10.3	ccs-20200630xex10_3.htm
EX-22.1	ccs-20200630xex22_1.htm
EX-31.1	ccs-20200630xex31_1.htm
EX-31.2	ccs-20200630xex31_2.htm
EX-31.3	ccs-20200630xex31_3.htm
EX-32.1	ccs-20200630xex32_1.htm
EX-32.2	ccs-20200630xex32_2.htm
EX-32.3	ccs-20200630xex32_3.htm

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company