Century Communities Reports Record Third Quarter 2022 Results
Century Communities, Inc. (NYSE: CCS) reported strong third quarter 2022 results, with net income rising 27% to $144.5 million or $4.44 per diluted share. Total revenues increased 19% to $1.1 billion, driven by deliveries of 2,630 homes, a 13% year-over-year growth. EBITDA reached $188.7 million, up 16%. Despite market challenges due to rising interest rates, the company maintained a healthy backlog of 3,455 homes valued at $1.4 billion. However, home deliveries guidance was revised down to 10,000 to 10,500 homes for the full year.
- Net income rose 27% to $144.5 million, setting a third quarter record.
- Total revenues increased by 19% to $1.1 billion, a third quarter record.
- Deliveries of 2,630 homes marked a 13% year-over-year increase.
- Return on equity improved to 33.2%, up from 30.5% in the previous year.
- Strong balance sheet with $2.1 billion in stockholders' equity.
- Net new home contracts fell to 1,318, down from 2,742 in the prior year.
- Adjusted homebuilding gross margin percentage decreased to 26.0% from 27.2% in the prior year.
- Financial services revenues declined to $23.3 million from $29.1 million year-over-year.
- Full year home delivery guidance reduced to 10,000-10,500 homes.
- Record Third Quarter Net Income of
- Deliveries of 2,630 Homes Generating
- EBITDA Increased to
- Return on Equity of
GREENWOOD VILLAGE, Colo., Oct. 26, 2022 /PRNewswire/ -- Century Communities, Inc. (NYSE: CCS), a top 10 national homebuilder, today announced financial results for its third quarter ended September 30, 2022.
Third Quarter 2022 Highlights Compared to Third Quarter 2021
- Net income increased
27% to$144.5 million or$4.44 per diluted share, both third quarter records - Pre-tax income improved
18% to a third quarter record$172.1 million - Total revenues increased
19% to a third quarter record$1.1 billion - Return on equity improved by 270 basis points to
33.2% - Deliveries of 2,630 homes, a
13% increase and third quarter record - Net new home contracts of 1,318
- Homebuilding gross margin of
24.8% - Adjusted homebuilding gross margin of
26.0% - EBITDA increased
16% to$188.7 million , a third quarter record - Homes in backlog of 3,455 homes valued at
$1.4 billion - Selling communities increased
17% to 217 from 186 communities
"We delivered strong results in the third quarter, reporting record third quarter earnings per share, net income and pre-tax income while generating a return on equity of
Rob Francescon, Co-Chief Executive Officer and President, said, "The flexibility of our operating model allowed us to reduce our controlled lot inventory and land spend commitments in the quarter for a minimal cost as we continue to only focus on projects that meet our stringent investment criteria. We saw an improvement in our cycle times and input costs during the third quarter and expect further gains in the fourth quarter of this year and into 2023. Our homebuyers continue to have a healthy financial profile, and our completed homes across our 45 plus markets are still at low levels. Our balance sheet remains strong with
Third Quarter 2022 Results
Net income for the third quarter 2022 increased
Total revenues rose to
Net new home contracts in the third quarter 2022 were 1,318 contracts, compared to 2,742 contracts in the prior year quarter. At the end of the third quarter 2022, the Company had 3,455 homes in backlog, representing
Adjusted homebuilding gross margin percentage, excluding interest, was
Selling communities at the end of the third quarter increased
Return on equity for the third quarter of 2022 was
Financial services revenues were
Balance Sheet and Liquidity
The Company ended the quarter with a strong financial position, including
During the third quarter, the Company maintained its quarterly cash dividend of
As of September 30, 2022, homebuilding debt to capital decreased to
Full Year 2022 Outlook
David Messenger, Chief Financial Officer of the Company, commented, "Given the continued industry-wide slowdown in current activity, we are reducing our full year home delivery guidance to 10,000 to 10,500 homes and home sales revenues to
Webcast and Conference Call
The Company will host a webcast and conference call on Wednesday, October 26, 2022, at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company's third quarter 2022 results, provide commentary, and conduct a question-and-answer session. To participate in the call, please dial 877-270-2148 (domestic) or 412-902-6510 (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 November 2, 2022, by dialing 877-344-7529 (domestic) or 412-317-0088 (international) and entering the passcode 5572574. A replay of the webcast will be available on the Company's website.
About Century Communities
Century Communities, Inc. (NYSE: CCS) is a top 10 national homebuilder, offering new homes under the Century Communities and Century Complete brands. 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 operates in 17 states and over 45 markets across the U.S., and also offers title, insurance and lending services in select markets through its Parkway Title, IHL Home Insurance Agency, and Inspire Home Loans 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 Net Income, Adjusted Diluted Earnings per Common Share (Adjusted Diluted 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," "intend," "estimate," "plan," "continue," "will," "may," "potential," and "outlook" 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 2022, its expectations to continue to improve cycle times and input costs, management's belief that Century is well positioned to navigate near-term challenges and its intention to continue to focus on projects that meet Century's stringent investment criteria, and invest in its business and return capital to stockholders throughout the various cycles in the market. 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, including increased interest rates, inflation, and employment levels; the potential impact of global supply chain disruptions, labor, land and raw material or other resource shortages and delays, municipal and utility delays, and COVID-19 on the Company's business, industry and the broader economy; the ability to identify and acquire desirable land; availability and cost of financing; the effect of tax changes; reliance on contractors and key personnel; availability and pricing for land, labor and raw materials or other resources; the ability to pay dividends in the future; 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. | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
(Unaudited) | ||||||||||||
(in thousands, except share and per share amounts) | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||
Revenues | ||||||||||||
Home sales revenues | $ | 1,118,588 | $ | 917,337 | $ | 3,241,537 | $ | 2,881,404 | ||||
Land sales and other revenues | 2,432 | 11,594 | 12,872 | 35,522 | ||||||||
Total homebuilding revenues | 1,121,020 | 928,931 | 3,254,409 | 2,916,926 | ||||||||
Financial services revenues | 23,271 | 29,101 | 72,373 | 92,586 | ||||||||
Total revenues | 1,144,291 | 958,032 | 3,326,782 | 3,009,512 | ||||||||
Homebuilding Cost of Revenues | ||||||||||||
Cost of home sales revenues | (841,665) | (682,012) | (2,365,633) | (2,203,187) | ||||||||
Cost of land sales and other revenues | (292) | (6,977) | (9,151) | (23,996) | ||||||||
Total homebuilding cost of revenues | (841,957) | (688,989) | (2,374,784) | (2,227,183) | ||||||||
Financial services costs | (13,922) | (17,666) | (43,262) | (54,135) | ||||||||
Selling, general, and administrative | (110,687) | (90,154) | (321,484) | (281,961) | ||||||||
Loss on debt extinguishment | — | (14,458) | — | (14,458) | ||||||||
Inventory impairment and other | — | — | — | (41) | ||||||||
Other income (expense) | (5,651) | (1,004) | (12,754) | (2,790) | ||||||||
Income before income tax expense | 172,074 | 145,761 | 574,498 | 428,944 | ||||||||
Income tax expense | (27,601) | (31,784) | (128,861) | (95,406) | ||||||||
Net income | $ | 144,473 | $ | 113,977 | $ | 445,637 | $ | 333,538 | ||||
Earnings per share: | ||||||||||||
Basic | $ | 4.49 | $ | 3.38 | $ | 13.57 | $ | 9.90 | ||||
Diluted | $ | 4.44 | $ | 3.31 | $ | 13.41 | $ | 9.69 | ||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 32,196,589 | 33,760,940 | 32,850,647 | 33,688,531 | ||||||||
Diluted | 32,570,335 | 34,471,044 | 33,241,764 | 34,420,163 | ||||||||
Century Communities, Inc. | ||||||
Consolidated Balance Sheets | ||||||
(Unaudited) | ||||||
(in thousands, except share amounts) | ||||||
September 30, | December 31, | |||||
2022 | 2021 | |||||
Assets | (unaudited) | (audited) | ||||
Cash and cash equivalents | $ | 98,203 | $ | 316,310 | ||
Cash held in escrow | 83,952 | 52,297 | ||||
Accounts receivable | 41,955 | 41,932 | ||||
Inventories | 3,107,734 | 2,456,614 | ||||
Mortgage loans held for sale | 194,123 | 353,063 | ||||
Prepaid expenses and other assets | 259,379 | 200,087 | ||||
Property and equipment, net | 30,450 | 24,939 | ||||
Deferred tax assets, net | 33,873 | 21,239 | ||||
Goodwill | 30,395 | 30,395 | ||||
Total assets | $ | 3,880,064 | $ | 3,496,876 | ||
Liabilities and stockholders' equity | ||||||
Liabilities: | ||||||
Accounts payable | $ | 94,054 | $ | 84,679 | ||
Accrued expenses and other liabilities | 337,415 | 316,877 | ||||
Notes payable | 1,016,548 | 998,936 | ||||
Revolving line of credit | 165,000 | — | ||||
Mortgage repurchase facilities | 195,047 | 331,876 | ||||
Total liabilities | 1,808,064 | 1,732,368 | ||||
Stockholders' equity: | ||||||
Preferred stock, | — | — | ||||
Common stock, | 318 | 338 | ||||
Additional paid-in capital | 579,697 | 697,845 | ||||
Retained earnings | 1,491,985 | 1,066,325 | ||||
Total stockholders' equity | 2,072,000 | 1,764,508 | ||||
Total liabilities and stockholders' equity | $ | 3,880,064 | $ | 3,496,876 | ||
Century Communities, Inc. | |||||||||||||||||||
Homebuilding Operational Data | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Net New Home Contracts | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||||||
West | 219 | 395 | (44.6) | % | 884 | 1,286 | (31.3) | % | |||||||||||
Mountain | 183 | 489 | (62.6) | % | 1,247 | 2,053 | (39.3) | % | |||||||||||
Texas | 181 | 392 | (53.8) | % | 867 | 1,309 | (33.8) | % | |||||||||||
Southeast | 240 | 387 | (38.0) | % | 1,064 | 1,151 | (7.6) | % | |||||||||||
Century Complete | 495 | 1,079 | (54.1) | % | 2,433 | 3,518 | (30.8) | % | |||||||||||
Total | 1,318 | 2,742 | (51.9) | % | 6,495 | 9,317 | (30.3) | % | |||||||||||
Home Deliveries | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change | ||||||||||||||
Homes | Average Sales | Homes | Average Sales | Homes | Average Sales | |||||||||||
West | 378 | $ | 674.3 | 409 | $ | 655.8 | (7.6) | % | 2.8 | % | ||||||
Mountain | 494 | $ | 582.4 | 509 | $ | 500.6 | (2.9) | % | 16.3 | % | ||||||
Texas | 314 | $ | 368.5 | 274 | $ | 313.1 | 14.6 | % | 17.7 | % | ||||||
Southeast | 423 | $ | 464.0 | 325 | $ | 403.8 | 30.2 | % | 14.9 | % | ||||||
Century Complete | 1,021 | $ | 258.6 | 805 | $ | 220.3 | 26.8 | % | 17.4 | % | ||||||
Total / Weighted Average | 2,630 | $ | 425.3 | 2,322 | $ | 395.1 | 13.3 | % | 7.6 | % | ||||||
Nine Months Ended September 30, | ||||||||||||||||
2022 | 2021 | % Change | ||||||||||||||
Homes | Average Sales | Homes | Average Sales | Homes | Average Sales | |||||||||||
West | 1,200 | $ | 676.1 | 1,113 | $ | 621.2 | 7.8 | % | 8.8 | % | ||||||
Mountain | 1,466 | $ | 575.4 | 1,805 | $ | 462.0 | (18.8) | % | 24.5 | % | ||||||
Texas | 1,043 | $ | 347.5 | 1,079 | $ | 281.9 | (3.3) | % | 23.3 | % | ||||||
Southeast | 1,193 | $ | 441.0 | 1,322 | $ | 393.2 | (9.8) | % | 12.2 | % | ||||||
Century Complete | 2,789 | $ | 250.3 | 2,571 | $ | 207.0 | 8.5 | % | 20.9 | % | ||||||
Total / Weighted Average | 7,691 | $ | 421.5 | 7,890 | $ | 365.2 | (2.5) | % | 15.4 | % | ||||||
Century Communities, Inc. | ||||||||||
Homebuilding Operational Data | ||||||||||
(Unaudited) | ||||||||||
Selling Communities | ||||||||||
Selling communities at period end | As of September 30, | Increase/(Decrease) | ||||||||
2022 | 2021 | Amount | % Change | |||||||
West | 22 | 18 | 4 | 22.2 | % | |||||
Mountain | 32 | 27 | 5 | 18.5 | % | |||||
Texas | 24 | 15 | 9 | 60.0 | % | |||||
Southeast | 25 | 19 | 6 | 31.6 | % | |||||
Century Complete | 114 | 107 | 7 | 6.5 | % | |||||
Total | 217 | 186 | 31 | 16.7 | % | |||||
Backlog | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||
As of September 30, | |||||||||||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||||||||||
Homes | Dollar Value | Average Sales | Homes | Dollar Value | Average Sales | Homes | Dollar Value | Average Sales | |||||||||||||||||
West | 208 | $ | 172,071 | $ | 827.3 | 659 | $ | 436,812 | $ | 662.8 | (68.4) | % | (60.6) | % | 24.8 | % | |||||||||
Mountain | 826 | 447,827 | $ | 542.2 | 1,037 | 556,192 | $ | 536.3 | (20.3) | % | (19.5) | % | 1.1 | % | |||||||||||
Texas | 210 | 73,482 | $ | 349.9 | 615 | 217,362 | $ | 353.4 | (65.9) | % | (66.2) | % | (1.0) | % | |||||||||||
Southeast | 584 | 246,764 | $ | 422.5 | 630 | 257,902 | $ | 409.4 | (7.3) | % | (4.3) | % | 3.2 | % | |||||||||||
Century Complete | 1,627 | 439,236 | $ | 270.0 | 1,925 | 454,516 | $ | 236.1 | (15.5) | % | (3.4) | % | 14.4 | % | |||||||||||
Total / Weighted Average | 3,455 | $ | 1,379,380 | $ | 399.2 | 4,866 | $ | 1,922,784 | $ | 395.1 | (29.0) | % | (28.3) | % | 1.0 | % | |||||||||
Lot Inventory | |||||||||||||||||||||||||||
As of September 30, | |||||||||||||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||||||||||||
Owned | Controlled | Total | Owned | Controlled | Total | Owned | Controlled | Total | |||||||||||||||||||
West | 4,824 | 1,325 | 6,149 | 3,971 | 5,435 | 9,406 | 21.5 | % | (75.6) | % | (34.6) | % | |||||||||||||||
Mountain | 11,312 | 2,374 | 13,686 | 8,004 | 13,633 | 21,637 | 41.3 | % | (82.6) | % | (36.7) | % | |||||||||||||||
Texas | 7,382 | 4,158 | 11,540 | 4,150 | 8,528 | 12,678 | 77.9 | % | (51.2) | % | (9.0) | % | |||||||||||||||
Southeast | 5,981 | 7,683 | 13,664 | 3,692 | 12,460 | 16,152 | 62.0 | % | (38.3) | % | (15.4) | % | |||||||||||||||
Century Complete | 4,978 | 12,761 | 17,739 | 5,178 | 10,486 | 15,664 | (3.9) | % | 21.7 | % | 13.2 | % | |||||||||||||||
Total | 34,477 | 28,301 | 62,778 | 24,995 | 50,542 | 75,537 | 37.9 | % | (44.0) | % | (16.9) | % | |||||||||||||||
% of Total | 54.9 % | 45.1 % | 100.0 % | 33.1 % | 66.9 % | 100.0 % | |||||||||||||||||||||
Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Adjusted Net Income and Adjusted Diluted Earnings per Share (Adjusted Diluted EPS) are non-GAAP financial measures that we believe are 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. We define Adjusted Net Income as consolidated net income before (i) income tax expense, (ii) inventory impairment and other (iii) restructuring costs, and (iv) loss on debt extinguishment, less adjusted income tax expense, calculated using the Company's GAAP tax rate for the applicable period. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income by weighted average common shares – diluted.
Adjusted Net Income and Adjusted Diluted Earnings Per Common Share | ||||||||||||
(in thousands, except share and per share amounts) | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||
Numerator | ||||||||||||
Net income | $ | 144,473 | $ | 113,977 | $ | 445,637 | $ | 333,538 | ||||
Denominator | ||||||||||||
Weighted average common shares outstanding - basic | 32,196,589 | 33,760,940 | 32,850,647 | 33,688,531 | ||||||||
Dilutive effect of restricted stock units | 373,746 | 710,104 | 391,117 | 731,632 | ||||||||
Weighted average common shares outstanding - diluted | 32,570,335 | 34,471,044 | 33,241,764 | 34,420,163 | ||||||||
Earnings per share: | ||||||||||||
Basic | $ | 4.49 | $ | 3.38 | $ | 13.57 | $ | 9.90 | ||||
Diluted | $ | 4.44 | $ | 3.31 | $ | 13.41 | $ | 9.69 | ||||
Adjusted earnings per share | ||||||||||||
Numerator | ||||||||||||
Net income | $ | 144,473 | $ | 113,977 | $ | 445,637 | $ | 333,538 | ||||
Income tax expense | 27,601 | 31,784 | 128,861 | 95,406 | ||||||||
Income before income tax expense | 172,074 | 145,761 | 574,498 | 428,944 | ||||||||
Inventory impairment and other | — | — | — | 41 | ||||||||
Loss on debt extinguishment | — | 14,458 | — | 14,458 | ||||||||
Adjusted income before income tax expense | 172,074 | 160,219 | 574,498 | 443,443 | ||||||||
Adjusted income tax expense(1) | (27,601) | (34,937) | (128,861) | (98,631) | ||||||||
Adjusted net income | $ | 144,473 | $ | 125,282 | $ | 445,637 | $ | 344,812 | ||||
Denominator - Diluted | 32,570,335 | 34,471,044 | 33,241,764 | 34,420,163 | ||||||||
Adjusted diluted earnings per share | $ | 4.44 | $ | 3.63 | $ | 13.41 | $ | 10.02 | ||||
(1) The tax rates used in calculating adjusted net income for the three and nine months ended September 30, 2022 were |
Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Adjusted homebuilding gross margin excluding inventory impairment and other and interest 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 inventory impairment and indebtedness 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 September 30, | ||||||||||||
2022 | % | 2021 | % | |||||||||
Home sales revenues | $ | 1,118,588 | 100.0 | % | $ | 917,337 | 100.0 | % | ||||
Cost of home sales revenues | (841,665) | (75.2) | % | (682,012) | (74.3) | % | ||||||
Inventory impairment and other | — | — | % | — | — | % | ||||||
Gross margin from home sales | 276,923 | 24.8 | % | 235,325 | 25.7 | % | ||||||
Add: Inventory impairment and other | — | — | % | — | — | % | ||||||
Add: Interest in cost of home sales revenues | 13,726 | 1.2 | % | 14,636 | 1.6 | % | ||||||
Adjusted homebuilding gross margin excluding interest and inventory | $ | 290,649 | 26.0 | % | $ | 249,961 | 27.2 | % | ||||
Nine Months Ended September 30, | ||||||||||||
2022 | % | 2021 | % | |||||||||
Home sales revenues | $ | 3,241,537 | 100.0 | % | $ | 2,881,404 | 100.0 | % | ||||
Cost of home sales revenues | (2,365,633) | (73.0) | % | (2,203,187) | (76.5) | % | ||||||
Inventory impairment and other | — | — | % | (41) | (0.0) | % | ||||||
Gross margin from home sales | 875,904 | 27.0 | % | 678,176 | 23.5 | % | ||||||
Add: Inventory impairment and other | — | — | % | 41 | 0.0 | % | ||||||
Add: Interest in cost of home sales revenues | 39,345 | 1.2 | % | 51,419 | 1.8 | % | ||||||
Adjusted homebuilding gross margin excluding interest and inventory | $ | 915,249 | 28.2 | % | $ | 729,636 | 25.3 | % | ||||
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. We define 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, (v) loss on debt extinguishment, (vi) inventory impairment and other. We believe 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, our management believes that this measurement is useful for comparing general operating performance from period to period. Adjusted EBITDA should be considered in addition to, and not as a substitute for, consolidated net income in accordance with GAAP as a measure of performance. Our presentation of Adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. Our Adjusted EBITDA is limited as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
(in thousands) | ||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||
Net income | $ | 144,473 | $ | 113,977 | 26.8 | % | $ | 445,637 | $ | 333,538 | 33.6 | % | ||||||||
Income tax expense | 27,601 | 31,784 | (13.2) | % | 128,861 | 95,406 | 35.1 | % | ||||||||||||
Interest in cost of home sales revenues | 13,726 | 14,636 | (6.2) | % | 39,345 | 51,419 | (23.5) | % | ||||||||||||
Interest expense (income) | (2) | (148) | (98.6) | % | (14) | (431) | (96.8) | % | ||||||||||||
Depreciation and amortization expense | 2,855 | 2,669 | 7.0 | % | 8,207 | 8,324 | (1.4) | % | ||||||||||||
EBITDA | 188,653 | 162,918 | 15.8 | % | 622,036 | 488,256 | 27.4 | % | ||||||||||||
Loss on debt extinguishment | — | 14,458 | (100.0) | % | — | 14,458 | (100.0) | % | ||||||||||||
Inventory impairment and other | — | — | NM | — | 41 | (100.0) | % | |||||||||||||
Adjusted EBITDA | $ | 188,653 | $ | 177,376 | 6.4 | % | $ | 622,036 | $ | 502,755 | 23.7 | % | ||||||||
NM – Not Meaningful |
Century Communities, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Ratio of Net Homebuilding Debt to Net Capital
The following table presents the Company's ratio of net homebuilding debt to net capital, which is a non-GAAP financial measure. The Company calculates this by dividing net homebuilding debt (homebuilding debt less cash and cash equivalents, and cash held in escrow) by net capital (net homebuilding debt plus total stockholders' equity). Homebuilding debt is our total debt minus outstanding borrowings under our construction loan agreement and mortgage repurchase facilities. The most directly comparable GAAP measure is the ratio of debt to capital. The Company believes the ratio of net homebuilding debt to net capital is a relevant and useful financial measure to investors in understanding the leverage employed in its operations and as an indicator of the Company's ability to obtain external financing.
(in thousands) | ||||||
September 30, | December 31, | |||||
2022 | 2021 | |||||
Notes payable | $ | 1,016,548 | $ | 998,936 | ||
Revolving line of credit | 165,000 | — | ||||
Construction loan agreements | (2,985) | — | ||||
Total homebuilding debt | 1,178,563 | 998,936 | ||||
Total stockholders' equity | 2,072,000 | 1,764,508 | ||||
Total capital | $ | 3,250,563 | $ | 2,763,444 | ||
Homebuilding debt to capital | 36.3 % | 36.1 % | ||||
Total homebuilding debt | $ | 1,178,563 | $ | 998,936 | ||
Cash and cash equivalents | (98,203) | (316,310) | ||||
Cash held in escrow | (83,952) | (52,297) | ||||
Net homebuilding debt | 996,408 | 630,329 | ||||
Total stockholders' equity | 2,072,000 | 1,764,508 | ||||
Net capital | $ | 3,068,408 | $ | 2,394,837 | ||
Net homebuilding debt to net capital | 32.5 % | 26.3 % | ||||
Contact Information:
Tyler Langton, Senior Vice President of Investor Relations
303-268-8345
Investorrelations@CenturyCommunities.com
Category:
Earnings
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SOURCE Century Communities, Inc.
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