CCS - Earnings call transcript Q2 2019 | Century Communities, Inc.

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Operator

Greetings, and welcome to the Century Communities Second Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Scott Dixon, Chief Accounting Officer. Thank you, Mr. Dixon.

begin. may You

Scott Dixon

would today We conference thank for you Good Century like Communities us for earnings second joining afternoon. to quarter call. XXXX

everyone statements. in call like on call historical the I differ may that described are based remind certain constitute and forward-looking Before are that and number not statements of a statements course the begins, made implied on information of These based this to could actual forward-looking subject cause are statements. management's those current expectations to materially results the in to and or and would uncertainties from beliefs risks

by of Risk other uncertainties Factors Certain filed SEC can heading company's the under supplemented most recently the Form and our risks in on annual filings. be these report found as XX-K

are at at update any on our filings company no made SEC are call. that and available during duty website undertakes www.sec.gov this forward-looking to The www.centurycommunities.com. Our statements

measures company's information that isolation be have this a the financial accordance considered after on in for will or discussed this non-GAAP Management GAAP. questions with you intended in be call available not did financial the of any certain not is answered. substitute get presentation should Additionally, to be The presented as call. will conference information

today Francescon, Dale Hosting Co-Chief the Messenger, call Co-Chief Financial Rob and Officer. are Executive Francescon, David Executive Officer; Chairman Chief Officer; and

the will over Dale. to turn I call With that,

Dale Francescon

results, highlights and and follow markets on Rob outlook. Thank you, balance financial updates. and operating will Afterwards, Scott. Today I business detail. improved further up Dave our on the then sheet information review business further discuss call, our will with our and will

the Following lines our open we prepared for questions. remarks, will

home contracts, achieve helped the in margin to of quarter dollars. adjusted gross new deliveries home Our net year revenues, strong us record sales levels and performance second date

one time, have the years home dramatically since continued Since company. that five scale especially the June our public Century Magazine in and five second a We a we row. scope in builder XXXX, fastest country. As top we growing builder builders for become to were public a XX in took named pleased of becoming home to as the home May top Builder celebrate we fastest year public expand be by the and in growing to

would we entire work which and their today like continued to So team our is for success. the to Century basis thank dedication for hard the excellence,

time trends markets housing rates nearly quarter progressed, across year. second confidence the experienced the all not interest outlook. of continued market net into environment, growth gives the payrolls near sales lower of in as the national strong As remain affordability the new healthy, and momentum continued housing have economy and meaningful remains within in unemployment provided bolstered with which coupled with at that remains the July lower These the activity longer-term all U.S. has as growth state positive we This rates job and platform. us did contracts story improved our buyer lows, better beginning our exist

operating our Looking at metrics.

model. and to a year-over-year million level activity as with to Jurney a the During of we entry continue down end Wade contracts new X,XXX Backlog expectations backlog homes, a the transition line us turning dollar $XXX strong sell continued of our to X,XXX with home quarter, XX% the of record fast net more leaving of in quarter. grew value to trend our at product homes build by to sell we second more

businesses. Homes primarily on This a offerings price and This to continued second by by second revenues in year our Wade point lower sales success Jurney branded driven quarter XX% penetration a driven versus X,XXX our of $XXX a deliveries a increase record, by increased focus record was quarter Home through X,XXX Century XX% ago. to Communities was million. into homes

in second experienced and our higher with these enhancements impacts from sequential to in addition percent able Wade home office see growth to we to we back to Despite quarter the expect regard balance decrease commissions conversion cost continued from revenues of Jurney our In deliveries. result a which the Homes associated impacts, SG&A, through of control of improvement initiatives. of a basis cost as and XX.X% as points, sales improvement achieve the to XX a year, were

efficiencies markets profile on further our on focus profitable position top shareholder to growth, generate and share liquidity and in within enhanced driving our continues homes gaining profile. legacy team closing Wade selected bottom to generate SG&A, and Jurney to returns, country, while for national consistent sense our our our gross our our reducing business, Homes lot greater evaluating where it Our maintaining and margin carefully our sheet, the leverage building in balance makes substantial debt current our line businesses deepening improving across strength and improving and presence and investments accretive

value We our past our upon for priorities achievements. believe we as combination help the of us core will shareholders, and further generate profitability build these

We have focus. business focused model that we intend continue our to demonstrated with and success returns

Our objectives. encouraging situated leaves with visibility to year well year in end, the achieve combined to date our increased us performance XXXX growth

to now over our to to markets like the Rob discuss greater in and call I'd detail. business turn

Rob Francescon

in quarter. buyer Dale, Thank the during business absorption our and by second pace the afternoon, you, recent everyone. good traffic We're and across the encouraged strong uptick

is in buyers throughout our the our positive mentioned, in U.S. our with momentum second rate to confidence progressed, growth, and economies economy supports the of should the growth which to along bode translating wage quarter June to we July. a Dale contracts into job building net markets, local market buyer in half with the economic especially of business, housing environment the home as the reduced our improvement As traffic for as overall well the in growth and continuing into This move back return interest business. along influenced continue current year. state to with

of level, local business. capitalizing buyer preferences, are and our open especially additional to improvement designs XX% communities appealing tailored this entry on We at market we approximately represents the our as with amenities which

of continued parcels of quarter, quarter We we attractive additional requirements. land U.S. in many second home excess in land XX,XXX the lots the meet source to most markets. disciplined that inventory our underwriting building During robust with the ended

to controlled accelerate split We owned continue to and a to scale, XX-XX flexibility. our preserving lots target financial while close

the recent out scheduled further in benefited Starting the deliveries impact And of to our in all of looking West regions year-over-year increased year. of communities driven communities throughout new with markets our has region our The by and count. Now most net XX%, detail. in have months. we additional the open XX%, increase by region, this of at balance new a contracts XX% by community

among the platform, we areas within priced which markets on market, buyer geographic spectrum generally a particular the the focus in homes pace. strong West level our our of offer the lower certain has are resulted in of price and higher end absorption at still Although, entry a

demand and positive Mountain Salt remains Lake in local our by buyer Denver, City at region, Las economies. healthy driven Vegas Looking

While and opened contributing quarters. a late be the fourth to they in number new of communities third quarter, results in the will

end. we to contracts of the new year throughout this during new XX affect Additionally, the in will open communities year, positively region expect net which our the balance

the performance a the a extremely In XX% Texas, fourth point in to for be region, to absorption increase expect but in and contracts and communities additional net our XX% positive closed in results out locations price in generate and attractive We to primarily Austin in helping of strong lower open region in by driven Houston, third recently pace. several this quarters. new continue five communities improvement

In especially entry markets, the level Southeast points. price Nashville, at region, to all Charlotte continue and Atlanta, be attractive

due primarily delayed have slowed to closings Our sales and openings. community

which However, possibly we in quarters’ will to quarter, this results. impact communities third our upcoming expect eight in open the new region

In Michigan. into states Jurney Homes as our Iowa asset and we Wade during experienced quarter, positive light the expanded we of business, operations the momentum

last to Jurney we line. light resources into invest mentioned entry quarter, level we continue As and Homes asset business capital Wade

that as Our will continue and to largely office from of and integration planned processes conversion, by including enhanced Carolina office procedures of the North anticipate the implementation completed systems, the quarter. are back Atlanta initiatives be the end relocation our we third progressing and to

go land sheet second confidence the overall enter position. of with company. a quarter we and momentum, balance during our direction positions, half are In our and second pleased XXXX summary, in market positive We our with of strong the solid forward progress the

I who results greater provide will on outlook. our call detail the turn and financial Dave, now over to will

David Messenger

Rob. you, Thank

per During $X.XX associated will and in the quarter was million, detail per bonds, second of refinancing diluted income difference quarter in the long with term the more for transaction $XX.X discuss diluted XXXX, I costs our or a share net share, the income to of being adjusted or the million, was $X.XX which primarily due moment. our with net $XX.X

revenues in $XXX.X of in to the the prior prices for second quarter delivered was expand XX% in homes of XXXX year the XX% for with $XXX.X by as year entry consistent prior of the driven revenues to This quarter increase sales home million, our quarter. expectations improvement level Home an of million in $XXX,XXX our quarter mainly deliveries X,XXX. was homes. Average increase to we compared compared were continue offerings second to selling $XXX,XXX,

percentage quarter to the Adjusted prior gross prior higher XX.X% mix year year compared compared was the the for Gross and quarter. to XX.X% margin incentives was margin second primarily homebuilding less in product due favorable XX.X%, quarter. to

highest. when homes second at March quarter our Looking prior our the period sold majority of a closings, were were significant a to at their XXXX XX, incentives

improved XX margins gross June usage of gross profile year nearly sales X,XXX our of the as trend an margin incentives and the homes, continued through declined. on expect new has to we have upwards In the remainder to backlog of

relocation significantly completed Homes and one-time still the be mainly XX.X% the first costs, the prior on related back to homebuilding revenues year while was integration third and SG&A the by percent to due litigation Wade XX.X% track compared office quarter. second other to as certain of substantially higher than costs in quarter, conversion, are which end settlements quarter, better of in Jurney quarter, the a SG&A was to modestly

through to to the initiatives incur of Wade year. expect costs Jurney Homes the related We balance the

generated result declining primary pretax basis, XXXX, margin the the continue on $X.X one In to contributed million our difference the and year-over-year. businesses as driven with a prior SG&A costs. The percent focus quarter of financial by we services in even these year-over-year with environment. improvement $X.X our XX% revenue $X.X our quarter rate business year expect an in as revenues homebuilding in one-time items up Reducing compared the remains of of compression second income a of million million to a

our liquidity. Now balance turning and to sheet

issuance quarter, X.XXX% to bonds million with the on In refinanced million improved bonds transaction. million our to to related the with rate incurred XXXX a we the prepaid. compared on of the During bonds being $XXX we $XX.X due XXXX. conjunction X.XX% The prepayment, charges $XXX new one-time the

including our $XX XX, $X.X had of $XXX billion As of the of total XX, unsecured $XXX debt With our of cash we process at net million million, stockholders’ and and June million at on buildup of due of capital equity, typical capacity land seasonal debt to XXXX, to revolver. long term investments. $XXX of certain working June with ratio net liquidity XX.X% stood million total homebuilding

leverage key year continue one is homebuilding As debt of net by our Dale in expect our upper profile improving ratio our net be and to to areas range we end. capital mentioned, focus the XX% to

continue Given an range and and to in billion. our compared XXXX. X,XXX in XX% of to incur year to confidence we we In homes of tax full $X.X in the to continued revenues are year-to-date We regard increasing our for now in range the approximately sales be outlook. to $X.X XXXX, expect XXXX to expect our performance strategy, delivery rate our billion of XX.X% X,XXX to income tax home rate to strong be

business expect we full of We national footprint. across pleased are earnings for our closing, of growth in another our very prospects year remain the continue our to further with In direction and confident diverse Jurney improvement national progress on our in coming Homes look expanding markets. through our legacy our We while and deepening by forward scale to current quarters. positions in Wade driving our you efficiencies updating business

open please the questions. lines Operator, for

Operator

you. Thank

your question-and-answer question question. JPMorgan. the be comes of session. Our with conducting proceed Michael Instructions] first Rehaut with from Please a line We will [Operator now

Michael Rehaut

the afternoon results. everyone. on Congrats Good Thanks. all

and I little the kind improve some specifically you comments, guidance around that’s of backlog. on question had margins, in have on what First I believe said to gross based was part you of directionally, in where expect bit your you a it

something the been magnitude have a trying positive, reported sense say from XX declined have level maybe think to that order most degree to of let’s also I reasonable there, improvement, in just of get minus that or Is expectation points XX I pointed has but that moderate basis anywhere have your builders for moderate, business? a sequentially. already – incentives given of kind relatively the So modest And the of of to mean, plus modest.

David Messenger

backlog say the Yes. at Mike, at that, I and our in is this for looking looking where Dave. are year. we would

year, on we’re XX% XX% a the and For of of first kind basis XX.X% at forecasting the half an range. we’re to adjusted

So to see aligned. not improvement how is saying mentioned, is in our look shape that we’re sequential at you the to margin ranges going – Though somewhere those backlog up. you starting

we still incentives to good. take We the of XX% before, than XX% is have less range

Michael Rehaut

I Dave. XX% the thanks be full specifically. to XX% And need on that, year back or the clarify would the for for to half

David Messenger

That’s the for year. full

Michael Rehaut

Okay.

reiteration from before. So that’s also kind of a

David Messenger

Correct.

Michael Rehaut

guess, picture to Rob or bigger hear your I just secondly, love Okay. maybe thoughts. Dale,

regions and is M&A, give thoughts? And into your assume that want of other expand the your get you didn’t years that and focused priorities, from sure, bigger a deepening where Obviously, that more a a with Jurney you current have you M&A lot footprint of sense can footprints be expanding potentially step your continue to how on in that, different on us I of have evaluate investments. geographic areas. see are? mean, Wade – a again does taking back of would areas. and a current to part I’m couple you front. even kind a you as I Just your ago you fits and of continue Or part existing you M&A And in reference a to

Dale Francescon

Mike, Sure. is this Dale.

as on within Jurney within existing our Homes. is markets well Wade focus the markets primarily Our on additional growing and as growing existing

On side, opportunistic. I remain we M&A the mean,

We at deals look presented. continue they’re to as

our our I a individual than in in, new I they’re them would look our in appealing all with think each of in I Wade on we’re all But But of to guess that terms them, weight business. in depends all we market ones transaction. and room would market. – growing say, of them. focus, Homes markets performing existing if well, In be our could Jurney how it’s really growing on ones it the terms markets existing and at We more we’re currently that have we happy in grow day-to-day probably

Michael Rehaut

mean, you’re operating should not going your X,XXX could, XX would it perspective, Wade if a off that XXXX, of – today’s Jurney, that say triple homes I last as – if look just in XXXX, given or expanding one areas quick think in. let’s if of think with you one, how mean, I should And A how I states years couple segment? the about cetera. base, the size you’re about that at obviously, last et has, as number, we rapidly from we that, closed double obviously out, presume months, I in you’ve to

Dale Francescon

support and we’ve whole some the fair of remarks of as of quite our time terms support of that Jurney of prepared part And a the costs a Well, back as we building the have purpose amount additional many to for Historically, we’ve we’re based think very scattered Homes growth subdivisions in we look has see. the expand as or the of been model Jurney on in room cases. we even it, well is already Wade lots that that each to markets When really geographically what Homes. money doing bit Wade that we of SG&A been We’ve with spent in. and office small we indicated in some incurred. at

more we’ve looking to And and have of initiated on us basis, the subdivision larger communities is it still now of each allows so and purchased market. we option but that, rolling one out changes each that of out typically get we’re

the a Jurney Wade we big side. focus on that have part And the of so that’s

not that’s just focus a go do we the are I’m our number, to prepared we’re of because and to you forward. that, In terms kind see of where have giving opportunities as

Michael Rehaut

Great. much. Thanks so

Dale Francescon

Sure. you. Thank

Operator

Jay Our proceed McCanless next Wedbush. question. with question comes from of the line Please with your

Jay McCanless

everyone. Hey, good afternoon,

we’re from of talk The could and all trending quantify also first July I the are second end are about July? had, maybe you question where in quarter you seeing where incentives

Dale Francescon

is Jay, Sure. this Dale.

June. on July quarter, and June in terms significant at when the sales talking strongly of two the they pretty and months – backing of a we in up trend. really same on is we mean, So about improvement saw And were slow. just the the I and first quarter, look rebounded

conversion interest look for it little we’re time the we of in at bit more like and when seems that it’s the So into kick dropping, but a in communities, on rates side, taken to seeing more now the buyer sales. traffic

to come the over tell can that really subdivision are. level incentives, general, they’ve of in year, In the I is what terms subdivision they’re down. But sequentially down you of by the where in terms incentives

started I call we on had season. We that too backed think probably then the as as January. tapering incentives spring we in year. to to them we direction. what then February And and the in pick that quickly. we there case right off up have They’re little been selling they’re get we’re in on do point, at want. still we into this each the we our trending them down. that And went our to they’ve we lowest had all said they’re in did And looking at that the But velocity

Jay McCanless

Great to hear.

hold I a are total in don’t percentage question certain communities guys second regions, pricing in pricing or and quantify certain even areas? I like of them had know if the of The terms raise could line you power, you able on to but

Dale Francescon

really there depending If a in broad competition have In competitors general, have ability we down sold would there. at But we the prices market have It could pricing raise looking we’re out even we push to that’s still that a is there’s to have no reduce on power and there’s I the subdivisions, further. products broad prices. we that that on you that – I the board there’s no basis. have have say, we – that individual tell across and/or than ability market to we incentives

Jay McCanless

for thinking Century, can be legacy Got XXXX would us into it. last And this what I’m one give and any year are about community then growth you you the insight just helpful? me, expectations for all’s

David Messenger

Dave. Yes. this Hey is Jay,

size years the don’t how provide – staggered communities. at any has community four little is quarters, selling that guidance. to them but average were years I kind we community we right through got it’s a three XXX count pace. been growth on think about four several think, us ago, work absorption this. XXX of And But taken That over lots, on look number normal Today, years bit a absorptions, on average count we our about ago we’ve I now, doing several three, that today’s past taking XXX approximately about is sized community a our years work through to lots.

a counts in our while region. over is bit but XX just that little communities Mountain flat we taking work community bit by in past we the bigger quarters would’ve But historically. due longer Rob online we’re a bit coming his got to you’ve on So little remarks, consents, the a prepared some as than through to brought several little said

out You’ve coming Texas. so in some we the Coast. in got opened just in the or And another five West quarter second

we So about can. to now as communities more right as allows, we’ll is soon count community feel our where if continue development good open and we

Jay McCanless

in, resolved and there? just – wanting have those in And going you sneak one know it. the what’s South Got been you’re resolved all development I delays, said on some having to guys more

David Messenger

opened and been to variety behind due earlier were now. of infancy of that primarily That’s should They’re opening candidly didn’t really their now several that’s a factors. resolved. Yes, have us up. There in communities

meaningful forward. a on going And so be that’s net hopefully going sales driver to

Jay McCanless

Thanks guys. Great.

David Messenger

Sure.

Dale Francescon

Thanks.

Operator

line Please Maguire from comes Associates. question. & your of Zelman proceed question with next Thomas Our the with

Thomas Maguire

quarter. Hey guys, great this job

quarter-to-quarter, we strong the and redemption behind And in for the that rolled how but the where fixing us? last keep the demand at on get and the growth would the results, just Jurney describe the in skewed that order product, and the the the it quarters the you Wade just know existing of we as can in cycle to to out was just really few side I we’re I sits from both there. saw in over qualitatively, of demand growth is you and in noise business, think out where it the that then the rates new thing Just selling repositioning portion footprint Are construction geographies? point

Dale Francescon

Sure.

Tom, is So Dale. this

to still of through. of the that terms the continuing the timing in to sales, made So change we it’s with work regard

think the when As announced that we indicated, would deliveries, was didn’t sales it impact our we going numbers. it but of we to some impact

yet to that since, so haven’t change, ourselves forward. go of we that we lapped as And have continue we’ll some fully on

we’re around bit of point at with we at you have average imagine, I’m overall, that price price $XXX,XXX. a demand. an quite But sure the of as point can

markets. of continue business also business, so – an as on we basically Century Century function business, on we’re we that that’s two positive really look on. at overall particularly but But were we’re it the we And that and were very positioning. where our a to break business just – positive the just that’s manage When out, we that grow we you were area it’s of you flat if if -- year-over-year,

resolved talked Every strength Vegas. with our we here more of in in we’ve we reflection Vegas. the to but of about, a Rob the count. opening thing reason up the not exception had, Southeast, those still few is and community market issues quarter. markets Las reflection happened of only there, that quite get open. in And development the just a that And communities are Las we’re lot had but we need of two Same were had divisions, Atlanta down third our one of the year-over-year got a We’ve as

have didn’t doing have on longer of And of done that communities we We where closed site. Wade and on one and that’s Homes growing we’ve so we’re also runway. Century the is in, side the Jurney the we’re a one in of the found now And open. that the that positioning subdivisions had that changes we’ve size position focuses ourselves certain the we communities had new we out a

selling count that community as much even our length in would be will number a we opportunities that the gated. within to a our community though as of going the be grow have community long is like, and we So made a

Thomas Maguire

just And are was acquisitions Got that that in but basis? heavy about are still of a point the got terms at And But consolidate can a back talk transaction we scale benefit of be just an scale in of it us there. on a where are course biggest maybe know getting guess in you surprise, just you – of just you we is more to in with what’s comfortable where go M&A of of and lifting, business? take it. the would just where really That then say higher tipping prior Can sense it’s of I makes the we’re we The normal terms ton helpful. to to already the here question, level. where done organic guess M&A the so in been needed in the overall I And to today? think company land the their piece story? a focus this be I to Century

Rob Francescon

was acquisition grow, Well, we going opportunistic. focus we ago really it’s And that years when were our public five went to we did. which primarily still by

to the us. behind The transaction, those of all transaction the will integrations here fully be going integrated of Homes Jurney Jurney according Everything’s plan. shortly. With are are Wade Wade exception

another opportunistic. on taking We’re really is it very and comfortable acquisition

our of small were we Even very a number transactions the that fraction are in of done done ones just we’ve opportunistic. the past, part we’ve focus, that still even at. big we a the of looked all was The that ones that though really

standards along, hesitate to in So forward pretty terms wouldn’t we one on an the those of in move of, have what came we’re attributes acquisition. for it. looking high we But of if

Thomas Maguire

a Have great Got it. Thanks. afternoon.

Rob Francescon

Thank you.

Operator

comes Alex Rygiel with of question. B. proceed your the Riley with next Our line Please from FBR. question

Alex Rygiel

Thanks. Good afternoon, gentlemen.

Rob Francescon

Hey, Alex.

Alex Rygiel

even With see of entry transition the going mix do being continuing such continue Wade the you business your that more so growth to this level? the Jurney kind is towards in strong, so of

Rob Francescon

most affordability faces. and for we market do. really overall that’s view And it’s And homebuilding think challenges I just We one is of is, at challenge – look the a the industry of the our people. when

when that Jurney we’re that on homes we a And brand. to think grow so that’s resources. have And point of Wade tremendous can lot at the the continue a model, and where deliver our price do to we that time, opportunity energy we we spending business

Alex Rygiel

down price point with out, ASPs that higher So next well? homes the Or trending or over hold think as such about going price time? stay over to the ASPs playing so that are year their should we flattish

David Messenger

that I ASP, think, given it our dollars thousand an as we’re year look right an turned from – $XXX,XXX surprise current of that you wouldn’t now, direction, reasonable backlog a either at us. around the it having when a mix if couple out having think, business. us, I range somewhere at $XXX,XXX now $XXX,XXX, is But ASP for

Alex Rygiel

that performance But play suspect or at stayed we two. And might of this to sort characterize due or as guidance? improvement if it July. and relates maybe quarter of benchmark for of it I What to strong June end. the another your in guidance, you low obviously with raised was pace the kind out

David Messenger

a see we’re come, across home be demand we – markets at fall, continue to eight to at November had accordingly. with bit and strong we’d I the Well, more I think end think environment we left time looking water to when have – guidance improving by we our you’d at that we’d our the see seeing that call still But little into us the continue an third our time bridge if under fine a have the it make adjusting early tuning in of at go be those and October, decisions. that, to call weeks the building year, we quarter look

Alex Rygiel

costs material pressure in relief any or new And lastly, or labor?

David Messenger

think, well nothing But fairly we we profile is material the pricing. necessarily. and red margin that had is quarter, Not standing be while increases, with seem offset as they now. lumber our to had raising what Right look second I out some right we’ve now, in a at flag

Alex Rygiel

you Thank Great. much. very

David Messenger

Thanks.

Operator

of with comes Research Our question. next from with your Center. Please Alex Housing Barron the question proceed line

Alex Barron

in a focus on Jurney. little Thanks and quarter. Yes. to congrats bit wanted guys on Wade the I

here hadn’t kind I’m but of the out operates attention, looks only that and it I it was I southeast year states, am am maybe website XX So much I like in it of your and as wrong wrong, on just a ago? paid

Dale Francescon

Homes second Alex. Wade acquired Yes, then half. we we that’s did our venture first with right, the when When and Jurney joint

During then of outside at we we of into time that of areas. balance business, Midwest. we additional price that Arizona, those expanded, in during this it, at in the this to was states have were point, June with frame, where had we it southeast. year, year operate model. of And that, comfortable point we which And But And process at of subsequent at look that, now us we’re last we’re business markets that very into the June closings all in the closings when the to acquired going when had the for last in are any planning allows various hadn’t Texas.

Alex Barron

guys in I see Phoenix was activity didn’t so Yes. on week Actually, were visiting a guess, of and in pretty was those. I impressive communities these you ago in I I But got to you markets. of many level other going out many the Jurney Wade realize

homes costs I or of a you be such kind areas finding in is low lots lots to operating kind developing own to keeping you’re the how this the you out price at of that basically great guys you low, these out offer guess of are points? able out still if distressed further opportunity, So are are your or

Dale Francescon

some It’s markets distressed I mean for are lots there they’re and lots cases other both. in we a in combination are of developing – have that us. developers really, it’s

combination. So it’s a really

don’t a that go we’re there’s on We forward, to markets expect in we for business that develop in there’s As are us. will develop available them be but lots balance developed – percentage sheet the that our line, we us. this the larger them developers for of in, fully

Alex Barron

And at guess about as I are the day, company of the same the end the margins average? your

Dale Francescon

We an the year the XXXX XX%, overall included be for of for They’re range XXXX in first the half year – basis. would in we numbers. included were XXXX to Yes. XX.X% and adjusted in those the had on over of our margins

Alex Barron

Got it.

queue. job. Great the Thanks. in Okay. Well I’ll get back

Dale Francescon

Thanks.

Operator

is question. Our Michael question from Please with question with follow-up next JPMorgan. proceed your a Rehaut

Michael Rehaut

guys. Thanks

if couple Just a circle little fewer detail. back could get – I wanted and to earlier try questions and to more see

and community different of a said, amount comments of the about you community five fact expecting openings count, of working the your believe new on I and off kind good XX in before the you are First that regions.

should Just terms expecting talked that triangulate of number. in seems that growth level I at the you try net on a quarter, like like we of some perhaps, think you year. getting It to at of end might earlier, XXX where end it might’ve about any of sense be But basis. last holding seems the

closings, pipe community. that have of lot given of a given number of bigger think size per me have number the You not a similar you’re openings, particularly to going length kind the leads it to or longer

So half thinking wanted if XXX? make about just the the back of be I’m to sure should that in that some off there right, growth

David Messenger

out throughout close June if when Yes. second Mike, XX of our going this from we’re the is to we’re March the we were our XX flat at country. inside you it’s all counts XX. on and us to about for flat that forecast But closing communities But I difficult number, to community quarter, Dave. opening relatively look that, communities. say would

So the flat. portfolio ended up

while fourth going of year, the aren’t talking communities number we the now that right out. we’re forecasting, about up in opening new are So third close we thing this quarters that to and one

going can’t to to it’s be. out So expect we will out number some. we’ll of tell close if you close I But whatever

Michael Rehaut

you a guess little that slow, on being the strong secondly, also having I Okay. bit, as around just June. then believe in rebound detail more comments and May, I characterize April, hopefully

a if region, a lower of did out, How You June. a are Jurney about kind maybe about we sense in quarter. regions that? of number. Wade can XX Are up us XX% really number if zero accelerated give there certain I the you that then and the the by think that something or or couple lights second talking in growth Or type to should that did over much in just months you order first

more about you versus magnitude bit when get of rebounding trying a strongly. talk to degree Just little slow of

Dale Francescon

our having saw started Well, improvement much. June really April into we was Homes of in as where in when re-engaging sales year-over-year when we certainly the in is started But was the terms there we It were in of came other that May, there of and we – our significant it got and of buyers across terms terms all and look regions in Jurney kind But it Wade board. also improvement. business. of really wasn’t saw growth our at we

with in minds, the started homes. and to out home of rates started they buyers resonating coming buy So really lower reflection it was back interest our a

Michael Rehaut

you. Thank Great.

Dale Francescon

Sure.

Operator

Please question with question Jay next Our Wedbush. follow-up with of from a line proceed the is your question. McCanless

Jay McCanless

my taking for follow-up. Thanks

how next are Just ask closings quarters? to in absorption think to and couple fairly or for XQ wanted XQ, the similar number expecting about of be guys we should those with backlog you

David Messenger

margin I can – of our historical what model. backlog you what get kind look what a was at sense of year our the to think last

I somewhere year somewhere were number the around The third was XX% fourth quarter number. around it’s and think then – last quarter XX% XX%,

Jay McCanless

Great. Thanks again.

Operator

with question follow-up Barron Center. line next of with is from the Alex question. a your Our Please Housing Research question proceed

Alex Barron

for my follow-up. you Thank taking

point the trending and affordable” of say So how about other for see be of to on elaborate time changing? you goes all within markets? to kind kind aiming Jurney going heard you “more Are is of But the would minute, mix you price the guys can do $XXX,XXX Dave, be product price be that? how Or you Wade we exclude point if I as a kind the by.

David Messenger

Yes.

Alex, I think this David. – is

in that the for Even in markets point, points at we’re to I be price look the the $XXX,XXX. If try some you west it’s – believe the just in or markets look the a you out in, definitely of coast. we point price tick higher average on those Century affordable the And price markets. across under

overall our finance You of portfolio, be vehicle for look for at XX% qualifying your entry an choice buyer. level typically of loans, which FHA it’s would

$XXX,XXX play see entry level in. $XXX,XXX Century so in or to that we’re versus is point price Jurney, And the while you’ll price point for Wade continue $XXX,XXX in the markets that

Alex Barron

Got it.

a Thanks Okay. lot.

Operator

are questions to to for I’d like the comments. closing back further management hand in There queue. no the call

Dale Francescon

us forward you Thank to again with for next you, look you to thank again operator, on call. everyone We speaking and today’s quarter. joining

Operator

this you participation. your for conclude Thank today’s Ladies teleconference. gentlemen, does and

You wonderful a and may disconnect have lines your time at this day.

Century Communities (CCS) 30 Jul 192019 Q2 Earnings call transcript