CCS - Earnings call transcript Q1 2024 | Century Communities, Inc.

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Operator

Good day, and welcome to the Century Communities First Quarter Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Tyler Langton. Please go ahead, sir.

Tyler Langton

afternoon. Good joining First Century Quarter for Call Earnings today the for XXXX. us you Communities for Conference Thank

found Before and under the in the heading may to forward-looking actual Certain call uncertainties current from of everyone These that can the risks described risks begins, are differ be latest expectations I would XX-Q statements statements in as that to during or materially implied Factors like and made filings. and and are those this a on uncertainties results call based XX-K, other constitute to subject duty forward-looking supplemented the update no our of statements. certain Risk statements. statements. forward-looking latest management's SEC these company's undertake to number our We remind cause could by

non-GAAP call. conference information not isolation Additionally, the substitute on will information The to for company's measures or be certain discussed is with of GAAP. considered in in accordance this a intended be this financial as presented presentation financial

today Executive are Co-Chief Co-Chief Officer; and Executive Dale Officer. Dixon, Chairman Chief Francescon, Francescon, call and Financial and Rob Interim President; Officer the Scott Hosting

prepared the up Following we'll line questions. for remarks, today's open

I'll call to that, over With Dale. the turn

Dale Francescon

driving was responsibilities the good and and most Thank you, and back our planning risk call. Chief Financial have recently and treasury, the over to Chief Assistant I start, Financial to Officer. accounting, XXXX Scott want our his everyone. Tyler, played Scott overseeing management afternoon, Dixon, To welcome Officer, Interim Century our Scott growth has in joined analysis. in XX-plus role included years. key past a And direct financial

to quarter. Turning the

quarter of period including quarter with pleased level an X,XXX first of deliveries second highest prior and year in We our first history. the homes, versus company's are results, deliveries XX% of the very our increase

versus $X.XX prior diluted quarter first XXX%. revenues share increased earnings and of per XX% year $XXX by adjusted increased period, by of the Our million our

affordable our resale new markets. for demand in our strong see to inventories low homes continued have We and

year-over-year and XXXX. of Our net contracts quarter quarter versus first XX% new by increased XX% the by fourth X,XXX homes

Our orders first each X in in basis levels. orders are overall with of and first our quarter weeks increased on the of consistent a quarter first April sequential the month

also a quarter Mountain first improvement XX% at XXXX with net We year absorption our in versus quarter regions the absorptions segments the averaging and of in our period X.X XX%, XXXX. year-over-year posting in meaningful a experienced and respectively. gains X.X our On the Southeast orders rates monthly ago fourth and strongest basis, across increased with all the X.X

when has While incentives to seeing us rate we adjust our level our provide through of higher incentives. buydowns enabled reduce continue platform, across rates which buyers necessary, to to we interest are

on target range affordability our priced deliveries success potential the buyers. us widest limits. positions quarter, In first future and home Our the we were growth below continued well focus can than as for more of XX% of FHA

homes generally our our average remains traded on of with built Our a our basis. to healthy the move-in XXX% nearly and In supply that maintain publicly our the lowest of approach our the the price starts and provide among we are first This quarter, sales homes, demand sales appropriate of costs, we homebuyers spec $XXX,XXX matched financing homebuilders. meet certainty allows control seeing an us of with of our in quick markets.

team HOME highest inclusion deliver believe who members partners this to of second row, selected our year trade list on of as that the FOR homebuilder is unwavering a America's highlight and for was we DREAM. want ranked In Century and in testament on Most A the consistently Companies Trustworthy Newsweek's closing, dedication list a to I recently EVERY the our

with homes work company and consistently buying around culture a ethic pairing affordable built experience. quality, entire best-in-class is Our home

second the for recognition this receive to a year honored row. in deeply we're So

I'll now position to call detail. more over operations land turn Rob discuss our in the and to

Robert Francescon

Thank you, and good everyone. afternoon, Dale,

able new the XXX strong XXXX. first points fourth from we roughly the the over quarter our XXXX homes, our in a closed for demand XXX are reduce to incentives on basis points to basis quarter in Given homes of little

we've As buyer. customers of our with focus fourth past, the our year buydowns their remain payments, the be quarter FICO healthy continue scores quarter, significantly the In levels and consistent in to ability XXXX. from discussed incentive the important a for and interest key most to monthly our rate the first for full given homebuyers lower entry-level

On continued wide a cost had range started. also basis, in saw categories we a the reduction controlling our X% We in we success direct on in of quarter. further sequential first construction a the costs our homes across

these even reductions footprint. housing expanding have across in achieve by and both the and able supply to trade market continued the base national our strength with We been our leveraging

the X- back remained During XXXX. historical half the of to quarter, after in the returned first X-month cycle to these pre-COVID our times time in having averages frame

quarter was by relatively of past accounted ended our lots, increase. first and approximately of front, with static total lots quarter in a land control driven our year-over-year lot the basis the years. the controlled year-over-year increase number lots over for higher first our owned XX% in on X On the we owned XX% count with remaining an a The XX,XXX which lots,

XX% benefiting grow and Texas our Additionally, up to lot and markets for XX% in roughly attractive the growth. strategy are end that and year of the total relative the strong affordability, our reflective of quarter, presence of Southeast ago these our at the in from population from count, employment first accounted period

and of Combined controlled with Century Complete, land these supply. comprise XX% more owned affordable markets over our

of the acquiring markets, across land-light is that Texas Southeast, third-party of strategy all the developers Century finished relationships focused further in and Complete Additionally, possible. where on our land support strength lots with our

our XX% ago of and count total for while every of the quarter year an company's over for We combined versus ended Texas community close the first we in experiencing count the first Southeast with history accounted XX%. with in, the a Century and growth. Complete our quarter community accounted increase operate to highest X% levels level region XXX, in

quarter, opened a communities we and the closed of During XX total XX.

first than better-than-expected deliveries. of level planned closed quarter communities out and the our in We a originally sales of to number great due also

continue the for half with to the expect community as weighted start second XXXX, heavily year of growth full towards online. year the increases the We more to count see come more new to communities

I'll to call in Scott results over detail. now discuss turn the our financial to more

John Dixon

Thank you, Rob.

adjusted or pretax respective income share, XXX% year-over-year and increase. EBITDA a per both $XX.X During a million, first Adjusted diluted quarter income ago diluted was and of or share, over million was deliveries the million XX% first per million, increases of $X.XX $XX.X average for year-over-year and quarter sales year XXXX, the net versus million XXX% was on increase. million higher $XXX.X levels. $XXX net XX% was $X $XX.X the for $XXX.X was the quarter XX% prior price. up year quarter Revenues and EBITDA were income

of $XXX,XXX fourth the and sales accounted increased by price to first X% basis, average for levels sequential quarter Century Our XX% of XX% in mix, quarter of Complete incentives on XXXX. a due as quarter first the in versus lower mainly deliveries

growth growth this expand with versus by the homes period. Southeast the rate year-over-year region. Our in to highest the of saw our continue We deliveries year of we all regions XX% as across presence prior attractive XX% our increased experiencing X,XXX

for deliveries remaining the are sequential see our and growth quarters expect We over XXXX. to with pleased the to the of year strong start

compared was sold of valued $XXX,XXX. our the our fourth increase backlog the the with first At end of quarter quarter price to average backlog of at end, average an XXXX units mix. also homes The largely price million to in quarter of was X,XXX $XXX due sales at of

the in XXXX, with percentage estimated full towards levels. to deliveries XXXX quarter to to backlog and first we expect our region for by more weighted this be the roughly year higher-priced regions, deliveries While broadly were trend the reverse similar of

the between was year We the sales to $XXX,XXX. currently margin first gross percentage average homebuilding XXXX. first XX.X% XX.X% quarter XXXX in and margin prior compared range gross compared to expect to was in price quarter, of XX.X% year adjusted quarter. the our XX.X% the Homebuilding $XXX,XXX full In for

basis. first flat Our in were a roughly sequential gross the margins on quarter

this tailwind that Landmark of from was offset accounting While and acquisition completed lower incentives, Homes in purchase mix benefited margins of generally price we sequential adjustments our from January. by Tennessee

of XX.X% in the first year-over-year of year. drivers and deliveries compared prior The of focus XX.X% levels higher our largest the a a in to SG&A this percentage controlling quarter on was as revenue fixed sales levels G&A. decrease home were our of

our as fixed $X.X deliveries the percentage For and constant. expect basis grow other included our of XXXX, we Other a million, which on year-over-year a home in as decline keep G&A we million noncore was to expense on look quarter $X.X a relatively impairment to of levels investments. SG&A revenue sales

quarter. our compared quarter, first to in XX.X% the year XX.X% rate In was the prior tax

for year full to our expect We roughly tax rate be XXXX XX%.

fourth starts heading was The homebuilding capital the increased to debt net to change XX.X%. net quarter of XXXX ratio Our compared by was levels season. driven XX.X% selling spring into

Our homebuilding the quarter to compared as fourth XX.X% of ratio debt to of end capital end decreased XXXX. XX.X% to quarter at the

by of record equity, During value common million $X.XX per liquidity XXX,XXX our repurchased $XXX to XX% $X.X increase. stockholders' billion total book dividend and billion $XX.XX, share quarterly quarter the per year-over-year our grew million a cash $XX.X with cash. XX% ended to increased quarter, a for $X we shares share, in in stock and We the our in

April revolving XXXX. credit $XXX facility borrowings no had our we until that XX, does March At mature unsecured outstanding not on million

have we providing maturities us leverage debt flexibility ample no XXXX, until senior our of Additionally, June management. with

that market Even the turning billion, home interest to deliveries and in the our to uncertainty on of XX,XXX around guidance we positive are year billion of in Now be exists for housing guidance. range and XX,XXX outlook full $X.X the our the $X.X rates. XXXX maintaining business, sales to revenue to be with given to our range homes our

our are the we closing, year. strong encouraged with to start In

solid our count demand we'll a are and footprint, on and across year-over-year grow times basis. managing costs both deliveries are We and cycle seeing our successfully our community

the that, questions. Operator? open With line for I'll

Operator

come [Operator from And will first Carl Instructions] question Reichardt with your BTIG.

Carl Reichardt

a the the the a grow I'm I on bottom confused just sequentially, end the by of of at you the end if mean year. you're guide. little deliveries little guide

business and It -- your fairly high. April in extremely rate already clearly, like is got conversion sounds trending. well. And backlog you've So

rates. So the interest ] expecting -- help me I you're [ not of guide, low here understand higher least much you're give raising unless why from certainly end the at rates, but don't again catastrophic

Dale Francescon

strictly of go. knowing a not be to are it's function trying where rates to conservative, Carl, going

rate year. started expected the to the As we during year, see we out significant cuts

seems in to somewhat question. that Now be

I we look future, the happen what positive, anticipate to but going it's as to when what's So now unfolds. we're just the seeing year right at mean, pretty hard is

so changing reason the not for And guidance. that's

Carl Reichardt

the understand I Okay. certainly uncertainty.

lots think, third-party And you relationships year-over-year. of flat count added developed I developers kept You've lot with to and are mentioned, key fairly your own lot a you. your that

questions. So X

you going do versus to then when that today, that contract are they with market under average? what be putting on anticipate you're market option lots built lots to later lots be to your you higher developers are of third-party coming yourself will on bring the and to develop margins? at On ready percentage And potentially second,

Robert Francescon

position part, various control we to have range that business on, full even from On development for the we're that third-party a structures. this those lots be to and in lots developer. develop to bringing us could the They where year's them lots first on putting finished those accretive have everywhere deals

So Obviously, though, have to you board, is imagine. finished they more the just desire lots. across can range if our

create everywhere reminder, that only lots the on buy And communities more buys we we're trying to the approach. and brand, a Complete Century finished model capital-efficient landline can finished lots. that As

the third-party develop previously, in ourselves the The us. something developers, markets that that question, our that that but that's we second Communities in of develop regarding addition second percentage part brand not disclosed we question, to your developers third-party have of all do in are for

brand, developers be those on lots. Century So third-party Complete that developing the finished XXX% would

developers. Communities along the brand, we On third-party with develop

Operator

Rygiel question next with Riley. Alex The from B. will come

Alexander Rygiel

Very again. quarter nice

you decline does the second that into could look appear sequentially? As again it quarter, incentives

John Dixon

good Yes. Alex, very question.

of of said with of additional the are that environment optimistic Certainly, a prepared some I first the the the QX. don't mortgage in had itself I got of over we we'll reduce remarks, evaluating. the as that of know terms terms volatility pricing the looking amount additional Certainly, able in line plays of item. optimism we power out little at being in last that that to weeks, we're there's be that incentives significant rest think rates rate incentive on as we our quarter the something we on in few into year is standpoint bit into the our

Alexander Rygiel

and about That the relates year, everything helpful. guidance maybe think -- is incentives? and provide we talk else as margins then remainder gross about sort sort in And for tailwinds as some your headwinds it you of of can the to of the directional

John Dixon

Yes, absolutely.

low first kind the margins saw of you through low and in with XX% margins gross when that that quarter come range. think I GAAP

of not our future. structure, we're cost As immediate in looking the significant we're cost over terms out seeing pressures a

So from going Certainly, guide as an there that standpoint into tailwinds a on margin kind or quarter us from for first mortgage about right it ASPs. perspective feels here a immediate future initial headwinds some of future. it from can the -- incentive be impacts from the

final really off pretty the the item first other our for XX out the The We do of QX some on little Landmark similar in we we as completed bit year. as to basis a half that here drag a drag that point back margins. within to about a purchase that and is quarter anticipate have acquisition falling be January. would well of QX call here the we quarter by It's accounting from related it would

Operator

The Associates. question with Lederman Zelman from come next Jesse will &

Jesse Lederman

Congrats strong the on quarter.

on is one conversion. First backlog

fell given to presumably sell deliver your Complete conversion, of high your homes same backlog So deliveries XX% Century sequentially percentage the and That XX%. a from percentage said, you quarter. in the high of

somewhat is, just question timing? qualification home the cetera? Or for demand that of Complete that affordability a testament to et is Century that issues, So or issues, is maybe

John Dixon

It's Yes. management quarter through. fair Thanks team amount spent -- the Jesse. good as played question, our as at a as a of really something It's for looking question. the itself time a we

a perspective from We and just that of where pretty were as factor year our of bit backlog lot of And quarter. from units little this a from as quarter, in prepared intra overall a little of A at we towards was on we the ourselves over obviously of So a were to done from We trend anticipate Century lighter percentage the that more into backlog this a were bit mix. of well that of quarter further within Complete demand I conversion the bit in last the percentage construction. our deliveries we XXXX as We along experience the our then all it -- remarks. a stage was little with a conversion, we've think a platform historically. XX% did close high year and coming that that our markets the it sell units. mentioned

Jesse Lederman

one that. just But helpful. on That's quick follow-up

pushback the sold any about if constrained percentage see maybe didn't business, you So rest or the percentage in the the prospective Century deliveries the that the Complete particular quarter caused you homes more buyers? buyer affordability maybe are that of concerns quarter relative from or those even to in talk you home affordability of of could

John Dixon

think look mid I you able No. range. the I Complete home in market being mean our to when Century $XXX,XXX bring below to at

one range. strong to additional our incentives time XX% still is on are side time, certainly were XXX%, sales think the buyer side. in needs that or From And -- up while I mortgage we're ASPs the perspective, from we that brand seeing demand. quarter-over-quarter $XXX,XXX Century Complete XXX% on that a some

Jesse Lederman

Great. question. One last

great done acquiring last job quarters. several a the over You've lots

mostly XX% count As know, lot with balance you up off sheet your year-over-year.

years capital was along just shares buybacks highest allocation to a which $XX capital first list? noticed in third turning priorities, you in on year. couple does bought of priority fit where So last that among quarter, of the I back allocation million quarter about your the share with

the about buybacks share talk can you maybe So bit. little a

John Dixon

back putting a and business. And allocation obviously absolutely. number our Yes, priority our the kind of perspective, a from question from larger one just into capital is capital

from seen the in return that best that quarter. owned quite share. certainly the that's currently Other we're from have shareholders. $X.XX That's dividend positions, a us previous we and quarterly about pretty that, than is our growing XX% bought a -- controlled we're frankly, our you've markets think As and optimistic at dividend the up

So allocations. that plays into our capital itself

obviously, do It buyback And Board shares us million program. have our a during saw the still is over then from perspective, something, underneath quarter. we authorized X you

to specific see structured no will But it's extent we a we buybacks to compared that or take dislocation at. guidance something the I the on our the book program within that currently. look think price, market

Operator

McCanless will from with question Jay next The Wedbush. come

James McCanless

closings could used mortgage first percentage quarter rate had, guess that of one customers I first you a your the I in what about were the talk buydown?

John Dixon

but a in that that's specific a XX%. past, substantial over Yes. Jay, not the number it's disclosed majority. we've It's

James McCanless

this And then us that's to year we've competitors 'XX land start income could more heard rising costs to to seeing and think be higher I guess you the you out play costs. how about maybe when costs or to be thing a land statement? to for going a from a they're that's Century? lot impact development of those 'XX of going rising And thing talk whether your might lot also going

Robert Francescon

Yes.

I think more 'XX it a would of thing. be

relatively I be some flat to little markets starts. projects reductions From an with this hungrier standpoint, people some that. that dependent. the think LD going We're for a competitor type don't year we're on as getting market business that's bit get multifamily in certain have actually

look you certain little a benefit when markets, a it's are we So Other in bit giving at of challenge. markets. that,

And market it's land so LD is a after on is like overall, competitive But everybody the on consolidated land. but to flat right up wanting go side, to again, overall, slightly seems It now. it's dependent. probably basis,

so as of you some growth that, we with bit we've see kind so been little And competitive that competitors. than year-over-year very our a of our [indiscernible] for started early

into that So 'XX. control going that of type position we feels have good a now that

James McCanless

margin anything fairly delivery Or in gross margin, XQ? that then to the once down to is a in could perspective accounting, expect we need more. is or be there going factor be the bit there we little purchase Great. thinking if X we Should the an about? similar could from you we gross talking price XQ incentive And to about Scott, --

John Dixon

I'd in reasonable that's a need that's do Jay, reasonable But expectation. mean, obviously, of, expectation to from rate happens I from sit able we're do to today, an what interest think incentive we what say I or outside a standpoint. mortgage what -- where from we a

Operator

JPMorgan. The Rehaut with next from come Michael question will

Andrew Azzi

on Andrew the ticked dial for push Azzi prices just to in that price the on is outlook Mike. I It average on your wanted widespread quarter. sequentially. on order in to up maybe nicely Congrats ability like and looks environment? this how

Dale Francescon

been lot of mix. A would the by driven have that just

production of lowest because of just earlier, down business, units, we've percentage Complete mentioned carries where we was below normally ASP of Century circumstances which the in terms As our been. the

result, a the that had number homes we Complete a price. Century ASP. overall had result, ASP down sales As that The higher lower of as bigger a brought the closed Century in our the that affected that percentage average Communities

Andrew Azzi

we Got it. growth community I secondly, as any on was explanation. and get go move more granularity then just this we any maybe thoughts I I as into And can that next initial appreciate count hoping if across year? year

John Dixon

absolutely. Yes,

think pretty controlled as to really weighted we our I throughout which is the year, pipeline. own adding being what count consistent we've really remarks, and in as but we said we growth said with back-half our been prepared quarter anticipate last community

compared community current count as up last get excited pipeline, quite think and year. communities be to I to single this really at during up of were of year the XX quarter, fewer which by think digits something it's was bit But first we when kind opened that we to time little on today, we the end our sit the given a which new market we'll about. than -- Closed here was we mid- thing good at look thought, out, obviously frankly, the it demand. from a look the we high the we

Operator

a is BTIG. with Carl question Reichardt follow-up next The from

Carl Reichardt

the mix Just a quarter. shift on this it from Century and bit away Complete

out a expect to it again? of flat of as looking the Century As and to increase from Complete begin we fall to 'XX, 'XX in do here should Or the percentage overall? communities mix you you're expect be or percentage

Dale Francescon

I Century at Complete it, this the few like closings. XX%, Complete would same been to you that just we been has was I we quarter expect had brand, quarters, Century had past just at get XX% that brand. Communities when in than our -- the mean, -- we've we It we're look back we homes of if in levels. overall less our our those what look

Carl Reichardt

Okay.

more So of anomaly. an

great. about can Okay, you then What one, a you you it? bit the did just little noncore talk impaired? it? And impair And last was investment why

John Dixon

perspective had quarter. itself this a Diamond company and every Absolutely. called a at is taking we the of points flush XD look updated printing that data through company. sure. in through Yes, we in Age, went an exercise an investment With And accounting start-up a charge quarter which an

Operator

Instructions] Barrón next Alex question come Our [Operator Housing with Center. from will Research

Alex Barrón

curious lot of incentives. you out Congratulations about commitment. I advantage of of quarter. if ask what on the assuming like take But are buydown guys using some or buyers of percentage form actually buyers I'm I wanted a the to something rate could forward spell was that.

John Dixon

from buyers from Obviously, it's the advantage our our above buyer on really a it's Alex. Absolutely, buyer, incentive. of some mortgage XX% majority, of focusing substantial level home of will pool that first-time take

Alex Barrón

that And offer we momentum that it. I will increase is rates you Or people sales the so keep month, know, market XX of your quarter. happened don't pace Got rates? far XX, going? what's to with the up bps along look you -- Is rate the kind sense last versus as will at guys incentive you up, as this go

Dale Francescon

trended and offering. been basically we're we've we offering that as between has that that similar rate we're have the go keeping so rates rates The a up market seen up spread

Alex Barrón

it's haven't far, much? you sales pace so And noticed whether affected

Robert Francescon

Yes.

So Obviously, month it now, the has yet, right but it has far, over we don't -- not not. not. is

Operator

I would conference turn like question-and-answer over concludes Francescon the for our Mr. back Please go to to closing This Dale any remarks. session. ahead.

Dale Francescon

with our your the look to progress. appreciate call for valued we to to and continued commitment work, investors our continued To our homebuyers. you thank today, everyone on Century and speaking and members, and sharing support quarter team our hard to And operator. you, Thank forward your dedication again you else next

Operator

today's The presentation. concluded. Thank conference you now for attending has

You may disconnect. now

Century Communities (CCS) 24 Apr 242024 Q1 Earnings call transcript