Press Release: Century Communities Reports Record Fourth Quarter and Full Year 2020 Results
Century Communities Reports Record Fourth Quarter and Full Year 2020 Results
- Net Income for the Quarter Increased 72% to a Record $91.8 Million or $2.72 per Diluted Share -
- Net New Home Contracts for the Quarter Increased 45% to 2,566 Homes -
- Home Sales Revenues for the Quarter Increased 22% to a Company Record $946.8 Million -
- EBITDA for the Quarter Increased 87% to a Company Record $144.7 Million -
- Full Year 2020 Revenues Increased 25% to a Company Record $3.2 Billion -
- Full Year Home Deliveries Increased 18% to a Company Record 9,453 Homes -
Century Communities, Inc. (NYSE: CCS), a leading national homebuilder, today announced financial results for its fourth quarter and full year ended December 31, 2020.
Fourth Quarter 2020 Highlights Compared to Fourth Quarter 2019
Dale Francescon, Co-Chief Executive Officer, stated, "Our exceptional performance in the fourth quarter concludes an impressive year, reflecting our ongoing momentum and scale benefits, as we capitalized on vigorous housing market demand trends and achieved fourth quarter and full year records in many categories including net new contracts, home deliveries and home sales revenues, along with the highest quarterly and full year net income in our history. As we continue to increase the penetration within our high-growth markets, we expect to generate further operational efficiencies from our national platform which, coupled with robust price appreciation and continued demand, will drive top-line growth, expanded margins and increased profitability."
Rob Francescon, Co-Chief Executive Officer, said, "We are confident our positive trajectory will continue as not only did our fourth quarter net new contracts increase 45% over last year but we have seen our sales pace accelerate, with December up 54% and January increasing 77%. We are solidly positioned with a backlog of 3,439 sold homes, an increase of 66%, along with nearly 50,000 owned and controlled lots which will support further increases in deliveries, contracts and community count across our Century Communities and Century Complete brands. We've substantially strengthened our balance sheet, further improved our cash position, reduced our net debt-to-net-capital ratio to 27% and are well positioned to generate even higher returns to our shareholders."
Fourth Quarter 2020 Results
Net income for the fourth quarter 2020 increased 72% to $91.8 million, or $2.72 per diluted share as compared to $53.4 million or $1.63 per diluted share for the prior year quarter.
Home sales revenues for the fourth quarter 2020 increased 22% to $946.8 million, compared to $775.7 million for the prior year quarter. The growth in home sales revenues was primarily due to a 14% increase in deliveries to 2,826 homes compared to 2,479 homes for the prior year quarter. Average sales price of home deliveries for the fourth quarter 2020 was $335,000, compared to $312,900 in the prior year quarter, primarily due to our successful efforts in increasing sales prices of our homes and a higher proportion of deliveries from our Century Communities brand. Across all our markets in the fourth quarter, we were successful in raising prices in order to offset the increased materials costs we experienced.
Adjusted homebuilding gross margin percentage, excluding interest, was 23.0% in the fourth quarter of 2020, an improvement of 200 basis points, compared to 21.0% in the prior year quarter and on a sequential basis, an improvement of 300 basis points from 20.0% in the third quarter. Homebuilding gross margin percentage in the fourth quarter 2020 was 20.8%, as compared to 18.2% in the prior year quarter and 17.5% in the third quarter 2020. SG&A as a percent of home sales revenues improved 80 basis points to 10.1%, compared to 10.9% in the prior year quarter. On a sequential basis, SG&A as a percent of homes revenues improved 120 basis points from 11.3% in the third quarter.
Net new home contracts in the fourth quarter 2020 increased 45% to 2,566 homes, compared to 1,775 homes in the prior year quarter. At the end of the fourth quarter 2020, the Company had 3,439 homes in backlog, representing $1.3 billion of backlog dollar value, increases of 66% and 103%, respectively.
Financial services revenues increased to $35.8 million compared to $14.5 million in the prior year quarter, and financial services pretax income increased to $17.8 million from $4.7 million.
Full Year 2020 Results
Net income for the full year 2020 was $206.2 million, or $6.13 per diluted share compared to $113.0 million, or $3.62 per diluted share in the prior year.
Home sales revenues for 2020 increased 22% to $3.0 billion, compared to $2.5 billion for 2019. The increase in home sales revenues was primarily due to home deliveries increasing 18% to 9,453 homes. Average selling price of homes delivered in 2020 was $320,200, compared to $310,200 in the prior year.
Adjusted homebuilding gross margin percentage, excluding interest, impairments and purchase price accounting, was 20.8% in 2020 compared to 20.3% in the prior year. Homebuilding gross margin percentage was 18.4%, compared to 17.7% in 2019. SG&A as a percent of home sales revenues decreased 90 basis points to 11.3% compared to 12.2% the prior year.
Net new home contracts in 2020 increased to 10,822 homes, an increase of 38%, compared to 7,861 homes in the prior year, primarily attributable to an increased absorption pace.
Financial services generated pre-tax income of $48.5 million in the full year 2020 as compared to $10.7 million in the prior year.
Strengthened Balance Sheet and Liquidity
The Company ended the quarter with a strong financial position including $1.3 billion of stockholders' equity, $417 million of cash and $1.1 billion of total liquidity.
As of December 31, 2020, net homebuilding debt to net capital decreased to 27.2%, a reduction of 1,800 basis points from 45.2% in the prior year quarter and a sequential reduction of 570 basis points from 32.9% at the end of third quarter of 2020.
Full Year 2021 Outlook
David Messenger, Chief Financial Officer of the Company, commented, "Our recent performance demonstrates the resiliency of our business and proven ability to execute. We remain encouraged by the strength and health of the housing market and as such, are introducing full year guidance of deliveries in the range of 10,500 to 11,500 homes and homes sales revenues in the range of $3.3 billion to $3.8 billion."
The Company will host a webcast and conference call on Thursday, February 4, 2021 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company's fourth quarter and full year 2020 results, discuss recent events and conduct a question-and-answer period. To participate in the call, please dial 877-451-6152 (domestic) or 201-389-0879 (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 March 4, 2021, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13714670. 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 across the U.S., and offers title, insurance and lending services in select markets through its Parkway Title, IHL Insurance Agency, and Inspire Home Loan 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.
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