GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--

Century Communities, Inc. (NYSE:CCS), a leading national homebuilder, today announced financial results for its first quarter ended March 31, 2018.

First Quarter 2018 Highlights Compared to First Quarter 2017

• Adjusted net income increased 144% to $22.5 million or $0.75 per diluted share and net income increased 128% to $20.0 million or $0.67 per diluted share
• Home sales revenues increased 74% to $394.8 million
• Adjusted homebuilding gross margin increased 86% to $91.5 million
• Adjusted homebuilding gross margin percentage improved to 23.2%
• Deliveries grew 55% to 941 homes
• Net new contracts increased 44% to 1,378 homes
• Backlog improved 60% to 1,757 homes
• Backlog value increased 69% to $738.0 million
• Adjusted EBITDA improved 114% to $42.3 million

Dale Francescon, Co-Chief Executive Officer of the Company, stated, “We continued to experience strong momentum across our business during the first quarter 2018 resulting in record earnings. Each region experienced double-digit percentage growth across nearly all key operating metrics. Our increased home deliveries and higher average selling price helped us drive additional gross margin expansion, which accentuates the strength of our dynamic growth strategy and enhanced geographical footprint. We are pleased to report that Century Communities was recently named the fastest growing public homebuilder by Builder Magazine. As we look forward, we plan to continue deploying capital on sound investments at attractive paybacks, while controlling costs to deliver strong results in our overall business.”

Rob Francescon, Co-Chief Executive Officer of the Company, said, “We remain encouraged by the positive fundamentals exhibited in our markets during the first quarter. Our backlog expanded 60% to a record 1,757 homes as a result of a 44% increase in net new contracts to a record 1,378 homes, an indicator of the strong demand we experienced across our geographies. We continue to develop and open new communities while investing in attractive owned and controlled land parcels that complement our portfolio. Our Wade Jurney Homes joint venture, recently named the fastest growing private homebuilder by Builder Magazine, and our financial services operations both continue to surpass our expectations, providing exceptional returns on investment and accretive earnings. Combined with a focus on sustained execution, we believe our strong balance sheet and increased scale firmly situate our Company to deliver on our growth objectives for the full year 2018 and beyond.”

First Quarter 2018 Results

Adjusted net income for the first quarter increased 144% to a record $22.5 million, or $0.75 per diluted share, as compared to $9.2 million, or $0.42 per diluted share, for the prior year quarter. Net income for the first quarter 2018 increased 128% to $20.0 million, or $0.67 per share as compared to $8.8 million or $0.40 per share for the prior year quarter. Adjusted net income excludes the impact of one-time charges associated with homebuilder acquisitions.

Home sales revenues and deliveries grew to record first quarter levels in the first quarter 2018. Home sales revenues for the first quarter 2018 increased 74% to $394.8 million, compared to $226.4 million for the prior year quarter. The growth in home sales revenues was attributable to a 55% increase in deliveries to 941 homes compared to 608 homes for the prior year quarter, and a higher average sales price of home deliveries of $419,600, compared to $372,400 in the prior year quarter. Deliveries and average sales price of home deliveries in the first quarter of 2018 were both favorably impacted, primarily in the West, by the acquisitions of UCP and Sundquist Homes. Excluding the West, the Company’s legacy regions experienced growth of 22% in both home sales revenues and deliveries.

Adjusted homebuilding gross margin percentage, excluding interest and purchase price accounting, was 23.2% in the first quarter 2018, as compared to 21.7% in the fourth quarter and 21.7% in the prior year quarter. Homebuilding gross margin percentage in the first quarter 2018 was 19.1%, as compared to 19.5% in the prior year quarter, with the difference attributable to a 180 basis point impact of purchase price accounting in the first quarter 2018 partly offset by higher core profitability. SG&A as a percent of home sales revenues improved to 14.3%, compared to 14.7% in the prior year quarter. With the integration of UCP completing early in the second quarter, we expect to begin realizing synergies later in 2018.

Net new home contracts in the first quarter 2018 increased to a record 1,378 homes, representing an increase of 44%, compared to 957 homes in the prior year quarter, attributable to the addition of the new West region and stronger demand trends in all legacy regions. Excluding the West, the Company’s legacy regions experienced a 21% increase in net new home contracts. At the end of the first quarter 2018, the Company had a record 1,757 homes in backlog, representing $738.0 million of backlog dollar value, compared to 1,098 homes in backlog, representing $436.0 million of backlog dollar value in the prior year quarter, an increase of 60% in units and 69% in dollar value.

Financial services generated a $1.2 million profit in the first quarter 2018 as compared to a loss of $750 thousand in the prior year quarter. Equity in income of unconsolidated subsidiaries increased 152% to $3.2 million, compared to $1.3 million in the prior year quarter.

Balance Sheet and Liquidity

As of March 31, 2018, the Company had total assets of $1.7 billion, including cash of $52.0 million and inventories of $1.5 billion. Liabilities totaled $983 million, which included $777 million of long-term debt. As of March 31, 2018, the Company had no outstanding borrowings under its $400 million unsecured credit facility.

Full Year 2018 Outlook

David Messenger, Chief Financial Officer of the Company, commented, “We are encouraged by the sustained demand in our markets during the first quarter and believe we are well positioned for continued success throughout the remainder of the year. Based on our current market outlook, we are increasing our expected home deliveries to be in a range of 4,600 to 5,100 homes and our home sales revenues expectation to be in a range of $1.8 billion to $2.1 billion for 2018. We continue to expect our active selling community count to be in the range of 130 to 140 communities at the end of the full year 2018. Additionally, we continue to expect to incur an income tax rate of approximately 25% in 2018.”

Conference Call

The Company will host a webcast and conference call on Tuesday, May 8, 2018 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s first quarter 2018 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 June 8, 2018, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13678606. A replay of the webcast will be available on the Company’s website for at least 12 months.

About Century Communities

Century Communities, Inc. (NYSE:CCS) is one of the nation’s largest U.S. homebuilders, engaged in all aspects of homebuilding, including the acquisition, entitlement and development of land and the construction, marketing and sale of quality homes designed to appeal to a wide range of homebuyers. The Colorado-based Company operates in 10 states across the West, Mountain, Texas and Southeast Regions and offers title and lending services in select markets through its Parkway Title 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 Diluted Earnings per Common Share (Adjusted Diluted EPS), Adjusted Homebuilding Gross Margin, Adjusted EBITDA, and Ratio of 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,” “estimate,” “plan,” “outlook,” and “project” 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 2018. 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, ability to identify and acquire desirable land, availability of financing, the effect of interest rate and tax changes, reliance on contractors, and the other factors included in the Company’s most recent Annual Report on Form 10-K. 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.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

Adjusted Diluted Earnings per Common Share (Adjusted Diluted EPS) is a non-GAAP financial measure that we believe is 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. Adjusted Diluted EPS is calculated by excluding the effect of acquisition costs and purchase price accounting for acquired work in process from the calculation of reported EPS.

Century Communities, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory 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 indebtedness and acquisitions 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.

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. The Company defines 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, and (v) adjustments resulting from the application of purchase accounting for acquired work in process inventory related to business combinations. The Company believes 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, the Company’s 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. The Company’s presentation of adjusted EBITDA should not be construed as an indication that its future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA is limited as an analytical tool, and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

Century Communities, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

Net Debt to Net Capital

The following table presents the Company’s ratio of net debt to net capital, which is a non-GAAP financial measure. The Company calculates this by dividing net debt (notes payable and revolving line of credit less cash held in escrow and cash and cash equivalents) by net capital (net debt plus total stockholders’ equity). The most directly comparable GAAP measure is the ratio of debt to capital. The Company believes the ratio of net 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.

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