Century Communities, Inc. (NYSE: CCS) net income increased 53% to a record $26.1 million, or $0.78 per diluted share, for its first quarter ended March 31, 2020. The gain compared to $17.1 million or $0.56 per diluted share for the prior year quarter. Analysts were expecting a gain of $0.64 per share.
Home sales revenues for the first quarter 2020 increased 9% to $572.7 million, compared to $523.3 million for the prior year quarter. The growth in home sales revenues was primarily due to a 12% increase in deliveries to 1,864 homes compared to 1,663 homes for the prior year quarter. Average sales price of home deliveries for the first quarter 2020 decreased to $307,200, compared to $314,700 in the prior year quarter, consistent with the company’s strategy of offering more affordably priced homes across its brands.
Adjusted home building gross margin percentage, excluding interest and impairments, increased to 20.2% in the first quarter 2020, as compared to 19.8% in the prior year quarter. Home building gross margin percentage in the first quarter 2020 increased to 17.7%, as compared to 17.1% in the prior year quarter. SG&A as a percent of home sales revenues was 12.9%, compared to 13.2% in the prior year quarter.
Net new home contracts in the first quarter 2020 increased 29% to 2,388 homes, compared to 1,858 homes in the prior year quarter. At the end of the first quarter 2020, the company had 2,594 homes in backlog, representing $861.1 million of backlog dollar value.
The company ended the quarter with $1.1 billion of stockholders’ equity, $473 million of cash and $592 million of total liquidity.
As of March 31, 2020, net home building debt to net capital increased to 46.6%, compared to 45.2% at the end of the 2019 but down sharply from 53.6% in the prior year quarter.
Dale Francescon, co-CEO, stated, “We began the year with positive momentum in a robust demand environment as reflected in our strong first quarter results reported today. However, as the gravity and far-reaching implications of the COVID-19 pandemic escalated, we saw traffic and sales activity begin to decelerate during the second half of March. We have taken swift action to address this unprecedented situation while safeguarding the health and safety of our team members, customers and trade partners. This is our top priority during this global crisis. Additionally, our entire management team has been and continues to be intently focused on strengthening and fortifying our business from an operational and financial position through this evolving landscape. While it is obvious that the COVID-19 impacts have dramatically affected our national economy, we are fortunate that home building is considered an “essential business” by most governmental entities and we remain committed to safely servicing our customers during this time.”
Rob Francescon, co-CEO, said, “Our team has taken extraordinary steps and displayed impressive ingenuity to enable Century to build, sell and close homes on a daily basis across our national footprint. Although the full impact of the virus remains uncertain, home buyer demand has thus far held up better than expected in the second quarter. April net sales are trending to be down less than 10% compared to 2019 with both gross and net sales increasing each sequential week. Although we saw an increase in cancellations in March, they have since declined each week and our April cancellation rate is now consistent with our year to date average. We are very pleased with our ability to successfully adapt to this changing environment by quickly and effectively leveraging our vast array of virtual tools to provide buyers with a seamless digital homebuying, lending and closing experience. Although times of crisis certainly test the strength and capabilities of not only individuals but entire organizations, we could not be more impressed with our team’s efforts and have the utmost confidence in our ability to move through this challenging period and grow our business over the long-term.”
