LGI Homes's posted fourth quarter earnings this morning, highlighted by 45.1% closings that came in above J.P. Morgan's Michael Rehaut's expectations. Its 26.5% gross margins met expectations, as well.
"At LGI Homes, we are focused on achieving results and our fourth quarter provided a solid finish to 2015 with a record-breaking 3,404 homes closed," said CEO Eric Lipar in a statement. "This 45% year-over-year increase marks the fifth consecutive year we have grown home closings by more than 40%. In addition to delivering record home closings, we achieved significant growth in revenues and active community count, and nearly doubled basic earnings per share over the prior year."
Here are some of the highlights from 4Q:
- Net Income of $15.7 million, or $0.79 Basic EPS and $0.75 Diluted EPS
- Net Income Before Income Taxes increased 108.2% to $24.1 million
- Home Sales Revenues increased 63.0% to $176.8 million
- Home Closings increased 45.1% to 946 homes
- Average Home Sales Price increased 12.4% to $186,855
- Adjusted Gross Margin (non-GAAP) as a Percentage of Home Sales Revenues was 27.6% as compared to 28.9%
- Active Selling Communities at quarter-end increased to 52 from 39
- Total Owned and Controlled Lots increased to 23,915 lots
Lipar expects more growth in the year ahead.
"As we turn our attention to 2016, we remain focused on continuing our trend of strong results," he said. "Through February 2016, we have closed 477 homes, an increase of 28% over the first two months of 2015. We hold a positive outlook on 2016 and believe the demand for homeownership in all of our markets is alive and well."
"We are poised to see continued growth and to meet our goals and objectives for 2016 through adding community count in our current markets and by improving community absorption in our newer markets. We expect all of our start-up operations in new geographic markets, including Colorado Springs, Seattle, Nashville and Raleigh, will generate home closings in 2016. Overall, we expect to close between 4,000 and 4,400 homes for the year and believe basic EPS for the full year 2016 will be in the range of $3.00 and $3.50 per share," Lipar concluded.