Century Communities, Inc. (NYSE: CCS), Greenwood Village, Colorado, on Thursday after market close reported net income for the first quarter 2019 of $17.1 million, or $0.56 per diluted share, for its first quarter ended March 31. The gain compares to a net of $20.0 million, or $0.67 per diluted share, for the prior year quarter. Analysts were looking for a gain of $0.41 per share.
Home sales revenues for the first quarter 2019 increased 33% to $523.3 million, compared to $394.8 million for the prior year quarter. The growth in home sales revenues was primarily attributable to a 77% increase in home deliveries to 1,663 homes compared to 941 homes for the prior year quarter, partly attributable to the acquisition of Wade Jurney Homes. Excluding the impact from the acquisition, deliveries from the Century Communities branded business increased 13% year over year. Average sales price of home deliveries for the first quarter 2019 was $314,700, compared to $419,600 in the prior year quarter, consistent with the Company’s expansion of its offering of entry level homes.
Net new home contracts in the first quarter 2019 increased 35% to a record 1,858 homes, compared to 1,377 homes in the prior year quarter, attributable to the addition of Wade Jurney Homes. At the end of the first quarter 2019, the company had 2,376 homes in backlog, an increase of 35% compared to 1,757 homes in backlog in the prior year quarter.
Adjusted net income for the first quarter was $18.4 million, or $0.60 per diluted share, as compared to $22.5 million, or $0.75 per diluted share, for the prior year quarter. Adjusted net income excludes the impact of one-time items associated with home builder acquisitions.
Adjusted home building gross margin percentage, excluding interest and purchase price accounting, was 19.8% in the first quarter 2019, as compared to 23.2% in the prior year quarter, which benefited from a particularly favorable product mix. Home building gross margin percentage in the first quarter 2019 was 17.1%, as compared to 19.1% in the prior year quarter, largely attributable to higher incentives and product mix. SG&A as a percentage of home sales revenues improved to 13.2%, compared to 14.3% in the prior year quarter, due to process enhancements, tight cost controls, and benefits generated by our larger scale.
Financial services generated pre-tax income of $1.6 million in the first quarter 2019 as compared to $1.2 million in the prior year quarter.
As of March 31, 2019, the company had total assets of $2.3 billion, including cash of $62.8 million and inventories of $1.9 billion. Liabilities totaled $1.4 billion, which included $1.1 billion of long-term debt. As of March 31, 2019, the company had $353.0 million of availability under its credit facility.
Dale Francescon, co-CEO, stated, “The first quarter ended significantly stronger than it started, where we experienced an overall stabilization in demand trends and better affordability, compared to relatively muted buyer activity in the latter half of 2018 which continued into the beginning of this year. Our focus remains on deepening our platform and driving additional operational efficiencies. Our concentration in markets with sound economic fundamentals combined with our lower price point product offerings throughout our business well positions us to deliver further earnings growth and generate enhanced returns for our stockholders.”
Rob Francescon, co-CEO, said, “We are encouraged by the pick-up in buyer activity in recent months which allowed us to end the quarter with a record number of net new contracts. Our continued expansion of Wade Jurney Homes’ asset-light, lower price point operations into new geographies should contribute more meaningfully to earnings as we progress through the year. We view our significant focus on entry level buyers as a catalyst for ongoing success in the quarters to come as our national platform and expanded scale allows us to continue to drive enhancements and efficiencies throughout our business.”
David Messenger, CFO of the company, commented, “We are optimistic on the prospects for continued growth in our overall business and long-term housing fundamentals. Given better visibility across our footprint during the first quarter 2019, we introduce our full year outlook for home deliveries to be in the range of 7,000 to 8,000 homes and our home sales revenues to be in the range of $2.2 billion to $2.5 billion.”
