Century Communities, Inc. (NYSE: CCS), Greenwood Village, Colorado, after market close Tuesday reported an increase in net income of 59% to $27.0 million, or $0.87 per diluted share, for its third quarter ended September 30, 2019. The gain compares to $17.0 million, or $0.56 per diluted share, for the prior year quarter. It also matched Wall Street expectations.
Home sales revenues for the third quarter 2019 increased to $573.9 million, compared to $552.9 million for the prior year quarter. The growth in home sales revenues was primarily attributable to an increase in deliveries to 1,891 homes, compared to 1,746 homes for the prior year quarter. Average sales price of home deliveries for the third quarter 2019 was $303,500, compared to $316,700 in the prior year quarter, consistent with the company’s expansion of its offering of lower priced homes.
Net new home contracts in the third quarter 2019 increased 35% to 2,046 homes, compared to 1,515 homes in the prior year quarter. At the end of the third quarter 2019, the company had 2,746 homes in backlog, with a value of $854.9 million.
Home building gross margin percentage in the third quarter 2019 was 18.1%, compared to 16.8% in the prior year quarter and 17.2% in the second quarter 2019. Adjusted home building gross margin percentage, excluding interest and purchase price accounting, was 20.6% in the third quarter 2019, compared to 21.2% in the prior year quarter and 19.6% in the second quarter 2019. SG&A as a percent of home sales revenues was 12.7%, compared to 12.8% in the prior year quarter, including relocation and integration costs related to its Wade Jurney Homes acquisition.
Financial services generated pre-tax income of $2.2 million in the third quarter 2019, compared to $1.7 million in the prior year quarter.
As of September 30, 2019, the company had total assets of $2.5 billion, including cash of $68.9 million and inventories of $2.1 billion. Liabilities totaled $1.5 billion, which included $1.2 billion of long-term debt. As of September 30, 2019, the company had a record $951.2 million of stockholders’ equity, a 13% increase over the prior year quarter, and $361.2 million of available capacity under its credit facility. The company had total liquidity of $430.1 million.
Dale Francescon, co-CEO, stated, “We experienced improving demand trends throughout the quarter driven by lower interest rates and improved affordability. We capitalized on this constructive environment by producing another strong quarter of earnings while generating a 35% year-over-year increase in net new contracts to a third quarter record 2,046 homes. As we move into the remainder of 2019, we are well positioned for continued success given expectations for interest rates to remain low along with our strong emphasis on delivering homes to the first-time buyer throughout our broad geographical platform.”
Rob Francescon, co-CEO, said, “Fundamentals across our diverse national footprint remained encouraging throughout the third quarter as our markets continued to benefit from healthy local economies and positive macroeconomic trends. We experienced considerable operating momentum across all aspects of our business generating third quarter records for revenues, net income, deliveries and net new contracts. We remain focused on deepening our presence in vibrant markets to continue to grow revenue and profitability with an on-going commitment of offering homes at entry-level price points. With our strong local market operations and a robust lot pipeline of new communities, we have the resources in place to continue to grow our business and generate attractive returns on equity into 2020 and beyond.”
David Messenger, CFO, added, “Given encouraging buyer activity within our markets and strong execution across our business year-to-date, we are raising our full year outlook for home deliveries to be in the range of 7,700 to 8,100 homes and our home sales revenues to be in the range of $2.4 billion to $2.5 billion.”