• LGI Homes Reports Second Quarter 2023 Results and Raises Full Year Closing and Margin Guidance

    来源: Nasdaq GlobeNewswire / 01 8月 2023 06:00:01   America/Chicago

    THE WOODLANDS, Texas, Aug. 01, 2023 (GLOBE NEWSWIRE) -- LGI Homes, Inc. (NASDAQ: LGIH) today announced financial results for the second quarter 2023 and the six months ended June 30, 2023.

    Second Quarter 2023 Highlights

    • Net Income of $53.1 million, or $2.26 Basic EPS and $2.25 Diluted EPS
    • Net Income Before Income Taxes of $71.4 million
    • Home Sales Revenues of $645.3 million
    • Home Closings of 1,854
    • Average Sales Price per Home Closed of $348,042
    • Gross Margin as a Percentage of Homes Sales Revenues of 22.0%
    • Adjusted Gross Margin* as a Percentage of Home Sales Revenues of 23.8%

    Six Months Ended June 30, 2023 Highlights

    • Net Income of $80.1 million, or $3.41 Basic EPS and $3.39 Diluted EPS
    • Net Income Before Income Taxes of $103.8 million
    • Home Sales Revenues of $1.1 billion
    • Home Closings of 3,220
    • Average Sales Price per Home Closed of $351,748
    • Gross Margin as a Percentage of Homes Sales Revenues of 21.3%
    • Adjusted Gross Margin* as a Percentage of Home Sales Revenues of 23.1%  
    • Active Selling Communities at June 30, 2023 of 102
    • Net Orders of 4,156
    • Ending Backlog at June 30, 2023 of 1,638 homes valued at $601.3 million
    • Total Owned and Controlled Lots at June 30, 2023 of 69,226

    *Non-GAAP

    Please see “Non-GAAP Measures” for a reconciliation of Adjusted Gross Margin (a non-GAAP measure) to Gross Margin, the most directly comparable GAAP measure.

    Balance Sheet Highlights

    • Total liquidity of $384.7 million at June 30, 2023, including cash and cash equivalents of $43.3 million and $341.4 million of availability under the Company’s revolving credit facility
    • Net debt to capitalization of 36.8% at June 30, 2023

    Management Comments

    “We delivered strong results in the second quarter as we continued to capitalize on the recovery in demand for new homes and focused on increasing affordability for our customers and returning profitability to historical levels,” said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes.

    “In the second quarter, we closed 1,854 homes, a 35.7% increase over the first quarter of 2023, and generated over $645.3 million in revenue. Driving our performance was the strength of our backlog coming into the second quarter and our ongoing success at connecting motivated, qualified buyers with our highly trained sales teams. Our average selling price in the second quarter was $348,042, a decrease of 2.4%, both year-over-year and sequentially. Contributing to the decrease was our decision to start smaller square footage homes with the goal of realigning our product offering to increase affordability for our customers. The success of these actions was evident in our second quarter results. Our net orders increased 124.2% over the same period last year, and we expect our continued focus on increasing affordability to drive additional benefits in the coming quarters as more of these smaller homes become available.

    “Increasing profitability remained a key priority during the quarter and our gross margins reflected that focus. In the second quarter, our gross margin was 22.0% and our adjusted gross margin was 23.8%. Both metrics were up 170 basis points over the first quarter of this year, marking significant progress on the path to returning our profitability metrics back to historical levels.

    “Based on our results to date and our outlook for the second half of the year, we are raising our full year closing guidance to a range between 6,500 and 7,200 homes and raising our full year gross margin guidance to a range between 21.5% and 23.5% and adjusted gross margin guidance to a range between 23.0% and 25.0%. We are investing in the growth of our business, bringing new communities online and identifying opportunities for additional growth in the years to come. We continue to expect 115 to 125 active communities at year end with an additional 20% to 30% growth in community count in 2024.”

    Mr. Lipar concluded, “Demand trends remain positive and our performance year to date provides us with significant momentum as we pursue our goals and objectives for 2023. We are proud of our second quarter results and enter the second half of the year well positioned with a clear focus on driving growth, improving profitability and continuing to create long-term value for our shareholders.”

    Full Year 2023 Outlook

    Subject to the caveats in the Forward-Looking Statements section of this press release, the Company is providing the following updates to its guidance for the full year 2023. The Company now expects:

    • Home closings between 6,500 and 7,200
    • Active selling communities at the end of 2023 between 115 and 125
    • Average sales price per home closed between $345,000 and $360,000
    • Gross margin as a percentage of home sales revenues between 21.5% and 23.5%
    • Adjusted gross margin (non-GAAP) as a percentage of home sales revenues between 23.0% and 25.0% with capitalized interest being the primary driver of the difference between gross margin and adjusted gross margin
    • SG&A as a percentage of home sales revenues between 12.5% and 13.5%
    • Effective tax rate between 24.0% and 25.0%

    This outlook assumes that general economic conditions, including input costs, materials, product and labor availability, interest rates and mortgage availability, in the remainder of 2023 are similar to those experienced so far in the third quarter of 2023 and that construction costs, availability of land and land development costs in the remainder of 2023 are consistent with the Company’s recent experience. In addition, this outlook assumes that governmental regulations relating to land development and home construction are similar to those currently in place.

    Earnings Conference Call

    The Company will host a conference call via live webcast for investors and other interested parties beginning at 12:30 p.m. Eastern Time on Tuesday, August 1, 2023 (the “Earnings Call”).

    Participants may access the live webcast by visiting the Investor Relations section of the Company’s website at www.lgihomes.com.

    An archive of the webcast will be available for replay on the Company’s website for one year from the date of the conference call.

    About LGI Homes, Inc.

    Headquartered in The Woodlands, Texas, LGI Homes, Inc. is a pioneer in the homebuilding industry, successfully applying an innovative and systematic approach to the design, construction and sale of homes across 35 markets in 20 states. As one of America’s fastest growing companies, LGI Homes has closed over 65,000 homes since its founding in 2003 and has delivered profitable financial results every year. Nationally recognized for its quality construction and exceptional customer service, LGI Homes was named to Newsweek’s list of America’s Most Trustworthy Companies for the second consecutive year. LGI Homes’ commitment to excellence extends to its more than 1,000 employees, earning the Company numerous workplace awards at the local, state and national level, including the Top Workplaces USA 2023 Award. For more information about LGI Homes and its unique operating model focused on making the dream of homeownership a reality for families across the nation, please visit the Company’s website at www.lgihomes.com.

    Forward-Looking Statements

    Any statements made in this press release or on the Earnings Call that are not statements of historical fact, including statements about the Company’s beliefs and expectations, are forward-looking statements within the meaning of the federal securities laws, and should be evaluated as such. Forward-looking statements include information concerning projected 2023 home closings, active selling communities, average sales price per home closed, gross margin as a percentage of home sales revenues, adjusted gross margin as a percentage of homes sales revenues, SG&A as a percentage of home sales revenues and effective tax rate, as well as market conditions and possible or assumed future results of operations, including descriptions of the Company’s business plan and strategies. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “will” or, in each case, their negative, or other variations or comparable terminology. For more information concerning factors that could cause actual results to differ materially from those contained in the forward-looking statements please refer to the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, including the “Cautionary Statement about Forward-Looking Statements” subsection within the “Risk Factors” section, the “Risk Factors” and “Cautionary Statement about Forward-Looking Statements” sections in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023 and subsequent filings by the Company with the Securities and Exchange Commission. The Company bases these forward-looking statements or projections on its current expectations, plans and assumptions that it has made in light of its experience in the industry, as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances and at such time. As you read and consider this press release or listen to the Earnings Call, you should understand that these statements are not guarantees of future performance or results. The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or projections. Although the Company believes that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect the Company’s actual results to differ materially from those expressed in the forward-looking statements and projections. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. If the Company does update one or more forward-looking statements, there should be no inference that it will make additional updates with respect to those or other forward-looking statements.


    LGI HOMES, INC.
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    (In thousands, except share data)
     
      June 30, December 31,
      2023  2022 
    ASSETS    
    Cash and cash equivalents $43,334  $31,998 
    Accounts receivable  48,166   25,143 
    Real estate inventory  2,889,113   2,898,296 
    Pre-acquisition costs and deposits  26,244   25,031 
    Property and equipment, net  37,786   32,997 
    Other assets  75,011   93,159 
    Deferred tax assets, net  7,867   6,186 
    Goodwill  12,018   12,018 
    Total assets $3,139,539  $3,124,828 
         
    LIABILITIES AND EQUITY    
    Accounts payable $59,365  $25,287 
    Accrued expenses and other liabilities  295,765   340,128 
    Notes payable  1,053,397   1,117,001 
    Total liabilities  1,408,527   1,482,416 
         
    COMMITMENTS AND CONTINGENCIES    
    EQUITY    
    Common stock, par value $0.01, 250,000,000 shares authorized, 27,485,513 shares issued and 23,546,041 shares outstanding as of June 30, 2023 and 27,245,278 shares issued and 23,305,806 shares outstanding as of December 31, 2022  275   272 
    Additional paid-in capital  315,174   306,673 
    Retained earnings  1,770,585   1,690,489 
    Treasury stock, at cost, 3,939,472 shares as of June 30, 2023 and December 31, 2022  (355,022)  (355,022)
    Total equity  1,731,012   1,642,412 
    Total liabilities and equity $3,139,539  $3,124,828 



    LGI HOMES, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
    (In thousands, except share and per share data)
     
      Three Months Ended June 30, Six Months Ended June 30,
      2023
    		 2022
    		 2023
    		 2022
    Home sales revenues $645,270  $723,069  $1,132,627  $1,269,119 
             
    Cost of sales  503,333   491,710   891,874   879,353 
    Selling expenses  49,225   43,269   92,030   77,667 
    General and administrative  27,626   29,084   57,586   57,373 
    Operating income  65,086   159,006   91,137   254,726 
    Other income, net  (6,323)  (4,006)  (12,620)  (7,836)
    Net income before income taxes  71,409   163,012   103,757   262,562 
    Income tax provision  18,275   39,636   23,661   60,500 
    Net income $53,134  $123,376  $80,096  $202,062 
    Earnings per share:        
    Basic $2.26  $5.24  $3.41  $8.53 
    Diluted $2.25  $5.20  $3.39  $8.43 
             
    Weighted average shares outstanding:        
    Basic  23,533,097   23,552,883   23,457,615   23,694,241 
    Diluted  23,608,892   23,745,853   23,615,206   23,968,263 
                     

    Non-GAAP Measures

    In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company has provided information in this press release relating to adjusted gross margin.

    Adjusted Gross Margin

    Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. The Company defines adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin. However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustments, which have real economic effects and could impact results, the utility of adjusted gross margin information as a measure of operating performance may be limited. In addition, other companies may not calculate adjusted gross margin information in the same manner that the Company does. Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of the Company’s performance.

    The following table reconciles adjusted gross margin to gross margin, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited):

      Three Months Ended June 30, Six Months Ended June 30,
      2023 2022 2023 2022
    Home sales revenues $645,270  $723,069  $1,132,627  $1,269,119 
    Cost of sales  503,333   491,710   891,874   879,353 
    Gross margin  141,937   231,359   240,753   389,766 
    Capitalized interest charged to cost of sales  9,138   5,735   15,895   10,248 
    Purchase accounting adjustments(1)  2,708   2,026   4,744   4,308 
    Adjusted gross margin $153,783  $239,120  $261,392  $404,322 
    Gross margin %(2)  22.0%  32.0%  21.3%  30.7%
    Adjusted gross margin %(2)  23.8%  33.1%  23.1%  31.9%


    (1) Adjustments result from the application of purchase accounting for acquisitions and represent the amount of the fair value step-up adjustments included in cost of sales for real estate inventory sold after the acquisition dates.
    (2) Calculated as a percentage of home sales revenues.
       

    Home Sales Revenues, Home Closings, Average Sales Price Per Home Closed (ASP), Average Community Count, Average Monthly Absorption Rates and Closing Community Count by Reportable Segment

    (Revenues in thousands, unaudited)
     
      Three Months Ended June 30, 2023 As of June 30, 2023
    Reportable Segment Revenues Home Closings ASP Average Community Count Average
    Monthly
    Absorption Rate    		 Community Count at End of Period
    Central $230,585 710 $324,768 36.3 6.5 36
    Southeast  143,649 448  320,645 24.7 6.0 23
    Northwest  70,404 143  492,336 10.0 4.8 10
    West  82,739 214  386,631 12.3 5.8 13
    Florida  117,893 339  347,767 18.7 6.0 20
    Total $645,270 1,854 $348,042 102.0 6.1 102


      Three Months Ended June 30, 2022 As of June 30, 2022
    Reportable Segment Revenues Home Closings ASP Average Community Count Average
    Monthly
    Absorption Rate    		 Community Count at End of Period
    Central $316,654 935 $338,667 31.0 10.1 32
    Southeast  117,569 361  325,676 19.7 6.1 20
    Northwest  70,792 133  532,271 8.3 5.3 8
    West  123,956 301  411,814 12.7 7.9 12
    Florida  94,098 297  316,828 19.6 5.1 20
    Total $723,069 2,027 $356,719 91.3 7.4 92


      Six Months Ended June 30, 2023
    Reportable Segment Revenues Home Closings ASP Average Community Count Average
    Monthly
    Absorption Rate
    Central $380,965 1,163 $327,571 35.7 5.4
    Southeast  248,025 764  324,640 24.3 5.2
    Northwest  145,219 302  480,858 9.7 5.2
    West  161,625 423  382,092 12.8 5.5
    Florida  196,793 568  346,467 17.3 5.5
    Total $1,132,627 3,220 $351,748 99.8 5.4


      Six Months Ended June 30, 2022
    Reportable Segment Revenues Home Closings ASP Average Community Count Average Monthly
    Absorption Rate
    Central $578,952 1,779 $325,437 30.5 9.7
    Southeast  190,032 599  317,249 19.8 5.0
    Northwest  173,666 334  519,958 9.3 6.0
    West  179,539 443  405,280 11.3 6.5
    Florida  146,930 471  311,953 19.3 4.1
    Total $1,269,119 3,626 $350,005 90.2 6.7
                 

    Owned and Controlled Lots

    The table below shows (i) home closings by reportable segment for the six months ended June 30, 2023 and (ii) owned or controlled lots by reportable segment as of June 30, 2023.

      Six Months Ended
    June 30, 2023    		 As of June 30, 2023
    Reportable Segment Home Closings Owned(1) Controlled Total
    Central 1,163 21,314 3,551 24,865
    Southeast 764 14,468 2,859 17,327
    Northwest 302 6,435 1,459 7,894
    West 423 9,373 1,635 11,008
    Florida 568 5,173 2,959 8,132
    Total 3,220 56,763 12,463 69,226


    (1) Of the 56,763 owned lots as of June 30, 2023, 43,762 were raw/under development lots and 13,001 were finished lots. Finished lots included 1,124 completed homes, including information centers, and 3,027 homes in progress.
       

    Backlog Data

    As of the dates set forth below, the Company’s net orders, cancellation rate and ending backlog homes and value were as follows (dollars in thousands, unaudited):

    Backlog Data
    		 Six Months Ended June 30,
    2023(4) 2022(5)
    Net orders(1)  4,156   2,837 
    Cancellation rate(2)  20.8%  20.8%
    Ending backlog – homes(3)  1,638   1,266 
    Ending backlog – value(3) $601,275  $445,120 


    (1) Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period.
    (2) Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period.
    (3) Ending backlog consists of homes at the end of the period that are under a purchase contract that has been signed by homebuyers who have met preliminary financing criteria but have not yet closed and wholesale contracts for which vertical construction is generally set to occur within the next six to twelve months. Ending backlog is valued at the contract amount.
    (4) As of June 30, 2023, the Company had 131 units related to bulk sales agreements associated with its wholesale business.
    (5) As of June 30, 2022, the Company had 412 units related to bulk sales agreements associated with its wholesale business.


    CONTACT: Joshua D. Fattor
      Vice President of Investor Relations and Capital Markets
      (281) 210-2586
      investorrelations@lgihomes.com

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