Century munities(US:CCS)2025-10-22 23:21Financial Performance - For the three and nine months ended September 30, 2025, the company generated total revenues of $980.3 million and $2.9 billion, respectively, compared to $1.1 billion and $3.1 billion in the prior year periods[110]. - The company reported net income of $37.4 million, or $1.25 per diluted share, for the three months ended September 30, 2025, down from $83.0 million, or $2.59 per diluted share, in the prior year[109]. - Total revenues for Q3 2025 were $980.3 million, a decrease of 13.8% from $1,136.9 million in Q3 2024[113]. - Net income for Q3 2025 was $37.4 million, a decline of 55.1% compared to $83.0 million in Q3 2024[113]. - For the nine months ended September 30, 2025, total revenue was $2,884.2 million, a decrease from $3,124.9 million in the same period of 2024, representing a decline of 7.7%[118]. - Net income for the nine months ended September 30, 2025, was $98.4 million, a decline from $307.5 million in 2024[154]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $238.6 million, down from $381.3 million in the same period of 2024[113]. - Adjusted net income for Q3 2025 was $45,711, down 48.2% from $88,572 in Q3 2024[197]. - Adjusted diluted earnings per share (EPS) for Q3 2025 was $1.52, a decline of 45.1% from $2.77 in Q3 2024[197]. Home Deliveries and Sales - The company delivered 2,486 and 7,357 homes during the three and nine months ended September 30, 2025, with average sales prices of $384.2 thousand and $382.7 thousand, respectively, reflecting a decrease in home deliveries by 12.3% and 5.8% compared to the prior year[110]. - The number of homes delivered in Q3 2025 was 2,486, a decrease of 12.3% from 2,834 homes in Q3 2024[113]. - Home sales revenues in Q3 2025 were $955.2 million, down 14.4% from $1,116.1 million in Q3 2024[113]. - The average sales price of homes delivered in Q3 2025 was $384.2 thousand, down from $393.8 thousand in Q3 2024[113]. - The average sales price of new homes delivered decreased to $382.7 thousand in 2025 from $391.3 thousand in 2024, a reduction of 1.5%[118]. - The backlog at the end of Q3 2025 included 1,117 homes with an aggregate sales value of $416.9 million, compared to 1,580 homes valued at $671.4 million at the end of Q3 2024[113]. - The average sales price of backlog units decreased by 12.1% to $373.3 thousand, influenced by higher incentives and a change in community mix[146]. Contracts and Market Conditions - Net new home contracts decreased by 6.9% and 7.1% for the three and nine months ended September 30, 2025, totaling 2,386 and 7,624 contracts, respectively[110]. - Net new home contracts in Q3 2025 were 2,386, a decrease from 2,563 contracts in Q3 2024[113]. - The company anticipates that homebuilding markets will continue to be influenced by macro-economic conditions, including interest rates and consumer confidence, which may impact future demand for homes[106]. - The average monthly absorption rate decreased by 13.8% to 2.5 in Q3 2025 compared to Q3 2024, and by 20.6% to 2.7 for the nine months ended September 30, 2025, primarily due to slowing demand and elevated mortgage rates[143]. Financial Services and Assets - The Financial Services segment generated income before income tax expense of $3.0 million and $11.6 million for the three and nine months ended September 30, 2025, representing decreases of 2.7% and 38.4% from the prior year[112]. - The number of mortgages originated decreased by 6.3% for the nine months ended September 30, 2025, totaling 4,796 loans compared to 5,118 in 2024[125]. - The company recorded a decrease in Financial Services assets by 31.9% to $326.2 million as of September 30, 2025, due to a reduction in mortgage loans held for sale[140]. Debt and Liquidity - The company ended the third quarter of 2025 with $130.1 million in cash and cash equivalents and $44.7 million in cash held in escrow, with a homebuilding debt to capital ratio of 34.5%[111]. - The total debt as of September 30, 2025, was $1.66 billion, compared to $1.48 billion as of December 31, 2024[170]. - The company had $1.0 billion in total principal amount of Senior Notes outstanding as of September 30, 2025[147]. - The company believes it can fund its current liquidity needs for at least the next twelve months with cash on hand and cash generated from operations[161]. - The company has a senior unsecured revolving credit facility of up to $1.0 billion, with $339.0 million outstanding as of September 30, 2025, at an interest rate of 5.7%[180]. Operational Adjustments - The company strategically managed its lot pipeline, resulting in 62,239 lots owned and controlled as of September 30, 2025, while selectively reducing land acquisition activities[111]. - The total owned and controlled lot inventory as of September 30, 2025, was 62,239 lots, down from 80,121 lots in the previous year[113]. - The company reduced its land acquisition and development activities by terminating certain contracts that no longer met investment criteria, reflecting current market conditions[158]. - The company is exploring opportunities to acquire other homebuilders to enhance its land portfolio and support organic expansion[167]. Expenses and Margins - Homebuilding gross margin percentage for Q3 2025 was 17.9%, compared to 21.7% in Q3 2024[113]. - Homebuilding gross margin percentage decreased to 18.4% for the nine months ended September 30, 2025, down from 21.9% in the same period of 2024[128]. - Selling, general and administrative expenses decreased by $13.1 million (9.8%) in Q3 2025 compared to Q3 2024, but as a percentage of home sales revenue increased to 12.6% from 11.9%[134]. - Adjusted homebuilding gross margin excluding inventory impairment for Q3 2025 was 20.1%, down from 23.6% in Q3 2024[132]. Tax and Regulatory - The estimated annual effective tax rate for 2025 is 25.0%, influenced by federal and state statutory rates and certain permanent differences[135]. - Income tax expense for Q3 2025 was $10.4 million, significantly lower than $26.9 million in Q3 2024[138]. - The effective tax rate for adjusted net income was 24.3% for both Q3 2025 and Q3 2024[198]. Market Outlook - The company anticipates that inflation may continue to adversely impact homebuilding operations due to rising costs in land, labor, and materials[203].