LGI Homes(US:LGIH)2025-11-04 21:32Home Sales Performance - Home sales revenues decreased by 39.2% to $396.6 million from $651.9 million in Q3 2024[109] - Homes closed decreased by 39.4% to 1,065 homes from 1,757 homes in Q3 2024[109] - Home sales revenues for the three months ended September 30, 2025 were $396.6 million, a decrease of $255.2 million, or 39.2%, from $651.9 million for the same period in 2024[113] - The number of homes closed decreased by 39.4% during the three months ended September 30, 2025 compared to the same period in 2024, contributing to the decline in revenues[113] - Home sales revenues for the nine months ended September 30, 2025 were $1.2 billion, a decrease of $413.7 million, or 25.1%, from $1.6 billion for the same period in 2024[124] - The number of homes closed decreased by 24.7% during the nine months ended September 30, 2025, contributing to the decline in revenues[124] Pricing and Margins - Average sales price per home closed increased by 0.4% to $372,424 from $371,004 in Q3 2024[109] - The average sales price per home closed increased by $1,420, or 0.4%, to $372,424 for the three months ended September 30, 2025[113] - The average sales price per home closed was $363,929, a decrease of $2,078, or 0.6%, from $366,007 for the nine months ended September 30, 2024[124] - Gross margin as a percentage of home sales revenues decreased to 21.5% from 25.1% in Q3 2024[109] - Gross margin for the three months ended September 30, 2025 was $85.1 million, a decrease of $78.4 million, or 47.9%, from $163.5 million for the same period in 2024[115] - Gross margin for the nine months ended September 30, 2025 was $269.4 million, a decrease of $136.3 million, or 33.6%, from $405.8 million for the same period in 2024[127] Income and Expenses - Net income decreased by 71.7% to $19.7 million from $69.6 million in Q3 2024[109] - Operating income for the three months ended September 30, 2025 was $21.5 million, a decrease of $58.8 million, or 73.2%, from $80.3 million for the same period in 2024[120] - Net income for the three months ended September 30, 2025 was $19.7 million, a decrease of $49.9 million, or 71.7%, from $69.6 million for the same period in 2024[122] - Net income for the nine months ended September 30, 2025 was $55.2 million, a decrease of $90.0 million, or 62.0%, from $145.2 million for the same period in 2024[134] - Selling expenses for the three months ended September 30, 2025 were $35.7 million, a decrease of $19.5 million, or 35.4%, from $55.2 million for the same period in 2024[116] - General and administrative expenses for the three months ended September 30, 2025 remained consistent at $28.0 million compared to the same period in 2024[117] Debt and Liquidity - Total debt as of September 30, 2025, was $1,751,427,000, resulting in a debt to capital ratio of 45.7%[145] - The net debt to capital ratio as of September 30, 2025, was 44.8%, up from 41.2% at the end of 2024[145] - The company had $367.9 million available to borrow under the Credit Agreement, providing ample liquidity for operations and growth initiatives[165] - The Credit Agreement includes a $1.1825 billion revolving credit facility, maturing in April 2029 for 82.2% of the commitments[169] - As of September 30, 2025, total borrowings under the Credit Agreement and senior notes amounted to approximately $1.7 billion[171] - The company had $62.0 million in cash and cash equivalents as of September 30, 2025[163] Operational Highlights - The company owned and controlled 62,564 lots as of September 30, 2025, down from 70,899 lots at December 31, 2024[108] - The average community count increased to 142.0 from 133.3 in Q3 2024[110] - The company completed 3,384 home closings in the nine months ended September 30, 2025[156] - The company had 2,801 completed homes and 895 homes in progress as of September 30, 2025[159] - The company is focused on mitigating risks associated with raw material and labor costs through fixed-price contracts[160] Market Conditions and Risks - The U.S. government shutdown in October 2025 caused delays in loan processing for government-backed mortgage programs, potentially impacting future home closings[102] - Inflation poses risks to the company, particularly from higher land, financing, labor, material, and construction costs, which could affect mortgage affordability[190] - The net orders for the nine months ended September 30, 2025, decreased to 4,098 from 4,993 in 2024, with a cancellation rate of 28.1%[151] - The backlog of homes increased by 19.9% from September 30, 2024, with an ending backlog value of $498,713,000[149] Cash Flow Activities - Net cash used in operating activities was $226.7 million for the nine months ended September 30, 2025, primarily driven by a cash outflow of $347.3 million in real estate inventory[184] - Net cash provided by investing activities was $14.3 million during the nine months ended September 30, 2025, mainly due to $10.2 million in proceeds from the sale of property and equipment[186] - Net cash provided by financing activities was $221.2 million during the nine months ended September 30, 2025, primarily driven by $594.6 million of borrowings under the Credit Agreement[187]