LGI Homes, Inc. (NASDAQ: LGIH) today announced financial results
for the second quarter 2024 and the six months ended June 30,
2024.
Second Quarter
2024 Highlights
- Home sales revenues
of $602.5 million
- Home closings of
1,655
- Average sales price
per home closed of $364,047
- Gross margin as a
percentage of home sales revenues of 25.0%
- Adjusted gross
margin (non-GAAP) as a percentage of home sales revenues of
27.0%
- Net income before
income taxes of $76.9 million
- Net income of $58.6
million, or $2.49 basic EPS and $2.48 diluted EPS
Six Months Ended June
30, 2024 Highlights
- Home sales revenues
of $993.3 million
- Home closings of
2,738
- Average sales price
per home closed of $362,801
- Gross margin as a
percentage of home sales revenues of 24.4%
- Adjusted gross
margin (non-GAAP) as a percentage of home sales revenues of
26.3%
- Net income before
income taxes of $100.0 million
- Net income of $75.6
million, or $3.21 basic EPS and $3.20 diluted EPS
- Active selling
communities at June 30, 2024 of 128
- Ending backlog of
1,393 homes valued at $553.6 million
- Total owned and
controlled lots at June 30, 2024 of 69,904
*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
$405.9 million at June 30, 2024, including cash and cash
equivalents of $51.1 million and $354.8 million of availability
under the Company’s revolving credit facility
- Net debt to
capitalization of 43.0% at June 30, 2024
- 83,763 shares of
common stock repurchased during the second quarter of 2024 for an
aggregate amount of $8.0 million
Management Comments
“We delivered solid results in the second
quarter, including continued growth in our community count and
outstanding profitability metrics that exceeded the high end of our
guidance,” said Eric Lipar, Chairman and Chief Executive Officer of
LGI Homes.
“During the quarter, we delivered 1,655 homes at
an average sales price of $364,047, resulting in $602.5 million
dollars of revenue. In May, we hit a new record of 130 communities
and ended June with 128 communities, up 25.5% over last year and
right on track to reach our goal of 150 communities by year
end.
“We delivered a gross margin of 25.0%, up 300
basis points from last year, and an adjusted gross margin of 27.0%,
up 320 basis points from last year. Notably, both results are in
line with our pre-pandemic performance. Driving this outperformance
was our ability to offset the impact of mortgage buydown incentives
and cost inflation by raising prices along with the benefits of
opening more self-developed, higher margin communities.
Additionally, we delivered a pre-tax profit margin of 12.8%, up 170
basis points from last year and similarly in line with our results
prior to the pandemic. Taken together, these achievements
contributed to diluted earnings per share of $2.48, an increase of
10.2% compared to the same period last year.
“On the momentum of these results, we now turn
our attention to the remainder of 2024. Based on our performance to
date, current backlog, and view on the inventory available to close
this year, we are adjusting our guidance. We now expect to close
between 6,400 and 7,200 homes this year at a higher average selling
price of between $360,000 and $370,000. Additionally, we have
increased our gross margin guidance range to between 23.5% and
24.5% and adjusted gross margin to between 25.5% and 26.5%.”
Mr. Lipar concluded, “Our strong second quarter
results are a testament to the focused execution of our teams and
our success at managing affordability challenges while still
delivering outstanding margins that reflect our commitment to
increasing profitability and driving higher returns.”
Full Year 2024 Outlook
Subject to the caveats in the Forward-Looking
Statements section of this press release and the assumptions noted
below, the Company is providing the following updates to its
guidance for the full year 2024. The Company now expects:
- Home closings
between 6,400 and 7,200
- Active selling
communities at the end of 2024 of approximately 150
- Average sales price
per home closed between $360,000 and $370,000
- Gross margin as a
percentage of home sales revenues between 23.5% and 24.5%
- Adjusted gross
margin (non-GAAP) as a percentage of home sales revenues between
25.5% and 26.5% with capitalized interest accounting for
substantially all of the difference between gross margin and
adjusted gross margin
- SG&A as a
percentage of home sales revenues between 13.0% and 14.0%
- 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 2024 are similar to those experienced to date in 2024
and that construction costs, availability of land and land
development costs in the remainder of 2024 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, July 30, 2024 (the
“Earnings Call”).
Participants may access the live webcast by
visiting the Investor Relations section of the Company’s website at
www.investor.lgihomes.com.
An archive of the Earnings Call will be
available for replay on the Company’s website for one year from the
date of the Earnings 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 36 markets in 21 states. As
one of America’s fastest growing companies, LGI Homes has closed
over 70,000 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 the World’s Most Trustworthy
Companies. 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 2024 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 2024 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, 2023, 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,
2024 and June 30, 2024 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, |
| |
|
2024 |
|
2023 |
| ASSETS |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
51,071 |
|
|
$ |
48,978 |
|
|
Accounts receivable |
|
|
43,213 |
|
|
|
41,319 |
|
|
Real estate inventory |
|
|
3,360,265 |
|
|
|
3,107,648 |
|
|
Pre-acquisition costs and deposits |
|
|
34,004 |
|
|
|
30,354 |
|
|
Property and equipment, net |
|
|
56,345 |
|
|
|
45,522 |
|
|
Other assets |
|
|
137,968 |
|
|
|
113,849 |
|
|
Deferred tax assets, net |
|
|
7,043 |
|
|
|
8,163 |
|
|
Goodwill |
|
|
12,018 |
|
|
|
12,018 |
|
|
Total assets |
|
$ |
3,701,927 |
|
|
$ |
3,407,851 |
|
| |
|
|
|
|
| LIABILITIES AND
EQUITY |
|
|
|
|
|
Accounts payable |
|
$ |
66,745 |
|
|
$ |
31,616 |
|
|
Accrued expenses and other liabilities |
|
|
209,975 |
|
|
|
271,872 |
|
|
Notes payable |
|
|
1,501,365 |
|
|
|
1,248,332 |
|
|
Total liabilities |
|
|
1,778,085 |
|
|
|
1,551,820 |
|
| |
|
|
|
|
| COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
| EQUITY |
|
|
|
|
| Common stock, par value $0.01,
250,000,000 shares authorized, 27,612,742 shares issued and
23,500,280 shares outstanding as of June 30, 2024 and 27,521,120
shares issued and 23,581,648 shares outstanding as of December 31,
2023 |
|
|
276 |
|
|
|
275 |
|
|
Additional paid-in capital |
|
|
331,246 |
|
|
|
321,062 |
|
|
Retained earnings |
|
|
1,965,342 |
|
|
|
1,889,716 |
|
|
Treasury stock, at cost, 4,112,462 shares as of June 30, 2024
and 3,939,472 shares as of December 31, 2023 |
|
|
(373,022 |
) |
|
|
(355,022 |
) |
|
Total equity |
|
|
1,923,842 |
|
|
|
1,856,031 |
|
|
Total liabilities and equity |
|
$ |
3,701,927 |
|
|
$ |
3,407,851 |
|
|
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, |
| |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Home sales revenues |
|
$ |
602,497 |
|
|
$ |
645,270 |
|
|
$ |
993,348 |
|
|
$ |
1,132,627 |
|
| |
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
451,613 |
|
|
|
503,333 |
|
|
|
751,063 |
|
|
|
891,874 |
|
| Selling expenses |
|
|
52,872 |
|
|
|
49,225 |
|
|
|
94,000 |
|
|
|
92,030 |
|
| General and
administrative |
|
|
30,491 |
|
|
|
27,626 |
|
|
|
62,031 |
|
|
|
57,586 |
|
|
Operating income |
|
|
67,521 |
|
|
|
65,086 |
|
|
|
86,254 |
|
|
|
91,137 |
|
| Other income, net |
|
|
(9,362 |
) |
|
|
(6,323 |
) |
|
|
(13,723 |
) |
|
|
(12,620 |
) |
| Net income before income
taxes |
|
|
76,883 |
|
|
|
71,409 |
|
|
|
99,977 |
|
|
|
103,757 |
|
| Income tax provision |
|
|
18,310 |
|
|
|
18,275 |
|
|
|
24,351 |
|
|
|
23,661 |
|
| Net income |
|
$ |
58,573 |
|
|
$ |
53,134 |
|
|
$ |
75,626 |
|
|
$ |
80,096 |
|
| Earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.49 |
|
|
$ |
2.26 |
|
|
$ |
3.21 |
|
|
$ |
3.41 |
|
|
Diluted |
|
$ |
2.48 |
|
|
$ |
2.25 |
|
|
$ |
3.20 |
|
|
$ |
3.39 |
|
| |
|
|
|
|
|
|
|
|
| Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
23,543,378 |
|
|
|
23,533,097 |
|
|
|
23,560,977 |
|
|
|
23,457,615 |
|
|
Diluted |
|
|
23,603,311 |
|
|
|
23,608,892 |
|
|
|
23,635,116 |
|
|
|
23,615,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 the Company’s 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, |
| |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Home sales revenues |
|
$ |
602,497 |
|
|
$ |
645,270 |
|
|
$ |
993,348 |
|
|
$ |
1,132,627 |
|
| Cost of sales |
|
|
451,613 |
|
|
|
503,333 |
|
|
|
751,063 |
|
|
|
891,874 |
|
| Gross margin |
|
|
150,884 |
|
|
|
141,937 |
|
|
|
242,285 |
|
|
|
240,753 |
|
|
Capitalized interest charged to cost of sales |
|
|
10,632 |
|
|
|
9,138 |
|
|
|
17,233 |
|
|
|
15,895 |
|
|
Purchase accounting adjustments (1) |
|
|
1,174 |
|
|
|
2,708 |
|
|
|
1,977 |
|
|
|
4,744 |
|
| Adjusted gross margin |
|
$ |
162,690 |
|
|
$ |
153,783 |
|
|
$ |
261,495 |
|
|
$ |
261,392 |
|
| Gross margin % (2) |
|
|
25.0 |
% |
|
|
22.0 |
% |
|
|
24.4 |
% |
|
|
21.3 |
% |
| Adjusted gross margin %
(2) |
|
|
27.0 |
% |
|
|
23.8 |
% |
|
|
26.3 |
% |
|
|
23.1 |
% |
|
(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 Rate and Closing Community Count by
Reportable Segment
(Revenues in thousands,
unaudited)
| |
|
Three Months Ended June 30, 2024 |
|
As of June 30, 2024 |
|
Reportable Segment |
|
Revenues |
|
Home Closings |
|
ASP |
|
Average Community Count |
|
AverageMonthlyAbsorption
Rate |
|
Community Count at End of Period |
|
Central |
|
$ |
173,434 |
|
535 |
|
$ |
324,176 |
|
44.0 |
|
4.1 |
|
44 |
| Southeast |
|
|
135,418 |
|
410 |
|
|
330,288 |
|
24.7 |
|
5.5 |
|
23 |
| Northwest |
|
|
68,125 |
|
132 |
|
|
516,098 |
|
14.3 |
|
3.1 |
|
14 |
| West |
|
|
128,155 |
|
308 |
|
|
416,088 |
|
22.0 |
|
4.7 |
|
23 |
| Florida |
|
|
97,365 |
|
270 |
|
|
360,611 |
|
23.3 |
|
3.9 |
|
24 |
| Total |
|
$ |
602,497 |
|
1,655 |
|
$ |
364,047 |
|
128.3 |
|
4.3 |
|
128 |
| |
|
Three Months Ended June 30, 2023 |
|
As of June 30, 2023 |
|
Reportable Segment |
|
Revenues |
|
Home Closings |
|
ASP |
|
Average Community Count |
|
AverageMonthlyAbsorption
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 |
| |
|
Six Months Ended June 30, 2024 |
|
Reportable Segment |
|
Revenues |
|
Home Closings |
|
ASP |
|
Average Community Count |
|
AverageMonthlyAbsorption
Rate |
|
Central |
|
$ |
277,170 |
|
854 |
|
$ |
324,555 |
|
42.8 |
|
3.3 |
| Southeast |
|
|
251,863 |
|
765 |
|
|
329,233 |
|
25.7 |
|
5.0 |
| Northwest |
|
|
104,192 |
|
194 |
|
|
537,072 |
|
13.2 |
|
2.4 |
| West |
|
|
201,234 |
|
487 |
|
|
413,211 |
|
19.5 |
|
4.2 |
| Florida |
|
|
158,889 |
|
438 |
|
|
362,760 |
|
21.3 |
|
3.4 |
| Total |
|
$ |
993,348 |
|
2,738 |
|
$ |
362,801 |
|
122.5 |
|
3.7 |
| |
|
Six Months Ended June 30, 2023 |
|
Reportable Segment |
|
Revenues |
|
Home Closings |
|
ASP |
|
Average Community Count |
|
Average MonthlyAbsorption
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 |
Owned and Controlled Lots
The table below shows (i) home closings by
reportable segment for the six months ended June 30, 2024 and
(ii) the Company’s owned or controlled lots by reportable segment
as of June 30, 2024.
| |
|
Six Months Ended June 30, 2024 |
|
As of June 30, 2024 |
|
Reportable Segment |
|
Home Closings |
|
Owned (1) |
|
Controlled |
|
Total |
|
Central |
|
854 |
|
20,588 |
|
2,104 |
|
22,692 |
| Southeast |
|
765 |
|
14,177 |
|
4,274 |
|
18,451 |
| Northwest |
|
194 |
|
5,411 |
|
2,218 |
|
7,629 |
| West |
|
487 |
|
9,131 |
|
3,365 |
|
12,496 |
| Florida |
|
438 |
|
5,055 |
|
3,581 |
|
8,636 |
| Total |
|
2,738 |
|
54,362 |
|
15,542 |
|
69,904 |
|
(1) |
Of the 54,362 owned lots as of June 30, 2024, 39,284 were
raw/under development lots and 15,078 were finished lots. Finished
lots included 2,032 completed homes, including information centers,
and 2,639 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, |
|
2024 (4) |
|
2023 (5) |
|
Net orders (1) |
|
|
3,541 |
|
|
|
4,156 |
|
| Cancellation rate (2) |
|
|
19.5 |
% |
|
|
20.8 |
% |
| Ending
backlog – homes (3) |
|
|
1,393 |
|
|
|
1,638 |
|
| Ending
backlog – value (3) |
|
$ |
553,604 |
|
|
$ |
601,275 |
|
|
(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 retail 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 with varying terms. Ending
backlog is valued at the contract amount. |
|
(4) |
As of June 30, 2024, the Company had 181 units related to bulk
sales agreements associated with its wholesale business. |
|
(5) |
As of June 30, 2023, the Company had 131 units related to bulk
sales agreements associated with its wholesale business. |
|
CONTACT: |
Joshua D. FattorExecutive Vice President of Investor Relations and
Capital Markets(281) 210-2586investorrelations@lgihomes.com |
LGI Homes (NASDAQ:LGIH)
過去 株価チャート
から 7 2024 まで 7 2024
LGI Homes (NASDAQ:LGIH)
過去 株価チャート
から 7 2023 まで 7 2024
