UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36491

Century Communities, Inc.

(Exact name of registrant as specified in its charter)

Delaware	68-0521411
(State or other jurisdiction of ‎incorporation or organization)	(I.R.S. Employer ‎Identification No.)
8390 East Crescent Parkway, Suite 650 ‎Greenwood Village, CO	80111
(Address of principal executive offices)	(Zip Code)

(Registrant’s telephone number, including area code): (303) 770-8300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	CCS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x

On April 21, 2023, 32,025,879 shares of common stock, par value $0.01 per share, of the registrant were outstanding.  

CENTURY COMMUNITIES, INC.

FORM 10-Q

For the Three Months Ended March 31, 2023

Index

	Page No.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022 (audited)	3
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022	4
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	5
Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2023 and 2022	6
Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	36
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	37
Item 4. Mine Safety Disclosures	37
Item 5. Other Information	37
Item 6. Exhibits	38
Signatures	39

2

PART I – FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS.

Century Communities, Inc.

Condensed Consolidated Balance Sheets

As of March 31, 2023 and December 31, 2022

(in thousands, except share and per share amounts)

	March 31,		December 31,
	2023		2022
Assets	(unaudited)		(audited)
Cash and cash equivalents	$	405,722	$	296,724
Cash held in escrow		12,691		56,569
Accounts receivable		52,787		52,797
Inventories		2,741,187		2,830,645
Mortgage loans held for sale		155,732		203,558
Prepaid expenses and other assets		260,505		250,535
Property and equipment, net		33,019		31,688
Deferred tax assets, net		20,939		20,856
Goodwill		30,395		30,395
Total assets	$	3,712,977	$	3,773,767
Liabilities and stockholders' equity
Liabilities:
Accounts payable	$	106,525	$	106,926
Accrued expenses and other liabilities		258,412		299,588
Notes payable		1,026,615		1,019,412
Revolving line of credit		—		—
Mortgage repurchase facilities		149,784		197,626
Total liabilities		1,541,336		1,623,552
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding		—		—
Common stock, $0.01 par value, 100,000,000 shares authorized, 32,025,785 and 31,772,791 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		320		318
Additional paid-in capital		580,489		584,803
Retained earnings		1,590,832		1,565,094
Total stockholders' equity		2,171,641		2,150,215
Total liabilities and stockholders' equity	$	3,712,977	$	3,773,767

See Notes to Unaudited Condensed Consolidated Financial Statements

3

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Operations

For the Three Months Ended March 31, 2023 and 2022

(in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2023		2022
Revenues
Homebuilding revenues
Home sales revenues	$	735,600	$	988,415
Land sales and other revenues		1,535		1,630
Total homebuilding revenues		737,135		990,045
Financial services revenues		15,855		26,305
Total revenues		752,990		1,016,350
Homebuilding cost of revenues
Cost of home sales revenues		(601,385)		(709,073)
Cost of land sales and other revenues		—		(846)
Total homebuilding cost of revenues		(601,385)		(709,919)
Financial services costs		(10,781)		(15,154)
Selling, general and administrative		(98,313)		(101,639)
Other income (expense)		1,498		(862)
Income before income tax expense		44,009		188,776
Income tax expense		(10,698)		(46,280)
Net income	$	33,311	$	142,496
Earnings per share:
Basic	$	1.04	$	4.25
Diluted	$	1.04	$	4.20
Weighted average common shares outstanding:
Basic		31,914,414		33,530,610
Diluted		32,117,082		33,942,234

See Notes to Unaudited Condensed Consolidated Financial Statements

4

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2023 and 2022

(in thousands)

	Three Months Ended March 31,
	2023		2022
Operating activities
Net income	$	33,311	$	142,496
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,292		2,606
Stock-based compensation expense		5,360		4,064
Fair value of mortgage loans held for sale and other		205		4,443
Abandonment of lot option contracts		638		875
Deferred income taxes		(83)		(33)
Loss on disposition of assets		198		384
Changes in assets and liabilities:
Cash held in escrow		43,878		7,085
Accounts receivable		10		(4,106)
Inventories		90,152		(222,863)
Mortgage loans held for sale		48,241		144,361
Prepaid expenses and other assets		8,247		(28,959)
Accounts payable		(401)		6,841
Accrued expenses and other liabilities		(41,714)		52,239
Net cash provided by operating activities		191,334		109,433
Investing activities
Purchases of property and equipment		(4,820)		(5,841)
Expenditures related to development of rental properties		(16,268)		—
Other investing activities		152		750
Net cash used in investing activities		(20,936)		(5,091)
Financing activities
Borrowings under revolving credit facilities		—		141,500
Payments on revolving credit facilities		—		(141,500)
Borrowing under construction loan agreements		7,137		—
Proceeds from issuance of insurance premium notes and other		3,032		16,863
Principal payments on insurance premium notes and other		(3,364)		(5,235)
Net payments for mortgage repurchase facilities		(47,842)		(138,848)
Withholding of common stock upon vesting of stock-based compensation awards		(9,880)		(12,138)
Repurchases of common stock under stock repurchase program		—		(62,377)
Dividend payments		(7,365)		(6,657)
Other financing activities		—		(34)
Net cash used in financing activities		(58,282)		(208,426)
Net increase (decrease)	$	112,116	$	(104,084)
Cash and cash equivalents and Restricted cash
Beginning of period		308,492		322,241
End of period	$	420,608	$	218,157
Supplemental cash flow disclosure
Cash paid (refunds) for income taxes	$	—	$	(893)
Cash and cash equivalents and Restricted cash
Cash and cash equivalents	$	405,722	$	209,046
Restricted cash (Note 5)		14,886		9,111
Cash and cash equivalents and Restricted cash	$	420,608	$	218,157

See Notes to Unaudited Condensed Consolidated Financial Statements

5

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2023 and 2022

(in thousands)

	Common Stock
	Shares	Amount		Additional Paid-In Capital		Retained Earnings		Total Stockholders' Equity
Balance at December 31, 2022	31,773	$	318	$	584,803	$	1,565,094	$	2,150,215
Vesting of stock-based compensation awards	412		4		(4)		—		—
Withholding of common stock upon vesting of stock-based compensation awards	(159)		(2)		(9,878)		—		(9,880)
Stock-based compensation expense	—		—		5,360		—		5,360
Cash dividends declared and dividend equivalents	—		—		208		(7,573)		(7,365)
Net income	—		—		—		33,311		33,311
Balance at March 31, 2023	32,026	$	320	$	580,489	$	1,590,832	$	2,171,641
Balance at December 31, 2021	33,761	$	338	$	697,845	$	1,066,325	$	1,764,508
Vesting of stock-based compensation awards	480		5		(5)		—		—
Withholding of common stock upon vesting of stock-based compensation awards	(190)		(3)		(12,135)		—		(12,138)
Repurchases of common stock	(1,013)		(10)		(62,367)		—		(62,377)
Stock-based compensation expense	—		—		4,064		—		4,064
Cash dividends declared and dividend equivalents	—		—		79		(6,736)		(6,657)
Other	—		—		(34)		—		(34)
Net income	—		—		—		142,496		142,496
Balance at March 31, 2022	33,038	$	330	$	627,447	$	1,202,085	$	1,829,862

See Notes to Unaudited Condensed Consolidated Financial Statements

‎

6

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2023

1. Basis of Presentation

Century Communities, Inc. (which we refer to as “we,” “CCS,” or the “Company”), together with its subsidiaries, is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 18 states. In many of our projects, in addition to building homes, we are responsible for the entitlement and development of the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand targets a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade opportunities. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet, and generally provides no option or upgrade opportunities.

Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, and IHL Home Insurance Agency, LLC, which provide mortgage, title, and insurance services, respectively, primarily to our homebuyers, have been identified as our Financial Services segment. Additionally, our wholly owned subsidiary, Century Living, LLC, is engaged in the development, construction and management of multi-family rental properties, primarily in Colorado. Century Living, LLC is included in our Corporate segment.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (which we refer to as “GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (which we refer to as the “SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of our financial position and results of operations for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by GAAP and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2022, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that was filed with the SEC on February 2, 2023.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, as well as all subsidiaries in which we have a controlling interest, and variable interest entities for which the Company is deemed to be the primary beneficiary. We do not have any variable interest entities in which we are deemed the primary beneficiary. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

2. Reporting Segments

Our homebuilding operations are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 18 states. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand is managed by geographic location, and each of our four geographic regions offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections. Each of our four geographic regions is considered a separate operating segment. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet, and generally provides no option or upgrade selections. Our Century Complete brand currently has operations in 11 states and it is considered a separate operating segment.

7

The management of our four Century Communities geographic regions and Century Complete reports to our chief operating decision makers (which we refer to as “CODMs”), the Co-Chief Executive Officers of our Company. The CODMs review the results of our operations, including total revenue and income before income tax expense to determine profitability and to allocate resources. Accordingly, we have presented our homebuilding operations as the following five reportable segments:

West (California and Washington)

Mountain (Arizona, Colorado, Nevada, and Utah)

Texas

Southeast (Florida, Georgia, North Carolina, South Carolina, and Tennessee)

Century Complete (Alabama, Arizona, Florida, Georgia, Indiana, Kentucky, Louisiana, Michigan, North Carolina, Ohio, South Carolina)

Commencing in the first quarter of 2023, our Century Complete operations in Texas were realigned and are now managed under our Texas segment. Accordingly, we have presented segment information under this new basis as of and for the three months ended March 31, 2023, and we have restated the corresponding segment information for those segments as of December 31, 2022 and for the three months ended March 31, 2022.

We have identified our Financial Services operations, which provide mortgage, title, and insurance services to our homebuyers, as a sixth reportable segment. Our Corporate operations are a non-operating segment, as our Corporate operations serve to support our homebuilding, and to a lesser extent our Financial Services operations, through functions, such as our executive, finance, treasury, human resources, accounting and legal departments.

Additionally, our wholly owned subsidiary, Century Living, LLC, is engaged in the development, construction and management of multi-family rental properties, primarily in Colorado. Century Living, LLC is included in our Corporate segment. 

The following table summarizes total revenue and income (loss) before income tax expense by segment (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenue:
West	$	129,081	$	262,710
Mountain		246,275		281,360
Texas		89,532		138,563
Southeast		87,126		149,600
Century Complete		185,121		157,812
Financial Services		15,855		26,305
Corporate		—		—
Total revenue	$	752,990	$	1,016,350
Income (loss) before income tax expense:
West	$	7,973	$	71,242
Mountain		27,808		56,999
Texas		3,673		22,837
Southeast		11,966		30,865
Century Complete		13,950		22,425
Financial Services		5,074		11,151
Corporate		(26,435)		(26,743)
Total income before income tax expense	$	44,009	$	188,776

8

The following table summarizes total assets by segment (in thousands):

	March 31,		December 31,
	2023		2022
West	$	632,820	$	665,827
Mountain		1,017,045		1,122,892
Texas