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Century Communities, Inc$18.83($.92)(4.66%)

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 Century Communities Reports Record Fourth Quarter and Full Year 2017 Results
   Tuesday, February 13, 2018 4:05:02 PM ET

--- Home Sales Revenues Increased 77% to $516.5 Million for Fourth Quarter -

--- Net New Home Contracts Grew 62% to 922 Homes for Fourth Quarter -

--- Provides Full Year 2018 Outlook for Solid Growth in Home Sales Revenues and Deliveries -

Century Communities, Inc. (CCS ), a leading homebuilder in select U.S. markets, today announced financial results for its fourth quarter and full year ending December 31, 2017.

Fourth Quarter 2017 Highlights Compared to Fourth Quarter 2016

-- Adjusted net income of $28.8 million or $1.01 per diluted share excluding the one-time charges related to the impact of remeasurement of deferred tax amounts and homebuilding acquisitions, an increase of 90%, and net income of $17.2 million, or $0.60 per diluted share

-- Net new home contracts increased 62% to 922 contracts

-- Home sales revenues increased 77% to a record $516.5 million

-- Deliveries grew 62% to a record 1,311 homes

-- Backlog value increased 89% to $572.9 million

-- Backlog improved 76% to 1,320 homes

-- Adjusted homebuilding gross margin percentage increased 30 basis points to 21.7%

-- Adjusted EBITDA improved 90% to $58.6 million

-- Completed the bolt-on acquisition of the assets of Sundquist Homes ("Sundquist"), strengthening the Company’s presence and enhancing operating efficiencies in the Seattle, Washington market

Dale Francescon, Co-Chief Executive Officer of the Company, stated, "2017 represented the most exciting year in the history of the Company. We dramatically expanded our geographical footprint as a result of the UCP acquisition while experiencing sustained improvement across the entire Century platform, including new and legacy markets. This progress resulted in a record year of home sales revenues and earnings to produce our 15th consecutive year of profitability. During the fourth quarter of 2017, our team’s superior performance allowed us to meaningfully increase growth in net new home contracts and deliveries by over 60% year-over-year. This solid operating momentum combined with our stable margin performance demonstrates our ability to successfully execute the goals of our dynamic growth strategy. As we move forward in 2018, we anticipate another year of record results fueled by our solid pipeline of new communities and strategic investments which should further enhance our returns on equity."

"During 2017, we continued to improve our backlog quantity and quality and strengthen our balance sheet," said Rob Francescon, Co-Chief Executive Officer of the Company. "So far in 2018, the buyer traffic and overall market dynamics in our West, Mountain, Texas and Southeast regions are encouraging, with our newly acquired operations in California and Washington having already positively impacted our results. Additionally, our joint venture and financing divisions have each surpassed our expectations, contributing cumulative pretax income in excess of $13 million during 2017 and meaningful returns on investment. With our planned community openings, strong backlog, and recent acquisitions of leading homebuilders in attractive markets, we are well positioned to continue this positive momentum into 2018 and beyond."

Fourth Quarter 2017 Results

Net income for the fourth quarter 2017 was $17.2 million, or $0.60 per share. Excluding the impact of one-time charges associated with the remeasurement of our net deferred tax assets and our homebuilder acquisitions, adjusted net income for the fourth quarter increased 90% to a record $28.8 million, or $1.01 per share, as compared to $15.1 million, or $0.71 per share, for the prior year quarter.

Home sales revenues and deliveries were at record levels for the Company for the fourth quarter 2017. Home sales revenues for the fourth quarter 2017 increased 77% to $516.5 million, compared to $292.4 million for the prior year quarter. The growth in home sales revenues was primarily due to a 62% increase in deliveries to 1,311 homes compared to 812 homes for the prior year quarter, and a higher average sales price of home deliveries of $394,000, compared to $360,100 in the prior year quarter. Deliveries and average sales price of home deliveries in the fourth quarter of 2017 were both favorably impacted, primarily in the West, by the acquisitions of UCP and Sundquist. Excluding the West, the Company’s legacy regions experienced growth in revenue and deliveries of 22% and 31%, respectively.

Adjusted homebuilding gross margin percentage, excluding interest and purchase price accounting, was 21.7% in the fourth quarter 2017, as compared to 21.0% in the third quarter and 21.4% in the prior year quarter, primarily as a result of favorable product and geographical mix. Homebuilding gross margin percentage in the fourth quarter 2017 was 17.6%, as compared to 19.2% in the prior year quarter, with approximately half of the difference attributable to the impact of purchase price accounting in the fourth quarter 2017. SG&A as a percent of home sales revenues was 12.1%, compared 11.9% in the prior year quarter, largely attributable to numerous investment initiatives to support growth objectives in 2018.

Net new home contracts in the fourth quarter 2017 increased to 922 homes, representing an increase of 62%, compared to 569 homes in the prior year quarter, attributable to the addition of the new West region and stronger demand trends in all legacy regions driving an overall increase in absorption rates. Excluding the West, the Company’s legacy regions experienced a 30% increase in net new home contracts. At the end of the fourth quarter 2017, the Company had 1,320 homes in backlog, representing $572.9 million of backlog dollar value, compared to 749 homes in backlog, representing $302.8 million of backlog dollar value in the prior year quarter, an increase of 76% in units and 89% in dollar value.

Financial services revenue was $5.2 million in the fourth quarter 2017 and financial services costs were $4.0 million. Equity in income of unconsolidated subsidiaries was $4.5 million, compared to $0.2 million in the prior year quarter.

Full Year 2017 Results

Net income for the full year 2017 was $50.3 million, or $2.03 per share. Adjusted net income increased 42% to a record $71.1 million, or $2.87 per share, compared to $50.1 million, or $2.36 per share, for the prior year.

Home sales revenues for 2017 increased 44% to $1.4 billion, compared to $978.7 million for 2016. The increase in home sales revenues was primarily due to home deliveries increasing 29% to 3,640 homes and the average selling price of homes delivered increasing to $386,100 compared to $346,500 in the prior year, helped by a shift in regional and product mix.

Homebuilding gross margin percentage in 2017 was 17.9%, compared to 19.7% in 2016. Adjusted homebuilding gross margin percentage, excluding purchase price accounting and interest in cost of home sales revenues, was 21.4% compared to 21.7% in the prior year. SG&A as a percent of home sales revenues remained constant at 12.5% compared to the prior year, with tight cost controls offsetting numerous investment initiatives to support growth objectives in 2018.

Net new home contracts in 2017 increased to 3,814 homes, an increase of 33%, compared to 2,860 homes in the prior year, largely attributable to increased demand, additional open communities and acquisitions.

At the end of full year 2017, the Company had 119 open communities, an increase of 34%, compared to 89 open communities at the end of the prior year.

Financial services revenue was $9.9 million for the full year 2017 and financial services costs were $8.7 million. Equity in income of unconsolidated subsidiaries was $12.2 million, compared to $0.2 million in the prior year.

Balance Sheet and Liquidity

As of December 31, 2017, the Company had the full $400.0 million of availability under its credit facility.

During the full year of 2017, in addition to shares issued in connection with the UCP business combination, the Company issued 3.7 million shares of its common stock under its ATM Program for proceeds of $98.9 million, or $27.31 per share.

Full Year 2018 Outlook

David Messenger, Chief Financial Officer of the Company, commented, "We are encouraged by the strong activity in our communities during 2017 and the potential for continued success in 2018. Based on our current market outlook, we expect home deliveries to be in the range of 4,500 to 5,000 homes and our home sales revenues to be in the range of $1.75 billion to $2.0 billion. We expect our active selling community count to be in the range of 130 to 140 communities at the end of the full year 2018. With the benefit of recent U.S. tax reform, we expect to incur an income tax rate of approximately 25% in 2018."

Conference Call

The Company will host a webcast and conference call on Tuesday, February 13, 2018 at 5:00 p.m. Eastern time, 3:00 p.m. Mountain time, to review the Company’s fourth quarter and full year 2017 results, discuss recent events and conduct a question-and-answer period. To participate in the call, please dial 877-705-6003 (domestic) or 201-493-6725 (international). The live webcast will be available at www.centurycommunities.com in the Investors section. A replay of the conference call will be available through March 13, 2018, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13675474.

About Century Communities

Century Communities, Inc. (CCS ) is one of the nation’s largest U.S. homebuilders, engaged in all aspects of homebuilding, including the acquisition, entitlement and development of land and the construction, marketing and sale of quality homes designed to appeal to a wide range of homebuyers. The Colorado-based Company operates in 10 states across the West, Mountain, Texas and Southeast Regions and offers title and lending services in select markets through its Parkway Title and Inspire Home Loan subsidiaries. To learn more about Century Communities please visit www.centurycommunities.com.

Non-GAAP Financial Measures

In addition to the Company’s operating results presented in accordance with GAAP, this press release includes the following non-GAAP financial measures: Adjusted Diluted Earnings per Common Share (Adjusted Diluted EPS), Adjusted Homebuilding Gross Margin, Adjusted EBITDA, and Ratio of Net Debt to Net Capital. These non-GAAP financial measures should not be used as a substitute for the Company’s operating results presented in accordance with GAAP, and an analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. Please refer to the reconciliation of each of the above referenced non-GAAP financial measures following the historical financial information presented in this press release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and assumptions. Forward-looking statements may be identified by the use of words such as "anticipate," "believe," "expect," "estimate," "plan," "outlook," and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on historical information available at the time the statements are made and are based on management’s reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law. Investors are referred to the Company’s Annual Report on Form 10-K for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.

                                                                                                                                                                            
                                                                                                                                                                           Century Communities, Inc.
                                                                                                                                                                Condensed Consolidated Statements of Operations
                                                                                                                                                                                  (Unaudited)
                                                                                                                                                              (in thousands, except share and per share amounts)
                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                     Three Months Ended December 31,                                                                                                                                    Year Ended December 31,
                                                                                           ------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------
                                                                                                           2017                                                                          2016                                                                          2017                                                                             2016
                                                                                           ------------------------------------                                          ------------------------------------                                          ------------------------------------                                          ------------------------------------------
Revenues
 Home sales revenues                                                                                          $        516,501                                                              $        292,398                                                              $      1,405,443                                                              $              978,733
 Land sales and other revenues                                                                        2,289                                                      4,891                                                      8,503                                                           15,707
                                                                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------------
                                                                                                                       518,790                                                                       297,289                                                                     1,413,946                                                                             994,440
Financial services revenue                                                                            5,156                                             --                                                      9,853                                                   --
                                                                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------------
  Total revenues                                                                                                       523,946                                                                       297,289                                                                     1,423,799                                                                             994,440
Homebuilding Cost of Revenues                                                                                   --                                                                --                                                                --                                                                      --
 Cost of home sales revenues                                                                                         (425,782)                                                                     (236,241)                                                                   (1,153,359)                                                                           (786,127)
 Cost of land sales and other revenues                                                              (1,522)                                                    (4,784)                                                    (6,516)                                                         (14,217)
                                                                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------------
                                                                                                                     (427,304)                                                                     (241,025)                                                                   (1,159,875)                                                                           (800,344)
 Financial services costs                                                                                              (4,016)                                                                --                                                                       (8,664)                                                                      --
 Selling, general, and administrative                                                                                 (62,707)                                                                      (34,712)                                                                     (176,304)                                                                           (122,224)
 Acquisition expense                                                                                                   (1,260)                                                                          (24)                                                                       (9,905)                                                                               (490)
 Equity in income of unconsolidated subsidiaries                                                                         4,528                                                                           191                                                                        12,176                                                                                 191
 Other income (expense)                                                                                 661                                                        173                                                      2,937                                                            1,576
                                                                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------------
Income before income tax expense                                                                                        33,848                                                                        21,892                                                                        84,164                                                                              73,149
Income tax expense                                                                                 (16,653)                                                    (6,819)                                                   (33,869)                                                         (23,609)
                                                                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------                                           -------------------- --------------------
Net income                                                                                                    $         17,195                                                              $         15,073                                                              $         50,295                                                              $               49,540
                                                                                           ==================== ==============                                           ==================== ==============                                           ==================== ==============                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                           
Earnings per share:
Basic                                                                                                         $           0.61                                                              $           0.71                                                              $           2.06                                                              $                 2.34
Diluted                                                                                                       $           0.60                                                              $           0.71                                                              $           2.03                                                              $                 2.33
Weighted average common shares outstanding:
Basic                                                                                                               27,967,797                                                                    20,775,450                                                                    24,280,871                                                                          20,679,189
Diluted                                                                                                             28,355,559                                                                    20,961,700                                                                    24,555,509                                                                          20,791,937
                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                  
                                                                                                        Century Communities, Inc.
                                                                                                  Condensed Consolidated Balance Sheets
                                                                                                               (Unaudited)
                                                                                                  (in thousands, except share amounts)
                                                                                                                                                                                                                     
                                                                                                                             December 31,                                                                     December 31,
                                                                                                                                 2017                                                                             2016
                                                                                                                 ------------------------------------                                          ------------------------------------------
Assets
Cash and cash equivalents                                                                                                           $         88,832                                                              $               29,450
Cash held in escrow                                                                                                                           37,723                                                                              20,044
Accounts receivable                                                                                                                           12,999                                                                               5,656
Inventories                                                                                                                                1,390,354                                                                             857,885
Mortgage loans held for sale                                                                                                                  52,327                                                                      --
Prepaid expenses and other assets                                                                                                             60,812                                                                              34,714
Property and equipment, net                                                                                                                   27,911                                                                              15,935
Investment in unconsolidated subsidiaries                                                                                                     28,208                                                                              18,275
Deferred tax asset, net                                                                                                                        5,555                                                                      --
Amortizable intangible assets, net                                                                                                             2,938                                                                               4,204
Goodwill                                                                                                                   27,363                                                           21,365
                                                                                                                 -------------------- --------------                                           -------------------- --------------------
Total assets                                                                                                                        $      1,735,022                                                              $            1,007,528
                                                                                                                 ==================== ==============                                           ==================== ====================
Liabilities and stockholders’ equity
Liabilities:
  Accounts payable                                                                                                                  $         24,831                                                              $               15,726
  Accrued expenses and other liabilities                                                                                                     150,356                                                                              62,296
  Deferred tax liability, net                                                                                                         --                                                                               1,782
  Senior notes payable                                                                                                                       776,283                                                                             259,088
  Revolving line of credit                                                                                                            --                                                                             195,000
  Mortgage repurchase facility                                                                                             48,319                                                   --
                                                                                                                 -------------------- --------------                                           -------------------- --------------------
Total liabilities                                                                                                         999,789                                                          533,892
                                                                                                                 -------------------- --------------                                           -------------------- --------------------
Stockholders’ equity:
  Preferred stock, $0.01 par value, 50,000,000 shares authorized, none                                                                --                                                                      --
  outstanding
                                                                                                                                                 295                                                                                 216
  Common stock, $0.01 par value, 100,000,000 shares authorized,
  29,502,624 and 21,620,544 shares issued and outstanding at
  December 31, 2017 and December 31, 2016, respectively
  Additional paid-in capital                                                                                                                 566,790                                                                             355,567
  Retained earnings                                                                                                       168,148                                                          117,853
                                                                                                                 -------------------- --------------                                           -------------------- --------------------
Total stockholders’ equity                                                                                                735,233                                                          473,636
                                                                                                                 -------------------- --------------                                           -------------------- --------------------
Total liabilities and stockholders’ equity                                                                                          $      1,735,022                                                              $            1,007,528
                                                                                                                 ==================== ==============                                           ==================== ====================
                                                                                                                                                                                                                     
                                                                 
                                                                                           Century Communities, Inc.
                                                                                         Homebuilding Operational Data
 
Net New Home Contracts
 
                                                                                                                                   Three Months Ended
                                                                                                                                      December 31,
                                                                           -----------------------------------------------------------------------------------------------------------------------------------
                                                                            2017                                                2016                                                         % Change
                                                                           -----                                           --------------                                           --------------------------
West                                                                         182                                           --                                             NM
Mountain                                                                     301                                                      276                                            9.1 %
Texas                                                                        117                                                       78                                           50.0 %
Southeast                                                                    322                                                      215                                           49.8 %
                                                                           -----                                           --------------                                           ---- --------------------
Total                                                                        922                                                      569                                           62.0 %
                                                                           =====                                           ==============                                           ==== ====================
                                                                                                                                                                                          
                                                                                                                                       Year Ended
                                                                                                                                      December 31,
                                                                           -----------------------------------------------------------------------------------------------------------------------------------
                                                                            2017                                                2016                                                         % Change
                                                                           -----                                           --------------                                           --------------------------
West                                                                         296                                           --                                             NM
Mountain                                                                   1,591                                                    1,260                                           26.3 %
Texas                                                                        477                                                      349                                           36.7 %
Southeast                                                                  1,450                                                    1,251                                           15.9 %
                                                                           -----                                           --------------                                           ---- --------------------
Total                                                                      3,814                                                    2,860                                           33.4 %
                                                                           =====                                           ==============                                           ==== ====================
NM - Not meaningful
                                                                                                                                                                                          
                                                                                                                                                     
Home Deliveries
(dollars in thousands)
                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                     Three Months Ended December 31,
                                                                           -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               2017                                                                                                                          2016                                                                                                               % Change                          
                                                                           ----------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------                                          -----------------------------------------------------------------------------
                                                                            Homes                                                  Average Sales                                                      Homes                                                           Average Sales                                                       Homes                                                   Average Sales
                                                                                                                                       Price                                                                                                                              Price                                                                                                                       Price
                                                                           -----                                           --------------------------                                            --------------                                           ----------------------------------                                            ------                                            --------------------------
West                                                                         247                                                              $  554.7                                           --                                                              $ --                                             NM                                                  NM
Mountain                                                                     419                                                                 410.4                                                      368                                                                         406.6                                           13.9 %                                               0.9 %
Texas                                                                        147                                                                 353.3                                                       86                                                                         429.5                                           70.9 %                                            (17.7) %
Southeast                                                                    498                                              312.5                                                      358                                                      295.6                                           39.1 %                                               5.7 %
                                                                           -----                                           -------------------- ------                                           --------------                                           -------------------- --------------                                           ---- --                                           ------ --------------------
Total / Weighted Average                                                   1,311                                                              $  394.0                                                      812                                                              $          360.1                                           61.5 %                                               9.4 %
                                                                           =====                                           ==================== ======                                           ==============                                           ==================== ==============                                           ==== ==                                           ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                         Year Ended December 31,
                                                                           -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               2017                                                                                                                          2016                                                                                                               % Change                          
                                                                           ----------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------                                          -----------------------------------------------------------------------------
                                                                            Homes                                                  Average Sales                                                      Homes                                                           Average Sales                                                       Homes                                                   Average Sales
                                                                                                                                       Price                                                                                                                              Price                                                                                                                       Price
                                                                           -----                                           --------------------------                                            --------------                                           ----------------------------------                                            ------                                            --------------------------
West                                                                         398                                                              $  529.4                                           --                                                              $ --                                             NM                                                  NM
Mountain                                                                   1,465                                                                 418.0                                                    1,222                                                                         409.5                                           19.9 %                                               2.1 %
Texas                                                                        413                                                              $  389.6                                                      338                                                                         400.0                                           22.2 %                                             (2.6) %
Southeast                                                                  1,364                                                              $  309.0                                                    1,265                                                      271.3                                            7.8 %                                              13.9 %
                                                                           -----                                           -------------------- ------                                           --------------                                           -------------------- --------------                                           ---- --                                           ------ --------------------
Total / Weighted Average                                                   3,640                                                              $  386.1                                                    2,825                                                              $          346.5                                           28.8 %                                              11.4 %
                                                                           =====                                           ==================== ======                                           ==============                                           ==================== ==============                                           ==== ==                                           ====== ====================
NM - Not meaningful
                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                            
                                                                                                                    Century Communities, Inc.
                                                                                                                  Homebuilding Operational Data
                                                                                                                                                                                                                                            
Selling Communities
                                                                                                                                                                                     
Selling communities at period end                                                                 As of December 31,                                                                                             Increase/(Decrease)
                                                                            --------------------------------------------------------------                                          ----------------------------------------------------------------------------
                                                                            2017                                                2016                                                Amount                                                    % Change
                                                                            ----                                           --------------                                           ------                                           ---------------------------
                                                                                                                                                                                                                                            
West                                                                          19                                           --                                               19                                              NM
Mountain                                                                      33                                                       35                                              (2)                                           (5.7) %
Texas                                                                         27                                                       23                                                4                                            17.4 %
Southeast                                                                     40                                                       31                                                9                                            29.0 %
                                                                            ----                                           --------------                                           ------                                           ----- --------------------
Total                                                                        119                                                       89                                               30                                            33.7 %
                                                                            ====                                           ==============                                           ======                                           ===== ====================
NM - Not meaningful
                                                                                                                                                                                                                                               
Backlog
(dollars in thousands)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                      As of December 31,
                                                                           ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                  2017                                                                                                                                                                                                     2016                                                                                                                                                                                            % Change
                                                                           ---------------------------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          -------------------------------------------------------------------------------------------------------------------------------------
                                                                            Homes                                                  Dollar Value                                                           Average Sales                                                      Homes                                                           Dollar Value                                                                  Average Sales                                                       Homes                                           Dollar Value                                                   Average Sales
                                                                                                                                                                                                              Price                                                                                                                                                                                                            Price                                                                                                                                                                              Price
                                                                           -----                                           ---------------------------                                            --------------------------                                            --------------                                           ----------------------------------                                            ----------------------------------                                            ------                                            -----------                                            --------------------------
West                                                                         270                                                              $ 164,071                                                              $  607.7                                           --                                                              $ --                                                              $ --                                             NM                                                  NM                                                     NM
Mountain                                                                     455                                                                200,887                                                                 441.5                                                      329                                                                       148,298                                                                         450.8                                           38.3  %                                             35.5     %                                            (2.1)                    %
Texas                                                                        215                                                                 82,886                                                                 385.5                                                      151                                                                        72,423                                                                         479.6                                           42.4  %                                             14.4     %                                           (19.6)                    %
Southeast                                                                    380                                             125,044                                              329.1                                                      269                                                     82,102                                                      305.2                                           41.3  %                                             52.3     %                                              7.8                    %
                                                                           -----                                           -------------------- -------                                           -------------------- ------                                           --------------                                           -------------------- --------------                                           -------------------- --------------                                           ---- --                                           ------ -----                                           ------ --------------------
Total / Weighted                                                           1,320                                                              $ 572,888                                                              $  434.0                                                      749                                                              $        302,823                                                              $          404.3                                           76.2  %                                             89.2     %                                              7.3                    %
Average
                                                                           =====                                           ==================== =======                                           ==================== ======                                           ==============                                           ==================== ==============                                           ==================== ==============                                           ==== ==                                           ====== =====                                           ====== ====================
NM - Not meaningful
                                                                                                                                                             
Lot Inventory
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                              As of December 31,
                                                                           ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               2017                                                                                                                                                             2016                                                                                                                                                                     % Change
                                                                           -------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                            Owned                                           Controlled                                            Total                                                Owned                                                 Controlled                                                  Total                                                 Owned                                           Controlled                                                      Total
                                                                           ------                                           ----------                                           ------                                           --------------                                           --------------                                           --------------                                           --------                                          -----------                                          --------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
West                                                                        3,742                                                3,179                                            6,921                                           --                                           --                                           --                                             NM                                                 NM                                                  NM
Mountain                                                                    4,666                                                4,856                                            9,522                                                    4,354                                 2,959                                 7,313                                            7.2 %                                             64.1 %                                              30.2 %
Texas                                                                       2,517                                                3,489                                            6,006                                                    1,356                                 3,420                                 4,776                                           85.6 %                                              2.0 %                                              25.8 %
Southeast                                                                   4,827                                                3,508                                            8,335                                                    2,953                                 3,254                                 6,207                                           63.5 %                                              7.8 %                                              34.3 %
                                                                           ------                                           ----------                                           ------                                           --------------                                           --------------                                           --------------                                           ---- --                                           ----- ----                                           ---- --------------------
Total                                                                      15,752                                               15,032                                           30,784                                                    8,663                                                    9,633                                                   18,296                                           81.8 %                                             56.0 %                                              68.3 %
                                                                           ======                                           ==========                                           ======                                           ==============                                           ==============                                           ==============                                           ==== ==                                           ===== ====                                           ==== ====================
NM - Not meaningful
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Century Communities, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited)

Adjusted Diluted Earnings per Common Share (Adjusted Diluted EPS) is a non-GAAP financial measure that we believe is useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating trends without the effect of certain non-recurring items. We believe excluding certain non-recurring items provides more comparable assessment of our financial results from period to period. Adjusted Diluted EPS is calculated by excluding the effect of acquisition costs and purchase price accounting for acquired work in process from the calculation of reported EPS.

                                                                                                                                                                                  
                                                                                                                                                                     Adjusted Diluted Earnings Per Common Share
                                                                                                                                                                                                                                                                                                                                                                 
(in thousands, except share and per share amounts)
                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                         Three Months Ended                                                                                                                                           Year Ended
                                                                                                                                                            December 31,                                                                                                                                             December 31,
                                                                                                             ----------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------------------------------------
                                                                                                                           2017                                                                      2016                                                                      2017                                                                           2016
                                                                                                             --------------------------------                                          --------------------------------                                          --------------------------------                                          ------------------------------------------
Numerator
Net income                                                                                                                      $     17,195                                                              $     15,073                                                              $     50,295                                                              $               49,540
Less: Undistributed earnings allocated to participating securities                                                   (85)                                                  (255)                                                  (384)                                                          (1,050)
                                                                                                             -------------------- ----------                                           -------------------- ----------                                           -------------------- ----------                                           -------------------- --------------------
Net income allocable to common stockholders                                                                                     $     17,110                                                              $     14,818                                                              $     49,911                                                              $               48,490
                                                                                                             ==================== ==========                                           ==================== ==========                                           ==================== ==========                                           ==================== ====================
Denominator
Weighted average common shares outstanding - basic                                                                                27,967,797                                                                20,775,450                                                                24,280,871                                                                          20,679,189
Dilutive effect of restricted stock units                                                                         387,762                                                186,250                                                                   274,638                                                                             112,748
                                                                                                             -------------------- ----------                                           -------------------- ----------                                                                ----------                                                                --------------------
Weighted average common shares outstanding - diluted                                                           28,355,559                                             20,961,700                                                                24,555,509                                                                          20,791,937
                                                                                                             ==================== ==========                                           ==================== ==========                                                                ==========                                                                ====================
Earnings per share:
Basic                                                                                                                           $       0.61                                                              $       0.71                                                              $       2.06                                                              $                 2.34
Diluted                                                                                                                         $       0.60                                                              $       0.71                                                              $       2.03                                                              $                 2.33
                                                                                                                                                                                                                                                                                                                                                                 
Adjusted Earnings per share
Numerator
  Income before income tax expense                                                                                              $     33,848                                                              $     21,892                                                              $     84,164                                                              $               73,149
  Purchase price accounting for acquired work in process inventory                                                                     9,295                                                                        70                                                                    15,625                                                                                 389
  Acquisition expense                                                                                               1,260                                                     24                                                  9,905                                                              490
                                                                                                             -------------------- ----------                                           -------------------- ----------                                           -------------------- ----------                                           -------------------- --------------------
  Adjusted income before income tax expense                                                                                           44,403                                                                    21,986                                                                   109,694                                                                              74,028
  Adjusted income tax expense(1)                                                                                 (15,630)                                                (6,848)                                               (38,612)                                                         (23,893)
                                                                                                             -------------------- ----------                                           -------------------- ----------                                           -------------------- ----------                                           -------------------- --------------------
Adjusted net income                                                                                                                   28,773                                                                    15,138                                                                    71,082                                                                              50,135
Less: Undistributed earnings allocated to participating securities                                                  (141)                                                  (256)                                                  (543)                                                          (1,062)
                                                                                                             -------------------- ----------                                           -------------------- ----------                                           -------------------- ----------                                           -------------------- --------------------
Adjusted net income allocable to common stockholders                                                                            $     28,632                                                              $     14,882                                                              $     70,539                                                              $               49,073
                                                                                                             ==================== ==========                                           ==================== ==========                                           ==================== ==========                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                 
Denominator - Diluted                                                                                                             28,355,559                                                                20,961,700                                                                24,555,509                                                                          20,791,937
                                                                                                                                                                                                                                                                                                                                                                 
Adjusted diluted earnings per share                                                                                             $       1.01                                                              $       0.71                                                              $       2.87                                                              $                 2.36
                                                                                                                                                                                                                                                                                                                                                                 
    (1)   The tax rate used in calculating adjusted net income was 35.2% for
                                                                   the three months and year ended December 31, 2017. The tax rate used
                                                                   is reflective of our GAAP tax rate for the applicable periods
                                                                   adjusted for certain acquisition costs which are not deductible for
                                                                   tax and the remeasurement of our deferred tax assets as a result of
                                                                   the tax cuts and Jobs Act which was signed into law on December 22,
                                                                   2017. For the three months and year ended December 31, 2016, our
                                                                   GAAP tax rate was utilized.
                                                                    

Adjusted homebuilding gross margin excluding interest and purchase price accounting for acquired work in process inventory is not a measurement of financial performance under United States generally accepted accounting principles; however, the Company’s management believes that this information is meaningful as it isolates the impact that indebtedness and acquisitions have on homebuilding gross margin and permits the Company’s stockholders to make better comparisons with the Company’s competitors, who adjust gross margins in a similar fashion. This non-GAAP financial measure should not be used as a substitute for the Company’s operating results. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

                                                                                                                                                                  
Gross Margin from Home Sales Excluding Interest and Purchase
Price Accounting for Acquired Work in Process Inventory
(in thousands)
                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                     Three Months Ended December 31,
                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                2017                                                              %                                                            2016                                                                      %
                                                                                                                  ---------------------------------                                          -----------                                          -------------------------------                                          ----------------------------
                                                                                                                                                                                                                                                                                                                                   
Home sales revenues                                                                                                                  $     516,501                                            100.0 %                                                                $   292,398                                            100.0 %
Cost of home sales revenues                                                                                           (425,782)                                           (82.4) %                                               (236,241)                                           (80.8) %
                                                                                                                  -------------------- -----------                                           ------ ---                                           -------------------- ---------                                           ------ --------------------
Gross margin from home sales                                                                                                                90,719                                             17.6 %                                                                     56,157                                             19.2 %
  Add: Interest in cost of home sales revenues                                                                           12,274                                              2.4 %                                                   6,325                                              2.2 %
                                                                                                                  -------------------- -----------                                           ------ ---                                           -------------------- ---------                                           ------ --------------------
Adjusted homebuilding gross margin excluding interest                                                                                      102,993                                             19.9 %                                                                     62,482                                             21.4 %
  Add: Purchase price accounting for acquired work in process inventory                                                   9,295                                              1.8 %                                                      70                                              0.0 %
                                                                                                                  -------------------- -----------                                           ------ ---                                           -------------------- ---------                                           ------ --------------------
Adjusted homebuilding gross margin excluding interest and purchase                                                                   $     112,288                                             21.7 %                                                                $    62,552                                             21.4 %
price accounting for acquired work in process inventory
                                                                                                                  ==================== ===========                                           ====== ===                                           ==================== =========                                           ====== ====================
                                                                                                                                                                                                                                                                                                                                   
                                                                                                                   
                                                                                                                                                                                                                         Year Ended December 31,
                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                2017                                                              %                                                            2016                                                                      %
                                                                                                                  ---------------------------------                                          -----------                                          -------------------------------                                          ----------------------------
                                                                                                                                                                                                                                                                                                                                   
Home sales revenues                                                                                                                  $   1,405,443                                            100.0 %                                                                $   978,733                                            100.0 %
Cost of home sales revenues                                                                                         (1,153,359)                                           (82.1) %                                               (786,127)                                           (80.3) %
                                                                                                                  -------------------- -----------                                           ------ ---                                           -------------------- ---------                                           ------ --------------------
Gross margin from home sales                                                                                                               252,084                                             17.9 %                                                                    192,606                                             19.7 %
  Add: Interest in cost of home sales revenues                                                                           32,898                                              2.3 %                                                  19,502                                              2.0 %
                                                                                                                  -------------------- -----------                                           ------ ---                                           -------------------- ---------                                           ------ --------------------
Adjusted homebuilding gross margin excluding interest                                                                                      284,982                                             20.3 %                                                                    212,108                                             21.7 %
  Add: Purchase price accounting for acquired work in process inventory                                                  15,625                                              1.1 %                                                     389                                              0.0 %
                                                                                                                  -------------------- -----------                                           ------ ---                                           -------------------- ---------                                           ------ --------------------
Adjusted homebuilding gross margin excluding interest and purchase                                                                   $     300,607                                             21.4 %                                                                $   212,497                                             21.7 %
price accounting for acquired work in process inventory
                                                                                                                  ==================== ===========                                           ====== ===                                           ==================== =========                                           ====== ====================
                                                                                                                                                                                                                                                                                                                                   

Century Communities, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited)

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure we use as a supplemental measure in evaluating operating performance. We define adjusted EBITDA as consolidated net income before (i) income tax expense, (ii) interest in cost of home sales revenues, (iii) other interest expense, (iv) depreciation and amortization expense, and (v) adjustments resulting from the application of purchase accounting for acquired work in process inventory related to business combinations. We believe adjusted EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, and items considered to be non-recurring. Accordingly, our management believes that this measurement is useful for comparing general operating performance from period to period. Adjusted EBITDA should be considered in addition to, and not as a substitute for, consolidated net income in accordance with GAAP as a measure of performance. Our presentation of adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. Our adjusted EBITDA is limited as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

(in thousands)                                                                                                                                                                                                            
                                                                                                                                                                                  Three Months Ended December 31,                                                                                                                                                                                                      Year Ended December 31,
                                                                                                           -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       2017                                                                  2016                                                                  % Change                                                                   2017                                                                   2016                                                                            % Change
                                                                                                           ----------------------------                                          ----------------------------                                          ---------------------------------                                          -----------------------------                                          -----------------------------                                          --------------------------------------------------
Net income                                                                                                                    $ 17,195                                                              $ 15,073                                                                    14.1 %                                                               $  50,295                                                              $  49,540                                                                    1.5 %
Income tax expense                                                                                                              16,653                                                                 6,819                                                                   144.2 %                                                                  33,869                                                                 23,609                                                                   43.5 %
Interest in cost of home sales revenues                                                                                         12,274                                                                 6,325                                                                    94.1 %                                                                  32,898                                                                 19,502                                                                   68.7 %
Interest expense (income)                                                                                                          (5)                                                                     1                                                                 (600.0) %                                                                     (3)                                                                      5                                                                (160.0) %
Depreciation and amortization expense                                                                         1,900                                              1,365                                                 39.2 %                                                6,973                                               5,580                                                25.0 %
                                                                                                           -------------------- ------                                           -------------------- ------                                           -------------------- -------- --                                           -------------------- -------                                           -------------------- -------                                           -------------------- ------- --------------------
EBITDA                                                                                                                          48,017                                                                29,583                                                                    62.3 %                                                                 124,032                                                                 98,236                                                                   26.3 %
Purchase price accounting for acquired work in process inventory                                                                 9,295                                                                    70                                                                13,178.6 %                                                                  15,625                                                                    389                                                                3,916.8 %
Purchase price accounting for investment in unconsolidated                                                                          30                                                                 1,228                                                                  (97.6) %                                                                     915                                                                  1,228                                                                 (25.5) %
subsidiaries outside basis
Acquisition expense                                                                                           1,260                                                 24                                              5,150.0 %                                                9,905                                                 490                                             1,921.4 %
                                                                                                           -------------------- ------                                           -------------------- ------                                           -------------------- -------- --                                           -------------------- -------                                           -------------------- -------                                           -------------------- ------- --------------------
Adjusted EBITDA                                                                                                               $ 58,602                                                              $ 30,905                                                 89.6 %                                                               $ 150,477                                                              $ 100,343                                                50.0 %
                                                                                                           ==================== ======                                           ==================== ======                                           ==================== ======== ==                                           ==================== =======                                           ==================== =======                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Century Communities, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited)

Net Debt to Net Capital

The following table presents our ratio of net debt to net capital, which is a non-GAAP financial measure. We calculate this by dividing net debt (notes payable and revolving line of credit less cash held in escrow and cash and cash equivalents) by net capital (net debt plus total stockholders’ equity). The most directly comparable GAAP measure is the ratio of debt to capital. The Company believes the ratio of net debt to net capital is a relevant and useful financial measure to investors in understanding the leverage employed in its operations and as an indicator of the Company’s ability to obtain external financing.

(in thousands)

                                                                 
                                                                              December 31,                                                                   December 31,
                                                                                  2017                                                                           2016
                                                                     -------------------------------                                          ------------------------------------------
Total debt                                                                              $   824,602                                                              $              454,088
Total stockholders’ equity                                               735,233                                                          473,636
                                                                     -------------------- ---------                                           -------------------- --------------------
Total capital                                                                           $ 1,559,835                                                              $              927,724
                                                                     -------------------- ---------                                           -------------------- --------------------
Debt to capital                                                            52.9%                                                            48.9%
                                                                     ==================== =========                                           ==================== ====================
                                                                                                                                                                    
Total debt                                                                              $   824,602                                                              $              454,088
Cash and cash equivalents                                                                  (88,832)                                                                            (29,450)
Cash held in escrow                                                     (37,723)                                                         (20,044)
                                                                     -------------------- ---------                                           -------------------- --------------------
Net debt                                                                                    698,047                                                                             404,594
Total stockholders’ equity                                               735,233                                                          473,636
                                                                     -------------------- ---------                                           -------------------- --------------------
Net capital                                                                             $ 1,433,280                                                              $              878,230
                                                                     ==================== =========                                           ==================== ====================
                                                                                                                                                                    
Net debt to net capital                                                    48.7%                                                            46.1%
                                                                     ==================== =========                                           ==================== ====================
                                                                                                                                                                    

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180213006478r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180213006478/en/

SOURCE: Century Communities, Inc.

Century Communities, Inc. 
Investor Relations: 
303-268-8398 
InvestorRelations@CenturyCommunities.com


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