Century Communities, Inc. (NYSE:CCS) Q2 2023 Earnings Call Transcript

Carl Reichardt: Okay. Thanks. If I can squeeze 1 more in, just on buybacks. Can you talk maybe — I don’t know exactly where your current authorization sits, and you’ve obviously got the dividend going now. Can you talk about given the run in the stock, you’re thinking on potential buybacks? Or are you thinking about the cash you’re generating, since you have no debt to pay down, going really plugging back into the land market to grow the business more or less for the next year or two? Thanks.

Dave Messenger: Yes. No problem, Carl. We’ve got roughly 1.5 million shares available under our current authorization. As we look at it right now, obviously the stock has been on a run for a little bit here, but we have always viewed the opportunity to plow some of these earnings and that cash flow back into the business and continue to grow it. We think that we have an opportunity across our footprint in our markets to really keep expanding this business and get deeper, larger, more scale in our existing markets. We’ll do that through reinvestment.

Carl Reichardt: Thank you, David. Thanks all.

Operator: Our next question comes from Jay McCanless with Wedbush Securities. Please go ahead.

Jay McCanless: Hey, good afternoon. Thanks for taking my questions. So, I guess, the first question I had with the guidance at 8,300 to 9,000 closings. It seems like a pretty wide range for this late in the year. Maybe talk to me about what the difference is between the top and the bottom of that range?

Dale Francescon: Yes, I think 8,300 to 9,000 closings, we still have — we just put those homes on the ground. We still have to sell and close them, and there’s still a lot of things that can happen between now and the end of the year. We think that there’s still going to be strong underlying demand. We’ve got a macro economy to think about. We have cycle-times. We have municipalities. We have labor and a variety of issues. And so at this point in time, we feel pretty good with having that range, which is less than 10% from the bottom to the top of it. And we’ll hopefully tighten it up as we get into the third quarter.

Jay McCanless: And then with SG&A dollars, could you maybe talk about, especially for what you said about co-broker in your prepared remarks, where you think that quarterly or annual run rate in dollars should be now and fixed versus variable, if you could?

Dale Francescon: Yes, I think on the commission side of the world, I think that we’ll end up being kind of in that 3.5% to 4% range, which is where we’ve been historically. And it’s roughly 30%-ish of our overall SG&A dollars. We’ve been running pretty historically fixed SG&A at 65% to 70% of the bucket.

Jay McCanless: And then one other question I wanted to ask on complete. We’ve heard people in the media talk about this lock-in effect where existing homeowners don’t want to list, because they don’t want to give up a 3% mortgage for a 7% mortgage. Historically, you guys have talked about complete competition being more the local housing market than other new homebuilders. I guess, is that still the case? And is that something that contributed to some pretty nice order growth for complete this quarter?

Dale Francescon: Yes, I think, first of all, it’s still the same. When we look at it, well, in some subdivisions, we’re competing against new homebuilders. It’s largely against resale homes. And we are definitely seeing the number of resale homes available in virtually all of our markets as being very constrained. So, as a result, that gives us a competitive advantage and one that we’re continuing to push. And I do think that’s a big reason why our complete business did so well in terms of new orders on the second quarter.