Century Communities Inc (CCS) 2023 Q3 法說會逐字稿

Greetings. Welcome to Century Communities Third Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note this conference is being recorded.

問候。歡迎參加世紀社區 2023 年第三季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to Tyler Langton, Senior Vice President of Investor Relations for Century Communities. Thank you. You may begin.

我現在將會議交給 Century Communities 投資者關係高級副總裁 Tyler Langton。謝謝。你可以開始了。

Good afternoon. Thank you for joining us today for Century Communities earnings conference call for the third quarter 2023. Before the call begins, I'd like to remind everyone that certain statements made during this call may constitute forward-looking statements. These statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward-looking statements. Certain of these risks and uncertainties can be found under the heading Risk Factors in the company's latest 10-K as supplemented by our latest 10-Q and other SEC filings.

午安.感謝您今天參加我們的世紀社區 2023 年第三季財報電話會議。在電話會議開始之前，我想提醒大家，本次電話會議中所做的某些陳述可能構成前瞻性陳述。這些陳述是基於管理階層目前的預期，並受到許多風險和不確定性的影響，這些風險和不確定性可能導致實際結果與前瞻性陳述中描述或暗示的結果有重大差異。其中某些風險和不確定性可以在公司最新 10-K 的風險因素標題下找到，並由我們最新的 10-Q 和其他 SEC 文件進行補充。

We undertake no duty to update our forward-looking statements. Additionally, certain non-GAAP financial measures will be discussed on this conference call. The company's presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.

我們不承擔更新前瞻性陳述的責任。此外，本次電話會議也將討論某些非公認會計準則財務指標。公司提供的這些資訊不應被孤立地考慮，也不能取代根據 GAAP 提供的財務資訊。

Hosting the call today are Dale Francescon, Chairman and Co-Chief Executive Officer; Rob Francescon, Co-Chief Executive Officer and President; and David Messenger, Chief Financial Officer. Following today's prepared remarks, we will open-up the line for questions.

今天主持電話會議的是董事長兼聯合執行長 Dale Francescon； Rob Francescon，聯合執行長兼總裁；和財務長大衛·梅辛格。在今天準備好的發言之後，我們將開放提問熱線。

With that, I'll turn the call over to Dale.

這樣，我就把電話轉給戴爾。

Thank you, Tyler. And good afternoon, everyone. I want to start by saying that we are very pleased with our solid third quarter results, especially within the context of a challenging overall housing market. Despite rising interest rates, our sales activity performed in line with our expectations and typical seasonality, demonstrating the strong underlying demand that remains for affordable new homes. Our deliveries of 2,264 homes increased on a quarter-over-quarter basis and benefited from improved cycle times.

謝謝你，泰勒。大家下午好。首先我想說，我們對第三季的穩健業績感到非常滿意，特別是在整體房地產市場充滿挑戰的背景下。儘管利率上升，但我們的銷售活動符合我們的預期和典型的季節性，顯示對經濟適用房的潛在需求仍然強勁。我們交付的 2,264 套房屋環比增加，並受益於週期時間的縮短。

Home sales revenues of $865 million grew by 6% over second quarter levels, with our average sales price gaining 4%. Our gross margins increased by 490 basis points sequentially to 24.6%, while our adjusted gross margins increased by 480 basis points to 25.8%. As a result, we delivered third quarter diluted earnings per share of $2.58, a 62% increase over second quarter 2023 levels. Turning to our sales activity. Our net new contracts in the third quarter totaled 2,149 homes, a 63% improvement over the level of sales activity that we saw in the third quarter of 2022.

房屋銷售收入為 8.65 億美元，比第二季成長 6%，平均銷售價格上漲 4%。我們的毛利率比上一季成長了 490 個基點，達到 24.6%，調整後毛利率成長了 480 個基點，達到 25.8%。因此，我們第三季的攤薄每股收益為 2.58 美元，比 2023 年第二季的水準成長 62%。轉向我們的銷售活動。我們第三季的淨新合約總數為 2,149 套房屋，比 2022 年第三季的銷售活動水準提高了 63%。

We commented last quarter that we expected more typical seasonality to return this year, and we saw it play out in the third quarter. With our net orders declining 7% sequentially, roughly in line with the 6% quarter-over-quarter decline we saw in the third quarter of 2019. Our net orders in August and September both exceeded the levels we experienced in July, which we view as a positive trend given the continued increase in interest rates over the past several months.

我們上季表示，我們預計今年將出現更典型的季節性，並且我們看到它在第三季發揮作用。我們的淨訂單環比下降 7%，與 2019 年第三季度環比下降 6% 大致一致。我們認為 8 月和 9 月的淨訂單均超過 7 月的水平鑑於過去幾個月利率持續上升，這是一個正面的趨勢。

Looking now to the fourth quarter as a whole, if typical seasonality holds, we would expect our net orders to decline on a sequential basis. We are continuing to see good demand for affordable entry-level homes across both our Century Communities and Century Complete brands and wanted to use this opportunity to go into a little more detail on the value that we see in our Century Complete business, which currently generates approximately 35% of our sales and deliveries. As we've discussed in the past, Century Complete targets entry-level customers with 100% of its deliveries within FHA limits and only acquires finished lots.

現在展望整個第四季度，如果典型的季節性因素持續存在，我們預計我們的淨訂單將環比下降。我們繼續看到我們的 Century Communities 和 Century Complete 品牌對經濟適用入門級住宅的良好需求，並希望利用這個機會更詳細地介紹我們在 Century Complete 業務中看到的價值，該業務目前產生約占我們銷售額和交貨量的35%。正如我們過去所討論的，Century Complete 的目標客戶是入門級客戶，其 100% 的交付均在 FHA 限制範圍內，並且只收購成品地塊。

It is a scalable business model which requires less capital investment and yields quicker asset turns. The increase in interest rates over the past year has also reinforced some additional advantages of the Century Complete brand. In the third quarter, Century Complete had an average sales price of $265,000 and the large public homebuilders generally don't build at this price point. Century Complete tends to compete more with existing homes and smaller private homebuilders, which puts us in a strong position.

這是一種可擴展的商業模式，需要更少的資本投資並產生更快的資產週轉。過去一年的利率上漲也強化了Century Complete品牌的一些額外優勢。第三季度，Century Complete 的平均售價為 265,000 美元，大型公共住宅建築商通常不會以這個價位建造。 Century Complete 傾向於與現有住宅和小型私人住宅建築商進行更多競爭，這使我們處於有利地位。

Existing home inventories remain depressed due to the lock-in effect, so there is less competition from the used home market. Smaller private new homebuilders tend to borrow from local and regional banks. Their borrowing costs are generally higher than ours, and we think the local and regional banks will likely reduce the amount of credit that they are willing to extend to the smaller private builders. As a result, we think Century Complete is in a strong position to capture additional market share in the years ahead.

由於鎖定效應，現有房屋庫存仍低迷，因此二手房市場的競爭較少。規模較小的私人新建住宅建築商傾向於向當地和地區銀行借款。他們的借貸成本普遍高於我們，我們認為當地和地區銀行可能會減少向小型私人建築商提供的信貸額度。因此，我們認為 Century Complete 處於有利地位，可以在未來幾年奪取更多市場份額。

Turning back to Century as a whole. We continue to maintain our focus on building some of the most affordable new homes in the markets we serve. More than 90% of third quarter deliveries were from homes priced below FHA limits, which allows us to target more potential buyers in any given market. Additionally, 99% of our home deliveries this quarter were from spec builds, which enables us to better control our costs and allows our buyers to purchase quick move-in homes and lock in their mortgage rates for certainty of financing.

回到整個世紀。我們繼續專注於在我們服務的市場上建造一些最實惠的新住宅。第三季超過 90% 的交付量來自價格低於聯邦住房管理局 (FHA) 限制的房屋，這使我們能夠在任何特定市場上瞄準更多潛在買家。此外，本季我們交付的房屋中有 99% 來自規格建造，這使我們能夠更好地控製成本，並允許我們的買家購買快速入住的房屋並鎖定抵押貸款利率以獲得融資的確定性。

Our cancellation rate was 16% in the third quarter, consistent with our year-to-date rate and well below an average cancellation rate in the low to mid-20% range in the years prior to COVID. We continue to believe that our cancellation rate is benefiting from buyers adjusting to the higher interest rate environment and our strategy of selling homes later in the construction cycle. In closing, we're encouraged by the improvement that we have seen over the past several quarters in our deliveries and gross margins which are benefiting from reduced levels of incentives, improved cycle times and lower direct costs.

第三季的取消率為 16%，與年初至今的取消率一致，遠低於新冠疫情爆發前幾年約 20% 的平均取消率。我們仍然認為，我們的取消率受益於買家適應較高利率環境以及我們在建造週期後期出售房屋的策略。最後，我們對過去幾季的交付量和毛利率的改善感到鼓舞，這得益於激勵措施的減少、週期時間的縮短和直接成本的降低。

As expected and previously messaged, our deliveries have increased sequentially in each of the last 2 quarters. And as Dave will detail in his remarks, we expect our fourth quarter deliveries to increase over third quarter levels and are increasing the midpoint of our 2023 delivery guidance. The sequential improvement in our margins and deliveries this year, coupled with the increase in our community count, which Rob will discuss further in his remarks, position us well for 2024.

正如預期和之前所傳達的那樣，我們的交付量在過去兩個季度中每季都連續增加。正如 Dave 在他的演講中詳細介紹的那樣，我們預計第四季度的交付量將超過第三季度的水平，並且正在提高 2023 年交付指導的中點。今年我們的利潤和交付量連續改善，加上社區數量的增加（Rob 將在他的演講中進一步討論），這使我們在 2024 年處於有利地位。

And on behalf of the entire management team, I want to thank our team members and trade partners for their hard work and dedication that made these results possible. I'll now turn the call over to Rob to discuss our operations and land position in more detail.

我謹代表整個管理團隊感謝我們的團隊成員和貿易夥伴的辛勤工作和奉獻精神，使這些成果成為可能。我現在將把電話轉給羅布，更詳細地討論我們的營運和著陸位置。

Thank you, Dale, and good afternoon, everyone. Given the market demand, we were able to reduce our level of incentives while still maintaining a healthy sales pace in the quarter. Incentives averaged roughly 700 basis points on closed homes in the third quarter 2023, down roughly 200 basis points on a sequential basis. In the third quarter, incentives on new sales also averaged approximately 700 basis points and were primarily mortgage related.

謝謝戴爾，大家下午好。鑑於市場需求，我們能夠降低激勵水平，同時仍保持本季健康的銷售速度。 2023 年第三季度，關閉房屋的獎勵措施平均約為 700 個基點，較上季下降約 200 個基點。第三季度，新銷售激勵措施平均也約為 700 個基點，並且主要與抵押貸款相關。

While we are continuing to purchase forward loan commitments and are currently offering our customers 30-year fixed interest rates between 5% and 6%, depending on the loan type, with certain programs even lower, the cost to buy down these rates to these levels has been increasing over the past several months with the overall increase in interest rates. However, given the ability to significantly lower monthly payments, a below-market interest rate provides us a significant sales tool that continues to be one of the most sought after incentive by our homebuyers and allows us a competitive advantage over private builders that can't compete on this front.

雖然我們繼續購買遠期貸款承諾，並且目前根據貸款類型向客戶提供 5% 到 6% 之間的 30 年期固定利率，某些計劃甚至更低，但將這些利率降低到這些水平的成本隨著利率整體上升，過去幾個月一直在增加。然而，鑑於能夠顯著降低每月付款，低於市場的利率為我們提供了一個重要的銷售工具，它仍然是我們的購房者最追捧的激勵措施之一，並使我們比私人建築商擁有競爭優勢，而私人建築商無法做到這一點。在這方面進行競爭。

We experienced further improvement in our cycle times on completed homes in the third quarter, which generally averaged in the 5- to 6-month time frame. We expect our cycle times to see some additional improvement in the fourth quarter such that by the end of the year, we are back to starting and completing homes in a more normalized 4- to 6-month time frame. Earlier this year, we discussed direct construction costs declining by roughly 11%, an average of approximately $20,000 per home versus the high watermark in the second quarter of 2022. The homes with these savings will flow through in the fourth quarter as we deliver these lower-cost homes and help offset the rising cost of mortgage rate buydowns.

第三季度，我們的完工房屋週期時間進一步縮短，平均週期為 5 至 6 個月。我們預計我們的週期時間在第四季度會出現一些額外的改善，這樣到年底，我們將恢復在更正常的 4 到 6 個月的時間範圍內開始和完成房屋。今年早些時候，我們討論了直接建築成本下降約11%，與2022 年第二季的高水位線相比，每戶平均約為20,000 美元。隨著我們以較低的價格交付這些成本，節省下來的房屋將在第四季度流入。- 降低房屋成本並幫助抵消抵押貸款利率購買成本的上升。

Given the level of industry-wide new home starts, our direct construction costs on the homes we started in the third quarter, which will be delivered in 2024 increased approximately 1.5% on a quarter-over-quarter basis. Turning to land. We ended the third quarter with approximately 69,000 owned and controlled lots, a 19% increase over second quarter 2023 levels as we continued our land acquisition efforts. This higher lot count was driven almost entirely by an 11,000 lot increase in our controlled land to 38,000 lots. Our controlled lots as a percentage of total lots increased to 56% in the third quarter from 46% last quarter and 39% in the first quarter.

考慮到全行業新屋開工水平，我們第三季開工的房屋（將於 2024 年交付）的直接建築成本環比增長約 1.5%。轉向陸地。截至第三季末，隨著我們繼續進行土地收購工作，我們擁有和控制的土地約為 69,000 塊，比 2023 年第二季的水準增加了 19%。地塊數量增加幾乎完全是由於我們控制的土地增加了 11,000 塊地塊至 38,000 塊地塊。我們的控制地塊佔總地塊的百分比從上季的 46% 和第一季的 39% 增加到第三季的 56%。

Our 30,000 owned lots in the third quarter are consistent with levels over the last 7 quarters and provide approximately 3 years of deliveries based on prior year volumes. In the third quarter, our community count of 252, a company record increased by 16% from year ago levels and by 8% on a sequential basis. Century Complete accounted for over 40% of our total community count, while the Southeast and Texas combined accounted for close to 30% as these markets are continuing to perform well given their relative affordability and strong employment and population growth.

我們第三季擁有 30,000 塊自有土地，與過去 7 個季度的水平一致，並根據去年的數量提供約 3 年的交付量。第三季度，我們的社群數量達到 252 個，創公司紀錄，較去年同期成長 16%，較上季成長 8%。 Century Complete 占我們社區總數的 40% 以上，而東南部和德克薩斯州合計佔近 30%，因為這些市場鑑於其相對負擔能力以及強勁的就業和人口增長，繼續表現良好。

We continue to expect our year-end 2023 community count to be in the range of $250 to 260 communities, showing strong year-over-year growth of 20% to 25%. We believe this increased number of communities will represent a new base for Century Communities which we will look to grow even further as we recognize increased deliveries in 2024 and beyond.

我們仍預期 2023 年底社區數量將在 250 至 260 美元之間，年增 20% 至 25%。我們相信，社區數量的增加將成為 Century Communities 的新基地，隨著我們認識到 2024 年及以後交付量的增加，我們將尋求進一步發展。

I'll now turn the call over to Dave to discuss our financial results in more detail.

我現在將把電話轉給戴夫，更詳細地討論我們的財務表現。

Thank you, Rob. During the third quarter of 2023, pretax income was $112 million and net income was $83.2 million or $2.58 per diluted share, representing sequential increases of over 60% for all 3 metrics. EBITDA for the quarter was $125.3 million, a 56% increase over second quarter 2023 levels. Home sales revenues for the third quarter were $865.1 million compared to $1.1 billion in the prior year quarter and $818.4 million in the second quarter of 2023.

謝謝你，羅布。 2023 年第三季度，稅前收入為 1.12 億美元，淨利潤為 8,320 萬美元，即稀釋後每股收益 2.58 美元，所有 3 個指標連續成長超過 60%。該季度的 EBITDA 為 1.253 億美元，比 2023 年第二季的水準成長 56%。第三季房屋銷售收入為 8.651 億美元，去年同期為 11 億美元，2023 年第二季為 8.184 億美元。

Our third quarter deliveries were 2,264 homes. For the fourth quarter, we are currently forecasting deliveries to be in the range of 2,200 to 2,600 homes. Our average sales price of $382,000 in the third quarter increased by 4% on a sequential basis as we continue to reduce incentives and selectively increase base prices. At quarter end, our backlog with sold homes of 1,887, valued at $707 million with an average price of $375,000. In the third quarter, adjusted homebuilding gross margin was 25.8% compared to 21% in the second quarter of 2023.

我們第三季交付了 2,264 套房屋。我們目前預測第四季度的交付量將在 2,200 至 2,600 套房屋之間。由於我們繼續減少激勵措施並選擇性地提高基本價格，第三季度我們的平均銷售價格為 382,​​000 美元，環比增長了 4%。截至季末，我們的待售房屋數量為 1,887 套，價值 7.07 億美元，平均價格為 375,000 美元。第三季調整後的住宅建築毛利率為 25.8%，而 2023 年第二季為 21%。

Homebuilding gross margin was 24.6% compared to 19.7% in the second quarter of 2023. As expected, our gross margins increased sequentially in the third quarter due to improved cycle times, lower direct costs and reduced levels of incentives. For the fourth quarter, we expect our gross margins to decline versus third quarter 2023 levels primarily due to the increased cost of mortgage rate buydowns.

住宅建築毛利率為 24.6%，而 2023 年第二季為 19.7%。正如預期的那樣，由於週期時間縮短、直接成本降低和激勵措施減少，我們的毛利率在第三季度環比增長。對於第四季度，我們預計我們的毛利率將較 2023 年第三季的水平下降，這主要是由於抵押貸款利率購買成本增加。

SG&A as a percent of home sales revenue, was 12.9% in the third quarter compared to 9.9% in the prior year. The largest driver of this year-over-year increase was the spreading of our fixed costs over a lower revenue base as well as more normalized commission rates on home sales. Looking out to next year, we expect our SG&A as a percent of home sales revenues to decline on a year-over-year basis as we look to grow our deliveries and keep our fixed levels of SG&A relatively constant. During the third quarter, Financial Services captured 71% of our closings and generated $23.6 million in revenues compared to $23.3 million in the prior year.

第三季 SG&A 佔房屋銷售收入的百分比為 12.9%，去年同期為 9.9%。年比成長的最大推動因素是我們的固定成本分散在較低的收入基礎上，以及房屋銷售佣金率更加標準化。展望明年，我們預計 SG&A 佔房屋銷售收入的百分比將同比下降，因為我們希望增加交付量並保持 SG&A 的固定水平相對穩定。第三季度，金融服務占我們結帳額的 71%，營收為 2,360 萬美元，而前一年為 2,330 萬美元。

This business contributed $12.2 million in pretax income compared to $9.3 million in the prior year quarter. Our net homebuilding debt to net capital ratio decreased to 25.3% compared to 32.5% in the prior year quarter. Our homebuilding debt-to-capital ratio decreased to 30.8% and at quarter end compared to 36.3% at the end of the same period last year. During the quarter, we maintained our quarterly cash dividend at $0.23 per share and ended the quarter with a strong financial position, including $2.3 billion in stockholders' equity, $1 billion in total liquidity and $246 million in cash.

該業務貢獻了 1,220 萬美元的稅前收入，而去年同期為 930 萬美元。我們的淨住宅建築債務與淨資本比率下降至 25.3%，去年同期為 32.5%。截至季末，我們的住宅建築債務資本比率下降至 30.8%，而去年同期末為 36.3%。本季度，我們將季度現金股息維持在每股 0.23 美元，並以強勁的財務狀況結束本季度，包括 23 億美元的股東權益、10 億美元的總流動資金和 2.46 億美元的現金。

At quarter end, we had no borrowings outstanding on our $800 million unsecured revolving credit facility that does not mature until April 2026. Additionally, we have no senior debt maturities until June 2027 providing us ample flexibility with our leverage management. Finally, back in September of this year, S&P upgraded our credit rating to BB from BB-. Now turning to guidance. Given the continued strength in our deliveries, which have benefited from improved cycle times and a continued sales pace, we are increasing the midpoint of our full year 2023 guidance for home deliveries to be in the range of 8,600 to 9,000 homes and our home sales revenues to be in the range of $3.2 billion to $3.4 billion.

截至季末，我們的8 億美元無擔保循環信貸安排中沒有未償還借款，該信貸安排要到2026 年4 月才會到期。此外，我們在2027 年6 月之前沒有優先債務到期，這為我們的槓桿管理提供了足夠的靈活性。最後，早在今年 9 月，標準普爾就將我們的信用評級從 BB- 上調至 BB。現在轉向指導。鑑於我們的交付持續強勁，這得益於週期時間的縮短和持續的銷售速度，我們將2023 年全年送貨上門指導的中點提高到8,600 至9,000 戶房屋，並將我們的房屋銷售收入提高到介於 32 億至 34 億美元之間。

With that, I'll open the line for questions. Operator?

接下來，我將開通提問專線。操作員？

(Operator Instructions) Our first question is from Carl Reichardt with BTIG.

（操作員說明）我們的第一個問題來自 BTIG 的 Carl Reichardt。

To talk about the margin change, 480 bps year-on-year direct construction costs, incentives off and improved cycle times. Can you talk a little bit about how each of those 3 contributed to that 480 basis points. Were there a lean in one direction or the other? I assume it was incentives, but maybe just sort of lay that out for us.

談論利潤變化、直接建設成本年增 480 個基點、激勵措施取消和週期時間縮短。您能談談這 3 個因素是如何為 480 個基點做出貢獻的嗎？是否有向一個方向或另一個方向傾斜？我認為這是激勵措施，但也許只是為我們安排的。

Yes. I think it was really a combination of all of them, Carl. We saw the ability that we were pulling back on some incentives with the sales for our homes that closed during the third quarter. We saw the benefit of some lower direct costs that came through in those closings as well. And then being able to deliver a home in a more normalized construction period is helpful. And we have some markets where we're increasing base prices.

是的。我認為這確實是他們所有人的結合，卡爾。我們看到了我們有能力在第三季結束的房屋銷售中取消一些激勵措施。我們也看到了這些關閉帶來的直接成本降低的好處。然後能夠在更正常的施工期間交付房屋是有幫助的。我們在一些市場上提高了基本價格。

And so the combination really of those 3, 4 items, tough to parse out which is which, and which one may have contributed more than another. But obviously, all 4 really contributed to some great gross margin performance we had this quarter. that we could talk about.

因此，這 3、4 項的組合確實很難分辨出哪一項是哪一項，以及哪一項可能比另一項貢獻更多。但顯然，這四者確實為我們本季的毛利率表現做出了貢獻。我們可以討論一下。

Okay. And Dave, so then if we look at fourth quarter and trying to think about the sequential change in margin, you'll have direct construction costs I don't know if it'll be up or flat with third quarter on a per house basis. Incentives may come up, pricing power may flatten, and your cycle times, I think, will continue to improve. So if I add that all up, the change in gross margin from third quarter to fourth quarter should be relatively modest on a negative basis. Is that the right way to think about it based on what you're seeing today?

好的。戴夫，如果我們看看第四季並嘗試考慮利潤率的連續變化，你將有直接的建築成本，我不知道每棟房子的成本是否會與第三季持平。激勵措施可能會出現，定價能力可能會趨於平緩，我認為您的週期時間將繼續改善。因此，如果我把所有這些加起來，從第三季到第四季的毛利率變化在負值基礎上應該相對溫和。根據您今天所看到的情況，這是正確的思考方式嗎？

Yes. I think those are definitely all the components that we're weighing against each other, and it's really going to come into what are the costs of those mortgage rate buydowns or other incentives that we have in place in order to move product. And what does that do to margin, sitting here today not sure what the economic environment and rate environment will look like and 30 to 60 days as we're closing homes. But those are definitely the 4 -- 3 or 4 components that we're looking at that will impact margins in the fourth quarter.

是的。我認為這些絕對是我們相互權衡的所有組成部分，而且它確實涉及抵押貸款利率購買或我們為轉移產品而採取的其他激勵措施的成本。這對保證金有什麼影響，今天坐在這裡不確定經濟環境和利率環境會是什麼樣子，以及我們關閉房屋的 30 到 60 天。但這些肯定是我們正在考慮的 4、3 或 4 個將影響第四季利潤率的組成部分。

The next question is from Jay McCanless with Wedbush.

下一個問題是來自韋德布希 (Wedbush) 的傑伊·麥肯利斯 (Jay McCanless)。

Could you talk about which markets or maybe what percentage of communities you've been able to raise price?

您能否談談您能夠提高價格的市場或社區的比例是多少？

Jay, it really comes down to a community by community basis although generally, I'd say we have more pricing power in Texas, in our Southeast markets and in Florida. It's just -- those markets have benefited more from having lower price points in general, more in-migration, stronger economies. So in general, if we were going to look at it, I'd say that most of the price increases came in those markets.

傑伊，這實際上取決於社區的基礎，儘管總的來說，我想說我們在德克薩斯州、東南市場和佛羅裡達州擁有更多的定價權。只是——這些市場從整體較低的價格、更多的移民和更強大的經濟中受益更多。因此，總的來說，如果我們要研究的話，我會說大部分價格上漲都來自這些市場。

And then, Dave, I think you said that you guys are expecting the SG&A margin -- SG&A to sales margin in '24 to kind of flatten out. So is this $112 million -- is this the kind of the run rate going forward on a quarterly basis?

然後，戴夫，我想你說過你們預計 24 年的 SG&A 利潤率——SG&A 與銷售利潤率會趨於平穩。那麼，這 1.12 億美元是按季度計算的運行率嗎？

Yes, we're looking at -- we feel comfortable with where we are from a fixed dollar perspective. So I think on the fixed dollars, we feel good about that. And then obviously, the variable is going to float as we see closings come through the pipeline. But the comment is really we think that SG&A as a percent of revenues is going to decline on a year-over-year basis as we're looking to grow our deliveries next year. So I think that with fixed dollars being relatively constant '23 to '24, we should see some leverage improvement in that line item next year.

是的，我們正在考慮——從固定美元的角度來看，我們對目前的狀況感到滿意。所以我認為就固定美元而言，我們對此感覺良好。顯然，當我們看到關閉通過管道時，變數將會浮動。但評論實際上是，我們認為銷售、管理及行政費用佔收入的百分比將年減，因為我們希望明年增加交付量。因此，我認為，由於固定美元在 23 至 24 年間相對穩定，我們明年應該會看到該訂單項目的槓桿率有所改善。

Okay. And then I guess kind of thinking ahead for '24, if rates stay at these levels or even go up from here? I mean, should we expect gross margins to kind of settle in somewhere. If it's going to be down sequentially from third quarter to fourth quarter, how much more was what you're seeing in terms of these buy down costs, what type of impact might that have on fiscal '24 gross margins especially if you're thinking you're going to have to carry a full year of buying down an 8% or 9% par rate down to, I think you guys said on your website, it's like 5 7/8% for some of these I guess, how much more is that cost going to go up if you have to carry this for a full year versus only call it, 3 months where rates have been around 8%?

好的。然後我想，如果利率保持在這些水平，甚至從現在開始上升，我想提前考慮一下 24 年的情況？我的意思是，我們是否應該預期毛利率會穩定在某個地方？如果從第三季到第四季連續下降，您所看到的這些購買成本會增加多少，這可能會對 24 財年的毛利率產生什麼類型的影響，特別是如果您考慮的話您將不得不將一整年的購買利率降低到8% 或9%，我想你們在網站上說過，對於其中一些我猜，這就像5 7/8% ，多少錢如果你必須攜帶這一整年，而不是僅僅調用它，3個月的利率約為8%，那麼成本是否會上升？

That's really tough to forecast in terms of where that mortgage market is going to be in terms of buydowns. We do expect that the cost of buydowns will go up. And accordingly, if you go ahead and move it to 9% or something above an 8% is going to get more costly, but we'll really look at that next year, and we'll try to evaluate that, so we can still post the best margins possible because we'll look at how far do we want to buy down the rates?

就抵押貸款市場的購買情況而言，很難預測。我們確實預期收購成本將會上升。因此，如果你繼續將其提高到 9% 或高於 8% 的成本將會變得更高，但我們明年會真正考慮這一點，我們會嘗試評估這一點，所以我們仍然可以發布盡可能最好的利潤，因為我們會看看我們想把利率降到什麼程度？

Are we buying them down across the board? Are we buying them down by community? And then what products we're utilizing in terms of government loans versus conventional and then what do we want to be offering to the consumer. So we'll look to stratify the offerings and try to minimize the impact, but we do expect that if rates are going to be at an elevated level for some time, it's going to cost more.

我們是否全面買入它們？我們是否會透過社區來購買它們？然後我們在政府貸款和傳統貸款方面使用什麼產品，然後我們想向消費者提供什麼。因此，我們將尋求對產品進行分層並儘量減少影響，但我們確實預計，如果利率在一段時間內處於較高水平，那麼成本將會更高。

Okay. And one more and I'll jump back in queue. I guess what are you guys thinking in terms of the community openings that are coming on and where do you expect average pricing to go? And are you expecting Century Complete to flex higher as a percentage of the community count and maybe pull that ASP down a little bit in '24 versus 23.

好的。再多一個，我就會重新排隊。我想你們對即將開放的社區有何看法？你們預計平均價格會怎樣？您是否預計 Century Complete 在社群數量中所佔的百分比會更高，並且可能會在 24 年與 23 年相比將 ASP 稍微降低一點。

Jay, we're looking from a community count growth at the 252 where we ended Q3, that's where we really think the base is going forward. So as we forecast out, let's just say, over the next 12 months, we think our community count is going to grow in that. But it's going to grow similar to where we've been now with the same percentages of Century Complete versus the Communities brand. But again, it's off this higher base, which we feel really good about that. And that's why we're anticipating to have higher deliveries in 2024 than we did and are going to have in 2023.

Jay，我們從第三季結束時社區數量增長到 252 個來看，我們確實認為這個基礎正在向前發展。因此，正如我們預測的那樣，在接下來的 12 個月內，我們認為我們的社區數量將會增加。但它的成長速度將與我們現在的情況類似，Century Complete 與 Communities 品牌的比例相同。但同樣，它脫離了這個更高的基礎，我們對此感覺非常好。這就是為什麼我們預計 2024 年的交付量將高於 2023 年的交付量。

The next question is from Alex Rygiel with B. Riley FBR.

下一個問題來自 Alex Rygiel 和 B. Riley FBR。

Just following up on community count. Will the contribution of new communities have a notable impact on your average selling price in 2024?

只是跟進社區人數。新社區的貢獻會對您 2024 年的平均售價產生顯著影響嗎？

No. They're very similar. We've continued to look at more entry-level offerings so it will be very similar to the price points we're at now. And again, that's on a general statement. We have outlier communities that some are at higher price points, of course, for different markets and different niches and strategies within a particular market. But as a general statement, the new communities that we're opening are very similar from a price point standpoint to where we are today.

不，他們非常相似。我們繼續尋找更多入門級產品，因此它將與我們現在的價格非常相似。再說一次，這是一般性聲明。當然，我們有一些異常社區，其中一些社區的價格更高，適用於不同的市場以及特定市場內的不同利基和策略。但總的來說，從價格角度來看，我們正在開設的新社區與我們今天的情況非常相似。

And then looking at the communities, again, Centric complete communities are down year-over-year. Most of the other regions are up. You've referenced a number of times the expectation to see some growth. And Century Complete communities. Is it communities that are growing? Is it the average size of the community within Century Complete increasing? A little bit more color there would be helpful.

再看看社區，Centric 的完整社區逐年下降。其他大部分地區都上漲了。您多次提到了看到一些增長的預期。和世紀完整社區。是社區在成長嗎？ Century Complete 內的社區平均規模是否在增加？多一點顏色會有幫助。

Yes. So the average size is definitely increasing in Century Complete. And also some of that's timing differences as well because just as a reminder, Century Complete only buy finished lots. And so sometimes there may be delays on a developer bringing the lots to us from a cycle time and so there could just be certain mix delays within a particular point in time. But as a general statement, the communities are getting bigger.

是的。所以在《Century Complete》中，平均大小一定是在增加。其中一些也是時間上的差異，因為提醒一下，Century Complete 只購買成品地段。因此，有時開發人員將批次交付給我們的週期時間可能會出現延遲，因此在特定時間點內可能會出現某些混合延遲。但總的來說，社區正在變得越來越大。

The next question is from Alan Ratner with Zelman & Associates.

下一個問題來自 Zelman & Associates 的 Alan Ratner。

Question on the incentives. So it sounds like they were pretty steady both on orders and closings during the quarter around 700 bps. But based on your, I guess, comments for fourth quarter, it sounds like you expect an uptick there. What was the trend on orders, I guess, through the quarter and into September and October? Have you seen that incentive number rising here thus far in October?

關於激勵措施的問題。因此，聽起來他們本季的訂單和成交量都相當穩定，約為 700 個基點。但我猜，根據您對第四季度的評論，聽起來您預計會有所上升。我想整個季度以及九月和十月的訂單趨勢是什麼？到目前為止，您是否看到 10 月的獎勵數量增加？

Yes, we have. As we look at the third quarter and coming into the fourth quarter, interest rates have continued to stay high and actually continue to increase. And so when we look at the cost of buying down mortgages to be able to offer something in that mid-5% range, it just becomes more costly depending on as the rate continues to increase. So yes, we have definitely seen the increase, and we expect to continue to see an increase.

是的我們有。當我們回顧第三季和進入第四季時，利率繼續保持在高位，並且實際上還在繼續增加。因此，當我們考慮購買抵押貸款以提供 5% 中間範圍內的東西的成本時，隨著利率繼續上升，它的成本就會變得更高。所以，是的，我們確實看到了這種增長，並且我們預計會繼續看到這種增長。

Got it. Okay. That makes sense. And then the rate you're offering in that 5% to 6% range, how are you thinking about that in -- if rates continue to kind of gradually move higher from here. Is that an important kind of line in the sand where you feel like once you get above a 6% rate or in the mid-6s that you see a pretty dramatic pullback in demand? Or will that base kind of gradually move higher along with the current prevailing rate, it's just kind of you're trying to use that trajectory a little bit.

知道了。好的。這就說得通了。然後，你提供的利率在 5% 到 6% 的範圍內，如果利率繼續從這裡逐漸走高，你會如何考慮這一點。這是一條重要的底線嗎？一旦利率超過 6%，或在 6% 左右，您就會看到需求大幅回落？或者這個基礎會隨著當前的普遍利率逐漸走高，這只是你試著稍微使用這個軌跡。

That's really hard to say. I mean, obviously, the way we're mitigating the high rates is to buy them down, and we even have some programs for a small dollar amount on very, very select communities that are in the high 4% range. Obviously, that's very costly right now. But we like a 5 handle on it currently. If rates continue to go up and they get up approaching close to 9% then the reality is we're probably not going to be able to offer that and our competitors aren't either, and the consumer will adjust to that, but it will just raise up.

這真的很難說。我的意思是，很明顯，我們降低高利率的方法是購買它們，我們甚至在非常非常精選的高利率 4% 範圍內的社區推出了一些小額項目。顯然，現在這樣做的成本非常高。但目前我們喜歡 5 手柄。如果費率繼續上漲並且上漲接近 9%，那麼現實是我們可能無法提供這種服務，我們的競爭對手也無法提供這種服務，消費者會適應這一點，但它會只要站起來。

But it's really hard to say how rates are going other than what we do know for a fact is that at the current lift in rates, it is costing us more on the buydowns currently.

但很難說利率的走勢如何，除了我們確實知道的事實是，以目前的利率上升，我們目前的買斷成本更高。

Got it. Great. And if I could sneak in one more. The big increase in your lot count this quarter, can you provide a little bit of color around what's the -- these lots that you're tying up today, when should we expect that to flow through to community count growth? What's the pricing trends in the land market today? And are you seeing any compelling distress opportunities either from deals falling through or some other factors that might have contributed to the big jump in lot count this quarter?

知道了。偉大的。如果我能再偷偷溜進去一次就好了。本季度你們的地塊數量大幅增加，您能否提供一些關於您今天捆綁的地塊的信息，我們應該預計什麼時候會帶來社區數量的增長？當今土地市場的價格趨勢如何？您是否看到任何令人信服的困境機會，要么是交易失敗，要么是其他一些可能導致本季度批次數量大幅增加的因素？

So we are buying from BFR operators, operators that had picked up a lot positions they were either going to get a fee builder on it or build it themselves. We've been successful in purchasing lots from those entities. So that's been a positive. In terms of the timing of the increase as you see it really increased our control percentage, and we telegraphed this in our previous calls that we were going to increase our land based on how we changed in 2022 on some of our controlled positions with a decrease based on market conditions.

因此，我們從 BFR 運營商那裡購買，這些運營商已經獲得了很多頭寸，他們要么從中獲得費用，要么自己建立。我們已經成功地從這些實體購買了很多批次。所以這是積極的。就增加的時間而言，正如你所看到的，它確實增加了我們的控制百分比，我們在之前的電話會議中傳達了這一點，我們將根據2022 年我們對一些控制位置的變化來增加我們的土地，減少根據市場情況。

We wanted to get back up to levels we felt comfortable with, and this has been a good start in the third quarter to get there. There are a variety of lot types from finished lots. That's obviously our preference if we could get finished lots on a just-in-time basis. And so we have some of those. As far as development deals that we are developing those depend on municipalities and time lines out on as I know you know these answers but they're anywhere from 12 to 24 months generally before they start development, and then you go from there.

我們希望回到我們感到滿意的水平，這是第三季度實現這一目標的良好開端。成品批次有多種類型。如果我們能夠及時完成批次，這顯然是我們的偏好。所以我們有一些。就我們正在開發的開發交易而言，這些取決於市政當局和時間表，據我所知，您知道這些答案，但通常在開始開發之前需要 12 到 24 個月，然後您就可以從那裡開始。

So it's kind of all across the board structure on the land. But we feel really good about the control positions we have. They're in the markets, we want them to be in the higher growth markets. Some of the markets Dale alluded to on this call we feel really good about them. And one just last thing. You also asked about distress. We have not seen any significant distress in the market. We are seeing things open up a little bit where financing is being tighter for the privates, they're not able to compete. It's really competition against public to public. And so certain things are opening up but as far as distress, I wouldn't go that far yet.

所以這是陸地上全面的結構。但我們對我們擁有的控制位置感覺非常好。他們在市場中，我們希望他們在更高成長的市場。戴爾在這次電話會議中提到的一些市場我們對它們感覺非常好。最後一件事。你還問了苦惱的問題。我們沒有看到市場出現任何重大問題。我們看到事情有所開放，私人融資變得更加緊張，他們無法競爭。這確實是公眾與公眾之間的競爭。因此，某些事情正在開放，但就痛苦而言，我還不會走那麼遠。

The next question is from Alex Barrón with Housing Research.

下一個問題來自住房研究中心的 Alex Barrón。

Yes. Yes, I was curious if you guys could tell us how many homes you started this quarter? That's my first question.

是的。是的，我很好奇你們能否告訴我們本季你們開工了多少棟房屋？這是我的第一個問題。

Yes. This quarter, in terms of the starts, we did 2,434 homes. So we're pretty much matching what we're doing from a sales pace.

是的。本季度，就開工量而言，我們建造了 2,434 套房屋。因此，我們的銷售速度與我們正在做的事情非常匹配。

Got it. Yes. My other question was, last year, I think several builders engaged in trying to find the market clearing price and obviously, that had an impact on margins. This year, it seems like everybody is focused on buying down rates instead, which I think is probably healthier. I'm just kind of curious as we're approaching year-end, are you -- do you believe that's slightly going to continue to be the case? Or are you starting to see some of that activity of people trying to compete on cutting prices?

知道了。是的。我的另一個問題是，去年，我認為一些建築商試圖找到市場出清價格，顯然，這對利潤率產生了影響。今年，似乎每個人都專注於購買降息產品，我認為這可能更健康。我只是有點好奇，隨著年底的臨近，你認為這種情況會繼續下去嗎？或者您開始看到人們試圖在降價方面競爭？

Well, I guess we'll see as we get closer to the end of the year. Right now, the incentive that buyers are most interested in is to have a below-market interest rate. And you can certainly see why it dramatically lowers their cost of ownership. And so that's where our focus has been. And as we look at our competitors, that's where their focus has been so far as well.

好吧，我想當我們接近年底時我們就會看到。目前，買家最感興趣的是低於市場的利率。您當然可以明白為什麼它大大降低了他們的擁有成本。這就是我們的重點。當我們觀察我們的競爭對手時，這也是他們迄今為止的焦點。

Okay. Well, hopefully, we'll keep our fingers crossed that it stays that way because it seems like a more rational way to compete, I think. And yes, other than that, do you believe in general that -- because you said you expect growth in units for next year. So do you believe you're just going to -- that's going to happen based on growing community count, but maybe slightly lower sales pace?

好的。好吧，希望我們能保持這種狀態，因為我認為這似乎是一種更合理的競爭方式。是的，除此之外，您總體上相信這一點嗎？因為您說過預計明年的銷量會成長。那麼，您是否相信您會——這會隨著社區數量的增長而發生，但銷售速度可能會略有下降？

That's tough to say. We think that we're well positioned today, call it, 250 to 260 community count going into next year, given our current sales pace, we feel good about being able to deliver those homes. We'll comment more on future guidance when we get into our fourth quarter call, and we may have a little bit of a better flavor of what we think absorption will be next year by them.

這很難說。我們認為，我們今天處於有利位置，明年將有 250 到 260 個社區，考慮到我們目前的銷售速度，我們對能夠交付這些房屋感到滿意。當我們進入第四季度電話會議時，我們將對未來的指導進行更多評論，並且我們可能會對他們明年的吸收情況有更好的了解。

Got it. Okay. Well, best of luck, guys.

知道了。好的。好吧，祝你好運，夥計們。

The next question is from Michael Rehard with JPMorgan.

下一個問題來自摩根大通的麥可雷哈德。

This is Andrew Azzi on for Mike. Congrats on the quarter. I just wanted to -- yes, I just wanted to ask if you guys have put out maybe an absorption target that you're managing the business to and if there's maybe a level where if that -- if it gets below that, you would get much more aggressive on incentives and discounts and things like that?

我是安德魯·阿齊 (Andrew Azzi) 替邁克發言。恭喜本季。我只是想 - 是的，我只是想問你們是否已經制定了一個吸收目標，你們正在管理業務，是否有一個水平，如果該水平 - 如果低於該水平，您會在激勵和折扣等方面變得更加積極？

No, we haven't done that. We manage all the communities in our divisions and markets individually, but we do not have any company-stated absorption pace.

不，我們還沒有這樣做。我們單獨管理部門和市場中的所有社區，但我們沒有任何公司規定的吸收速度。

Got it. And then I'm not sure if you guys have alluded to how demand has been trending in October. And I'm just curious I believe I heard the cancellation on is 13%, which is similar to last quarter, just given how impressive orders were this quarter and the entry-level exposure I'm curious how cancellation rates have stayed so low.

知道了。然後我不確定你們是否提到了十月的需求趨勢。我只是很好奇，我相信我聽說取消率為13%，這與上季度類似，只是考慮到本季度的訂單量令人印象深刻，而且入門級的曝光率我很好奇取消率如何保持如此低。

Yes. Our cancellation rate last quarter was 16%, which is consistent with where we had been running down quite a bit from what we were experiencing pre-COVID in the low to mid-20% range. And I think that's -- as we said in our prepared remarks, it's really a reflection of 2 things. One, we're selling later in the construction cycle so that the consumer can know what his interest rate is, and we can lock that as -- which is the primary factor as well as people are starting to adjust to these higher rates.

是的。上季我們的取消率為 16%，與新冠疫情爆發前的 20% 中低範圍相比，我們的取消率大幅下降。我認為，正如我們在準備好的發言中所說，這實際上反映了兩件事。第一，我們在建設週期的後期進行銷售，以便消費者可以知道他的利率是多少，我們可以將其鎖定為——這是主要因素，人們也開始適應這些更高的利率。

With regard to the sales pace we're seeing so far this month, October is actually up over the same period in September. Although as we get later in the year, we start really being impacted by seasonality that happens towards the end of the year, we expect that to certainly start slowing down. But so far, October has started out very well for us.

就我們本月到目前為止所看到的銷售速度而言，十月實際上比九月同期有所增長。儘管隨著今年稍後的到來，我們開始真正受到年底發生的季節性影響，但我們預計這種影響肯定會開始放緩。但到目前為止，十月對我們來說開局非常好。

I appreciate that.

我很感激。

The next question is a follow-up from Alex Barrón with Housing Research.

下一個問題是住房研究中心亞歷克斯·巴倫 (Alex Barrón) 的後續問題。

I was curious if you guys would be able to share some of your average statistics for what a typical consumer looks like and maybe even break it down into a Century Complete, meaning like what's the average household income, what's the average cycle, what's the average down payment, those types of things.

我很好奇你們是否能夠分享一些關於典型消費者的平均統計數據，甚至可能將其分解為一個完整的世紀，意思是平均家庭收入是多少，平均週期是多少，平均是多少首付之類的東西。

I think that we can look at providing something like that offline as opposed to going into all the nitty-gritty details here. We're looking at putting something into one of our investor deck going forward in the future.

我認為我們可以考慮在線下提供類似的東西，而不是在這裡討論所有的細節。我們正在考慮在未來將一些東西放入我們的投資者平台中。

Okay. I think that would be helpful. The main reason I'm asking is because I think there's this notion that how can a median household income afford a home today. And I think the answer is it's not your typical median household in combined homes. I think it's more like the upper quintile or something. So I think it'd be helpful for investors to see what the profile of a typical buyer today is, but I appreciate it.

好的。我認為這會有幫助。我問的主要原因是我認為現在有一個觀念：家庭收入中位數如何買得起房。我認為答案是這不是典型的聯合住宅中位家庭。我認為它更像是上五分位數之類的東西。因此，我認為了解當今典型買家的概況對投資者會有幫助，但我對此表示讚賞。

Yes, you tell that in your piece today, Alex. So appreciate where you're coming from there. And Dave can...

是的，你在今天的文章中提到了這一點，亞歷克斯。所以要感謝你來自哪裡。戴夫可以...

Yes, we will take that as well.

是的，我們也會接受。

We have all those statistics, Dave could give you that.

我們有所有這些統計數據，戴夫可以給你。

This concludes our question-and-answer session. We will now turn the line back over to Dale for some brief closing remarks.

我們的問答環節到此結束。現在，我們將把電話轉回給戴爾，讓其發表一些簡短的結束語。

Thank you, operator. To everyone on the call, thank you for your time today and interest in Century Communities. To our employees, thank you for your incredible efforts, dedication to Century and commitment to our valued homebuyers. To our investors, we appreciate your continued support and look forward to speaking with you again next quarter ensuring our continued progress and outlook for 2024.

謝謝你，接線生。感謝所有參加電話會議的人今天抽出寶貴的時間以及對世紀社區的興趣。感謝我們的員工，感謝你們所付出的巨大努力、對世紀的奉獻以及對我們尊貴的購屋者的承諾。對於我們的投資者，我們感謝您的持續支持，並期待下個季度再次與您交談，以確保我們的持續進步和 2024 年的展望。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。