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Sep 30, 2020
LGI Homes Q3 2020 Earnings Report
LGI Homes reported record results driven by unprecedented demand and a well-positioned entry-level focused model.
Key Takeaways
LGI Homes reported a strong third quarter with significant increases in net income, home sales revenues, and home closings. The company saw unprecedented demand across its markets, driven by low interest rates and an undersupply of homes.
Net Income increased 80.4% to $89.0 million, or $3.55 Basic EPS and $3.52 Diluted EPS.
Home Sales Revenues increased 10.6% to $534.2 million.
Home Closings increased 4.4% to 2,091 homes.
Average Home Sales Price increased 5.9% to $255,477.
LGI Homes
LGI Homes
LGI Homes Revenue by Geographic Location
Revenue by Geographic Location
Central Revenue
CapyFin.comSoutheast Revenue
CapyFin.comNorthwest Revenue
CapyFin.comWest Revenue
CapyFin.comFlorida Revenue
CapyFin.com Forward Guidance
The Company updates its guidance for the full year 2020.
Positive Outlook
- Home closings between 8,400 and 9,000
- Active selling communities at the end of 2020 between 115 and 120
- Gross margin as a percentage of home sales revenues between 24.0% and 25.0%
- Adjusted gross margin (non-GAAP) as a percentage of home sales revenues between 26.0% and 27.0% with capitalized interest accounting for substantially all the difference between gross margin and adjusted gross margin
- Average sales price per home closed between $245,000 and $255,000
Challenges Ahead
- SG&A as a percentage of home sales revenues between 10.3% and 10.8%
- Effective tax rate for 2020 between 10.0% and 12.0%
- This outlook assumes that general economic conditions, including interest rates and mortgage availability, in the remainder of 2020 are similar to those experienced so far in the fourth quarter of 2020 and that average sales price per home closed, construction costs, availability of land, land development costs and overall absorption rates in the remainder of 2020 are consistent with the Company’s recent experience.
- In addition, this outlook assumes that governmental regulations relating to land development, home construction and COVID-19 are similar to those currently in place.
- Any further COVID-19 governmental restrictions on land development or home construction could negatively impact our ability to achieve this guidance.
Revenue & Expenses
Visualization of income flow from segment revenue to net income