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Nov. 2, 2021, 4:47 p.m. EDT

10-Q: LGI HOMES, INC.

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(EDGAR Online via COMTEX) -- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For purposes of this Management's Discussion and Analysis of Financial Condition and Results of Operation, references to "we," "our," "us" or similar terms refer to LGI Homes, Inc. and its subsidiaries. Business Overview We are engaged in the design, construction and sale of new homes in the following markets: West Northwest Central Midwest Florida Southeast Mid-Atlantic Phoenix, AZ Seattle, WA Houston, TX Minneapolis, MN Tampa, FL Atlanta, GA Washington, D.C. Tucson, AZ Portland, OR Dallas Ft. Worth, TX Orlando, FL Charlotte, NC Norfolk, VA Albuquerque, NM Denver, CO San Antonio, TX Fort Myers, FL Raleigh, NC Richmond, VA Las Vegas, NV Austin, TX Jacksonville, FL Wilmington, NC Baltimore, MD Northern CA Oklahoma City, OK Fort Pierce, FL Winston-Salem, NC Southern CA Daytona Beach, FL Columbia, SC Sarasota, FL Greenville, SC Birmingham, AL Nashville, TN

Our management team has been in the residential land development business since the mid-1990s. Since commencing home building operations in 2003, we have constructed and closed over 50,000 homes. During the nine months ended September 30, 2021, we had 7,916 home closings, compared to 5,931 home closings during the nine months ended September 30, 2020.







        Results of Operations
        The following table sets forth our results of operations for the three and nine
        months ended September 30, 2021 and 2020:
                                                            Three Months Ended September 30,               Nine Months Ended September 30,
                                                                2021                   2020                   2021                    2020
                                                               (dollars in thousands, except per share data and average home sales price)
        Statement of Income Data:
        Home sales revenues                              $       751,608           $  534,202          $     2,249,073           $ 1,470,531
        Expenses:
        Cost of sales                                            549,319              398,971                1,642,756             1,110,763
        Selling expenses                                          39,871               35,470                  127,450                98,193
        General and administrative                                24,480               22,320                   72,479                62,422
           Operating income                                      137,938               77,441                  406,388               199,153
        Loss on extinguishment of debt                            13,314                    -                   13,976                     -
        Other income, net                                         (2,370)                (374)                  (6,979)               (2,148)
           Net income before income taxes                        126,994               77,815                  399,391               201,301
        Income tax provision                                      26,444              (11,189)                  81,049                13,834
           Net income                                    $       100,550           $   89,004          $       318,342           $   187,467
        Basic earnings per share                         $          4.10           $     3.55          $         12.85           $      7.45
        Diluted earnings per share                       $          4.05           $     3.52          $         12.72           $      7.40
        Other Financial and Operating Data:
        Average community count                                    102.7                109.3                    104.7                 111.3
        Community count at end of period                             103                  110                      103                   110
        Home closings                                              2,499                2,091                    7,916                 5,931
        Average sales price per home closed              $       300,764           $  255,477          $       284,117           $   247,940
        Gross margin (1)                                 $       202,289           $  135,231          $       606,317           $   359,768
        Gross margin % (2)                                          26.9   %             25.3  %                  27.0   %              24.5  %
        Adjusted gross margin (3)                        $       211,844           $  145,791          $       639,245           $   389,817
        Adjusted gross margin % (2)(3)                              28.2   %             27.3  %                  28.4   %              26.5  %
        EBITDA (4)                                       $       135,892           $   87,171          $       429,941           $   228,588
        EBITDA margin % (2)(4)                                      18.1   %             16.3  %                  19.1   %              15.5  %
        Adjusted EBITDA (4)                              $       147,788           $   88,193          $       440,148           $   229,711
        Adjusted EBITDA margin % (2)(4)                             19.7   %             16.5  %                  19.6   %              15.6  %
        


(1)Gross margin is home sales revenues less cost of sales.







                                                                                                                                                               As of September 30,
                                                                          Three Months Ended September 30, 2021                                                       2021
                                                                                                                                           Average
                                                                                                                                           Monthly             Community Count at
                                     Revenues             Home Closings              ASP             Average Community Count           Absorption Rate            End of Period
        Central                   $   287,878                 1,072              $ 268,543                      34.7                         10.3                          33
        Southeast                     146,166                   551                265,274                      24.0                          7.7                          26
        Northwest                     148,515                   325                456,969                      12.3                          8.8                          12
        West                           90,592                   248                365,290                      12.7                          6.5                          13
        Florida                        78,457                   303                258,934                      19.0                          5.3                          19
        Total                     $   751,608                 2,499              $ 300,764                     102.7                          8.1                         103
                                                                                                                                                               As of September 30,
                                                                          Three Months Ended September 30, 2020                                                       2020
                                                                                                                                           Average
                                                                                                                                           Monthly             Community Count at
                                     Revenues             Home Closings              ASP             Average Community Count           Absorption Rate            End of Period
        Central                   $   186,909                   812              $ 230,183                      33.3                          8.1                          35
        Southeast                     130,131                   550                236,602                      33.7                          5.4                          31
        Northwest                      91,138                   229                397,983                      11.7                          6.5                          13
        West                           62,935                   220                286,068                      12.7                          5.8                          12
        Florida                        63,089                   280                225,318                      18.0                          5.2                          19
        Total                     $   534,202                 2,091              $ 255,477                     109.3                          6.4                         110
        


Home sales revenues for the three months ended September 30, 2021 were $751.6 million, an increase of $217.4 million, or 40.7%, from $534.2 million for the three months ended September 30, 2020. The increase in home sales revenues is primarily due to a 19.5% increase in homes closed and an increase in the average sales price per home closed during the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. The average sales price per home closed during the three months ended September 30, 2021 was $300,764, an increase of $45,287, or 17.7%, from the average sales price per home closed of $255,477 for the three months ended September 30, 2020. This increase in the average sales price per home closed is primarily due to increased closings at higher price points in certain markets and a favorable pricing environment, partially offset by additional wholesale home closings. The overall increase in home closings was largely due to a strong demand environment leading to higher average monthly absorption rates within certain markets in all reportable segments during the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. Our community count at September 30, 2021 decreased to 103 from 110 at September 30, 2020. The decrease in community count is due to close out of or transition between certain active communities for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020.

Nov 02, 2021

COMTEX_396245780/2041/2021-11-02T16:46:46

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