Yahoo Finance LGI Homes Inc (LGIH) Q1 2024 Earnings Call Transcript Highlights: Key Financial Metrics and ...
Total Revenue: $390.9 million from 1,083 homes closed.
Average Sales Price (ASP): $360,897 per home.
Gross Margin: 23.4%, adjusted gross margin 25.3%.
Net Income: $17.1 million, or $0.72 per basic and diluted share.
Backlog: 1,335 homes valued at $519.5 million.
Community Count: Ended the quarter with 120 active communities, up 21% year-over-year.
Debt: $1.4 billion outstanding, with a debt-to-capital ratio of 42.5%.
Liquidity: Total liquidity at $491.5 million.
Book Value Per Share: $79.31, up 11.5% from last year.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide insights into the current land pipeline in terms of inflation for land contracted today, and the differences between the development part and the raw land part? A: (Eric Thomas Lipar - Chairman & CEO, LGI Homes, Inc.) The land market continues to see price increases due to strong demand and competition. We are selective and diligent in our land purchases across the U.S. Development costs are rising, but we are confident in our land market position and our ability to maintain historical gross margins on lots under development.
Q: Could you update us on your community count growth throughout the year and any initial thoughts moving into next year? A: (Eric Thomas Lipar - Chairman & CEO, LGI Homes, Inc.) We ended the quarter with 120 active communities, a company record, and expect to reach 127 by April. Our target is 150 active communities by year-end, with growth evenly distributed throughout the remaining months.
Q: Regarding SG&A expenses, particularly selling expenses, how do you see these evolving as community counts increase? A: (Charles Michael Merdian - CFO & Treasurer, LGI Homes, Inc.) Total advertising spend was $9.5 million in Q1, and we expect absolute dollars to increase but remain similar per community. We are confident in our spending efficiency and the nominal impact of new sales personnel on overall selling expenses as we progress through the year.
Q: What has driven the recent surge in sales, reaching over 800 sales in March and April, without increasing incentives? A: (Eric Thomas Lipar - Chairman & CEO, LGI Homes, Inc.) The increase is attributed to ramped-up advertising and the opening of new communities, coupled with effective training and leadership. Our marketing efforts have successfully driven over 35,000 leads in both March and April.
Q: Can you discuss the mix of incoming orders and any geographic or price point shifts observed during the quarter? A: (Eric Thomas Lipar - Chairman & CEO, LGI Homes, Inc.) The pipeline ASP is higher than reported due to costs rising across materials, labor, and development. We've maintained our price guidance as we see customers choosing smaller homes, and the mix is skewed towards higher-priced West Coast markets.
Q: What are the current build times, and do you see potential for further reduction? A: (Charles Michael Merdian - CFO & Treasurer, LGI Homes, Inc.) Build times range from 75 to 180 days, with longer times for Terrata homes. Build times are consistent across the country, factored into our inventory flow, and we consider them on track with our operational plans.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
