THE WOODLANDS, Texas, Aug. 08, 2017 (GLOBE NEWSWIRE) -- LGI Homes, Inc. (Nasdaq:LGIH) today announced results for the second quarter 2017 and the six months ended June 30, 2017.

Second Quarter 2017 Results and Comparisons to Second Quarter 2016

• Net Income increased 55.9% to $32.2 million, or $1.49 Basic EPS and $1.39 Diluted EPS
• Net Income Before Income Taxes increased 54.9% to $48.6 million
• Home Sales Revenues increased 45.6% to $324.2 million
• Home Closings increased 34.0% to 1,511 homes
• Average Home Sales Price increased 8.7% to $214,545
• Gross Margin as a Percentage of Homes Sales Revenues was 26.6% as compared to 26.5%
• Adjusted Gross Margin (non-GAAP) as a Percentage of Home Sales Revenues was 28.0% as compared to 27.8%
• Ending backlog increased 74.2% to 1,545 units
• Active Selling Communities at June 30, 2017 increased to 71 from 56
• 32,689 Total Owned and Controlled Lots at June 30, 2017

Please see "Non-GAAP Measures" for a reconciliation of Adjusted Gross Margin (a non-GAAP measure) to Gross Margin, the most directly comparable GAAP measure.

Six Months Ended June 30, 2017 Results and Comparisons to Six Months Ended June 30, 2016

• Net Income increased 35.9% to $44.0 million, or $2.05 Basic EPS and $1.91 Diluted EPS
• Net Income Before Income Taxes increased 33.0% to $65.5 million
• Home Sales Revenues increased 26.5% to $487.1 million
• Home Closings increased 15.2% to 2,272 homes
• Average Home Sales Price increased 9.8% to $214,388
• Gross Margin as a Percentage of Homes Sales Revenues was 26.7% as compared to 26.1%
• Adjusted Gross Margin (non-GAAP) as a Percentage of Home Sales Revenues was 28.0% as compared to 27.3%

Please see "Non-GAAP Measures" for a reconciliation of Adjusted Gross Margin (a non-GAAP measure) to Gross Margin, the most directly comparable GAAP measure.

Management Comments

"We are proud to announce an outstanding quarter at LGI Homes highlighting record-setting closings, revenues, average home sales price, community count, net income and EPS," stated Eric Lipar, the Company's Chief Executive Officer and Chairman of the Board. "Based on these solid results during the first half of the year, increased demand for homeownership, and robust orders we believe we are well positioned to finish the year strong and are updating our guidance. For the full year 2017, we now anticipate to close more than 5,000 homes. In addition, we are raising the range of our full year EPS guidance to $4.25 to $4.75 per basic share."

2017 Second Quarter Results

Home closings during the second quarter of 2017 increased 34.0% to 1,511 from 1,128 during the second quarter of 2016. Active selling communities increased to 71 at the end of the second quarter of 2017, up from 56 communities at the end of the second quarter of 2016.

Home sales revenues for the second quarter of 2017 were $324.2 million, an increase of $101.5 million, or 45.6% over the second quarter of 2016. The increase in home sales revenues is due to both the increase in the number of homes closed and an increase in the average home sales price.

The average home sales price was $214,545 for the second quarter of 2017, an increase of 8.7% over the second quarter of 2016. This increase is largely attributable to changes in product mix, price points in new markets, and a favorable pricing environment.

Gross margin as a percentage of home sales revenues for the second quarter of 2017 was 26.6% as compared to 26.5% for the second quarter of 2016.  Adjusted gross margin (non-GAAP) as a percentage of home sales revenues for the second quarter of 2017 was 28.0% as compared to 27.8% for the second quarter of 2016. This increase is primarily due to a combination of higher average home sales prices and construction costs, and to a lesser extent a one-time reimbursement of costs associated with community development. Please see "Non-GAAP Measures" for a reconciliation of adjusted gross margin (non-GAAP) to gross margin, the most comparable GAAP measure.

Net income of $32.2 million, or $1.49 per basic share and $1.39 per diluted share, for the second quarter of 2017 increased $11.5 million, or 55.9%, from $20.7 million for the second quarter of 2016. This increase is primarily attributable to the 34.0% increase in homes closed and the 8.7% increase in average home sales price.

Results for the Six Months Ended June 30, 2017

Home closings for the six months ended June 30, 2017 increased 15.2% to 2,272 from 1,972 during the six months ended June 30, 2016.

Home sales revenues for the six months ended June 30, 2017 increased 26.5% to $487.1 million compared to the six months ended June 30, 2016. The increase in home sales revenues is primarily due to the increase in the number of homes closed and an increase in the average home sales price.

The average home sales price was $214,388 for the six months ended June 30, 2017, an increase of $19,060, or 9.8%, over the six months ended June 30, 2016. This increase is largely attributable to changes in product mix, price points in new markets, and a favorable pricing environment.

Gross margin as a percentage of home sales revenues for the six months ended June 30, 2017 was 26.7% as compared to 26.1% for the six months ended June 30, 2016.  Adjusted gross margin (non-GAAP) as a percentage of home sales revenues for the six months ended June 30, 2017 was 28.0% as compared to 27.3% for the six months ended June 30, 2016. This increase is primarily due to a combination of leveraging our construction costs and lot costs with higher average home sales price. Please see "Non-GAAP Measures" for a reconciliation of adjusted gross margin (non-GAAP) to gross margin, the most comparable GAAP measure.

Net income of $44.0 million, or $2.05 per basic share and $1.91 per diluted share, for the six months ended June 30, 2017 increased $11.6 million, or 35.9%, from $32.4 million for the six months ended June 30, 2016. This increase is primarily attributable to the 15.2% increase in homes closed and the 9.8% increase in average home sales price.

Outlook

Subject to the caveats in the Forward-Looking Statements section of this press release, the Company offers the following updated guidance for 2017. The Company believes it will have between 75 and 80 active selling communities at the end of 2017, close more than 5,000 homes in 2017, and generate basic EPS between $4.25 and $4.75 per share during 2017. In addition, the Company believes 2017 gross margin as a percentage of home sales revenues will be in the range of 25.0% and 27.0% and 2017 adjusted gross margin (non-GAAP) as a percentage of home sales revenues will be similar to previous years in the range of 26.5% and 28.5% with capitalized interest accounting for substantially all of the difference between gross margin and adjusted gross margin. The Company also believes that the average home sales price in 2017 will be between $210,000 and $220,000. This outlook assumes that general economic conditions, including interest rates and mortgage availability, in the remainder of 2017 are similar to those in the first half of 2017 and that average home sales price, construction costs, availability of land, land development costs and overall absorption rates for 2017 are consistent with the Company's recent experience.

Earnings Conference Call

The Company will host a conference call via live webcast for investors and other interested parties beginning at 12:30 p.m. Eastern Time on Tuesday, August 8, 2017 (the "Earnings Call"). The Earnings Call will be hosted by Eric Lipar, Chief Executive Officer and Chairman of the Board, and Charles Merdian, Chief Financial Officer.

Participants may access the live webcast by visiting the Investor Relations section of the Company's website at www.LGIHomes.com. The Earnings Call can also be accessed by dialing (855) 433-0929, or (970) 315-0256 for international participants.

An archive of the webcast will be available on the Company's website for approximately 12 months. A replay of the Earnings Call will also be available later that day by calling (855) 859-2056, or (404) 537-3406, using conference id "57141613". This replay will be available until August 15, 2017.

About LGI Homes, Inc.

Headquartered in The Woodlands, Texas, LGI Homes, Inc. engages in the design, construction and sale of homes in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington and Tennessee. The Company has a notable legacy of more than 14 years of homebuilding operations, over which time it has closed over 18,000 homes. For more information about the Company and its new home developments please visit the Company's website at www.LGIHomes.com.

Forward-Looking Statements

Any statements made in this press release or on the Earnings Call that are not statements of historical fact, including statements about the Company's beliefs and expectations, are forward-looking statements within the meaning of the federal securities laws, and should be evaluated as such. Forward-looking statements include information concerning projected 2017 home closings, year-end selling communities, basic earnings per share, gross margins as a percentage of home sales revenues, adjusted gross margins as a percentage of home sales revenue and average home sales price, as well as market conditions and possible or assumed future results of operations, including descriptions of the Company's business plan and strategies. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believe," "estimate," "project," "anticipate," "expect," "seek," "predict," "contemplate," "continue," "possible," "intent," "may," "might," "will," "could," "would," "should," "forecast," or "assume" or, in each case, their negative, or other variations or comparable terminology. For more information concerning factors that could cause actual results to differ materially from those contained in the forward-looking statements please refer to the "Risk Factors" section in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, including the "Cautionary Statement about Forward-Looking Statements" subsection within the "Risk Factors" section, and subsequent filings by the Company with the Securities and Exchange Commission. The Company bases these forward-looking statements or projections on its current expectations, plans and assumptions that it has made in light of its experience in the industry, as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances and at such time. As you read and consider this press release or listen to the Earnings Call, you should understand that these statements are not guarantees of future performance or results. The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or projections. Although the Company believes that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect the Company's actual results to differ materially from those expressed in the forward-looking statements and projections. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. If the Company does update one or more forward-looking statements, there should be no inference that it will make additional updates with respect to those or other forward-looking statements.

Non-GAAP Measures

In addition to the results reported in accordance with U.S. GAAP, the Company has provided information in this press release relating to Adjusted Gross Margin.

Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. The Company defines adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin. However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustments, which have real economic effects and could impact the Company's results, the utility of adjusted gross margin information as a measure of the Company's operating performance may be limited. In addition, other companies may not calculate adjusted gross margin information in the same manner that the Company does. Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of the Company's performance.

The following table reconciles adjusted gross margin to gross margin, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands):

1. Adjustments result from the application of purchase accounting for acquisitions and represent the amount of the fair value step-up adjustments included in cost of sales for real estate inventory sold after the acquisition dates.
    
2. Calculated as a percentage of home sales revenues.

CONTACT: Investor Relations:
Caitlin Stiles, (281) 210-2619
InvestorRelations@LGIHomes.com