lgih-20240220
0001580670false00015806702024-02-202024-02-20

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): February 20, 2024
LGI HOMES, INC.
(Exact name of registrant as specified in its charter)
Delaware001-3612646-3088013
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification Number)
 
1450 Lake Robbins Drive, Suite 430,The Woodlands,Texas77380
(Address of principal executive offices)(Zip Code)
(281) 362-8998
(Registrant’s Telephone Number, Including Area Code)

N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareLGIHNASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
                                    Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Item 2.02Results of Operations and Financial Condition.
On February 20, 2024, LGI Homes, Inc. (the “Company”) issued a press release announcing its financial results for the three months and fiscal year ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
None of the information furnished in this Item 2.02 and the accompanying exhibit will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor will it be deemed incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended.
Item 7.01Regulation FD Disclosure.
The information set forth in Item 2.02 above and in Exhibit 99.1 to this Current Report on Form 8-K is incorporated herein by reference.
None of the information furnished in this Item 7.01 and the accompanying exhibit will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor will it be deemed incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended.
Item 9.01Financial Statements and Exhibits.
            
(d)Exhibits.
99.1
104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Dated: February 20, 2024
LGI HOMES, INC.
By:/s/ Eric Lipar
Eric Lipar
Chief Executive Officer and Chairman of the Board


Document

EXHIBIT 99.1
LGI Homes, Inc. Reports Fourth Quarter and Full Year 2023 Results and Issues Guidance for 2024
THE WOODLANDS, Texas, February 20, 2024 (GLOBE NEWSWIRE) - LGI Homes, Inc. (NASDAQ: LGIH) today announced financial results for the fourth quarter and year ended December 31, 2023.
“We delivered a strong performance in the fourth quarter and successfully achieved all of our guidance targets for 2023,” said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes. “At the same time, we laid the foundation for profitable growth for years to come.
“Our strong execution in the fourth quarter resulted in full year closings of 6,729 homes and revenue of $2.4 billion. We believe these results make us one of just a few homebuilders to have delivered growth in both of these metrics in 2023. We made considerable progress in growing our community count and ended the year with 117 active communities, an increase of 18.2%. Our full year gross margin was 23.0% and our adjusted gross margin was 24.7%, both in line with our guidance and at the high end or above the guidance we provided at the beginning of 2023.
“Our priorities this year are reflected in our full year 2024 guidance and include increasing community count, growing closings and revenue, and further improving profitability. While inflation has moderated, current levels may prove to be more stubborn than previously expected, making the outlook for interest rates and the broader economy impossible to determine with certainty. Therefore, our focus remains on increasing leads through targeted marketing, controlling costs, efficiently building affordable, move-in ready homes at a disciplined pace, maintaining our strong balance sheet, and identifying opportunities to enhance our long-term growth and profitability.”
Mr. Lipar concluded, “Our success navigating last year’s headwinds and delivering profitable results, demonstrates the effectiveness of our systems and people and gives us confidence as we head into 2024. We thank our employees for their commitment and enthusiasm, and we look forward to all that we will accomplish together this year.”
Fourth Quarter 2023 Highlights (comparisons to fourth quarter 2022)
Home sales revenues increased 24.6% to $608.4 million
Homes closed increased 21.4% to 1,758 homes
Average sales price per home closed increased 2.6% to $346,083
Gross margin as a percentage of home sales revenues increased 270 basis points to 23.4%
Adjusted gross margin (non-GAAP) as a percentage of home sales revenues increased 300 basis points to 25.1%
Net income before income taxes increased 46.3% to $68.5 million
Net income increased 52.7% to $52.1 million, or $2.21 basic EPS and $2.19 diluted EPS
Full Year 2023 Highlights (comparisons to full year 2022)
Home sales revenues increased 2.3% to $2.4 billion
Homes closed increased 1.6% to 6,729 homes
Average sales price per home closed increased 0.7% to $350,510
Gross margin as a percentage of home sales revenues decreased 510 basis points to 23.0%
Adjusted gross margin (non-GAAP) as a percentage of home sales revenues decreased 450 basis points to 24.7%
Net income before income taxes decreased 37.4% to $261.8 million
Net income decreased 39.0% to $199.2 million, or $8.48 basic EPS and $8.42 diluted EPS



Active selling communities at December 31, 2023 increased 18.2% to 117
Owned lots of 55,331 and controlled lots of 15,750, resulting in total owned and controlled lots of 71,081 at December 31, 2023
Ending backlog at December 31, 2023 of 590 homes
Ending backlog value at December 31, 2023 of $224.9 million
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.
Balance Sheet
Net debt to capitalization of 39.3% at December 31, 2023
Total liquidity of $403.8 million at December 31, 2023, including cash and cash equivalents of $49.0 million and $354.8 million of availability under the Company’s revolving credit facility
Full Year 2024 Outlook
Subject to the caveats in the Forward-Looking Statements section of this press release and the assumptions noted below, the Company is providing the following guidance for the full year 2024. The Company expects:
Home closings between 7,000 and 8,000
Active selling communities at the end of 2024 of approximately 150
Average sales price per home closed between $350,000 and $360,000
Gross margin as a percentage of home sales revenues between 23.1% and 24.1%
Adjusted gross margin (non-GAAP) as a percentage of home sales revenues between 25.0% and 26.0% with capitalized interest accounting for substantially all the difference between gross margin and adjusted gross margin
SG&A as a percentage of home sales revenues between 12.5% and 13.5%
Effective tax rate between 24.0% and 25.0%
This outlook assumes that general economic conditions, including input costs, materials, product and labor availability, interest rates and mortgage availability, in the remainder of 2024 are similar to those experienced to date in 2024 and that the average sales price per home closed, construction costs, availability of land and land development costs in the remainder of 2024 are consistent with the Company’s recent experience. In addition, this outlook assumes that governmental regulations relating to land development and home construction are similar to those currently in place.
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, February 20, 2024 (the “Earnings Call”).
Participants may access the live webcast by visiting the Investor Relations section of the Company’s website at www.lgihomes.com.
An archive of the Earnings Call webcast will be available for replay on the Company’s website for one year from the date of the Earnings Call.




About LGI Homes, Inc.
Headquartered in The Woodlands, Texas, LGI Homes, Inc. is a pioneer in the homebuilding industry, successfully applying an innovative and systematic approach to the design, construction and sale of homes across 36 markets in 21 states. As one of America’s fastest growing companies, LGI Homes has closed over 65,000 homes since its founding in 2003 and has delivered profitable financial results every year. Nationally recognized for its quality construction and exceptional customer service, LGI Homes was named to Newsweek’s list of the World’s Most Trustworthy Companies. LGI Homes’ commitment to excellence extends to its more than 1,000 employees, earning the Company numerous workplace awards at the local, state and national level, including the Top Workplaces USA 2023 Award. For more information about LGI Homes and its unique operating model focused on making the dream of homeownership a reality for families across the nation, 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 2024 home closings, active selling communities, average sales price per home closed, gross margin as a percentage of home sales revenues, adjusted gross margin as a percentage of homes sales revenues, SG&A as a percentage of home sales revenues and effective tax rate, 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 “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “will” 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, 2022, including the “Cautionary Statement about Forward-Looking Statements” subsection within the “Risk Factors” section, the “Risk Factors” and “Cautionary Statement about Forward-Looking Statements” sections in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023 and subsequent filings by the Company with the Securities and Exchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 when it is filed with the SEC. 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.



LGI HOMES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share data)
 December 31,
 20232022
ASSETS
Cash and cash equivalents$48,978 $31,998 
Accounts receivable41,319 25,143 
Real estate inventory3,107,648 2,898,296 
Pre-acquisition costs and deposits30,354 25,031 
Property and equipment, net45,522 32,997 
Other assets113,849 93,159 
Deferred tax assets, net8,163 6,186 
Goodwill12,018 12,018 
Total assets$3,407,851 $3,124,828 
LIABILITIES AND EQUITY
Accounts payable$31,616 $25,287 
Accrued expenses and other liabilities271,872 340,128 
Notes payable1,248,332 1,117,001 
Total liabilities1,551,820 1,482,416 
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, par value $0.01, 250,000,000 shares authorized, 27,521,120 shares issued and 23,581,648 shares outstanding as of December 31, 2023 and 27,245,278 shares issued and 23,305,806 shares outstanding as of December 31, 2022
275 272 
Additional paid-in capital321,062 306,673 
Retained earnings1,889,716 1,690,489 
Treasury stock, at cost, 3,939,472 shares as of December 31, 2023 and December 31, 2022
(355,022)(355,022)
Total equity1,856,031 1,642,412 
Total liabilities and equity$3,407,851 $3,124,828 




LGI HOMES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended December 31,Year Ended December 31,
2023202220232022
Home sales revenues$608,414 $488,262 $2,358,580 $2,304,455 
Cost of sales465,785 387,227 1,816,393 1,657,855 
Selling expenses49,771 33,323 191,582 144,928 
General and administrative33,016 26,908 117,350 111,565 
   Operating income59,842 40,804 233,255 390,107 
Other income, net(8,706)(6,049)(28,499)(28,009)
   Net income before income taxes68,548 46,853 261,754 418,116 
Income tax provision16,459 12,738 62,527 91,549 
   Net income$52,089 $34,115 $199,227 $326,567 
Earnings per share:
Basic$2.21 $1.46 $8.48 $13.90 
Diluted$2.19 $1.45 $8.42 $13.76 
Weighted average shares outstanding:
Basic23,565,640 23,291,372 23,507,136 23,486,465 
Diluted23,737,448 23,513,303 23,648,548 23,730,770 







Non-GAAP Measures
In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company has provided information in this press release relating to adjusted gross margin.
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 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, unaudited):
Three Months Ended December 31,Year Ended December 31,
2023202220232022
Home sales revenues$608,414 $488,262 $2,358,580 $2,304,455 
Cost of sales465,785 387,227 1,816,393 1,657,855 
Gross margin142,629 101,035 542,187 646,600 
Capitalized interest charged to cost of sales8,893 5,411 33,368 20,276 
Purchase accounting adjustments (1)
981 1,399 6,492 6,869 
Adjusted gross margin$152,503 $107,845 $582,047 $673,745 
Gross margin % (2)
23.4 %20.7 %23.0 %28.1 %
Adjusted gross margin % (2)
25.1 %22.1 %24.7 %29.2 %
(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.





Home Sales Revenues, Home Closings, Average Sales Price Per Home Closed (ASP), Average Community Count and Average Monthly Absorption Rates by Reportable Segment
(Revenues in thousands, unaudited)

Three Months Ended December 31, 2023
Reportable SegmentRevenuesHome ClosingsASPAverage Community CountAverage
Monthly
Absorption Rate
Central$166,108 517 $321,292 36.7 4.7 
Southeast159,190 500 318,380 27.0 6.2 
Northwest38,286 78 490,846 10.3 2.5 
West124,527 320 389,147 16.0 6.7 
Florida120,303 343 350,738 22.3 5.1 
Total$608,414 1,758 $346,083 112.3 5.2 
Three Months Ended December 31, 2022
Reportable SegmentRevenuesHome ClosingsASPAverage Community CountAverage
Monthly
Absorption Rate
Central$204,444 634 $322,467 33.7 6.3 
Southeast126,830 386 328,575 23.0 5.6 
Northwest32,976 73 451,726 8.3 2.9 
West56,365 153 368,399 12.3 4.1 
Florida67,647 202 334,886 17.0 4.0 
Total$488,262 1,448 $337,198 94.3 5.1 
Year Ended December 31, 2023
Reportable SegmentRevenuesHome ClosingsASPAverage Community CountAverage
Monthly
Absorption Rate
Central$730,688 2,241 $326,054 35.7 5.2 
Southeast556,808 1,716 324,480 24.8 5.8 
Northwest251,171 511 491,528 10.2 4.2 
West381,102 992 384,175 14.0 5.9 
Florida438,811 1,269 345,793 19.2 5.5 
Total$2,358,580 6,729 $350,510 103.9 5.4 



Year Ended December 31, 2022
Reportable SegmentRevenuesHome ClosingsASPAverage Community CountAverage Monthly
Absorption Rate
Central$1,011,844 3,094 $327,034 31.9 8.1 
Southeast455,340 1,404 324,316 21.5 5.4 
Northwest253,416 502 504,813 8.5 4.9 
West300,968 751 400,756 11.5 5.4 
Florida282,887 870 325,157 18.5 3.9 
Total$2,304,455 6,621 $348,052 91.9 6.0 

Owned and Controlled Lots
The table below shows (i) home closings by reportable segment for the year ended December 31, 2023 and (ii) the Company’s owned or controlled lots by reportable segment as of December 31, 2023.
 Year Ended December 31, 2023As of December 31, 2023
Reportable SegmentHome Closings
Owned (1)
ControlledTotal
Central2,241 20,606 3,093 23,699 
Southeast1,716 14,563 5,429 19,992 
Northwest511 5,934 1,652 7,586 
West992 9,049 2,747 11,796 
Florida1,269 5,179 2,829 8,008 
Total6,729 55,331 15,750 71,081 
(1)Of the 55,331 owned lots as of December 31, 2023, 41,155 were raw/under development lots and 14,176 were finished lots.
Backlog Data
As of the dates set forth below, the Company’s net orders, cancellation rate, and ending backlog homes and value were as follows (dollars in thousands, unaudited):   
Year Ended December 31,
2023 (4)
2022 (5)
2021 (6)
Net orders (1)
6,617 5,268 9,533 
Cancellation rate (2)
25.4 %24.4 %19.3 %
Ending backlog - homes (3)
590 702 2,055 
Ending backlog - value (3)
$224,851 $252,002 $659,234 
(1)Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period.
(2)Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period.
(3)Ending backlog consists of retail homes at the end of the period that are under a purchase contract that has been signed by homebuyers who have met preliminary financing criteria but have not yet closed and wholesale contracts with varying terms. Ending backlog is valued at the contract amount.
(4)As of December 31, 2023, the Company had 60 units related to bulk sales agreements associated with its wholesale business.
(5)As of December 31, 2022, the Company had 157 units related to bulk sales agreements associated with its wholesale business.
(6)As of December 31, 2021, the Company had 481 units related to bulk sales agreements associated with its wholesale business.





CONTACT:
Joshua D. Fattor
Vice President of Investor Relations
(281) 210-2586
investorrelations@lgihomes.com