Q2 2020 Century Communities Inc Earnings Call
As a teacher if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to Hunter Wells, Vice President Investor Relations for centuries coming into do you guys. Thank you you may begin good afternoon. Thank you for joining us today.
Century communities second quarter 2020 earnings conference call before the call begins I would like to remind everyone that certain statements made in the course of this call are not based on historical information and May constitute forward looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risk and uncertainty.
He is that could cause actual results to differ materially from those described or implied in the forward looking statements certain of these risks and uncertainties. It can be found under the heading risk factors and the company's most recently filed annual report on form 10-K, I supplemented by our other SEC filings our SEC filings.
Well at Www Dot FCC dot Gov and on our website at Www Dot century communities Dot Com. The company undertakes no duty to update any forward looking statements that are made during this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call.
In your presentation. All this information is not intended to be considered an isolation or as a substitute for the financial information presented in accordance with gap management will be available. After the call Street, you had any questions that did not get answered.
Hosting the call today, our Dalfonso skin, Chairman and co Chief Executive Officer, Raw Franciscan co Chief Executive Officer, and David Messenger, Chief Financial Officer. Following today's prepared remarks, we'll open up the life for questions with that I will turn the call over today ill.
Thank you Hunter and good afternoon, everyone on the coal.
On a last call in April we described the strategic actions implemented to protect the health and wellbeing of our team members homebuyers homeowners and trade partners, while we continue to build sell in close homes across our national platform.
We also discussed steps being undertaken to generate cash flow reduce debt and increase our liquidity.
As we look back at those decisions, which were made rapidly and a period of significant uncertainty. We're very pleased not only with the actions taken but more importantly, with the exceptional second quarter results. These actions generated including double digit revenue growth.
Expanded profit they don't profitability.
Our highest quarter ever a boat new home deliveries and that new home calling drugs.
Following a 1% decline in April may and June rebounded strongly with both months enjoying a 33% year over year increase in that new contracts.
A trend, which is even increase so far in July.
Home sales revenues increased 23% to $747 million on a 26% improvement in deliveries to a record 2480 homes.
Adjusted net income increased 71% to a record $40.3 million and absorptions increased an impressive 33% year over year to five sales per month per community.
The highest rate and the company's history.
In addition to our improved top and bottom line, we made significant progress or galore, realizing cost efficiencies across our business.
S.G. today as a percent of home sales declined to 11.6%.
An 80 basis point improvement over the second quarter last year.
130 basis point sequential improvement compared to the first quarter of this year.
We expect to realize ongoing savings from the cost reduction measures, we took earlier in the year.
We also took steps to strengthen our balance sheet by paying down the full $522 million auto line of credit.
And dramatically improving our net debt to net capital leverage ratio to 37.5%, a 910 basis point improvement from the first quarter.
Collectively these results were strong evidence of the adaptability got business model.
And our team's ability to execute on a playbook and navigate through a difficult and uncertain environment, while meeting the substantial ongoing demand for new homes that entry level price points across our national footprint.
Over the last two quarters, we've continued to expand our investment in an employee the use of digital technologies to further serve homebuyers through online reservation and contracting capabilities.
Virtual tours in appointments video walk throughs electronic earnest money transfers and the like.
We've enhanced our online chat features that directly connect customers with onsite agents, where they may browse communities ask questions and coordinate appointments.
Even with some sales office is still operating on an appointment only basis through online platform homebuyers cannot only explore a product offerings, but actually purchase the home and apply for a mortgage all with the click of a button and without the need to personally interface with a salesperson.
Pending on a buyer's preference, we offer the opportunity to meet face to face distantly or not at all.
Our financial services company also wrap their digital efforts to provide a convenient virtual onestop.
Financing and closing experience.
Because of these increased capabilities total company web traffic improve 66% on a year over year basis in the second quarter.
We we've also been intently focused on carefully managing our supply chain to mitigate any potential interruptions.
Our supply chain is built on a network of extensive national agreements and these relationships enable us to swiftly address any challenges that may arise.
Not only do our supplier partners provide us with preferential treatment in many cases.
But if a building material become scarce our team is adept at rapidly finding alternative materials at a comparable price to enable a project to move forward without delays or cost increases.
As certain challenges arose during the second quarter, we successfully manage through these issues without incurring additional costs or missing any closings.
The continued execution on our growth strategy and delivery of robust results is a reflection of the strength and resiliency of our business.
The ability of our team to be agile and adjust to unexpected circumstances.
Throughout the second quarter, we saw sequential month over month sales improvement.
Due to our product positioning the effective work of our sales teams that are robust online sales tools.
As the quarter progressed, we experienced decreases in our cancellation rate from a high of 21% to a lower 15% in June averaging 19% for the quarter.
The ongoing social distancing guidelines and remote working arrangements, resulting from the pandemic.
Fuel demand for homes as we witness an outbound migration from both apartments and more urban areas taking place.
Buyers are taking advantage of historically low interest rates, which for the first time and a half century fell below 3%.
A lack of resale competition has helped demand within the new home market as resale inventory decreased 30% year over year nationwide in nearly every major new home market.
Well, new home sales increased significantly.
The homebuilding industry is one of the brightest spots in the economy and is experiencing an extremely positive macro environment.
The opportunity to work remotely has allowed homebuyers to search for homes to purchase in less urban and less costly areas of the country.
We are confident these positive trends will help support continued demand for our homes.
Well this year has been marked by many unforeseen challenges.
Our team is committed to executing our long term initiatives and increasing our market share across our national footprint as we further scale our business.
In July century communities was again ranked as the ninth largest homebuilder in the country on builders build or 100 list and for a third you're in a row, we were named the fastest growing public builder.
We believe these acknowledgements reflect not only the trust that home buyers have placed and century.
But also the quality of our employees across our local sales centers construction sites and various nationwide offices.
We are truly grateful for our entire team.
Whom have effectively maintain their focus and attention throughout this unprecedented year to deliver exceptional homes and quality service to our customers.
Looking ahead, we remain encouraged with our continued performance and competitive positioning across high potential markets.
We are confident our ability to drive further improvements in operational performance.
Deliver long term value enhancement to our shareholders.
And support our future growth over the balance of 2020.
Into 2021 and beyond.
I'll now turn the call over to Rob to discuss our business and markets in more detail.
Thank you and good afternoon, everyone.
As Dayl mentioned, the second quarter was one a tremendous accomplishment and record results within a very difficult environment.
Not only did we increase adjusted net income, 71% to a record $40.3 million or one dollar and 21 cents per diluted share we increased new home deliveries to a record of 2480 homes, a 26% increase.
And net new home contracts to a record 2664, a 22% increase.
Year to date, our net contracts and deliveries have increased 25% and 20% respectively over.
Over the first six months of last year.
We ended the quarter with a backlog of 2778 homes with a dollar value of 963 million.
23% year over year increase.
Across the 17 states in which we operate we currently have no cobot related homebuilding restrictions and given that constrain supply.
Historically low interest rates and the rise of the exodus from both apartments and high cost areas of the country.
Our product portfolio is strongly position to meet the increased demand that we are experiencing at our entry level price points.
In the second quarter, our century complete brand continued to scale and expand delivering 835 homes up sequentially, 34%, while new orders increased 43% over the same period.
With our average sales price of $160000 and penetration into 11 states. We're uniquely positioned among all public homebuilders to grow this brand and captured increasing share. These new homebuyers seeking the ownership of a home at the most affordable level possible.
We have and will continue to make investments into our high growth asset light century complete business line to support its future expansion, both within and beyond our existing markets.
We are seeing similar demand trends for entry level homes in our Texas region as evidenced by a year over year, 60% increase and absorptions and net new contracts as well as an 88% increase in deliveries.
The appeal of no state income tax.
Low cost of living and increased opportunities for remote work has driven Texas to become a top destination for us relocation.
In fact, Austin, San Antonio and Houston are all ranked as top 10 cities for relocating millennial workers.
Our Texas portfolio of new home offerings with Asps in the 240000 range.
As us well positioned to further capitalize on this robust demand.
Our mountain region, which achieved a 14% year over year increase in net new contracts continues to perform well for us.
Utah has the second lowest state unemployment rate in the country and Salt Lake City continues to experience positive in migration trends.
Entry has built a significant top 10 market share position in this growing and vibrant market.
We believe that demand within this high growth Metro region will persist.
Supported by its diverse healthy economy.
In Denver sales growth and traffic increase throughout the quarter.
As stay at home restrictions east.
Even Las Vegas, which was probably our market with the highest percentage of interrupted employment enjoyed double digit growth in net sales, partially driven by continued in migration.
These positive Tailwinds resulted in strong performance in our mountain region, both for entry level as well as move up product.
With our backlog of homes, increasing 31% year over year.
The southeast region remains a high demand market with absorptions up 45%, resulting in home deliveries and new order growth up 43% and 38% respectively.
In fact, we experienced year over year sales improvement each month in every one of our markets in this region.
Century is the second largest builder and Atlanta, and we've seen a resurgence in demand within this market, particularly within the entry level segment.
We're also seeing robust demand across Charlotte and Nashville.
We closed the quarter with a strong backlog of homes that are southeast region, which increased 34% year over year.
Despite parts of California in Washington, being one of the earliest at both severely affected areas in terms of shelter at home ordinances closures and homebuilding restrictions.
Our west region saw steady sequential improvement in new home demand as the second quarter progressed.
Deliveries in orders increased double digits up 23% and 18% respectively.
And we ended the quarter with a backlog of 381 homes, an increase of approximately 30% on a year over year basis.
Many employers across Washington in California as in other areas of the country have recently announced that their employees may work remotely for the foreseeable future and we believe this will likely drive homebuyers out of expensive cities to more affordable suburban at X urban areas, which will contain.
Thank you to support demand for our new homes.
Given the market uncertainty than existing we made the decision early on the second quarter to deploy the use of incentives to drive it increased sales pace.
With more market clarity, we discontinued this practice in June and have sense increased prices and reduced incentives in every market.
Even with this defensive approach through much of the quarter, our adjusted homebuilding gross margin was essentially flat year over year.
Looking at our backlog, we expect margins to improve in the third and fourth quarters.
As we discussed at our last call in April we ceased all investments in land acquisition land development in most spec home starts.
As the quarter progressed, we restarted acquisition and development activities, along with new homes.
As of the ended the second quarter, we had nearly 35000 owned and controlled lots of which 55% are already owned.
Looking ahead, we remain singularly focused on growing both of our brands to capture an increase share of entry level homebuyer demand.
Century was built on a strong foundation of quality affordable homes built in strategic high growth markets and we will continue to carry out our initiatives to drive improved performance and expand our market share position across our national platform.
I will now turn the call over to Dave who will provide a detailed update on our financial results and outlook.
Thank you Rob during the second quarter 2020, our adjusted net income increased to a record $40.3 million or $1.21 per diluted share and net income increased a 148% to a record $38.5 million or $1.15 per diluted share.
Home sales revenues for the second quarter increased to 747.4 million.
An increase of 23% compared to 608.6 billion in the prior year quarter.
This improvement in revenues was driven by 22% increase in net new contracts to accompany record 2664 homes and a 26% increase in home deliveries to accompany record of 2480.
The average selling price of homes delivered for the second quarter 2020.
Decreased $8000 to $301400 compared to the prior year quarter, which is consistent with our plan to capture additional share of homebuyers at entry level price points.
Adjusted homebuilding gross margin percentage was essentially flat at 19.5% compared to 19.6% and their prior year quarter.
Homebuilding gross margin percentage decreased 30 basis points to 16.9% from 17.2% in the prior year quarter, driven primarily by and an inventory impairment and slightly higher interest costs.
Looking ahead, we expect margins to improve as we have pulled back on our incentives and increased home prices in each market.
As DNA as a percent of home sales revenue improved 80 basis points to 11.6% in the second quarter compared to 12.4% and the prior year.
This was a result of our past and continued efforts to contain costs and improve the operating leverage of our company.
The second quarter 2020, our financial services business generated $25.7 million in revenues up 159% year over year.
The business contributed $13 million in pre tax income.
Compared to 2.2 million in the prior year quarter.
Our improved second quarter results were primarily due to a larger number of loan originations increased efficiencies in our financial services operation and the stabilization of the credit markets, which enabled us to recoup our approximately $3 million unrealized noncash valuation loss that we reported in the first.
Quarter.
For the second quarter, we benefited from strong margin performance as well as increased loan closings, resulting from both growth and our homebuilding business and continued increase in our capture rates across the platform.
In the second quarter, we made substantial progress on strengthening and fortifying our balance sheet to enable our business to weather any ongoing challenges and economic disruptions related to the covert 19 pandemic.
During the second quarter as a result of the Swift action, we undertook in March and April we were able to fully paid down the $522 million on our line of credit ending the quarter with approximately $220 million of cash and total liquidity of $860 million, which includes six on.
Hundred $40 million of availability under our credit facility.
We feel that we are well positioned to continue to operate our business regardless of the environment.
Consistent with our previously communicated goal of reducing leverage and further strengthening our financial position, we made significant progress during the quarter.
At quarter end, our net homebuilding debt the net capital improves substantially the 37.5% compared to 46.6% at the end of the first quarter and down significantly from 53.8% in the prior year quarter.
In the second quarter, our tax rate was 23.3% compared to 25.6% in the same quarter the prior year.
Given the strength of our second quarter results and continued sales momentum we are providing full year guidance of deliveries to be in the range up 8800 homes to 9500 homes and home sales revenues to be in the range, a 2.7 billion to $3 billion.
Our deliveries will be weighted more toward the fourth quarter as a result of the delayed starts that occurred early in the second quarter.
Our recent results demonstrate a vigorous new homebuilding environment supported by positive Tailwinds and rising demand across our geographically diverse footprint.
Our business is uniquely positioned with an emphasis on serving the entry level homebuyer, a strong balance sheet and solid financial position to whether any changes across the broader macro economy.
We remain uncertain and our ability to deliver on our long term strategic and financial objectives, and look forward to enhancing value for our shareholders.
With that I'll open the line for questions operator.
Thank you if he would like to ask a question. Please press star one on your telephone keypad.
For me to total indicate your line is in the question can you maybe press star to if he would like three move your question from the Q ever participants using speaker equipment and may be necessary to pick up they had said before pressing the star teas.
Our first question his from Thomas Maguire with Zelman and Associates. Please proceed.
Hey, everyone. Thanks for all the color and great job navigating unprecedented time.
Just on the pricing side of the equation I think the July commentary shows there weren't any issues on a company wide level, but we are there any pockets on a geographic or price point basis, where demand fell you adjusted net prices and then just maybe more broadly can you give a sense of the magnitude for the recent adjustments in what was this a onetime matching how you think about it to reset after.
Taking a step back what togut or is there still more pricing power moving forward.
So Thomas this is Dale we look across the spectrum of all of our markets.
They're all they are all performing well, we have reduced incentives and increased prices across the whole platform. So there's nothing that was an outlier with the ability to do that.
As far as the incentives that we had on at the beginning of the quarter.
It was really a function of just where where we stood at that point, we were committed to moving homes and not knowing how things were going to play out we certainly didn't want to get behind the curve. So as we started getting more clarity as the quarter continued on a we started reducing.
The incentives and then.
In June they.
We're we're significantly reduced prices were increased and as we go forward.
We don't see anything that constrains us from being able to continue to do that.
Got it that's really helpful and then just.
On the leverage you made some really impressive progress this quarter and think got more done.
As expected in terms of where you wanted to being a relatively quick period of time I guess just to confirm you alluded to in the prepared remarks, but today's level position, where you're comfortable running in the current macro backdrop in and if so how do you think about allocating capital moving forward is there enough confidence in the market and the availability.
That cash flow go back into inventory or any thoughts on on repurchases are kind of the various buckets of what we can different here.
This is Dave I would say that you know from where we're at today at 37 and 8% on net leverage basis, we're comfortable with that that while leverage can fluctuate from time to time in quarter to quarter, we think that where we are today that visit the business can cash flow itself and and operate and support our growth plans as we see over the next year too as.
We look out and for capital allocation, we definitely see an opportunity to continue growing the business that there's reasons for us to reinvest reinvest the cash flow back into the business, whether it's through inventory inland.
Got it.
Thanks, guys.
Our next question is from Michael Rehaut with Jpmorgan. Please proceed.
Michael Please check as your line is open.
Hi, sorry about that.
Good afternoon, everyone. Congrats on the results.
Just wanted to get a sense for you had mentioned on July order growth better than May and June both of which were up 33%.
Hi, this is kind of a lot of focus around.
The exit rate.
In other words, how June July thing doing, which obviously incredibly well across the board so the industry, but also.
Trying to triangulate.
You know the sustainability of that type of growth so.
It would be really helpful. I think for modeling and just setting expectations correctly can you give us a sense of now is July kind of in the mid to high Thirtys or.
40, 40% to 50% what type of.
Great magnitude are we talking about.
And if thats driven in any part by you know and acceleration community count or certain markets, just getting even harder.
Hey, Mike It's Dave I would say that you know July we're almost 40% above last year. So we've we've continued to see a strong trend.
Exiting exiting may and June into July.
And I would say it's across our markets. It's it's not just one market focus nobody's dominating that percentage increases. So it's really just the markets getting better and stronger as we've gone through the first 28 days of the month.
Okay.
That's helpful.
At this stage for that and then.
Also on the gross margins you and I appreciate the.
The transparency there in terms of you know digging a little bit sequentially, because it's density of some of those increased incentives.
Earlier in the quarter.
We have the same time now you're looking at.
A nice improvement in pricing in June and I would assume into July.
You mentioned that you expect a improvement in the four in Threeq and Fourq you.
Also any type of degree of magnitude would be helpful. There. Obviously, we started off the year, a little bit shy of 18% we're actually doing.
Above 18% in the back half its 19.
Any type of.
Directionality, there would be helpful also.
Yeah, Hey, this Dave again, I would say Directionally, it's going the right direction that we were at do you know.
900, and a half on an adjusted basis.
Little bit below 17 on a GAAP basis for Q2 and as we're as we're pulling back incentives and moving prices. We do see gross margin in our backlog are climbing in Q3, but more so in Q4.
So we we do see some improvements but order of magnitude that will really depend on what ends up closing and how we round out the sales through the third quarter.
Okay.
Appreciate that one last one if I could sneak one in more of a bigger picture for Robert Dale.
You know obviously over the last few years, you guys have expanded nicely across several markets.
Primarily through acquisition.
Has the landscape changed at all this year from your standpoint, I mean, obviously.
Over the last 12 months, you've talked about growing out century complete.
And maybe getting deeper and better leverage Onest DNA standpoint in your existing markets is that still the plan or.
In terms of your primary focus or has the M&A.
Need or kind of risen in the last six months and maybe some opportunistic markets that you wanted would want to take another look at.
Mike. This is deal yes were what we a message before that.
Our primary goals were to expand and century complete and deepened in all of our existing century community markets still remains the same but with that said I mean, we're always optimistic we're looking at alternatives.
And if we found the right M&A opportunity we would certainly.
Look at it very closely.
But we don't think we need to rely on that as we as we did over.
The last five years or so in terms of our growth we've got a tremendous footprint, we've got a depth and every one of our markets, but every one of our markets. We we have the ability to pick up additional market share.
And that's really where our focus is.
And again not not to say, we wouldn't do something else. If it came but we're really focused on growing our existing business.
Thanks very much.
Our next question is from Alex Rigel with B. Riley FBR. Please proceed.
Thank you and congratulations on a fantastic quarter.
A couple of quick questions here.
First the century complete average selling prices up nicely both sequentially and year over year can you comment broadly on the margin profile of this business relative to last year.
And relative to the legacy century business.
Well in terms of in terms of last year, it's continuing to to increase as we scale that business and we've continue to add efficiencies in both the operation of it as well as.
In connection of the construction of our product we've gone through we've revamped some product to make it I'm not only more consumer acceptable, but also to reduce some costs and so I think you'll see that continue to improve is as we go forward.
And it's just when you look at where our price point isn't a lot of cases, we don't have a lot of new home competition, which allows us to continue to move our prices up which we intend to do.
Very helpful and then.
As it relates to sort of your business in the west in the mountain region.
Could you.
Is there an opportunity for you too.
Down to a lower price points that could accelerate growth even greater.
Well candidly, we've been doing that Alex for at least to last 18 months or so and our new offerings are at more attractive lower price point offerings compared to where we were as I mentioned just about 18 months ago. So we have continued to do that and we'll continue to do that in the future.
And then lastly leverage ratio below 40%. That's fantastic is this the new norm or.
You still have an interest to pushing it back closer to 50% if the opportunity arises.
Alex This is Dave as I mentioned earlier, I think no leverage will continue to fluctuate from quarter to quarter, but we're comfortable with where we are right now and we think it funds the business.
Perfect. Thank you.
Our next question is from Alex Barron with housing Research Center. Please proceed.
Hey, guys great job in the quarter.
I wanted to focus and on the financial services business. So this this quarter you guys had a pretty significant increase both in the revenues and profits and I was hoping you could expand on that and whether that's something we can expect going forward.
I would tell you we had a very successful second quarter given how we bet you look back in April and May and as the builder, we began moving a lot of homes through the system.
Tied a lot of incentives on those homes to the usage of inspire our in house mortgage company that drove up the capture rate, which then obviously drives up revenue and profitability and with the credit markets, helping out and still being able to secure.
Good margins on selling or loans off into the secondary marketplace lattus to capture a lot of that profit I would say that you know going forward. It will be it'll be a little bit of a dynamic of how how much. The incentives are tied to the usage of inspire but we are seeing increased application capture rates within that business and so what.
All that well that.
The profitability of that business will be somewhat dependent on the ultimate sale. The loans, we do expect to be seeing increased capture rates on the application and ultimately on the closing side from that business as the quarters progress.
Okay. So what was the capture rate this quarter versus say last quarter last year doesn't get a sense from permit for from an application capture rate because that's probably more your steady rate stay rate a business on a century side. We were just over 80% at 82% on essentially complete side, we're about 54 per se.
For a blended 74% across sales that came through in the second quarter.
How does that compare versus last last quarter.
Well I guess when I've got right in front me as a last year you look at last year and to the application cap rate for century was probably within the mid Sixtys and the essentially complete business. Since we just started was in the high teens low twentys. So we nearly we did more than doubled it on the centered complete side.
Okay, So pretty significant there now and I guess this this quarter you know every region has had some nice growth but the.
The Wade jurney seem to be a little bit less I guess you guys call since you complete now.
Versus last year.
But obviously sequentially was was pretty strong do you feel like the opportunities for that segment of the business are.
Good as for the rest of century or similar hired like how do you guys look at that right now.
In terms of of opportunity, we think that it's it's really part of our business as a significant amount of opportunity what what you saw it.
The second quarter is really a function of that that business, because we don't inventory land.
It is highly dependent on his closing land and starting starting new homes and since we don't sell homes before we start them.
That that is really what impacted that business. It was the most impacted by the pause we took on land acquisition.
And then so now that land acquisition.
Across the board in both of our brands is undergoing the and you'll see that recover as we go into the third quarter and beyond.
Alright, great just to look for the rest of the year. Thanks.
Thank you.
And our next question is from Jay Mccanless with Wedbush Securities. Please proceed.
Hey, good afternoon, everyone. Thanks for taking my questions HM.
Hey, so the first question I had.
What should we expect free community growth rate in the in the legacy century business for the rest of this year.
Hi.
Our community Count was down obviously sequentially.
Year over year, but we ended up selling through some communities faster than originally expected now that weve restarted some developments, we'd like to see some of those.
Communities come back online and the third and fourth quarter, we don't have any guidance out there, but we are trying to push as much development as we have right now as many communities we have under development, we're trying to push them to fruition.
So they can monetize the assets by putting homes on them.
That was going to Alex still part of my question on century complete because the the.
Sales growth rate orders were up for the quarter lag the rest of your business and the backlog was down.
The second quarter in a row and.
All related to not being able to buy in store land like you talked about before.
And if the problem is you need to buy land and get those from started how much more of a lag is there going to be until century complete catches up to the rest of your business.
We're really in the lag that occurred is really the the lag that was there.
We had a significant number of controlled lots, but we just weren't bring a month on balance sheet. So as a result, we couldn't start the homes. So you'll we once we turn that back on in.
Terms of closing the controlled lots than that issue completely took care of itself.
So we should expect.
A little bit faster sales pace as we go through the rest of the or something more in line with complete being in lot of the legacy assets is that what we should expect.
Yes, yes.
Right.
The other question I had just looking at the guidance and backing into an average sales price.
It looks like there's going to be a step higher.
And your average sales price for the back half of the year versus the front half.
That just strictly mix and the century.
Behind the growth rate of the legacy business or.
Is it just timing on.
Certain higher price communities are gonna be delivering.
It's both its just a matter, it's really matter of mix and how much of century complete comes through versus the legacy business and as we have new communities come online what does that due to our overall price point.
Sounds good thanks again for taking my questions.
Thanks.
This concludes the key M&A portion I like to hand, the call back over to del for closing remarks.
I'd like to close by thanking our entire team for their ongoing commitment to century, and our valued homebuyers throughout this challenging period their hard work dedication and resilience is deeply appreciated and inspires our entire organization to deliver superior quality homes, providing exceptional home buying experience for our.
Customers and achieve another year of robust growth and substantial value creation for our stakeholders.
Thank you for taking the time to join US today. We appreciate your continued support in investment and look forward to speaking to you next quarter.
Thank you. This concludes today's conference you may disconnect your lines at this time and thank you for your participation.