lgih-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission file number 001-36126

LGI HOMES, INC.

(Exact name of registrant as specified in its charter)

Delaware

46-3088013

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1450 Lake Robbins Drive,

Suite 430,

The Woodlands,

Texas

77380

(Address of principal executive offices)

(Zip code)

(281)

362-8998

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

LGIH

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 27, 2023, there were 23,563,868 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION
Item 1.	LGI Homes, Inc. Consolidated Financial Statements (Unaudited)
	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	4
	Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	5
	Consolidated Statements of Equity for the three and nine months ended September 30, 2023 and 2022	6
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	8
	Notes to the Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37

PART II - OTHER INFORMATION
Item 1A.	Risk Factors	37
Item 5.	Other Information	37
Item 6.	Exhibits	38

SIGNATURES		39

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LGI HOMES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)


	September 30,		December 31,
	2023		2022
ASSETS
Cash and cash equivalents	$	46,981	$	31,998
Accounts receivable	35,651		25,143
Real estate inventory	3,056,966		2,898,296
Pre-acquisition costs and deposits	34,661		25,031
Property and equipment, net	41,872		32,997
Other assets	97,238		93,159
Deferred tax assets, net	9,624		6,186
Goodwill	12,018		12,018
Total assets	$	3,335,011	$	3,124,828

LIABILITIES AND EQUITY
Accounts payable	$	67,289	$	25,287
Accrued expenses and other liabilities	274,681		340,128
Notes payable	1,190,366		1,117,001
Total liabilities	1,532,336		1,482,416

COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, par value $0.01, 250,000,000 shares authorized, 27,503,340 shares issued and 23,563,868 shares outstanding as of September 30, 2023 and 27,245,278 shares issued and 23,305,806 shares outstanding as of December 31, 2022	275		272
Additional paid-in capital	319,795		306,673
Retained earnings	1,837,627		1,690,489
Treasury stock, at cost, 3,939,472 shares as of September 30, 2023 and December 31, 2022	(355,022)		(355,022)
Total equity	1,802,675		1,642,412
Total liabilities and equity	$	3,335,011	$	3,124,828

See accompanying notes to the consolidated financial statements.

Table of Contents

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Home sales revenues	$	617,539	$	547,074	$	1,750,166	$	1,816,193

Cost of sales	458,734		391,275		1,350,608		1,270,628
Selling expenses	49,781		33,938		141,811		111,605
General and administrative	26,748		27,284		84,334		84,657
Operating income	82,276		94,577		173,413		349,303

Other income, net	(7,173)		(14,124)		(19,793)		(21,960)
Net income before income taxes	89,449		108,701		193,206		371,263
Income tax provision	22,407		18,311		46,068		78,811
Net income	$	67,042	$	90,390	$	147,138	$	292,452
Earnings per share:
Basic	$	2.85	$	3.88	$	6.24	$	12.42
Diluted	$	2.84	$	3.85	$	6.21	$	12.29

Weighted average shares outstanding:
Basic	23,546,061		23,272,811		23,562,374		23,552,211
Diluted	23,640,686		23,488,325		23,696,095		23,805,086

See accompanying notes to the consolidated financial statements.

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LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock		Total Equity
	Shares	Amount
BALANCE—December 31, 2022	27,245,278	$	272	$	306,673	$	1,690,489	$	(355,022)	$	1,642,412
Net income	—	—		—		26,962		—		26,962
Restricted stock units granted for accrued annual bonuses	—	—		206		—		—		206

Compensation expense for equity awards	—	—		3,103		—		—		3,103
Stock issued under employee incentive plans	226,928	3		1,543		—		—		1,546
BALANCE— March 31, 2023	27,472,206	$	275	$	311,525	$	1,717,451	$	(355,022)	$	1,674,229
Net income	—	—		—		53,134		—		53,134

Compensation expense for equity awards	—	—		2,360		—		—		2,360
Stock issued under employee incentive plans	13,307	—		1,289		—		—		1,289
BALANCE— June 30, 2023	27,485,513	$	275	$	315,174	$	1,770,585	$	(355,022)	$	1,731,012
Net income	—	—		—		67,042		—		67,042

Compensation expense for equity awards	—	—		3,123		—		—		3,123
Stock issued under employee incentive plans	17,827	—		1,498		—		—		1,498
BALANCE— September 30, 2023	27,503,340	$	275	$	319,795	$	1,837,627	$	(355,022)	$	1,802,675

See accompanying notes to the consolidated financial statements.

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LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock		Total Equity
	Shares	Amount
BALANCE—December 31, 2021	26,963,915	$	269	$	291,577	$	1,363,922	$	(259,920)	$	1,395,848
Net income	—	—		—		78,686		—		78,686
Restricted stock units granted for accrued annual bonuses	—	—		294		—		—		294
Stock repurchase	—	—		—		—		(57,659)		(57,659)
Compensation expense for equity awards	—	—		3,570		—		—		3,570
Stock issued under employee incentive plans	223,980	2		2,010		—		—		2,012
BALANCE— March 31, 2022	27,187,895	$	271	$	297,451	$	1,442,608	$	(317,579)	$	1,422,751
Net income	—	—		—		123,376		—		123,376
Stock repurchase	—	—		—		—		(37,443)		(37,443)
Compensation expense for equity awards	—	—		3,545		—		—		3,545
Stock issued under employee incentive plans	24,213	—		1,692		—		—		1,692
BALANCE— June 30, 2022	27,212,108	$	271	$	302,688	$	1,565,984	$	(355,022)	$	1,513,921
Net income	—	—		—		90,390		—		90,390

Compensation expense for equity awards	—	—		1,516		—		—		1,516
Stock issued under employee incentive plans	17,650	1		1,153		—		—		1,154
BALANCE— September 30, 2022	27,229,758	$	272	$	305,357	$	1,656,374	$	(355,022)	$	1,606,981

See accompanying notes to the consolidated financial statements.

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LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net income	$	147,138	$	292,452
Adjustments to reconcile net income to net cash used in operating activities:
Equity in income of unconsolidated entities	(8,493)		(3,990)
Distributions of earnings from unconsolidated entities	9,989		3,202
Depreciation and amortization	1,780		1,134

Gain on sale of interest rate cap	—		(7,055)
Gain on disposal of assets	(1,634)		(2,206)
Compensation expense for equity awards	8,586		8,631
Deferred income taxes	(3,438)		(1,439)
Changes in assets and liabilities:
Accounts receivable	(10,508)		20,459
Real estate inventory	(194,360)		(791,682)
Pre-acquisition costs and deposits	(9,630)		8,592
Other assets	30,873		27,456
Accounts payable	42,002		41,070
Accrued expenses and other liabilities	(

SEC Form 10-Q filed by LGI Homes Inc.