LGI Homes, Inc. (LGIH) research, news, and more from GeoInvesting

Company description

Wed, 18 Dec 2013 05:00:00 GMT

LGI Homes, Inc. is engaged in the design and construction of entry-level homes in Texas, Arizona, Florida, and Georgia, the United States. The company was founded in 2003 and is headquartered in The Woodlands, Texas.

Research

Tue, 09 Aug 2016 14:57:44 GMT

LGIH ($32.33) In our May 13 email we stated LGIH was back on our radar due to strong commentary in the Q1 2016 release. The stock was trading at $25.26 at that time, we stated we had not bought shares but were considering taking a small bet. We first alerted you we were buying LGIH on May 7, 2015 when shares were trading at $17.15 . We closed this position on August 5, 2015 at $23.21, locking in 30+%. The stock went on to reach a high of $36.07 in early December, but then had sharp pullback to near $20.

Unfortunately we did not re-establish a position, this morning LGIH reported strong Q2 2016results and increased full year EPS guidance:

Sales of $222.7 million vs $158.8 million in the prior year and ahead of analyst estimates of $219.5 million
EPS of $0.96 vs $0.66 in the prior year and ahead of analyst estimates of $0.87
Sees full year 2016 EPS guidance of $3.20 to $3.70, versus analyst consensus estimates of $3.27. Prior guidance was for $3.00 to $3.50

Quotes from management:

“Based on these solid results and our achievements during the first half of the year, we believe we are well positioned to finish the year strong and are updating our guidance. For the full year 2016, we now anticipate closings to be between 4,000 and 4,300 homes and are increasing the range of our average sales price guidance. In addition, we are raising our full year EPS guidance to $3.20 to $3.70 per basic share based on our expectation to produce gross margin between 25.2% and 27.2%, adjusted gross margin between 26.5% to 28.5% and continued SG&A leverage.”

Research

Fri, 13 May 2016 15:06:43 GMT

LGIH ($25.26) Back on our Radar

We have not bought shares of LGIH, but are considering placing a small bet. On May 7, 2015 we alerted members we were buying homebuilder LGIH when shares were trading at $17.15 . We closed this position on August 5, 2015 at $23.21, locking in 30+%. The stock went on to reach a high of $36.07 in early December, but has since pulled back. The company has reported 5 consecutive quarters impressive sales and EPS growth and is expected to continue this trend for at least the next three quarters. Shares are selling at P/E of 7.8 on 2016 EPS estimates.

Managemen quote from Q1 2016 release:

“Things are not slowing down at LGI Homes,” commented Eric Lipar, the Company’s Chief Executive Officer and Chairman of the Board. “We continue to see strong demand for homeownership across the country. This coupled with our first quarter results has set the pace for another year of solid growth and strong performance. In 2016, we will continue to expand and execute on our growth plan and we expect to deliver robust year-over-year results.”

Research

Thu, 06 Aug 2015 16:23:29 GMT

Locked in gains in LGIH

Yesterday via premium tweet we stated we were locking in 30%+ gains in LGIH ($23.21) as shares soared on strong Q2 2015 financial results. On April 23, 2015 we stated we were taking a closer look at two home builders: LGIH ($18.82) and $NWHM ($16.84). On May 7, 2015 we disclosed our long position in LGIH at $17.15. Shares reached a new 52 week high of $23.48 in yesterday's trading session. We will look to re-establish a position if shares pull back.

Research

Wed, 05 Aug 2015 14:24:38 GMT

Maintain our long position in LGIH

On April 23, 2015 wealerted you that we were taking a closer look at two home builders: LGIH ($18.82) and $NWHM ($16.84). On May 7, 2015 we disclosed our long position in LGIH at $17.15. Today, the company reported Q2 2015 results:

Q2 2015 sales of $158.8 million vs $106.4 million in the prior year. Slightly below analyst estimates of $159.6
Q2 2015 EPS of $0.66 vs $0.43 in the prior year and slightly above analyst estimates of $0.65.

LGIH Increased its full year 2015 EPS guidance range to $2.15 to $2.50, from the previous guidance range of $1.85 to $2.25. The new guidance range is well above analyst 2015 EPS estimates of $1.95.

Quotes from management:

"2015 continues to be an outstanding year for LGI Homes," said Eric Lipar, the Company's Chief Executive Officer and Chairman of the Board. "With a record-setting 853 home closings during the second quarter, we continued our trend of strong results and profitability…

...July continued our trend of strong home closings with a 79% increase over the previous year."

We hope the stock pulls back due to slight miss on the top line, despite the strong year over year results. We will look to add if this is the case, and maintain our long position.

Comments & Business Outlook

Thu, 07 May 2015 04:00:00 GMT

Reported Q1 2015results:

Q1 2015 revenues of $120.7 million vs $75.9 million in the prior year and ahead of analyst estimates of $114.0 million.
Q1 2015 EPS of $0.33 vs $0.22 in the prior year and ahead of analyst estimates of $0.31.

Quotes from management:

"We continue to deliver robust year-over-year results and are on track to meet our goal of 2,800 to 3,200 home closings in 2015."

Research

Thu, 23 Apr 2015 04:00:00 GMT

Beginning to track The New Home Company (NWHM) and LGI Homes (LGIH)

We encourage readers to read Seeking Alpha articles on LGIH ($17.59) and NWHM ($15.87) published by O’Neil Trader which summarizes part of the bullish theses for these two companies.

It’s been awhile since we have actively tracked a home builder stock. We had success with two out of three home building stocks in the period from 2012 to 2013.

Bought $HOV in September 2012 and sold in November 2012 for a gain of 40%.
Bought William Lyon Homes $WLH in March 2013 and sold in October 2013 for a gain of 36%
Bought $CHCI April 2013 and sold in September 2013 for a loss of 35%

Our experience with CHCI left a bad taste. However, an improving U.S. economy, combined with a possibility that consumers may accelerate their home buying decisions in anticipation of increasing interest rates in the near future, could provide increased visibility into the home building industry.

We are tracking $NWHM Reasons for tracking:

It appears growth is about to accelerate in 2015 and 2016, Revenues came in at $150 million in 2014 and are expected to increase 170% to $405 million in 2015 followed by a 56% increase in 2016 to $633 million.
Earnings per share are expected to reach $1.40 in 2015, and $2.30 in 2016 up from $0.30 in 2014
Company’s strong backlog supports the bullish analysts estimates (2014 year end backlog grew 6x to $87 million)
According to a recent Seeking Alpha article The company’s shares are selling way below its peers (30% to 50% discount)
Credit Suisse recently up price target to $18 from $16

Here are some comments from the Q4 2014 press release:

“2014 was a transitional year for the Company. As a result of our IPO in January 2014, we significantly expanded our operations across all project activities. We delivered another year of profitable results while investing in our platform to meet our growth objectives in the years ahead,” stated Larry Webb, Chief Executive Officer. “During the fourth quarter 2014, we were especially pleased with our results, which reflected our transformation from a private company to a public company. This transformation resulted in strong growth in our revenues, improved leverage of our G&A and continued progress in our JV operations, all of which contributed to growth in our net income. We entered 2015 with a dramatically strengthened backlog and a healthy pipeline of well located, premium lots in highly desirable California markets. As we move forward, our growth strategy remains intact. We are well positioned to continue acquiring land and opening communities across our vibrant markets as we expand our business and further capitalize on the attractive opportunities.”

We are tracking $LGIH for the following reasons

After growing revenue by 60% in 2014 to $383 million, revenue is expected to grow to $548 million in 2015 and $703 million in 2016.
The company is diversifying geographically outside of its main market (Texas)

Management commentary from Q4 2014

“This has been a momentous year for LGI Homes,” said Eric Lipar, the Company’s Chief Executive Officer and Chairman of the Board. “Our fourth quarter provided a solid finish to the year. We ended 2014 with record breaking results of 2,356 homes closed which exceeded expectations. This 45% year-over-year increase marks the fourth consecutive year we have grown home closings by more than 40%. In addition to delivering great results during our first full year as a public company, we also acquired our first home builder, entered the Denver and Charlotte markets, and launched our new move-up brand, Terrata Homes.”

“Turning our attention to 2015, we kicked off the year with solid results closing 373 homes during the first two months. We continue to see strong demand for homeownership in our markets and uphold a positive outlook on the year.”

Homebuilding caveats:

Investor sentiment for housing stocks can be very fickle and change quarter to quarter depending on housing data. So investors who play in this space may need a longer term horizon.
Both of these companies have limited geographic diversification

Reasons For Tracking

Thu, 23 Apr 2015 04:00:00 GMT

Beginning to track The New Home Company (NWHM) and LGI Homes (LGIH)

We encourage readers to read Seeking Alpha articles on LGIH ($17.59) and NWHM ($15.87) published by O’Neil Trader which summarizes part of the bullish theses for these two companies.

It’s been awhile since we have actively tracked a home builder stock. We had success with two out of three home building stocks in the period from 2012 to 2013.

Bought $HOV in September 2012 and sold in November 2012 for a gain of 40%.
Bought William Lyon Homes $WLH in March 2013 and sold in October 2013 for a gain of 36%
Bought $CHCI April 2013 and sold in September 2013 for a loss of 35%

We are tracking $NWHM Reasons for tracking:

It appears growth is about to accelerate in 2015 and 2016, Revenues came in at $150 million in 2014 and are expected to increase 170% to $405 million in 2015 followed by a 56% increase in 2016 to $633 million.
Earnings per share are expected to reach $1.40 in 2015, and $2.30 in 2016 up from $0.30 in 2014
Company’s strong backlog supports the bullish analysts estimates (2014 year end backlog grew 6x to $87 million)
According to a recent Seeking Alpha article The company’s shares are selling way below its peers (30% to 50% discount)
Credit Suisse recently up price target to $18 from $16

Here are some comments from the Q4 2014 press release:

We are tracking $LGIH for the following reasons

After growing revenue by 60% in 2014 to $383 million, revenue is expected to grow to $548 million in 2015 and $703 million in 2016.
The company is diversifying geographically outside of its main market (Texas)

Management commentary from Q4 2014

Homebuilding caveats:

Investor sentiment for housing stocks can be very fickle and change quarter to quarter depending on housing data. So investors who play in this space may need a longer term horizon.
Both of these companies have limited geographic diversification

Comments & Business Outlook

Thu, 12 Mar 2015 04:00:00 GMT

2014 Fourth Quarter Financial Results

Home sales revenues for the fourth quarter of 2014 increased 40.8% to $108.4 million compared to the fourth quarter of 2013.
Diluted EPS was $0.34 the same as last year.

Management Comments

"This has been a momentous year for LGI Homes," said Eric Lipar, the Company's Chief Executive Officer and Chairman of the Board. "Our fourth quarter provided a solid finish to the year. We ended 2014 with record breaking results of 2,356 homes closed which exceeded expectations. This 45% year-over-year increase marks the fourth consecutive year we have grown home closings by more than 40%. In addition to delivering great results during our first full year as a public company, we also acquired our first homebuilder, entered the Denver and Charlotte markets, and launched our new move-up brand, Terrata Homes."

"Turning our attention to 2015, we kicked off the year with solid results closing 373 homes during the first two months. We continue to see strong demand for homeownership in our markets and uphold a positive outlook on the year."

"Recognizing that growth is the key driver to our success, we plan to build on our current momentum by further expanding our community count, increasing our share in our current markets, and improving community absorption in our newer markets to meet our goals and objectives for 2015. We believe we will have between 50 and 55 active selling communities at the end of 2015 and close between 2,800 and 3,200 homes during the year," Lipar concluded.

Outlook

Subject to the caveats in the Forward-Looking Statements section of this press release, the Company offers the following guidance for 2015. The Company believes it will have between 50 and 55 active selling communities at the end of 2015, close between 2,800 and 3,200 homes during the year, and generate EPS between $1.85 and $2.25 per share. This outlook assumes that general economic conditions, including interest rates, and mortgage availability in 2015 are similar to those in 2014, and that home sales price, construction costs and overall absorption rates for 2015 are consistent with the Company's recent experience.

Deal Flow

Wed, 26 Nov 2014 05:00:00 GMT

Item 1.01 Entry into a Material Definitive Agreement.

4.25% Convertible Notes due 2019 Indenture

On November 21, 2014, LGI Homes, Inc. (the “Company”) issued $75,000,000 aggregate principal amount of its 4.25% Convertible Notes due 2019 (the “Initial Notes”) pursuant to an Indenture (the “Indenture”) with Wilmington Trust, National Association, as trustee. In addition, on November 26, 2014, the Company issued an additional $10,000,000 aggregate principal amount of its 4.25% Convertible Notes due 2019 under the Indenture (together with the Initial Notes, the “Notes”). The Notes were issued and sold by the Company to the several initial purchasers named in that certain Purchase Agreement dated November 17, 2014 between the Company and Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC, as representatives of the several initial purchasers named therein (the “Initial Purchasers”), pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”), afforded by Section 4(a)(2) of the Act.

Maturity and Payment

The Notes mature on November 15, 2019 and bear interest at a rate of 4.25% per annum, payable semiannually in arrears on May 15 and November 15 of each year, beginning on May 15, 2015.

Subordination

The Notes are (i) subordinated to all of the Company’s existing and future Senior Indebtedness, including secured Senior Indebtedness, (ii) effectively subordinated to any of the Company’s secured indebtedness that ranks equal or junior to the Notes, to the extent of the value of the assets securing such indebtedness, and (iii) structurally subordinated to all debt and other liabilities (including trade payables) incurred by the Company’s subsidiaries. “Senior Indebtedness” means principal, premium, interest (including interest accruing on or after the filing of a petition in bankruptcy or for reorganization by or against the Company whether or not a claim for such interest is allowed in such proceeding), fees, costs, expenses and other amounts (including related hedging or cash management obligations) owed or due under any revolving credit facility, term loan facility, letter of credit reimbursement facility, mortgage warehouse facility or line of credit or any similar facility with commercial bank lenders or similar financial institutions (but excluding, for the avoidance of doubt, any notes or other debt securities issued pursuant to an indenture or note purchase agreement).

Conversion

Holders of Notes may surrender their Notes for conversion at any time prior to the close of business on the business day immediately preceding May 15, 2019 only under the following circumstances:
during any calendar quarter commencing after the calendar quarter ending on December 31, 2014 (and only

during such calendar quarter), if the closing sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price for the Notes in effect on each applicable trading day;

during the five consecutive trading-day period following any ten consecutive trading-day period in which the trading price for the Notes for each such trading day was less than 98% of the closing sale price of the Company’s common stock on such date multiplied by the then-current conversion rate;

orupon the occurrence of specified corporate events as provided in the Indenture.

On or after May 15, 2019 until the close of business on the business day immediately preceding November 15, 2019, holders of Notes may surrender their Notes for conversion regardless of the foregoing circumstances.

The initial conversion rate for the Notes is 46.4792 shares of the Company’s common stock for each $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $21.52 per share of the Company’s common stock). Initially, upon conversion, the Company will deliver a number of shares of the Company’s common stock, per $1,000 principal amount of converted Notes, equal to the conversion rate (together with a cash payment in lieu of any fractional share) on the third business day following the relevant conversion date. However, following the approval of the Company’s stockholders for the payment of cash in lieu of shares of the Company’s common stock upon conversion of Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election.

The conversion rate for the Notes is subject to adjustment upon the occurrence of certain events as provided in the Indenture. An adjustment to the conversion rate will result in a corresponding (but inverse) adjustment to the conversion price.

Purchase of Notes at Holder’s Option upon a Fundamental Change

The Indenture provides that holders of Notes may require the Company to purchase for cash all or any portion of their Notes upon the occurrence of a fundamental change at the fundamental change purchase price equal to 100% of the principal amount of the Notes being purchased, plus accrued and unpaid interest to, but excluding, the fundamental change purchase date.

Certain Covenants

If the Company incurs any capital markets indebtedness that is guaranteed by one or more of the Company’s subsidiaries, or any of the Company’s subsidiaries incurs any capital markets indebtedness (including, without limitation, any guarantee of capital markets indebtedness incurred by another of the Company’s subsidiaries), each subsidiary that guarantees such capital markets indebtedness, and each subsidiary that incurs capital markets indebtedness, shall fully and unconditionally guarantee the Notes, and such guarantee of the Notes shall rank equally with the guarantee of such capital markets indebtedness or such subsidiary capital markets indebtedness, as the case may be. Any such subsidiary guarantee of the Notes shall be released upon the release (other than discharge upon payment thereof) of the guarantee that triggered such subsidiary guarantee of the Notes or the repayment of the subsidiary capital markets indebtedness that triggered such subsidiary guarantee of the Notes, so long as, in each case, no other guarantee or indebtedness is outstanding at such time that would otherwise require the subsidiary to guarantee the Notes at such time.

In the Indenture, the Company covenanted that it would not, directly or indirectly, incur any indebtedness in the form of, or otherwise become liable in respect of, any notes or other debt securities issued pursuant to an indenture or note purchase agreement unless such indebtedness is contractually subordinated to all Senior Indebtedness to the same extent as, or to a greater extent than, the Notes.

The description of the Indenture contained herein is qualified in its entirety by reference to the Indenture attached as Exhibit 4.01 to this Current Report on Form 8-K, which Indenture is incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 above is incorporated herein by reference.

Item 8.01 Other Events.

Repurchase of 1,000,000 Shares of Common Stock

On November 21, 2014, the Company used $16.6 million of the net proceeds from the sale of the Initial Notes to repurchase 1,000,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), from purchasers of the Initial Notes in the offering of the Notes referred to above in privately negotiated transactions effected through J.P. Morgan Securities LLC, one of the Initial Purchasers, as the Company’s agent. The purchase price per share of Common Stock repurchased in such transactions was equal to the closing sale price per share of Common Stock on November 17, 2014 (the date that the Notes were priced and the Purchase Agreement was executed and delivered by the parties thereto), which was $16.55 per share.

Deal Flow

Wed, 19 Nov 2014 05:00:00 GMT

Item 1.01 Entry into a Material Definitive Agreement.

Purchase Agreement

On November 17, 2014, LGI Homes, Inc. (the “Company”) entered into a Purchase Agreement (the “Purchase Agreement”) with Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC, as representatives of the several initial purchasers named therein (collectively, the “Initial Purchasers”), to issue and sell $75,000,000 aggregate principal amount of the Company’s 4.25% Convertible Notes due 2019 (the “Notes”), for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). The Notes will be issued and sold to the Initial Purchasers pursuant to an exemption from the registration requirements of the Act afforded by Section 4(a)(2) of the Act. In addition, the Company granted the Initial Purchasers a 30-day option to purchase up to an additional $10,000,000 in aggregate principal amount of the Notes on the same terms and conditions.

The Purchase Agreement contains customary representations, warranties and covenants by the Company and customary closing conditions. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities.

Comments & Business Outlook

Wed, 12 Nov 2014 05:00:00 GMT

Third Quarter 2014 Financial Results:

Home sales revenues for the third quarter of 2014 increased 36.1% to $92.5 million compared to the third quarter of 2013.
Dilluted EPS this quarter was $0.31 (no previous EPS number is available for same quarter last year).

"LGI Homes continues to deliver solid results," said Eric Lipar, the Company's Chief Executive Officer and Chairman of the Board. "Sustaining the momentum of the previous quarters, we experienced strong year-over-year growth in home closings and revenue, average homes sales price and net income. In addition, we continued to execute our growth strategy and capture market share by increasing our active community count within our existing markets."

Lipar concluded, "The fourth quarter kicked off with a great start closing 241 homes in October, representing year-over-year growth of 89.9%. We continue to see robust demand for homeownership across the nation and maintain an optimistic outlook on the remainder of the year."

Deal Flow

Fri, 03 Oct 2014 04:00:00 GMT

Item 1.01 Entry into a Material Definitive Agreement.

On September 30, 2014, LGI Homes, Inc. (the “Company”) and each of its subsidiaries (collectively, the “Borrowers”) entered into a Second Commitment Increase Agreement dated as of September 30, 2014 with Wells Fargo Bank, N.A. and Texas Capital Bank, National Association, as administrative agent, whereby (i) the aggregate Commitments under the Company’s senior secured revolving credit facility increased from $175.0 million to $200.0 million in accordance with the accordion feature of the Credit Agreement dated as of April 28, 2014 by and among the Company, the Company’s subsidiaries named therein, the Lenders party to the Credit Agreement from time to time, Texas Capital Bank, National Association, as administrative agent, L/C Issuer and a Lender (the “Credit Agreement”), and (ii) Wells Fargo Bank, N.A. became a lender under the credit facility and made a Commitment of up to $25.0 million. Unless otherwise defined in this Current Report on Form 8-K, capitalized terms used in this Current Report on Form 8-K shall have the meanings specified in the Credit Agreement.

In addition, on September 30, 2014, the Borrowers entered into a First Modification Agreement dated as of September 30, 2014 (the “Modification Agreement”) with the lenders under the Credit Agreement and Texas Capital Bank, National Association, as administrative agent, whereby certain provisions of the Credit Agreement were modified and supplemented. Among other changes to the Credit Agreement, the Modification Agreement (x) increases each of the Combined A&D and Entitled Land Subfacility, the Combined A&D, Entitled Land and Lot Inventory Subfacility, and the Entitled Land Subfacility under the credit facility, (y) modifies certain of the Credit Agreement financial covenants, which are generally tested on a quarterly basis, and (z) allows the Company to incur up to $85,000,000 of unsecured subordinated indebtedness. The Credit Agreement now requires the Borrowers to (i) not exceed a debt to capitalization ratio of 0.60 to 1.0, (ii) maintain a Leverage Ratio of not more than 1:75 to 1.0, (iii) beginning with the fiscal quarter ending December 31, 2014, maintain liquidity in excess of $40.0 million, (iv) maintain a ratio of the sum of the value of all land, Entitled Land, vacant lots, and A&D Improvements to tangible net worth of not more than 1:75 to 1.0, and (v) maintain a ratio of the Maximum Credit Amount for all Entitled Land and A&D Improvements to the Total cost of all Land, Entitled Land and A&D Improvements of not more than 0.35 to 1.0. In addition, the Credit Agreement now requires the Borrowers to maintain for each four fiscal quarter period, a ratio of EBITDA to any debt service payments of at least 4.0 to 1.0. As of September 30, 2014, outstanding borrowings under the Credit Agreement were approximately $160.0 million.

Comments & Business Outlook

Tue, 12 Aug 2014 04:00:00 GMT

Second Quarter 2014 Financial Results:

Revenue was $106.4 million, an increase of 185% from 37.3 million in prior year.
Diluted EPS was $0.43 in this quarter (EPS number not available for the previous year).

"2014 continues to be an outstanding year for LGI Homes," said Eric Lipar, the Company's Chief Executive Officer and Chairman of the Board. "During the second quarter, we continued our trend of strong results and profitability. With record-setting home closings during the second quarter and increased demand for homeownership, we maintain a favorable outlook on the remainder of the year and are raising our guidance on earnings per share."

Business Outlook

Subject to the caveats in the Forward-Looking Statements section of this press release, the Company is increasing its earnings per share guidance range for 2014 to $1.30 - $1.38 per share from $1.22 - $1.30 per share. This outlook assumes that general economic and mortgage availability conditions in the last six months of 2014 are similar to those in the last six months of 2013. In addition, this outlook also assumes that home sales prices, construction costs, and overall absorption rates for the remainder of 2014 are consistent with the Company's recent experience.

Deal Flow

Wed, 06 Aug 2014 04:00:00 GMT

Item 1.01 Entry into a Material Definitive Agreement.

On July 31, 2014, LGI Homes, Inc. (the “Company”) and each of its subsidiaries entered into a Commitment Increase Agreement with Woodforest National Bank, Fifth Third Bank and Texas Capital Bank, National Association, as administrative agent, whereby the aggregate commitments under the Company’s senior secured revolving credit facility with a syndication of lenders increased from $135.0 million to $175.0 million in accordance with the accordion feature of the credit agreement. Woodforest National Bank increased its commitment by an addition $5.0 million and Fifth Third Bank became a lender under the credit facility and made a commitment of up to $35.0 million. The description set forth above is qualified in its entirety by reference to the Commitment Increase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Comments & Business Outlook

Mon, 19 May 2014 04:00:00 GMT

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)



	Three Months Ended March 31,
	2014			2013

Revenues:
Home sales	$	75,919		$	21,479
Management and warranty fees	—			481
Total revenues	75,919			21,960
Cost of sales	56,389			15,817
Selling expenses	7,362			2,248
General and administrative	5,105			1,759
Income from unconsolidated LGI/GTIS Joint Ventures	—			(292		)
Operating income	7,063			2,428
Interest expense, net	—			(4		)
Other income, net	4			73
Net income before income taxes	7,067			2,497
Income tax provision	(2,473		)	(47		)
Net income	4,594			2,450
Income attributable to non-controlling interests	—			—
Net income attributable to owners	$	4,594		$	2,450
Basic and diluted earnings per share data:
Basic	$	0.22
Diluted	$	0.22

Weighted average number of shares of common stock:
Basic	20,763,449
Diluted	20,862,701

Management Discussion and Analysis

Home sales revenues for the three months ended March 31, 2014 were $75.9 million, an increase of $54.4 million, or 253.5%, from $21.5 million for the three months ended March 31, 2013. The increase in home sales revenues is primarily due to a 221.2% increase in homes closed and an increase in the average selling price per home during the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. The average selling price per home closed during the three months ended March 31, 2014 was $156,535, an increase of $14,292, or 10.0%, from the average selling price per home of $142,243 for the three months ended March 31, 2013.

Operating Income and Net Income. Operating income for the three months ended March 31, 2014 was $7.1 million, an increase of $4.6 million, or 190.8%, from $2.4 million for the three months ended March 31, 2013. Net income for the three months ended March 31, 2014 was $4.6 million, an increase of $2.1 million, or 87.5%, from $2.5 million for the three months ended March 31, 2013. The increases are primarily attributed to a 221.2% increase in homes closed during the first quarter of 2014 as compared to the first quarter of 2013, net of the impacts of the step-up adjustment and increased expenses associated with new communities and additional professional service fees and expenses.

Comments & Business Outlook

Tue, 01 Apr 2014 04:00:00 GMT

LGI HOMES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



	For the Year Ended December 31,
	2013			2012			2011

Revenues:
Home sales	$	160,067,139		$	73,820,028		$	49,269,971
Management and warranty fees	2,728,563			2,401,013			1,186,188
Total revenues	162,795,702			76,221,041			50,456,159
Cost of sales	121,325,536			54,530,971			36,699,505
Selling expenses	15,768,575			7,269,331			4,884,310
General and administrative	13,604,160			6,096,114			5,125,331
Income from unconsolidated LGI/GTIS Joint Ventures	(4,286,639		)	(1,526,464		)	(714,758		)
Operating income	16,384,070			9,851,089			4,461,771
Interest expense, net	(50,946		)	(1,234		)	(28,152		)
Gain on remeasurement of interests in LGI/GTIS Joint Ventures	6,445,964			—			—
Other income, net	24,239			172,785			203,677
Net income before income taxes	22,803,327			10,022,640			4,637,296
Income tax provision	(1,066,072		)	(154,542		)	(124,891		)
Net income	21,737,255			9,868,098			4,512,405
(Income) loss attributable to non-controlling interests	589,818			(162,969		)	(1,161,986		)
Net income attributable to owners	$	22,327,073		$	9,705,129		$	3,350,419
Basic and diluted earnings per share data for the period November 13, 2013 to December 31, 2013 post Reorganization Transactions (see Note 11):
Basic	$	0.34
Diluted	$	0.34

Weighted average number of shares of common stock for the period November 13, 2013 to December 31, 2013 post Reorganization Transactions (see Note 11):
Basic	20,763,449
Diluted	20,834,124

Management Discussion and Analysis

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012

Homes Sales

Home sales revenues for the year ended December 31, 2013 were $160.1 million, an increase of $86.2 million, or 116.8%, from $73.8 million for the year ended December 31, 2012. Home sales revenues represented approximately 98.3% and 96.8% of our total revenues for the year ended December 31, 2013 and 2012, respectively. The increase in home sales revenues is primarily due to a 98.1% increase in homes closed and an increase in the average selling price per home during the year ended December 31, 2013 as compared to the year ended December 31, 2012. The average selling price per home closed during the year ended December 31, 2013 was $150,722, an increase of $12,998, or 9.4%, from the average selling price per home of $137,724 for the year ended December 31, 2012. We closed 1,062 homes during the year ended December 31, 2013, as compared to 536 homes closed during the year ended December 31, 2012. During the year ended December 31, 2013, we averaged 13.8 active communities as compared to 6.6 for the year ended December 31, 2012, a 109.1% increase.

Deal Flow

Wed, 05 Feb 2014 05:00:00 GMT

Item 1.01 Entry into a Material Definitive Agreement.

On January 30, 2014, certain subsidiaries (the “Borrowers”) of LGI Homes, Inc. (the “Company”) executed a Second Amended and Restated Loan Agreement with Texas Capital Bank, National Association (the “Credit Agreement”), which amends and restates the Amended and Restated Loan Agreement dated as of June 24, 2013 by and between Texas Capital Bank, National Association (the “Lender”) and certain of the Borrowers, as amended.

The Credit Agreement provides for a $50.0 million senior secured revolving credit facility, guaranteed by the Company. The new revolving credit facility matures on June 30, 2016. As of December 31, 2013, $34.1 million was outstanding under the previous revolving credit facility, with approximately $0.9 million available for additional borrowings. Borrowings under the new revolving credit facility are limited to the borrowing base, which is determined based on the loan value of the pool of collateral in which the Lender has a security interest. The Company may add vacant lots, houses, land, and acquisition and development projects to its pool of collateral through June 30, 2015. Pre-sold houses may remain in the borrowing base for up to nine months while model homes, speculative homes and vacant lots may remain in the borrowing base for up to one year.