Company: LGIH
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001580670-25-000076
Chunk: 58

Company: LGI Homes, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 1
Chunk 58
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 quarter to quarter due to the seasonal nature of the homebuilding industry. We generally close more homes in our second, third and fourth quarters. Thus, our revenues may fluctuate on a quarterly basis and we may have higher capital requirements in our second, third and fourth quarters in order to maintain our inventory levels. Our revenues and capital requirements are generally similar across our second, third and fourth quarters.

As a result of seasonal activity, our quarterly results of operations and financial position at the end of a particular quarter, especially the first quarter, are not necessarily representative of the results we expect at year end. We expect this seasonal pattern to continue in the long term.

Liquidity and Capital Resources

Overview

As of September 30, 2025, we had $62.0 million of cash and cash equivalents. Cash flows for each of our active communities depend on the status of the development cycle and can differ substantially from reported earnings.

Our principal uses of capital are operating expenses, land and lot purchases, lot development, home construction, interest costs on our indebtedness and the payment of various liabilities. In addition, we may purchase land, lots, homes under construction or other assets as part of an acquisition and repurchase shares of our common stock.  Early stages of development or expansion require significant cash outlays for land acquisitions, land development, plats, vertical development, construction of information centers, general landscaping and other amenities. Because these costs are a component of our inventory and are not recognized in our statement of operations until a home closes, we incur significant cash outflows prior to recognition of home sales revenues. In the later stages of an active community, cash inflows may exceed home sales revenues reported for financial statement purposes, as the costs associated with home and land construction were previously incurred.

Net Debt to Capital Ratio

As of September 30, 2025, our net debt to capital ratio was 44.8%.  We use this ratio as a supplemental measure of financial leverage and capital efficiency. This ratio is calculated as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity.  Our net debt to capital ratio reflects our balanced approach to financing growth while maintaining liquidity.  We continue to monitor leverage levels in light of evolving market conditions to keep an eye on capital efficiency and shareholder value.  At September 30, 2025, we were in compliance with all of the covenants contained in the Credit Agreement, including minimum tangible net worth, maximum leverage ratio, minimum liquidity amount