Company: LGIH
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001580670-25-000016
Chunk: 554

Company: LGI Homes, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 554
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3 (5)2022 (6)Net orders (1)6,037 6,617 5,268 Cancellation rate (2)22.8 %25.4 %24.4 %Ending backlog - homes (3)599 590 702 Ending backlog - value (3)$236,511 $224,851 $252,002 

(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 our 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, 2024, we had 146 units related to bulk sales agreements associated with our wholesale business.

(5)As of December 31, 2023, we had 60 units related to bulk sales agreements associated with our wholesale business. 

(6)As of December 31, 2022, we had 157 units related to bulk sales agreements associated with our wholesale business.

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Land Acquisition Policies and Development

See discussion included in “Business—Land Acquisition Policies and Development.” 

Homes in Inventory

See discussion included in “Business—Homes in Inventory.” 

Raw Materials and Labor

See discussion included in “Business—Raw Materials and Labor.” 

Seasonality

In all of our reportable segments, we have historically experienced similar variability in our results of operations and in capital requirements from 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.

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