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Century Communities, Inc. (NYSE:CCS)
Q3 2019 Earnings Call
Oct 29, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Greetings. Welcome to Century Communities third-quarter 2019 earnings conference call. [Operator instructions] Please note, this conference call is being recorded. I will now turn the conference over to Scott Dixon, chief accounting officer.

Thank you. You may begin.

Scott Dixon -- Chief Accounting Officer

Good afternoon. We would like to thank you for joining us today for Century Communities' third-quarter 2019 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 risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward-looking statements.

Certain of these risks and uncertainties can be found under the heading Risk Factors in the company's most recently filed annual report on Form 10-K and supplemented by our other SEC filings. Our SEC filings are available at www.sec.gov and on our website at www.centurycommunities.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.

The company's presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Management will be available after the call should you have any questions that did not get answered. Hosting the call today are Dale Francescon, chairman and co-chief executive officer; Rob Francescon, co-chief executive officer; and David Messenger, chief financial officer. Dale will review our operating highlights and business updates.

Rob will then discuss our business and markets in further detail. Afterwards, Dave will follow up with further information on our financial results, balance sheet, and improved outlook. Following our prepared remarks, the line will be open for questions. With that, I will turn the call over to Dale.

Dale Francescon -- Chairman and Co-Chief Executive Officer

Thank you, Scott. Our third-quarter performance resulted in another quarter of strong earnings as we leveraged our national scale to drive improvements and efficiencies and achieve record levels of net new home contracts, deliveries, home sales revenues, and net income. We experienced improving home buyer demand and considerable operating momentum throughout our business as reflected by year-over-year increases in net new home contracts in each of our regions. These favorable dynamics have reinforced our view that the overall homebuilding environment remains positive and poised for continued growth into 2020 and beyond.

We believe our strategy of offering a diversified choice of product across a broad geographic footprint with a strong emphasis on entry-level buyers will fuel our continued growth and validate our cycle-tested approach to investing in attractive markets that exhibit sound long-term fundamentals. During third quarter 2019, net new home contracts grew 35% to 2,046 homes. Home deliveries increased to 1,891 homes. Home sales revenues improved to $573.9 million, and net income increased 59% to $27 million.

This progress was broadly based and accomplished by the balanced contribution across our markets during the quarter. Our adjusted homebuilding gross margin percentage was 20.6%, a 100-basis-point improvement since the second quarter of this year. This sequential improvement is primarily the result of reduced need for the use of incentives. The year-over-year growth that occurred during the third quarter was entirely organic given that we completed our full acquisition of Wade Jurney Homes in the second quarter 2018.

The Wade Jurney Homes region has now been integrated onto our platform and continues to represent a growing mix of our net new home contracts, deliveries, and revenues. For example, this region generated year-over-year increases in contracts and deliveries of 52% and 19%, respectively. We're very pleased with our returns on this investment over the last 16 months and continue to focus on cost-effective opportunities to expand this asset-light, fast-turning portion of our business within existing, as well as new geographies. The success in our core homebuilding operations also contributed meaningfully to growth in our financial services group.

This business grew its revenues and profits by 35% year over year to $10.4 million and $2.2 million, respectively, in the third quarter. As a one-stop solution for Century's homebuyers, providing mortgage, title and insurance offerings, the financial services group helps us create a more seamless home-buying experience for our customers while capturing incremental value on each home delivery. As we move into the remainder of 2019, our team continues to focus on driving operational efficiencies to enhance margins and reduce our SG&A in order to maximize profits and returns while maintaining consistent strength and liquidity in our balance sheet. We continue to leverage our substantial national land position to deepen our presence and gain additional share within our current markets.

Given expectations for interest rates to remain low and our focus on delivering homes at entry-level price points throughout our national platform, we are confident in our ability to grow our earnings and create an even stronger foundation for Century as we continue to invest time, energy, and capital to advance our goal of building Century into one of the most profitable national homebuilders. I'd now like to turn the call over to Rob to discuss our markets and business in greater detail.

Rob Francescon -- Co-Chief Executive Officer

Thank you, Dale, and good afternoon, everyone. A strong economic backdrop, including job growth, higher wages, and low interest rates, all helped to sustain the pickup in demand that began earlier this year. During the quarter, our success was very broad-based, with net new home contracts increasing double digits in each region and home deliveries rising in nearly all of our markets. This translated to a 35% year-over-year increase in net new home contracts to a third-quarter record of 2,046 homes.

Furthermore, we were pleased that our absorption pace improved by 24% which, combined with more selling communities, allowed us to end the quarter with a strong backlog of 2,746 homes with a dollar value of $855 million. Now looking at our regions in greater detail, starting with our Texas region. Austin, San Antoni,o and Houston continue to drive excellent results evidenced by a 109% increase in absorption, a 73% improvement in net new contracts for the region, a 40% increase in deliveries and a 23% increase in home sales revenues as we continue to increase our offerings at entry-level price points. In the third quarter, we opened additional lower price point communities in attractive locations, which should continue to augment the strong performance of our vibrant Texas markets into year end.

Austin's tech sector continues to attract workers, supporting job growth in the area. In San Antonio, sales of homes priced below $220,000 continue to outperform bolstered by employment levels now 25% above the prior 2008 peak. In Houston, affordability of entry-level price points remained strong. Looking at our mountain region, we saw significant growth with net new contracts, up 36% year over year, reflecting a solid pace of activity across the region.

Job markets are stable in Denver, Las Vegas, and Salt Lake City, while home supply remains constrained at less than three months, providing us with good opportunities to capture demand on our strong pipeline of new communities. Furthermore, each of our markets in the mountain region are benefiting from good economies and noticeable strength at entry-level price points. In the West region, we experienced solid improvement during the quarter with the year-over-year net new contracts up 10% and deliveries up 18%. Through a combination of well-situated communities and affordable product offerings, we are firmly situated to take advantage of stabilizing market conditions in the region.

Our new communities in the Bay Area and the Central Valley have supported additional sales into the fourth quarter, while Southern California overall has shown the most improvement over the past six months. Additionally, we expect to open a number of communities in the fourth quarter in each of our four divisions in the West, which will provide growth heading into 2020. In the Southeast, solid home price appreciation and rising entry-level demand have contributed to make this one of the more attractive regions in the nation, with our year-over-year absorptions increasing by 36%. Estimated month supply across our Southeast markets stand at 3.2 months.

Nashville has been our best-performing Southeast market in recent months where we've been able to take advantage of home price appreciation on new sales. Third-quarter results in our Wade Jurney Homes division increased significantly year over year, leading to net new contracts up 52% and deliveries up 19%. As Dale mentioned, our final integration initiatives were largely complete by the end of the third quarter, including the relocation of the main office to Atlanta, implementation of enhanced systems, processes, procedures, and the back-office conversion mentioned on our last earnings call. Our incremental investments into our Wade Jurney business are focused on deepening penetration with an already established market while carefully evaluating opportunities to expand into new attractive markets where we can gain additional share in the entry-level segment.

During the quarter, we increased our inventory of lots, both sequentially and year over year, while achieving our desired 50-50 mix between owned and controlled. The improved homebuilding landscape across our markets has continued into October. This environment, coupled with continued positive momentum of our U.S. economy, keeps us confident in the longer-term housing fundamentals and our improved outlook for the remainder of 2019.

We remain committed to deepening our presence in vibrant markets to grow revenue and deliver incremental profitability. We are pleased with our business execution year to date with our solid pipeline of new communities and record lot positions. We have the resources in place to generate improved returns on equity during the remainder of the year as well as into 2020 and beyond. I will now turn the call over to Dave who will provide greater detail on our financial results and outlook.

Dave Messenger -- Chief Financial Officer and Secretary

Thank you, Rob. During the third quarter of 2019, our net income increased 59% to $27 million or $0.87 per diluted share, a third-quarter record for the company. Home sales revenues for the third quarter were $573.9 million, an increase of 4%, compared to $552.9 million in the prior-year quarter. This improvement in revenues was mainly driven by an 8% increase in home deliveries to 1,891.

The average selling price of homes delivered for the third quarter of 2019 was $303,500, compared to $316,700 in the prior-year quarter, consistent with our higher mix of entry-level homes. Homebuilding gross margin for the third quarter was 18.1%, compared to 16.8% in the prior-year quarter, with the 130-basis-point differential largely attributable to acquisition purchase accounting impacts in the prior-year quarter. Adjusted homebuilding gross margin percentage was 20.6%, compared to 21.2% in the prior-year quarter but improved 100 basis points sequentially from the 19.6% in the second quarter of this year. In our September 30 backlog of 2,746 homes, we have a similarly improved gross margin profile and expect our fourth-quarter adjusted gross margins to also be in the 20% range.

G&A as a percent of homebuilding revenues was 12.7% in the third quarter, compared to 12.8% in the prior-year quarter mainly due to scale benefits and process enhancements. Our SG&A is split roughly 36% for variable costs, including selling, commissions, and advertising, while our fixed costs account for the remaining 64%. Over the last five quarters, we have held our fixed spend in absolute dollars relatively flat. While we expect additional investments for targeted optimization initiatives in our Wade Jurney division through year end, reducing our SG&A a percent of homebuilding revenues remains one of our primary focus items.

Accordingly, we continue to anticipate and improved as a margin year over year for full year 2019. In the third quarter 2019, our financial services business generated $10.4 million in revenues, up 35% year over year. The business contributed $2.2 million in pre-tax income, compared to $1.7 million in the prior-year quarter, a 35% increase and representing an essentially stable margin. Now turning to our balance sheet and liquidity.

As of September 30, 2019, our stockholders' equity expanded to a record $951 million. We had total long-term homebuilding debt of $1.2 billion, with total liquidity of $430 million consisting of $69 million in cash and $361 million of capacity on our unsecured revolver. Our net homebuilding debt to net capital ratio held steady sequentially, even though our inventory increased due to the typical seasonal buildup of work in process and certain land investments. We remain committed to reducing our leverage ratio below 50%.

However, due to some attractive land investments we expect to make in the fourth quarter, the achievement of this goal may be delayed into the new year. Given the strong execution across our business year to date, we are pleased to increase our full- year 2019 outlook. We now expect deliveries to be in the range of 7,700 to 8,100 homes and home sales revenues to be in the range of $2.4 billion to $2.5 billion. In regard to our tax rate for 2019, we continue to expect to incur an annual income tax rate, exclusive of federal energy credit, of approximately 26.5%, compared to 25% in 2018.

In closing, our third-quarter results demonstrate the strength and depth of our national homebuilding platform. Our markets continue to be supported by positive fundamentals, including job gains, household formations, and positive regional economies. We remain confident about our business prospects, and our increasingly diversified national footprint enhances the stability of our growth and earnings profile. The continuation of our growth is well under way for 2020 with a strong pipeline of communities, a deep land portfolio, and ample capital resources to further increase our base of activity in an effective manner.

We look forward to updating you on our progress in coming quarters. Operator, please open the lines for questions.

Questions & Answers:


Operator

Thank you. [Operator instructions] Our first question is from Thomas Maguire with Zelman & Associates. Please proceed.

Thomas Maguire -- Zelman and Associates -- Analyst

Hey, guys. Good afternoon, and nice quarter. On the SG&A side, appreciate there's a little bit of leverage this quarter, and you talked about some of the issues like office relocation being complete, but -- with Wade Jurney but maybe some other investments that might ramp up there as an offset. Can you just specifically talk about what that spend is or any additional color on what the continued incremental investment in the Wade Jurney is? And then if we take a step back and -- even if you could talk about how you guys think about a normalized SG&A leverage ratio or a multi-year target or kind of what you guys think the normal business should run at.

Dave Messenger -- Chief Financial Officer and Secretary

Yeah. Hey, Thomas, this is Dave. I would say -- taking your second half of your question first, in terms of a longer-term run rate target, we don't have one out there other than we expect that we can continue to get leverage out of our platform as we spent the past several years acquiring a variety of homebuilders then integrating them into our system, which obviously takes time but gains a lot of visibility into the business. As we've been able to hold our fixed cost relatively flat from where we are for the past several quarters, we think that, that -- from that standpoint, we're probably hitting some sort of a run rate on fixed dollars.

In terms of the third quarter, I would say that we had some increased costs on the selling side due to some additional broker co-ops, an increase in broker co-ops in some of our markets. And then from the fixed cost side, we set up a variety of dollars going out regarding the conversion of the Wade Jurney systems into our systems, the final relocation of people in offices, but it's something that right now we're expecting to incur a little bit more than fourth quarter, but I think that we'll have the majority of that behind us.

Thomas Maguire -- Zelman and Associates -- Analyst

Got it. It sounds good, and it sounds like 2020 will shape up well. Just to stay on the Wade Jurney side and shift to volume, pretty incredible growth there this quarter. And appreciate the comment that was made that it's coming from both market expansion and just organic opportunity in existing markets.

Can you help us as put that out or think about it a little? How do you guys think about what's driving the majority of the growth? Is it evenly split? And then just maybe qualitatively, can you talk about the opportunity in existing Wade Jurney markets and how you think about that longer term? Does it feel like volume kind of hits a plateau or gets tapped out from a land availability perspective or demand? Or kind of how do you think about the growth in existing markets?

Dale Francescon -- Chairman and Co-Chief Executive Officer

So, Thomas, this is Dale. We're not seeing that we're plateauing in any market. There's -- land remains available. We believe that we've got depth in all of our markets to continue to grow.

When we look at it, Florida is a market that on the Wade Jurney side, we think we have tremendous opportunity. It's a very large market. And on a relationship basis, we have a very small position there. So we think that we have a lot of room to grow there.

When we look at Arizona, which is one of our more recent expansion markets, the market has been very strong there. We're continuing to acquire land and scale that business. So I mean we're still very bullish on our opportunities both in each of our markets, as well as where we've expanded. Our focus really recently has been to continue to get everything converted overall into our system.

And with that just about behind us at this point, with the move behind us and all, then we're going to start looking at growing and expanding into new markets, as well.

Thomas Maguire -- Zelman and Associates -- Analyst

Awesome. Thanks, everyone.

Operator

Our next question is from Michael Renault with JP Morgan. Please proceed.

Mike Rehaut -- J.P. Morgan -- Analyst

Hi, thanks. It's Mike Rehaut. Nice quarter. Maybe for my first question, I would love to dig in a little bit around the absorption improvement in the business ex-Wade Jurney.

And if you compare against last year, up 24%, but it kind of varied widely by region in terms of the year-over-year change. I was wondering if you could just kind of call out if there were any kind of unusual drivers there. I mean, obviously, Texas continues to benefit from just a significantly improved position and book of business, and obviously you've transitioned there to more affordable, and so you see the results. So that region does continue kind of a year-long year-over-year trend.

But when you look at the Southeast, and the West in particular, I guess, even the mountain region, the year-over-year differences are much more wide and varied, particularly relative to the first couple of quarters of the year. So I was just hoping you could address what was driving those other regions, the year-over-year changes, be it mix, community openings, etc.

Dale Francescon -- Chairman and Co-Chief Executive Officer

Sure, Mike. It's Dale. Well, when we look at the regions, I mean you highlighted Texas. And I mean we've had significant improvement in Texas because of the -- just really the state of the market and our continued pivot toward more entry level.

I mean we're more than able to double our absorptions. And so it's really a reflection of both strategy, as well as a market that's doing very well. When we look at the Southeast, we were able to increase in the Southeast. We increased our sales on a year-over-year basis, even though our community count actually went down.

Community count declined because we've seen that there's been an elongation in the time frame to get communities open and developed in the Southeast. When we look at our mountain region, we were flat on a year-over-year basis in terms of our absorptions, yet our communities were up, and so our sales were up. The West was the one area where we did see a slight decline in absorptions, even though our sales were still up 10% because we had additional communities. It's just a reflection of when we look at the California market, which is the majority of our West, it's the highest price that we have in our portfolio, and it's -- it has been a little slow.

But when we look at it, we've been happy with it, and it's actually done very well. But it's the highest price that we have in our portfolio.

Mike Rehaut -- J.P. Morgan -- Analyst

OK. I appreciate that -- those comments. I guess secondly, kind of shifting to community count, on an overall basis this year, you've been up very, very slightly year over year, but it's kind of been in a relatively tight range. And if I look at your total lots controlled and kind of even excluding this Wade Jurney -- well, I can't -- it seems like your lots controlled ex-Wade Jurney are actually down a little bit, total loans and option.

So just trying to get a sense of how we should think about community count maybe nearer term going into the fourth quarter but also as we think about 2020, particularly with your lot position, again just community count ex-Wade Jurney, obviously. But your lot position does look a little thinner, slightly thinner year over year. How should we think about community count next quarter and into next year?

Dale Francescon -- Chairman and Co-Chief Executive Officer

Well, when we look at it, our sales were up 35% year over year. So with that, we're going to move through our communities more quickly than we did in the third quarter of last year. And so -- in that case, even though we're opening new communities, we're closing out communities where we have robust sales in those communities. As we've indicated on past calls, we have in a number of instances taken larger positions within larger communities so that it takes us longer to build through them.

But we were able to year-over-year increase our community count a bit on a year-over-year basis. And I mean part of the opening of communities is dependent on weather and municipal approvals and just getting some of the work done. So some of that, even though we plan to have things open, they get pushed off into another period just because of circumstances.

Mike Rehaut -- J.P. Morgan -- Analyst

OK. Thank you.

Dale Francescon -- Chairman and Co-Chief Executive Officer

Thanks.

Operator

Our next question is from Alex Rygiel with FBR & Company. Please proceed.

Alex Rygiel -- FBR & Company -- Analyst

Thank you. Nice quarter, gentlemen.

Rob Francescon -- Co-Chief Executive Officer

Thanks, Alex.

Alex Rygiel -- FBR & Company -- Analyst

A couple of questions. Coming back to your comment with regards to seeing some attractive land acquisition opportunities in the fourth quarter, could you go a little bit more detailed and fill us in on whether or not that's in your core Wade Jurney business and strategy of going deeper in existing markets or if it's in your Century brand going into -- deeper into existing markets or new markets?

Rob Francescon -- Co-Chief Executive Officer

It's in both brands, Alex. And these are assets that we feel really good about that will be accretive to 2020 and beyond. And we're taking positions in some of our better markets, without disclosing the exact markets for obviously competitive reasons. But we feel really good about the markets we're in, in these particular positions that were scheduled to close on in the fourth quarter.

Alex Rygiel -- FBR & Company -- Analyst

And could you expand upon your views, your broader views, of land acquisition pricing today and how that's changed maybe over the last 12 months or might change in the near term?

Rob Francescon -- Co-Chief Executive Officer

It varies from market to market on that. Let's say 12 months ago or so, we saw kind of a slowdown with the market shifting. As the market has picked back up, with interest rates dropping, there's been renewed interest in land acq generally across the board. With that said, though, we've been very cautious to continue to maintain our 50-50 ratio between owned and controlled.

We feel really good about that. This is our all-time high in total lots of just under $40,000, yet we like the optionality of having 50% owned versus 50% controlled. We're still in the market to buy land. But again, we're putting a very strategic lens on that, on deals that we are doing.

And so the ones that we were talking about in the fourth quarter that are scheduled to close, those are ones that we've been tracking for a while now, have had them under contract, they're just coming to fruition. And again, they will be accretive to 2020 and beyond.

Alex Rygiel -- FBR & Company -- Analyst

And also coming back to an earlier comment with regards to acquiring larger positions in larger communities, can you comment on what that implies toward your intermediate-term outlook for the housing market and how that could impact your homebuilder gross margins over the coming years?

Dave Messenger -- Chief Financial Officer and Secretary

I would say that as we're looking at taking down larger positions in larger communities, we've got a pretty good view on that particular market. And so we think that building through the community over a little longer period of time is warranted given where we're seeing the underlying demand in and out of that price point of that product in that market. So we're comfortable in taking a longer position. We oftentimes have multiple product lines with different price points within some of those communities in order to help us work through the lots quicker, but we're still taking positions where we feel comfortable with the outlook on the overall housing.

Alex Rygiel -- FBR & Company -- Analyst

And what does it mean toward your homebuilder gross margins?

Dave Messenger -- Chief Financial Officer and Secretary

Well, I wish --

Alex Rygiel -- FBR & Company -- Analyst

I suspect buying larger portfolios could possibly improve your land acquisition cost and also improve certain utilization of fixed labor on site. So I would suspect it would drive margins higher or at least push you in a better pricing position. But --

Rob Francescon -- Co-Chief Executive Officer

I mean that's our expectation. But...

Dave Messenger -- Chief Financial Officer and Secretary

It's always difficult to forecast what's going to happen on individual projects as there's so many different inputs that go into it. But I mean, obviously, theoretically, as you underwrite these deals, you do expect to get some sort of economies of scale.

Alex Rygiel -- FBR & Company -- Analyst

Thank you very much.

Rob Francescon -- Co-Chief Executive Officer

Thanks, Alex.

Operator

Our next question is from Alex Barrón with Housing Research Center. Please proceed.

Alex Barron -- Housing Research Center -- Analyst

Yeah. Hey, guys. Thanks. Good start with the quarter.

I was curious to see, as you've been working with the Wade Jurney brand and expanding it to new markets, are you finding that the demand is playing between both entry-level people versus downsizing baby boomers? Or can you comment on how that's -- what you guys are observing there?

Rob Francescon -- Co-Chief Executive Officer

Yeah. We're actually seeing both. And I think most people think it's just truly an entry-level buyer and, of course, that's a large percentage of it, Alex. But we are seeing a lot of move-down buyers, as well.

And some of that is more geography-driven. But candidly, it's probably pretty much in every one of the markets right now.

Alex Barron -- Housing Research Center -- Analyst

Got it. And in the rest of the business, the Century brand business, how are you guys looking at your product positioning? Especially from a price point perspective, what can we expect over the next 12 months or so? Are prices going to start trending lower because the mix is shifting, or would it be similar?

Rob Francescon -- Co-Chief Executive Officer

That's consistent with what we've been doing now for some period of time. And we have designed new plans, what we call Project Genesis, which are new entry-level price point plans. So that took what we had earlier of an entry-level series and actually dropped some efficiencies, additional efficiencies into the plan, dropped the price points, the direct costs on these. And so as a result, you are going to see a shift that's continuing to get our price point down.

And that's been -- if you just look at kind of where we've been over the past 12 to 24 months, that's been a consistent theme that we continue to execute on, and I see that continuing in the future.

Alex Barron -- Housing Research Center -- Analyst

Got it. And if I could ask one last one. Have you guys given any thought to build-to-rent as an opportunity or something that you guys are considering at this point?

Dale Francescon -- Chairman and Co-Chief Executive Officer

Yeah. We've looked at it from a variety of different perspectives. And we've -- we have always sold certain amount of homes to investors. We -- from our standpoint, we haven't figured out exactly how that we would want to play in that particular arena.

But it's something that we're continuing to explore. Getting in the build-for-rent business ourselves or joint-venturing with someone else probably doesn't happen, but we think there's an opportunity as a potential additional outlet for some of our homes that as we would continue to find ways of executing on that, that we might be able to meaningfully increase our deliveries as a result. But we haven't really settled on a strategy yet.

Alex Barron -- Housing Research Center -- Analyst

Got it. Thank you very much. Good luck.

Dale Francescon -- Chairman and Co-Chief Executive Officer

Welcome.

Operator

Our next question is from Jay McCanless with Wedbush Securities. Please proceed.

Jay McCanless -- Wedbush Securities -- Analyst

Hey, good afternoon. The first question I had -- it looks like the diluted share count went up sequentially from 2Q to 3Q. Can you tell us how much stock was issued and what the outstanding share count was at quarter end?

Dave Messenger -- Chief Financial Officer and Secretary

Outstanding share count at the quarter end was about just shy of 31 million, it's about 30.9 million. In terms of shares being issued during the quarter, it was about 897,000 shares for about $27 million.

Jay McCanless -- Wedbush Securities -- Analyst

And then my next question -- and I know Alex just asked about pricing, but with the midpoint of the new guidance, it looks like the average closing price should come in around, somewhere around 311,000. And I'm just wondering, as we look ahead to next year, is there going to be the same type of volatility in the average closing price because of mix? Or are you guys thinking that might balance out and be a little bit smoother, maybe a more normal trend where prices start low at the beginning of the year and then kind of tick higher?

Dave Messenger -- Chief Financial Officer and Secretary

I think it's really... Sorry. It's really going to vary based on the percentage of closings we have from the Wade Jurney brand that, obviously, at 155,000, that does help drive the ASP lower. And depending on how much we have in a given quarter from that brand will help determine what that ultimate ASP is each quarter. So there's probably still going to be a little bit of variability from quarter to quarter.

Jay McCanless -- Wedbush Securities -- Analyst

Got it. And then apologies if you mentioned this already or discussed already, but what did the order trends looked like for each month of the quarter? And could you talk about what you've seen so far in October?

Dale Francescon -- Chairman and Co-Chief Executive Officer

Sure. Overall for the quarter, we were up 35%. When we look at each month, the incremental amount was fairly consistent. It's -- so we really didn't see that the trend changed at any point in the quarter, either in the beginning starting out stronger and then tailing off or starting out slower and then picking up.

When we look at October and how those sales trends are going so far, we would anticipate that we will end up October up about the same amount that we were up in the third quarter. So we've really not seen a change since we've been in the October period. It's just been a relatively steady improvement throughout that four-month time frame.

Jay McCanless -- Wedbush Securities -- Analyst

Great to hear. And then the last question I had, I think the SG&A number was certainly a little bit higher from both a dollar and a margin perspective than we were anticipating for the quarter. Are there -- could you give us maybe a dollar figure of items that may not necessarily be onetime items for GAAP but onetime spend, whether it's for the relocation for the broker co-op that you talked about? Is there any type of cost that may not recur? And also, is that broker co-op you talked about, is it getting worse? Or was that just you guys trying to get out of some neighborhoods and maybe paying a little bit more to make that happen?

Dale Francescon -- Chairman and Co-Chief Executive Officer

You know, the increase in the broker co-op, which was about 30 basis points, is really -- it's hard to tell whether it was actual increased incentives or if it was just a higher percentage. And it's really a combination of both. And so when we look at that, that's going to vary from quarter to quarter just depending on circumstances. In terms of specific items and quantifying them, I don't think we're prepared to do that.

But as Dave indicated, we obviously had a fair amount of expenditure related to wrapping up the Wade Jurney Homes relocation, finishing up the conversion. We've got a little bit left that will trickle in, in the fourth quarter. But most of that is behind us at this point.

Jay McCanless -- Wedbush Securities -- Analyst

OK. Sounds great. Thanks for taking my question.

Dale Francescon -- Chairman and Co-Chief Executive Officer

Thanks, Jay

Dave Messenger -- Chief Financial Officer and Secretary

Thanks, Jay.

Operator

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Dale Francescon -- Chairman and Co-Chief Executive Officer

Thank you, operator, and thank you again to everyone for joining us on today's call. We look forward to speaking with you again next quarter.

Operator

[Operator signoff]

Duration: 44 minutes

Call participants:

Scott Dixon -- Chief Accounting Officer

Dale Francescon -- Chairman and Co-Chief Executive Officer

Rob Francescon -- Co-Chief Executive Officer

Dave Messenger -- Chief Financial Officer and Secretary

Thomas Maguire -- Zelman and Associates -- Analyst

Mike Rehaut -- J.P. Morgan -- Analyst

Alex Rygiel -- FBR & Company -- Analyst

Alex Barron -- Housing Research Center -- Analyst

Alex Barrn -- Housing Research Center -- Analyst

Jay McCanless -- Wedbush Securities -- Analyst

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