Harbor Custom Development, Inc.

Thank you for standing by and welcome to Harbor Custom Development Incorporated first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session from previously submitted questions and live questions will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to introduce today's presenters, Sterling Griffin, CEO and President and Chairman of the Board, and Lance Brown, Chief Financial Officer. I will now turn the conference over to Mr. Brown.

Thank you, operator, and thank you all for joining us today. Welcome to Harbor Custom Development's first quarter 2022 earnings conference call. During our discussion today, we will be referring to our earnings press release and presentation that were made available prior to the call. The release and presentation can be found in the investor relations section of the Harbor website at www.harborcustomhomes.com. Before we begin, I would like to remind everyone that today's call includes forward-looking statements. Any forward-looking statements contained in the earnings release or discussed today are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from these forward-looking statements. Specifically included are statements regarding our industry and our outlook for 2022. Please see our recent SEC filings, which identify the principal risks and uncertainties which could affect future performance. We assume no obligation to update any forward-looking statements In addition, we will be discussing or providing certain non-GAAP financial measures today, including EBITDA, adjusted EBITDA, and adjusted EBITDA margin. Please see the appendix of our earnings presentation for a reconciliation of these non-GAAP measures to their most direct comparable GAAP measure. I would now like to turn the call over to Sterling.

Thank you, Lance, and thanks to everyone for joining the call today. We appreciate your interest in Harbor Custom Developments. Our unique business model continued to deliver the first quarter of the year with 106% increase in revenue over the first quarter of 2021. Inventory levels remain near historic lows. We expect to benefit from continued stable pricing throughout 2022. Our distinct business plan of serving multiple segments of the home buying market within a 20 to 60 minute commute of some of the nation's fastest growing regions continues to provide us with a consistent stream of revenue. Our expertise allows for a diversified product strategy that enables us to better serve a wide range of buyers, adapt quickly to changing market conditions, and optimize performance. We are equipped to build to the surrounding community's needs, including single-family homes, townhomes, condominiums, and apartments. This flexibility allows us to target a wide and diverse range of customers. Our portfolio of land, lot, Home plans and finishing options, coupled with a historic low inventory of residential and multifamily housing in our geographic areas, provides an opportunity for us to increase revenue and overall market share. In addition to our single-family residential projects, we plan to build and sell townhomes, condominiums, and apartments and anticipate the commencement or continuation of land development and construction projects. We recently announced a listing of six apartment properties in Western Washington for $278 million. Those projects are Pacific Ridge, Mills Crossing, Bellefaire View, Windstone, Tanglewild, and Bridgeview Trails. In addition to our diverse product portfolio, we continue to expand geographically. Western Washington remains our largest market, but we have operations in Texas, Florida, and California. In Q1 of 2022, we closed our first two single-family homes in the Austin, Texas MSA. We also executed several other new home contracts within a 20 to 60-minute commute to Austin, which are expected to close in the following months. Prices for the Texas homes are averaging approximately $400 per square foot. We recently located to a new office space in Tacoma, Washington. The new office space is designed with a hybrid workforce in mind and considers employment trends that arose after the COVID-19 pandemic. We continue to demonstrate strong and consistent growth, delivering increased revenues each year of operation. Our compound annual growth rate for the years ended December 31st, 2018 through 2021 was 132.9%, and our compound annual growth rate for the first quarters ended March 31st, 2019 through March 31st, 2022 was 88.5%. As of March 31st, 2022, our backlogs of fully executed contracts for the sale of developed residential lots and single family homes was 20.7 million compared to 19.2 million as of March 31st, 2021. Our fee bill backlog as of March 31st, 2022 was 7.3 million. We did not have a fee bill backlog as of March 31st, 2021. Our financial condition continues to improve. We made significant progress last year to strengthen our balance sheet and finished Q1 with $22.3 million of unrestricted cash, up from $9 million the previous year. We continue to invest in our business to drive shareholder value. In the first quarter, we announced the closing of a revolving credit facility of $25 million with Bank United. The facility provides us with the liquidity and financial flexibility to build on our already strong foundation and pursue further growth initiatives. As of March 31st, 2022, we had $13 million of availability on the revolving credit facility for total liquidity of $35.2 million. Despite rising interest rates and inflationary conditions, I remain confident that the stability in the single and multifamily housing markets, strength of our balance sheet, and our unique business model makes us well positioned to deliver on our 2022 plan and beyond. I will now turn the conference call back to Lance Brown, our Chief Financial Officer, to further discuss our financial details.