LGI Homes, Inc.

Welcome to LGI Homes first quarter 2021 conference call. Today's call is being recorded and the replay will be available on the company's website later today at www.lgihomes.com. We have allocated an hour for prepared remarks and Q&A. If anyone should require operator assistance during the conference call, please press star zero. At this time, I will turn the call over to Josh Fador, Vice President of Investor Relations at LGI Homes.

Thank you, Lara. Good afternoon and welcome to LGI Homes conference call to discuss our results for the first quarter of 2021. Today's call contains forward-looking statements regarding our business strategy, outlook, plans, objectives, and guidance for 2021. These statements, which speak only as of today's call and are based on management's expectations, are not guarantees of future performance and are subject to risks and uncertainties. You should review our filings with the SEC, including our risk factors and cautionary statement about forward-looking statements, for a discussion of the risks, uncertainties, and other factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. LGI Homes assumes no obligation to publicly update or revise any forward-looking statements. Reconciliations of any non-GAAP financial measures discussed on today's call to the most comparable measures prepared in accordance with GAAP are included in the press release issued this morning and in our quarterly report on Form 10-Q for the quarter ended March 31st, 2021 that we expect to file with the SEC later today. This filing will be accessible on the SEC's website and in the investor relations section of our company website. Our hosts today are Eric Leeper, Chairman and Chief Executive Officer, and Charles Murdian, Chief Financial Officer and Treasurer. I'll now turn the call over to Eric. Thanks, Josh.

Good afternoon, and welcome to everyone participating on today's call. 2021 is off to a tremendous start, and we're very pleased to share our results with you today. Our remarkable performance was a direct result of our continued focus on sales and closings, our commitment to maintaining gross margins by raising home prices ahead of ongoing cost inflation, managing our supply chain, and effectively delivering on our backlog. The demand strength we saw last year has continued unabated into 2021 and is being driven by several key factors. First, interest rates. Despite a 30 basis points increase since December, Mortgage rates are still almost 40 basis points lower than they were at this time last year and remain at historical lows. Not only is this fueling demand, it's directly supporting our ability to raise home prices ahead of input cost inflation without impacting our sales pace. In fact, despite an 11% increase in our average sales price over the last year, Demand for our homes has never been higher. The second factor is the supply-demand imbalance. Across the country, home inventory is limited and existing home inventory is at historic lows. Pre-owned homes are selling in a matter of weeks and often at prices above asking price due to competitive bidding among buyers. This dynamic has increased attention on the new home market especially within the entry-level product segment where we focus. We would expect this trend to continue as long as the total supply of homes remains constrained. The third factor is increased interest in home ownership. When the housing market began to accelerate last May, one of the ideas floated was that demand was being fueled by people's freedom to work from home. However, as the economy has reopened, and many workers have returned to their offices, we haven't seen less demand for homes but more. We believe this is explained by a deeper, fundamental shift in how the home is valued. This is also a trend we expect to continue for the foreseeable future. In short, it remains the strongest housing market we've ever experienced, supported by dynamics that the LGI business model is uniquely well positioned to capitalize on. Here are a few highlights of our recent performance. Net orders during the quarter were the highest in our history, up over 110% year over year, which in turn drove a 200% increase in our backlog. Closings in the first quarter were up 40% over last year to 2,561, We generated record revenue of $706 million, an increase of 55 percent while delivering meaningful increases on all profitability metrics. This was highlighted by a 350 basis point improvement in our gross profit margin, a 490 basis point improvement in our EBITDA margin, a 540 basis point improvement in our pre-tax profit margin, and a 137% increase in our earnings per diluted share. During the first quarter, we averaged eight closings per community per month company-wide. Dallas-Fort Worth was our top market with 12.4 closings per community per month, followed by San Antonio with 12.2 and Austin with 11.4. Phoenix came in fourth with 11 closings per community per month, followed by Denver, with 10.6. Finally, we had our first closings in our new Baltimore market, and are now officially operating in 35 markets across 19 states. With that, I'll turn the call over to Charles for more details on our financial results.