LGI Homes, Inc.

Welcome to LGI Homes second quarter 2021 conference call. Today's call is being recorded and a replay will be available on the company's website later today at www.lgihomes.com. We have allocated an hour for repaired 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 Vatter, Vice President of Best Relations at LGI Homes.

Thank you. Good afternoon, and welcome to LGI Homes' conference call to discuss our results for the second quarter of 2021, and the sixth month ended June 30th, 2021. Today's call contains forward-looking statements regarding our business strategy, outlook, plans, objectives, and updated 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 sections for 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 June 30th, 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 Lieber, Chairman and Chief Executive Officer, and Charles Meridian, 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. I'll start by sharing some highlights of our quarter before handing it to Charles to provide more details on our financial results. We'll conclude with a view on our performance in the third quarter and provide updated full-year guidance. We delivered the strongest second quarter performance in our history, exceeding our expectations and setting new company records for revenue, closings, absorptions, and virtually all profitability metrics. The housing market remains incredibly strong, driven by dynamics that LGI Homes is uniquely well-positioned to capitalize on. Here are a few highlights of our recent performance. Closings in the second quarter were up 42% over last year to a record 2,856 homes, and our average sales price increased over 15% to more than $277,000. This resulted in revenue increasing 64% to $792 million, a new second quarter record and the second best quarter overall in our history. Our continued success at offsetting cost inflation enabled us to achieve gross margins of 27 percent and adjusted gross margins of 28.5 percent both second quarter records. We achieved our lowest ever SG&A expense ratio that in turn helped drive a 460 basis point improvement in our pre-tax net income percentage to an all-time high of 18.8 percent. Finally, our net income was over $118 million representing an increase of over 112%. This was a second quarter record and the second highest net income in our company's history. During the second quarter, we averaged 9.1 closings per community per month company-wide. This was the second highest absorption rate in our company's history, exceeded only by our fourth quarter 2020 absorption rate of 10 closings per community per month. This quarter, Austin was our top market with a new company record of 20 closings per community per month. Second was Houston with 13.1, followed by San Antonio with 12.7. Dallas-Fort Worth was fourth with 12.5 closings per community per month, and Jacksonville closed out the top five with 11.9. Our teams continue to manage through supply chain constraints input cost uncertainty, and availability of lots to build on. We have not seen a pullback in demand for homes related to declining interest in homeownership or affordability constraints. However, we remain focused on offering affordable homes that meet the needs of our target market. For the quarter, our net orders were down 10% year-over-year solely as a result of matching our sales pace, with our capacity to deliver homes to our customers. We're releasing new homes for sale later in the construction cycle when there's more visibility into our costs, construction times, and expected margins. In many of our communities, our sales professionals are maintaining long wait lists of potential buyers who are sidelined until either a new home is released or a current buyer cancels their contract. Given the robust demand environment and the measures we've taken to support our margins, we expect to see continued negative near-term order growth, particularly in the third quarter as we compare our results to last year's strong comp. I'll share a few more highlights of the quarter before handing the call over to Charles. Since our last earnings call, we made two opportunistic acquisitions to support our long-term growth objectives. On May 7th, we announced the acquisition of our home in Minneapolis, and on July 15th, we acquired Buffington Homes in Central Texas. Both acquisitions complement our existing footprint and increase our land positions in attractive markets. We're pleased to welcome the employees of our home in Buffington to our LGI team and know they will play an important role in our continued success. Finally, during National Homeownership Month in June, we closed our 50,000th home. This significant milestone in our history is a result of our ongoing commitment to help renters become homeowners and a testament to the success of our unique business model, which has proven so effective at making the dream of homeownership a reality for thousands of families across the nation. With that, I'll turn the call over to Charles for more details on our financial results.