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spk02: Welcome to LGI Homes third quarter 2023 conference call. Today's call is being recorded and a replay will be available on the company's website at www.lgihomes.com. After management's prepared comments, there will be an opportunity to ask questions. At this time, I'll turn the call over to Joshua Fatter, Vice President of Investor Relations and Capital Markets.
spk05: Thanks and good afternoon. I'll remind listeners that this call contains forward-looking statements. including management's views on the company's business strategy, outlook, plans, objectives, and guidance for future periods. Such statements reflect management's current expectations and involve assumptions and estimates that are subject to risks and uncertainties that could cause those expectations to prove to be incorrect. You should review our filings with the SEC for discussion of the risks, uncertainties, and other factors that could cause actual results to differ from those presented today. All forward-looking statements must be considered in light of those related risks, and you should not place undue reliance on such statements, which reflect management's current viewpoints and are not guarantees of future performance. On this call, we'll discuss non-GAAP financial measures that are not intended to be considered in isolation or as substitutes for financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be found in the press release we issued this morning and in our quarterly report on Form 10-Q for the quarter ended September 30th, 2023, 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 website. I'm joined today by Eric Leeper, LGI Homes Chief Executive Officer and Chairman of the Board, and Charles Murdian, Chief Financial Officer and Treasurer. I'll now turn the call over to Eric. Thanks, Josh.
spk08: Good afternoon, and welcome to our quarterly earnings call. I'm pleased to share our exceptional performance during the third quarter of 2023. Our strong results built upon the momentum generated in the first half of the year and the positive impact of decisions we made to align our business with unique challenges of today's affordability-constrained market. Demand remains healthy, supported by positive longer-term fundamentals and including strong demographic trends and a low supply of affordable homes. We believe that once the Fed's targets are met and we have a clearer view of the economic landscape, interest rate volatility will subside and the market will likely exhibit more stability, similar to what we experienced in the years prior to the pandemic. However, there's no consensus on whether that takes a couple of quarters or a couple of years. Therefore, we are laser-focused on ensuring that any near-term decisions around pricing, incentives, investments, and community openings are weighed not only in the context of their impact to our company's near-term success, but also 5, 10, and 20 years down the road. A great example of this is the 1,751 homes we closed in the third quarter. This was a 13.2% increase over the same period last year and represented a strong pace of 5.6 closings per community per month. It is possible that if we'd offered significantly more than our typical two to three points of rate buy-down assistance, we may have pushed closings higher. But beating the closing guidance wasn't the goal. Hitting the guide while also protecting and expanding margins was our focus. And that's exactly what we did. delivering adjusted gross margins of 27.2%, representing a sequential improvement of 340 basis points and back within the pre-pandemic range we've been working towards. Additionally, our pre-tax profit margin of 14.5% was also up 340 basis points and was the highest third quarter result in our history outside of the pandemic. During the third quarter, our top market on a closings per community basis was Dallas-Fort Worth with 10.1 closings per month. Next was Charlotte with 9.5 closings, followed by Northern California with 8.9. Rounding out the top five were Fort Pierce with 8.5 and Houston with 7.9. Congratulations to the teams in these markets for their strong performance last quarter. To reiterate, Every decision currently being made is being considered within the context of our systems-based philosophy and represents a careful assessment of its potential to create sustainable, long-term value for our shareholders. Along with margin expansion, our continued community account growth is another highlight. At the end of the quarter, we reported 106 active communities, a 14% increase from a year ago and a 4% increase from the prior quarter. Growing our community count remains a key focus, and we still expect to be active in 115 to 125 communities by the end of 2023. Finally, I'll share my thoughts on an additional highlight from the quarter, the land market. Early in 2020, deals for finished lots began to diminish. By the end of 2020, they were virtually nonexistent. However, we've started to see that shift. During the third quarter, we approved a total of 23 new projects, nine of which were composed entirely of finished lots, many of which will contribute to closings and community count in the back half of 2024. Though still in the early innings, we're encouraged by this recent trend and its potential to impact future returns. Along with attractive land opportunities, we've also seen a meaningful increase in M&A opportunities. The majority of these are small private builders looking to leverage longer dated land pipelines to free up capital to continue to grow their operations. During the quarter, we closed the deal to acquire substantially all of the land assets of Glenwood Homes in North Carolina. The transaction enabled us to acquire over 1,100 lots in one of our best performing regions. On the opposite side of the deal, the seller retained their high margin backlog and received an inflow of capital that has the potential to insulate them from turbulent credit markets and support their continued success as a home builder and developer. The win-win nature of this deal illustrates a positive upside of today's uncertainty. Challenging times can create great opportunities that, if structured thoughtfully, hold real value for both parties. We expect similar opportunities to materialize in the future and plan to pursue those that work within our profitability focus long-term growth strategy. I'll now turn the call over to Charles for more details on our financial results.
spk07: Thanks, Eric. Revenue in the third quarter was $617.5 million based on 1,751 homes closed. Revenue was up 12.9% and closings were up 13.2% over the same period last year as we benefited from continued demand and the momentum built during the first half of the year. Of our total closings, 139 were through our wholesale channel, representing 7.9% of total closings in line with the second quarter this year. Our average selling price of $352,678 was slightly lower year over year, but up 1.3% sequentially. Our third quarter gross margin was 25.7%, and adjusted gross margin was 27.2%. As Eric highlighted, adjusted gross margins improved 340 basis points sequentially compared to the 150 basis point improvement we guided to on our last call. The outperformance was driven by our success in maintaining and, where possible, raising prices in many communities, as well as lower input costs and new and replacement community openings at normalized margin profiles. Adjusted gross margin excluded $8.6 million of capitalized interest charged to cost of sales and $767,000 related to purchase accounting, together representing 150 basis points. Combined selling general and administrative expenses for the third quarter were $76.5 million, or 12.4% of revenue, Selling expenses were $49.8 million, or 8.1% of revenue, compared to 7.6% in the second quarter of this year. The 50 basis points sequential increase was primarily due to spending on advertising to drive leads and support new community openings. General and administrative expenses totaled $26.7 million, or 4.3% of revenue, a level that was in line with the second quarter of this year. We expect advertising and G&A dollars will remain consistent in the fourth quarter, resulting in full-year SG&A as a percentage of revenue of around 13%. Pre-tax net income for the quarter was $89.4 million, or 14.5% of revenue, a 340 basis point improvement over the prior quarter. Our effective tax rate was 25.1% compared to 16.8% in the same quarter last year, The increase in the rate was primarily due to fewer federal energy efficient home tax credits recognized this quarter compared to the same period last year. We expect the rate in the fourth quarter to be similar to the third, resulting in a full year effective tax rate of approximately 24%. Third quarter reported net income was $67 million, or $2.85 per basic share and $2.84 per diluted share. Third quarter gross orders were 2,068, up 6% over the same period last year. Net orders were 1,490, a slight decrease compared to the third quarter of last year. Our cancellation rate during the quarter was 27.9% compared to 21.3% in the same period last year. At September 30th, our backlog consisted of 1,377 homes. valued at $510 million. Of those homes, 273, or 19.8% of our total backlog, were related to wholesale contracts with single-family rental partners. Turning to our land position, at September 30th, our portfolio consisted of 72,109 owned and controlled lots, a decrease of 5.7% year over year, but an increase of 4.2% sequentially driven by an increase in the availability of fairly valued land deals during the quarter. Of those lots, 56,301, or 78.1%, were owned, a decrease of 7.1% year over year and less than 1% sequentially. Of our owned lots, 42,618 were raw land or land under development. Of the remaining 13,683 owned lots, 1,471 were completed homes, including our information centers, and 3,009 were homes in progress, and 9,203 were finished vacant lots. We controlled 15,808 lots at quarter end, essentially flat year over year, but an increase of 26.8% sequentially. With that, I'll turn the call over to Josh for a discussion of our capital position.
spk05: Thanks, Charles. As of September 30th, we had just under $1.2 billion of notes payable outstanding, including $904.2 million drawn on our credit facility. Our debt to capital ratio was 39.8%, and our net debt to capital ratio was 38.8%. Total liquidity at the end of the quarter was $243.2 million, including $47 million of cash on hand, and $196.2 million of available capacity under our credit facility. At September 30th, our stockholders' equity was over $1.8 billion, and our book value per share was $76.50, an increase of 10.9% over the same time last year. At this point, I'll turn the call back over to Eric.
spk08: Thanks, Josh. On Friday, we expect to report October closings of 567 homes, up 5% compared to last October, in 108 active communities. Based on those deliveries and a sales pace in October that was consistent with this time last year, we expect to achieve an increase in closings year over year in the fourth quarter. Based on this, we are tightening the range of our expected closings for the year. We now expect to close between 6,700 and 7,000 homes at an average selling price between $350,000 and $355,000 for the full year. Margins in the fourth quarter are expected to be similar to slightly lower than what we've delivered in the third quarter, depending on several factors, including geographic, product, and retail versus wholesale mix, as well as incentive levels offered in the fourth quarter related to our Make Your Move national sales event. Based on those variables and our performance in the third quarter, we are raising the low end of our margin guidance by 150 basis points while holding the top end steady. We now expect full year gross margins between 23% and 23.5% and adjusted gross margins between 24.5% and 25%. Community count is building. As I mentioned earlier, we continue to expect 115 to 125 active communities at year end. As a closing thought, I'll add that, based on our existing land pipeline, and views on development timing, we now expect to end 2024 with over 150 communities and to be operating in over 180 communities by the end of 2025. I'll conclude by saying again how proud I am of our strong third quarter results and our success in returning profitability metrics back to pre-pandemic levels. Our continued success is the result of outstanding execution by our teams around the country. Despite volatile rate movements market uncertainty, and the occasional need to move between projects due to the timing of new openings, our dedicated employees continue to construct, sell, and close homes while delivering the best service in the industry. Thank you for continued commitment to our company and to our customers. We'll now open the call for questions.
spk02: Certainly. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
spk01: And one moment for our first question.
spk02: And our first question will come from Michael Rahat of JP Morgan. Your line is open, Michael.
spk04: Hi, guys. This is Andrew Ozzie. I'm for Mike. Congrats on an impressive quarter. I just wanted to ask if maybe you can bucket out and maybe quantify more succinctly what drove the gross margin beat and maybe if there was a lean in one direction or the other.
spk08: I think, Andrew, this is Eric. I can start and Charles can add if he'd like. I think the gross margin beat comes from a couple different factors. One is we held pricing strong. We're still in a very strong demand environment, low supply of inventory out there, and able to hold pricing and raise prices in a substantial number of communities. The other thing that happened during the quarter is when we guided to 25-3 and then beat that is we didn't have a lot of wholesale closings or gave room for more wholesale closings to come through in the quarter, which didn't happen. I'd point to those two as the two primary reasons.
spk04: That's really good color. And then maybe just one more. How maybe widespread were these price increases that you guys are seeing?
spk08: Yeah, I would say in October we did our Q4 pricing. We probably raised prices in, you know, a quarter to a third of our communities.
spk04: Okay. And maybe if you could quantify the magnitude or.
spk08: Yeah, they're very slight, just to quantify the strong demand communities, and also we did have some house cost increases, which we need to raise prices to maintain margins as well.
spk04: Thanks so much. I'll pass it on.
spk08: You're welcome.
spk01: And one moment for our next question. Our next question will be coming from Truman Patterson.
spk02: of Wolf. Your line is open, Truman.
spk06: Hey, good afternoon, everyone, and thanks for taking my questions. First, Eric, I'm hoping to understand how you're balancing your historically elevated gross margin, which you all were able to rebuild kind of back to normalized levels this quarter. By balancing that with the recent spike in rates and the affordability constraints, are Are you all going to continue to favor price a bit more at the sake of absorption pace, given just all of this community growth that you all have in the pipeline?
spk08: Yeah, it's a great question, Truman, and good afternoon. Starting again with very strong demand, but certainly affordability is getting constrained, whether it's raising prices to offset additional costs, which I should also mention the development costs are generally increasing as well, or the increasing in rates. And we're cautious about throwing too many incentive dollars with the customers, because Incentives are really short-term, and there's no question in our mind if we put a lot more dollars into large forward commitments or buying down rates, that would improve sales temporarily. But we want to make sure we're making good strategic long-term decisions. We're protective of that gross margin because the financials, as we just showed with this quarter, are 5.6 absorption pace, creating a 14.5% pre-tax. The financials can handle a slower absorption pace, but when you start discounting your houses tremendously and start throwing a lot of incentives into a short-term bucket to drive that absorption pace, that may or may not be the right long-term decision for the company, and that's what we're really focused on.
spk06: Okay, perfect. And then I believe you mentioned that you all were maintaining, I think, two to three points of financial incentives. Could you help us understand what portion of your buyers are getting a mortgage rate buy down? And are you all doing any sort of forward commitments at all? Or is this just kind of a case by case basis with incentives that the consumer can use, you know, based on their specific needs?
spk08: Yeah, it's another great question, Truman, and there's a lot of talk about rate buy-downs and incentives. For clarification, what we've been really focused on is getting the consumer the lowest fixed rate possible every week. And what has that involved over the last couple quarters is really paying two or three discount points, if you will, to get the lowest rate possible on a week-to-week basis. And that has been over 7% here recently, even paying a couple points. We have not purchased any big forward commitments, which instead of costing two to three points, may cost 600, 900, 1,000 basis points to get a rate materially lower from that, and that is very expensive to do. But we're continuing to analyze sales week to week and what incentives are going to be best for our customers.
spk06: Okay, perfect. And then just one final one for me, just in your fourth quarter gross margin guide. Any discussion around there? Does that, you know, contemplate any buyers or incremental rate buy downs incentives needed for any buyers that might get kicked out due to affordability? Or any way you can help us kind of think about, you know, the sensitivity of buyers that might not be able to qualify without a buy down today?
spk08: Yeah, I think it does contemplate that, Truman. You know, I think we're all, it's an unknown. When rates got to 6.5 to 7, we didn't necessarily expect them to go to 7.5 or 8. And I think from this point forward, you know, where do they go from here? So when we're giving our gross margin guide, you know, we said similar to slightly down. So we think we got 100 to 200 basis points of room, either for mortgage incentives. You know, we'll see where the costs come in. see what percentage of our business comes from the wholesale investors. And the geographic mix also plays a role in that. All right. Thank you all. Thank you.
spk02: One moment for our next question. And our next question will come from Ken Zinner of Seaport Research. Your line is open, Ken.
spk09: Afternoon, everybody. Good afternoon. So a couple different angles here. I believe you said you bought finished lots that you saw in the market. And was it 23 communities? Is that what you actually said?
spk08: 23 overall, nine of which were finished lots, Ken. That's what we said.
spk09: And how does that play into – and, you know, when you find that attractive, given your – self-development bias to buy raw land and keep that 300 basis point spread development to buying from somebody. What makes you go ahead and do this? Is it because you're trying to get something just literally opportunistically came up? And how do you think about that relative to the margin bias you have for your existing land development business or process?
spk08: Yes. It's really opportunistic and, you know, that's the positive about being in a more challenging market, you know, a more challenging affordability market where, you know, we're seeing lower absorptions than historical past. But we're seeing tremendous opportunities to grow our community account and I think that's one of the most exciting things that we shared on the call is the ability to buy these new communities Instead of buying bigger land positions, which take a lot more capital, there's more timing on development risk, what we're seeing in the market today on these 23 communities, these are smaller deals. Most are coming from private builders or private developers, probably average lot size around 100 lots instead of a few hundred lots, less capital intensive, less risk, stress testing these deals to meet our margin requirements. probably works at half the absorption pace as a larger community. So really accretive earnings. We can get in there and create closings quicker. And that led to us being confident that we're on track for our community count growth this year. We're confident that we're going to have 150 communities by the end of 2024, which is substantial growth, and 180 communities by the end of 2025. All those developments are already in play. It's just a matter of timing of getting them open.
spk09: Right, so absorption, there's community size risk, which is duration. But how do you think broadly about the margin differential? When you introduce the pace, historically you kind of talk about a 300 basis point spread, I believe, for margins you want to achieve and develop. And the reason I'm asking is if you could just kind of reaffirm that range and how it plays out with finish lots. Because if you can buy finish lots, Structurally, I wonder if there's something that you might be more open to depending on how the environment is, given your high land positions today.
spk08: Yeah, no, we're more open to it. First of all, you're correct. I mean, it's a big thing, and we've used 300 basis points in our history as a guide, and I think that's still a reasonable guide. I think the biggest objective that we're always cognizant about is when you're doing development and putting lots on the ground for the purpose of the home building, you need to make sure you're capturing the development profit as well as the home building profit for taking on that risk and spending the upfront capital. What we're talking about on this call, the ability to buy finished lots, is just a market component. For the last 20 years, if we could go out and buy all finished lots, we'd be open-minded to that. There just wasn't a lot available. Most of the developers can sell finished lots to smaller private builders at higher margins for the developers, so it's really competitive, and we have the balance sheet and we're comfortable developing, so we thought that's where the opportunity was for us. That's just a dynamic that's happening in the market is we're seeing more finished lot opportunities that we can buy, get into closings quicker, and the prices for those finished lots, I won't say they're distressed pricing or coming down, but their price is that are very realistic at today's pricing. We can make a good margin on them, and we think we should buy them and get in there and start selling and closing houses.
spk09: Good. I appreciate that. I think it's a fascinating part of the industry. Last question here. Charles, could you give us confidence? I mean, obviously you've recovered your margins. You know, they ran, gross margins ran, you know, 21, 21, 22, and then they popped up, which is great. there's some vacillation here in the quarter wholesale, you know, obviously rates, but could you give us maybe, you know, some clarity about, you know, obviously input costs have gone down, but was this really a function, i.e. your price stability as opposed to your incentives is what it sounds like you're talking about, because I'm just trying to get a sense of this level rates do go up. What keeps us from going backwards again? You know, um, You've talked about the pace, but I'm just trying to get a sense of clarity if it's just market firm pricing is what it sounds like to you. But that could go away if that were the case. Thank you.
spk07: Yeah, I mean, he mentioned the call. Yeah, I can take the input costs, Ken, really, is that, you know, I think our Our philosophy hasn't changed in terms of how we think of the input costs. I think our lot costs as a percentage of our average sales price has been pretty consistent. So kind of running that 18 to 20% range from a lot cost basis. So development costs overall, we've done a great job of budgeting through either contingency or through our estimates to make sure that we're getting the most appropriate standard lot cost that's going to flow through the financials. So I think on the land side, we feel like we have a pretty good visibility to where we're going to sit there. The house costs can fluctuate, and certainly that's a timing piece as well. So it starts from the second quarter and into the third or what's going to come through in the fourth quarter and even into the first quarter. And we've seen nominal movement between house costs really slightly up to slightly down in most of our markets. So I think the input costs have been about as stable as we've seen. We're starting to see lumber come down at least under the last couple months, which is going to impact closings going into the first quarter. So I think it is more so about evaluating every community, looking at it on a community-by-community basis from a pricing and expected margin. We're doing a fantastic job of estimating our purchasing teams, doing a great job across the country, really working hard on making sure we're getting fair bids, multiple bidders on our projects, and I think that is paying off for us, and we have a very high confidence level on what it's going to cost to build our houses going into the future. So I think that has helped us navigate making sure that we can maintain margins in our historical range.
spk09: Thank you.
spk07: You bet.
spk01: You're welcome. And one moment for our next question.
spk02: And our next question will be coming from Carl Reichert of BTIG. Carl, your line is open.
spk00: Thanks, everybody. Eric, I wanted to talk a little bit about sales. Your team, you've got a unique operating model when it comes to selling houses. And I'm curious how you manage the toggle between volume, since I assume they're paid on that commission-wise, versus holding margin and maybe an individual salesperson sells one less house a month. How do you balance that in terms of motivating and rewarding those folks when you toggle between margin and volume and look more in the direction of margin?
spk08: Yeah, great question, Carl. I think the first thing, and we talked about it earlier on the call, is really focusing on the long term. Even when we hire salespeople and you're paid on commission and we all want to close as many houses as possible every single month, But sometimes getting that additional closing is not worth it because we need to think longer term. You know, for example, you know, reducing prices in the communities is something that we want to avoid as much as we can. Because when you start reducing prices in the communities, it's just not really good for anyone. The customers, ourselves, our employees. So that's one thing that we balance. because we believe the interest rate volatility is going to settle in some point. It's not there yet. And when the interest rates are likely to come down, what the experts are saying, the 30-year mortgage, we're going to be in really good position. Our sales teams across the United States are doing a really good job of working with the customers. It's more challenging now from an affordability standpoint. We're seeing more co-signers. The ability for a customer, they may have to go pay more pay some debt down in order to qualify. The customer may have to save up money for a down payment. They may have to look at a smaller square footage house. And the team of salespeople, about 400 of them nationwide, they all have a pool of customers that they're working with to create those closings in the future, even if it's more of a headwind on a very short-term basis.
spk00: I appreciate that, Eric. Thanks. And then can we talk about vertical construction times? We've heard sort of this mixed commentary from some of your peers about a return to normalcy. Can you talk about how long it's taken you from start to CFO right now? Are you back to pre-pandemic norms? And if you're not, sort of how far away are you? Thanks.
spk07: Yeah, Carl, this is Charles. I mean, we haven't really seen much movement in our build times. I would describe them as generally the same. I mean, we're constantly working with our trades, looking for opportunities to find spots in the schedule. But from a construction time standpoint, I mean, we're still running that 80 to 120 days timeframe depending on the market. So we've seen it very consistent. Yeah, similar to pre-pandemic levels. Yeah.
spk00: Okay, great. If I could sneak one more in. Do you know offhand what percentage of the orders you took this quarter were on homes that were in process already vertically?
spk08: Well, I think the vast majority of them were. I mean, almost all of them would have been under construction at some point, being a spec builder.
spk00: All right, figured as much. All right, thanks a lot, fellas. Appreciate it.
spk08: Thanks, Carol.
spk02: And one moment for our next question. And our next question will come from Jay McCandless of Wedbush. Your line is open.
spk03: Hey, good afternoon, everybody. To my first question, what do you think kind of, I don't want to call it a hiccup, but a little bit sort of sales-based, In September, now you've seen the rebound in October. Was that a larger competitor trying to make their year, or were there some other things going on there that we need to know about?
spk08: No, I think, Jay, this is Eric. I mean, October sales are similar to September, and it's a little slower than July and August. And I don't want to say it's all about rates, but certainly rates are higher in September and October than they were in July and August. We're seeing those 7% plus rates. which the rate really doesn't matter as we talked about. It's really more about affordability. And really what our success is not really determined on what our competitors are doing. We are seeing more builders doing price discounts. Certainly a lot of them are doing mortgage commitments and everybody's got their own view on incentives. And we're continuously watching the cost of rent versus the cost of own based on where rates and pricing is today. That's difference between those two is probably as high as it's ever been. But our team is also, our teams across the country are also focused on the reason to buy. And it's not a mathematical equation. It's not a spreadsheet equation. All the reasons that customers buy homes for their lifestyle decisions, those are all still there, and that's what we're focused on.
spk03: And then asking the sales pace question a different way, Is the goal maybe for the next, call it 12 to 24 months, to sell at something at the lower end of normal, five to five and a half per month, to get the company to 140 communities by year end, rather than trying to brute force open a bunch or buy a bunch of small builders?
spk08: Yeah, no, I think the focus is on maintaining our historical margins at the highest absorption rate possible. I think that would be a way to describe it. And, you know, we're pretty excited about, you know, putting up a 5.6 absorption pace and creating 14.5 pre-tax because the absolute dollars for the way our average sales price has increased over the last few years, the absolute dollars coming through the income statement is very positive for us. So the sales pace, whether it's four a month or five a month or six or eight a month during the pandemic, is one item that we closely look at. And we all want more sales and closings, but we also have to be protective of the margins and make good long-term decisions for the company. But you're right. We are really excited about our community count growth, and we are going to be increasing revenue and closings for the company overall because of all that community count growth, irregardless of how many closings per community that equates to.
spk03: Got it. And then the other question I had, are you seeing enough savings on lumber yet to maybe contribute a little bit more to doing mortgage rate buy-downs, or is that going to flow through the first half of 2024?
spk07: Yeah, Jay, I would describe it as relatively nominal at this point. I mean, it is a couple thousand bucks month over month, but certainly something that gives us a little bit more flexibility. We've seen it more in the last two months. which is really looking more into the first quarter of 24, really, by the time those houses get completed and are available to close.
spk03: Okay, great. That's all I have. Thanks, guys.
spk02: I would now like to turn the conference back over to Eric for closing remarks.
spk08: Yeah, thanks, everyone, for participating on today's call and for your continued interest in LGI Homes. Have a great afternoon.
spk02: Ladies and gentlemen this concludes today's conference. Thank you for participating. You may now disconnect.
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