LGI Homes, Inc.

Welcome to LGI Homes second quarter 2024 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 would like to turn the call over to Joshua Fatter, Executive Vice President of Investor Relations and Capital Markets. Please go ahead.

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 a 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 shouldn't 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 June 30th, 2024 that we expect to file with the FCC later today. This filing will be accessible on the FCC's website and in the investor relations section of our website. With me today are Eric Leeper, LGI Homes Chief Executive Officer and Chairman of the Board, and Charles Merdian, Chief Financial Officer and Treasurer. I'll now turn the call over to Eric.

Thanks, Josh. Good afternoon and welcome to our earnings call. We're pleased to report the strong operating results we delivered in the second quarter and to provide more details on the significant progress we've made increasing profitability and growing community count. As highlighted in our press release this morning, we delivered 1,655 homes at a record-breaking average sales price of $364,000, resulting in revenue of over $602 million. During the quarter, we opened more self-developed communities underwritten at higher margins and successfully offset the impact of mortgage buy-down incentives and cost inflation by raising prices in our higher performing communities. Doing so allowed us to deliver a gross margin of 25% up 300 basis points from last year and adjusted gross margin of 27% up 320 basis points from last year. These are noteworthy increases in our profitability that brings today's margins in line with pre-pandemic levels. Pre-tax net income for the quarter was approximately $77 million, representing a pre-tax profit margin of 12.8%. This was a 170 basis point improvement over last year and like gross margins in line with our performance prior to the pandemic. These and other achievements contributed to earnings per share of $2.48 an increase of 10.2% compared to the same period last year. In May, we hit a new record of 130 communities and ended June with 128 communities, up an industry-leading 26% in the past year, and more communities are coming. We just completed our July training class here in the Woodlands, which included 60 new salespeople who will be instrumental in helping us achieve our goal of 150 communities by year end. During the quarter, we averaged 4.3 closings per community per month. Our top markets on a closings per community basis were Charlotte with 8.6 closings per month, Las Vegas with 7.8, Mid-Atlantic with 6.9, Dallas-Fort Worth with 6.7, and Fort Pierce with 6.3 closings per month. Congratulations to the teams in these markets on their outstanding results last quarter. On May 9th, we held our annual service impact day. Nationwide, our teams volunteered more than 9,000 hours, working with 73 local charities that support the most critical needs of our communities. We're grateful to our nonprofit partners for allowing us to support the transformative work they do, and we thank our employees for making this year's Service Impact Day a success. At a high level, the housing market remains healthy, with demand supported by strong fundamentals, including household formations and migration trends, years of underproduction, and a lock-in effect limiting the supply of resale homes. Additionally, we're witnessing a resilient labor market with historically low unemployment. On the other side of this equation is constrained affordability, which remains the number one challenge for customers and the key limitation on higher sales and closings. With rising land and input costs compounded by higher interest rates and increased costs of insurance and property taxes, today's entry-level customer faces harder choices and has fewer options. At LGI Homes, we're making those choices easier and creating meaningful value for our customers by providing affordable-sized but feature-rich homes and offering the mix of incentives that results in the most attainable monthly payment for our buyers. Finding the effective mix of each of these levers, product type, size, amenities, ASP, and incentive levels, presents a unique set of operational challenges in every market. Our performance in the second quarter demonstrates our success at balancing these variables while still delivering outstanding margins that reflect our commitment to increasing profitability and driving higher returns. Now I'll invite Charles to provide additional details on our financial results. Thanks, Eric.