Landsea Homes Corporation

And welcome to the Lancy Homes Corporation second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Drew McIntosh. Thank you, sir. You may begin.

Good morning, and welcome to Lancey Holmes' second quarter of 2023 earnings call. Before the call begins, I would like to note that this call will include forward-looking statements within the meaning of the federal securities laws. Lancey Holmes cautions that forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. These risks and uncertainties include but are not limited to the risk factors described by Lancie Homes in its filings with the Securities and Exchange Commission. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. And you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws. Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be accessed through Lansi Home's website and in its SEC filings. Hosting the call today are John Ho, Lansi's Chief Executive Officer, Mike Forsum, President and Chief Operating Officer, and Chris Porter, Chief Financial Officer. With that, I'd like to turn the call over to John.

Good morning, and thank you for joining us today as we review our second quarter results and provide an update on our operations. Lansi Homes continue to benefit from a combination of strong industry and company-specific fundamentals. resulting in another quarter of solid profitability and healthy sales activity. We produced net income of $4.9 million for the second quarter of 2023, or $0.12 per diluted share, thanks mainly to our strong top-line results, which were driven by a home closings total that was well in excess of our previously stated guidance. Order activity was solid throughout the quarter as we generated a sales pace of 3.3 per community per month comparable to where we were last year at this time. It continues to be a dearth of existing home inventory in our markets, which has brought an increasing number of prospective buyers to the new home market. While this dynamic has benefited all homebuilders, We believe Lansi is uniquely positioned to capitalize on this trend thanks to our high-performance homes, which offer the latest in home innovation and technology, setting us apart from other homebuilders, especially the existing home market. We expect existing home inventory to remain constrained as long as rates stay elevated, keeping buyers with lower mortgage rates in their current homes. A big part of our strategy is to rapidly increase our market share in the high growth markets we've established a presence in. We understand that this is a business of scale and that returns and profitability are often correlated with the builder size. We have made great strides towards growing our presence in places like Phoenix and Central Florida in a short amount of time, and we want to continue that momentum in these markets and elsewhere. To that end, we decided to raise $250 million in capital through a private debt deal in July. This capital will provide us with the dry powder we need to make investments in our markets and maintain the high growth trajectory we've demonstrated since our inception. One of the regions we view as a big opportunity for our company is Texas. Back in March, we announced the relocation of our corporate headquarters to Dallas, signaling our commitment to the state and our intent on becoming a national homebuilder. Texas has established itself as a business-friendly state with favorable demographics and immigration patterns. We are excited about the prospects for our current operations in the Austin area. I look forward to expanding our presence in that market and others around the state, like Dallas and Houston. Despite Lansi's strong track record of growth and profitability, we have believed for some time that our stock's valuation did not reflect the true value of our company. One of the factors we felt was causing this was a lack of flow for shares available to trade in the open market. To alleviate this problem, we worked with our largest shareholder, Lancey Green, to facilitate a secondary offering of a portion of the company's shares. In June, we went to market with this offering, and it was met with great enthusiasm from investors, resulting in an upsizing of the transaction. The net effect of this deal has been tremendous for our shareholders, sending our stock 30% higher in June alone and creating considerably more liquidity for investors to establish positions. We still feel our stock is undervalued, even at current levels, and have been actively repurchasing shares as a result. We bought 443,000 shares in the secondary offering for $3.3 million and purchased an additional 623,000 shares in the open market for about $5 million through the end of June. We completed the remaining piece of our share repurchase program in July for a total of just over 1.1 million shares for $10 million in the open market. In total, we have purchased roughly 4% of our outstanding shares since March. And last week, we received board approval for an additional $10 million in capacity at our meeting. We will continue to strike a balance between a reasonable level of shares outstanding and opportunistic share repurchases throughout the remainder of the year. As we look to the second half of the year, we believe Lancy Homes is in a great position to capitalize on the positive housing fundamentals that exist in our markets. There is a sense of urgency among home buyers as they realize that there are few options available to them in the existing home market. We feel that our high-performance homes present a very appealing, affordable option for these buyers. The pricing environment has remained firm given the supply-demand dynamics in place, and we are seeing less discounting in the market. Supply chain issues that have impacted our industry for the last few years seem to be abating, giving us better clarity on our delivery schedules and faster inventory turns. Our balance sheet is in great shape, and we have the necessary capital and liquidity to achieve our growth objectives. For all these reasons, I'm extremely optimistic about the future of Lansi Homes. With that, I'll turn the call over to Mike, who will provide more detail on our operations this quarter. Mike?