Landsea Homes Corporation

Land C. Holmes Corporation first quarter 2024 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. Please go ahead.

Good morning, and welcome to Lancey Holmes' first quarter of 2024 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 security laws. Lancey Holmes cautions that forward-looking statements are subject to numerous assumptions, risks, and uncertainties which range over time. These risks and uncertainties include but are not limited to the risk factors described by Lancey Holmes in its filings with the Securities and Exchange Commission. We do not undertake any obligation to update forward-looking statements. Additionally, reconciliation of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be accessed through Lansing Home's website and in its SEC filings. Hosting the call today are John Ho, Lansing'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 go over our results for the first quarter of 2024, discuss current market conditions, and provide an update on our outlook for the remainder of the year. Lansley Homes delivered strong top-line growth of 22% in the first quarter, thanks to a 7% year-over-year increase in home closings and a 14% rise in average sales prices. Order activity during the quarter was also solid, as we generated 612 orders on a sales pace of 3.3 homes per community per month. We continue to see strong interest for our new homes in our markets and look to capitalize on this demand through our well-located communities and our desirable high-performance home product line. The macro environment remains favorable thanks to a resilient economy, strong job growth, and low levels of existing home inventory. Against this backdrop, we continue to pursue a strategy of targeting high growth markets and rapidly achieving economies of scale at the local level. This strategy has been proven successful in places like Arizona and Florida, and we look to achieve similar success in Texas and Colorado. Our Texas expansion goals got a big boost with the April 1st acquisition of Antares Homes. which provided us with 20 communities and over 2,100 lots in the Dallas-Fort Worth area. We are extremely excited about what this acquisition brings to our organization, not only from a land and lots perspective, but also from a talent and local market expertise standpoint. The team from Antares Homes shares our vision operationally as it relates to product and new home affordability, as well as our values when it comes to quality home construction and customer service. The integration is proceeding smoothly, and we expect to have Antares operations fully on board on our platform by the end of this month. In addition to the operational progress we made during the quarter, we also executed two capital markets transactions that added more stability to our balance sheet. First, we successfully placed another 2.8 million shares from our largest shareholder, Lansley Holdings Corporation, with more traditional institutional investors. The transaction brought Lansi Holdings ownership to approximately 47%, meaning Lansi Homes is no longer considered a controlled company under ASTEC listing standards. While we have always operated independently from our largest shareholder, we felt this was an important designation to achieve and believe it is in the best interest of all of our stakeholders to accrue a diverse and stable investor base. The second transaction was our placement of $300 million in senior notes due in 2029 and an interest rate of 8 and 7 eighths. This was a significant achievement for our company as it allowed us to pay down a portion of the outstanding borrowings under a revolving credit facility and provide us with longer term fixed rate capital to pursue our growth initiatives. Given the recent increase in interest rates since the deal closed, We felt fortunate to have placed these notes when we did. One of our goals for the remainder of 2024 is to generate enough cash from operations to bring our net leverage down from current levels while continuing to invest in our home building business. Over the last several quarters, we have made significant upfront investments in our operations, particularly in Texas and Colorado, and we're beginning to see a return on those investments as we sell and close homes. This shifting dynamic will bring more cash in the door, as will the improvement in cycle times, which lowers the capital tied up in work and process inventory. A higher cash flow balance will allow us to operate from a position of strength going forward and will give us the optionality to either reinvest in the business, pay down debt, or return capital to shareholders. We ended the first quarter with 10% fewer shares outstanding as compared to the first quarter last year. a direct result of our share repurchase efforts over the last 12 months. We accomplished a lot in the first quarter, both from an operational and financial standpoint, and feel we are in a great position to achieve our goals for 2024 and beyond. The new home market continues to benefit from a lack of existing home inventory and pent-up demand from buyers who are motivated to own a home. We have made great progress in positioning our company to take advantage of these favorable trends, both in terms of our geographic footprint and our product positioning. As a result, I believe Lansi Homes can build on a success we've already achieved and establish our company as a top builder in each of our markets. Now I'd like to turn the call over to Mike, who will provide more color on our operational performance this quarter.