Landsea Homes Corporation

Good day, everyone, and welcome to today's Lansi Homes Corporation First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. Please note, this call may be recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Drew McIntosh, Investor Relations. Please go ahead.

Good morning, and welcome to Lansi Homes First Quarter 2025 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 and 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 Lancey Holmes in 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 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 go over our results for the first quarter of 2025 to provide an update on our operations. Clancy Homes recorded a net loss of $7.3 million in the first quarter, or a net loss of $0.20 per diluted share. Home sales revenue increased 2% year-over-year on a 27% increase in deliveries, partially offset by a 20% decline in average closing prices. Decline in average prices were due in part to a mixed shift from higher priced California communities to a higher contribution of closings from our Florida and Texas operations. Elevated incentive activity during the quarter also contributed to a decrease in ASPs. Net new orders for the quarter increased 11% year over year on a sales pace of 3.0 homes per community per month. Overall, we were encouraged by the demand elasticity we saw during the quarter as buyers responded to declines in mortgage rates and higher incentives. Order activity started off slowly to begin the year, then picked up as the quarter progressed. Affordability remains an important issue for most buyers, so financing incentives were a key driver of sales during the quarter. We continue to balance pace versus price at each of our communities. with a slight lean towards pace, all things being equal. As a production home builder, we feel it is important to price the market, maintain a base level of sales activity. We also made the strategic decision to sell through some of our spec home inventory in an effort to return to a more balanced approach between spec sales and build-to-order homes, with 67% of our first quarter deliveries also sold in the same quarter. Our goal is to return to a 50-50 split between specs and bill-to-order closings over time. There are several reasons for this strategic shift. First, bill times have returned to pre-COVID levels, which has shortened the timeframe between selling and closing on a pre-sold home. Second, the margin opportunities are much greater with a pre-sold home, as it gives us the ability to charge more for lot premiums and other new home amenities. It also allows the buyer to pick out high-margin options upgrades for their home, as opposed to the standardized packages found in spec homes. Finally, reducing our spec levels lowers the cash tied up in standing inventory. It gives us better visibility into our future closings with the buildup of a solid backlog. More balanced strategies also align with our company's approach to home building, which emphasizes product differentiation as a way to attract customers and grow market share. We believe our core customer is a more discerning buyer who wants more out of a home than just a place to live. That is why we have developed and refined our high-performance home series to offer the latest in new home technology and innovation. While the pandemic has been over for some time, people continue to spend more time at home than ever before. Whether it's a work-from-home situation, in-home entertainment, or just dining in, We feel that this stay-at-home dynamic plays into our strengths and believe buyers will pay a premium for a home that fits their lifestyle. Of course, there are other factors that play into the decision-making process when buying a home, the biggest of which is affordability. That is why we continue to work with buyers to find a new home solution and monthly payment that suits their needs. Financing incentives remain a popular option for our customers looking to lower the monthly cost of home ownership. serve as a great selling tool with buyers looking at both new and resale homes. These incentives do, however, come at a cost to our company, representing 9% of the average closing price in the first quarter. We're optimistic that the combination of better pricing strategies and a higher mix of pre-sold homes will offset some of the negative effects the incentives have had on our margins. We head into the latter half of the spring selling season we continue to see opportunities to refine our operations and increase our size and scale in the markets we currently build in. While there is some uncertainty surrounding the near-term macro environment, we believe the long-term outlook for our industry remains positive, given the need for additional housing supply and the desire for home ownership that is on display at our communities each week. Product differentiation is more important than ever when selling homes at uncertain times. Move And we feel that having communities and desirable locations and new home designs that stand out from the competition give us a distinct advantage. As a result, I remain optimistic about Lansi's ability to compete and grow our operations over time. With that, I'd like to turn the call over to Mike, who will provide more details on our operations. Mike?