Beazer Homes USA, Inc.

starts scheduled to be closed this year. Second, there are clearly affordability risks posed by rising home prices and the potential for higher mortgage rates. To address this, we are obsessively committed to delivering extraordinary value to homebuyers through innovation, simplification, and choice, among other strategies. At a company level, we are encouraged by the dollar value and embedded profitability of our backlog. the continuing strength in our online and in-person traffic, and our ability to leverage overheads and further reduce interest expense. With that background, I'd like to highlight some of our expectations for fiscal 22. First, we expect to grow EBITDA by more than 10%, leading to earnings per share above $5. We are beginning fiscal 22 with approximately half of our expected closings for the year already in backlog. giving us visibility into profitability growth driven by higher ASPs and better margins. Our deleveraging results will also contribute to lower interest expense. Second, we expect double-digit growth in our lot position, with lots controlled by options remaining around 50%. Land spending is expected to increase again this year, although we remain highly disciplined in our underwriting. Third, we expect to deliver a return on total equity of about 20%, or nearly 25%, excluding our deferred tax assets. And finally, we fully expect to achieve our long-standing goal of reducing debt below $1 billion. Looking beyond this year, we believe that we are positioning the company for more growth and more profitability, leading to higher returns and shareholders' equity. As we improve our financial and operational performance, we are also focused on creating additional value for stakeholders by extending our leadership position in ESG. On the environmental side, we were pleased to be named an Energy Star Partner of the Year for the sixth consecutive year. And importantly, we continue to make improvements in our designs, materials, and construction practices in support of our industry-first pledge to have every home we build designated as Net Zero Energy Ready by the end of 2025. As part of this effort, in fiscal 21, we committed to meeting the EPA's rigorous standards for their Indoor Air Plus program. On the social side, we've made significant progress on the rollout of Charity Tidal. Our Tidal business committed to contributing 100% of its profits to Charity. In fiscal 22, we expect this expansion will allow us to donate more than $1 million. allocated between our national philanthropic partner Fisher House and other charities in the communities we serve. Our process of partnering with charities aligns our financial contributions with opportunities for both employee engagement and wellness. These philanthropic efforts have added to employee satisfaction and have been very well received by our trade partners and home buyers. Finally, on the governance side, Our diverse and highly engaged board has earned high ratings from third-party rating services. But we aren't resting there. Later this calendar year, we will publish our first-ever tariff sheet where we will provide substantial new ESG disclosures pursuant to the SASB framework for homebuilders. If you're familiar with SASB and the types of metrics and disclosure topics they favor, you'll know this has taken a significant effort to prepare, and it won't just be a glossy marketing report. The bottom line is that we believe extending our ESG leadership position will provide real value for each of our stakeholders, and we are excited about adopting new processes and products to enhance the sustainability and resiliency of our business. With that, I'll turn the call over to Dave to walk through our results and expectations in more detail.

Thanks, Alan, and good afternoon, everyone. Turning to slide nine, we outline the detailed results for fiscal 21, In the appendix, we include a comparable slide highlighting results for the fourth quarter. For the full fiscal year, we generated net income of $122 million, or just over $4 of earnings per share, which benefited from $12 million of energy-efficient tax credits. Excluding these tax credits, our earnings per share would have been $3.61, more than double the prior year. Adjusted EBITDA was about $263 million, up nearly 30% versus the prior year. Home building revenue remained relatively flat versus the prior year, as the benefit from higher ASPs offset a modest decline in closings. Gross margin, excluding amortized interest, impairments, and abandonments, was up about 200 basis points to 23%. SG&A as a percentage of total revenue decreased 50 basis points to 11.4%. Interest amortized as a percentage of home building revenue was 4.1%, down 40 basis points as we benefited from lower interest incurred. And our tax expense was about $22 million for an average annual tax rate of 15%. This rate was lowered by energy efficient tax credits, primarily related to homes closed between fiscal 18 and fiscal 20. Turning now to our expectations for the first quarter of this fiscal year. Average monthly sales pace should be in the high twos, which represents an increase relative to our historical first quarter average over the past five years. Community count is expected to be around 115, essentially flat sequentially. Closings should be between 1,000 and 1,050, reflecting extended cycle times and our emphasis on delivering a spectacular customer experience. ASP should be in the high $430,000 range. Gross margin should be up between 125 and 150 basis points versus the same period last year. SG&A on an absolute dollar basis should be up about $4 million. Land sale and other revenue should be about $7 million with a margin of about 50%. Within the ranges we provided for closings and margins, EBITDA should be above $50 million or up around 15%. Interest amortized as a percentage of home building revenue should be in the mid threes and our tax rate should be approximately 25%. While precision in EPS forecasting is difficult, we expect earnings per share to be up at least 50% versus the same period last year. Looking forward to the full fiscal year, We expect to grow EBITDA by more than 10% in fiscal 22 and earn more than $5 per share. Our improved profitability will be driven by the following factors. A significant increase in our average sales price to about $450,000, up over 10% versus fiscal 21. More than 100 basis points of operating margin improvement arising from a combination of increased gross margin and lower SG&A as a percentage of total revenue. interest amortizes a percentage of home building revenue in the low 3% range as the benefit from our efforts to lower our cash interest expense continue to materialize. We ended the fourth quarter with nearly $500 million of liquidity comprised of unrestricted cash of approximately $250 million and nothing outstanding in our revolver. We have no significant maturities until 2025 and a clear path to bring debt below $1 billion in fiscal 22. Our substantial deleveraging, combined with higher earnings, has led to significantly better credit metrics for our business. This trend should continue as we move through fiscal 22, and by year end, we anticipate our net debt to EBITDA will be in the low twos and our net debt to net cap in the 40s. In the appendix to this presentation, we provided a longer-term view of our improvement in these statistics, which we've accomplished while growing the profitability of our business. We spent over $245 million on land and development in the quarter, bringing our full year total spend to almost $600 million, up from less than $450 million in fiscal 2020. This increased land spending, combined with our efforts to increase the percentage of our lots controlled through options, has allowed us to grow our active lot position to over 21,000 lots. Looking forward, we expect to again increase our spend on land acquisition and development in fiscal 22, which should generate at least 10% growth in our total lot position. As you can see on slide 12, we've already driven our total active lot position back to a level that supported a much higher community count. To further demonstrate the relationship between growth in our lot position and our community count, on slide 13, we've shown this data on an index basis. In addition, we've also lagged our community count by one year to roughly reflect reflect the normal timing difference between controlling new lots and opening communities. As we plan for where community count is headed, there are a couple important things to consider. In fiscal 21, the growth in our lot position was driven by the approval of more than 100 communities for acquisition. This was about double the run rate of new community approvals in fiscal 19 and 20 and did not reflect any material change in community size. But, As you would expect, the supply chain disruptions that we're experiencing are also impacting the timing of land development activity. As such, the lag we typically experience from the time of controlling new lots to activating new communities has extended and become less predictable. Accordingly, we have very good visibility into a substantial lift in our community count, which will start later this year and accelerate during fiscal 23. On a final note, our profitability expectations for fiscal 22 are not meaningfully dependent on new community openings. With that, let me turn the call back over to Alan for his conclusion.

Thanks again, Dave. Fiscal 21 was a very successful year, but it's in the rearview mirror, and in fact, I'm even more excited about fiscal 22. Here's why. The housing market remains quite strong, with demographically driven demand confronting structural supply constraints. We have a terrific backlog to jumpstart our year, giving us visibility into improvements in pricing and margins to be realized in the near term. We're also investing for the future with a growing but risk-balanced land position, creating longer-term growth opportunities. We have the best balance sheet we've had in more than a decade with far less debt and plenty of liquidity. And we're expanding our capabilities across the entire spectrum of ESG, resulting in clear, easily observed achievements. Taken together, these factors have us better positioned than ever to create growing and durable value for shareholders, customers, partners, and employees and positively impact every community where we operate. Ultimately, credit for our results and our optimism about our future prospects is attributable to our team. I am sincerely grateful for their dedication, their efforts, their resiliency, and their success. That's why I remain confident we have the people, the strategy, and the resources to accomplish our goals in the coming years. With that, I'll turn the call over to the operator to take us into Q&A.