Beazer Homes USA, Inc.

Welcome to the Beezer Homes Earnings Conference Call for the first quarter ended December 31st, 2025. Today's call is being recorded and a replay will be available on the company's website later today. In addition, PowerPoint slides intended to accompany this call are available in the Investor Relations section of the company's website at www.beezer.com. At this point, I will turn the call over to David Goldberg. Senior Vice President and Chief Financial Officer.

Thank you. Good afternoon and welcome to the Beezer Homes Conference Call discussing our results for the first quarter of fiscal 26. Joining me today is Alan Merrill, our Chairman and Chief Executive Officer. After our prepared commentary, we will open up the line and Alan and I will be happy to take your questions. Before we begin, you should be aware that during this call we will be making forward-looking statements. Such statements involve known and unknown risk uncertainties, and other factors described in our SEC filings, which may cause actual results to differ materially from our projections. Any forward-looking statement speaks only as to the date this statement is made. We do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. New factors emerge from time to time, and it is simply not possible to predict all such factors. I will now turn the call over to Allie.

Thank you, Dave, and thank you for joining us on our call this afternoon. We began fiscal 26 in a stubbornly soft demand environment, but stayed focused on actions within our control that can drive timely and measurable progress toward our 2026 and multi-year goals. Our efforts were concentrated on proving the value of our differentiation, reducing direct construction costs, and enhancing balance sheet efficiency. While most metrics came in at or below our expectations, the December quarter is always our slowest. We have plenty of time to make up for the shortfall. While caution is certainly warranted, we have paths to grow both full-year EBITDA and book value per share. Here's how. First, since mid-December, we've seen better traffic and buyer engagement. In fact, January sales pace has been in line with the prior year after eight quarters of year-over-year pace compression. Second, we have tangible catalysts in place that will drive higher home building margins in the back half of the year. And third, we're managing our balance sheet and land spend to accelerate highly accretive share repurchases. Let's take these one at a time. On sales, we're not just hoping market conditions continue to improve. We're also benefiting from the new branding and lead generation efforts we launched in the fall. The focus of our enjoy the great indoors message is a more comfortable and healthier home and dramatically lower utility bills. This is a message other builders can't deliver and it amounts to thousands of dollars in savings per year for most customers. We're also extending our leadership in utility savings by introducing solar included homes in many communities. This makes the full potential of zero energy ready homes an easy reality for our buyers. No complicated sizing decisions, no cumbersome leases or guessing at payback periods. From day one, our solar included homes reduce monthly utility bills to little more than a basic service charge. Now, there are two keys for making solar work for homeowners without tax credits or incentives. First, you must significantly reduce a home's energy consumption in order to shrink the size of the system. All of our homes do this. Second, you have to eliminate the many inefficiencies that have existed in residential solar business models. Working with our partners, we've been able to reduce installation costs from more than $4 per kilowatt hour to less than $2, and we know we can drive it even lower. Results thus far are promising. Homebuyer enthusiasm has been strong, and margins in our fully solar communities are among the very best in the company. This is exactly the kind of offering that separates us from other builders in meeting the affordability challenge. On profitability, last quarter we laid out a series of specific catalysts for about 300 basis points of margin expansion between the first quarter and year end, and these remain firmly intact. So far, we've reduced labor and material construction costs by more than $10,000 per home, or nearly 200 basis points, which should be reflected in our third and fourth quarter results. By the fourth quarter, we expect another 100 basis points of margin expansion from the combination of positive mixed shifts within our existing communities and the increase in contributions of new communities. These newer communities, which we have defined as those that started selling in or after April 2025, were just over 10% of first quarter revenue, but are projected to account for about 50% of fourth quarter revenue. ASPs and margins on sales in these communities are both substantially above existing communities. Finally, we're seeing a modest shift toward to-be-built sales so far this year, which if sustained would be another margin catalyst. Turning to capital allocation, our strategy remains disciplined and aligned with our multi-year goals. Within our portfolio, we continue to sell non-strategic assets and sub-markets that no longer match our differentiated product strategy or were intended for sale when we bought them. We now expect around $150 million in proceeds, increasing balance sheet efficiency and freeing up capital for higher return uses, particularly share repurchases. During the first quarter, we bought back $15 million of stock, bringing our trailing 12-month total to $48 million or about 7% of our shares. We have $72 million remaining on our share repurchase authorization, and we expect to fully execute it this year. Selling land above book value to fund share buybacks below book value is obviously highly accretive for shareholders. Of course, we evaluate all of our actions through the lens of achieving our multi-year goals for growth, deleveraging, and book value per share accretion. With 168 communities at quarter end and 23,500 active lots under control, we remain on track to reach our greater than 200 community count goal by the end of fiscal 27, even accounting for the impact of our planned asset sales. We are committed to deleveraging to the low 30% range by the end of fiscal 27. With our plan to accelerate share repurchase activity, however, net leverage is likely to be flat year over year at or just under 40% at our fiscal year end. Finally, book value per share finished the quarter above $41, up versus last year. Our goal remains to generate a double-digit CAGR and book value per share through the end of fiscal 27 through both profitability and share repurchases, allocating $72 million to share repurchases through the rest of this year will certainly drive book value per share growth. Even in a challenging market, we're determined to move profitability and returns higher by capitalizing on our differentiated product strategy, reducing labor and material costs, driving toward a higher margin community mix, and allocating capital to maximize shareholder value. With that, I'll turn the call to Dave.