Century Communities, Inc.

Welcome to Century Community's second quarter 2021 earnings conference 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. Please note, this conference call is being recorded. I will now turn the conference call over to Hunter Wells, Vice President of Investor Relations for Century Community. Thank you. You may begin.

Good afternoon. Thank you for joining us today for Century Community's earnings conference call for the second quarter ended June 30th, 2021. Before the call begins, I would like to remind everyone that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward-looking statements. Certain of these risks and uncertainties can be found under the heading Risk Factors in the company's most recently filed annual report on Form 10-K, as supplemented by our other SEC filings. Our SEC filings are available at www.sec.gov and on our website at www.centurycommunities.com. The company undertakes no duty to update any forward-looking statements that are made during this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call. The company's presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Management will be available after the call should you have any questions that did not get answered. Hosting the call today are Dale Francescan, Chairman and Co-Chief Executive Officer of Rob Francescan, Co-Chief, Executive Officer and President, and David Messinger, Chief Financial Officer. Following today's remarks, we will open up the line for questions. With that, I will turn the call over to Dale.

Thank you, Hunter, and welcome everyone to our quarterly conference call. We're pleased to report our exceptional start to the year has continued, resulting in record second quarter results and our most profitable quarter ever. In the second quarter, we generated over a billion dollars in home sales revenues, a 34% increase, and the highest ever achieved in a single quarter. Net new home contracts increased 17% to 3,120 homes, driven by a 56% increase in sales from our Century Complete brand. And home deliveries increased 12% to 2,771 homes, both of which are quarterly records. Net income improved 207% to $118 million, and pre-tax income improved 204% to $152 million, both company records. We are extremely pleased with the health of our balance sheet. Stockholders' equity increased to $1.5 billion from $1.1 billion and our net home building debt to net capital ratio improved to 23% compared to 37.5%, liquidity of 1.3 billion. We ended the quarter with a backlog of 4,446 homes, a new record, valued at $1.8 billion, increases of 60% and 83% respectively. Given our disciplined business model, over 96% of these homes had already been started at quarter end, and across our two brands, less than 15% of our home deliveries were sold as pre-sales. For new second quarter sales, only 10% of the homes were pre-sales. There are many benefits to this model, particularly during periods of increased material and input costs, such as what we recently experienced with lumber. Spec homes also simplify the design process for homebuyers, promote shorter build times, and accelerate the cash flow and profits recognized upon the closing of the home. Selling homes already under construction provides better visibility into costs, protects our margins, and drives increased profitability to the bottom line. This meaningful focus on move-in ready homes has enabled Century to capture additional margin expansion, culminating in second quarter margins of 23.9%, up 700 basis points from 16.9% last year, and our fourth consecutive quarter of sequential margin improvement. The strong order activity we are experiencing reflects a healthy pricing environment supported by robust demand and tight inventory. While we expect this level of obtainable price increases to moderate at some point in the near future, it will be occurring at a time when certain material costs, such as lumber, are decreasing. As we have grown and scaled our organization, we have maintained disciplined controls on all of our costs. This focus resulted in SG&A as a percent of home sales improving to 9.9%, a 170 basis point improvement over last year. Our emphasis on controlling costs while growing our top line has resulted in increased profitability and a second quarter return on equity of 28%, our ninth consecutive quarter on quarter improvement. In May, we announced the initiation of a quarterly cash dividend of 15 cents per share, an amount that allows us to reward our stockholders with cash while maintaining sufficient cash levels as we simultaneously invest in our future growth and build on our business momentum. Looking ahead, we're committed to maintaining a disciplined approach to capital allocation and expect to drive further value creation for our stockholders. We're pleased with our tremendous progress, not only in the second quarter, but since going public in 2014. In May, we were again ranked the ninth largest home builder by the annual Builder 100 list. Demand for new homes is at record levels, supported by industry tailwinds such as low interest rates, increasing household formation, and a shortage of homes available at affordable price points. Across the majority of our markets, the months of supply of homes for resale is well below the current U.S. national average. Our enviable footprint continues to benefit from domestic migration to the smile states. These positive industry dynamics, coupled with our focus on the entry-level homebuyer, provide us with exciting opportunities and are a strong catalyst for continued growth across both our Century Communities and Century Complete brands. With that, I'll turn the call over to Rob to discuss our business in more detail.