Century Communities, Inc.

Greetings. Welcome to Century Community's fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. A 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 over to Hunter Wells, Vice President of Investor Relations for Century Communities. Thank you. You may begin.

Good afternoon. Thank you for joining us today for Century Communities Earnings Conference Call for the fourth quarter and full year ended December 31st, 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 2021 and to be filed 2021 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 Franceskin, Chairman and Co-Chief Executive Officer, Rob Franceskin, President and Co-Chief Executive Officer, and David Messinger, Chief Financial Officer. Following today's prepared remarks, we will open the line for questions. With that, I will turn the call over to Dale.

Thank you, Hunter, and good afternoon, everyone. Our record fourth quarter results helped propel Century to the most successful year in our history as we continue to experience strong consumer demand for our affordable new homes across our entire 17 state footprint. We delivered 2,915 homes, the most homes we have ever delivered within a quarter, culminating in a record 10,805 closings for the year, generating over $4.2 billion in total revenues, a 33% increase. The fourth quarter was not only Century's strongest quarter in terms of closings, but we also achieved a number of additional milestones in quarterly records, including $1.2 billion in home building revenues, an increase of 23%, and home sales gross margin of 25.9%, our highest since going public. We accomplished this while concurrently improving our SG&A leverage to 9.3%, the lowest in company history, and the fourth quarter in a row of single-digit SG&A ratio, helping to drive our eighth sequential quarter of pre-tax margin improvement, which expanded 530 basis points to 17.6%. Fourth quarter net income increased 80% to a record $165 million, or $4.78 in earnings per diluted share, our highest quarterly net income and EPS. Net new contracts increased to a fourth quarter record, 2,700 homes, with our sales pace accelerating each month through the end of the year, reflecting not only the resiliency we are experiencing in terms of demand, but also our ongoing sales momentum into 2022. The most significant constraint on our achievable sales pace remains the number of homes we have available for purchase. This strong demand environment is further evidenced by the significant progress made in growing our backlog, ending the year with 4,651 sold homes valued at $1.9 billion, increases of 35% and 45% respectively. Our 2021 home building revenues also grew by 34% to $4 billion and was achieved in parallel with record gross margin expansion of 580 basis points to 24.2% and a 160 basis point improvement in SG&A leverage to a record 9.7%, fueling Century Community's most profitable year ever. Throughout 2021, we were able to increase our gross margin percentage in each successive quarter, resulting in a 142% year-over-year increase in net income to $499 million, or $14.47 in earnings per diluted share, and driving return on equity to 33%, our 11th quarter of sequential improvement. 2021 also represented our 19th consecutive year of profitability. Housing demographics and buyer demand remain strong, and we are well positioned to benefit from the ongoing shortage of both new and resale homes available for purchase. In the fourth quarter, across our more than 40 markets, the estimated months of supply decreased to an average of approximately one month. well below the current national average of 2.4 months. This constrained supply of available homes is occurring at a time when millions of millennials, the largest generational group in the country, are reaching the prime age for new household formation, driving demand, and further exacerbating the shortage. By 2025, it is expected that an additional 6.4 million new households will be formed as millennials continue to age into their home buying years. To better position Century and the appeal of our homes to this digitally focused generation, we recently announced the expanded capability of our industry first buy online experience, which allows home buyers to not only reserve, but fully complete a new home sales contract over the internet. While this program has been in place for several years within the Century Complete brand, it is now available for all Century homes sold across our expansive national footprint. The streamlined process is easily completed, providing the convenience of online shopping and enabling buyers to purchase a home anytime, 365 days a year. The program's significant potential was recently demonstrated when the BuyOnline platform was used to purchase a home on Thanksgiving Day, one of the few days a year our sales offices are closed. Our record results for the fourth quarter and full year reflect the power of our business model, the strong foundation we have built, and our ability to overcome the impact of higher input costs, supply chain disruptions, and a tight labor market. In 2021, we bolstered cash flows as reflected by a 103% increase in EBITDA to a company record $718 million and improved our net home building debt to net capital ratio to 26.3%, all while significantly growing the investment in our business and initiating a quarterly cash dividend to reward our shareholders. Stockholders' equity also increased 38% to $1.8 billion, strengthening our balance sheet and providing us with maximum flexibility to manage our organization and capitalize on opportunities as they arise. The incredibly talented teams across our business have done a fantastic job of navigating the construction challenges the industry is experiencing. It is their hard work dedication and commitment that enabled us to deliver on our objectives for the year, and they remain sharply focused on the continued execution of our strategy to drive organic growth and increase our presence in existing markets as well as future ones. This year will celebrate the 20-year anniversary of our founding. As we enter this milestone year, We are looking forward to capitalizing on the tremendous growth opportunities ahead of us. I'll now turn the call over to Rob to discuss our business in more detail.