Century Communities, Inc.

Community's first quarter 2022 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Scott Dixon. Thank you and over to you, sir.

Good afternoon. Thank you for joining us today for Century Communities Earnings Conference call for the first quarter 2022. Before the call begins, I would like to remind everyone that certain statements made during 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 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, Rob Francescan, 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, Scott, and good afternoon, everyone. We're extremely pleased with our results this quarter, which included the achievement of numerous company records and successes as we continue to experience strong consumer demand throughout the quarter for our affordable new homes across our entire 17-state, 45-plus market footprint. Despite the continued headwinds from municipal and utility delays, supply chain disruptions, and labor shortages, we delivered 2,348 homes for $1 billion in revenues with a gross margin of 28.3% and an adjusted gross margin of 29.5%, both all-time company records. These home deliveries produced record first quarter pre-tax income of $189 million and a pre-tax income margin of 18.6%, a 560 basis point increase from the prior year quarter, and our eighth sequential quarter of improvement. Net income in the first quarter increased 40% to $142.5 million, or $4.20 in earnings per diluted share, both first quarter records. During the quarter, we executed 2,944 net new contracts, with the number of sales increasing each month as the quarter progressed, even as the pace of interest rate increases accelerated. Our backlog at quarter end consisted of 5,247 sold homes valued at $2.2 billion, increases of 28%, and 37%, respectively, both company records. Our spec-based operating strategy enabled us to produce another quarter of strong results with increased gross and pre-tax income margins, even as we dealt with higher material and labor costs. Despite these challenges, we increased EBITDA by 34% to our first quarter record, $204 million. We also increased our investment in homes under construction, land under development, and our quarterly dividend while repurchasing more than a million shares of our common stock, reducing our outstanding share count to the lowest levels since the third quarter of 2019. We are continuing to see delays in land development and home starts due to the various factors facing the industry. All homes that we offer for sale are generally being sold before the home gets completed, as the potential buyer pool still exceeds the supply of available homes. As a spec builder, we're accustomed to having completed homes for immediate sale and move-in. At quarter end, we only had 17 completed homes across our 17 states that could be sold for an immediate move-in. The elevated interest rate environment has not eliminated the demand drivers propelling the housing market over the last several years, including the ongoing shortage of both new and resale homes available for purchase, millions of millennials, the largest generational group in the country, reaching the prime age for new household formation, and the increased desire for home ownership brought about by the pandemic. We believe the most significant impact of higher interest rates will not be on our ability to sell homes, but on our ability to raise prices as much or as frequently as we have done in the recent past. As the housing market continues to normalize from the unsustainable pricing power that has existed for the last year or so, we expect to be back to the typical homebuilding scenario of raising prices in some subdivisions and offering certain incentives in others. We have a seasoned management team and strong operational fundamentals and are confident in our abilities to make this transition. Our record-setting first quarter results would not have been possible without the perseverance, ingenuity, and dedication of our talented teams across the country. They continue to solve problems daily with the goal of providing our customers a home for every dream, and we want to thank them for their contributions. I'll now turn the call over to Rob to discuss our business in more detail.