Century Communities, Inc.

Good day and welcome to the Century Community's first quarter earnings call. All participants will be in a listen only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch tone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Tyler Langton. Please go ahead, sir.

Good afternoon. Thank you for joining us today for Century Community's earnings conference call for the first quarter of 2024. Before the call begins, I would like to remind everyone that certain statements made during this call may constitute forward-looking statements. These statements are based on management's current expectations 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 Latest 10-K, as supplemented by our latest 10-Q and other SEC filings. We undertake no duty to update our forward-looking statements. 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. Hosting the call today are Dale Franceskin, Chairman and Co-Chief Executive Officer, Rob Franceskin, Co-Chief Executive Officer and President, and Scott Dixon, Interim Chief Financial Officer. Following today's prepared remarks, we'll open up the line for questions. With that, I'll turn the call over to Dale.

Thank you, Tyler, and good afternoon, everyone. To start, I want to welcome Scott Dixon, our Interim Chief Financial Officer, to the call. Scott joined Century back in 2013 and was most recently our Assistant Chief Financial Officer. Scott has played a key role in driving our growth over the past 10 plus years, and his direct responsibilities have included overseeing accounting, treasury, risk management, and financial planning and analysis. Turning to the quarter, we're very pleased with our first quarter results, including deliveries of 2,358 homes an increase of 23% versus the prior year period, and the second highest level of first quarter deliveries in our company's history. Our first quarter revenues of $949 million increased by 26% versus the prior year period, and our adjusted diluted earnings per share of $2.22 increased by 114%. We have continued to see strong demand for our affordable new homes and low resale inventories in our markets. Our first quarter net new contracts of 2,866 homes increased by 42% year-over-year and by 22% versus the fourth quarter, 2023. Our orders increased on a sequential basis in each month of the first quarter and our orders in the first three weeks of April are consistent with overall first quarter levels. We also experienced a meaningful improvement in absorptions with our first quarter 2024 monthly absorption rates averaging 3.8 versus 2.9 in the year-ago period and 3.1 in the fourth quarter of 2023. On a year-over-year basis, our net orders increased across all our segments, with the southeast and mountain regions posting the strongest gains at 86% and 84%, respectively. While we continue to provide incentives through rate buy-downs when necessary, we are seeing buyers adjust to higher interest rates across our platform, which has enabled us to reduce our level of incentives. Our focus on affordability positions as well for future growth and continued success as we can target the widest range of potential home buyers. In the first quarter, more than 90% of our deliveries were priced below FHA limits. Our average sales price of $391,000 remains among the lowest of the publicly traded home builders. In the first quarter, we generally matched our starts with our sales and built nearly 100% of our homes on a spec basis. This approach allows us to control our costs, maintain an appropriate supply of quick move-in homes, provide our home buyers with certainty of financing, and meet the healthy demand that we are seeing in our markets. In closing, I want to highlight that Century was recently selected is the highest ranked home builder on Newsweek's list of America's most trustworthy companies for the second year in a row. And we believe our inclusion on this list is a testament to the unwavering dedication of our team members and trade partners who consistently deliver a home for every dream. Our entire company culture and work ethic is built around consistently pairing quality, affordable homes, with a best-in-class home buying experience. So we're deeply honored to receive this recognition for the second year in a row. I'll now turn the call over to Rob to discuss our operations and land position in more detail. Thank you, Dale, and good afternoon, everyone. Given the strong demand for our new homes, we were able to reduce our incentives on closed homes to a little over 700 basis points in the first quarter 2024 from roughly 800 basis points in the fourth quarter of 2023. As we've discussed in the past, interest rate buydowns continue to be the most important incentive for our customers, given their ability to significantly lower monthly payments, a key focus for our entry-level buyer. In the first quarter, the FICO scores of our homebuyers remain healthy and consistent with levels from the fourth quarter and full year 2023. We also had continued success in controlling our costs in the first quarter. On a sequential basis, we saw a further 2% reduction in our direct construction costs across a wide range of categories on the homes we started. We have been able to achieve these reductions, even with the continued strength in the housing market, by both leveraging and expanding our trade and supply base across our national footprint. During the first quarter, our cycle times remained in the four- to five-month timeframe, after having returned to these pre-COVID historical averages in the back half of 2023. On the land front, we ended the first quarter with approximately 75,000 owned and controlled lots, a 46% year-over-year increase. The higher lot count on a year-over-year basis was driven by an increase in our controlled lots, which accounted for 58% of our total lots in the first quarter, with our number of owned lots remaining relatively static over the past two years. Additionally, at the end of the first quarter, Texas and the Southeast accounted for roughly 50% of our total lot count, up from 39% in the year-ago period, and reflective of our strategy to grow our presence in these attractive markets that are benefiting from relative affordability, strong employment, and population growth. Combined with Century Complete, These more affordable markets comprise over 70% of our owned and controlled land supply. Additionally, the strength of our relationships with third-party land developers across the Southeast, Texas, and in all of Century Complete's markets further support our land-light strategy that is focused on acquiring finished lots where possible. We ended the first quarter with a community count of 253, the highest level in our company's history, and an increase of 8% versus year-ago levels with every region we operate in experiencing growth. Century complete accounted for over 40% of our total community count in the first quarter, while the southeast and Texas combined accounted for close to 30%. During the quarter, we opened a total of 42 communities and closed 40. We also closed out a greater number of communities than originally planned in the first quarter due to our better than expected level of sales and deliveries. We continue to expect to see community count growth for the full year 2024 with the increases more heavily weighted towards the second half of the year as more new communities start to come online. I'll now turn the call over to Scott to discuss our financial results in more detail.