Forestar Group Inc.

Good afternoon and welcome to Four Star's second quarter 2023 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 store zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to Ashley Dagley, Corporate Securities Counsel for Four Star.

Thank you, John. Good afternoon, everyone, and welcome to the call to discuss Four Star's second quarter results. Thank you for joining us. Before we get started, today's call includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Although Four Star believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to Four Star on the date of this conference call, and we do not undertake any obligation to update or revise any forward-looking statements publicly. Additional information about factors that could lead to material changes in performance is contained in Four Star's annual report on Form 10-K and its most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission. Our earnings release is on our website at investor.4star.com, and we plan to file our 10Q early next week. After this call, we will post an updated investor presentation to our investor relations site under events and presentations for your reference. Now, I will turn the call over to Dan Bartok, our CEO.

Thanks, Ashley, and we appreciate you filling in for Katie this quarter. Good afternoon, everyone. As always, we appreciate your interest in Four Star and taking the time to discuss our second quarter results. I am pleased to be joined on the call today by Jim Allen, our Chief Financial Officer, and Mark Walker, our Chief Operating Officer. Our second quarter results continue to demonstrate the strength and resiliency of Four Star's unique business model. Four Star generated $301.5 million of consolidated revenues. a gross profit margin of 18.5 percent, a pre-tax profit margin of 11.9 percent, and a return on equity for the trailing 12 months of 11.7 percent. Despite a transitioning housing market, sticky inflation, and challenging comparisons to our exceptional quarter achieved a year ago, our operational discipline, manufacturing mentality, and cost management initiatives helped us maintain double-digit pre-tax profit margins and return on equity. Thank you to all of our valued team members for your efforts. Over the past five years, Four Star has undergone a remarkable transformation, becoming the largest pure-play residential lot manufacturing company in the United States. We have built a platform and assembled a team that is flexible and focused, We have further strengthened our balance sheet and look to be opportunistic in ways that will continue to build shareholder value. Our strategic relationship with B.R. Horton, America's largest builder, has helped us capture market share quickly, and we are well positioned to expand our customer base. While builders have started to increase new home starts, from our perspective, there is still uncertainty about how the rest of the year unfolds. We are continuously monitoring the market and remain flexible to quickly adjust to builder demand. What sets Forrester apart from peers is our strong capital structure, our operational flexibility, and a strong customer relationship, and most importantly, an exceptional team to execute our plans. We will continue to navigate the short-term volatility while investing wisely for our future growth and striving to maximize returns. Four Star is better positioned than ever to serve current and new customers and to continue to consolidate market share.