KB Home

Good afternoon. My name is Alex and I will be your conference operator today. I would like to welcome everyone to the KB Home 2022 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the company's opening remarks, we will open the lines for questions. Today's conference call is being recorded and will be available for replay at the company's website, kbhome.com, through April 23rd. Now, I would like to turn the call over to Jill Peters, Senior Vice President, Investor Relations. Jill, you may begin.

Thank you, Alex. Good afternoon, everyone, and thank you for joining us today to review our results for the first quarter of fiscal 2022. On the call are Jeff Mesger, Chairman, President, and Chief Executive Officer, Rob McGibney, Executive Vice President and Chief Operating Officer, Jeff Kaminsky, Executive Vice President and Chief Financial Officer, Bill Hollinger, Senior Vice President and Chief Accounting Officer, and Thad Johnson, Senior Vice President and Treasurer. During this call, items will be discussed that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results and the company does not undertake any obligation to update them. Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward-looking statements. In addition, a reconciliation of the non-GAAP measures referenced during today's discussion to their most directly comparable GAAP measures can be found in today's press release and or on the investor relations page of our website at kbhome.com. And with that, let me turn the call over to Jeff Mezger.

Thank you, Jill. Good afternoon, everyone. We delivered solid results in our first quarter that drove year-over-year growth in many key metrics, including revenues, operating margin, and diluted earnings per share. Our revenues were up 23%, and we produced significant margin expansion, increasing our operating margin to over 12%. We overcame the impact from lower than expected deliveries, which I will address momentarily, to drive a 44% increase in our diluted earnings per share to $1.47. With our backlog value expanding 55% year-over-year to $5.7 billion, its highest level in 15 years, we have sold almost all the homes we need to achieve our projected $7.4 billion in revenues. We continue to focus on managing to our construction capabilities by aligning our sales to our starts. Over the past 12 months, we have started roughly 16,800 homes. We have 46% more homes in production at the beginning of the second quarter relative to the prior year, and with these homes being further along in their construction cycle, we believe we are well-positioned to achieve our guidance this year. Market conditions are strong, and along with our expected growth in community count throughout the remainder of the year, we believe we have the foundation in place to drive further scale and profitability growth in 2022 and beyond. I want to provide some context for our shortfall in deliveries. Then I will ask Rob to go a little deeper into the discussion. The guidance that we provided in January assumed that we would at least hold fourth quarter cycle times. While we were not counting on relief from the supply chain challenges, neither did we expect that they would worsen. We underestimated the degree to which the Omicron variant would exacerbate an already constrained supply chain and workforce across our trade partners, municipalities, utility companies, and even our own employees. While we take responsibility for our deliveries being below our prior expectations, at the same time, we acknowledge that the variant was a significant contributing factor. In the last six weeks of our first quarter, we lost approximately two weeks in our construction cycle, primarily in the finishing stages, while our foundation and frame segments held to the fourth quarter's timelines. At a run rate of about 250 deliveries per week, this two-week extension in build times was meaningful. Our team has adapted to the changing conditions, re-sequencing construction when necessary. We continue to be proactive to the extent possible to mitigate the impact of these issues going forward and are committed to regaining our previous construction efficiency over time. Let me turn it over to Rob to share some details. Rob?