KB Home

And now I would like to turn the call over to Jill Peters, Senior Vice President, Investor Relations. Thank you, Jill. You may begin.

Thank you, John. Good afternoon, everyone, and thank you for joining us today to review our results for the fourth quarter of fiscal 2023. On the call are Jeff Mezger, Chairman, President, and Chief Executive Officer, Rob McGibney, Executive Vice President and Chief Operating Officer, Jeff Kaminski, 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 measure of adjusted housing gross profit margin, which excludes inventory-related charges, and any other non-GAAP measure referenced during today's discussion to its most directly comparable gap measure can be found in today's press release and or on the investor relations page of our website at kbhome.com. And with that, here is Jeff Mezger.

Thank you, Jill. Good afternoon, everyone, and Happy New Year. We finished the year strong with a fourth quarter performance that exceeded our guidance across our key financial metrics. We produced total revenues of $1.7 billion and diluted earnings per share of $1.85. Our outperformance on closings at just over 3,400 homes was driven primarily by our continued improvement in build times, along with a strong backlog of buyers who are committed to a timely closing when their home is completed. With respect to margins, they remain solid at just under 21% in gross and 11% in operating income margins. In addition, we returned nearly $180 million of capital to shareholders, primarily through share repurchases. These results contributed to a healthy financial performance for 2023. We delivered more than 13,200 homes, driving revenues of $6.4 billion and diluted earnings above $7 per share. Our top line? together with an operating margin exceeding 11% and the repurchase of 11% of our shares outstanding at the start of the year contributed to 15% growth in book value per share to over $50. The strength of our results is notable when considering that our initial 2023 revenue guidance was about 5.5 billion equating to roughly 11,400 deliveries given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving, with rates having declined and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment, and wage growth, are those that we believe will sustain the longer-term health of the housing market. Demographics have been and will continue to be a significant factor with the largest generational cohorts, millennial and Gen Z, demonstrating a strong desire for homeownership. One of our most important operational achievements of this past year was a significant reduction in our build times, which favorably impacted our business in several respects. Rob will share the details in a moment, but for now, I will highlight the shorter construction times helped to drive the outperformance in our deliveries and revenue relative to our expectations. In addition, the quicker conversion of homes and production to deliveries has unlocked a meaningful amount of cash. Going forward, faster build times will boost our selling efforts as a built-to-order home with quicker delivery dates becomes even more compelling to a home buyer, and the cost to lock the interest rate on the mortgage for a shorter period of time will be lower. We begin 2024 with a healthy backlog of more than 5,500 homes valued at approximately 2.7 billion. Typically, our ending backlog represents about 40% of our subsequent year's deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in 24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes. We have nearly 7,000 homes in production of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community and range of net orders for our 2023 fourth quarter based on normal seasonality, assuming then current market conditions. As the quarter progressed, interest rates increased each week from late September through the end of October which over this period significantly curbed demand and impacted our net order results. We elected not to take a sales at any price approach and pursue lower margin orders in a softer demand period as we did not need additional orders to achieve our fourth quarter delivery target. And we're also well positioned for deliveries in our 2024 first quarter. As interest rates have now declined, since the end of our fiscal year, demand has improved significantly. For the first five weeks of our first quarter, our net orders are 904 as compared to 403 in the comparable period of the prior year. Our orders in December were higher than November, which is unusual given that December is typically a slower sales month. To us, this speaks to the pent-up demand for homeownership. That said, on a year-over-year basis, the comparison is somewhat distorted due to the low net orders in the prior year period. While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable. We believe we are well positioned to respond to this strengthening in buyer demand given our product positioning and price points as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update. Rob.