KB Home

Good afternoon. My name is John, and I will be your conference operator today. I would like to welcome everyone to the KB Home 2026 first quarter earnings conference call. All participant lines are in a listen-only mode. Following the company's opening remarks, we will open the lines for questions. The conference call is being recorded, and a replay will be accessible on the KB Home website until April 24, 2026. And I will now turn the call over to Jill Peters, Senior Vice President, Investor Relations. Thank you, Jill. You may now begin.

Thank you, John. Good afternoon, everyone, and thank you for joining us today to review our results for the first quarter of fiscal 2026. On the call are Jeff Mezger, Executive Chairman, Rob McGibney, President and Chief Executive Officer, Rob Dillard, 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, an explanation and or reconciliation of the non-GAAP measure of adjusted housing gross profit margin as well as another 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 finally, please note all figures are based on our quarter ended February 28th and all comparisons are on a year over year basis unless otherwise stated. And with that, here's Jeff Mezger.

Thank you, Jill. Good afternoon, everyone. We are pleased that our first quarter financial results were within our guidance ranges. Operationally, our divisions continued to execute well, and we achieved our highest community count in many years, contributing to year-over-year growth in net orders. Perhaps most importantly, we have returned to a mix of sales that are predominantly built to order, which we believe will enable us to achieve 70% built to order deliveries in the second half of this year. We have a renewed focus on this core strategy as a central component in strengthening our company going forward. With the lag between sale and delivery for built-to-order homes, we expect to continue growing our backlog. A larger backlog will provide many benefits, including greater predictability in our deliveries and higher gross margins than we achieve on inventory sales, typically in the range of 300 to 500 basis points. As to the details of our first quarter results, we produced total revenues of about $1.1 billion and diluted earnings per share of 52 cents. We continue to have significant financial flexibility and remain balanced in our capital allocation, investing for growth while also returning capital to our shareholders. We repurchased 843,000 shares of our common stock at an average price below our current book value per share, which we believe is an excellent use of our cash, accreted to both our earnings and book value per share, and a factor in improving our return on equity over time. Inclusive of dividends, we returned almost $70 million in capital to our shareholders in the first quarter. In addition, we continued to expand our book value per share compared to the year-ago period to over $61. Consumers have been faced with a variety of challenges over the past two years, and the conflict in the Middle East that began at the end of February has added another layer of uncertainty. Against this backdrop and taking into consideration that our net orders in the first quarter were below the level we needed to hold our prior full-year delivery guidance, we are lowering our range for the year. Rob McGibney will provide more color on this in a moment. Before turning the call over to Rob, I want to congratulate him on his promotion. As part of our long-term succession plan, Rob assumed the role of president and chief executive officer on March 1, and I transitioned to executive chairman of the board. Rob is a proven, results-oriented leader with a deep understanding of our business gained over the past 25 years with the company. He began his career at KB Home in our Las Vegas division, historically our largest and most profitable, where he rose to division president and then continued on in roles of increasing responsibility within the company. Rob has worked side by side with me during the past five years while running our home building operations, and both the board and I are confident that he is ready to lead KB Home forward. With that, I'll turn the call over to Rob.