M.D.C. Holdings, Inc.

Hello, and welcome to the MDC Holdings 2022 First Quarter Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a 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 touchtone phone. To throw your question, please press star, then two. Please note, today's event is being recorded. I now would like to turn the conference over to Derek Kimmerle, Vice President and Corporate Controller. Mr. Kimmerle, please go ahead.

Thank you. Good morning, ladies and gentlemen, and welcome to MDC Holdings 2022 First Quarter Earnings Conference Call. On the call with me today, I have Larry Meisel, our Executive Chairman, David Mandrich, Chief Executive Officer, and Bob Martin, Chief Financial Officer. At this time, all participants are in a listen-only mode. After finishing our prepared remarks, we will conduct a question and answer session, at which time we request that participants limit themselves to one question and one follow-up question. Please note that this conference is being recorded and will be available for replay. For information on how to access the replay, please visit our website at mdcholdings.com. Before turning the call over to Larry and David, it should be noted that certain statements made during this conference call, including those related to MDC's business, financial condition, results of operation, cash flows, strategies and prospects, and responses to questions, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that may cause the company's actual results performance, or achievements to be materially different from the results, performance, or achievements expressed or implied by the forward-looking statement. These and other factors that could impact the company's actual performance are set forth in the company's first quarter 2022 Form 10Q, which is expected to be filed with the SEC today. It should also be noted that SEC Regulation G requires that certain information accompany the use of non-GAAP financial measures. Any information required by Regulation G is posted on our website with our webcast slides. And now I will turn the call over to Mr. Meisel for his opening remarks.

Good morning, and thank you for joining us today as we go over our results for the first quarter of 2022, provide our thoughts on current housing market conditions and give some insight into the future of our company. MDC Holdings reported earnings of $2.02 per diluted share for the quarter, a 34% increase over the first quarter of 2021. This substantial year-over-year increase in earnings per share was largely driven by 19% rise in home sales revenue and a 380 basis point expansion in home sales gross margins to 25.7%. Our teams did an excellent job delivering homes during the quarter in what continues to be a challenging supply chain environment. As we came in near the high end of our stated guidance with new home deliveries of 2,233, Average sales price on homes closed in the quarter trended higher, rising 16% on a year-over-year basis as the combination of healthy demand and limited supply continued to provide for a favorable pricing environment at our communities. This positive industry dynamic also led to a continuation of the healthy order activity we've experienced over the last several quarters. As we sold an average of 5.4 homes per community per month in the quarter, demand was broad-based from both a geographic and pricing standpoint. With the millennial age buyer continued to be the driving force behind our sales success, This large population of buyers has reached a prime phase in their lives when home ownership became a much higher priority, whether due to changing family dynamics, a chance to build equity, or the desire to put down roots. Another driving factor that we have witnessed in our markets is the ongoing migration from high to low cost areas by both companies and individuals. Factors including taxes, affordability, and overall quality of life are weighing more heavily into where business operates. While the emergence of online and remote work capabilities have given employees more freedom to live and work from where they choose. At MDC, we have positioned our company to take advantage of these trends by investing in the markets that are benefiting from this migration and by opening communities that appeal to millennials with innovative homes at more affordable prices. We believe that the demand forces we see today are long-term in nature and will continue to support the new home market for the foreseeable future. After years of historically low mortgage rates, buyers are now being faced with higher financing costs for their prospective home purchase. As the average rate on 30-year fixed rate mortgage has moved approximately 200 basis points since the beginning of the year. While current mortgage rates are still attractive from a long-term historical perspective, It is natural to expect that this move higher may have a near-term impact in our business as buyers adjust to this new reality. Long-term, however, we believe that the demand factors in place coupled with a lack of supply in our markets keep the new home construction market on a solid footing. In addition, it is important to note that while the absolute cost of owning a home has gone up with the rise in interest rates, the relative cost has stayed relatively stable given the concurrent rise in monthly rents across the country. With a strong balance sheet, a seasoned leadership team, and a product profile that is tailored to today's buyers, MDC is in a great position to build on the track record of success and to adjust whatever changing rate environment may bring. We continue to invest in the future of our company while taking a long-term risk adverse approach to the business. Confidence we have in our ability to fund our operations and operate effectively through the housing cycle is borne out by our industry-leading dividend, which yields above 5% based on recent price levels. For those investors who believe in long-term viability of the housing market and who are seeking a healthy dividend, we believe MDC is a compelling value. With that, I'd like to turn the call over to David Cronin. who will provide more details on our operations this quarter.