M.D.C. Holdings, Inc.

and welcome to MDC Holdings 2022 second 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 a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Derek Kimmerle, Vice President and Corporate Controller. Please go ahead.

Thank you. Good morning, ladies and gentlemen, and welcome to MDC Holdings 2022 Second 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 statements. These and other factors that could impact the company's actual performance are set forth in the company's second quarter 2022 Form 10-Q, 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.

Thank you for joining us today as we go over our results for the second quarter of 2022, provide an update on current business conditions, and discuss the outlook for our company. MDC reported earnings of $2.59 per diluted share in the second quarter of 2020, representing a 23% increase over the second quarter of 2021. Home sales gross margin for the quarter improved 370 basis points year-over-year to 26.8%. New home deliveries and average sales price came in at the high end of our previously stated guidance for the quarter, as our team did an excellent job overcoming construction delay and delivering homes in what has become a more difficult operating environment. We also ended the quarter with a solid backlog worth over $4.4 billion. putting us in a great position to continue to deliver strong revenues and operating profits as we enter the back half of 2022. We are extremely pleased with our financial and operating results for the second quarter. Our order results fell short of our expectations. Beginning around mid-May, we began to see a slowdown in traffic and order activity, which became more pronounced as the quarter progressed. In addition, our net order results were negatively impacted in increase in cancellations as a higher number of buyers and backlog were either unwilling or unable to move forward with their purchase. We believe this negative shift in buyer sentiment was a natural reaction to the macro headwinds that have become increasingly difficult for buyers to overcome in the quarter, including a sharp rise in mortgage rates, surging inflation, and an overall uncertainty surrounding the health of our economy. Our sense is that these demand headwinds will persist for at least the remainder of the year, which will likely put a damper on our order results as both buyers and home builders adjust to this new reality. Despite these near-term challenges, we remain confident in the long-term outlook for our industry and our company. We believe the demand drivers that propel our industry over the last few years continue to exist, including a large population of millennials entering their prime home buying years, baby boomers relocating to adjust their lifestyles, and migration trends from high to low cost areas of the country. In addition, While we have seen a recent increase in new and existing home inventories, they remain both well below historic levels, while rent in many markets continue to rise. MDC is well positioned to benefit from these industry trends over the long term, thanks to our affordable product focus and our geographic exposure. Our home building operations are in some of the most attractive home building markets in the country with favorable job to permit ratios, strong employment bases, and rising incomes. We have spent the last several years retooling our new home offerings to address affordability concerns in our markets and to target a broader pool of buyers. These homes are in well-located areas of the market and feature some of the quality and craftsmanship that Richmond American Homes are known for, but at a scaled-down footprint and price point. While no builder is immune to the broader market forces that currently affect our industry, we believe that being in the right markets with the right type of product will lead to better results over the long term and give us a distinct advantage over many of our competitors. Another advantage our company has is the well-capitalized nature of our balance sheet, which allows us to operate from a position of strength during this period of uncertainty. We entered the quarter with a debt-to-capital ratio of 34%, and a net debt to capital ratio of 24%. The total liquidity stood at $1.74 billion at the end of the quarter, with $590 million in cash and cash equivalents, and $1.14 billion available under our unsecured revolving credit facility. With a low leverage profile, and ample liquidity, we're well positioned giving the current level of market uncertainty and can potentially take advantage of strategic opportunities should they arise. We've always run our company to be successful through the entirety of a housing cycle, not just in the good times. This means we stay disciplined in our acquisition of new land deals, adhere to our build-to-order business model, and limit the amount of speculative inventory in our communities. While this discipline may curtail some of the upside during the market peaks, it limits our exposure during the market troughs. It allows us to pay an industry-leading dividend of $2 per share on an annualized basis, which equates to a 5.5% yield based on recent price levels. We believe these attributes, along with the strength of our balance sheet and the experience of our seasoned management team, are factors long-term investors should consider when evaluating an investment in the home building space. With that, I'd like to turn the call over to David, who will provide more detail on our operational performance this quarter.