M.D.C. Holdings, Inc.

Hello and welcome to the MDC Holdings 2023 Second Quarter Earnings Call. 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. I would like now to turn the conference over to Derek Kimmerle, Vice President and Chief Accounting Officer at MDC. Please go ahead.

Thank you. Good morning, ladies and gentlemen. And welcome to MDC Holdings 2023 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 of 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 2023 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 2023 and provide some insight into the current market conditions and the outlook for our company. MDC reported net income of $93 million or $1.24 per diluted share for the second quarter of 2023 and driven by a delivery total of over 2,000 homes, resulting in home sales revenues of $1.1 billion. Order activity improved on a sequential and a year-over-year basis. We generated 2,167 net new orders on a sales pace of 3.1 homes per community per month. We also ended the quarter with over $1.8 billion in cash and marketable securities, giving us the necessary liquidity to reinvest in our business and increase our industry-leading quarterly dividend by 10% to $0.55 per share. Market conditions remained favorable during the second quarter as a combination of low existing home supply and a resilient economy resulted in healthy traffic trends in our communities. Buyers have adjusted to the higher mortgage rate environment and may have come to realize that the new home market provides much more in the way of quality construction, customization, and functionality as compared to existing home markets. The consistently strong traffic patterns during the quarter allowed us to scale back on many of the incentives we implemented earlier in the year, and we have begun to raise prices in communities where demand has been the strongest. Another positive development during the quarter was a noticeable improvement in building conditions. For the first time in several quarters, we achieved a sequential improvement in the average construction build time for those homes that closed in the quarter. Supply chain conditions and material availability have improved considerably since the pandemic, as we are now projecting a construction build time of under 180 days on the homes that we are starting today. A more streamlined and dependable supply chain will have a significant impact on our industry and should lead to better inventory terms and improve capital efficiency for our company. In light of the improvements we have seen in both demand and building conditions, we have become more active in the land market. In the second quarter, we approved the purchase of over 1,300 lots which go a long way towards giving us a land pipeline necessary to achieve our growth objectives. While the land market remains competitive, we believe that our size, scale, and access to capital provides us with a significant edge over smaller private builders who rely on project financing from local lenders. We believe that public builders will continue to gain market share from smaller builders as well as the existing home market. And MDC is intent on benefiting from this trend. With solid momentum on the order front and improved supply chain and a healthy balance sheet, MDC is well positioned to take advantage of the positive housing fundamentals as we see in our markets. The increase in mortgage rates has compelled current homeowners to stay put in their existing homes, creating a real opportunity for homebuilders to fill the void. In addition, there is a need for new housing in this country after years of underbuilding following the Great Recession. As a result, We are very optimistic about the outlook of our industry and MDC in particular. Now I'd like to turn the call over to David, who will provide more detail on our operation performance this quarter. David.