M/I Homes, Inc.

Good morning, ladies and gentlemen, and welcome to the MI Homes fourth quarter and year-end earnings conference call. At this time, our lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Wednesday, January 28th, 2026. I would now like to turn the conference over to Phil Creek. Please go ahead.

Thank you, and thank you for joining us today. On the call with me is Bob Schottenstein, our CEO and President, and Derek Clutch, President of our mortgage company. First, to address regulation fair disclosure, we encourage you to ask any questions regarding issues that you consider material during this call because we are prohibited from discussing significant non-public items with you directly. And as to forward-looking statements, I want to remind everyone that the cautionary language about forward-looking statements is contained in today's press release also applies to any comments made during this call. Also, be advised that the company undertakes no obligation to update any forward-looking statements made during this call. With that, I'll turn it over to Bob.

Thanks, Phil, and good morning, and thank you for joining us today. As I begin, I'd like to take a brief moment to acknowledge an important milestone for MI Homes. 2026 marks our 50th year in business. Over the past five decades, our company has grown to become one of the nation's largest and most respected home builders. Looking back, we've been through a lot. We've experienced disciplined growth and certainly our fair share of successes navigating through multiple housing cycles. Through it all, we have maintained an unwavering focus on quality, customer service, and operating at a high standard. As we look ahead to celebrating this milestone, we're proud to report that we are in the best financial condition in our history, have a group of leadership teams that are as strong as we've ever had, and that we are well positioned in our 17 markets. With that, we'll turn to our 2025 performance. Our full year 2025 results reflect the economic conditions that we and, frankly, our entire industry experience throughout the year. Despite choppy demand, affordability challenges, economic uncertainty, and other macroeconomic pressures, our performance remained very solid. Though new contracts were down slightly for the full year, we were pleased that our monthly new contracts during the fourth quarter showed a 9% year-over-year increase and that we successfully increased our 2025 average community count by 6% versus our guide of about 5%. In 2025, we delivered 8,921 homes, recorded revenue of $4.4 billion, and excluding charges of $59 million related to inventory and warranty items, We generated pre-tax income of nearly $590 million, which was down 20%, compared to last year's record, $734 million. Our pre-tax income percentage was a very solid 13% before the charges and 12% after all charges. Our financial services segment had a record capture rate of 93%, record volume levels and a very strong year, achieving pre-tax income for the year $56 million. Our full-year gross margins, excluding the above-mentioned inventory and warranty charges, were 24.4%, 220 basis points lower than 2024, and down primarily due to higher incentives and higher lot costs versus the same period a year ago. As you all know, our primary incentives were and continue to be mortgage rate buy-downs, And we will continue to use these incentives as necessary on a community-by-community basis. Our net income was $403 million, or $14.74 per share, with a very strong return on equity of 13.1%. Our shareholders' equity increased 8% year-over-year and reached an all-time record of $3.2 billion, with a record book value per share of $123. The quality of our buyers in terms of credit worthiness continues to be strong with average credit scores of 747 and average down payments of almost 17% or just over $90,000 per home. Our Smart Series, which is our most affordably priced product, continues to have a very positive and meaningful impact, not just on our sales but our overall performance. Smart Series sales comprise 49%. of total company sales in the fourth quarter compared to 52% a year ago. And as I previously noted, we ended the year with community account growth with 232 active communities, which was an increase of 5% compared to the end of 24, and on average an increase of 6%. In terms of our various markets, our division income contributions in 2025 were led by Columbus, Dallas, Chicago, Orlando, and Minneapolis. Our new contracts for the fourth quarter in our southern region increased by 13% year-over-year and by 4% in the northern region. For the year, new contracts decreased 1% in the southern region and 9% in our northern region. Deliveries increased 1% over last year's fourth quarter in the southern region, and represented 57% of the company-wide total. The northern region contributed 981 deliveries, which was a decrease of 8% over last year's fourth quarter. For the year, homes delivered slightly increased in the southern region, but decreased slightly in the northern region. Our owned and controlled lot position in the southern region decreased by 11% compared to a year ago, increased by 9% compared to a year ago in the northern region. We have a tremendous land position. Company-wide, we own approximately 26,000 lots, which is slightly less than a three-year supply. Of this total, 30% of our own lots are in the northern region, with a balance of 70% in the southern region. On top of the lots that we own, we control via option contracts an additional 24,000 lots, So in total, we own and control approximately 50,000 single-family lots, which is down 2,000 lots from a year ago, and this equates to roughly a five- to six-year supply. Most importantly, 49% of our lots are controlled pursuant to option contracts, which gives us continued flexibility and important flexibility to react to changes in demand or individual market conditions. With respect to our balance sheet, we ended the year in excellent condition with cash of $689 million and zero borrowings under our $900 million unsecured revolving credit facility. This resulted in a very strong debt-to-capital ratio of 18% and a net debt-to-cap ratio of zero. Before I conclude, let me again state that we are in the best financial condition in our 50-year history. Despite the current challenging conditions, we feel very good about our business, remain very confident in the long-term fundamentals of our industry, and are well-positioned as we begin 2026. I'll now turn it over to Phil to provide more specifics on our results.