Meritage Homes Corporation

Greetings. Welcome to Meritage Homes second quarter 2022 analyst call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Emily Tindano, Vice President of Investor Relations in ESG, at Meritage Homes. Thank you. You may begin.

Thank you, operator. Good morning and welcome to our analyst call to discuss our second quarter 2022 results. We issued the press release yesterday after the market closed. You can find it along with the slides we'll refer to during this call on our website at investors.meritagehomes.com or by selecting the investor relations link at the bottom of our homepage. Please refer to slide to caution you that our statements during this call as well as the press release and accompanying slides. Contain forward looking statements, including, but not limited to our views regarding the health of the housing market, economic conditions, changes in interest rates, the potential benefits of rate loss. community count and absorption, trends in construction costs, supply chain and labor constraints, and cycle times, projected third quarter home closings and revenue, growth margins, tax rates, and diluted EPS, potential future disruptions to our business from an epidemic or pandemic such as COVID-19, as well as others. Those and any other projections represent the current opinions of management which are subject to change at any time and we assume no obligation to update them. Any forward-looking statements are inherently uncertain. Our actual results may be materially different than our expectations due to a wide variety of risk factors which we have identified and listed on this slide as well as in our press release and most recent filings with the Securities and Exchange Commission specifically our 2021 Annual Report of Form 10-K and Quarterly Reports of Form 10-Q, which contain a more detailed discussion of those risks. We have also provided a reconciliation of certain non-GAAP financial measures referred to in our press release as compared to their closest related GAAP measures. With us today to discuss our results are Steve Hilton, Executive Chairman, Philippe Lord, CEO, and Giles Ferruza, Executive Vice President and CFO of Meritage Homes. We expect this call to last about an hour. A replay will be available on our website within approximately two hours after we conclude the call and will remain active through August 11th. I'll now turn it over to Mr. Hilton. Steve?

Thank you, Emily. Welcome to everyone participating on our call. We'll briefly discuss current market trends and provide an overview of our recent accomplishments. Sleep will cover our strategy and quarterly performance, and Heal will provide an overview of the quarter and forward-looking guidance for Q3 2022. Let me start by congratulating the entire marriage team for achieving our long-term goal of 300 communities this quarter, ending June 2022 with 303 communities. This milestone... high level of execution and dedication by all of our employees amidst longstanding supply chain constraints and labor availability present in the market since mid-2020. We continue to believe that now is the right time to be operating across these new locations as it will allow us to market share from incremental order and closing volume. We think that the low supply of housing inventory and favorable demographics are positive factors for long-term volume and of housing demand. Household formations trends are now slowing despite changing macroeconomic factors. However, we acknowledge that the housing market is softening from the unprecedented demand levels of the last two years. Volatility rapidly increases mortgage rates in a short amount of time, and the Fed's signals of more income are challenging affordability and buyer psychology. And Philippe will share what we are seeing and here on the ground at our markets today. Now on to slide four for recent accomplishments. Second quarter of 2022, we achieved our highest second quarter sales volume order, sales order volume of 3,767 homes, 1.4 billion in quarterly home closing revenue, company record for quarterly home gross margin of 31.6%, and a lower outstanding share count we achieved a quarterly record diluted EPS of $6.77 per share this quarter. 13 divisions at Meritage were recognized for customer service excellence awards from AVID this quarter. Our Southern California division received the prestigious AVID Cup in the production category for the first time in our company's history, which is the program's top honor given to one builder in North America each year. In addition to being named and Energy Star Partner of the Year for Sustained Excellence in 2020. EPA, our ninth year for this distinction since 2013. We also earned the 2022 Energy Star Market Leader Award. These EPA and AVID awards demonstrate our commitment to building better and more sustainable homes while delivering the industry's highest level of customer satisfaction. We also announced the extension of our partnership with Operation Homefront We're immensely proud to have three deserving military families with brand-new mortgage-free marriage homes in Houston, Nashville, and Tucson metro areas. This quarter, we held our annual purchasing summit. We further strengthened our relationships and mutual funds to work through the current challenging environment with our key trades and also took this opportunity to collaborate on improving the sustainability of the materials and products that go into our efficient homes. Now turn it over.