Meritage Homes Corporation

Hello, and welcome to the Meritage Homes first quarter 2024 analyst call. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Emily Tadano, Vice President, Investor Relations and ESG. Please go ahead, Emily.

Thank you, operator. Good morning and welcome to our analyst call to discuss our first quarter 2024 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 two, cautioning you that our statements during this call, as well as in the earnings release and accompanying slides, contain forward-looking statements. 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 earnings release and most recent filings with the Securities and Exchange Commission, specifically our 2023 Annual Report on Form 10-K. We have also provided a reconciliation of certain non-GAAP financial measures referred to in our earnings 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 Gilles Ferruza, Executive Vice President and CFO of Meritage Homes. We expect today's call to last about an hour. A replay will be available on our website later today. I'll now turn it over to Mr. Hilton. Steve?

Thank you, Emily. Welcome to everyone listening in on our call. I will briefly discuss current market trends and our recent accomplishments. Philippe will cover highlights of our operational performance and how our strategy is driving our success. Hilo will provide a financial overview of the first quarter and our forward-looking guidance for Q2 and full year 24. Meritage had a remarkable start to the year. We achieved an average absorption pace of 4.9 sales per month in the first quarter of 2024, which resulted in our highest quarterly sales orders, totaling 3,991 homes. During the spring selling season, with a healthy supply of move-in ready inventory, we were able to capitalize on strong market conditions generated by the increasing need for housing for millennials and Gen Zs, as well as the move-down day boomers who continue to find our limited inventory, limited availability of resale housing supply. In the first quarter of this year, our record backlog conversion of 138% drove 3,507 home deliveries which led to home closing revenue of $1.5 billion. Home closing growth margin for the quarter was 25.8 percent, which combined with SQ&A of 10.4 percent resulted in diluted EPS of $5.06. As of March 31st, 2024, we increased our book value per share 17 percent year over year to $129.98. and generated a return on equity of 18%. Although visibility into what interest rate and mortgage rates will do for the remainder of the year remains unclear, we believe that by satisfying homebuyers' desire to have quick closing timelines, our available inventory should position us to continue increasing our market share. Now on to slide four for our recent milestones. It's very timely that during the month that we celebrate Earth Day, we can announce Meredith's 11th Award at the EPA's Energy Star Partner of the Year for Sustained Excellence for continuing industry leadership in the production of energy-efficient homes. Additionally, Meredith was also named in Newsweek's 2024 America's Greenest Companies list as our commitment to sustainability is recognized even outside of our sector. I also take pride in sharing that in the first quarter of this year, Meredith received the President's Volunteer Service Award a civil award bestowed by the U.S. President and the highest civilian honor available for volunteerism. It was earned through our partnership with No Child Hungry and the 1,100 plus hours our team members volunteered to package nearly 260,000 meals over the past two years to fight childhood hunger. Last of this quarter, we were recognized as one of Forbes' 2024 most successful mid-cap companies based on sales and earnings growth, return on equity, and total stock return for the last five years. At Meritage, we believe that financial achievements must be maintained while maintaining a focus on responsible corporate citizenry, and we are honored that these accolades continue to illustrate the breadth and depth of our commitment. With that, I'll now turn it over to Philippe. Thank you, Steve.