Tri Pointe Homes, Inc.

Greetings and welcome to the TriPoint Homes first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Lee, General Counsel. Thank you, sir. You may begin.

Good morning and welcome to TriPoint Homes earnings conference call. Earlier this morning, the company released its financial results for the first quarter of 2025. Documents detailing these results, including a slide deck, are available at www.tripointhomes.com through the investors link and under the events and presentations tab. Before the call begins, I would like to remind everyone that certain statements made on this call, which are not historical facts, including statements concerning future financial and operating performance, are forward-looking statements that involve risks and uncertainties. Discussion of risks and uncertainties and other factors that could cause actual results to differ materially are details that accompany SEC violence. Except as required by law, the company undertakes no duty to update these forward-looking statements. Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be accessed through TriPoint's website and NSSEC filings. Hosting the call today are Doug Bauer, the company's Chief Executive Officer, Glenn Keeler, the company's Chief Financial Officer, Tom Mitchell, the company's President and Chief Operating Officer, and Linda Bame, the company's Executive Vice President and Chief Marketing Officer. With that, I'll now turn the call over to Doug.

Good morning, and thank you for joining us today as we report our results for the first quarter of 2025. Our teams executed at a high level, achieving strong results, demonstrating our ability to navigate the current political and economic volatility and its impact on the housing market. During the first quarter, we either met or exceeded all of our guidance. We delivered 1,040 new homes, an average sales price of $693,000, resulting in home sales revenue of $721 million. Home building gross margin remained strong in the first quarter at 23.9%, a 90 basis point increase compared to the same period last year. This margin underscores the resilience of our product offering, market positioning, and the successful execution of our premium lifestyle brand. Finally, net income was 64 million for the first quarter, resulting in diluted earnings per share of 70 cents. The spring selling season is off to a slower start than we normally experience with net new home orders of 1,238 for the quarter on a monthly absorption rate of 2.8 per average selling community. While the longer-term outlook for housing remains favorable with a continuing shortage of homes and strong demographics, it's clear that elevated uncertainty about the economy is weighing on consumer sentiment. International trade tensions and the new tariffs have emerged as unpredictable variables in the current environment. The headline news of tariffs and their potential inflationary effects has dampened buyer confidence. However, we do not believe tariffs will have a material impact on our cost structure in 2025. Our differentiated business strategy is to offer innovative designs and a premium brand experience with communities located in core locations in top markets. Although incentives can drive urgency for our homebuyers, our margin and pace are typically driven by the location, product, and amenities we offer. Our teams are equipped with the right tools to meet our customer needs. We are utilizing a combination of targeted incentives and proactive mortgage financing solutions to help buyers achieve their monthly payment and home personalization goals. Our well-located communities close to job centers and great schools continue to attract a well-qualified homebuyer. Homebuyers have backlogged financing through our mortgage company TriPoint Connect, have an average annual household income of $219,000, average FICO score of 753, 79% loan-to-value, and average debt-to-income ratio of 40%. In light of current market conditions, we are proactively balancing risk mitigation with opportunity, leveraging the deep experience of our teams in navigating the local market environment. We're taking a disciplined and forward-looking approach to how we invest our capital, including land underwriting and structuring deals to better reflect current market dynamics. These actions position us to be selective and opportunistic while preserving flexibility and maximizing returns. Our balance sheet remains a key strength. We ended the quarter with total liquidity of $1.5 billion. including over $800 million of cash. With a home building debt-to-capital ratio of 21.6% and a net debt-to-net capital ratio of 3%, we are well positioned to support our long-term growth objectives and take advantage of opportunities we see in the market. During the quarter, we repurchased $75 million of our common stock, reducing our shares outstanding by an additional 1.9%. As of the quarter end, we have $175 million of authorization remaining and continue to view our stock as an attractive use of capital, particularly at current market levels. On a year-over-year basis, our book value per share has increased 14%, reflecting both earnings growth and disciplined capital deployment. Now I'd like to provide an update on our new market expansions. Two new communities are underway with openings in the third quarter of 2025. Additionally, our land pipeline is strong and we currently control approximately 500 lots. In Orlando, we have attracted a strong management team and land acquisition is progressing with 250 lots owned or controlled. We recently started grading our first community in New Smyrna Beach, Florida. And the Coastal Carolinas remain on track for initial deliveries in 2026, supported by growing operations and strong alignment with our Charlotte team. Each of these markets represent a compelling long-term opportunity. We are executing with discipline, drawing on our internal expertise to ensure scalable growth. As a company, we are well-positioned to build on our foundation of growth, innovation, and operational expertise. Our strategy remains centered on driving revenue and returns through our premium lifestyle brand positioning, enhanced operational efficiency, prudent capital deployment, and an unwavering focus on customer satisfaction. We execute on these core areas of the business with discipline and consistency, and we are confident this strategy will continue to deliver strong results. We remain encouraged on the long-term fundamentals of the housing market. The U.S. continues to face a significant housing shortage, a structural imbalance that reinforces the sustained need for new home development. Demographic tailwinds and the ongoing demand for housing supports a positive long-term outlook for the industry, despite the near-term volatility the market is experiencing. These underlying demand drivers provide a strong foundation for our business and validate the strategic investments we are making. As we continue to allocate capital towards the highest return opportunities, both in new markets and across our existing operations, we are confident in our ability to drive sustainable performance and create long-term value for our shareholders. With that, I will turn the call over to Glenn.