UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38545 Landsea Homes Corporation (Exact Name of Registrant as Specified in Its Charter) Delaware 82-2196021 (State or Other Jurisdiction of (I.R.S. Employer Incorporation ...

(Address of Principal Executive Offices) (Zip Code) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-38545 Landsea Homes Corporation (Exact Name of Registrant as Specified in Its Charter) 1717 McKinney Avenue, Suite 1000 Da ...

Landsea Homes Corporation (NASDAQ:LSEA) Q2 2023 Earnings Conference Call August 1, 2023 10:00 AM ET Company Participants Drew Mackintosh - Mackintosh, Investor Relations John Ho - Chief Executive Officer Mike Forsum - President & Chief Operating Officer Chris Porter - Chief Financial Officer Conference Call Participants Alex Rygiel - B. Riley Securities Carl Reichardt - BTIG Matthew Bouley - Barclays Jay McCanless - Wedbush Alex Barron - Housing Research Center Operator Greetings and welcome to the Landsea ...

Debt to Adjusted EBITDA Net Debt to Adjusted EBITDA Total Debt to Adjusted EBITDA (Non-GAAP) In this presentation, we include certain non-GAAP financial measures, including net debt to total capital, adjusted home sales gross margin, adjusted net income, EBITDA and adjusted EBITDA. These non-GAAP financial measures are presented to provide investors additional insights to facilitate the analysis of our results of operations. These non-GAAP financial measures are not in accordance with, or an alternative for ...

Financial Data and Key Metrics Changes - Landsea Homes reported a net income of $3.2 million, or earnings of $0.08 per diluted share, on home sales revenue of $241 million, indicating strong performance compared to previous guidance [3][16] - Homebuilding revenue decreased by 19% year-over-year to $240.6 million, attributed to fewer homes delivered in Florida and California, partially offset by a 19% increase in Arizona [16][19] - The company ended the quarter with a cash position of approximately $140 million and a net debt to total capital ratio of 30.7%, reflecting a conservative leverage profile [41][50] Business Line Data and Key Metrics Changes - Net new orders totaled 498 with an average selling price of $567,000, resulting in a total order value of $282.5 million, which was up 466% sequentially from Q4 2022 but down 22% year-over-year [17][19] - The average selling price in Florida increased by 14% year-over-year, while Arizona and California saw decreases due to increasing incentives [16][19] - The company maintained an average of 59 selling communities, up 8% from the previous year [17] Market Data and Key Metrics Changes - Selling conditions improved significantly in Q1 2023 compared to Q4 2022, driven by limited existing home inventory and buyer acceptance of higher mortgage rates [10][45] - The cancellation rate improved, dropping back into single digits for April, indicating a recovery in buyer confidence [31] Company Strategy and Development Direction - The company aims to grow operations in select high-growth markets by offering quality, affordable new home options, focusing on achieving better economies of scale [11][66] - Landsea is strategically moving its headquarters to Dallas, reflecting its expansion into markets outside California, with a balanced portfolio expected across California, Arizona, Texas, and Florida [66][67] - The company is exploring synthetic or M&A opportunities to grow in existing and new markets over the next 2-3 years [27][66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the new home market, citing a resilient job market and favorable demographics as supportive factors [4][5] - The company believes that the momentum generated in Q1 can carry into the remainder of 2023, with expectations of improved margins in the second half of the year [5][24] - Management acknowledged ongoing challenges with build times and buyer confidence but remains confident in resolving these issues over time [15][19] Other Important Information - The company generated cash from operations during a typically cash-consuming period, demonstrating flexibility in responding to market conditions [3] - Landsea Title was launched to enhance the homebuying experience, with plans to expand its services to Arizona and Texas [48] Q&A Session Summary Question: What is the outlook for margins in the second half of the year? - Management expects improving margins in the second half, driven by a shift towards dirt start buyers who typically yield higher margins compared to spec starts [24][56] Question: How is the company adjusting its spec strategy? - The company plans to maintain a balanced approach of 50-50 between dirt starts and spec starts, responding to buyer preferences for customization [53] Question: What is the current status of cancellation rates? - Cancellation rates have improved and returned to single digits in April, indicating a positive trend in buyer engagement [31] Question: How is the company positioned in the California market? - Management expressed satisfaction with performance in California, particularly in the Inland Empire and Northern California, where demand is strong [32][66] Question: What percentage of lots does the company intend to self-develop this year? - The company indicated that roughly 10% to 15% of its communities will involve self-development, with most lots being finished [70]

PART I - FINANCIAL INFORMATION [Item 1. Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Landsea Homes Corporation as of March 31, 2023, and for the three months ended March 31, 2023 and 2022, including Balance Sheets, Statements of Operations, Statements of Equity, Statements of Cash Flows, and accompanying notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets were $1.428 billion, a slight decrease from $1.440 billion at year-end 2022, primarily due to reduced real estate inventories and cash held in escrow, while total liabilities decreased to $715.5 million and total equity increased slightly to $712.6 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $136,785 | $123,634 | | Real estate inventories | $1,080,877 | $1,093,369 | | **Total assets** | **$1,428,082** | **$1,440,496** | | **Liabilities & Equity** | | | | Notes and other debts payable, net | $516,929 | $505,422 | | **Total liabilities** | **$715,464** | **$730,177** | | **Total equity** | **$712,618** | **$710,319** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2023, total revenues decreased to $241.7 million from $316.2 million in the prior-year period due to lower home sales, resulting in net income attributable to Landsea Homes Corporation falling significantly to $3.2 million, or $0.08 per diluted share, compared to $13.1 million, or $0.28 per diluted share, in Q1 2022 Q1 2023 vs Q1 2022 Statement of Operations (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total revenues | $241,740 | $316,227 | | Home sales revenue | $240,625 | $297,966 | | Total gross margin | $43,973 | $65,154 | | Income from operations | $4,785 | $23,420 | | Net income attributable to Landsea | $3,218 | $13,065 | | Diluted EPS | $0.08 | $0.28 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2023, net cash provided by operating activities was **$5.5 million**, a significant improvement from the **$32.1 million** used in Q1 2022, mainly due to favorable changes in real estate inventories, while net cash used in investing activities was minimal at **$1.6 million** compared to **$261.6 million** in the prior year, and net cash from financing activities was **$9.2 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $5,477 | $(32,141) | | Net cash used in investing activities | $(1,563) | $(261,568) | | Net cash provided by financing activities | $9,237 | $27,314 | | Net increase (decrease) in cash | $13,151 | $(266,395) | [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, the 2022 acquisition of Hanover Family Builders, segment reporting, debt structure, and stockholder's equity, including organization into five reportable segments, a **$675.0 million** credit facility, and a stock repurchase program authorized in March 2023 - The company's operations are organized into five reportable segments: Arizona, California, Florida, Metro New York, and Texas[20](index=20&type=chunk) - In January 2022, the Company acquired **100%** of Hanover Family Builders for an aggregate cash purchase price of **$262.6 million**, adding approximately **3,800 lots** owned or controlled[29](index=29&type=chunk) - The Company has a senior unsecured credit facility with a borrowing capacity of up to **$675.0 million**, maturing in October 2025. As of March 31, 2023, **$525.0 million** was outstanding at an interest rate of **8.01%**[48](index=48&type=chunk) - In March 2023, the Board of Directors authorized a stock repurchase program for up to **$10.0 million** worth of common stock, expiring December 31, 2023[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Result%20of%20Operations) Management discusses the Q1 2023 financial results, highlighting a decrease in home sales revenue and net income compared to Q1 2022, driven by higher mortgage rates impacting demand and affordability, with the company responding through sales incentives affecting gross margins, and covering operational metrics, segment performance, liquidity, and non-GAAP financial measures [Business Overview and Strategy](index=23&type=section&id=Business%20Overview%20and%20Strategy) Landsea Homes designs and builds homes across Arizona, California, Florida, Metro New York, and Texas, focusing on first-time homebuyers, and is navigating a market challenged by rising interest rates by emphasizing affordability, managing inventory, and leveraging its partnership with NFM Lending for mortgage services, with long-term goals including expanding community count, focusing on entry-level products, and becoming a top-ten US homebuilder - Recent increases in federal interest rates have put downward pressure on demand by reducing affordability for homebuyers across all markets[111](index=111&type=chunk) - The company is responding to the market by focusing sales efforts on affordability and interest rates, providing purchase incentives like mortgage interest rate buydowns[113](index=113&type=chunk) - Long-term strategic objectives include expanding in current markets, focusing on entry-level offerings, geographic expansion, and becoming a top-ten homebuilder in the United States[120](index=120&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) For Q1 2023, home sales revenue decreased **19%** to **$240.6 million**, and home deliveries fell **14%** to **472 units** year-over-year, primarily due to decreased demand from higher mortgage rates, while net new orders decreased **22%** to **498 homes**, home sales gross margin declined to **18.1%** from **20.9%** in Q1 2022 due to increased sales discounts and incentives, and backlog value decreased **55%** to **$422.9 million** Net New Home Orders - Q1 2023 vs Q1 2022 | Segment | Q1 2023 Homes | Q1 2022 Homes | % Change | | :--- | :--- | :--- | :--- | | Arizona | 152 | 139 | 9% | | California | 164 | 174 | (6%) | | Florida | 178 | 307 | (42%) | | **Total** | **498** | **637** | **(22%)** | Home Deliveries - Q1 2023 vs Q1 2022 | Segment | Q1 2023 Homes | Q1 2022 Homes | % Change | | :--- | :--- | :--- | :--- | | Arizona | 170 | 143 | 19% | | California | 85 | 128 | (34%) | | Florida | 212 | 271 | (22%) | | **Total** | **472** | **552** | **(14%)** | - Home sales gross margin decreased by **280 basis points** to **18.1%** for Q1 2023, primarily due to additional sales discounts and incentives. Adjusted home sales gross margin (excluding interest, impairments, and purchase price accounting) decreased **710 basis points** to **21.9%**[136](index=136&type=chunk)[135](index=135&type=chunk) - Total backlog decreased **57%** in units to **696 homes** and **55%** in value to **$422.9 million** as of March 31, 2023, compared to the prior year, reflecting high cancellation rates in the second half of 2022[138](index=138&type=chunk) [Segment Performance](index=29&type=section&id=Segment%20Performance) In Q1 2023, Florida was the most profitable segment with **$8.2 million** in pretax income, a significant increase from the prior year which was impacted by Hanover acquisition costs, while Arizona and California saw substantial declines in pretax income to **$0.2 million** and **$2.9 million** respectively due to lower ASPs and increased incentives, and the Corporate segment's loss narrowed primarily because Q1 2022 included a **$5.6 million** loss on warrant remeasurement Pretax Income (Loss) by Segment (in thousands) | Segment | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Arizona | $183 | $5,142 | | California | $2,937 | $25,337 | | Florida | $8,227 | $72 | | Metro New York | $(603) | $(542) | | Texas | $(1,320) | $(14) | | Corporate | $(3,684) | $(11,867) | | **Total** | **$5,740** | **$18,128** | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company had **$139.5 million** in cash and cash equivalents, with principal capital sources being cash from operations and a **$675.0 million** credit facility, of which **$525.0 million** was outstanding, and the company was in compliance with all financial covenants, including maintaining a leverage ratio of **38.5%** (against a **<60%** requirement) and a minimum liquidity of **$289.5 million** (against a **$50 million** requirement), with cash flow from operations turning positive at **$5.5 million** for the quarter - As of March 31, 2023, the company had **$139.5 million** of cash, cash equivalents, restricted cash, and cash held in escrow[157](index=157&type=chunk) - The company has a credit facility with **$675.0 million** total capacity and **$150.0 million** in additional borrowing capacity as of March 31, 2023[162](index=162&type=chunk) Financial Covenant Compliance as of March 31, 2023 | Covenant | Actual | Requirement | | :--- | :--- | :--- | | Minimum Liquidity | $289,545 thousand | $50,000 thousand | | Interest Coverage Ratio | 4.39 | 2.00 | | Tangible Net Worth | $643,979 thousand | $394,253 thousand | | Maximum Leverage Ratio | 38.5% | <60% | - Net cash provided by operating activities was **$5.5 million** in Q1 2023, compared to net cash used of **$32.1 million** in Q1 2022[170](index=170&type=chunk) [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) The company uses several non-GAAP measures to provide additional insight into its performance, with Adjusted EBITDA at **$16.2 million** for Q1 2023, down from **$50.4 million** in Q1 2022, Adjusted Net Income at **$7.1 million** compared to **$32.8 million** in the prior-year period, and the ratio of net debt to total capital at **30.7%** as of March 31, 2023 Net Debt to Total Capital Ratio | Metric (in thousands) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total notes and other debts payable, net | $516,929 | $505,422 | | Less: Cash and cash held in escrow | $139,545 | $140,735 | | Net debt | $377,384 | $364,687 | | **Ratio of net debt to total capital** | **30.7%** | **30.0%** | Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net income | $4,123 | $13,061 | | EBITDA | $11,711 | $26,140 | | Purchase price accounting in cost of home sales | $4,485 | $17,738 | | Transaction costs | $15 | $948 | | Loss on remeasurement of warrant liability | $— | $5,555 | | **Adjusted EBITDA** | **$16,211** | **$50,381** | [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations and inflation, with interest rate risk stemming from its variable-rate credit facility, and inflation adversely impacting costs for land, labor, and materials, potentially leading to higher mortgage rates that affect homebuyer affordability - The company's main market risk exposure is to interest rate changes associated with its variable-rate credit facility (SOFR plus **3.35%**)[188](index=188&type=chunk) - Inflation can adversely impact operations through higher land, financing, labor, and material costs, and can also lead to higher mortgage rates that reduce home affordability[189](index=189&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2023, and concluded they were effective, with no material changes to the company's internal control over financial reporting during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of March 31, 2023[190](index=190&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[191](index=191&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions in the ordinary course of business, including a notable dispute with insurers over reimbursement for a **$14.9 million** settlement paid on the company's behalf in a wrongful death suit, with the outcome of this and other proceedings currently uncertain - The company is in a dispute with insurers who are seeking reimbursement for some or all of a **$14.9 million** settlement paid on behalf of the Company in a wrongful death suit. The company is unable to estimate the outcome[52](index=52&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to risk factors were reported since the last Annual Report on Form 10-K[193](index=193&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In March 2023, the Board of Directors authorized an extension of the stock repurchase program, allowing for the repurchase of up to **$10.0 million** of common stock through December 31, 2023, with no shares repurchased under this new authorization as of March 31, 2023 Stock Repurchase Program Status as of March 31, 2023 | Period | Total Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that may yet be Purchased (in millions) | | :--- | :--- | :--- | :--- | | Jan 1 - Mar 31, 2023 | — | $— | $10.0 | - The Board authorized a **$10.0 million** stock repurchase program in March 2023, which expires on December 31, 2023[195](index=195&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's certificate of incorporation, bylaws, CEO and CFO certifications, and financial statements formatted in Inline XBRL

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 001-38545 LANDSEA HOMES CORPORATION (Exact name of registrant as specified in its charter) 660 Newport Center Drive, Suite 300 Newpor ...

Landsea Homes Corporation (NASDAQ:LSEA) Q4 2022 Earnings Conference Call March 7, 2023 10:00 AM ET Company Participants Drew Mackintosh - Mackintosh IR John Ho - CEO Mike Forsum - President and COO Chris Porter - CFO Conference Call Participants Alex Rygiel - B. Riley Carl Reichardt - BTIG Matthew Bouley - Barclays Alex Barron - Housing Research Center Operator Ladies and gentlemen, greetings. And welcome to the Landsea Homes Corporation Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] ...

Financial Data and Key Metrics Changes - Landsea Homes reported a record delivery of 543 homes in Q3 2022, with an average selling price (ASP) increase of 9% year-over-year to $601,000, resulting in a 56% revenue growth to $335.6 million [8][35] - Net income reached $20 million or $0.49 per diluted share, marking a 130% increase compared to Q3 2021 [8][42] - EBITDA for the quarter totaled $36.8 million, a significant increase from $22.6 million in the same period last year [42] Business Line Data and Key Metrics Changes - The Florida division accounted for 45% of home deliveries and one-third of homebuilding revenue, despite operational challenges from Hurricane Ian [11][12] - The company experienced a 7% decline in net new orders compared to the previous year, attributed to rising mortgage rates affecting buyer activity [13][37] Market Data and Key Metrics Changes - California contributed 36% of revenues, Florida 32%, and Arizona 21%, indicating a more balanced performance across these markets compared to the previous year [35] - The average credit score of buyers using Landsea Mortgage was 720, with loan-to-value ratios at 84% and average household income around $150,000 [38] Company Strategy and Development Direction - The company is focusing on expanding into strong growth markets while maintaining a disciplined approach to land acquisition and development, with an estimated land spend reduction from $450 million in 2022 to $400 million in 2023 [15][18] - Landsea Homes aims to strengthen its balance sheet and increase liquidity in response to market conditions, with 57% of lots controlled via option agreements allowing for flexibility [14][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging sales environment due to increased mortgage rates but expressed optimism about long-term industry trends, including a lack of existing home inventory and strong millennial demand for homeownership [20][21] - The company plans to adapt to market conditions by enhancing its value proposition and operational practices to meet buyer needs [25][29] Other Important Information - The company ended the quarter with $198 million in liquidity, including $117 million in cash and $81 million available under its revolving credit facility [43][44] - Total debt stood at $585.1 million, with a debt-to-capital ratio of 46.1% [45] Q&A Session Summary Question: What are the financing incentives being observed in Arizona and California? - Management indicated a mix of incentives and selective price reductions, focusing on mortgage programs to lower monthly payments without implementing wholesale price reductions [51][52] Question: How is the company managing land acquisition in the current market? - The company is reevaluating land deals and has the ability to negotiate extensions or price reductions with landowners, with no write-offs reported to date [54][56] Question: What is the outlook for average selling prices in 2023? - The company expects ASPs to moderate as it focuses on entry-level and first move-up segments, particularly in Florida and Texas [58][59] Question: What are the absorption targets for 2023? - Management believes a natural absorption rate of around 3.0 per community is ideal, with adjustments made based on market dynamics [63][64] Question: What is the status of the New York market? - The company confirmed it will exit the New York market after selling the remaining units, reallocating capital to its horizontal business [80][81] Question: What were the starts in the quarter and the approach to spec building? - While specific start numbers were not disclosed, management indicated that nearly 40% of homes for the quarter were spec starts, aligning starts with sales [84]

Financial Data and Key Metrics Changes - Landsea Homes reported earnings of $0.34 per diluted share for Q2 2022, a 48% increase compared to Q2 2021 [7] - Home sales revenue grew 46% year-over-year to $351 million, driven by a 35% increase in new home deliveries and a 9% increase in average selling price [8] - Net new orders increased by 63% year-over-year, totaling 538 for the quarter [9] Business Line Data and Key Metrics Changes - The average selling price (ASP) increased by 9%, with ASPs across divisions rising between 6% and 21% [22] - The cancellation rate for the quarter was 11%, primarily from buyers who purchased homes in the last 30 to 45 days [25] - The backlog at the end of June included 1,571 homes valued at $902.1 million, representing a 31% growth in volume and a 43% increase in total dollars compared to the previous year [26] Market Data and Key Metrics Changes - The company experienced a slowdown in demand due to higher interest rates and lower consumer confidence, impacting order activity [10] - In established markets like Arizona, California, and Florida, absorption rates remained consistent at 3.4 or better [23] - The credit profile of buyers remains strong, with an average credit score of 737 and a majority of loans being conventional [27] Company Strategy and Development Direction - Landsea Homes is focusing on land acquisition in affordable segments and prime locations, targeting the upper end of the entry-level market [12] - The company has increased its lot count by 52% year-over-year, with 63% of lots controlled and 37% owned [15] - The company aims to navigate market uncertainties with a well-capitalized balance sheet and a risk-averse land life strategy [14] Management's Comments on Operating Environment and Future Outlook - Management believes that favorable demographic trends and a lack of existing supply will drive the need for new housing, maintaining optimism for the future [21] - The company anticipates third-quarter new home deliveries to range from 550 to 630 units, with ASPs between $550,000 and $575,000 [44] - Management acknowledges the challenges posed by supply chain issues but sees improvements in the availability of trades, which may help reduce costs [32] Other Important Information - The company repurchased 5.1 million shares at an average price of $7.07, representing approximately 11% of the prior quarter's outstanding share count [17] - The company retired all 5.5 million outstanding private warrants, which will clean up the capital structure and eliminate potential future valuation swings [19] - The tax rate for the quarter was 36%, up from 28.5% the previous year, primarily due to non-deductible warrant revaluation [38] Q&A Session Summary Question: Update on July trends in traffic and sales pace - Management noted a stabilization in absorption rates, with expectations for a potential fall bump in interest [51][53] Question: Adjustments to base prices and competitor actions - Very little adjustment to base prices has been made, with most competitors also focusing on incentives rather than significant price changes [54][55] Question: Lot acquisition and development spending - The company is being disciplined with land spending, ensuring it meets targeted IRR hurdles, and is comfortable with its current land position heading into 2023 [56] Question: Psychological demand in Phoenix and Central Florida - The demand shift is more related to concerns about home pricing rather than macroeconomic issues, with strong liquidity and job security among potential buyers [60] Question: Consumer reactions to adjustable-rate mortgages (ARMs) - Less than 10% of the backlog is priced on an ARM, indicating a preference for fixed-rate mortgages among consumers [63]