Financial Data and Key Metrics Changes - Revenues for the first quarter reached $273 million, a 9% increase from $250.4 million in the prior year quarter [4][5] - Net income was $15.4 million or $0.30 per diluted share, compared to $16.5 million or $0.32 per diluted share in the prior year quarter [5] - Pre-tax income was $20.8 million, down from $21.9 million in the same quarter last year, with a pre-tax profit margin of 7.6% compared to 8.7% [5][6] - Book value per share increased 10% from a year ago to $35.10 [4][13] - The company ended the quarter with $820 million of liquidity, including $212 million in unrestricted cash [13] Business Line Data and Key Metrics Changes - The company sold 1,944 lots in the quarter with an average sales price of $121,000, influenced by a mix of lot deliveries from higher price point communities [4][5][6] - Gross profit margin for the quarter was 20.1%, down from 22% in the prior year quarter, but would have been approximately 21.5% excluding a low-margin tract sale [6][12] Market Data and Key Metrics Changes - Demand for new homes is being impacted by affordability constraints and cautious consumer sentiment, although mortgage rate buydown incentives are helping to spur demand [8] - The company’s total lot position was 101,000 lots, with 65% owned and 35% controlled through purchase contracts [10] Company Strategy and Development Direction - The company remains focused on turning inventory, maximizing returns, and consolidating market share in the lot development industry [5] - The strategic goal is to maintain a three- to four-year supply of land and lots while managing development phases to match market demand [10][12] - The company plans to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that home affordability constraints and cautious consumer sentiment will continue to be near-term headwinds for new home demand [15][16] - The company is confident in the long-term demand for finished lots and its ability to gain market share in the fragmented lot development industry [16] Other Important Information - The company’s capital structure is viewed as a competitive advantage, providing operational flexibility and strong liquidity to capitalize on opportunities [13][14] - The company’s underwriting criteria for new development projects remains unchanged, targeting a minimum 15% pre-tax return on average inventory [12] Q&A Session Summary Question: Discussion on gross margins and future expectations - Management indicated that the gross margin was impacted by the mix of projects delivering lots, and they expect margins to remain in the historical range of 21%-23% [18] Question: Customer pricing pushback and market conditions - Management noted a shift from large bulk takedowns to structured quarterly takedowns, with no significant changes in pricing observed [21] Question: SG&A spending expectations - Management expects SG&A to remain stable, with headcount and labor costs being the primary components [22] Question: Inventory and market strategy in Texas and Florida - Management is being selective in development activities in Texas and Florida due to higher resale inventory but remains optimistic about long-term fundamentals in these markets [27] Question: Impact of phased developments on cost structure - Management stated that pulling back on phased developments does not significantly impact the cost structure and helps reduce cycle times [28]

Financial Data and Key Metrics Changes - Revenues for Q1 2026 were $273 million, a 9% increase from $250.4 million in the prior year quarter [4][5] - Net income was $15.4 million or $0.30 per diluted share, compared to $16.5 million or $0.32 per diluted share in the prior year quarter [5] - Book value per share increased 10% from a year ago to $35.10 [4][15] - Pre-tax income was $20.8 million, down from $21.9 million in the prior year quarter, with a pre-tax profit margin of 7.6% compared to 8.7% [5][6] - Gross profit margin for the quarter was 20.1%, down from 22% in the same quarter last year [6] Business Line Data and Key Metrics Changes - The company sold 1,944 lots in the quarter with an average sales price of $121,000, influenced by a mix of higher price point lots [5][6] - SG&A expense was $36.5 million, or 13.4% of revenues, compared to $36 million or 14.4% in the prior year quarter [8] Market Data and Key Metrics Changes - Demand for new homes is impacted by affordability constraints and cautious consumer sentiment, although mortgage rate buy-down incentives are helping to spur demand [9][10] - The company’s total lot position was 101,000 lots, with 65% owned and 35% controlled through purchase contracts [11] Company Strategy and Development Direction - The company remains focused on turning inventory, maximizing returns, and consolidating market share in the lot development industry [5] - The strategic goal is to maintain a three- to four-year supply of land and lots while managing development phases to match market demand [11][14] - The company plans to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to market conditions [14] Management's Comments on Operating Environment and Future Outlook - Management expects home affordability constraints and cautious consumer sentiment to continue as near-term headwinds for new home demand [17] - The company maintains its fiscal 2026 revenue guidance of $1.6 billion to $1.7 billion and lot delivery guidance of 14,000 to 15,000 lots [17][18] - The company is confident in long-term demand for finished lots and its ability to gain market share in the lot development industry [18] Other Important Information - The company ended the quarter with $820 million of liquidity, including $212 million in unrestricted cash [15] - Total debt was $793 million, with a net debt to capital ratio of 24.6% [15] Q&A Session Summary Question: Can you discuss the gross margins and what they might look like over the next few quarters? - Management indicated that the biggest impact on margin was due to the mix of projects delivering lots, and they expect gross margins to remain in the historical range of 21%-23% [20][21] Question: What are you seeing from your customers regarding price pushback? - Management noted a shift from large bulk takedowns to more structured quarterly takedowns, with little change in pricing overall [22][23] Question: Is SG&A spend expected to remain stable? - Management confirmed that headcount is down slightly and expects SG&A to remain stable for the remainder of the year [24] Question: How is the inventory of developed lots breaking out between entry-level and move-up homes? - Management stated that the higher average sales prices were planned and that they remain focused on entry-level and first-time homebuyer markets [27][28] Question: Are you looking to rebalance exposure in Texas and Florida? - Management is being selective in development activities in Texas and Florida due to higher resale inventory but believes in the long-term fundamentals of these markets [29] Question: How does pulling back on phased developments impact your cost structure? - Management indicated that there is no significant impact on cost structure and that they continue to work with trade partners to reduce costs and cycle times [30]