United Homes (UHG) 10 May 242024 Q1 Earnings call transcript

Good day, everyone, and welcome to the United Homes Group First Quarter 2024 Earnings Call. [Operator Instructions] Please note this call may be recorded, and I will be standing by should you need any assistance.

It is now my pleasure to turn the conference over to Erin. Please go ahead.

Good morning, and welcome to United Homes Group's First Quarter of 2024 Earnings Call.

I forward-looking to of statements securities begins, call that the call laws. include will within the would note like this federal Before the meaning assumptions, statements Group time. subject that Homes uncertainties, forward-looking United to change cautions numerous risks over and which are and but Exchange are Commission. United factors by to, risk not and uncertainties include, risks the Group Securities in limited Homes described its These the filings with

upon statements should under as circumstances as subsequent after a applicable Accordingly, place securities representing views forward-looking as events the be whether forward-looking new statements reflect these of except any you should made as do any future laws. information, on date, were reliance update relied and events We not result not or to not undue of required date be or statements. otherwise, they may obligation our forward-looking undertake to

financial Additionally, SEC over Operating United most measures President, Chief comparable Officer, GAAP the to reconciliations Keith on website Jack Financial Feldman. and like Homes of Shelton Jack. call in Officer, to accessed turn company's non-GAAP that, this to today With Chief call Micenko; are directly the the call I'd and be the measures can Group's discussed Twine; through filings. Hosting its

our both United and strong beyond is focus growth. grow a in Group of Good strategic morning, homebuilders record first pursue everyone. poised With States. we a becoming progress Thanks, premier for the success, Erin. number one the operating the organic existing United made goal fronts as a and United affordability, to Homes footprint continue M&A its in Homes of of on quarter track XXXX Southeastern of land-light strategy of homebuilding on a to

come. new in families Southeast, continued and on favorable job a on plan growth for formation. household We housing, homebuilding migrate a capitalizing thanks market, inventory to and home and for to continue creating our to this throughout to continue Both strong the in and the to resale we trend cities a markets, see need of years companies lack landscape

past, driver retain Homes company's feel As be have acquisitions, the of Creekside have following to a over number expansion peers our in the presence most are and of key our willingness acquired will markets. the into roots We we expanded Carolina. The transaction. advantage a into in our the competitive part Southeastern first team. we've builders the acquired the in region and a we South We've already recently and further them stated our of in quarter our as closed personnel M&A of new Custom and progressing the which of nicely, excited to coastal Creekside other are integration our executed

good add are financial to year, possible a to a our deals platform cultural in and We evaluating fit more they markets constantly from are hope builders to this provided company our perspective. our and

We our XX,XXX giving the costs focus associated capital-efficient of arrangements. options and land will that runway owned ended selling offloading to to with land us great agreements We of the securing use of committed land core a feel and first the quarter for development banking homes. controlled, on lots manner and allow growth. us much building competency with remain future just in for our We capital over a

later. a in a his just created commentary will agreement then entered Overall, speak to week, with fund In boost with partner, with a into this real Our end land-light focus also should our in a about the transaction quarter of homebuilder our becoming increase land that strong XX% of the progress initial on partnership efforts sold over and ended the entry while first market large We which which of home at pleased coming further cash with towards XXX got the I'm first new quarter a flow closing in long-term strategic made a XXXX that quarter backlog a of we partner. first represented which a to on in the definitive Keith lead opportunities a homes, remain maintaining positioning quarters. in ahead. We newly with the for generation our quarter banking land affordability. premier the and goal excited Southeastern lie U.S.

We cash under capacity also million million with maintained in facility. over undrawn $XX a strong $XX credit revolver balance sheet our and of

XXXX Homes and I Group to result, goals our a is believe well United beyond. As positioned achieve for

the Now call who this more on I'd detail over to turn will operations provide Shelton, like quarter. to some

of revenue XXX quarter Jack, Thanks, homes $XXX delivered XXXX, sales and United Homes the home million. everyone. in of good first generating to morning

to flow materials Midlands Our returned labor mentioned. divisions. generation Jack our contributor we as have as our with as in in Upstate Construction unit to quarters, and the the real levels of along compared cycle coming pre-pandemic followed by believe total, year-over-year delivery in to this Coastal a times division our cash availability was strong the saw XX% improvement the biggest quarter last to increase year. improvement time, cycle will lead We backlog and in

a homes of active quarter community X.X per sales We per on XXX the sold during pace month.

as first new payment spring quarter signal season. Financing levels began net at as We the tool which incentives move budget. Following March, orders first progressed. a remain April secure they with successful we fairly at back was within as the through generated year demand were close the buyers staying are in it a trends but XXX dialing that monthly the of we consistent selling positive an quarter, fits in their elevated communities our that important help selling the incentive

of trajectory continue, interest the here. from in trend on rates optimistic of incentive it are will We this much levels but depend will downward

engaged the see the the supply to steady and buyers of and of to people markets motivated, lack thanks in available and jobs continue region. engaged our We new flow into

solid our carried the XX%, their quarter in their into who Our saw buyers throughout and with remain we demand and home that level trends forward a the buying this cancellation process. Overall, rate at decision April. was committed that confident implies first during quarter move the purchase traffic prospective in through communities

balance strike to continue pace deliver return to We timely in achieve price desired and our a manner. a goals and homes between

our will value. and beyond which entry-level us in lots, delivery affordable of to focus our XXXX fulfill pipeline healthy product that terms buyers allow most quality of of for a and in have needs and an markets goals the meets We

we results quarter. turn we more While to to goal. With have like work that to right a lot want Keith, of track southeastern still on to large-scale who call be, we do believe will that the I'd this detail our financial over achieve builder that, to the on the I provide become to are

and Jack, you, morning. and good Thank Shelton,

$XXX.X first $XX.X included quarter in XXXX This quarter expense be average company. Revenue each value XXX of $XX.X of first of the in reaching quarter quarter first during million was accounting was first for price sales the our related sales XXXX. quarter homes paid earnout quarter quarter This fair were of only which to first million, statements for a certain a of XXX was change compared shares $XX.X homes. first an primarily XXXX. the price for the for the for and will hurdles homes. during potential first closings For the of which compared the net XXXX, in income the financial to fluctuate to production-built production-built quarter in upon million, ending to on of common price price. in for the Home based result our $XXX,XXX Average cash million can of stock will stock earnout, XXX XXXX $XXX,XXX compared during XXX XXXX homes of XXXX never

compared XXX orders homes As of first quarter to of XXX XXXX new Shelton mentioned, were the the quarter first during our homes in net XXXX.

quarter first million. XXX end Our homes the approximately backlog at value the of with a was of $XX.X

to profit and XX%, XX.X% of decreased quarter XXXX was XXXX. we for interest and acquired from $XX.X decrease driven the expense sold that inventory. Rosewood purchase adjustments inventory million accounting a margin the for Gross of few finished the profit first and on gross million from and This was $XX.X and items, increased by which Creekside first quarter related

profit in of expense quarter million XX.X% stock-based $XX.X compared expense, Excluding first for was of in profit quarter. $XX.X revenue XXXX and were or approximately first and onetime quarter XXXX. SG&A and gross $XX.X first adjusted and margin for SG&A million. adjusted gross of Adjusted $XX.X fees noncash these the the XX.X% transaction XX.X% million adjusted the was to million compensation items,

mentioned, a capital be are large to Jack initiatives on this land-light will homes. significant This continue land progress new starting down lots as efficient quarter our sheet we made moving lots to allow finished As banking strategy our to we by balance take and million partner. of $XX approximately us with

core Additionally, we future amount capital lots total of in land agreement land into provide markets. to which entered for funds created million, for finished for our newly will up a $XXX into a development definitive

XXXX. QX XX As communities, of we have XX of active from up as today,

development of remarks. we Operator, as $XX approximately control our our XXXX, as availability As total from of affiliate million March well credit and for $XX on XXXX, lots cash had some concludes open our questions. parties. XX, XX, the $XX We prepared in liquidity of facility line third XX,XXX as please of million million. That had resulting up March under in land

[Operator question from Instructions] And Reichardt Carl we'll take our with first BTIG.

Apologies for here. the noise background

gross the you drove impact improvement ex higher can in year, impact from travel what accounting you on talk Keith, -- gross the rate that those margin, First, last the margin purchase interest about and and excluding the can items?

of have marginally look from profit, costs this burned it remember, at lumber higher. yes, year last the beginning was last last really had year that. right? gross was we as last has year, but our inventory, down year, Yes. this so incentives -- really year, this you we and at lumber cost from year we if the So high Carl, the to through in did come to we adjusted year, -- And it

uplift a in probably which have year, of gross So little last bit. are And bit that we trending similar gave incentives to up then a an little but margin. us adjusted

acquisition obviously, are Jack, sort I ago? of then for, I've builders there Okay. X other Can out. talk environment at flow deal look it. you've it right. potential today flesh you And proposition forward months same of but that say, of time, it you be targets about for I'd that that maybe different? value guys potential sort looking, at got given So have the if the how And you appreciate just was very been now, lot a versus, might a X it quarters look does of what as think, sort

Carl. that Sure, the of of have There M&A Thanks picked observers, the it's don't has I Yes. up. no on most been, activity industry things. A Carl, question. To Indiana, X X for in know, X couple where -- in of Texas, least last X or There's at account, couple public companies Tennessee, my months. in the or others. involve X a a deals deal secret

that transactions We the structure M&A side. them. our use can, at, as engine couple the The are Definitely in picking many more expect We the of a to the size, activity. as just consideration. look -- Valuations, we're is the one color that calls. We've keep our cash have at things up. we of a and velocity or because market, footprint, that those. you'd of took going at the understands the of get certainly the our a don't -- as other the of we on much at the look marketplace. much we've look community to the to strategy, We'd we're equity like So broker most capital, M&A we organic got got the look and to ton as geography, our as

increased. and into You have it, when evaluations, peers can the transactions of not surprisingly, back our filed some

And then for need with the the important a thing time. ahead land to that's solution of always is for into last go these us really we

We are us strategy nonnegotiable. -- for the is land-light

with in to of a have [ it's lot lots builder solve a need the balance if we So ] sheet, for a that. traditional

of number go a when conversations positions And in having that partner of I at multiple side the back strategic forward. early land to bank on of efficiently to beyond place and think providers, the going sale -- comments, that more us we well that, efficient some now address prepared point the with and

And you this fortunate Conference the I and this were conference. really We at of to that deals, slowing and so discussion more up, lot have around don't M&A were out of win down. of that. seen, we we year, may out the the Builder valuations were week are Builder XXX accepting Year a that But award see

future. going more there I suggests the think of to color And foreseeable the see for so we're same the

guys. Great. on congrats Builder really too. of color, appreciate Year, the And I meant say the to I

will appears remarks. It at further Instructions] questions the I [Operator management that no for turn have call time. we back to closing this

progress to Homes look Thank grow updating and everyone forward continue you. in interest you, this Appreciate and as everybody, we for morning. to your in Thank our calling United Group, company.

program. disconnect at your time. this and today's And may for you any conclude does Thank you participation,