Title

Presentation

Century Communities, Inc. beats earnings expectations. Reported EPS is $2.58, expectations were $1.59.

Operator: Greetings. Welcome to Century Communities’ Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Tyler Langton, Senior Vice President of Investor Relations for Century Communities. Thank you. You may begin.

Tyler Langton: Good afternoon. Thank you for joining us today for Century Communities earnings conference call for the third quarter 2023. Before the call begins, I would like to remind everyone that certain statements made during this call may constitute forward-looking statements. These statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward-looking statements. Certain of these risks and uncertainties can be found in the heading Risk Factors in the company’s latest 10-K, as supplemented by our latest 10-Q and other SEC filings. We undertake no duty to update our forward-looking statements.

Additionally, certain non-GAAP financial measures will be discussed on this conference call. The company’s presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Hosting the call today are Dale Francescon, Chairman and Co-Chief Executive Officer; Rob Francescon, Co-Chief Executive Officer and President; and David Messenger, Chief Financial Officer. Following today’s prepared remarks, we’ll open-up line for questions. With that, I’ll turn the call over to Dale.

Dale Francescon: Thank you, Tyler and good afternoon, everyone. I want to start by saying that we are very pleased with our solid third quarter results, especially within the context of a challenging overall housing market. Despite rising interest rates, our sales activity performed in line with our expectations and typical seasonality, demonstrating the strong underlying demand that remains for affordable new homes. Our deliveries of 2,264 homes increased on a quarter-over-quarter basis and benefited from improved cycle times. Home sales revenues of $865 million grew by 6% over second quarter levels, with our average sales price gaining 4%. Our gross margins increased by 490 basis points sequentially to 24.6%, while our adjusted gross margins increased by 480 basis points to 25.8%.

As a result, we delivered third quarter diluted earnings per share of $2.58, a 62% increase over second quarter 2023 levels. Turning to our sales activity. Our net new contracts in the third quarter totaled 2,149 homes, a 63% improvement over the level of sales activity that we saw in the third quarter 2022. We commented last quarter that we expected more typical seasonality to return this year, and we saw it play out in the third quarter with our net orders declining 7% sequentially, roughly in line with the 6% quarter-over-quarter decline we saw in the third quarter of 2019. Our net orders in August and September both exceeded the levels we experienced in July, which we view as a positive trend given the continued increase in interest rates over the past several months.

Looking out to the fourth quarter as a whole, if typical seasonality holds, we would expect our net orders to decline on a sequential basis. We are continuing to see good demand for affordable entry-level homes across both our Century Communities and Century Complete brands, and wanted to use this opportunity to go into a little more detail on the value that we see in our Century Complete business, which currently generates approximately 35% of our sales and deliveries. As we’ve discussed in the past, Century Complete targets entry-level customers with a hundred percent of its deliveries within FHA limits and only acquires finish lots. It is a scalable business model, which requires less capital investment and yields quicker asset turns. The increase in interest rates over the past year has also reinforced some additional advantages of the Century Complete brand.

In the third quarter, Century Complete had an average sales price of $265,000. And the large public homebuilders generally don’t build at this price point. Century Complete tends to compete more with existing homes and smaller private homebuilders, which puts us in a strong position. Existing home inventories remain depressed due to the lock-in effect, so there is less competition from the used home market. Smaller, private, new homebuilders tend to borrow from local and regional banks. Their borrowing costs are generally higher than ours, and we think the local and regional banks will likely reduce the amount of credit that they’re willing to extend to the smaller private builders. As a result, we think Century Complete is in a strong position to capture additional market share in the years ahead.

Turning back to Century as a whole, we continue to maintain our focus on building some of the most affordable new homes in the markets we serve. More than 90% of third quarter deliveries were from homes priced below FHA limits, which allows us to target more potential buyers in any given market. Additionally, 99% of our home deliveries this quarter were from spec builds, which enables us to better control our costs and allows our buyers to purchase quick move-in homes and lock-in their mortgage rates for certainty of financing. Our cancellation rate was 16% in the third quarter, consistent with our year-to-date rate and well below an average cancellation rate in the low to mid 20% range in the years prior to COVID. We continue to believe that our cancellation rate is benefiting from buyers adjusting to the higher interest rate environment and our strategy of selling homes later in the construction cycle.

In closing, we’re encouraged by the improvement that we have seen over the past several quarters in our deliveries and gross margins, which are benefiting from reduced levels of incentives, improve cycle times and lower direct costs. As expected and previously messaged, our deliveries have increased sequentially in each of the last two quarters, and as Dave will detail in his remarks, we expect our fourth quarter deliveries to increase over third quarter levels and are increasing the midpoint of our 2023 delivery guidance. The sequential improvement in our margins and deliveries this year, coupled with the increase in our community counts, which Rob will discuss further in his remarks, position us well for 2024. And on behalf of the entire management team, I want to thank our team members and trade partners for their hard work and dedication that made these results possible.

I’ll now turn the call over to Rob to discuss our operations and land position in more detail.

Robert Francescon: Thank you, Dale, and good afternoon, everyone. Given the market demand, we were able to reduce our level of incentives while still maintaining a healthy sales pace in the quarter. Incentives averaged roughly 700 basis points on closed homes in the third quarter 2023, down roughly 200 basis points on a sequential basis. In the third quarter, incentives on new sales also averaged approximately 700 basis points, and were primarily mortgage related. While we are continuing to purchase forward loan commitments and are currently offering our customers 30-year fixed interest rates between 5% and 6% depending on the loan type with certain programs even lower, the cost to buydown these rates to these levels has been increasing over the past several months with the overall increase in interest rates.

However, given the ability to significantly lower monthly payments, a below market interest rate provides us a significant sales tool that continues to be one of the most sought after incentive by our homebuyers and allows us a competitive advantage over private builders that can’t compete on this front. We experience further improvement in our cycle times on completed homes in the third quarter, which generally averaged in the five to six month timeframe. We expect our cycle times to see some additional improvement in the fourth quarter, such that by the end of the year we are back to starting and completing homes in the more normalized four to six month timeframe. Earlier this year, we discussed direct construction costs declining by roughly 11%, an average of approximately $20,000 per home versus the high watermark in the second quarter of 2022.

The homes with these savings will flow through in the fourth quarter as we deliver these lower cost homes and help offset the rising cost of mortgage rate buydowns. Given the level of industry-wide, new home starts, our direct construction costs on the homes we started in the third quarter, which will be delivered in 2024 increased approximately one and 5% on a quarter-over-quarter basis. Turning to land. We ended the third quarter with approximately 69,000 owned and controlled lots, a 19% increase over second quarter 2023 levels as we continued our land acquisition efforts. This higher lot count was driven almost entirely by an 11,000 lot increase in our controlled land to 38,000 lots. Our controlled lots as a percentage of total lots increased to 56% in the third quarter from 46% last quarter and 39% in the first quarter.

Our 30,000 owned lots in the third quarter are consistent with levels over the last seven quarters and provide approximately three years of deliveries based on prior year volumes. In the third quarter, our community count of 252, a company record, increased by 16% from year ago levels and by 8% on a sequential basis. Century Complete accounted for over 40% of our total community count, while the Southeast and Texas combined accounted for close to 30% as these markets are continuing to perform well, given their relative affordability and strong employment and population growth. We continue to expect our year-end 2023 community count to be in the range of 250 to 260 communities, showing strong year-over-year growth of 20% to 25%. We believe this increased number of communities will represent a new base for Century Communities, which we will look to grow even further as we recognize increased deliveries in 2024 and beyond.

I’ll now turn the call over to Dave to discuss our financial results in more detail.

David Messenger: Thank you, Rob. During the third quarter of 2023, pre-tax income was $112 million, and net income was $83.2 million or $2.58 per diluted share, representing sequential increases of over 60% for all three metrics. EBITDA for the quarter was $125.3 million, a 56% increase over second quarter 2023 levels. Home sales revenues for the third quarter were $865.1 million compared to $1.1 billion in the prior year quarter and $818.4 million in the second quarter 2023. Our third quarter deliveries were 2,264 homes. For the fourth quarter, we are currently forecasting deliveries to be in the range of 2,200 to 2,600 homes. Our average sales price of 382,000 in the third quarter increased by 4% on a sequential basis as we continue to reduce incentives and selectively increase base prices.

At quarter-end, our backlog of sold homes was 1,887, valued at $707 million with an average price of $375,000. In the third quarter, adjusted homebuilding gross margin was 25.8% compared to 21% in the second quarter 2023. Homebuilding gross margin was 24.6% compared to 19.7% in the second quarter of 2023. As expected, our gross margins increased sequentially in the third quarter due to improved cycle times, lower direct costs, and reduced levels of incentives. For the fourth quarter, we expect our gross margins to decline versus third quarter 2023 levels primarily due to the increased cost of mortgage rate buydowns. SG&A, as a percent of home sales revenue, was 12.9% in the third quarter compared to 9.9% in the prior year. The largest driver of this year-over-year increase was the spreading of our fixed costs over a lower revenue base, as well as more normalized commission rates on home sales.

Looking out the next year, we expect our SG&A as a percent of home sales revenues to decline on a year-over-year basis as we look to grow our deliveries and keep our fixed levels of SG&A relatively constant. During the third quarter, financial services captured 71% of our closings and generated $23.6 million in revenues compared to $23.3 million in the prior year. This business contributed $12.2 million in pre-tax income compared to $9.3 million in the prior year quarter. Our net homebuilding debt to net capital ratio decreased to 25.3% compared to 32.5% in the prior year quarter. Our homebuilding debt to capital ratio decreased to 30.8% at quarter-end compared to 36.3% at the end of the same period last year. During the quarter, we maintained our quarterly cash dividend at $0.23 per share and ended the quarter with a strong financial position, including $2.3 billion in stockholders equity, $1 billion in total liquidity, and $246 million in cash.

At quarter-end, we had no borrowings outstanding on our $800 million unsecured revolving credit facility that does not mature until April, 2026. Additionally, we have no senior debt maturities until June of 2027, providing us ample flexibility with our leverage management. Finally, back in September of this year, S&P upgraded our credit rating to double B from double B minus. Now turning to guidance. Given the continued strength in our deliveries, which have benefited from improved cycle times and the continued sales pace, we are increasing the mid points of our full year 2023 guidance for home deliveries to be in the range of 8,600 to 9,000 homes and our home sales revenues to be in the range of $3.2 billion to $3.4 billion. With that, I’ll open the line for questions.

Operator?

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Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Carl Reichardt with BTIG. Please go ahead.

Carl Reichardt: Hey guys, how are you?

Dale Francescon: Great.

Carl Reichardt: Thanks for the time. As always thanks for taking my question. I’m going to talk about the margin change, 480 bps year-on-year direct construction costs, incentives off and improved cycle times. Can you talk a little bit about how each of those three contributed to that 480 basis points? Was there a lien in one direction or the other? I assume it was incentives, but maybe just sort of lay that out for us.

Dale Francescon: Yeah. I think it was really a combination of all of them, Carl. We saw the ability that we were pulling back on some incentives with the sales for our homes that closed during the third quarter. We saw the benefit of some lower direct costs that came through in those closings as well. And then being able to deliver a home in a more normalized construction period is helpful. And we have some markets where we’re increasing base prices and so the combination really of those, three, four items, tough to parse out which is which and which one may have contributed more than another. But obviously all four really contributed to some great gross margin performance we had this quarter that we could talk about.

Carl Reichardt: Okay. And Dave, so then if we look at fourth quarter and trying to think about the sequential change in margin, you’ll have direct construction costs. I don’t know if it’ll be up or flat with third quarter per house basis, incentives may come up. Pricing power may flatten and your cycle times I think will continue to improve. So if I add that all up, the change in gross margin from third quarter to fourth quarter should be relatively modest on a negative basis. Is that the right way to think about it based on what you’re seeing today?

Dale Francescon: Yeah. I think those are definitely all the components that we’re weighing against each other and it’s really going to come into what are the costs of those mortgage rate buydowns or other incentives that we have in place in order to move product. And what does that do to margin that — sitting here today, not sure what the economic environment and rate environment will look like in 30 to 60 days as we’re closing homes, but those are definitely the four, the three or four components that we’re looking at that’ll impact margins in the fourth quarter.

Carl Reichardt: Okay. Great. I’ll get back in queue. Thanks so much. I appreciate it.

Operator: The next question is from Jay McCanless with Wedbush. Please go ahead.

Jay McCanless: Hey, good afternoon. Thanks for taking my questions. Could you talk about which markets are — or maybe what percentage of communities you’ve been able to raise price?

David Messenger: Jay, it really comes down to a community by community basis. Although, generally I’d say we have more pricing power in Texas, in our southeast markets and in Florida. It’s just — those markets have benefited more from having lower price points in general, more in migration, stronger economies. So in general, if we were going to look at it, I’d say that most of the price increases came in those markets.

Jay McCanless: And then Dave, I think you said that you guys are expecting the SG&A margin, SG&A to sales margin in 2024 to kind of flatten out. So is this $112 million, is this the kind of the run rate going forward on a quarterly basis?

David Messenger: Yeah. We’re looking at — we feel comfortable with where we are from a fixed dollar perspective. So I think on the fixed dollars, we feel good about that and then obviously the variable’s going to flow as we see closings come through the pipeline. But the comment is really we think that SG&A as percent of revenues is going to decline on a year-over-year basis as we’re looking to grow our deliveries next year. So I think that with fixed dollars being relatively constant 2023, 2024, we should see some leverage improvement in that line item next year.

Jay McCanless: Okay. And then I guess kind of thinking ahead for 2024, if rates stay at these levels or even go up from here, I mean, should we expect gross margins to kind of settle in somewhere? If it’s going to be down sequentially from third quarter to fourth quarter, how much more with what you’re seeing in terms of these buydown costs, what type of impact might that have on fiscal 2024 gross margins, especially if you’re thinking you’re going to have to carry a full year of buying down an 8% or 9% par rate down to, I think you guys said on your website, it’s like five and seven eights for some of these. I guess how much more is that cost going to go up if you have to carry this for a full year versus may only call it three months where rates have been around 8%.

David Messenger: That’s really tough to forecast in terms of where that mortgage market is going to be in terms of buydowns. We do expect that the cost of buydowns will go up and accordingly, if you go ahead and move it to 9% or something above an eight, it’s going to get more costly. But we’ll really look at that next year and we’ll try to evaluate that so we can still post the best margins possible because we’ll look at how far do we want to buydown the rates? Are we buying them down across the board? Are we buying them down by community? And then what products we utilizing in terms of government loans versus conventional, and then what do we want to be offering to the consumer? And so we’ll look to stratify the offerings and try to minimize the impact, but we do expect that if rates are going to be at an elevated level for some time, it’s going to cost more.

Jay McCanless: Okay. And one more, and I’ll jump back in queue. I guess, what are you guys thinking in terms of the community openings that are coming on, where do you expect average pricing to go and are you expecting Century Complete to flex higher as a percentage of the community count and maybe pull that ASP down a little bit in 2024 versus 2023?

Robert Francescon: Jay, we’re looking from a community count growth, at the 252 where we ended Q3. That’s where we really think the base is going forward. So as we look forecast out, let’s just say over the next 12 months, we think our community count’s going to grow in that, but it’s going to grow similar to where we’ve been now with the same percentages of Century Complete versus the communities brand. But again, it’s off this higher base, which we feel really good about that and that’s why we’re anticipating to have higher deliveries in 2024 than we did in — are going to have in 2023.

Jay McCanless: Okay. Sounds great. Thanks for taking my questions.

Operator: The next question is from Alex Rygiel with B. Riley FBR. Please go ahead.

Alex Rygiel: Thank you. And just following up on community account, will the contribution of new communities have a notable impact on your average selling price in 2024?

Dale Francescon: No. They’re very similar. We’ve continued to look at more entry-level offerings. So it will be very similar to the price points we’re at now. And again, that’s on a general statement. We have outlier communities that some are at higher price points, of course, for different markets and different niches and strategies within a particular market. But as a general statement, the new communities that we’re opening are very similar from a price point standpoint to where we are today.

Alex Rygiel: And then, looking at the communities again, Century Complete communities are down year-over-year. Most of the other regions are up. You’ve referenced a number of times the expectation to see some growth in Century Complete communities. Is it communities that are growing? Is it the average size of the community within Century Complete increasing, a little bit more color there would be helpful.

Robert Francescon: Yeah. So the average size is definitely increasing in Century Complete. And also some of that’s timing differences as well because just as a reminder, Century Complete only buys finished lots, and so sometimes there may be delays on a developer bringing the lots to us from a cycle time. And so there could just be certain mixed delays within these, within a particular point in time. But as a general statement, the communities are getting bigger.

Alex Rygiel: Thank you.

Operator: The next question is from Alan Ratner with Zelman & Associates. Please go ahead.

Alan Ratner: Hey guys. Good afternoon. Nice quarter.

Robert Francescon: Hi, Alan.

Alan Ratner: Question on the incentives. So sounds like they were pretty steady both on orders and closings during the quarter around 700 bps. But based on your, I guess, comments for fourth quarter, it sounds like you expect an uptick there. What was the trend on orders, I guess through the quarter into September and October? Have you seen that incentive number rising here thus far in October?

David Messenger: We have. As we look at the third quarter and coming into the fourth quarter, interest rates have continued to stay high and actually continue to increase. And as — so when we look at cost of buying down mortgages to be able to offer something in that mid 5% range, it just becomes more costly depending on — as the rate continues to increase. So yes, we have definitely seen an increase and we expect to continue to see an increase.

Alan Ratner: Got it. Okay. That makes sense. And then, the rate you’re offering in that 5% to 6% range, how are you thinking about that in — if rates continue to kind of gradually move higher from here, is that an important kind of line in the sand where you feel like once you get above a 6% rate or in the mid sixes that you see a pretty dramatic pullback in demand? Or will that base kind of gradually move higher along with the current prevailing rate? It’s just kind of you’re trying to ease that trajectory a little bit?

Robert Francescon: That’s really hard to say. I mean obviously, the way we’re mitigating the high rates is to buy them down and we even have some programs for a small dollar amount on very, very select communities that are in the high 4% range. Obviously that’s very costly right now and — but we like a five handle on it. Currently, if rates continue to go up and they get up approaching close to 9%, then the reality is we’re probably not going to be able to offer that and our competitors aren’t either, and the consumer will adjust to that, but it’ll just raise up. But it’s really hard to say how rates are going other than what we do know for a fact is that at the current lifted rates, it is costing us more on the buydowns currently.

Alan Ratner: Got it. Great. And if I could speak in one more. The big increase in your lot count this quarter, can you provide a little bit of color around, what’s the — these lots that you’re tying up today, when should we expect that to flow through to community count growth? What’s the pricing trends in the market today? And are you seeing any compelling distress opportunities either from BFR deals falling through or some other factors that might have contributed to the big jump in lot count this quarter?

Robert Francescon: So we are buying from BFR operators, operators that had picked up lot positions. They were either going to get a fee builder on it or build it themselves. We’ve been successful in purchasing lots from those entities. So that’s been a positive. In terms of the timing of the increase, as you see, it really increased our control percentage and we telegraph this in our previous calls that we were going to increase our land based on how we changed in 2022 on some of our controlled positions with a decrease based on market conditions. We wanted to get back up to levels we felt comfortable with, and this has been a good start in the third quarter to get there. There are a variety of lot types from finished lots. That’s obviously our preference if we can get finished lots in a just-in-time basis.

And so we have some of those. As far as development deals that we are developing, those — depending on municipalities and timelines, Alan, is, I know you know these answers or — but they’re anywhere from 12 to 24 months generally before they start development and then you go from there. So it’s kind of an all across the board structure on the land, but we feel really good about the control positions we have. They’re in the markets we want them to be in. The higher growth markets. Some of the markets Dale alluded to on this call, and we feel really good about them.

Alan Ratner: Right.

Robert Francescon: And one just last thing, you also asked about distress. We have not seen any significant distress in the market. We are seeing things open up a little bit where financing’s being tighter for the privates. They’re not able to compete. It’s really competition against public to public and so certain things are opening up, but as far as distress, I wouldn’t go that far yet.

Alan Ratner: Thanks very much. Appreciate it.

Robert Francescon: You’re welcome.

Operator: The next question is from Alex Barron with Housing Research. Please go ahead.

Alex Barron: Yes, thank you. Yeah. I was curious if you guys could tell us how many homes you started this quarter? That’s my first question.

Dale Francescon: Yeah. This quarter, in terms of the starts, we did 2,434 homes. So we’re pretty much matching what we’re doing from a sales pace.

Alex Barron: Got it. Yeah. My other question was, last year, I think several builders engaged in trying to find the market clearing price, and obviously that had an impact on margins. This year it seems like everybody’s focused on buying down rates instead, which I think is probably healthier. I’m just kind of curious if — as we’re approaching year-end, are you — do you believe that’s likely going to continue to be the case or are you starting to see some of that activity of people trying to compete on cutting prices?

David Messenger: Well, I guess we’ll see as we get closer to the end of the year. Right now, the incentive that buyers are most interested in is to have a below market interest rate. And I mean, you can certainly see why it dramatically lowers their cost of ownership. And so that’s where our focus has been. And as we look at our competitors, that’s where their focus has been so far as well.

Alex Barron: Okay. Well, hopefully we’ll keep our fingers crossed that it stays that way because it seems like a more rational way to compete, I think.

David Messenger: Yes.

Alex Barron: And — yeah, other than that, do you believe in general that because you said you expect growth in units for next year, so do you believe you’re just going to — that’s going to happen based on growing community count, but maybe slightly lower sales space?

Dale Francescon: That’s tough to say. We think that we’re well positioned, we’re well positioned today that if — call it a 250 to 260 community account going into next year, given our current sales basis, we feel good about being able to deliver those homes. We’ll comment more on future guidance when we get into our fourth quarter call and we may have a little bit of a better flavor on what we think absorption will be next year by then.

Alex Barron: Got it. Okay. Well, best of luck guys. Thank you.

Dale Francescon: Thank you.

Operator: The next question is from Michael Rehaut with JP Morgan. Please go ahead.

Andrew Hassen: Hi, guys. This is Andrew Hassen from Mike. Thank you for taking the question. Congrats on the quarter. I just wanted to — yeah. I just wanted to ask if you guys have put out maybe a absorption target that you’re managing the business to, and if there’s maybe a level where if that — if it gets below that you would get much more aggressive on incentives and discounts, and things like that.

Robert Francescon: No, no, we haven’t done that. So we manage all the communities in our divisions and markets individually, but we do not have any company stated absorption pace.

Andrew Hassen: Got it. Thanks. And then, I’m not sure if you guys have alluded to how demand has been trending in October, and I’m just curious — I believe I heard the cancellation 13%, which is similar to last quarter. Just given how impressive orders were this quarter and the entry level exposure, I’m curious how cancellation rates have stayed so low.

David Messenger: Yeah. Our cancellation rate last quarter was 16%, which is consistent with where we had been running, down quite a bit from what we were experiencing pre-COVID in the low to mid 20% range. And I think that’s — as we said in our prepared remarks, it’s really a reflection of two things. One, we’re selling later in the construction cycle so that the consumer can know what his interest rate is and we can lock that, as — which is the primary factor as well as people are starting to adjust to these higher rates. With regard to the sales pace we’re seeing so far this month, October is actually up over the same period in September, although as we get later in the year, we start really being impacted by seasonality that happens towards the end of the year. We expect that to certainly start slowing down. But so far October has started out very well for us.

Andrew Hassen: Thank you. I appreciate that.

Operator: The next question is a follow up from Alex Barron with Housing Research. Please go ahead.

Alex Barron: Yeah. Thank you. I was curious if you guys would be able to share some of your average statistics for what a typical consumer looks like and maybe even break it down into a Century Complete, meaning like what’s the average household income, what’s the average FICO, what’s the average down payment, those types of things.

Dale Francescon: I’d say — I think that — we can look at providing something like that offline as opposed to going into all the nitty-gritty details here, or we can look at putting something into one of our investor decks going forward in the future.

Alex Barron: Okay. I think that would be helpful. Main reason I’m asking is because I think there’s this notion that, how can a median household income afford a home today? And I think the answer is it’s not your typical median household income buying homes. I think it’s more like the upper quintile or something. So I think it’d be helpful for investors to see what the profile of a typical buyer today is, but …

Robert Francescon: Yeah. We saw that in your piece today, Alex, so appreciate where you’re coming from there. And Dave, can — we have all those statistics. Dave could give you that.

Alex Barron: Got it. Thanks so much.

Robert Francescon: Okay.

Operator: This concludes our question-and-answer session. We will now turn the line back over to Dale for some brief closing remarks.

End of Q&A:

Dale Francescon: Thank you operator. To everyone on the call, thank you for your time today and interest in Century Communities. To our employees, thank you for your incredible efforts, dedication to Century and commitment to our valued homebuyers. To our investors, we appreciate your continued support and look forward to speaking with you again next quarter and sharing our continued progress and outlook for 2024.

Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.