NWHM - Earnings call transcript Q1 2019

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Operator

Greeting. Welcome to the New Home Company's First Quarter 2019 Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the to turn Investor Mackintosh now Relations. will conference Drew over with I you. Thank

You may begin.

Drew Mackintosh

to Home of results the call. Welcome the detailing morning. Good New available are Web the quarter XXXX. in released site these first nwhm.com. results Earlier Relations Company's company its company's the financial section for Investor of Documents the today conference earnings at

filing historical annual made call the most reports would such forward-looking call to other from undertakes remind in A not statements are begin, duty its on made which report and differ including cause company no certain could those in update this this of of I uncertainty. the the to with like Form statements factors in SEC its operating are important that recent in the risks forward-looking statements call. course materially XX-K are results Before Form that made the course and these and forward-looking and involve to detailed The facts during quarterly are the everyone that actual that XX-Q. and risk uncertainties company's statements of discussion in

non-GAAP Executive Officer; that, call Chief President the with on comparable GAAP financial in be non-GAAP may Company's site of the Home Hosting Stephens, I'll Larry. is Miller, its Webb, the Leonard SEC. to accessed turn the Chief Chief today over now filings With and Operating call and Web Officer. through conference be Financial measures and can John measures, Officer Larry discussed measures Reconciliations call. these prepared Additionally, in with financial most this accordance the New

Larry Webb

us as trends. fourth of of on the selling to housing quarter by which New color more quarter about adjustments morning progressed spring encouraging general, season. head high XXXX half deals and position Home, commentary relative giving the John numbers. decisively start I'd call of the quarter land current the the first re-evaluate then and to Housing to good will to following leverage ourselves And our as today. reduce our continue second actions the improved and more acting rest was additional of These focus structure, on a the Drew, our months and about each some buyers be of improved in trends to sign as the into became cost half to generate will during we conditions in detail marketing some level everyone the put At weak we sales in XXXX. in will activity active Leonard In the the Order give of market. cash year. joining to efforts, Thanks, demand back while provide primary XXXX our markets. market streamline of made like an

some of that there in to sequential attributed in normal activity place seasonality. contributed rebound the in that quarter order be believe demand. other While factors improvement can the are in I to have the

first successful and in Company and that the from pricing thanks an the rates in of attractive shock. the industry Home issue builders the half New First, as in to experiencing buyers XXXX. and affordability price that re-engaging buyers second Through lower a use cases year of and quarter in We incentives markets many were had builders. in mortgage face several quarter combination more The of of more affordability sticker of some reductions. other learned in become eased an last were

net continues first XX% Home's from which wage industry California buyer housing behind to The An increase creation, New saw a is we country. the the led absorption Specific and the the by economy top to growth the sequential that rates than While national factor the fourth in demand new improving creation job in absorption quarter, for first prior and inflation. in XX% persist were over the in lower year to rates markets, country. equally up resiliency a characterized job orders. muted sales were that important quarter was to benefit continues conditions economic absolute steady state a favorable be quarter,

always ranked of for for as believe we key same Jobs one Arizona holds states Job job the creation growth driver to XXXX market report. Home and the New true the today. While best according year-over-year March a the has been

is supply demand in of markets. available driver most the Another of lack

has been the of The more result to long-term where and been rate combination the on more in bringing a risk decade prices. to pronounced tight and more average And supply a housing restructuring. over industry supply challenging is is entitlement California building the regulatory land below Our has now. rising even homes for due barriers at a situation

shift that not In this has a housing we thanks basis on of for our the improved which to first industry that in trends up the demand drivers affordable continuation demand some and quarter, While our propelled same particularly the sequential points is since in affordability a pent to the have to development, began. is improvements why lack long-term direction. new business incremental supply resulted summary, of in price continue the at recovery

focus it on to ratios. place to company's generation foreseeable will shift Leonard for on the In cost flow We our we for color I'd more market. our optimistic that demand turn our in continue product. to will are future our these the more drivers that, to order With affordable we in focus meantime, remain improve profitability and over and cash to like leverage containment as

Leonard Miller

on everyone good Thanks the Larry and morning call. to

narrowed progressed, but in in on a fourth at relatively negative the XXXX X.X%. quarter what as the lower buyers in more with general to as levels flat aggressive we year-over-year we the demand basis. spread from the The quarter for of varied saw market-to-market, lower mentioned was in rates As sequential market. Order quarter it pricing pace combination positively and incentive responded in improvement the first quarter approximately of stayed the Larry saw

with three the as new of have has trending opening We continue below the been communities average. points to XXX,XXX. recent company projects the rates priced more these to early focus above absorption response price on moving The been spectrum down affordable encouraging

the remains market experience did in exceed and we challenging, several target progressed up as meet demand their While have quarter sales the did March. or in up communities an tick move

positive color, development the California, Bay Inland has been better and in Arizona note Area. Another applications. of an to and the Empire compared recent saw Sacramento in respect and Southern mortgage the geographic the as improvement trends relatively in increase market to resale With we

to remain in in pressures expect going from Our continues historic in area see trades build and market check. as forward two do communities Sacramento to we momentum the market the in a Cost sales best starts in performing located where incentives the abated the quarter labor perspective also although having to helped tighten season. delayed due due to builders rainy the a in region in

optimistic strong Overall, communities sales this in eight Belmont community and appears a Greater Paradise While in a strong as Arizona, in the at by points, market of Mountain joint to both our new continue we our higher Valley. price various and Phoenix market witnessed have open an XXXX. future be demand to in be growth about at Shadows market and remain our scheduled to small presence though price saw in we number pressures We experienced priced venture the Gilbert points cost have still issue.

rebound down to Corona Southern a with we saw soft communities the better only March year-over-year in the interest theme were in orders in Trends South been for more for Parson in of a very opened with base market, but mid X% is markets. consistent the the has at affordably activity initial in community in our be across master California strong. our priced bed hundreds all In continues plan month. we which prices starting April, an

relatively most got quarter. models quarter significantly during difficult effort. comps in boost to to expect aggressive California, over incentives increased market we prices years year-over-year quarter put as sales the like where in are sales the from due at to the the the Our in see region. seek project points, active opening declines lower community spread market. did the homes the and the prior Sales Higher alternatives buyers XX Builders pronounced the Bay on activity particularly home living second our a Seabluff progressed. price Lathrop the On continue Similar to we in the Core which Tidewater narrow at note, Community positive increase located to in has saw overall Southern pressure high in sales better comparisons. between our standing close cost count an were a inventory, in and area with staying on community of

to turn detail Now, over for John I'd numbers. on the like more to

John Stephens

you, and good Thank morning. Leonard

diluted million related compared loss of share $X.XX with XX% average at to XXXX reported a line net over came loss of in top-end XXXX and or increase structure driven by in was $X selling was income the $X.XX and to $XXX,XXX for $XX per higher XX% included of rightsizing the as our first diluted we and the was to year up after charges or in year. lower Adjusted which primarily quarter share. the The the per first prior level. revenue quarter price, pre-tax headcount million a excluding the $X net net first XXXX was our up a demand first year-over-year million million share compared The prior X% For increase XX% severance $XXX,XXX delivery. $X.X sales million quarter, charges diluted in reducing operations per or $X.XX cost of quarter guidance. for to our deliveries an in per Home severance $XX by approximately

be We price million. average expect to between and between $XXX to be quarter sales million $X our and $XXX,XXX our revenue $XXX home second million, selling

The XXXX costs was XX.X% XX.X% by gross prior higher incentive. in was Our mix related to gross for to XX partially primarily a the in compared was offset basis interest the quarter product margin year point as first shift period. margin which and increase

home for first Excluding our points basis ago gross XXXX sales, the period. XX.X% the XX.X% in cost XXX quarter to to interest up compared year to margin from was sales and

sales interest second XX.X%. XXXX margin projecting quarter, between the are gross we For of and XX.X% including home

the sales percentage XX.X% for Our SG&A XX.X% the in of rate revenue year. as was prior a versus quarter first home

As marketing to count new and to basis extent of charges first primarily benefit in SG&A severance lower XXX home rate and by revenue first $X.X higher a standard severance and sales connection leverage compensation quarter in due with million the amortization increases accounting These revenue quarter quarter ASC adopting offset community charges. XXXX XXXX. previously first mentioned, XXXX our higher recognition in to was from and and in selling higher XX amortization included partially an the increase expenses. lesser were expense related better the expenses the capitalized point XXXX The in

charges, than XX.X% the rate severance our year. the SG&A was lower Excluding points basis prior XXX or

to rate mid in SG&A For our the low range. be to the quarter, XXXX second we expect XX%

share quarter The prior income to income XXXX Mountain joint first venture in Phoenix the activity of venture in year quarter Our $XXX,XXX JV was as joint for of period. the resulted compared for the market. $XXX,XXX the pre-tax driven Shadows in largely by our of income

XXXX second we joint are venture quarter, $XXX,XXX of approximately projecting For the income.

for revenue in $XX building million fee as to year period. compared quarter Our the was the million ago first $XX

versus the at quarter the in construction first gross our fee was Our from margin sub-market. this quarter communities margin activity in for demand fee prior lower XXXX X.X% less resulting million $X.X The to revenue approximately the building and was X.X% for lower year. $XXX,XXX urban or due or

levels year the Irvine. due currently prior are to balance less the to throughout construction and of compared activity revenue anticipating in fee year We the demand lower reduced as

to million down XXXX XX% up quarter. of as For representing Net and we're between new are but the quarter first $XX the orders we compared month XX% year, strongest with revenue sequentially the fee be quarter, to million. the quarter building from estimating fourth the for second prior were the $XX March

compared community for first per X.X sales the year. in community monthly was Our prior absorption quarter the per rate X.X to

XXXX of a at on of a increase dollar the X% $XXX represented result higher a the million. XX and slower quarter our first of was terms down first ended to absorption XX% the units As the communities which X% basis We value delivery active year-over-year with and first quarter in XXXX backlog end QX rates volumes, quarter. down over

real land during million the land our quarter $XXX balance quarter We through expect and to $XXX million year. $XX flat in community the the the count the We targeting full and to in We in million and in ended cash, inventories XX second be $XX of XXXX. quarter million are with estate remain $XX million on first debt. between million for spent $XXX spend year fairly

quarter. close to are We for the of anticipate $XX end also third sales of scheduled land million by XXXX, approximately the which

repurchased for addition, approximately In related a in the aggregate $X price X.XX%] our resulted XXXX $X.X million, cost. gain debt $XXX,XXX we after [ph] in notes an of [X million which of and senior of principal amount deferred write-off due

repurchased be XXX,XXX ratio in concluding for net third also being and our remarks. $X the quarter of We we goal quarter fairly Larry of quarter the to capital to of to shares ended the approximately begin mid second leverage call consistent million. with low turn purchase QX, the of to aggregate range I'll net quarter now During end. the his for XX% the leverage XX.X%, debt XXXX year in with stock our price expect we by common a decline an then, to with net back

Larry Webb

Thanks John.

higher conditions decisively responded on variety stated, response of a and previously market a As fronts in to difficult more leverage. we

fourth than the improvement order business We at activity and especially the quarter the first we feel of of much did March. month today a saw we our significant end during in the better quarter. However, about in

the While orders XX% first net lower were fourth quarter. sequentially the were sales up than quarter year prior over new

In XX% prior home and first addition, home XX sales we quarter. by gross strategy sales grew basis and progress over diversification on deliveries points revenue XX% our the by by margins made

product We is pace where portfolio continue reposition robust. affordable sales to more to our deeper manage believe to more sales include and we

team cost and place has focused long-term challenges our our We position allocating lowering on to the We right in company structure, the long-term our currently and success. acknowledge generate the company our balance value remain that sheet our resources also best for business to face believe shareholders. strengthening thoughtfully for

to pride all where despite than a regarding validation your that now and Homebuyers values nominated members remained were and we contributions class in company XXXX of more we of home I'd team both concludes team other in of a customer awards thank the service to XX happy our making market Choice be any best that and delivering recognized won most our have welcome remarks our We questions. take for I'm on Finally, at true we'll like proud these members their awards conditions. focus new total company. varying the the to Awards very That customers. core ourselves prepared homebuilder

Operator

question first Ratner Zelman Our Instructions] Please [Operator you. is Associates. Alan from Thank and proceed. with

Alan Ratner

if to in Larry, some on success the market the you continued on any guys. Hey through pricing first-off, environment to was morning. hear as improvement the it April. into on order progress. then, that you you through aggressive activity incentives improve homes. job willing the pulling the was comment back in guess where Nice to the opposite of more momentum whether secondly, some And Good I the Good those became I began quarter. to quarter. wondering going was that might order be what move more maybe find of Did or those on

Larry Webb

comment Sure. on I'm to happy that Alan.

our was slower As than came a consistent and mentioned, little parallel April were solid with really really on a February and remark. we was and and plan up March we January expected. was

really the So, price are in to -- Sacramento. what in sales. of what are we fourth programs offered some quarter forward have to fourth line appreciation that we're and consistent our see some markets we and remained quarter. We've have moving slightly opened in solid selected in good basically we We seen continue had seen going about incentives we've only primarily the maybe in newer pretty hopeful below we and for that with feel

Alan Ratner

That's Got it. helpful.

look if lot Yes, Second, think appreciate concern to in opinion relieve leverage the those that and in of equity certainly achieve the commentary would targets. are I already the Do next have, it look couple from of assets overall or there. so as given meaningful monetizing I monetize able the being the you of today. you the John, and your to you achieve when that any paying targets sheet valuation standpoint or you you can to and think at generating maybe really the you really that on think and years, on end the at you my a guess year bigger growth as obviously XX, you about this matures year think cash steady do we as and I your as balance count focus like borrowings off fairly that revolver the the volume two think should both clearly about seems priorities the business community picture think next opposed just the that the is I

John Stephens

Well, hit I you think head. the on it

the the if it bringing on would paying to flow to around like some We'd the First and debt there down that operate cash range we're of the XX% down -- for be operating our of potentially is say cap and down notes bring and of really bank generating I as, makes well. as in foremost, reduce line sort going focused senior to well that sense form if enough leverage forward. as would

of because would I the think terms sort down will I I terms leverage. would the in community are Now bringing in growth of in move and we're leverage that's growth, But, think forward, bringing we're what we of because down anticipating. price accounts right as point going be down terms think not strong we it as you're of revenue increase

Larry Webb

want add to just in point could the this speaking. everyone the I company and is optimist know If I one

the and feel in the our hitting series will about. in new majority price very in of good that communities a those $XXX,XXX range. pipeline that Phoenix $XXX,XXX of in that have points We in price to be The I are XXXX marketplace are are

next can the can we grow. grow months on next primarily focus we and ways. a is our show leverage we our is blocking XX That's we focus cash we and our that we with bringing over to we on have up. primary should can to is where And eight business it's focused can XX very is what small months, our company And six back an in can area we are on. the another for making improvement but in and in our, lowering the focused getting tackling can where with that do but improvement, So but on area in and on we that everything little it's something margins place, have

Leonard Miller

it follow-up, flat then more would Alan, and would say there. I probably to from for up just anticipate XX

Alan Ratner

the quarter, one, up very land just one been assets for California. an also the charge test? give to impairment competitive you on Clearly, bit a you took are impairment have Got but minds I'm glad you being they've could brought is update on sneak you a on it. market almost decade. night the probably builder it's the That's on that's large over you really thinner. there And the but that another given because last well where margins fourth California on if Can -- of close that's that triggered margin long, predominantly are took helpful. last guys I I in some just being don't Larry there the today? in had anything people's a that in top books you for a And the know on us

John Stephens

I given front Larry the on we much year. with we incentive of given things more and than sort sales haven't would quarter end as really say we indicated, fourth Now, the again the haven't the since at were stabilized of have activity away

in we of talked about quarter additional projects, our materially but incentives on fourth that budgets, from analyzed has nothing the what of sort included our some in cases So, we've front. in all changed

Alan Ratner

Okay. Good guys. Thanks luck.

Larry Webb

Thank you.

John Stephens

welcome. You're

Operator

Sam question is McGovern proceed. from Credit with next Please Suisse. Our

Sam McGovern

question. for taking Thanks my guys. Hey,

Alan's Just a points. some further of on

looking bonds. balance reduce there note in be that response mentioned his buying at back out questions may of think do you the to How I you some extent to you're senior the equity, bonds know repurchasing you versus value both about versus the quarter. about do think on How in go did think you forward the a other of basis? to one relative you I the

John Stephens

at the on the that debt still we term. this down again have to time. as we number in indicated reduction from point As Having said one near first priority our leverage debt board priority but some well the is is stock bring authorization in Sam, buyback, our

Sam McGovern

of to maturity your What Got Do pay question Alan's plans near-term Okay. the plan the maturity, revolver you extend the opportunities? you mentioned you in to What that then there? it. thoughts are are regard about And the revolver? with in off. terms have the it to any

John Stephens

Yes. We bank our dialogue got with a group. great

going also current is, update have couple now months be next to We in over plan. and group. our on on in think the would then, our several the next to months give discussing maturity revolver be the year. meeting the to first again XXXX, down But, September a of it's the half in it that the extend move intention through on paying group. with and bank foremost revolver them an facility of with just we'll is X great bring the about talk And to of something I our it our is the as And and we our bank back be intention working we're business extension, leverage

Sam McGovern

your you stand forward it. Got Can What Okay. go currently? it to options do terms us where are basis? a covenants, remind on in of manage you

John Stephens

are I as now fairly that the And we will focused sit were the ground -- perspective. it's probably is some land, the we again, a potentially our think there leverage have fourth of many the forecasting to starting flat to as And today covenant down there's with fairly that better, we but we QX some buying every we've the some day, we're revolver get tightest, plan under closest. room we're specs QX here we where really opportunity a in end quarter. from there. on do that to are not that additional consistent selling got if but Well, little we're planning whether the our at here leverage in right is The success covenant we're be QX, doing specs, specs not managing starting in in have net-net managing selling everything on leverage that's again, we but from

Larry Webb

our relationship our we shareholders. and with within this. staying but our slow us had we fourth as value our quarter, We well we let on bondholders our acted clear be covenants. and Sam, totally And of a are decisively really as focused banks about all

that will responsible manner. do over year the bank down forward line show We and will move progress in and and a we this pay

Sam McGovern

much. it along. so Thanks very helpful. That's Great. pass I'll

Operator

Our from proceed. Schrier next Please question is Scott with Citi.

Scott Schrier

magnitude you about some it see of the gross about comments and given to with to margins margins. improving curious, gross bit you type your for, your more do How of some where a that call made of ROE view your Larry, margins gross morning. had that or do achievable? to of maybe higher goals on that? do longer backlog the I'm might whether could homes have you you'd it's medium like them. internal shift the if that you Where is goals see margins? gross term timing talk have cycle Good you Hi. that the and little that have set like think some incentives of And any you you

Larry Webb

down be margins very where next higher will going are over area opened, at communities slower the our we are our being look margin see we than houses had But, to of be that have, showing clearly the the and course really four when And but what selling we've they year, could the these on roughly older communities. think improvement. our same because delivered. over we margins you go I even to to Well, are backlog months, of clear, where our slightly, three is they in newer

we So, margin improvement. must that have we recognize

have margins was our the had where reasons propensity been One lower plans company there a building master within be for proper participation. of to our

have all our showing they higher we've As that opened, we we're But to fewer those of newer I communities grow, say are going of just margins. communities. can

John Stephens

add to And I just would that.

with point of we're exception more Some one margins. where seeing the or maybe the of price that's higher the two communities on pressure

than been affordable higher So projects on to and said, again, as the priced Larry thumb. more margins as have we we have we lower rule end seeing the more general better like a at of product pivot affordable

Scott Schrier

Got it.

These XXXX and going in open lower range. of think margins about higher size price faster as of in thinking you to $XXX,XXX be somewhat I be with we're to new said the into as up the eight So clear, the be lot $XXX,XXX They're communities Arizona. if a to maybe well. you communities given overhead turn these might

John Stephens

that's say true. would I Yes.

drag revenue. You're from to priced start that'll have for bigger a help. still and But to going these they a through continue to pulling we communities account that these open higher portion is because the communities deliveries obviously of as

interfacing. absorption as we and soft be we're on to very -- the think interest is going the and how and debt down think is will little pull our and I we're able just -- Leonard can is in successful inventory pull I that we focused to lowering our think a is, I leverage, other potentially granular can high thing absorption to where our our are And think help debt relative we levels key. I if if I know produce our cost equity and

Leonard Miller

Yes.

right all I think hit points. you guys have the

benefit say get shorter I Arizona higher won't but you think cycle expect, year would the times, one margins, we is one would XXXX. in I about have definitely thing should full

opening. on about timing got of So a to based careful little be bit you the that

level, the at look by encouraging year-to-date. the I have and break the of months know averaged it for was entry when per five that when month you a down huge we I been you has sales four really first is product thing other entry nearly communities -- community our we really have think four don't level segment, count that but year

based gives point. price down just as So would it steps encouraging. very me expect And you that's on then,

we're interest, because cost so side interest in have So you sales when down for the marketing then, high We're then we other us indirect interest made to really like increased the just it, said -- and progress slower, costs exclude and to absorption. we got of bring absorption pushing John killer your sweet margins spot. in your on [indiscernible] is is costs as and trying of percentage that and sales find of again a that

Scott Schrier

then, and focus spoke then questions on to on deleveraging. And your several answered Great. you've leverage

quarter, last environment believe land comments You success talking I'm on the I the so projects, not were on also speak going land certain drawing made wondering which the about you were spend? in deals or rebidding revaluating, know progress might if your have I board as and some And land land you to of those could some had quite to you back attractive.

Leonard Miller

really a question. It's Yes. good

have it's depends. out maybe but to help we've we diligence particular deals go in in If price back are case price, reduction. found there, a one the what bit the think those And so. were due got did did I also one tied relief our really that that nice in in pretty than and seller little divisions, it terms in -- terms really a of we then rather extend up some more one the

bag continue it's So push board, kind we success. across a at it of some mixed and to had but have the

John Stephens

the here with on and just a a California it add on think to other next master But couple product much models that that. plan start done longer. the we're that's community. seller We I ready to getting to bring of in more pretty and months a affordable we in Southern in higher the takes was had we price another that community is, one resounded where basically went -- little

So that's positive feel. real a

Larry Webb

or still we add, we could I control our that have option. land own if Scott, XX% And of under

months, about back are not one-time a continue these that two sure properties is re-evaluation be successful going last and and at our to continue strengthening we but a to We've to in sellers market meet expectations. very to event. option the seen we this can make So under diligent look

Scott Schrier

taking for good and luck. questions Thanks my Great.

Larry Webb

you. Thank

Operator

from Housing question Research Alex next proceed. Barron is Center. with Our Please

Alex Barron

credit where so of most Your of far, capital... that has line

Larry Webb

question, it for if I'm start Alex but reason please? some we didn't over your sorry, get could you

Alex Barron

where been so Hi, capital for the use What Okay. that credit of has been far used? has line Larry. main the

John Stephens

been and land so purchases. really land, our working our capital It's web

Alex Barron

And know it. but you say now heard don't a in where are terms like, count in I spec Got I guys ago? I don't of of know if year anything spec versus terms

Leonard Miller

year believe to last Yes. to specs close overall. But months. spec would where in XX% that's those quickly that end produced just those a I I the XX% on if the progress to five And say of the going We've that I do. next near-term I our know made of four first we say down is see in Really I quarter. want count are lot about about

teams the working through that. So

to progress. We're making continue work we So, at it.

in we divisions sales think we've not put see again a a do flow line. than cash out making our out spec over we policy But, our last their [indiscernible] very sales in of quarter we importantly strict so spec mentioned on margin place, we're very, as this really front -- sure managing getting our we're leverage. better I any aren't

do. we're but we have So of we're work lot progress, a of looking all making to at that still

Larry Webb

company many primarily you market as been as or anybody. builder. well started were we've had And gone specs. before know, models as a large we've spec never waited We've Alex our to our until open

As prices sales sales do. or bit, a it. we that's so far their proven whether would a something we've say future company we're every little and the in new land focused more and -- I it's laser spec the be we're important to added but disciplined our And thing spec sales affordable into with to to on count our gotten probably But we're we've specs. pretty to that's solid very about openings very our see week

John Stephens

the you but the projects, sold haven't sold have as you attached whole spec think all to Alex generally some started. have on know I building because the start a where whole the and units you before building have condominium may I other area we pre and

Leonard Miller

in range. John closer That's that the XX% those we've made say what and going to I exclude was if to quarter is XX% too you progress then recorder

Alex Barron

it. media in the community year count? mention on you or far as and plan And count the heard your over northern Got California then, two as in Phoenix. next find and southern that you I What's growing

Leonard Miller

want you John? in jump to -- think I

John Stephens

in what the I Phoenix, growing and I board would is probably Northern in Yes, I Based say think flattish. we're mean on have on what we California more Southern today.

and markets back continue evaluate will our we'll that. success how and put tied those to to again much that on based we Now, that deleveraging into be

Leonard Miller

is communities opened we've three say with open Northern on by an year really new to would I additional this price point. Well just really three the quick, going what's in California repositioning there up plan

really having more Taco those markets much the of we're -- as margins. Fairfield points higher we're where higher Bell, commuter So really Bay and price doing area in and doing highest some those again not in absorption Sacramento, Core

Alex Barron

you. Thank of luck. Best Okay, great.

John Stephens

Thank you.

Operator

Our with proceed. question [indiscernible] Asset Tiffany next is from Management. Please

Unidentified Analyst

in of getting talk Thanks. and quarter it. from found third land expecting the proceeds about, deal are you Hey, we guys the can hopefully, revolver? of the what be use guys can one, we That's pace you're you in just second, Arizona? guys. Can used that about just the is And sales kind talk

John Stephens

down you revolver. This on in. I'll I know Leonard, land that and is in John to be sales foremost from of be kind Arizona? proceeds then, used if would pace the sales. about pay to sales jump the talk Yes. And don't to Yes, any want first

Leonard Miller

in a four currently, less three project million. consistent Belmont between and we've know, I opening our and Yes. a only a $XXX,XXX other communities, that's we're venture don't communities we joint point I will and two really say Rich, month and talking a what that's there $X one two been since have price a of little communities, average than Gilbert, if and

So that would good really record thing On got month. two been it's one we that a more home really type there. anticipate second a to track like we've

below look points as underwritten is are $XXX,XXX but so, And we the price everything and or mean I all $XXX,XXX. forward,

kind have So targeting. of But to we give out ground. margins would the before of little let's with him the do we're again, get we a a X time of underwritten that bit month

Unidentified Analyst

much. so Thanks

Larry Webb

Sure.

Operator

questions over I'd the at are remarks. back management no turn for time. more There [Operator like to closing Instructions] to conference this

Larry Webb

in the the took at actions fourth right just If strong are headed end could say of definitely if feel We we direction. I quarter. conclusion, the in you. that Thank as we

are and believe We appreciate we you. seen be and in we We your is successful. right to we Thank improvement have have continue very place going the experienced that support your And confident improvement. to team that of comments. all

Operator

concludes Thank conference. you. today's This

lines time. And for may participation. your your you You at thank this disconnect

New Home (NWHM) 3 May 192019 Q1 Earnings call transcript