Earnings call transcript Q2 2023

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Operator

Greetings and welcome to the Landsea Homes Corporation Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Drew Mackintosh. sir. you, Thank

begin. You may

Drew Mackintosh

and earnings welcome second morning Landsea to XXXX call. quarter Good Homes'

call like meaning Before this I begins, the would include Securities statements Federal call to forward-looking within the the of laws. will that note

Exchange Homes Homes the to, numerous risks, to described the Commission. time. risks risk and are but Securities include, Landsea over assumptions, and change factors that uncertainties statements in which are Landsea with cautions These subject and its forward-looking filings uncertainties not by limited

should should statements upon these representing undue forward-looking whether relied Accordingly, not subsequent as securities. deciding on our be any to of date reliance our invest forward-looking and views not as statements and in you place

after undertake do made, any result new securities as be were obligation of not a or whether applicable under to may future laws. except We as circumstances otherwise, date events, the required or information, forward-looking they update statements to reflect events

non-GAAP comparable its call financial and this in measures SEC on can Additionally, Landsea website through measures reconciliations accessed GAAP of Homes' discussed most filings. the to be

Mike today Officer. call Officer; Chief Executive Chief Operating President Chris and Ho, Chief Landsea's the are Officer; Financial John and Hosting Forsum, Porter,

to I'd turn to that, call the With over like John.

John Ho

today and our provide as Good joining results review for thank quarter morning an our second you operations. we on us and overview

quarter Homes solid profitability a benefit and sales combination another from resulting continue in of to company-specific and Landsea of strong fundamentals, industry activity. healthy

that topline second which was million total of the mainly $X.X income quarter XXXX a strong produced We share, guidance. previously of stated excess by in home were per results, for thanks our or of net to well our driven closings $X.XX diluted

continues home comparable buyers X.X per increasing the a to number we market. prospective in throughout be generated of were of home It which dearth at sales inventory as the brought our month pace we to per of existing has Order where year new time. markets, an last activity a this was solid community to quarter

While uniquely our homebuilders, on we believe us and latest this is thanks market. all to homes, setting dynamic existing high-performance offer innovation Landsea other the capitalize the to technology, trend, from home apart positioned which has homebuilders, especially benefited home this in

rates buyers constrained lower We expect as mortgage as rates home with to elevated, current homes. keeping inventory in remain long stay their existing

A big to part with that rapidly our presence in. we've is understand the a the of share high-growth returns increase our often this of in business strategy is and correlated established market builder are and profitability a that We scale markets size.

of and our have elsewhere. Florida presence We in Central growing these in Phoenix a to like in that short we great strides want and made places markets towards continue amount time momentum and

we we decided million in in deal our markets, to powder in end, us that our To with This provide need raise the debt through inception. dry will investments trajectory a capital make the maintain July. since high-growth $XXX demonstrated capital to private we've

intent on One Dallas, March, regions corporate immigration national our state commitment established itself and a of has as becoming signaling big announced in Texas our a Texas. our to and we business-friendly our is demographics opportunity the headquarters state, of the we company as with relocation to Back the patterns. favorable view a homebuilder. for

Houston. around forward prospects and the our the the area for others market current to operations that Austin our and like about in state, excited are in look presence and We expanding Dallas

have and for stock believed Despite our time strong true our value track that reflect did not record profitability, of of company. we some Landsea's growth valuation the

to work secondary the portion causing shareholder, lack To this was was facilitate for shares. of Landsea a largest with this offering the available a trade of a factors of we to Green, shares alleviate flip market. we in company's the One felt open problem, or our

investors, still current $X We physicians. offering of stock purchased XX% levels even the feel resulting undervalued been and $X.X went effect actively our a for million we market as the sending offering The June. June, of shareholders, alone the more this shares re-pushing open stock XXX,XXX higher shares have enthusiasm transaction. this establish June to for tremendous through end for the market has at from bought with our in shares XXX,XXX secondary our deal for met and is result. additional upsizing an been great of in in In to and investors and was We liquidity about net considerably in with creating million

for our shares week, We just for purchased in approval over our total, the meeting. piece of X% March. million of program roughly open we received our $XX $XX remaining total a for since an last additional market. have of completed in repurchase outstanding million the capacity X.X In And board share July shares million at in we

balance and We outstanding share remainder shares will strike continue a opportunistic to of a throughout level of between reasonable year. the repurchases the

the they the We there our that position of high-performance is feel a home of great to few Landsea we a sense our homes present to existing for these buyers. fundamentals as Homes capitalize year, are and available among housing option very market. urgency realize As positive homebuyers, affordable exist a look options on to we that There that them appealing in believe in second a is half the in the markets.

we years are giving industry less on in few schedules chain our remained our Supply market. given last clarity and place, delivery the the have seem has us seeing faster in be inventory to and the turns. dynamics that firm environment discounting issues better impacted updating, supply-demand for Pricing

growth to necessary capital balance great liquidity have achieve is in Our sheet we shape and our objectives. the and

For Landsea the extremely Homes. future about all I'm of optimistic these reasons,

Mike, over our operations to detail quarter. With Mike? turn call will on this the who provide that, I'll more

Mike Forsum

in conditions up prior XXX year the quarter. throughout remained were April communities faster a expected than favorable the Orders second community in fairly openings quarter John. the Market to selling first X% sold and we from of new Thanks, finished. representing attributed was as increase the sequentially some model until year on XX% and existing we hold quarter consistent off over the homes, earlier to while our June a which complexes were May, decision bit closeout lower, and

we Additionally, in selling communities been again start those are Several have June. rates now saw new of to well. open increase and interest

opening XX at example, this For in sold in our Hills March California since homes Montana. Community Narra located Master-Planned have of we of year, Southern City the

We floor across pricing existing has our of definitely power John are on put as experiencing similar mentioned the lack markets a inventory pricing.

rate to payment affordable will lock standpoint. view X% range continue that locks accepted incentives the utilize such higher be to a rate to to a appear the more our environment as we monthly buy-downs forward in in the real in for rate from have make a purchase. future a We foreseeable to homes and their financing move as incentive and ability Buyers with

in All project the the took and with be layoffs of conditions. quarter recently exception announced performing in in effects core the a tech million of Area, second well, sector. markets are to feeling the San the We Area Bay of Francisco market related slower $X.X our to seems to our which the Bay lower reflect the impairment these

cost options. the of is rental we new Northern our in positions market for high lack in given inventory solid of we there the still existing Outside remain of homes and about demand believe California, the and this, positive

quarter, Our carry saw into the and strong and Southern that we California, July. Arizona in Florida, experienced all order operations momentum second activity in

spec strategy to we employed the in standpoint, the a operational an have shifted away more from start we earlier heavy balanced From year approach.

build for us a the peak, to from down seen which built have in that timeframe to allowed their now buyer return We buyers. times has marketplace acceptable homes that a cycle and more of X-B the have is come deliver

are the with a feel with We starting the supply the behind customization. adjustments have that to margin a homes earlier issues efficient obstacles. opportunities smarter overcome associated us, process still have homes we as the we buyer’s of builder and industry are result We our where those on and believe these of have maximize without a we more are we made focused contracted selling construction that chain worst to become more the in comfortable place disrupted

the delivery feel half in ability good operations the started we targets. for Overall, we We hit and our heading to goals or closed, of year. confident either into everything back our to need where those really hit our sold XXXX feel stand about

We of a markets offering best the the product country growing competition. in the and strong compelling and some a from presence in that have differentiates us

created considerably come and advantage the that housing the from has well-positioned to we a improvements opportunity from existing Landsea resulted inventory opportunity. is homebuilders real of peak, Our take of for lack down further have void The build expect from has the see market times to home in and here. that

Chris? Now to financial provide will to results over like turn who the more our on detail quarter. call Chris, this I'd

Chris Porter

Thanks, Mike.

second over $XXX For million first the the million revenue, taking half of total homebuilding quarter to XXXX, the a decrease generated a us we $XXX year. in of second for of XX% quarter,

Second decline our in quarter deliveries XX% were closeout by by and the New decrease in of revenue driven which was average selling in York. largely price, operations year-over-year X% impacted a a

a second California, number our of average sale same year. Florida increase and achieved Excluding delivered X% New York, the and markets core the as in of last price Arizona quarter homes of

up X%. On second California compared of a was to second million for the We Florida's Arizona ASPs were sequential and $XXX of quarter last total X% the up million $XXX and both in reported basis, quarter revenue year.

not revenue generated sales bulk $XX primarily quarter other contracts lot sales did The of occur this we year. XXXX, second million in that from and

pre-tax margin basis inventory New change. the a million $X.X Our XXX The related York, income sales the in in was primarily million revenue $X.X to year. difference home compared to gross impairment of of incentives from last were million quarter for decrease drivers $XX.X this point and the

a of sales and the from year. sales marketing basis our home quarter, In revenue second percentage of improved points quarter XX as expense last second

of $X.X as million lower percentage but expense elevated a home G&A sales than revenue. last Our year, remained million $XX of was

roughly and transactions, our going related This related markets anticipate G&A quarter move to quarter, $XX stay some We remain to to to our million fees committed additional onetime charges operating overall to million capital to Dallas. had at corporate $XX forward efficiency per with we relocation along improvements.

the sales XX.X% reported XX.X% We home XXXX. of to in gross of GAAP quarter margin second compared

point during margin. quarter, As cost the we inventory million gross XXX we've that our basis a runs sold through on recorded in decrease $X.X impairment goods represents and a mentioned, of

fully points impact margin our XX.X% quarter. goods of inventory first sold, adjusted a have but in inventory margin quarter, decrease this been our for XX%, and interest purchase impairments guidance basis, accounting, the points above excludes estate basis gross the On was XXX cost which from a of quarter. price of and basis our which real gross XXX ago, sequentially from the year a the Excluding impairment, up was would

volume with order John the the As consistency our very produced and mentioned, we in new are pleased quarter.

$XXX of from million. selling XXX XX% were average orders ago New and up the year a price total X% Orders volume from and with sequentially first were $XXX,XXX an quarter. of order a

also We XX average from ended earlier. the up with year selling communities, an of quarter a X%

Throughout current an option as on this XX,XXX our these focus acquisitions year, our disciplined under lots continue and lots conditions remained XX% over market ended with we assess asset-light controlled. land were just the the as or to strategy. quarter on of owned agreement we we've

Our tax which effective rate represents $X.X an XX.X%. expense in tax second quarter was million, the rate of

anticipate effective we be in year, rate our the of the to will XX% tax range XX%. For

on in cash managing turning and we our We ended $XXX interest revolver with million With increasing, revolver. where are in cash second million and in efficiently under Now cash our our more quarter liquidity, equivalents reducing outstanding and balance – sheet. to $XXX the rates hand $XX million availability

Our share June year. as XX $XX.XX XX% tangible of XX, to from a increase value last June per of book increased

Additionally, and our points quarter, our policies, debt from ratios XX% from basis more at quarter total total leverage XX% stated ending first quarter from capital, with reflecting XX% the line use revolver. of our to remained capital, net to in debt down efficient first XXX the up

quarter guidance This conditions. some third and based full estimate year. provide to guidance is today current best like I'd with on Now the our as market of for

units selling new We overall XXX,XXX in XX%. with inflation to prices and relatively sales $XXX,XXX. of the and quarter XXX delivery at third around this interest in We XXX gross range be home quarter consistent be of As results. rates home range affect our may their average anticipate continue the deliveries anticipate impact margin to GAAP change, to to to to remain

and the be For from be X,XXX range previous our anticipate full new XXXX, deliveries $XXX,XXX selling home $XXX,XXX. now of delivery to average prices homes, and X,XXX guidance in year the up to between to we

With And we'd prepared for that, to the call up remarks. like our that open questions. concludes operator, now,

Operator

Thank you.

Securities. conducting Please We [Operator will Rygiel Instructions] first comes question-and-answer now B. be go Riley a from with ahead. Alex question Our session.

Alex Rygiel

is for here. question morning, John, Congratulations capital Thank gentlemen. you. of transactions on you. markets Good first a number

better in talk If it's you you future could, though, accelerating sort for how years? the growth positioned of about

John Ho

private the sheet, given continue more permanent to interest that debt of I in. to operate and in has we one capital it, we're the that which one allows obviously Thank banking really it us longer-term debt that if you. quarter, balance grow to find flexibility volatility, in opportunity got rates of markets business land diversify sort diversify in the or five-year did it's our key gives of the to buy Yes, this on continue Hey, term also can capital. us think Alex. we stack then market, some And with acquisitions overall a whether the to and we placement, the our is things with a currently

name -- for story. to very the helped actually on extended, attract more lastly, allowed offering really we year. other to we and extending US another investors did in successful line a tell institutional the The then to that increase the secondary the liquidity was capital closed revolving just stock, And markets in really front us allow continue that of our us thing credit and revolver on our

from that to another XXXX. XXXX three goes So years out

more I on capitalize and forward company market it grow us grow we've to think to scale. opportunities and really that and go in at any comes positioned So the for well business the also volatility

Alex Rygiel

profit then, be buyer comment that? bit opportunities shift a in from Mike, a maximizing option you And was spec about helpful. from Included a talked about Very selections. you a towards bit little more about that talk Can builds to built. little away

Mike Forsum

we a Alex. when escrow towards move prospects a to around ability home a want home have generally of towards buying our Generally, unique able customizing also those them and profit into margin our Sure, we we're have quarter. to and get specs upgrading centers to actually in And pay going they that certain so a can doing, homeowners materials and we levels higher design items.

take two does us the it it with One, process things deposits the even into additional for to [indiscernible] us us. So escrow relationship transaction. allows

And and because options then add to most are revenue of accretively XX%. XX% profits our

pull When of so do. do of we options. really like and you're price of up from standpoint, to very back that you that those for those the options, options to the sort and happens out. but build, concerned on that many tendency you you move about have price also one to overall things also And And house preselect spec is it's what you trying a the

again, So the support of of homeowners, you centers, sort have house. to be thoughtful what about as get again, that. want we cost in terms that add of mortgages want to that as, how they long Whereas, insurers, add, the should they unbetter they're much line to additional

So, it's always been good a thing. a thing. good It's

to we like can. it, we So do if

Alex Rygiel

XX, like Chris, then, the XX out and what And count at might guidance months? helpful. Very going maybe any on look lot year-end

Chris Porter

the the Yes, year…. lot Alex, last of year, I as at opposed think, a count, end

Alex Rygiel

not count, community meant sorry, I lot sorry, I'm count.

Chris Porter

was go. Because that's to going where I

said, It year be be ended selling to up closer about will it the basis end active year-over-year. and top XX% looks this organic like that on communities the we XX for XX% an XX%. to And we'd we probably average. on So of about on

So count end XX% than about community on last average we -- should year. higher community selling count our

Alex Rygiel

Thank Very you. quarter. helpful. Nice

Christopher Porter

Thanks.

Operator

go from comes Please Our with Reichardt next ahead. BTIG. question Carl

Carl Reichardt

question, impact that. start purchase count thank the margins? bleed can so to talk Chris, about to not you when community Thanks. guys. Was and will going the Hi, ask you off for accounting

Chris Porter

be probably XXXX. in -- Yes

-- go on well. when this quarter amount We've over about first burned Hanover XXXX. put we'll we the gone about probably a $XXX little through million million through or we in acquisition that We through last of year $XXX So year. as $XX-ish so about bought million the

So guess bleeding that is in start it my will completely off XXXX

Carl Reichardt

XXX -- half back in of Okay. anticipate get you And a happening in you've the on the that on much the went got you pay XXX for do to think, line how how expect be end the the of then from we Thank so of And year do flow the year? of line, line, much what's that. paid so -- you notes in where what perspective out cash outstanding? terms when you're, I to the down the down to

Chris Porter

Yeah.

So we've about. look I the managing will targeted ratios think we really leverage within that at talked

XX% to in be of we we've range, then company that we've to being debt kind leverage, and total be ebb and committed level. would cap that I talked the And but the so ended We think kind about net that that. where on flow within at quarter XX% may of to within a mid-XXs at running we'll XX% debt the cap. manage And the to company would

Carl Reichardt

return be is right. question improving question on a the make traded returns really related How reasonably focused that that. the more And talk homebuilder more sort for I is given about returns? you All or the that ROE this for so equity will high at return But public the how to leverage of to turn have is, you And value your change. is higher? picture for likely you Thank strategy can do high of bigger thin, then Okay. focused? real you do moment the on Thanks. margin reasonably basis, book get is asset

Chris Porter

John? Yes,

John Ho

Mike this I'll and I'll first, that is hand it answer question and John. Chris. Carl, over Hey, then to

So we obviously, very is important. believe ROIC do

to I think price it's highly stock correlated well. as as well

that a really growing that quickly. job One we good very doing is date of we're company the things the pretty think to

business in. the our everything high-growth to to at Texas markets we're public chosen into record and like track we these since went continue scale Florida done in we look to really that said of and be going grow you we've markets expand We've -- do think I in XXXX.

we turn do we've traded public public a the markets company. smallest particularly with it's currently certain opportunity Florida, a a that like fixed publicly with company, Obviously, Texas also company that much being faster. and turning inventory comes the faster as the have into, to cost is inventory much think But and running scale well. expanded I being traded there

business of growing important So turn. well as the as is higher in markets these scale that inventory

So one scale in these the because our the to in into if is thoughts the year, speak we well next then comparable in of half second to as to about a more returns that markets we we'll more the year things that get of these can Mike can growing Mike? inventories think turning these we're diversified see want and a lot to in faster. portfolio I be peers we detail markets, our have more our as

Mike Forsum

Sure. Thanks, I pretty Look, terms last add coming excited they of way about would just remarkably in inventory times year. that our turns, we've Carl. where cycle down from our been were

ago. -- in to In fact, one X.X of highlights just of of we which the cycle that last literally months, it what a Arizona, we year a time release was our went is had is half

standpoint, to in great commensurate from So closed seeing in in and we would house we're with that getting which be in. built the markets we're really think, improvements I best-in-class currently what operating started, the consider

and looking actively which not. Along still for in markets we're targets which in are the in in with to expand and that in we point, John's operating markets we're

currently we're so several And great having with some conversations candidates.

which the builders or size that acquisitions. one for we're of Hanover are choice with again, think in I those Walker of the Garrett are commensurate the

John get to quickly We transact that us to how how scale on We do and to And about. know talked companies them how that. those help that. know integrate online we that know to get

Carl Reichardt

the I content. appreciate

Mike Forsum

Yeah. And am… I what Carl,

Carl Reichardt

sorry, go ahead. Oh,

Mike Forsum

of we're that No, overall It's well as help is, and kind to that about those the as to well on. to profitability say, improve focus manage continuing G&A things talked one I was going of our something to margins. continue we've

be once now do point got scale start to nice grow G&A of growing. public that scale, we've a feel leveraging like to a current I from. see to the We need of right think back would we And a Again, company. scale you that we

Carl Reichardt

really help. so Great, guys, the I Thanks much. appreciate

Mike Forsum

Thanks Carl.

Operator

Bouley Matthew Barclays. Please with from ahead. comes question go next Our

Matthew Bouley

know the for gave you just in morning quarter. Thanks about some my around per It I to pace. everyone. sales wanted believe, the X.X taking I questions. Good color Hey. orders. I was, ask month

number how guys guess, and historical kind then one, bit sales pace have of in trend set through quarter little a data don't the into around of higher-level. given the I'm July a went you time maybe did great curious, rather housing. public, I we and think volatile one a I

with billion. in So is normal communities think the could do of speak guys. the year, $X.X you, sales Thanks you what you kind today, pace have seasonality of to relative to for the this second -- half that

Mike Forsum

Mike. Hi it's Matt,

So generally. community net communities by answer is absorption let X.X X.X velocity me rate that try a point right regardless around roughly that to We saying we to like think per price in at month. generally our that of always run to any that, the

community a And to It momentum in at terms the pace. of where through keeps we are. consistent proper build a

really going whether the or down, continue at clearing So to always incentives, level the we're is the to of find trying proper market right price, necessary is pace. up kind going of whatever that

that's So we are. where

are good standpoint, community believe what a rates down they where a where substantially were from have is we now level that year I that come environment. Cancellation prior. at From sales we're seeing right healthy and the

in that a of either. certainly, XX%, in single-digit operate great, XX% where against be to XX% absorption, getting healthy kind settling want cancellation cancellation to rate, rate we really that low This the if gross not is traditionally. sort above which we like that's you're to would of is in number probably where is We're

solid we're of all At through, people in steady seeing our that's at not rate that good cancellation we're pace a traffic ready and absorptions, a are So and buyers at. are nice communities, settling getting pace growth to anxious transact. of willing against good, coming

of tail of couple seasonality, in a what That bit And as a that. is around saw June. was a very which expected. a off probably bit of factors, that so we're from wind standpoint we excited about We well, little little

some But some righted just dealing a lull to a, gapping also it for things be had going people we other things most and been had were Q&As of then a that a a weather into was part, bit sort supposed little that the itself bit of of with. coming think, online have I some that around And We of that. July.

So strong forward rates, the summer that around as gross July pleased cancellation very and of around our we're has part business. things are looking stabilization we with net go been how and this

Matthew Bouley

it. Got

moving Okay. to margin. Perfect. just And gross the maybe the Thanks down for color. then secondly,

guided I up be to did GAAP and in but first QX margin to I'm it the in the me flat sequentially think you if QX, nicely there tick correct relative wrong, quarter.

you and some think I everything you're doing then out built. on options be tailwinds around price called and shifting to back

are I given gross guess guidance the So takes? What rise what margin the prevent continuing puts from would to there? your and

Chris Porter

take Chris. it's Matt, Yes, I'll that one.

I we're and interest be. still think tend where Fed rates little that a to with the cautious movements

experienced in continue what I think interest and rates momentum. all to we've the where to sales be that in incentives a need spike happens

think the probably there needed. to We've I that's what factor abate out incentives So that, seen that's are is biggest year. this start those

to favorable as see tailwind where of cost a do improvements through cost bit that's of a continue think sold. little tailwind we that, we are We trend assuming And starting us. do that, that's a rates behind -- mortgage think some to bleed well. that So goods

factor and and mortgage price But that maintaining rates and about the that Mike talked where the to is we those balance has really, rate around the questionable and right cancellation that payments. sure have get right making to rates head mortgage there out

Matthew Bouley

it. Got

And helpful. That's lastly, just you, then Chris. one Okay. for more

interest either or we capital thoughts year how out to the transactions, On markets any capitalized this later the next get -- on about into private year? and the as placement think following

Chris Porter

Yes.

Matt, there's and I about a difference think revolvers where our between loan delta basis that XXX point term today the price is. effectively, five-year where

years bleeds or active four that it roughly I today, selling think that communities the overall. of that in as kind takes five through are

constructed what's then new got there. will we've plus being that in communities be So

out see bleed we'll to so And years, next that three really. over the five

Matthew Bouley

thank Well, luck. Thanks, Chris. right. guys. Good you, All

Chris Porter

Thanks, Yes. Matt.

Operator

with comes go Please from ahead. Our Jay question next McCanless Wedbush.

Jay McCanless

good Thanks taking Hey, my for morning. questions.

going get start pace, you could but as That talk about deliveries if one, like to to year-end by So entire good cycle Arizona, triangulate my to does think trying just news roughly a that time you're to selling XX XXXX? three on we for first and was company. look the you're for if at what communities about

Mike Forsum

one. I'll it's that take Jay, Hey, Mike.

I part, faced times think last cycle the the most had here for or we over a the decrease that large are elongated year so. we in seeing

As really is been really we Xx been that which turns that per marketplace out that core because highlight has those month you want get Arizona, said, to to the in range, which of five get to year we've excited there.

So we're improvements everywhere, disruption great actually, is actual had probably weirdly doing and a supply of they seeing in of Florida And California terms and Southern the cycle the times. around chain. job places all including least cycle their good their times with

they've really done a job. great so And

their that of been box tax in we what which impact or their down build and there's bringing Northern has times these sort have California electrical cycle seems it arms slice up the getting Area. challenge a they to product, there and the substantially. also be these boxes really Really Bay challenge around call been primarily the that -- we

be seems So also to -- resolving that but itself.

has ranging it the been as to we're higher because anywhere which I terrific types look, than was we're improvements. been X.X% that which So I would say that that country, say, said, much across product prior has really a good seeing, much, between X.X%

Jay McCanless

Okay. Great. Thank, Mike.

so And guys large, did and orders we think are I about sounds it limiting by of guess as whatever restrictions off. June, those like during July, you

to So you pace right way to that it? about should XQ? higher what achieve in than able a line think you're the in to Is think maybe about

Mike Forsum

so. Yeah. think I

Jay McCanless

other in the Lumber had really guess increase, the margin around margin? of just be I higher of question We some moving some gross that you we prices some up. should guide into of when cost. in these that some provided, I rolled the goods. to other the be include gross haven't to does lumber then effect, lumber or lumber expect was And deflation seems the seen much

Mike Forsum

Chris side. first handle year. probably closings that gross But generally again. though, see that margin quarter until up some of I'll lumber around we'll starts next the right, let of again, you're going That's back is

that were in to is of took labor continue through lumber starts Jay, costs what that hoping the at material to costs and year year. costs So other balance for, the that for we're we'll roll of frankly, the and lower the beginning embedded hopeful see lower -- place the

Chris Porter

Yeah.

Mike think really I said Jay. well,

of for of that the our sold then you'll think by year at I the time and time balance takes of next embed homes, we it I beginning see close pick this the benefit that up year. into of think start the and just cost to goods those the to

Jay McCanless

Okay.

you. Thank had. I all That’s good. Sounds

Chris Porter

Thanks, Jay.

Operator

next Our go question from Housing Research Please comes Alex Barron ahead. Center. with

Alex Barron

was you Yes, just York? Thanks. gentlemen. operations in on units a morning, your New hoping from an of couple to Texas update left Good I get and

John Ho

Hi, take hand I'll Alex, York then the question over New it to Mike. and I'll

then New York, our New we done, then can that's But better the sales longer access Sixth of -- in York in this MTA. units, once on condo to lot and there's construction there left we So with penthouse Street building Mike should activity will any have building, area. that question. now a have just the right to units building, going and in done XXth There's two we Manhattan. continue that have be take with we no think any

Mike Forsum

currently. what's Texas, about excited for going Really particularly us Sure. in Austin on

look all year Texas. underway finished the well It's to Kyle, that [indiscernible] to communities multi-planning here we as are construction lot three vertical us were going fall acquired as last are in in that -- at multi-segmented community well deliver master We we over and strains. delivering us area, to planned communities our community a other early be Anthem with

going We those. getting in months to of coming the online on have couple those and be next of construction we're here, here two

to progress looking as at Texas the base -- So as very other and we're we're soon to excited opportunities that here our getting revenue we're and our add about through general. looking that some making operations energy there in very throughout well

Alex Barron

it you So next won't year, many terms type to maybe first And And of like and next would sounds assume? revenues price deliveries speaking? roughly closings what you come give us can some guys point in guidance until average how year? of expect

John Ho

Yes.

first the in start homes next state So state. or But think ramp not of there. guidance on and in by typical by delivering part I then giving we're up property about we think if our that typically, will do year, you property Texas

Anthem those year consistent what typical the seeing is you'll what see in more and line through selling prices in communities. Arizona and average selling Florida community. ramp in So we're our on be should in Average price XXXX a with our with

Alex Barron

Thank luck. very much. you Good

John Ho

you. Thank

Mike Forsum

Alex. Thanks,

Operator

[Operator questions at Instructions] are no There time. this further

to So I to like would Officer back turn over the floor closing for Ho, comments. Chief John Executive

John Ho

everyone today. when time We're your next about to has forward and speak looking year again. the performed quarter for you. how Thank Thank this we really excited you,

Operator

today's That teleconference. concludes

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

Landsea Homes (LSEA) 1 Aug 232023 Q2 Earnings call transcript