LSEA - Earnings call transcript Q4 2024 | Landsea Homes Corporation

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Operator

Good day, everyone, and welcome to the Landsea Homes Corporation Fourth Quarter 2024 Earnings Call. [Operator Instructions] Please note, this call may be recorded. [Operator Instructions]

It is my pleasure to turn the program over to Drew Mackintosh, Investor Relations.

Drew Mackintosh

Good morning, and welcome to Landsea Homes Fourth Quarter of 2024 Earnings Call.

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

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

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

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

John Ho

over year Good quarter operations. the morning, and XXXX you of joining thank update go results and our fourth for on full us provide we and an for our as today

challenging the a markets progress of country. a number made face our further across In towards Homes XXXX. made of industry, several Landsea key on homebuilder company in strides in headwinds fronts the for The large-scale becoming

few XX goal markets, that in be next to over a homebuilder is realizing we top to the see each and of a Our path goal our years.

market $X.X generated Homes, giving We records us a billion we revenue great by in X,XXX, Antares fundamentals. DFW-based with in key Texas long-term acquiring our new home XXXX, the of sales presence for home deliveries During expanded and company. of both our state a of foothold

series. through our lots markets affordability functionality emphasis future Performance an opening We Homes projects on our also new communities our fortified for and acquiring in by operations existing and High with

XXXX XXXX our of to and in we we beyond. activity, opportunities to Our company, on about the pivotal excited both our share. and growth for continue mix grow organic and what expansion M&A been was year and has by are holds fueled see future fronts market a a

delivery XX% generated new year-over-year, In top of growth Landsea line home driven growth terms of of the by strong fourth XX%. quarter,

in are the a we of team's profitability incentives buyer high our inventory. were increase success persistently delivering the pinch to compelled quarter, pleased and in and such execution compete move homes combination and hesitancy rates we as with While of volume high to mortgage

to and cash for We hold heading spring standing selling into also of appropriate reduce path in our to generate new and our was felt of terms ahead additional decision balance aging our rather on that inventory an strategic the the our than year. both We forward, goals made positioning this specs season sheet. the

in in new million flow fourth of orders representing During fourth quarter quarter Net increase a over the the $XX.X we from operations. the quarter, XXXX. in cash came generated at XXX, XX%

with Homes to sustainability. the efficiency innovation, High competition differentiated continue platform our in provide a Our well and and Performance against sell energy company rooted

buyers made in utilize interactive plans as investments we've a from tools benefited also online needs. to presence, tours We and XXX-degree a such the perfect can floor where for our their home virtual find home

can pitch our salespeople an a Landsea them. is right about into important buyers Home why also make they gives that so It effective for prospective insight

enhance role can a and an technology sales plays the also in the new that believers important value efforts. firm marketing are We and of our home

shareholder During public flow. behalf that our goals increasing the reducing on stockholders achieved we by offering base executed concentration the diversifying selling secondary ownership fourth of of quarter, dual our our a and

shareholders from for our its positive will long-term an stock Following concentrated in shareholder nature overhang the a stake that our XX%, this company at We feel shareholder, beginning was be of transaction, biggest stability reduced of XX% base believe that of our the company. quality for down and our our to the the our year. and Landsea Green, new

those for our markets. are company Landsea our the local positioning within given our about unique an scale quickly enter long-term for and we our product XXXX, portfolio, demonstrated excited operations. markets to has prospects ability outlook to ahead our Looking and the markets

markets. have in newer our success expect similar We to

series Our for when buyers. is and the contrast home is differentiator an nature We for feel High important our new competing Performance tool distinct that an our our to important Homes given with company competitors markets. draw allows a this of us selling competitive

a to an we tailwind supply affordability for of homeownership remains as While a should for this issue that there a country housing for for home industry, in construction strong that come. our is believe serve desire years lack and new structural

building. the will home We given builders of large taking associated market scale with trend the continue benefits recent that of advantage public and also share cost production think capital

As Landsea for and a positive. outlook believe the result, our especially industry long-term we Homes remains

like I'd more results. the over operational detail to on who that, to provide our call Mike, turn With will

Michael Forsum

and John, good morning Thanks, everyone. to

the Landsea record Arizona XXXX, quarter homes Texas. X,XXX top a billion, of homebuilding in a XXX were resulting respectively. and Homes closed deliveries by for and delivery Florida, that company revenue followed $X.X total to year The fourth and in for contributors at

XX%. XX% revenues team grew Arizona and Our deliveries

also and April, deliveries XXX We opening out in Texas. enjoyed deliveries our portfolio acquiring saw DFW Colorado Austin of between and XXX in we

great between making and our markets We core strides in our portfolio Texas. are Arizona balancing California, Florida,

healthy continue our in compared all of We a improved significantly construction markets a ago. to times have year environment see as to build

XX% to the X.X paces fourth averaged with followed the by community during Colorado, Our per Arizona per were generating committed Texas. the per month. of quarter in homes X.X per Markets X over sales quarter a between and We community to sales improvement pace the XXXX. remain absorption best quarter month,

on and and of buyers for demand, insurance of property Financing to a impact increases driver ways looking incentives are payment. mortgage offset monthly the key and remain tax their most higher rates

home a it about quarter been detrimental were these the sales on market, selling had higher great a bps effect third incentives than existing quarter. tool in margins. our the when Overall, the against has XXX in has this fourth While

driver have of land future has combat about takedown. margin margin rebidding components our our cost we a of costs the and To and Lot been aggressively go cost been pressure, reducing we lot into projects labor this possible. partners that material the have pressure, and where inflation engaged

seen underwriting peers of of is discipline We again hit sellers. optimistic up a land market our reset have previously some are that land the expectations tied from we sign the deals and from this and

Additionally, land. we option At very just of over or XX,XXX years supply position owned on XX% our represents controlled some our in through X were we owned were XX% XX-month based these year-end, a of control under of of are This with contract. these lots. good last sort sales. and

a we XX% to controlled As strategy XXXX. to more anticipate and end owned the percentage shifting are and we XX% of said, land-light this have pushing by

number we spring head the profiles inventory selling our as into mentioned, in rebalance significant community John we our season. quarter standing the a sold of specs As to and reduce

in quarter, In the closed community X we XXXX, our communities, primarily digits to should expect out the in in we new opened During for year. we as for grow the single communities growth Florida, position count and low XXXX. XX

diminished now around cycle last year has deliver with need home higher we a over times build-to-order spec improvement operate The X the months. a in in of the level as to can inventory

versus While when communities, to homes a in it for we move-in ready have approach our to continue spec comes sale we balanced taking each build-to-order. more are of

and margins. moderated have carry ultimately in specs that This more this margins given such, should As levels with our help be desired and of our line efforts we build-to-order target our homes better quarter to also build-to-order. typically XX-XX our get to closer to improve starts

how are season. pleased heading spring the XXXX am with ended I how Overall, we positioned into and we selling

are coming to year existing feel our will this inventory. a new more and about approach the We benefit excited communities spec that online from communities balanced

key the from out the stand Performance Homes build markets is a of and continued vibrant from from terms which parts more series we High competition, benefit value, become economically in-migration to growth Our quality other discerning. in as advantage remain job to buyers continue and both we of country. feel and The in

these outlook about I optimistic Given company. the our positives, remain for long-term

who to that, over the performance provide detail give would With coming for financial Chris? guidance on Chris, forward-looking the like and I some more will call turn quarter. to

Christopher Porter

morning, Mike. Thanks, everyone. Good

the Mike and revenue line the record and we for top deliveries As John and quarter mentioned, for experienced year.

year. quarter fourth for was per In the million for purchase million $X.XX $X.XX diluted recorded price accounting, Net to income quarter share. equated $X.X $XX.X million which share, or the $X net the or we for $X.X $X.XX was per to income per adjusted share. of us income Pretax bringing and quarter, million the million, full $X.X was

for We XXXX. expect to next couple impacts million accounting years of the of through continue to with approximately $XX to price purchase see amortized the million $XX

higher XX.X% rise fourth as the of over were in incentives quarter XXX slightly X%, basis progressed. quarter margins than Discounts third quarter quarter quarter full for points of higher and the Gross just about XX.X% the below to the from XXX points incentives guidance XXXX. for our basis and the year, sequentially were continue the XXXX as and

The of we seeing quarter. around rate interest on after pressures in competitive settled XX-year the treasury seen see in has incentives abate are end market but to mortgage year. some and the range those were fourth continue We than lower they offerings offered have the the X.X%

margin Our year. for was quarter gross and over XX.X% the XX% the remain in just adjusted fourth

rate to to the as with environment. buydowns year, X.XX% XXXX, the through seen we the After X.XX% mortgage actual remain levels we incentive the homes expect selling off spring in consistently overall elevated the We season. move-in for fluctuating with quick have range costs first rate the kick of

offered. fewer we back a to slight need where mentioned, build-to-orders incentives Mike also are shift As more seeing be to will

levels look to we range. in first quarter, as the incentive be the we X% X% would anticipate However, to into

good services generated the saw of year. buyers insurance also Elements, title year which profitability as Landsea provides performance for $X.X We million mortgages, our and this it for from

we XX.X%, revenue focus SG&A basis on percentage same with pleased last of at time year. as and a very the improvement a came also quarter in high am SG&A I to our leverage the homebuilding expense XX continue in as point for quarter reductions our the volume. from leveraging

saw total home sales G&A ratio included revenue. dollar about costs. of of onetime markets XXXX in $X.X our basis, the in rate through fees only basis, overall just year, year, fees, For and on was G&A this XX.X% and to point expense, adding we a million X.X% basis percentage Antares a revenue of home the out including the at up improved acquisition of improvement XXXX Separating a our as $XXX,XXX XXXX. XXX expenses full an And X.X% from from acquisition on severance sales capital year-over-year and that a

gain positions, headcount seeing we efficiencies that are off. quarter, recall streamlining through and those eliminated the as You second to efforts both will reduction efforts the in structure our took pay reporting well operations we as during XX

quarter for tax was credit. tax rigorous Our XX.X%. for the fourth $X.X effective of rate to more million XXL new, qualified This an bringing tax in homes our total year, the fewer $X.X expense million, year for the

the than expect continue the we larger rules cost homes have the overall fewer XXXX achieve credit. in to As of tax as to for tax our tighten, is to XXL credits qualify much

expect we our between to XXXX, For and be XX%. XX% tax rate

revolver. to million equivalents quarter Now availability the million $XX.X our and in in and liquidity, ended million balance in sheet. under $XXX.X our turning We fourth with cash $XXX.X cash

During in of Antares our we generated operations, we million cash the leverage our have quarter, since been acquisition flow reduce in discussing goal ratios, a helped $XX.X which from earlier XXXX.

million a year, our this prepayable Additionally, premium. $XXX private X.XX% with notes become XX%

Our when about current note costs should starting private notes X% and go-forward X.XX%, margin, high-yield to begin look our interest representing around show the savings our so or this this par interest we later year. gross a trading close With basis points reduce are up it to will on XXX opens costs of to basis. refinance

later. new with or notes Additionally, our maturing in this will any XXXX extend profile maturity

the At quarter another and to XXX of debt total the from points basis improved maintained capital XX.X%. sequentially capital to year, net third end our to debt we XX.X% the total

XX%. between an first our XXX we of Now the adjusted anticipate between margins to gross margins XX% looking and price to and $XXX,XXX, gross at $XXX,XXX XX% average quarter, between and be home and new XXX GAAP to forward XX% sales deliveries with

deliveries For X,XXX home to in units, which of range a X,XXX over XXXX. XX% the growth full year, the we be anticipate midpoint to represents at the new

$XXX,XXX. $XXX,XXX We expect the ASPs to of range of the be these in deliveries to

XX%. conditions. margins elevated the gross margin for market around stay estimate of is year the year for similar Additionally, be based at gross to guidance around be we XXXX incentive best current assumes This XX% home as and GAAP and to on to our sales adjusted today full expect with

As continue rates change, inflation, results could and accordingly. to overall incentives interest change

That questions. call like our we'd up remarks. And the open concludes now to for prepared

Operator

Barclays. Instructions] [Operator of take Bouley Matthew from our We'll question first

Elizabeth Langan

have today. Matt I asking start just about to wanted You Langan Elizabeth for incentives. on off

what them expecting the based terms X% demand? spec? of build-to-order quarter, on be you're mixing seeing that X% you're from homes like towards Or you're to trends or mentioned in the mix bit You -- from down a right is now more to in first that market the down of would and the that the which XQ. come little a in Is reflection

John Ho

Ho. Elizabeth, we're give mortgage in some the the happening and those first, I'll the this that of both combination Chris in of and incentives total a have of buydowns. of what markets John both We're specifics. is seeing then that year. take I'll actual cost months first of that's couple incentives terms It's in seeing also trend down, the rate

as communities higher The in kind of margin And where offering incentives you're as our typical offering right, spec we're our portfolio homes build-to-orders addition, shift we both well quick mortgage move-in a In have offering. the we're with our them. with not as offering same in build-to-order. that the

both. of So it's a combination

Christopher Porter

like just with beginning kind XX-year between I But would That's since say X.X%. of it's just really is then, saw seen at settled out out. the X.XX% okay. spike now. And adding in We we've January. that of that offerings, settling of the and X.XX% kind the said, to I actually

cost stable buying the well as so is we're at more as to now. And X.XX% X.XX%

Elizabeth Langan

Okay. Got land? of of little topic said I helpful. kind quantification be expecting -- more you know us you're been that about tariffs, a if on And helpful And in a And any Could of that, speak it. That's the you would really around give that terms staying bit. building you kind that inflation costs? could anything then like just color. have you what just around anything underlying has margin pressure.

Michael Forsum

that Mike. Elizabeth, Sure. field question. I'll it's

the tariffs, immigration, to the been macro coming pretty questions tackle Let recently. around those routinely sort have of just that me us

as right we're that's impact now, seeing any So real of not tariffs. of result really a

to these going forward For are place. our committed purchases of going the were vendors, that contractors, of material tariffs most many have part, sort suppliers our house their into already into before

to of the many they location. to materials where sourcing of the our distribution single many maybe disruption of single were one chain COVID, now foreign one channels which single that access result distribution out have as by multiple opposed the suppliers Also, to or came in from materials before location,

So for impact that really tariffs result the seen from of most part, not big a we standpoint. any have as

our selling labor we're spring, season our as started and would impact some the haven't any second may underway. now, Also, the then. with communities last not kind year, seeing same and what a lot Those starts issues see of coming of labor here our regions, we've outstanding around already pressure. conditions early late And of be trades had But we're level and right our of in starts spring seeing We coming had labor, all into of moving that. all we're -- concerns -- we any from real summer.

relates a it standpoint, a from of macros. see sort our back we path those to So still as clear big

talked every Performance cost of mentioned, our we Outside without of the around and I as out are sacrificing looking value that, High out Homes had I our any at well of consistently John think to squeeze homes proposition. as elements as way

different also actual we're in also do with focused really premiums, premiums, where pricing it. enhance our micro your as getting premiums, that houses, to speed in incrementally view communication helpful. you for which which so in we're margins looking can around trades We're ways getting well ways very these other is lot as our constant more And things around

housing through that Frankly, So they've X time. margins. in by how cycle now our and X-month we're the and through period of this they're to month costs value teams going production about has cycling really time their thrilled real our got our beating

amazing this doing on and is, locations, find local crevice, we rock, everywhere every under through cycle, can in at enhance homebuilders I looking to job going to think team different great which our our have outstanding ways and we're through a we which they're so an every that. margins And

Operator

We'll BTIG. take our next of question from Carl Reichardt

Carl Reichardt

I'm wanted to bit have sorry did. the -- I so talk I may quarter But guide. just a performance I little relative can to missed you if delivery about this, this

so. issues? Was XX% we about you higher lot which did the we're of expected? all think to function also some first kick a in than have looks or I a light Or that sales-related quarter,

Christopher Porter

of Chris. one. that a is really loaded. take I'll This was Carl, just Yes, Yes, back-end lot it

early And kick that into so of January. some did

we difference And We quarter the primarily pushed that closings. was record was -- so what had way. the on a along

they mashed of we so minute last that year, into over some did the shifted were into quarter. and the And the have first

Carl Reichardt

Okay. to year good think, I in And go then in per I store. everyone. obviously, talked you of guys got to find for 'XX you to that that. about selling model the your X X.X goals was per some an sort month did awfully for time And -- when back, a to

you is more then sales you or basis it on what per set have where that a in the pathway relative Is tracked that product a So store smaller number? far from turns? on to of now to And how to get are goal function focus so XXXX?

Michael Forsum

Mike. Carl, is this

that is is community So somewhat community, number of detached any number aspirational but that on a it's rhythm that, on we some a to natural believe forth, degree, we again, that a set average. single-family

we're per We starts. will month could be drive community that a where like in look and go. our a around little And the bit have where pricing we're of higher, towards construction That's X that's generally, But community. are competition. a against when we roughly even lower. net the we at that sales And where setting we that's we some it per little when should flow our some bit be feel

shorter units to sort of that little attached We're you're out kind that of always in for what you're a starting going average longer, then community when are absorbing just, we because a of one shy goal specifically bit are time the you and because generally on the bit X relate the a again, which to you're component That's a necessarily product, forward. in doesn't have may have building slightly as is building, that at do also going along. little some of There's goal. there

So we again, number want there in to I is out that, direct are sort we of as because to focused be just hit need X.X. that on that goals have want to that guiding a sort that opposed able, teams the of a light emphasize again, the to

goal. vibrant affordable. sales get right We pace Chris reduce really to shrinking at a have are little more cycle just goal, of achieve that through footprints inventory, cycle, incentives to to the cycle through point within our at and take about, are to every sure doing our our and land able level doing this That's are continuing what land all that But really day, positions be to just now, to the generate things will including, the times, the a again, of we're cash new talked in we it single cash that toolbox spec one this out redeploy 'XX, has back is our our of make making Carl, them the bit into communities we that take part 'XX to end that to at and that the us 'XX. are that

for have cash. me, generation. a We been phantom you cash I've believe time, a margins. and to -- at business be not us generating that For we This having is look do done this long in

You have through. to moving keep

are through things the I the our do move sales And and to just focused to we really continue land on inventory to this and side talked of and about. doing those so what need we

and goal be X.X thing. the to movers. pace leading do not -- last move just to focused. first on markets forward stay that we're and and for to I We We're continuing continue one be this. -- in to be that sort guess we sales to to going want us, of to that So We're don't going want our we to the really is going

Christopher Porter

Carl, might to add Mike was I what saying. Yes. just on

Austin year, through Antares year. pace. Texas you California Texas. acquisition coming look all the just X and a over full for had If Arizona, online at and their and for working average is selling Colorado in the just on Florida

over already about. ones talking stronger that was that those got X we've Mike So

there get just And we've and well. so to on Florida got Texas as to work

Operator

We'll next take from of question Jay our Wedbush. McCanless

James McCanless

mix, the fiscal had, there I some to closing there? guidance going price better we in was than expecting. think? Is question just first Is be pricing 'XX the you So were that power all

Christopher Porter

Yes.

Chris. I think it's Jay, --

I bit think both. it's a little of

the top been into of line, some of is pricing revenue able mortgage pricing goes things, So that contra automatically the side which with at incentives, but the to a we've got ASP also as look on you've well. better on

it's kind double-edged of So sword there. a

James McCanless

come you us then, Mike, And few up these give were maybe are could back a color resold? trying market? the some longer-dated tied they're or market, few come only And Or mean, Great. the you're you the seeing get pricing around deals months? seeing that to little guess for what that is you're are back that? that land from that this to I a I weeks maybe with more land a stuff seeing sellers to it

Michael Forsum

a And think is it's it's market to and mostly but real going those going is who think position of that bringing there have within I what's mixed discipline and everywhere, strong Jay, clear now, the be can't a kinds into product a you Texas, right in large whereby Colorado, bag, on market, segmentation out in offerings. through not selling I the Yes, whether California, necessarily Florida, multi-parcels not builders. are Arizona, in land it's sellers

are we're numbers that we're sure did builder a settling acquisitions. left proposition When communities they're full first get -- parcel recalibrated to and out of cold acquisition think be what doing It's master identified, defined excuse very back I'm the that able distinct going that, market each of is the settle very the seeing not to to out so these and And battling good. seeing clear, the over value things a the those to in I And and make these price. sale keeping run not me, that's When many really is the parcels builders here. a come a when making numbers are parcels. planned

term, of. it's term, of out long that's kind there. It's what seeing we're lot all timelines are short a So

this land and know, is also to the bankers part land conversation evaluation. of the mix this in industry And of also bankers. of turning are terms part you As

at many strong a in there sort have momentum also we're opportunities ways, that's that also isn't that they're to communities the And look we that along can't that's financing on sort help able willing that us also to well, that partner be there's a our to are have to land way. and us So we competition, finding to the from of seeing helping as too. extent blindly. stay new walkaways going partner into hesitating, light, If of going we're some

James McCanless

guidance significant Okay. this there to through quarter the amount new communities Florida and Got talk to what just And move you through maybe the just guys of of the it. to seems especially given existing playing sounded helpful. that bunch for trying -- another point? home a like communities. That's very at Florida in then out there? is of guys wanted are some a middle be the closed you're demand there first inventory, that you ask, is about a from it theme of And Maybe that seeing

Michael Forsum

Well, as a you Right. strong least of affordability, around homebuyer, strong, markets the expect just still which in. There's there. still qualifications, It's in there's overall, It's home at a the challenge would the country, entry-level in strong homeowner. will in the a we're buyers. demand throughout

deliver how company a them bridge of they terms desire profile to conversation for acquire. within in us, in of be the that ability which and So house the between to constant to our can the able our that's buyer

that. focused on always So we're in

going and on the is having in that back market. We say with Florida, it's communities. I the conversations traffic still particularly it to prospects. As great buyer great have We're what at our would same. goes

as going doing sales deliver good think because them here, taxes then are job insurance little looking property point or in cycle bit monthly converting our has higher to value. rate But being or we the on-site on, that challenged many times able identified coming were incentives about assessors presence. also out that mortgage them we're it's which that down. premiums which it Jay, it's be now X-year to is, sort down a through I in to price get of are now online of it county really a either the We are Chris in that at can And the around

you're little a so of pop a And seeing there. bit

get around it find can just in to an of do that mortgage to just the way, great tool a and -- that if it's where So affordability. pressure need affordable they lot we But be. down really can it we

still of demand in in We which operating out the have a lot we're markets in.

James McCanless

And from thought you quantify -- Have people's Florida it. a on some percentage Got yet? much just insurance. up is or going what insurance your said communities this been homeowners' how in about to able basis guys on you even of California

Michael Forsum

our It's have And specific that. you. that to for data looking the now come of But for get anything that's I be but we're a don't great sort around question. thing poking seems to up, arms to in, new flowing its head and trying we're

Operator

Instructions] We'll next Research move Center. of Housing Barrón Alex [Operator to

Alex Barrón

hoping versus year spec some and guys levels Yes. share this also I statistics starts a could this you your a year quarter was ago versus your around quarter ago.

Christopher Porter

Sure.

Mike this think I Porter. is that, said, Chris as

really pacing starts the standing to year order we our more drive inventory is do our to push said, of what a then and well had we're as build-to-order with some at really Mike sold end trying get As the of are platform. and of the the also

you this going about year, industry So quarter. paced remember, And all spec. really really this our time last full specifically we if was the starts

so change that And to slightly. seen start you've

is out longer what would home. of look backlog, XX% move-in If consider we a quick than roughly that about our you at closing

movement that And so some we're seeing overall. objective towards

Alex Barrón

numbers, get possible? if I Yes, that have Okay. directionally, but could I you hoping guys was any

Michael Forsum

a I'll we a is is have you our or a was with versus off would would Alex, have the spec. of talking Chris have been then construction XX if to spec this we were Mike, probably XX% XX to build-to-order, about of backdrop around to and lots build-to-order were what say, year releasing, Sure. generally strategy sort XX lots, you start at ago gone X on XX% to X just of Well, looking off were starts if

a spec. release before towards to In XX-XX. roughly build-to-order lots moving to of that now XX% are around go being would into words, done XX like We we we other see

So then month are we're end near-term to incentivize between with spec cycle, to the moving move so towards probably way end or of inventory to more the inventory we're its and its that's approach of against a find more we in through quarter don't that ourselves or discount at the build-to-order finished moved finishing to the have we balanced more taking traditional along. up heavily production the that the going we where have inventory end

a getting we we it's cycle talked in So But them reducing at that where may where but is the center. level bit have also or do may now for about are rates about our range now the which of things I customization, understanding their where within looking design to earlier, may down. to in of that comfort not exciting not terms in be about feeling within buyer is timeframe higher little around those personalization, rates they're of is times be, that have them we may because or with buy window the had more that a kind

through in houses. actually people those center into the few adding looking heightened are helpful, extra ago, because center doing and were extra design a floorings, their where houses. real again, And you're choosing profit had coverings, you people to had bespoke kinds If out business. that's of going Today, things revenue very of terms we seeing choosing their going we those very a activity design through a year spec-ed a

that. like we So

Alex Barrón

Right. makes sense. Yes. That

that competitors like competitive? guys in change Because in of or margins were you were to match or it Was stay the mortgage a what Now in a go it for mind but seem changed interest and of a X achieved kind down rates have yourself, the it terms lot. quarter to just change versus that expectations quarter that what low Or sort seems whole for ago rates X offering your margins just of very industry? versus caused the ago, changed? actually the doesn't not to

John Ho

Yes. Alex, this is John.

right. You're

the to volatility market, into elevated Texas. shared with from call getting end required the incentives obviously, Going points definitely fence our increased in of year, XXX the we markets, off of incentives. And as mortgage on into was quarter-to-quarter. purchasing the lot home of across the Florida about and his finished inventory homebuyers sequentially year, was markets Chris unsold particularly remarks And to the spec more with end the the in basis got like in rates increasing, commit a the

So that on margins. impact biggest had the

more lot A inventory seeing of cleared decreased ourselves, into We're being going is our first spec these everyone's right, -- that including has now build-to-order. quarter. -- somewhat from also a quarter the of has unsold inventory lot, building shift to fourth unsold and

inventory. and incentives to pressures Arizona, less there's So some board less that's to across that incentives, particularly those kind provide going the competitive the cases, have price a markets, given of Texas, even in for to of help lot these increases in some

Alex Barrón

Okay. sense. one I last That ask makes If could one.

On the is purchase adjustments, that abate likely XXXX? to accounting in

Christopher Porter

So we'll the have mid-$XX amortize probably will range that million acquisition. still throughout in related It's Texas that kind XXXX. primarily to of

the April of to that we any sell will $XX and some lots down the take there, million throughout have sort to being continue price we homes last $XX it. we purchase of million inventory purchased accounting kind year. anticipate would that But on of as So amortized

Operator

that appears it no further questions And time. at this we have

John Ho

to We call. for to look again, quarter XXXX forward Thank our joining first everyone, you call. you, earnings speaking

Operator

does conference. today's This conclude

You lines, have may now day. everyone, your great disconnect a and

Landsea Homes (LSEA) 27 Feb 252024 Q4 Earnings call transcript