HOV - NYSE

Thanks, Jeff. I'm going to review our full year and fourth quarter results, and I'll comment on the current housing environment. Brad O'Connor, our CFO, will follow me with more details, and of course, we'll open it up to Q&A afterward. Our results from the fourth quarter benefited from strong demand for new homes, which is supported by strong demographic trends, a resilient job market, and a low supply of existing homes for sale. On slide five, we show our full year of guidance in the first column and our final results for all of fiscal ‘23 in the second column. Beginning at the top, our total revenues were $2.76 billion above the high end of our guidance range. Our adjusted gross margin was 22.7% for the quarter, which is toward the high end of the range. Our SG&A ratio was 11.1%, which is at the very low end of the guidance. The combination of revenues above the upper end of the guidance, margins being near the top of the guidance, and SG&A being very close to the bottom of the guidance, contributed to a great year. In addition, we had a great quarter for land sales and JV profits. The combination resulted in EBITDA and pre-tax income being significantly above the guidance we gave. Our adjusted EBITDA was $427 million. Our adjusted pre-tax income was $283 million. Our fully diluted EPS was $26.88 per share, well above the high end of our guidance range. And finally, our book value came in at $73 per common share, also above the high end of our range. Needless to say, we're pleased with our performance for the full year. If you go back to this time last year, when sales in the housing market stalled due to a quick climb in mortgage rates, we couldn't have imagined our performance would be this solid this year. By any measure, fiscal ‘23 was a good year. Turning now to slide six, overall, gross margins, revenues, and SG&A for the quarter were very similar to last year's results. The big improvements over last year’s solid results were heavily influenced by land sales and JV profits that I described. On the left-hand portion of the slide, you can see that land sale profits have been a regular part of our business for a long time. On the right-hand portion of the slide, you can see that income from unconsolidated joint ventures has been an important part of our operations and has also been an important part for a long time. Going forward, both of these will continue to materially contribute to our bottom line, but certainly may vary from quarter-to-quarter. This quarter was a good quarter for both. On slide seven, we show three measures of profitability for our fourth quarter. On the upper left-hand portion of the slide, we show that our adjusted EBITDA for the fourth quarter of ‘23 was $181 million, a 25% year-over-year increase. In the upper right-hand portion of the slide, you can see that our adjusted pre-tax income was $144 million this year, a 38% increase over the prior year. Our strong profit was helped by $21 million of land sale profits and over 2,100 homes delivered in our joint venture in Saudi Arabia, resulting in a $9 million profit. Even without these two tailwinds, our adjusted pre-tax income would still have been up compared to last year by 9%. And on the bottom of the slide, we show that our net income was up 75% year-over-year to $97 million. Net income from the quarter benefited from a $10.9 million state tax valuation allowance reversal, and as our strong performance resulted in the using of more of our existing deferred state tax credits, we were able to recognize that benefit. On the other hand, our 75% increase to net income to $97 million for the quarter was after a one-time $22 million loss on the extinguishment of debt related to our early debt redemption and refinancing. Turning to slide eight, on this slide, you can see that contracts per community for the fourth quarter increased 66% year-over-year. While last year was an easy comparison, the 8.3 contracts per community in the fourth quarter of ‘23 was only slightly below the long-term average of 8.8 contracts per community for the fourth quarter of ‘97 through the most recent quarter. While that doesn't sound exceptional, you've really got to consider what happened with mortgage rates during the fourth quarter. As you can see on the blue line on slide nine, this all took place in an environment where interest rates rose sharply from 6.8% at the end of July to 7.8% at the end of October. That's 100 basis points in three months. The 7.8% level was the highest mortgage rate since November of 2000. The gray line on this slide shows what happened to interest rates last year. We saw an even steeper increase in mortgage rates last year, which resulted in a precipitous drop in sales. However, once the rates came down from the highs, we experienced a pickup in sales in the late fall and winter, and we had a much stronger than expected spring selling season in ‘23. The encouraging news is that in the past few weeks, we've seen mortgage rates back off from the recent highs at the end of October. In addition, the interest rate outlook today is much brighter, given better results from inflation data. It feels like we could experience the same pattern as last year in the coming spring selling season. On slide 10, we give more granularity and show the trend of monthly contracts per community compared to the same month in ‘22 for each month of the quarter, plus the month of November, the first month of fiscal ‘24. The slide shows contracts per community, including and excluding build-for-rent contracts. No matter how you look at it, our sales pace has improved significantly for each of the four months shown on this slide compared to the previous year. The amount of improvement was less in October, and sales slowed more than we would expect seasonally. But sales bounced back a bit in November, ending with an increase of 43% compared to last year. Finally, the sales pace in the first weekend in December has started off very strong, and it's been much better than we would normally expect seasonally. The month of November is typically a slower seasonal month than October, but this year November has improved on a seasonally adjusted basis, and November only had four Sundays versus five Sundays in October. Turning to slide 11, we show annual contracts per community. On the far left side, you can see that our average pace of 44 for the normal period we've mentioned in the past of ‘97 through ‘02. On the far right side, you can see we ended the year with 40.7 contracts per community, which is close to our historical normal levels, although a little below. Turning to slide 12, we show our contracts per community as if the quarter ended on September 30th of ‘23 compared to our peers that report contracts per community on a September quarter end. At 10.5 contracts per community, our sales pace per community is better than all, but three of our peers that report community count for this time period. On slide 13, you can see that our year-over-year growth in contracts per community for the same period was the second highest among the peers. These last two slides illustrate that we're not only competitive, but we're getting more than our fair share of the contracts to be had in today's home market. Through this last weekend, weekly traffic in our communities and our website visits have both been continuing at very healthy levels, indicating that future demand for new homes should remain strong. One of the reasons we've been able to maintain such a strong sales pace is due to our pivot to start more quick move-in homes, or QMIs as we call them. The logic behind this pivot is that QMIs give our customers more certainty regarding delivery dates and more certainty on what their mortgage rates will be at closing. QMIs allow us to offer customers mortgage rate buy-downs that would be cost prohibitive on homes with longer delivery dates. For the full fiscal year, 62% of our customers that used a mortgage to purchase a home used some form of interest rate buy-down incentive. We're still evaluating whether this QMI pivot will be more permanent on a long-term basis. One of the benefits of a greater supply of QMIs is that we've greatly reduced the complexity of choices for customers, and significantly increased efficiencies for our trades and construction and purchasing teams. We're certainly becoming more proficient at producing, monitoring, and selling a greater number of QMIs, and our quick pivot is a testament to our team's nimbleness. If you turn to slide 14, you can see that after a significant shortage of QMIs during the COVID surge in demand, we've gone from 1.5 QMIs per community at the end of fiscal ‘21 to 7.3 QMIs at the end of the fourth quarter of ‘23. We've reached our goal of about 7 QMIs per community. In fiscal ‘23, we've seen our QMI sales increase to about 60% of our sales for the full year versus 40% historically. That's a 50% increase. At this point, we plan to match our start schedule with our current sales pace at each community, and keep the overall level of QMIs relatively steady on a per community basis. Some investors have feared that homebuilders will overproduce QMIs. That's a fear that's been going on for the last year or so, but we simply don't see that in the field. Our focus continues to be to sell these QMIs before they are completed. On slide 15, we show existing homes for sale and QMIs of all the homebuilders. The blue line shows the number of existing homes for sale around the country remains depressed at 1 million homes. That's less than half of the historical average of 2.1 million homes available for sale. We added a gray line to this slide, and the gray line represents existing homes plus started and completed new homes, the measure that the U.S. Census Bureau uses for spec homes or QMIs. The combined total today is 1.3 million homes, which is 1 million homes less than the historical average of 2.3 million homes. Frankly, I think the Census Bureau estimate of spec homes is high compared to what we see in the marketplace. Regardless, even with the addition of specs with their measure, inventory available for homebuyers is very, very low. Hopefully, this alleviates some concern that there are too many QMIs on the market. The lower level of existing homes plus QMIs for sale certainly helps our sales team and certainly helps our QMI strategy. Consumers have fewer homes to choose from, whether they be existing homes or a combination of existing homes and QMIs. And as a result, homebuyers are turning to more new construction than they have in the past. Moving to slide 16, due to the strength of demand for our homes, we were able to raise net home prices in 71% of our communities during the third quarter this year. And in the fourth quarter that we just completed, as mortgage rates increased rapidly, we were still able to raise prices again in 54% of our communities. During the fourth quarter, the average price increased 17%, which is 3% of our average revenues per home for the quarter. These increases were generally small, incremental, week-by-week increases. If demand remains strong, we expect to be able to continue to increase home prices moving forward. Keep in mind that these net home price increases I'm referring to are typically reductions in incentives or concessions. As a reminder, we do not assume future home price increases in our guidance, and we do not assume future home price increases in underwriting new land acquisitions. We remain optimistic about our future growth prospects, and as you'll see in a moment, we spent one of the highest amounts on land and land development this quarter than we have in a long time. We're very focused on using our significant cash flow to both reduce debt and to fund substantial growth in communities and ultimately in deliveries in the near future. Furthermore, we believe that favorable demographics, a persistently low supply of existing homes, and a positive employment trend will support demand over the long term. I'll now turn it over to Brad O'Connor, our Chief Financial Officer and Treasurer.

Thank you, Ara. Before I get further along, I want to take a moment to talk about the 2,176 deliveries and $9.4 million of profit from our unconsolidated joint venture in the Kingdom of Saudi Arabia. During the fourth quarter, we delivered the vast majority of our backlog from one large project, which led to a significant profit. The project was done in conjunction with the Kingdom's Ministry of Housing and was structured such that the homes were recognized as deliveries all at once. That project is basically complete, and we are beginning the startup phase on two new communities. Those two new communities, along with an additional community not yet started, will provide an opportunity for another 1,000 homes with several more in the works. The Saudi government is involved in all three projects. In fiscal ‘24, we don't expect this unconsolidated joint venture to contribute significant deliveries or income since the new communities are in startup mode. However, the housing market in Saudi Arabia is rock solid and is not exhibiting the same slowdown that we are seeing in the U.S. The reservations at our newest community, which opened recently, have been robust. Now, beginning with slide 17, you can see that we ended the quarter with a total of 129 communities open for sale. 113 of those communities were wholly owned. We opened 22 new wholly owned communities and closed 11 wholly owned communities during the fourth quarter. We also closed out of four unconsolidated JV communities during the fourth quarter. We expect our community count to grow further in fiscal ‘24. However, we are not going to try to project the number given how existing communities can sell out ahead of schedule and new community openings can be delayed for a variety of reasons. But we are focused on attaining substantial community count growth this year. Turning to slide 18, during the rapid increase in mortgage rates last summer, we suspended most new land acquisitions for a few quarters. As a result, our lot count declined. However, as housing demand recovered, we jumped back into the land market. At the end of the third quarter of ‘23, we saw a small sequential increase in total lots controlled. And in the fourth quarter of ‘23, we saw an even bigger sequential increase, as well as a modest year-over-year increase in total lots controlled. In the last two quarters, our lots controlled has increased by 3,000 homes. These transactions were underwritten in a challenging market with high interest rates, yet still met our underwriting hurdles. We ended fiscal ‘23 with 31,726 lots controlled. One interesting trend to point out on this slide is that while our total lots controlled grew in the last two quarters, there was a sequential decrease in the number of owned lots each and every quarter over the last year. Our land teams are actively engaging with land sellers and negotiating for new land parcels that meet our underwriting standards. Our corporate land committee calendar continues to be busy, which is an indication that our lot count should continue to increase over time, but not always in a straight line. By using current home prices, including the cost of appropriate mortgage rate buy-downs, current construction costs, and current sales pace to underwrite to a 20% plus internal rate of return, our underwriting standards automatically self-adjust to any changes in market conditions. We are finding many opportunities and are very focused on growing our top line for the long term. On slide 19, we show our percentage of lots controlled by option increased from 46% in the fourth quarter of fiscal ‘15 to 77% in the fourth quarter of fiscal ‘23. This increase is intentional and has been a focus of our land light, high inventory turn land strategy. We are pleased with the progress we have made. Turning now to slide 20, compared to our peers, you see that we continue to have one of the higher percentages of land controlled via option, and we are significantly above median. Next on slide 21, we show year supply of owned lots for us and our peers. With one and a half years’ supply of owned lots, we have the third lowest year supply. As the previous three slides show, we are very focused on increasing the percentage of lots we control through option, which provides the benefits of higher inventory turn, increased return on capital, and land risk mitigation. Turning now to slide ‘22, compared to our peers, we continue to have the third highest inventory turnover rate. High inventory turns are a key component of our overall strategy. We believe we have opportunities to continue to increase our use of land option and a further improvable inventory turn and our returns on inventory in future periods. On slide 23, you can see one way to improve our inventory turns is by shortening our cycle times. We made good progress reducing our cycle times in the second half of fiscal ‘23. As you can see on this slide, our cycle times have decreased to an average of 160 days. The decrease through the year is meaningful progress and brings us closer to our pre-pandemic cycle times of about four months or 120 days. Turning to slide 24, after 220 million of new land and development spent in our fourth quarter, which was the third highest quarterly land spent since 2010 when we first reported the data, and after retiring early $100 million of debt in August, we ended the quarter with $564 million of liquidity, more than twice as much as the high end of our targeted liquidity range. This is the highest level of liquidity we have reported since the third quarter of 2009, when we had a much larger revolver. After the quarter ended, we used excess cash for early retirement of $114 million of bonds. Turning now to slide 25, the top half of this slide shows our maturity ladder as of July 31, 2023, the end of our third quarter. On the bottom of this slide, we show our debt maturity ladder at the end of the fourth quarter, pro forma for the debt retirement in November that I just mentioned. We took a significant step to improving our maturity ladder during the quarter. We refinanced over $600 million of secured debt that was to come due during the first and second quarters of fiscal ‘26. The new debt is made up of two tranches. The first is $225 million of 8% secured debt that comes due in the fourth quarter of ‘28, and the second is $430 million of 11.75% secured debt that comes due in the fourth quarter of ‘29. Not only did we extend the maturities on this debt, but we did so with only a nominal increase in annual interest incurred. Furthermore, and as important, we also extended the maturity on our revolver by two years until the third quarter of fiscal ‘26. The latest debt reduction and refinancing shows that we remain committed to strengthening our balance sheet. Given our remaining $303 million of deferred tax assets, we will not have to pay federal income taxes on approximately $1.1 billion of future pre-tax earnings. This benefit will continue to significantly enhance our cash flow in years to come, and will accelerate our progress of paying down debt and improving our balance sheet while simultaneously growing our top line. Our financial guidance for the first quarter of fiscal ‘24 assumes no adverse changes in current market conditions, including no further deterioration in our supply chain or material increases in mortgage rates, inflation, or cancellation rates. Our guidance assumes continued extended construction cycle times averaging five to six months compared to our pre-COVID cycle time for construction of approximately four months. Further, it excludes any impact to SG&A expenses from our phantom stock expense related solely to the stock price movement from our $69.48 stock price at the end of the fourth quarter of fiscal ‘23. Slide 26 shows our guidance for the first quarter of fiscal ‘24. We expect total revenues for the first quarter of ‘24 to be between $525 million and $625 million. We also expect adjusted gross margin to be in the range of 22% to 23.5%, and SG&A as a percent of total revenues to be between 12.5% and 13.5%. Our guidance for adjusted EBITDA is a range between $55 million and $70 million, and our adjusted pre-taxed income for the first quarter of fiscal ‘24 is expected to be between $25 million and $40 million. Turning to slide 27, here we show the progress we've made to date to reduce debt and our net debt to cap. Starting in the upper left-hand portion of the slide, we show the growth in equity over the past few years, and in the upper right-hand portion, you can see the progress we have made in reducing our net debt. Including the redemptions we made in fiscal ‘23, we reduced our net debt by $844 million since the beginning of fiscal ‘20. On the bottom of the slide, you can see that net debt to net cap at the end of fiscal ‘23 was 54.9%, which is a significant improvement from where we were at the beginning of fiscal ‘20. We still have more work to do to achieve our goal of a mid-30% level, but we've made significant progress and are well on our way to getting there. Our balance sheet has improved significantly over the last five years, and we expect to continue to make significant progress moving forward. Turning now to slide 28, it shows the compounded annual growth rate of our book value per share from the end of 2021 through the fourth quarter of fiscal ‘23. Our compounded annual growth rate was 238%. Slide 29 shows our book value growth rate compared to our peers. Helped by the fact that we started at a low number, our growth rate is much higher than our peers. We think it is important to consider how rapidly our book value is increasing when evaluating an appropriate price-to-book ratio compared to our peers. This is part of the reason that we think it is inappropriate to only look at our price-to-book compared to our peers. Turning to slide 50, not only has our book value per share been growing at an extremely strong rate, but on this slide we show that compared to our peers, we had the second highest return on equity at 42.9% over the last 12 months. Turning to slide 31, we show compared to our peers that we have one of the highest consolidated EBIT returns on investment at 34.3%. While our ROE was helped by our leverage, our EBIT return on investment, a true measure of pure home building performance without regard to leverage, was the highest among our mid-sized peers. Over the last several years, we have consistently had one of the highest EBIT ROIs among our peers. Eventually, investors will recognize our consistent superior returns on capital, reduced leverage, and significantly improved balance sheet. As a result, our stock price multiples should increase. On slide 32, we show our price-to-book multiple compared to our peers. We currently trade near the median of our peers. Given our rapidly growing book value, we think it would be appropriate to consider a variety of metrics, including EBIT return on investment, enterprise value to EBITDA, and our price-to-earnings multiple when establishing a fair value for our stock. We believe when all our financial metrics are considered, our stock is a compelling value. Turning to slide 33, here you can see that when we compare our enterprise value to adjusted EBITDA, we have the lowest ratio despite our outperformance on a return basis. And on slide 34, we show the trailing 12-month price-to-earnings ratio for us in our peer group. Based on our price-to-earnings multiple of 3.68x at yesterday's closing stock price of $98.98, we are trading at a 56% discount to the homebuilding industry average PE ratio. We recognize that our stock may trade at a discount to the group because of our higher leverage. However, given our 42.9% return on equity, our industry-leading growth in book value, our top quartile EBIT return on investment combined with our rapidly improving balance sheet, we believe our stock continues to be the most undervalued in the entire universe of public homebuilders. We remain focused on further strengthening our balance sheet, including further reduction in our debt levels. I will now turn it back to Ara for some brief closing remarks.

Thanks, Brad. Here we are reporting our year-end results, and in many regards, it feels an awful lot like it did exactly a year ago. The most recent sales pace is down from where it was earlier in the year, but we're reporting a strong fourth quarter in year-end. This year, I feel like we're in a better position than we were last year. Instead of scurrying to build up a supply of QMIs for the spring selling season, our construction teams have ramped up our starts, and we already have a healthy level of QMIs in our communities throughout the country for the spring selling season. Additionally, our mortgage company, along with our sales and marketing teams, have various below-market-rate mortgages that we're currently offering to our buyers. Our gross margins are high enough to absorb costs of these mortgage-rate buy-downs. This is partially due to the year-over-year reductions in lumber costs. We're about to enter a seasonally slow time of the year for our home sales. There's a lot that we've learned over the last year, and our balance sheet is stronger than it was a year ago. We're going to be ready to hit the ground running come the spring selling season, rather than playing catch-up like we did last year. Rates seem to be trending down earlier than last year, which will be helpful for buyer psychology. We're hopeful that this preparation will lead to some strong results for the upcoming spring selling season. Turning to slide 35, I understand that some have been skeptical about our ability to produce superior results. We hope that our continued results create a few more believers that recognize the risk-return opportunity. Our fourth quarter pre-tax profit was almost 40% higher than last year. Our contracts were up 56% compared to last year, and up 43% compared to November of ‘23. We had an 80% increase in year-over-year book value per share. We've reduced net debt by $844 million since the beginning of ‘20. The high end of our first quarter ‘24 adjusted pre-tax guidance, results in more than 100% increase from our first quarter ‘23 results. And our excess liquidity at the end of the year was one of the highest we have had in more than 14 years, and positions us for strong growth and continued balance sheet improvements. We hope that our continued strong results turn some skeptics into believers. That concludes our formal comments, and we'll be happy to open it up for Q&A.

Thank you. The company will now answer questions. So that everyone has an opportunity to ask questions, participants will be limited to two questions and a follow-up, after which you will have to get back into the queue to ask another question. [Operator Instructions]. Please stand by while we compile our Q&A roster. Our first question is going to come from the line of Alan Ratner with

Hey guys. Good morning. Congrats on the great quarter and year and all the progress on the operations and balance sheet. Very impressive. So I think that you went through a lot there in terms of the balance sheet and the cash flow. And I guess as you think about the go forward and kind of putting aside what the market's going to do, clearly the last decade or so you've been trying to balance those two objectives, kind of maintaining a certain volume pace while paying down debt. But if I look at your top line or your closings, you've generally held pretty steady over the last decade or so in that 4,000 to 5,000 closings per year range. Do you think the company's positioned now at a point where you can more aggressively target volume growth and market share gains or should we kind of expect over the next several years more of kind of the balance between those two objectives?

That's a good question, Alan. And we have certainly been focused on taking our excess cash flow and reducing leverage, and we've accomplished a lot with that. The last few years of making about $1 billion pre-tax has certainly helped us a lot, especially since we're not paying cash taxes right now. So we feel like we've really made substantial progress in debt reduction. We've made substantial progress in equity increases. So we're definitely going to get more aggressive in top line growth in the coming years, significantly more aggressive. And I think you're going to see that in the results. We found a formula. We don't talk a lot about our actual home strategy, but we think we've got one that's working quite well. And I think our EBIT to ROI results year-after-year beating our peers shows that, and now we want to take that same result and add to it some top line growth, and we think that's even going to turbo charge the results that we've been producing.

Great. Well, we look forward to seeing that. And then second, I guess, just more on kind of the current market conditions. I heard a little bit of a conflicting message in terms of what's going on in the pricing side. You kind of gave that very helpful chart in terms of the percentage of communities that you're raising prices in. The press release, you kind of alluded to, it was hard to tell whether you're actually increasing incentives or whether you're more just kind of viewing that as a lever that you could pull if rates were to remain volatile and go back up again. So how have incentives been trending over the last, call it six to eight weeks? And, what are you doing specifically on the rate buy-down side in terms of fueling additional sales?

Yeah. And I think the way to think about the incentives is community-by-community where we need to make adjustments. So we talk about the price increases that happen in some of the – in 54% of the communities, and that's basically net of incentives. But there are communities where we've had to increase incentives or whether that's through mortgage rate buy-downs or other forms of concessions. In the remarks, we told you that the deliveries for this fiscal year, about 62% of those that had mortgages used some form of rate buy-down. And I know that for the month of October's contracts, it was about 70%. So it will vary with what's going on with rates. That doesn't surprise me in October when rates jumped up that we saw more use of rate buy-downs. As rates come back down, maybe that will taper off. So we have to think and consider all of those things as we do our projections, and there's also a change in the mix of communities that deliver in the first quarter versus the fourth. So all of those things together can cause the slight decline in margin that we're expecting for the first quarter compared to the fourth. That being said, we are selling more QMIs and delivering them in the quarter. So there's still some sales to go that we have to project what the margins will be as opposed to having it in backlog, so.

That's really helpful Brad.

The additional color I'll add is we tend to see more incentives on the West Coast than the East Coast, and the East Coast is certainly an important part of our business. The other thing is we see a little more incentive in the entry-level buyer and the entry level product, who is very dependent on qualifying. So the mortgage rate buy-downs really help, but those mean more incentives. We also have a significant part of our business which is active adult. There we use far fewer incentives. Most of our active adult buyers get a no mortgage or a very small mortgage, and they are not worried about giving up a 3% mortgage, because they probably paid up – paid off their old 3% mortgage. So we're seeing a lot less incentive there compared to the first time. And we've got a sizable chunk in the middle on our move-up homes. So overall we're feeling pretty good about the trend in incentives.

Got it. If I could just squeeze in one follow-up then on that margin point. And Brad, thank you for all the moving pieces there. I know you're not guiding beyond 1Q, but is it fair to assume you did roughly a 23% gross margin this year as a whole? That's kind of roughly where your 1Q guide is. Is it safe to assume that that's kind of where you see the business for the foreseeable future, plus or minus, absent any significant changes in marketing conditions or are there any significant mix factors that we should be aware of?

Alan, I'd say there's no significant mix factors. We are trying to introduce a few more active adults, but it's not meaningful enough to make a huge difference. I mean, frankly, the market has moved around a lot and the rates have moved around a lot. So we're extremely hesitant to provide more guidance than we're providing. I think a quarter out is fairly reasonable. Margins are going to be very dependent on what we have to do with incentives, what happens with lumber costs, and a variety of other factors. But on the whole, I don't know what we can tell you. Fourth quarter, our sales are up dramatically compared to last year, and we're giving you a first quarter, which is almost double last year. So you can reach whatever conclusions you want. Our crystal ball is not so clear to give longer guidance than a quarter.

Understood. I appreciate that guys. Thanks a lot.

Thank you.

Thank you. [Operator Instructions]. I'm showing no further questions, and I'd like to turn the conference back over to Ara Hovnanian for any further remarks.

Great. Well, thanks so much. We're pleased with a good quarter. We think we've got some more good news in quarters to come and look forward to sharing those with you. Thank you.