Q3 2024 Tri Pointe Homes Inc Earnings Call

Yeah.

Operator: Greetings and welcome to TRI Pointe's third quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Operator: Greetings and welcome to TRI Pointe's third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker Change: Greetings and welcome to Tri Pointe third quarter 2024 earnings Conference call.

Speaker Change: At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Operator: A question and answer session will file the formal presentation. If anyone should acquire operator assistance from any conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Operator: A question-and-answer session will follow the formal presentation.

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker Change: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker Change: As a reminder, this conference is being recorded.

Operator: And I'd like to turn a conference over to your host, basically. Thank you. You may begin.

David Lee: I'd like to turn the conference over to your host, David Lee.

Speaker Change: I'd like to turn the conference over to your host David Lee.

David Lee: Thank you.

Speaker Change: You may begin.

David Lee: Good morning and welcome to TRI Pointe Homes' earnings conference call. Earlier this morning, the company released its financial results for the third quarter of 2024. Documents detailing these results, including a slide deck, are available at www.tRI Pointe Homes.com through the investors link and under the events and presentations tab.

Doug Bauer: Morning, and welcome to TRI Pointe Homes earnings conference call. Earlier this morning, the company released its financial results for the third quarter of 2024. Documents detailing these results, including a slide deck, are available at www.tripointehomes.com through the investors link and under the events and presentations tab.

David Lee: Good morning, and welcome to Tri Pointe homes earnings Conference call earlier. This morning, the company released its financial results for the third quarter of 2024.

David Lee: Documents detailing these results, including a slide deck are available at www Dot Tri Pointe homes Dot com under the investors link under the events and presentations tab.

David Lee: Before the call begins, I would like to remind everyone that certain statements made on this call, which are not historical facts, including statements concerning future financial and operating performance, are forward-looking statements that involve risks and uncertainties. A discussion of risks and uncertainties and other factors that could cause actual results to differ materially are detailed in the company's SEC filings. Except as required by law, the company undertakes no duty to update these forward-looking statements.

Doug Bauer: Before the call begins, I would like to remind everyone that certain statements made on this call, which are not historical facts, including statements concerning future financial and operating performance, are forward-looking statements that involve risks and uncertainties. A discussion of risks and uncertainties and other factors that could cause actual results to differ materially are detailed in the company's SEC filing. Except as required by law, the company undertakes no duty to update these forward-looking statements. Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be accessed through TRI Pointe's website and in its SEC filings.

David Lee: Before the call begins I would like to remind everyone that certain statements made on this call, which are not historical facts, including statements concerning future financial and operating performance.

David Lee: Our forward looking statements that involve risks and uncertainties.

David Lee: A discussion of risks and uncertainties and other factors that could cause actual results to differ materially are detailed in the company's SEC filings.

David Lee: Except as required by law the company undertakes no duty to update these forward looking statements.

David Lee: Additionally, recommendations of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be accessed through TRI Pointe's website and in its SEC filings.

David Lee: Additionally, reconciliations of non-GAAP financial measures discussed on this call to the most comparable GAAP measures can be accessed through Tri Pointe web site and in its SEC filings.

David Lee: Hosting the call today are Doug Bauer, the company's Chief Executive Officer, Glenn Keeler, the company's Chief Financial Officer, Tom Mitchell, the company's President and Chief Operating Officer, and Linda Mame, the company's Executive Vice President and Chief Marketing Officer.

Doug Bauer: Hosting the call today are Doug Bauer, the company's Chief Executive Officer. Glenn Keeler, the company's chief financial officer. Tom Mitchell, the company's President and Chief Operating Officer, and Linda Mamet, the company's Executive Vice President and Chief Marketing Officer.

Speaker Change: Hosting the call today are Doug Bauer, the company's Chief Executive Officer.

David Lee: Glenn Keeler, the company's Chief Financial Officer.

David Lee: Tom Mitchell, the company's President and Chief operating Officer.

David Lee: And Linda My May the company's executive Vice President and Chief Marketing Officer with that I will now turn the call over to Doug.

Douglas Bauer: With that, I will now turn the call over to Doug. Thank you, David, and good morning to everyone on today's call. As we review our third-quarter results, discuss our growth initiatives, and update you on the current market conditions. We'll also share our outlook for the fourth quarter in the full year, 2024. I'm pleased to report that TRI Pointe has once again delivered excellent financial results for the quarter. We achieved a 32% increase in deliveries to 1,619 homes, a 2% increase in the average sales price to 688,000, and 35% growth in home sales revenue to 1.1 billion.

Doug Bauer: With that, I will now turn the call over to Doug.

Doug Bauer: Thank you, David.

Doug Bauer: Thank you David and good morning to everyone on today's call.

Doug Bauer: And good morning to everyone on today's call. As we review our third quarter results, discuss our growth initiatives, and update you on the current market conditions. We'll also share our outlook for the fourth quarter and the full year 2024. I'm pleased to report that TRI Pointe has once again delivered excellent financial results for the quarter. We achieved a 32% increase in deliveries to 1,619 homes, a 2% increase in the average sales price to $688,000. and 35% growth in home sales revenue to $1.1 billion. The improvements in both volume and pricing were well balanced across our markets.

Doug Bauer: As we review our third quarter results discuss our growth initiatives.

Doug Bauer: You on the current market conditions.

Doug Bauer: Well also share our outlook for the fourth quarter and the full year 2024.

Doug Bauer: I'm pleased to report that Tri Pointe has once again delivered excellent financial results for the quarter.

Doug Bauer: We achieved a 32% increase in deliveries to 1619 homes.

Doug Bauer: 2% increase in the average sales price is 688000.

Doug Bauer: And 35% growth in home sales revenue to 1.1 billion.

Douglas Bauer: The improvements in both volume and pricing were well-balanced across our markets, with each reporting segment achieving gains in deliveries and revenues. Our home sales growth margin for the quarter was 23.3%, a 100 basis point improvement compared to the same period last year, reflecting the strong demand and pricing power we experienced during the spring selling season. Selling, general and administrative expenses was 10.8% of home sales revenue for the quarter, a 150 basis point improvement year over year, largely resulting from additional operating leverage gained through increased revenues. Collectively, the Revenue Growth, Margin Expansion, and S-GNA leverage to row pre-tax earnings of $152 million for the quarter, a 52% increase over the previous year. Diluted earnings for share, or was $1.18, reflecting substantial year-over-year growth of 55%.

Doug Bauer: The improvements in both volume and pricing were well balanced across our markets.

Doug Bauer: with each reporting segment achieving gains in deliveries and revenue. Our home sales gross margin for the quarter was 23.3%, a 100 basis point improvement compared to the same period last year, reflecting the strong demand and pricing power we experienced during the spring selling season. Selling general and administrative expenses was 10.8% of home sales revenue for the quarter. A 150 basis point improvement year over year, largely resulting from additional operating leverage gained through increased revenue. Collectively, the revenue growth, margin expansion, and SG&A leverage drove pre-tax earnings of $152 million for the quarter. a 52% increase over the previous year.

Doug Bauer: With each reporting segment achieving gains in deliveries and revenues.

Doug Bauer: Our home sales gross margin for the quarter was 23, 3%.

A 100 basis point improvement compared to the same period last year.

Doug Bauer: Reflecting the strong demand and pricing power, we experience during the spring selling season.

Doug Bauer: Selling general and administrative expenses was 10, 8% of home sales revenue for the quarter.

Doug Bauer: 850 basis point improvement year over year.

Doug Bauer: Largely resulting from additional operating leverage gained through increase revenues.

Doug Bauer: Collectively the revenue growth margin expansion.

Doug Bauer: And SG&A leverage drove pretax earnings of 152 million for the quarter.

Doug Bauer: A 52% increase over the previous year.

Doug Bauer: Diluted earnings per share was $1.18. reflecting substantial year-over-year growth of 55%. In addition to these strong earnings, we generated $168 million of operating cash flow during the quarter. and $336 million for the nine-month year-to-day period. Book value per share ended the quarter at $34.73. a 16% increase compared to the prior year. And our return on average equity was 15% for the 12-month period. Turning to orders, we achieved a monthly absorption rate of 2.8 for the quarter. Demand trends were in line with normalized seasonal patterns consistent with historical results. Our diversified geographic footprint provides stability, allowing us to capitalize on stronger markets and offset weakness in others.

Doug Bauer: Diluted earnings per share or was $1.18, reflecting.

Doug Bauer: Substantial year over year growth of 55%.

Douglas Bauer: In addition to these strong earnings, we generated $168 million of operating cash flow during the quarter, and $336 million for the nine-month year-to-date period. Book value per share ended the quarter at $34.73, a 16% increase compared to the prior year, and our return on average equity was 15% for the 12-month period. Turning to orders, we achieved a monthly absorption rate of $2.8 for the quarter. Demand transfer in line with normalized seasonal patterns consistent with historical results. Our diversified geographic footprint provides stability, allowing us to capitalize on the stronger markets and offset weakness in others. Housing supplies increased in Austin and Dallas, and absorptions have slowed, although we are performing well relative to the market.

Doug Bauer: In addition to these strong earnings we generated 168 million.

Doug Bauer: Operating cash flow during the quarter.

Doug Bauer: And 336 million for the nine months year to date period.

Doug Bauer: Book value per share ended the quarter at $34.73.

Doug Bauer: A 16% increase compared to the prior year.

Doug Bauer: Our return on average equity was 15% for the 12 month period.

Doug Bauer: Turning to orders, we achieved a monthly absorption rate of 2.8 for the quarter.

Doug Bauer: Demand trends were in line with normalized seasonal patterns consistent with historical results.

Doug Bauer: Our diversified geographic footprint provides stability, allowing us to capitalize on the stronger markets and offset weakness in others.

Doug Bauer: Housing supply has increased in Austin and Dallas, and absorptions have slowed, although we are performing well relative to the market. Colorado continues to be a challenging market, with an increase in supply and a slowdown in regional job growth, serving as headwind. Conversely, markets that demonstrated seasonally strong demand for TRI Pointe this quarter were Orange County and the Inland Empire in California. Arizona, Washington, Houston, and the D.C. metro area. So far in October, macro events. such as the continued volatility in the mortgage rates, the upcoming election. Severe weather events and renewed geopolitical uncertainties has introduced some hesitation among buyers.

Doug Bauer: Housing supply has increased in Austin, and Dallas and absorptions have slowed although we are performing well relative to the market.

Douglas Bauer: Colorado continues to be a challenging market, with an increase in supply and a slowdown in regional job growth serving as headwinds. Conversely, markets that demonstrated a seasonally strong demand for tri-point this quarter were Orange County and the Inland Empire in California, Arizona, Washington, Houston, and the DC Metro area. So far in October, macro events such as the continued volatility in the mortgage rates, the upcoming election, severe weather events, and renewed geopolitical uncertainties has introduced some hesitation among buyers. We continue to balance pace and price on a community-by-community basis, with targeted incentives such as interest rate buy downs and design studio credits that encourage home shoppers.

Colorado continues to be a challenging market with an increase in supply and a slowdown in regional job growth serving as headwinds.

Doug Bauer: Conversely markets that demonstrated seasonally strong demand for Tri Pointe this quarter, where Orange county in the inland Empire in California.

Doug Bauer: Arizona, Washington, Houston, and the D C Metro area.

Doug Bauer: So far in October macro events.

Doug Bauer: Such as the continued volatility in the mortgage rates.

Doug Bauer: The upcoming election.

Doug Bauer: Severe weather events can renew geopolitical uncertainties has introduced some hesitation among buyers.

Doug Bauer: We continue to balance pace and price on a community-by-community basis with targeted incentives such as interest rate buy-downs and design studio credits that encourage home shoppers. We feel this buyer hesitation is temporary and will only create pent-up demand as we move into 2025. As we head into 2025, cooling inflation and stronger-than-anticipated job market data are positive indicators, and we are optimistic about stronger conditions in the upcoming spring selling season. We anticipate mortgage rates will decrease modestly next year. With many experts forecasting average rates from the high fives to the low 6% range, improving housing affordability.

Doug Bauer: We continue to balance pace and price on a community by community basis with targeted incentives such as interest rate buy downs.

Doug Bauer: And design studio credits and encourage home shoppers.

Douglas Bauer: We feel this buyer hesitation is temporary and will only create pent-up demand as we move into 2025. As we head into 2025, cooling inflation and stronger-than-anticipated job market data are positive indicators, and we are optimistic about stronger conditions in the upcoming spring selling season. We anticipate mortgage rates will decrease modestly next year, with many experts forecasting average rates from the high fives to the low 6% range, improving housing affordability. We believe there is pen-up demand from home buyers who have been waiting on the sidelines, and moderately low rates will be a motivating factor. Our buyer profile tri-point continues to be strong.

Doug Bauer: We feel this buyer hesitation is temporary it will.

Doug Bauer: Only create pent up demand as we move into 2025.

Doug Bauer: As we head into 2025 cooling inflation and stronger than anticipated job market data are positive indicators and we are optimistic about stronger conditions in the upcoming spring selling season.

Doug Bauer: We anticipate mortgage rates will decrease modestly next year.

With many experts forecasting average rates in the high fives, low 6% range improving housing affordability.

Doug Bauer: We believe there is pent-up demand from homebuyers who have been waiting on the sidelines and moderately lower rates will be a motivating factor. Our buyer profile at TRI Pointe continues to be strong. in our backlog with our mortgage company, TRI Pointe Connect. Our buyers have average FICO scores of 752. debt-to-income ratios of 41 percent. Loan devaluations of 80%, and average household income of $209,000. Over 70% are millennials and Gen Z buyers, and 48% are first-time homebuyers. Our TRI Pointe Connect capture rate for the third quarter remained robust at 82 percent, demonstrating the strength of our integrated mortgage platform.

Doug Bauer: We believe there is pent up demand from homebuyers, who had been waiting on the sidelines and moderately lower rates will be a motivating factor.

Doug Bauer: Our buyer profile of Tri Pointe continues to be strong in.

Douglas Bauer: In our backlog with our mortgage company, Tri-point Connect, our buyers have average cycle scores of $752,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000, Get income ratios of 41%, loaned evaluations of 80%, and average household income of $209,000. Over 70% are millennials and Gen Z buyers, and 48% are first time home buyers. Our TRI Pointe can't capture a for the third quarter, remain robust at 82%, demonstrating the strength of our integrated mortgage platform. Our long-term outlook remains positive with solid housing market fundamentals, supported by favorable demographics, a growing chord of millennial and Gen Z buyers, and a structural mismatch between housing supply and demand.

Doug Bauer: In our backlog with our mortgage company Tri Pointe connect.

Doug Bauer: Buyers have average FICO scores of 752.

Doug Bauer: Debt to income ratios of 41%.

Doug Bauer: Loan to value ratios of 80% and average household income of $209000.

Doug Bauer: Over 70% are millennials and Gen Z buyers in our four and 48% are first time homebuyers.

Doug Bauer: Our Tri Pointe connect capture rate for the third quarter remained robust at 82% demonstrating the strength of our integrated mortgage platform.

Doug Bauer: Our long-term outlook remains positive with solid housing market fundamentals, supported by favorable demographics. a growing cohort of millennial and Gen Z buyers. and a structural mismatch between housing supply and demand. Housing remains undersupplied. And some estimates state that new home needs are between 14 and 21 million new homes over the next decade, while as an industry, we're only producing 1.3 million homes annually.

Doug Bauer: Our long term outlook remains positive with solid housing market fundamentals supported by favorable demographics.

Doug Bauer: A growing cohort of millennial and Gen Z buyers.

Doug Bauer: Any structural mismatch between housing supply and demand.

Douglas Bauer: Housing remains undersupplied, and some estimates state that new home needs are between 14 and 21 million new homes over the next decade, while, as an industry, we're only producing 1.3 million homes annually. Regarding our capital allocation strategy, for the nine months ended September 30, 2024, we've repurchased and retired 2.8 million shares for $97 million. Since the inception of our share repurchase program, we've repurchased 76 million shares at an average price of $18.35, representing a 47% discount to our current book value per share of $34.73. Furthermore, we've reduced our share count by 42% from its peak in 2016.

Doug Bauer: Housing remains under supplied.

Doug Bauer: And some estimates state that new home needs are between 14, and 21 million new homes over the next decade.

Doug Bauer: As an industry, we're only producing 1.3 million homes annually.

Doug Bauer: Regarding our capital allocation strategy For the nine months ended September 30, 2024, we've repurchased and retired 2.8 million shares for $97 million. Since the inception of our share repurchase program, we've repurchased 76 million shares at an average price of $18.35. representing a 47% discount to our current book value per share of $34.73. Furthermore, we've reduced our share count by 42% from its peak in 2016. In addition to executing this repurchase program, we've expanded our market scale. entered new markets and driven our debt to capital ratio to an all-time low. Our balance sheet is in excellent shape, providing us with the flexibility to continue delivering strong shareholder returns while positioning the company for future growth.

Doug Bauer: Regarding our capital allocation strategy.

Doug Bauer: For the nine months ended September 32024.

Doug Bauer: We repurchased and retired two 8 million shares for $97 million.

Doug Bauer: Since the inception of our share repurchase program, we've repurchased 76 million shares at an average price of $18 at 35 cents.

Doug Bauer: Representing a 47% discount to our current book value per share of $34.73.

Furthermore, we've reduced our share count by 42% from its peak in 2016.

Douglas Bauer: In addition to executing this repurchase program, we've expanded our market scale, inter-new markets, and driven our debt to capital ratio to an all-time low. Our balance sheet is in excellent shape, providing us with the flexibility to continue delivering strong shareholder returns while positioning the company for future growth. As we mentioned in our last earnings call, we remain focused on expanding our presence in both established and growth markets. Position ourselves for long-term strength. Our strategic initiatives are creating a more geographically diversified and resilient company, enabling us to navigate market fluctuations and capitalize on new opportunities.

Doug Bauer: In addition to executing this repurchase program, we've expanded our market scale.

Doug Bauer: Enter new markets.

Doug Bauer: And driven our debt to capital ratio to an all time low.

Doug Bauer: Our balance sheet is in excellent shape, providing us with the flexibility to continue delivering strong shareholder returns while positioning the company for future growth.

Doug Bauer: As we mentioned in our last earnings call, we remain focused on expanding our presence in both established and growth markets. position ourselves for long-term strength. Our strategic initiatives are creating a more geographically diversified and resilient company, enabling us to navigate market fluctuations and capitalize on new opportunities.

Doug Bauer: As we mentioned in our last earnings call, we remain focused on expanding our presence in both established and growth markets.

Doug Bauer: Positioning ourselves for long term strength.

Doug Bauer: Our strategic initiatives or create any more geographically diversified and resilient company, enabling us to navigate market fluctuations and capitalize on new opportunities.

Douglas Bauer: Before I turn the call over to Glenn, let me provide an update on our progress in three expansion markets: Utah, Orlando, and the Coastal Carolinas. Our market entry in Utah is progressing well. We've targeted core sub-Margots close to employment and amenities in strong schools. So far, we control three communities totaling 346 lots, with the first community expecting to launch sales in mid-2025. We are also negotiating contracts for another 800 plus lots, with diversified product from premium entry level through second move-up. With a strong land pipeline and an experienced team, we are well positioned to capitalize on the market's potential.

Doug Bauer: Before I turn the call over to Glenn, let me provide an update on our progress in three expansion markets, Utah, Orlando, and the coastal Carolina. Our market entry in Utah is progressing well. We've targeted core sub-markets close to employment, amenities, and strong schools. So far, we control three communities, totaling 346 lots. with the first community expecting to launch sales in mid-2025. We are also negotiating contracts for another 800 plus lots. with diversified product from premium entry level through second move up. With a strong land pipeline and an experienced team, we are well positioned to capitalize on the market's potential.

Doug Bauer: Before I turn the call over to Glenn Let me provide an update on our progress in three expansion markets.

Doug Bauer: Utah, Orlando and the coastal Carolinas.

Doug Bauer: Our market entry in Utah is progressing well.

Doug Bauer: We've targeted core submarkets close to employment amenities and strong schools.

Doug Bauer: So far we control three communities totaling 346 watts.

Doug Bauer: The first community expecting to launch sales in mid 2025.

Doug Bauer: We are also negotiating contracts for another 800 plus lots.

Doug Bauer: With diversified product from premium entry level through second move up.

Doug Bauer: With a strong land pipeline and an experienced team we are well positioned to capitalize on the market's potential.

Douglas Bauer: Our Orlando and Coastal Carolina divisions are making significant progress as we expand our team in operational presence. In the third quarter, we welcome key leadership members and developers have responded positively to our premium product and design strategy, which we believe will answer an unmet need in these regions. We are underwriting new land opportunities and expect to sell our first homes in early 2026. These markets remain highly promising, and we're leveraging resources and expertise from our established nearby divisions in Charlotte and the DC metro area. We're very optimistic that this year's playbook will drive results in both the Orlando and Coastal Carolina divisions.

Doug Bauer: Our Orlando and Coastal Carolina divisions are making significant progress as we expand our team and operational presence. In the third quarter, we welcome key leadership members, and developers have responded positively to our premium product and design strategy, which we believe will answer an unmet need in these regions. We are underwriting new land opportunities and expect to sell our first homes in early 2026. These markets remain highly promising, and we're leveraging resources and expertise from our established nearby divisions in Charlotte and the D.C. metro area. We're very optimistic that this shared playbook will drive results in both the Orlando and Coastal Carolina divisions.

Doug Bauer: Our Orlando and coastal Carolina divisions are making significant progress.

Doug Bauer: As we expand our team and operational presence.

Doug Bauer: In the third quarter, we welcomed key leadership members and developers have responded positively to our premium product and design strategy, which we believe will answer and unmet need in these regions.

Doug Bauer: We are underwriting new land opportunities and expect to sell our first homes in early 2026.

Doug Bauer: These markets remain highly promising and we're leveraging resources and expertise from our established nearby divisions in Charlotte and the D C Metro area.

Doug Bauer: We're very optimistic that this shared playbook will drive results in both Orlando and coastal Carolina divisions.

Douglas Bauer: In conclusion, TRI Pointe Homes is poised for a solid close to 2024 and will position a hit the ground running in 2025. We continue to leverage our strengths and seize opportunities in both established and expansion markets. Halsey market fundamentals remain strong, supported by a persistent under-supply of homes driving demand. Our strategic focus on profitability, growth, and shareholder returns, coupled with a favorable industry outlook, reinforces our confidence. We remain dedicated to increasing book value per share by 10-15% annually while delivering strong returns and creating sustained value for our shareholders.

Doug Bauer: In conclusion, TRI Pointe Homes is poised for a solid close to 2024 and well positioned to hit the ground running in 2025. We continue to leverage our strengths and seize opportunities in both established and expansion markets. Housing market fundamentals remain strong. Supported by a persistent undersupply of homes driving demand. Our strategic focus on profitability, growth, and shareholder returns, coupled with a favorable industry outlook, reinforces our confidence. We remain dedicated to increasing book value per share by 10 to 15% annually. while delivering strong returns and creating sustained value for our shareholders.

Doug Bauer: In conclusion Tri Pointe homes is poised for a solid.

Close to 2024, and well positioned to hit the ground running in 2025.

Doug Bauer: We continue to leverage our strengths and seize opportunities in both established and expansion markets.

Doug Bauer: Housing market fundamentals remained strong.

Doug Bauer: Supported by a persistent under supply of homes driving demand.

Doug Bauer: Our strategic focus on profitability growth and shareholder returns coupled with a favorable industry outlook reinforces our confidence.

Doug Bauer: We remain dedicated to increasing book value per share by 10% to 15% annually.

While delivering strong returns and creating sustained value for our shareholders.

Douglas Bauer: With that, I will now turn the call over to Glenn. Glenn? Glenn.

Doug Bauer: With that, I will now turn the call over to Glenn.

Speaker Change: With that I will now turn the call over to Glenn Glenn.

Glenn Keeler: Glenn? Thanks, Doug, and good morning. I'd like to highlight some of our results for the third quarter and then finish my remarks with our expectations and outlook for the fourth quarter and full year for 2024. The third quarter produced strong financial results for the company. We delivered 1,619 homes, which was above the high end of our guidance due to our ability to sell and close spec homes during the quarter. Gross margins were 23.3% for the quarter, right at the midpoint of our guidance. Based on our backlog and mix of specs that could deliver in the quarter, we expect margins to remain consistent at approximately 23.3% for the fourth quarter.

Glenn Keeler: Thanks, Doug, and good morning. I'd like to highlight some of our results for the third quarter and then finish my remarks with our expectations and outlook for the fourth quarter and full year for 2024. The third quarter produced strong financial results for the company. We delivered 1,600 to 19 homes, which was above the high end of our guidance due to our ability to sell and close spec homes during the quarter. Gross margins were 23.3% for the quarter, right at the midpoint of our guidance. Based on our backlog and mix of specs that could deliver in the quarter, we expect margins to remain consistent at approximately 23.3% for the fourth quarter.

Glenn: Thanks, Doug and good morning, I'd like to highlight some of our results for the third quarter and then finish my remarks, with our expectations and outlook for the fourth quarter and full year for 2024.

Glenn: The third quarter produced strong financial results for the company. We delivered 1006 hundred 19 homes, which was above the high end of our guidance due to our ability to sell and close spec homes during the quarter.

Glenn: Gross margins were 23, 3% for the quarter right at the midpoint of our guidance.

Glenn: On our backlog and mix of specs that could deliver in the quarter, we expect margins to remain consistent at approximately 23, 3% for the fourth quarter.

Glenn Keeler: SG&A expense as a percent of home sales revenue came in better than our guide at 10.8%, due largely to the additional leverage gained through the increase in deliveries resulting in the quarter. Finally, diluted EPS was $1.18, a 55% increase compared to 76 cents. A year ago. Net new home orders in the third quarter were 1,252 on an absorption pace of 2.8 homes per community per month. Incentives on orders for the third quarter were 5.5%, and approximately 65% of our orders during the quarter were on spec homes. Our cancellation rate on gross orders during the quarter remained low at 10%, and we ended the quarter with approximately 2,300 homes and backlog representing $1.7 billion of future revenues.

Glenn Keeler: SG&A expense as a percent of home sales revenue came in better than our guide at 10.8% due largely to the additional leverage gained through the increase in deliveries and resulting revenue in the quarter. Finally, diluted EPS was $1.18, a 55% increase compared to $0.76 a year ago. Net new home orders in the third quarter were 1,252 on an absorption pace of 2.8 homes per community per month. Incentives on orders for the third quarter were 5.5% and approximately 65% of our orders during the quarter were on spec homes. Our cancellation rate on gross orders during the quarter remained low at 10%, and we ended the quarter with approximately 2,300 homes in backlog, representing $1.7 billion of future revenues.

Glenn: SG&A expense as a percent of home sales revenue came in better than our guide at 10, 8% due largely to the additional leverage gained through the increase in deliveries, resulting and resulting revenue in the quarter. Finally diluted EPS was $1 18 at 55% increase compared to 76 cents a year ago.

Glenn: Net new home orders in the third quarter were 1252 on an absorption pace of 2.8 homes per community per month.

Glenn: Incentives on orders for the third quarter were 5.5% and approximately 65% of our orders during the quarter were on spec homes.

Glenn: Our cancellation rate on gross orders during the quarter remained low at 10% and we ended the quarter with approximately 2300 homes in backlog, representing $1 7 billion of future revenues.

Glenn Keeler: Turning to communities, we opened 9 new communities in the quarter and closed 14, ending with 148 active selling communities. Based on our estimated mix of opening and closing communities in the fourth quarter, we expect to end the year in the range of 135 to 140 active selling. We continue to be active in the land market during the third quarter, investing $192 million in land and land development. We ended the quarter with approximately 33,000 total lots, with 51% owned and 49% controlled. Our land teams have done a great job in building a strong land pipeline utilizing our core market strategy, focusing on A locations, close to job centers, and access to great schools and other amenities.

Glenn Keeler: Turning to communities, we opened nine new communities in the quarter and closed 14, ending with 148 active selling communities. Based on our estimated mix of opening and closing communities in the fourth quarter, we expect to end the year in the range of 135 to 140 active selling communities. We continue to be active in the land market during the third quarter, investing $192 million in land and land development. We ended the quarter with approximately 33,000 total lots, with 51% owned and 49% controlled. Our land teams have done a great job in building a strong land pipeline, utilizing our core market strategy, focusing on A-locations, close-to-job centers, and access to great schools and other amenities.

Glenn: Turning to communities, we opened nine new communities in the quarter and closed 14, ending with 148 active selling communities.

Glenn: Based on our estimated mix of opening and closing communities in the fourth quarter, we expect to end the year in the range of 135 to 140 active selling communities.

Glenn: We continue to be active in the land market during the third quarter investing $192 million in land and land development. We ended the quarter with approximately 33000 total lots with 51% owned and 49% control.

Glenn: Our land teams have done a great job in building a strong land pipeline utilizing our core market strategy focusing on a locations close to job centers and access to great schools and other amenities.

Glenn Keeler: Based on what we currently own and control, we expect to grow communities to a range of 150 to 160 active selling communities by the end of 2025, and to a range of 170 to 180 active selling communities by the end of 2026. Looking at the balance sheet and capital spend, we ended the quarter with approximately 1.4 billion of liquidity, consisting of 676 million of cash and 698 million available under our unsecured, revolving credit facility. Our home building debt to capital ratio was 22.1%, and our home building debt to net capital ratio was 7% to end the quarter.

Glenn Keeler: Based on what we currently own and control, we expect to grow communities to a range of 150 to 160 active selling communities by the end of 2025. and to a range of 170 to 180 active selling communities by the end of 2026. Looking at the balance sheet and capital spend, we ended the quarter with approximately $1.4 billion of liquidity, consisting of $676 million of cash and $698 million available under our unsecured revolving credit facility. Our home building debt-to-capital ratio was 22.1%, and our home building net-debt-to-net-capital ratio was 7% to end the quarter. During the third quarter, we repurchased 273,000 shares for an aggregate dollar spend of $9.9 million, leaving us with $153 million available under our current authorization.

Glenn: Based on what we currently own and control, we expect to grow communities to a range of 150 to 160 active selling communities by the end of 2025.

Glenn: And to a range of 170 to 180 active selling communities by the end of 2026.

Glenn: Looking at the balance sheet and capital spend we ended the quarter with approximately $1 4 billion of liquidity, consisting of 676 million of cash and 698 million available under our unsecured revolving credit facility.

Glenn: Our homebuilding debt to capital ratio was 22, 1% and our homebuilding net debt to net capital ratio was 7% to end the quarter.

Glenn Keeler: During the third quarter, we repurchased 273,000 shares for an aggregate dollar spend of $9.9 million, leaving us with $153 million available under our current authorization.

Glenn: During the third quarter, we repurchased 273000 shares for an aggregate dollar spend of $9 9 million, leaving us with $153 million available under our current authorization.

Glenn Keeler: We continue to view share repurchases of the valuable part of our capital allocation strategy, and we are targeting to repurchase approximately 50 million in stock during the fourth quarter.

Glenn Keeler: We continue to view share repurchases as a valuable part of our capital allocation strategy, and we are targeting to repurchase approximately $50 million in stock during the fourth quarter.

Glenn: We continue to view share repurchases as a valuable part of our capital allocation strategy and we are targeting to repurchase approximately $50 million in stock during the fourth quarter.

Glenn Keeler: Now I'd like to summarize our outlet for the fourth quarter and full year for 2024. For the fourth quarter, we anticipate delivering between 1,600 and 1,800 homes at an average sales price between $700,000 and $710,000. We expect home building growth margin percentage to be in the range of 23 to 23.5%, and we anticipate our SGNA expense ratio to be in the range of 10.5 to 10.9%.

Glenn Keeler: Now I'd like to summarize our outlook for the fourth quarter and full year for 2024. For the fourth quarter, we anticipate delivering between 1,600 and 1,800 homes at an average sales price between $700,000 and $710,000. We expect home building gross margin percentage to be in the range of 23 to 23.5 percent. And we anticipate our SG&A expense ratio to be in the range of 10.5 to 10.9 percent. Lastly, we estimate our effective tax rate for the fourth quarter to be approximately 26%. For the full year, we anticipate delivering between 6,300 and 6,500 homes with an average sales price of approximately $680,000.

Glenn: Now I'd like to summarize our outlook for the fourth quarter and full year for 2024.

Glenn: For the fourth quarter, we anticipate delivering between 1600 and 1800 homes at an average sales price between 700 and 710000.

We expect homebuilding gross margin percentage to be in the range of 23 to 23, 5% and.

Glenn: And we anticipate our SG&A expense ratio to be in the range of 10 five to 10, 9%.

Glenn Keeler: Lastly, we estimate our effective tax rate for the fourth quarter to be approximately 26%. For the full year, we anticipate delivering between 6,300 and 6,500 homes, with an average sales price of approximately 680,000. We expect our full year home building growth margin to be approximately 23.3%, and we anticipate our SGNA expense ratio to be approximately 10.9%.

Glenn: Lastly, we estimate our effective tax rate for the fourth quarter to be approximately 26%.

Glenn: For the full year, we anticipate delivering between 6300 6500 homes with an average sales price of approximately 680000.

Glenn Keeler: We expect our full-year home building gross margin to be approximately 23.3%, and we anticipate our SG&A expense ratio to be approximately 10.9%. Lastly, we estimate our effective tax rate for the full year to be approximately 25.5%.

Glenn: We expect our full year homebuilding gross margin to be approximately 23, 3% and we anticipate our SG&A expense ratio to be approximately 10, 9%.

Glenn Keeler: Lastly, we estimate our effective tax rate for the full year to be approximately 25.5%.

Glenn: Lastly, we estimate our effective tax rate for the full year to be approximately 25, 5%.

Douglas Bauer: With that, I will now turn the call back over to Doug for some closing remarks. Thanks, Glenn. As we wrap up, I want to take a moment to thank the Tri-Point team for your continued hard work and commitment to our mission and values. Your efforts are essential to our success, and we're instrumental in delivering another quarter of strong results for the company. We remain excited about the long-term outlook for our industry and have the right strategy coupled with a solid plan and strong team to move forward to make the most of the opportunities in front of us.

Doug Bauer: With that, I will now turn the call back over to Doug for some closing remarks.

Speaker Change: With that I will now turn the call back over to Doug for some closing remarks.

Doug Bauer: Thanks, Glenn.

Doug Bauer: As we wrap up, I want to take a moment to thank the TRI Pointe team for your continued hard work and commitment to our mission and values. Your efforts are essential to our success, and we're instrumental in delivering another quarter of strong results for the company. We remain excited about the long-term outlook for our industry and have the right strategy coupled with a solid plan and strong team to move forward to make the most of the opportunities in front of us.

Doug Bauer: Thanks Glenn.

Doug Bauer: As we wrap up I want to take a moment to thank the Tri Pointe team for your continued hard work and commitment to our mission and values.

Doug Bauer: Your efforts are essential to our success and were instrumental in delivering another quarter of strong results for the company.

Doug Bauer: We remain excited about the long term outlook for our industry.

Doug Bauer: Have the right strategy, coupled with a solid plan and strong team to move forward to make the most of the opportunities in front of us.

Operator: With that, we'll open it up to questions.

Operator: With that, we'll open it up to questions.

Doug Bauer: With that we'll open up the questions operator.

Operator: Operator? Great, thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself. from theCUBE. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please; we'll pull for questions.

Operator: Operator? Great, thanks.

Great. Thank you.

Operator: At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself.

Speaker Change: This time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you.

Speaker Change: You May press star two to remove yourself from the queue.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start One moment, please, we'll report for- Our first question.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment, please pull for questions.

Stephen Kim: Our first question is from Stephen Kim from Evercore ISI. Please go ahead. Thanks very much, guys. Appreciate all the color. I wanted to ask about your community count, and you know, with that sort of implied volume expectation. So, previously, I think you said, Glenn, that you expect to end the year with 135 to 140 communities. I think you had previously been guiding something closer to about 155. So a shortfall there of 15 to 20 communities, correct me from wrong. And it's not like you know 3Q sales were particularly strong. So I'm wondering why the community count guide is going lower.

Speaker Change: Our first question.

Stephen Kim: Our first question is from Stephen Kim from Evercore ISI, please go ahead. Thanks very much, guys. Appreciate all the color.

Speaker Change: Our first question is from Stephen Kim from Evercore ISI. Please go ahead.

Stephen Kim: Thanks, very much guys appreciate all the color.

Stephen Kim: I wanted to ask about your community count. And, you know, with that sort of implied volume expectation. So previously, I think you said, Glenn, that you expect to end the year with 135 to 140 communities, I think you had previously been guiding something closer to about 155. So a shortfall there, you know, 15 to 20 communities, correct me if I'm wrong. And it's not like, you know, 3Q sales were particularly strong. So I'm wondering why the community count guide is going lower. And then also, because you had made comments about next year, year end, I think you were sort of talking 10%.

Stephen Kim: I wanted to ask about your community count and Ah you know with that sort of implied volume expectation. So previously I think you said Glenn that you expect to end the year with 135 to 140 communities. I think you had previously been guiding something closer to about 155. So a shortfall there have you now.

Speaker Change: 15 to 20 communities correct me if I'm wrong.

Speaker Change: And Ah it sounds like you know <unk> sales were particularly strong so I'm wondering why the community Count guide is going lower and then also because you had made comments about next year a year and I think you were sort of talking 10% that that kind of implied 170 for next year. So I'm wondering with the you know 135 to 140 <unk> at the end of this year.

Stephen Kim: And then also because you would make comments about next year, year and I think you were sort of talking 10% that kind of implied 170 for next year. So I'm wondering with the, you know, 135 to 140 at the end of this year.

Stephen Kim: But that kind of implied 170 for next year. So I'm wondering with the, you know, 135 to 140 at the end of this year, does that also provide downside risk to 170 next year? Or are there reasons why that would not be?

Stephen Kim: Does that also provide downside risk to 170 next year or other reasons why that would not be the case.

Speaker Change: Does that also provide downside risks to 170 next year or are there reasons why that would not be the case.

Glenn Keeler: Hey Stephen, it's Glenn. Good question. Our previous guys was that 140 to 150. So a couple of things going on there. We did close out of a handful of communities earlier than expected. So that played a role in it. But we also made this strategic decision to move some community count openings into the spring selling season in the Q1 next year. And so that's what's causing the difference for 2024. And for 2025, we gave guidance on the call that we expect to end 25 at about 150 to 160 active selling communities. And then in 2026, 170 to 180 communities.

Glenn Keeler: Hey Stephen, it's Glenn. Good question. Our previous guide was that $140 to $150, so a couple things going on there. We did close out of a handful of communities earlier than expected, so that played a role in it. But we also made the strategic decision to move some community count openings into the spring selling season, into Q1 next year, and so that's what's causing the difference for 2024. And for 2025, we gave guidance on the call that we expect to end 2025 at about 150 to 160 active selling communities, and then in 2026, 170 to 180 communities.

Glenn: Hey, Stephen it's Glenn Good question, we our previous guys was that $1 40 to $1 50. So a couple of things going on there. We did close out of a handful of communities earlier than expected. So that played a role in it but we also made the strategic decision to move some community count openings into the spring selling season into Q1 next year and so that's what.

Speaker Change: Causing the.

Glenn: The difference for 2024.

Glenn: And for 2025, we gave guidance on the call that we expect to end 25 at about 150 to 160 active selling communities and then in 2020 670 to 180 communities. So that that's the guidance we gave on the call.

Glenn Keeler: So that's the guidance we gave on the call.

Douglas Bauer: So that's a guidance we gave on the call. Gotcha. I missed that. That I appreciate that. So it is coming down for next year. I guess my question is if you're just sort of deferring, you know, into the spring. Why would that necessarily, you know, reduce your outlook for, you know, next year. Why would it cascade like that if it's sort of just like a kind of a pushing out? I guess I'm my first question.

Stephen Kim: Gotcha. I missed that. I appreciate that. So it is coming down for next year. I guess my question is if you're just sort of deferring, you know, into the spring, why would that necessarily, you know, reduce your outlook for, you know, next year? Why would it cascade like that if it's sort of just like a kind of a pushing out? I guess that would be my first question.

Stephen Kim: Gotcha I missed that I appreciate that so it is coming down for for next year.

Speaker Change: My question is if you're just sort of deferring you know into the spring why would that necessarily you know reduce your outlook for you know next year why would the cascade like that if it's sort of just like a kind of a pushing out I guess my first question.

Douglas Bauer: Hey, Steven, it's Doug. How are you doing? Yeah, you know, we take a very measured approach to our business, focusing in on, you know, growing PT pre-tax earnings. And, you know, we look at this as a long-term game. So we looked at those communities at the back half of the year and said, you know, what's going to make more money for the shareholders going next year? So that's just, that's our measured approach to the way we run the business. And in that's just that's our business philosophy.

Doug Bauer: Hey, Stephen, it's Doug. How are you doing? Yeah, you know, we take a very measured approach to our business, focusing in on, you know, growing PT, pre-tax earnings, and, you know, we look at this as a long-term game, so we looked at those communities at the back half of the year and said, you know, what's going to make more money for the shareholders going next year? So that's just, that's our measured approach to the way we run the business, and that's our business philosophy.

Doug Bauer: Hey, Steven it's Doug How're you doing.

Stephen Kim: Right Yeah.

Speaker Change: Yeah, you know, we take a very measured approach to our business focusing in on.

Speaker Change: P T pretax earnings and you know, we we look at this as a long term game. So we looked at those communities.

Speaker Change: The back half of the year and said you know what is going to make more money for the shareholders going next year and so that's just that's our measured approach to the way we run the business.

Speaker Change: And in and that's just that's our business philosophy.

Douglas Bauer: Gotcha. And then when I think about what these communities are going to look like, I think when you had previously been talking about your ASP, you know, dropping because of, you know, mix and things like that. We haven't quite seen that in the closing ASP, but we did see something there on the water ASP. So I'm assuming it's coming. Are these communities also likely to be designed to run a little hotter on an absorption basis? You know, in other words, are they designed to run at a higher absorption than the communities they're replacing? And if so, you give us a sense for, like, kind of how much higher that they would typically be geared to run.

Stephen Kim: Gotcha. And then when I think about what these communities are going to look like, I think, Glenn, you had previously been talking about your ASP, you know, dropping because, you know, of mix and things like that. We haven't quite seen that in the closings ASP, but we did see something there on the order ASP. So I'm assuming it's coming. Are these communities also likely to be designed to run a little hotter on an absorption basis? You know, in other words, are they designed to run at a higher absorptions than the communities they're replacing? And if so, can you give us a sense for like kind of how much higher that they would typically be geared to run?

Speaker Change: Gotcha, and then when I think about what these communities are going to look like I think Glenn you had previously been talking about your E. S. P. You know dropping because of you know a mix and things like that we haven't quite seen that are in the closings I asked me, but but we did see something there on the order asps. So I'm, assuming it's coming out of these.

Speaker Change: Communities also likely to be designed to run a little hotter on an absorption basis.

Speaker Change: The words are they designed to run at a higher absorptions and the communities. They are replacing and if so could you give us a sense for like kind of how much higher.

They would typically be geared to run.

Glenn Keeler: I wouldn't necessarily say they're going to run hotter. I mean our target is when we underwrite is three to four and that depends on the type of the community and it tends to average out to around three five for a full year from an absorption phase. The ASP slight decline maybe next year and that’s just mix more Texas, more Carolinas, things like that, but it’s just pure mix and I think he’s referenced that that was the order mix and the quarter was just a little bit heavier weighted to those types of communities. But I wouldn't say our absorption is going to change.

Glenn Keeler: I wouldn't necessarily say they're going to run hotter. I mean, our target is when we underwrite is three to four, and that depends on the type of the community, and it tends to average out to around three, five for a full year from an absorption pace. The ASP, slight decline maybe next year, and that is just mix more Texas, more Carolinas, things like that, but it's just pure mix, and I think, like you referenced that, that was the order mix, and the quarter was just a little bit heavier weighted to those types of communities, but I wouldn't say our absorption is going to change.

Speaker Change: I wouldn't necessarily say, they're going to run hotter I mean, our target is when we underwrite is three to four and that depends on the type of the community and it tends to average out to around three five for a full year from an absorption pace.

Speaker Change: The a S. P slight decline maybe next year and that is just mix more Texas more carolina's things like that but it is just pure mix and I think he referenced that that was the order mix in the quarter was just a little bit heavier weighted to those types of communities, but I wouldn't say our absorption is going to change.

Douglas Bauer: We tend to generally target that three five. Okay, that's helpful.

Stephen Kim: We tend to generally target that three, five. Okay, that's helpful. All right, great.

Speaker Change: Tend to generally target that three five.

Speaker Change: Okay. That's helpful Alright, great well I'll jump off but thanks very much guys.

Douglas Bauer: All right, great.

Stephen Kim: Well, I'll jump off, but thanks very much, guys.

Trevor Allison: Well, I'll jump off, but thanks very much, guys. Our next question is from Trevor Allison from Wolf Research. Please go ahead. Hi, good morning. Thank you for taking my questions.

Trevor Allison: Our next question is from Trevor Allison from Wolf Research, please go ahead. Hi, good morning. Thank you for taking my question. First, can you just talk about the cadence of demand throughout the quarter as rates moved lower? Did you see demand picked up as the quarter moved along? And then, Doug, you mentioned some hesitation here in October. You listed a few reasons why that might be occurring.

Speaker Change: Our next question is from Trevor Allison from Wolfe Research. Please go ahead.

Trevor Allison: Hi, Good morning. Thank you for taking my questions first can you just talk about the cadence of demand throughout the quarter as rates move lower or do you see demand picked up as the quarter moved along and then Doug you mentioned some hesitation here in October you may listen to a few reasons why that might be occurring and you talk with your.

Trevor Allison: The first key is to talk about the cadence of demand throughout the quarter. As rates move lower, do you see demand picked up as a quarter moved along and then documents and some hesitation here in October? You may have listed a few reasons that why that might be occurring. If you talk with your operators in the field, is your sense that's primarily a reaction to the higher rates that we've seen here over the last few weeks, or some of those other impacts you mentioned, like the election creating equally as large of a headwind here more recently?

Trevor Allison: As you talk with your operators in the field, is your sense that that's primarily a reaction to the higher rates that we've seen here over the last few weeks, or are some of those other impacts you mentioned, like the election, creating equally as large of a headwind here?

Speaker Change: Operators in the field is your sense that that's primarily a reaction to the higher rates that we've seen here over the last few weeks or are some of those other impacts you mentioned like the election, creating equally as large of a headwind here more recently.

Douglas Bauer: Yeah, that's a good question. And I've been going through some operating calls with our divisions actually this week. And I would really label the buyer hesitation, especially in early October, to some of the macro issues, but primarily the election. I've been doing this for a long time, and we actually ran our absorption in the company and our own plan to adjust for this event. Linda can talk about that too. She's seen it for years. So I would say that's the bigger, bigger hesitation that we're seeing in the field. Rates are not an issue. We have the ability to pull different levers to get people across the goal line.

Doug Bauer: Yeah, that's a good question. And I've been going through some operating calls with our divisions actually this week. And, you know, I would really label the buyer hesitation, especially in early October, to some of the macro issues, but primarily, the election. And, you know, I've been doing this for a long time. And we actually we actually ran our absorption. in the company in our own plan to adjust for this event. Linda can talk about that too. She's seen it for years. So I would say that's the bigger hesitation that we're seeing in the field. Rates are not an issue.

Doug Bauer: Yeah, that's a great question and yeah, I've been going through some operating calls with our divisions actually this week and you know I I would really label the buyer hesitation, especially in early October two are some of the macro issues, but primarily the election.

Doug Bauer: And you know I've been doing this for a long time, and we actually we actually ran our absorption.

Doug Bauer: And the company and our own plan too.

Doug Bauer: To adjust for this event Linda can talk about that too she's seen it for years. So I would say that's the bigger a bigger hesitation that we're seeing in the field.

Doug Bauer: Rates are not an issue.

Doug Bauer: We have the ability to pull different levers to get people across the goal line. I would also say that The demand is still really strong. It's just hesitation.

Doug Bauer: You know, we have the ability to pull different levers.

Doug Bauer: To get people across the go line I would also say that the.

Thomas Mitchell: I would also say that the demand is still really strong. It's just hesitation. I'm very bullish about the spring selling season. And we're seeing people sitting on the fence. Hence the reason why we kind of played around with our community opening is going into next year. I mean, we're a smaller builder, so we have the ability to make our business the most profitable business that could be going into the following year or any year. So we're trying to be a little smart about what's going to happen in the spring selling season. And frankly, we think there's a lot of demand.

Doug Bauer: The demand is still there.

Doug Bauer: Really strong it's just hesitation.

Doug Bauer: And I'm very bullish about the spring selling season. And we're seeing people sitting on the fence, hence the reason why we kind of played around with our community openings going into next year. I mean, we're a smaller builder, so we have the ability to make our business the most profitable business it can be going into the following year or any year. And so we're trying to be a little smart about what's going to happen in the spring selling season. And frankly, we think there's a lot of demand and a lot of buyers just sitting there.

Doug Bauer: I'm very bullish about the spring selling season, and we're seeing people sitting on the fence. Hence the reason why we kind of played around with our community openings going into next year I mean, we're a small cut smaller builder. So we have the ability to make our business. The most profitable business that could be going into the following year or any year.

And so we're you know we're trying to be a little smarter about what's going to happen in the spring selling season, and frankly, we think theres a lot of demand and a lot of buyers are sitting there and it's not about rates. It's just gave a little confidence getting over this election.

Douglas Bauer: A lot of buyers are sitting there, and it's not about rates. It's just getting a little confidence getting over this election.

Doug Bauer: And it's not about rates. It's just getting a little confidence getting over this election.

Thomas Mitchell: Hey Trevor, it's Tom just to follow up relative to your question about cadence of orders during the quarter. You know, July was definitely the slowest month of the quarter. August picked up a little bit as people were perceiving rates to be coming down. Then September was pretty consistent with August. So that's kind of how it's gone. And as Doug mentioned, it's been choppy as we're heading in October with all the macro issues out there.

Tom Mitchell: Hey, Trevor, it's Tom. Just to follow up relative to your question about cadence of orders during the quarter, you know, July was definitely the slowest month of the quarter. August picked up a little bit as people were perceiving rates to be coming down. Then September was pretty consistent with August. So that's kind of how it's gone. And as Doug mentioned, it's been choppy as we're heading into October with all the macro issues out there. But again, we're highly confident that we're building pent-up demand and the spring season is going to be strong.

Doug Bauer: Hey, Trevor its Tom just to follow up relative to your question about cadence of orders during the quarter.

Speaker Change: July was definitely the slowest month of the quarter August picked up a little bit as people were perceiving our rates to be coming down and then September was pretty consistent with the August. So that's kind of how it's gone and as Doug mentioned, it's been choppy as we're heading into October with all the macro issues.

Trevor Allison: But again, we're highly confident that we're building ten up demand, and the spring season is going to be. Thank you for all that color that makes a lot of sense.

Speaker Change: Out there, but again, we're highly confident that we're building pent up demand in the spring season, it's going to be strong.

Trevor Allison: Okay, thank you for all that color. It makes a lot of sense.

Speaker Change: Okay. Thank you for all that color. It makes a lot of sense and Doug I guess kind of piggybacking off a comment you made about profitability, there and and I think you were kind of alluding to your your choice of pace and price.

Trevor Allison: And Doug, I guess, kind of piggybacking off a comment you've made about profitability there, and I think you were kind of alluding to your choice of pace and price. Gross margin was solid in the quarter, and it looks like 4Q is gonna be roughly flat, which I think is a pretty good outcome in the current environment. So can you talk about, I guess, further what you were alluding to there about your decision on pace and price in the current environment, how you're balancing that? Well, again, we're we're always balancing pace and price. We took an approach to illustrating that, you know, as we land for the 2024, you know, margins will be steady at, I think, Glenn, 23.3% roughly.

Douglas Bauer: And, Dahl, I guess kind of piggybacking up a comma you made about profitability there. And I think you were kind of alluding to your choice of pace and price. Gross margin was solid in the quarter, and it looks like 4Q is going to be roughly flat, which I think is a pretty good outcome in the current environment. Can you talk about further what you were alluding to there about your decision on pace and price in the current environment and how you're balancing those two things? Well, again, we're always balancing pace and price, and we took an approach to illustrating that as we land for the 2024 margins will be steady at I think it's gone 23.3% roughly.

Speaker Change: Gross margin was solid in the quarter and it looks like <unk> is going to be roughly flat, which I think is a pretty good outcome in the current environment can you talk about I guess further what you were alluding to there about your decision on pace and price in the current environment, how you're balancing those two things.

Speaker Change: Well again, we're we're always balancing pace and price and we took an approach to two illustrating that you know as we land for the 2024.

Speaker Change: Margins will be steady at.

Speaker Change: Glen 'twenty, 3.3% roughly so that that's you know our goal here Trevor is to grow our book value per share, 10% to 15% a year again, where smaller builder and we're just focused on growing EPS and growing that book value per share and let the market multiples and other things adjust.

Douglas Bauer: So that's our goal here at Trevor is to grow our book value per share 10 to 15% a year. Again, we're a smaller builder, and we're just focused on growing EPS and growing that book value per share and let the market multiples and other things adjust for what we're doing. We've got a very solid company, got a great team, and most importantly, we've got a very solid premium brand that we can enter into these new markets that are going to be very, very successful. So you know, I think margins are looking good for the end of the year.

Doug Bauer: So that's, you know, our goal here at Trevor is to grow our book value per share 10 to 15% a year. Again, we're a smaller builder and we're just focused on growing EPS and growing that book value per share and let the market multiples and other things adjust for what we're doing. We've got a very solid company, got a great team, and most importantly, we've got a very solid premium brand that we can enter into these new markets that are going to be very, very successful. So, you know, I think margins are looking good for the end of the year.

Speaker Change: For for what we're doing we've got a very solid company got a great team and most importantly, we've got a very solid premium brand that we can enter into these new markets that are going to be very very successful. So you know I think our margins are are are looking good for the end of the year.

Douglas Bauer: Okay, yeah, it makes sense.

Trevor Allison: Okay, yeah, it makes sense. Thanks for all the color there.

Speaker Change: Okay makes sense. Thanks for all the color there very helpful and good luck moving forward.

Trevor Allison: Thanks for all the color; there is very helpful and good luck moving forward.

Trevor Allison: It was very helpful, and good luck moving forward. Thank you.

Operator: Thank you.

Speaker Change: Thank you.

Alan Ratner: Our next question is from Alan Ratner from the Zellman Institute. Please go ahead. Hey guys, good morning. Thanks for all the info. Appreciate it.

Alan Ratner: Our next question is from Alan Ratner from Zellman & Associates, please go ahead. Hey, guys. Good morning. Thanks for all the info. Appreciate it.

Speaker Change: Our next question is from Alan Ratner of Zelman and Associates. Please go ahead.

Alan Ratner: Hey, guys. Good morning, Thanks for all the info appreciate it.

Alan Ratner: Doug, maybe just following on the gross margin topics since that's where the prior question left off. So I think, and correct me if I'm wrong, I think you said incentives on orders were about five and a half percent of price this quarter. I think that's up from about 3.7 and two Q. So just curious, you know, with the flattest gross margin guide for four Q, even though incentives, you know, ticked up. Are there offsets there, either on the cost side or mix, or should we think about that bump in incentives, you know, impacting margin more in early 25.

Alan Ratner: Doug, maybe just following on the gross margin topic, since that's where the prior question left off. So, I think, and correct me if I'm wrong, I think you said incentives on orders were about 5.5% of price this quarter. I think that's up from about 3.7 and 2Q. So, just curious, you know, with the flattish gross margin guide for 4Q, even though incentives, you know, ticked up, are there offsets there, either on the cost side or mix, or should we think about that bump in incentives? impacting margin more in early 25.

Doug maybe just following on the gross margin topic since that's where the prior question left off.

I think and correct me if I'm wrong I think you said incentives on orders were about five 5% of price this quarter.

Alan Ratner: I think that's up from about $3 seven in two Q. So just curious you know what the with the flattish gross margin guide for four Q, even though incentives ticked up are there offsets there either on the cost side or mix or should we think about that bumping incentives yep impacting margin more in early 'twenty five.

Glenn Keeler: Yeah, I'll take that one. In centers, we're, you know, slightly elevated in the third quarter, but it was on a lower order base. Our incentives overall and backlog are still, you know, lower than that, obviously. And so that's what's really driving that margin in the fourth quarter. It wasn't enough to really move that margin because, you know, there's good to be built margins and backlog. And that's what, you know, it was driving a lot of that Q4 margin. Got it. Okay, that's helpful.

Glenn Keeler: Hey, Alan, it's Glenn. I'll take that one. Incentives were, you know, slightly elevated in the third quarter, but it was on a lower order base. Our incentives overall and backlog are still, you know, lower than that, obviously. And so that's what's really driving that margin in the fourth quarter. It wasn't enough to really move that margin, because, you know, there's good to be built margins and backlog. And that's what, you know, is driving a lot of that Q4 margin. Got it. Okay, that's helpful.

Glenn: Yeah, Alan it's Glenn I'll take that one.

Glenn: Incentives were slightly elevated in the third quarter.

Glenn: But it was on a lower order base our incentives overall in backlog are still you know are lower than that honestly and so that's what's really driving that margin in the fourth quarter. It wasn't enough to really move that margin because you know there's good to be built margins in backlog and that's what I was driving a lot of that Q4 margin.

Speaker Change: Got it okay. That's helpful.

Alan Ratner: And then, you know, I know you're not given specific 25 guidance yet, and it's early, but I'm just curious if we could think through, you know, kind of the setup heading into the year. Obviously, it sounds like you're pretty bullish on the spring selling season, but you're probably going to enter the year with backlog down, you know, plus or minus 20%. I don't recall if you gave the specific homes that you have under construction, so I know the backlog number isn't necessarily telling the full picture because of the pivot to more specs. But, you know, given that backlog entering the year, do you still feel like you have enough opportunity to grow from a closings perspective based on what you have under production, based on what your community count growth is going to look like through the year, or does that set you up, you know, maybe to make it a bit more difficult to grow from a unit perspective next year?

Alan Ratner: And then, you know, I know you're not given specific 25 guidance yet, and then it's early, but I'm just curious if we could think through, you know, kind of the setup heading into the year. Obviously, it sounds like you're pretty, pretty bullish on the spring selling season, but you're probably going to enter the year with backlog down, you know, plus or minus 20%. I don't recall if you gave the specific homes that you have under construction. So I know the backlog number isn't necessarily telling the full picture because of the pivot to more specs.

Speaker Change: And then I know youre, not giving specific twenty-five guidance yet and then it's early but I'm just curious if we could think through.

Speaker Change: Kind of the set up heading into the year, obviously, it sounds like you're pretty pretty bullish on the spring selling season, but youre, probably going to enter the year with backlog down plus or minus 20% am I I don't recall, if you gave the specific homes that you have under construction. So I know the backlog number isn't necessarily telling the full picture because of that.

Speaker Change: The pivot to more specs, but you know given that backlog entering the year do you still feel like you have enough opportunity to grow our from a closings perspective based on what you have on your production based on what your community count growth is going to look like through the year or does that set you up you know maybe to make it a bit more difficult to grow from a unit perspective.

Alan Ratner: But, you know, given that backlog entering the year, do you still feel like you have enough opportunity to grow from a clothing's perspective based on what you have under production, based on what your community count growth is going to look like through the year. Or does that set you up, you know, maybe to make it a bit more difficult to grow from a unit perspective next year.

Speaker Change: Back with next year.

Glenn Keeler: Good question, Alan, and you're trying to make us give guidance without giving guidance, but no. I try. No, we do believe in the spring selling season, and like you said, we're going to start the year with lower community count. Then we started last year; backlog coming in the year is lower because of the backouts of this year. So that does present, you know, somewhat of a challenge to grow deliveries, but we do, we are coming into the year with a good amount under construction. So we have about 1,300 homes right now that are started and unsold.

Glenn Keeler: Good question, Alan, and you're trying to make us give guidance without giving guidance, but no. But... I tried. Yeah, I know, I know. No, we do believe in the spring selling season, and like you said, we aren't going to start the year with lower community count than we started last year. Backlog coming into the year is lower because of the backup of this year. So that does present, you know, somewhat of a challenge to grow deliveries, but we do, we are coming into the year with a good amount under construction. So we have about 1,300 homes right now that are started and unsold.

Speaker Change: Good question, Alan and you're trying to get make us give guidance without giving guidance, but [laughter].

Speaker Change: But I.

Uh huh.

Speaker Change: Yeah.

Speaker Change: No. We do believe in the spring selling season, and like you said, we aren't going to start the year with lower community count than we started last year backlog coming into the year as lower.

Speaker Change: Cause of the back half of this year. So that does present somewhat of a challenge to grow deliveries, but we do we are coming into the year with.

Speaker Change: A good amount under construction. So we have about 1300 homes right now that are started and unsold. So we have about 1300 specs going into the fourth quarter.

Tom Mitchell: So we have about 1,300 specs going into the fourth quarter, and then, you know, we do have, you know, our backlog and our community count next year is going to ramp to that 150 to 160, but it's going to be pretty radibly over the year. So, it's not heavily weighted towards the back half or the front half just to give you some kind of color there.

Thomas Mitchell: So we have about 1,300 specs going into the fourth quarter. And then, you know, we do have, you know, our backlog and our community count next year has gone a ramp to that 150 to 160, but it's going to be pretty radically over the year. So it's not heavily weighted towards the back half or the front half, just to give you some kind of color there.

And then you know we do have you know our backlog in our community Count next year is going to ramp to that $1 50 to 160, but it's gonna be pretty ratably over the year. So it's not heavily weighted towards the back half with the front half.

Speaker Change: Just to give you some kind of color there.

Thomas Mitchell: Yeah, Alan, it's Tom. Just to tag on that a little bit. We really do feel pretty good relative to our spec inventory moving into that spring selling season. So a lot will just depend on how strong that spring selling season is. Obviously, if it's as robust as we think it is, we have the ability to react and capitalize on that. But really fortunate to be entering into that season with the spec units we have under construction right now.

Tom Mitchell: Yeah, Alan, it's Tom to tag on a little bit. We really do feel pretty good relative to our spec inventory moving into that spring selling season. So a lot will just depend on how strong that spring selling season is. Obviously, if it's as robust as we think it is, we have the ability to react and capitalize on that, but really fortunate to be entering into that season with the spec units we have under construction right now.

Speaker Change: Yeah, Alan it's Tom just to tag on that a little bit we really do feel pretty good relative to our spec inventory moving into that spring selling season. So a lot will just depend on how strong that spring selling season is obviously, if it's as robust as we think it is a we have the ability to react and capitalize.

Speaker Change: On that but really fortunate to be entering into that season with the spec units, we have under under construction right now.

Alan Ratner: Great. Last one, if I could, that 1,300 homes under construction spec on, how does that compare to a year ago? I'd have to look at it. It's actually very similar. Last year, we were at 1,172 in the third quarter, so very similar. Okay.

Alan Ratner: Great.

Alan Ratner: Last one, if I could, that 1300 homes under construction spec on how does that compare to a year ago? I'd have to look, but do you have that? It's actually very similar.

Alan Ratner: Great last one if I, if I could that 1300 homes under construction spec out how does that compare to a year ago.

Speaker Change: I'd have to look what it would have been essentially very similar to last year, we were at 1800 and Steve any true in the third quarter, So very similar.

Alan Ratner: Last year we were at 1,372 in the third quarter, so very similar. Thank you, Linda. Appreciate it, guys. Thanks a lot. All right, thanks, Alan.

Speaker Change: Okay. Thank you Linda.

Operator: Thank you, Linda. Appreciate it, guys. Thanks a lot.

Speaker Change: I appreciate it guys. Thanks a lot.

Mike Dow: Next question is from Mike Dow from RBC Capital Markets. Please go ahead. Thanks for taking my questions.

Speaker Change: Hi, Joan.

Mike Dahl: Our next question is from Mike Dahl from RBC Capital Markets. Please go ahead. Thanks for taking my question.

Speaker Change: Our next question is from Mike Dahl from RBC capital markets. Please go ahead.

Mike Dahl: Hi, Thanks for taking my questions.

Mike Dahl: Doug, Glenn, it's interesting in terms of the strategic decision to move the community openings and it kind of begs a couple of questions. The first one is, you know, if you're looking out at fourth quarter and making that decision around something as meaningful as when do I open a community, how should we think about how you're managing your pace and incentives potentially differently in 4Q than the quarter we just exited, are you going to kind of pull back on incentives and let pace kind of shake out where it does, just given your view that spring is going to be much better or really how should we be thinking about the other strategic implications?

Speaker Change: But glenn.

Mike Dow: It's interesting in terms of the strategic decision to move the community openings, and it kind of begs a couple of questions. The first one is, you know, if you're looking out at fourth quarter and making that decision around something as meaningful as when do I open a community, how should we think about how you're managing your pace and incentives, essentially, differently in 4Q than the quarter we just exited? Are you going to kind of pull back on incentives and let pace kind of shake out where it does, just give them your view that spring's going to be much better, or really, how should we be thinking about the other strategic implications there?

Mike Dahl: It's interesting in terms of the strategic decision to move the community openings.

Mike Dahl: And I kind of begs a couple of questions. The first one as you know.

Speaker Change: If you're looking out at fourth quarter, I'm, making that decision around something as far as when do I open a community how should we think about how you're managing your piece and incentives.

Mike Dahl: Really differently than.

Mike Dahl: And for Q than the quarter. We just exited are you are you going to kind of pull back on incentives in and let let pace kind of shake out where where it does just given your view that spring is going to be much better or really how should we be thinking about the the other strategic implications there.

Douglas Bauer: Yeah, this, Mike. I mean, generally speaking, in the beginning of the fourth quarter, in the third quarter this year, you're going to have some homes that you're going to probably have to sell for a division to meet their closing plans. So the incentives will be a tad bit higher going into the fourth quarter. There's a lot of buyer hesitation, as I mentioned, the macro side. And as we look into the spring selling season, we would expect that incentives would be a little bit lower with those new communities that we're opening. So that's kind of strategically how we look at it.

Doug Bauer: Yeah, this is Doug, Mike. I mean, generally speaking, in the call at the beginning of the fourth quarter and the third quarter this year, you're gonna have some homes that you're gonna probably have to sell for a division to meet their closing plan. So the incentives will be a tad bit higher going into the fourth quarter. And there's a lot of buyer hesitation, as I mentioned, on the macro side. And as we look into the spring selling season, we would expect that incentives would be a little bit lower with those new communities that we're opening.

Mike Dahl: Yeah. This is Mike I mean generally speaking.

Mike Dahl: In that you can call at the beginning of the fourth quarter into third quarter. This year, you're going to have some homes that you're going to probably have to sell that for a division to meet there.

Mike Dahl: They're they're closing plants or the incentives will it be a tad bit higher going into the fourth quarter and then there's a lot of buyer hesitation as I mentioned on the macro side and as we look into the spring selling season, we would expect that incentives would be a little bit lower.

Mike Dahl: And with that those new communities that were opening so that thats kind of strategically how we look at it.

Doug Bauer: So that's kind of strategically how we look at it.

Mike Dahl: Okay.

Mike Dahl: Okay.

Glenn Keeler: So that's it. Sorry, Mike, I was just going to add, just to highlight our approach to that and how we think about it, is obviously we are focused on moving completed inventory to match our plan, as Doug just said. So as we look at incentives, they do vary community by community depending on what inventory we have out there available for ready move-ins. So we're continuing to want to turn our inventory relative to that, and then we're focused on individual buyer demographics, and incentives are primarily being utilized towards finance, closing costs, and then options and upgrades.

Mike Dahl: Yeah.

Linda Mamet: So, sorry, Mike, I was just going to add, just to highlight, you know, our approach to that and how we think about it is obviously we're focused on moving, you know, completed inventory to match our plan, as Doug just said. So as we look at incentives, they do vary community by community, depending on what inventory we have out there available for ready movements. So we're continuing to want to turn our inventory relative to that, and then we're focused on individual buyer demographics, and incentives are primarily being utilized towards finance closing costs and then options and upgrades, and it's about a 50 50 mix, so it's somewhat fluid, but I would agree with Doug that.

Speaker Change: Sorry, Mike I was just going to add just to highlight you know our approach to that and how we think about it.

Speaker Change: Obviously, we're focused on moving completed inventory to match our plan as Doug just said so as we look at incentives they do very community by community depending on what inventory we have out there available for ready move ins. So we're continuing to want it.

Speaker Change: Our inventory relative to that and then we're focused on individual buyer demographics and incentives.

Speaker Change: Primarily being utilized.

Speaker Change: Towards finance closing costs, and then options and upgrades and it's about a 50 50 mix. So it is somewhat fluid, but I would agree with Doug that.

Glenn Keeler: And it's about a 50-50 mix. So it is somewhat fluid, but I would agree with Doug that... With the choppy back half, we'll meet our plans through utilizing slightly increased incentives, but overall outlook for next year is decreasing.

Douglas Bauer: With the choppy back half, we'll meet our plans through utilizing slightly increased incentives, but overall outlook for next year is decreasing incentives.

Speaker Change: With the choppy back half, we'll we'll meet our plans through utilizing slightly increased incentives, but overall the outlook for next year is decreasing incentives.

Mike Dow: Okay, got it. So what's on the ground today, you'll keep moving through to hit reasonable targets.

Mike Dahl: Okay, got it. So what's on the ground today, you'll keep moving through to hit reasonable targets. In terms of kind of the, so you're facing some hesitancy in terms of buyers, I guess how much is also a response to the competitive dynamics on the ground where clearly a lot of builders have leaned into into spec as as well and is it also kind of a response to hey there's just there's just a little too much inventory in some of these markets we might as well kind of hold off on some of these.

Speaker Change: Okay got it so what's on the ground today, you'll keep moving through to hit.

Speaker Change: Reasonable targets.

Mike Dow: It's in terms of kind of the so you're facing some hesitancy in terms of buyers, I guess how much is also a response to the competitive dynamics on the ground where clearly a lot of builders have leaned into into spec as well and is it also kind of a response to, hey, there's just, there's just a little too much inventory in some of these markets, we might as well kind of hold off on some of these. These openings so that that would be my follow-up question there if you had. Yeah, you know, my gets a really, really good question, and it's breaking down by a market.

Speaker Change: In terms of kind of the so you're facing some hesitancy in terms of.

Speaker Change: Buyers I guess, how much is also a response to the competitive dynamics on the ground and we're clearly a lot of builders had when you didn't.

Speaker Change: And the spec is as well and is it also kind of a response to hey, there's just there's just a little too much inventory in some of these markets, we might as well kind of hold off on some of these.

Mike Dahl: openings so that that would be my A follow-up question there, if you could.

Speaker Change: Openings, so that that would be my.

Speaker Change: A follow up question there.

Doug Bauer: Yeah. Yeah, Mike, that's a really, really good question. And let's break it down by a market. You know, Austin has been on the radar screen for everybody. And relative to the competition, The bigger homebuilders will play a much bigger incentive absorption game. But when you look at what we offer as a premium brand opportunity, our share of the market that we're getting is very strong, because we build in closer locations, closer to amenities, school, and work. So the larger builders... are typically what's driving us. It's really, we offer a premium brand opportunity. And even in an Austin market, that's, that's very choppy.

Speaker Change: Yeah, Yeah, Mike It's a really really good question and you know that that's break it down by a market. You know Austin is has been on the radar screen for everybody and relative to the competition.

Douglas Bauer: You know, Austin has been on the radar screen for everybody, and relative to the competition, the bigger home builders will play a much bigger, bigger incentive absorption game. But when you look at what we offer as a premium brand opportunity, our share of the market that we're getting is very strong because we build in closer locations, closer to amenity, school, and work. So the larger builders aren't typically what's driving us, it's, it's really, we offer a premium brand opportunity and even in an Austin market, that's very choppy. We're getting better than our share of market in that market.

Speaker Change: The bigger homebuilders will play a much bigger bigger incentive absorption game, but but when you look at what we offer as a premium brand opportunity our share of the market that we're getting is very strong because we build in and closer locations closer to amenities SKU.

Speaker Change: And works so.

Speaker Change: The larger builders.

Speaker Change: Arent arent typically what's driving us. It's it's it's really we we offer a premium brand opportunity and even in an Austin market. That's that's very choppy, we're getting better than our share of market and that market out Linda if you want to add to that too.

Linda Mamet: We're getting better than our share of market in that market. I don't know, Linda, if you want to add to that too.

Linda Mamet: I don't lend. If you want to add to that too. So I think you've shared that really well. I mean, it is so variable by market right now; often, it is the market that does have more inventory currently. But when you look across all of Tri-Point's footprint on a weighted average basis, the supply in our market is under three months of supply from the resale side. And in some of our markets, like Washington with the premium locations that we have, or Southern California, there is very little new home competition in those markets for our products.

Mike Dahl: I think you've shared that really well. I mean, it is so variable by market right now, often is the market that does have more inventory currently. But when you look across all of TRI Pointe's footprint on a weighted average basis, The supply in our market is under three months of supply from the resale side, and in some of our markets like Washington, with the premium locations that we have, or Southern California, there is very little new home competition in those markets for our products. Okay, and then sorry to harp on this and squeeze another one in, but then should we think about the delayed openings as aligning with those regional dynamics?

Speaker Change: No I think he said that really well I mean, it's a very Oh I know I can't right now often is the market that Gartner has more inventory currently when you look across all of Tri Pointe footprint on a weighted average basis.

Speaker Change: Supply in an hour.

Speaker Change: Got it.

Three months of supply on the reef outside and then some of our markets like Washington with the premium locations that we have or southern California. There is very little new home competition and that's not good for our product.

Mike Dow: Okay, and then, sorry to harp on this and squeeze another one in, but then should we think about the delayed opening as aligning with those regional dynamics, or how would you characterize the regional mix of where you pushed out some of those openings? I don't have that in front of me, Mike. I probably have to get to the last point you haven't. Yeah, it's a little bit aligned with that, but I also think we might be making too big of a deal out of some of the push outs. We're talking about a community that was kind of open, maybe in the end of November, that's now going to open in January or February, right?

Speaker Change: Okay, and then Florida harp on this and squeeze another one in but then should we think about the delayed openings is aligning with those regional dynamics or how would you characterize the regional mix of where you pushed out some of those openings.

Glenn Keeler: Or how would you characterize the regional mix of where you've pushed out some of those those? I don't have that in front of me, Mike, probably have to get unless Glenn, do you have it? Yeah, it's a little bit aligned with that, but I also think we might be making too big of a deal out some of the push-outs. We're talking about a community that was going to open maybe in the end of November that's now going to open in January or February, right? So, not a major impact and not a huge impact to Q4, obviously.

Speaker Change: Oh I don't have that in front of me, Mike I'd, probably have to get to.

Unless it Glen do you have it.

Speaker Change: Yeah, it's it's a little bit of line with that but I also think we might be making too big of a deal out some of the push outs. We're talking about a community that was gonna open maybe in the end of November that's now going to open in January or February right. So not a major impact and not a huge impact to Q4, obviously and if the spring selling season is strong like we think it is.

Douglas Bauer: So not a major impact and not a huge impact to queue for, obviously. And if the spring selling season is strong, like we think it's going to be, we'll be able to make up for any orders that we potentially, you know, didn't get in the fourth quarter. So it's not that big deal. But I would add to that, it's not weighted at all in this. Say, some of the, as we noted in our remarks, some of the slower markets, it's actually spread out in these new communities and some of the stronger markets. So just, you know, like Glenn said, it's suggesting openings from the holiday period of late November, December to January.

Glenn Keeler: And if the spring selling season is strong like we think it's going to be, we'll be able to make up for any orders that we potentially, you know, didn't get in the fourth quarter. So, it's not that big deal to explain. I would add to that, it's not weighted at all in, let's say, some of the, as we noted in our remarks, some of the slower markets. It's actually spread out. I think the most important thing to you guys relative to that is in that slight shift of timing relative to openings, it will not have any impact on deliveries for next year.

Speaker Change: Going to be we'll be able to make up for any orders that we potentially didn't get in the fourth quarter. So it's not that big deal.

Speaker Change: I would add to that it's not weighted at all and let's say some of the as we noted in our remarks as some of the slower markets, it's actually spread out.

Speaker Change: These new communities and in some of the stronger markets. So just.

Speaker Change: Just you know like Glen Glen said, it's suggesting openings from the holiday period of late November December to January.

Carl Reichardt: I think the most important thing to as relative to that is in that slight shift of timing relative to openings; it will not have any impact on deliveries for next year. Okay, thank you very much.

Speaker Change: I think the most important thing too.

Speaker Change: Relative to that is and that slight shift of timing relative to openings. It will not have any impact on deliveries for next year.

Carl Reichardt: Okay, thank you very much.

Speaker Change: Got it okay. Thank you very much.

Glenn Keeler: Our next question is from Carl Reichert from BTIG. Please go ahead. Thanks, hey guys. Glenn, just a quick one on the SGNA guide for the next quarter. I think even at the midpoint, you'll be up 100 million sequentially in revenue. Is there anything special in that SGNA? Is it related to cost associated with community openings, or already additional spend to just put assume you got a little bit better leverage in the next quarter than what your guide says. Yeah, good question. And, you know, there is a range there: 10, 5 to 10, 9. So some of that is just timing of spend in the fourth quarter.

Glenn Keeler: Our next question is from Carl Reichardt from BTIG, please go ahead. Thanks, guys. Um, Glenn, just a quick one on the SG&A guide for the next quarter. I think even at the midpoint, you'll be up 100 million sequentially in in revenue. Is there anything special in that SG&A? Is it related to costs associated with community openings or any additional spend? I just would assume you got a little bit better leverage in the next quarter than what your guide Yeah, good question. And, you know, there is a range there, $10,500 to $10,900. So, some of that is just timing of spend in the fourth quarter.

Speaker Change: Our next question is from Carl Reichardt from BTG. Please go ahead.

Carl Reichardt: Thanks, Hey, guys.

Carl Reichardt: Glenn just a quick one on the SG&A guide for the next quarter I think even at the mid point, you'll be up 100 million sequentially. In revenue is there anything special in that SG&A as it related to costs associated with community openings or where any additional spending would assume you've got a little bit better leverage in the next quarter than what your guidance says.

Carl Reichardt: Yeah. Good question and you know there is a range there 10 five to 10 nine so.

Carl Reichardt: Some of that is just timing of spend in the fourth quarter, but we also are ramping up those three new startup divisions and hiring more more people and so there is a little bit of that that is not that impactful, but I'm just a little bit of noise in the fourth quarter, but we'll see how that ends up shaking out in the fourth quarter. Okay that makes sense all right. Thank you.

Glenn Keeler: But we also are ramping up those three new startup divisions and hiring more people. So, there is a little bit of that that's not that impactful, but just a little bit of noise in the fourth quarter. But, you know, we'll see how that ends up shaking out in the fourth quarter.

Glenn Keeler: But we also are ramping up those three new startup divisions and hiring more people. And so there is a little bit of that that's not that impactful, but just a little bit of noise in the fourth quarter. But you know, we'll see how that ends up shaking out in the fourth quarter. Okay, that makes it right. Thank you, Glenn.

Glenn Keeler: Okay. That makes sense.

Carl Reichardt: All right. Thank you, Glenn.

Douglas Bauer: And then along those lines, so Doug, now that you've kind of moved greenfield into some pretty significant markets. Could we consider you sort of out of the market for acquisitions of small builders, and then, as you look at your capital outlay over the course of the next couple of three years, could we expect a more aggressive lean into the new greenfield markets you've opened? Yeah, Carl, good question. I mean, we're always inquisitive, but I would tell you I would lean into what you're saying. I mean, we're leaning really into the Utah's got a lot of a lot of momentum.

Doug Bauer: And then along those lines, so, Doug, now that you've kind of moved Greenfield into some pretty significant markets, Could we consider you sort of out of the market for acquisitions of small builders? And then as you look at your capital outlay over the course of the next couple of three years, could we expect a more aggressive lean into the new greenfield markets you've opened? Yeah, Carl, good question. I mean, we're always inquisitive, but I would tell you I would lean into what you're saying. I mean, we're leaning really into the Utah's got a lot of momentum, so does Orlando.

Speaker Change: And then on along those lines. So Doug now that you've kind of moved greenfield into some some pretty significant markets.

Speaker Change: Could we consider you're sort of out of the market for acquisitions of small builders and then as you look at your capital outlay over the course of the next couple of three years can we expect a more aggressive lean into the new Greenfield markets you've opened.

Yeah, Yeah. Carl Good question I mean, we're always inquisitive, but I would tell you our I would lean into what you're saying I mean, we're leaning really into the Utah has got a lot of a lot of momentum sodas Orlando and and you know in the batting lineup I would tell you and coastal is right behind Orlando South where.

Douglas Bauer: So does Orlando. And you know, in the batting lineup, I would tell you Coastal's right behind our land. So we're very leaning into those three new expansion divisions, both in land and in people. I can't tell you how I mean, it's quite flattering for me and Tom to get around to these markets and how landsellers are opening their door to try point because of our premium lifestyle brand. They have really gotten the message; we can demonstrate the product. And it allows us to be in those core locations. I always kind of kid it as Main and Main.

Doug Bauer: And in the batting lineup, I would tell you Coastal's right behind Orlando. So we're very leaning into those three new expansion divisions, both in land and in people. I can't tell you how, I mean, it's quite flattering for me and Tom to get around to these markets and how land sellers are opening their door to TRI Pointe because of our premium lifestyle brand. They have really gotten the message. We can demonstrate the product, and it allows us to be in those core locations. I always kind of kid it as Maine and Maine. I know Doug Yearley won't like me for saying that, but we're focused on the core locations.

Speaker Change: Very they're leaning into those three new expansion divisions, both in land and in people I can't tell you how I mean, it's it's quite flattering too for me and Tom to get around to these markets and how land sellers are opening their door to tri Pointe because of.

Speaker Change: Our premium lifestyle brand they they have really gotten the message we can demonstrate the product and it it allows us to be in those core locations.

Speaker Change: These kind of kit. It is main and main I know, Doug you really won't like me for saying that but.

Douglas Bauer: I know Doug really won't like me for saying that, but you know, we're focused on the core locations. That's why we do a lot of joint ventures with Tom. Matt, that makes sense. Thank you very much.

Our focus on the core location. So that's why we do a lot of joint ventures with tall.

Doug Bauer: That's why we do a lot of joint ventures with Toll. Yeah, that makes sense.

Speaker Change: Yeah that makes sense. Thank you very much Doug I appreciate that and I'm rooting for your docks, okay have a good one.

Carl Reichardt: Thank you very much, Doug. I appreciate that. And I'm rooting for your ducks.

Douglas Bauer: I appreciate that, and I'm rooting for your ducks, okay? Have a good one. Thanks for the ducks.

Carl Reichardt: Okay.

Carl Reichardt: Have a good one. Thanks.

Speaker Change: <unk>.

Jay Mccanless: Our next question is from Jay McCanless, from Leadfish Securities. Please go ahead. Hey, thanks everyone. So Doug, I wanted to dig down on what you're saying about rates on an issue. Is that more? You can do the buy downs, rate buy downs, things like that.

Jay Mccanless: Our next question is from Jay McCandless from Wedbush Securities, please go ahead. Hey, thanks, everyone. So, Doug, I wanted to dig down on what you're saying about rates aren't an issue. Is that more, you can do the buy downs, rate buy downs, things like that? Or is it something about customer mix? Because basically, that's that's the exact opposite of what we've been hearing from a lot of your competitors is that rates, especially here in October, really become a headwind to the buyer sentiment.

Speaker Change: Our next question is from Jay Mccanless from Wedbush Securities. Please go ahead.

Jay Mccanless: Hey, Thanks, Juan So Doug I wanted to dig down on what you were saying about rates arent an issue is that more you can do the buy downs refi downs things like that or is it something about customer mix cause.

Jay Mccanless: Or something about customer mix because basically that's the exact opposite of what we've been hearing from a lot of your competitors: is that rates, especially here in October, really become a headwind to the buyer's sediment.

Jay Mccanless: Basically that's that's the exact opposite of what we've been hearing from a lot of your competitors is that rates, especially here in October really become a headwind to a buyer sentiment.

Linda Mamet: Jay, this is Linda. I'll start and have Doug Edden here as well, but there's really two things to think about. One is what is happening with rates in terms of the consumer's understanding of it. When there's volatility, consumers tend to hesitate or pause because they may not understand the reason for the volatility. On the other side, there's what TRI Pointe customers can qualify for. And as Tom said earlier, one of the things that's very interesting on the use of our incentives is that even though we advertise forward commitments and they are great at driving traffic into our new home galleries, our customers ultimately choose to use more of their incentive dollars for the design studio to personalize their homes.

Linda Mamet: Jay, this is Linda. I'll start and have Doug add in here as well. But there's really two things to think about. One is what is happening with rates in terms of the consumer's understanding of it. When there's volatility, consumers tend to hesitate or pause because they may not understand the reason for the volatility. On the other side, there's what TRI Pointe customers can qualify for. And as Tom said earlier, one of the things that's very interesting on the use of our incentives is that even though we advertise forward commitments and they are great at driving traffic into our new home galleries, our customers ultimately choose to use more of their incentive dollars for design studio to personalize their homes.

Speaker Change: This is Linda I'll I'll start and have done it in here as well, but there's really two things to think about one is what is happening with rates and Kansas the consumers understanding all that when there is volatility.

Speaker Change: This team he's a take a pause because they may not understand the reason for the volatility on.

Speaker Change: On the other side, there's what tri Pointe customers can qualify for and as Tom said earlier, one of the things that's very interesting on the use of borrowings Dana is that even though we advertise forward commitments and they are great at driving traffic into our new home galleries, our customers ultimately choose to use more.

Speaker Change: Is there anything on a dollar for a design studio to personalize their homes, they don't need as much help in financing because they have good incomes and they can qualify the ultimately rate is not a reason for our customers not to move forward and buy them, but we are doing a lot of education to help people understand.

Tom Mitchell: They don't need as much help in financing because they have good incomes, and they can qualify. So ultimately, rate is not a reason for our customers not to move forward and buy, but we are doing a lot of education to help people understand the volatility. Jay, to put it into perspective for you relative to our deliveries in Q3, the average mortgage rate was 6.3%. And then moving forward of our lock backlog, the average mortgage rate is 6%. So, while we are utilizing permanent buy downs, it's not significant. So, as Linda said, our buyers are well qualified and able to purchase kind of in that 6%.

Doug Bauer: They don't need as much help in financing because they have good incomes and they can qualify. So ultimately, rate is not a reason for our customers not to move forward and buy. But we are doing a lot of education to help people understand the volatility. To put it into perspective for you, relative to our deliveries in Q3, the average mortgage rate was 6.3%. And then moving forward of our locked backlog, the average mortgage rate is 6%. So while we are utilizing permanent buy-downs, it's not significant. So as Linda said, our buyers are well-qualified and able to purchase kind of in that 6% range.

Speaker Change: And the volatility.

Speaker Change: Okay to put it into perspective for you relative to our.

Speaker Change: Our deliveries in Q3, the average mortgage rate was six 3%.

Speaker Change: And then moving forward of our locked backlog.

Speaker Change: Average mortgage rate is 6% so while we are utilizing permanent buy down it's not significant so as Linda said, our buyers are well qualified and able to purchase kind of in that 6% range right and ultimately only 3% about four days in the third quarter.

Linda Mamet: And ultimately, only 3% of our orders in the third quarter used the forward commitment. And obviously, we prefer for our customers to use design studio that's not dollars or dollars approach. Thanks.

Linda Mamet: Right. And ultimately, only 3% of our orders in the third quarter used the forward commitment. And obviously, we prefer for our customers to use Design Studio. That's not a dollar-for-dollar approach. Thank you, Linda and Tom.

Speaker Change: Or use the forward commitments and obviously, we prefer to our customers to use design studio that's not dollar for dollar products.

Douglas Bauer: Thank you, Linda and Tom. The other question I had when you think about the community growth for next year, is it still going to have, you know, called a 48, 50% entry level mix or how are you thinking about what's your opening next year? What is that customer mix going to look like? You're very similar to what we're delivering now, which is about that 50% premium entry level. And then the rest is that mix of first move up and second move up with your way to first move up. Okay, that's all ahead.

Speaker Change: Alright, Thank you Linda.

Linda Mamet: The other question I had, when you think about the community growth for next year, is it still going to have, call it a 48-50% entry-level mix, or how are you thinking about with what you're opening next year, what is that customer mix going to look like, Linda? Very similar to what we're delivering now, which is about that 50% premium entry level and then the rest is that mix of first move up and second move up with heavier weight to first move up.

Speaker Change: The other question I had when you think about the community growth next year is it still going to have caught up 48, 50% entry level mix or how are you thinking about what's what's your opening next year, what does that customer mix is going to look like Linda.

Speaker Change: Very similar to what we're delivering now which is about that 50% and premium entry level and then.

Speaker Change: The rest of that mix of first move up and second move up with heavier weight to first move up.

Jay Mccanless: That's all I have.

Speaker Change: Okay. That's all I had thank you.

Jay Mccanless: Thank you. Thanks, Jay.

Speaker Change: Thanks Jay.

Ken Venter: Our next question is from Ken Venter from Seaport Research Partners. Please go ahead. Good morning, everybody. Doug. You said broadly on a national footprint; you talked about being a smaller builder, but you're large in California. I think you referred to the fourth largest. So could you talk about, you know, I think you gave talks about incentives by orders, but for many of the builders, we've seen real strength in the West. After quite a period of weakness, I would say.

Ken Zener: Our next question is from Ken Zener from Seaport Research Partners. Please go ahead. Good morning, everybody. Doug, you said broadly on a national footprint, you talked about being a smaller builder, but you're large in California. I think you refer to the fourth largest. So could you talk about, you know, I think you gave, talked about incentives. by orders. But for many of the builders, we've seen real strength in the West after quite a period of weakness, I would say, in terms of margin expansion versus other regions.

Speaker Change: Our next question is from Ken Zenner from Seaport Research partners. Please go ahead.

Ken Zenner: Good morning, everybody.

Doug Bauer: Hey, Ken Doug.

Doug Bauer: Yeah.

Ken Zenner: Lee on a national footprint, you talked about being a smaller builder, but your large in California, I think you refer to the fourth largest so could you talk about you know I think he gave talks about incentives.

Ken Zenner: By orders, but for many of the builders, we've seen real strength in the west.

Ken Zenner: After quite a period of weakness I would say in terms of margin expansion versus other regions.

Douglas Bauer: In terms of margin expansion versus other regions, but could you maybe parse the comments around incentives and demand or margins what you're seeing, you know, kind of in the West versus your other regions, pretty segmented. Thank you. Well, overall, as we mentioned, Orange County and Lynn Empire have been very strong markets for us, including Washington, Arizona. And so, you know, the incentives that are offered there are in line with what we announced on a market basis in our remarks. But the West Coast and California continues to be a big driver for a TRI point, but it represents a little less than 50% of our orders and deliveries now.

Doug Bauer: But could you maybe parse the comments around incentives and demand or margins, what you're seeing, you know, kind of in the West versus your other regions, pre the segment data? Thank you. Well, overall, as we mentioned, Orange County, Inland Empire, have been very strong markets for us, including Washington, Arizona, and so, you know, the incentives that are offered there are in line with what we announced on a market basis in our remarks. But the West Coast and California continues to be a big driver for TRI Pointe, but it represents a little less than 50% of our orders and deliveries.

Ken Zenner: But could you maybe parse the comments around incentives and demand are margins, what you're seeing you know kind of in the west versus your other regions pre the segment David Thank you.

Ken Zenner: Well over overall I as we mentioned Orange County inland Empire.

Ken Zenner: We're very have been very strong markets for us including.

Ken Zenner: Washington, Arizona.

Ken Zenner: And so you know the incentives that are offered there in line with what we announced on a market basis and in our in our remarks, but the west coast in California continues to be a big driver for Tri Pointe.

Ken Zenner: But it it represents.

Ken Zenner: A little less than 50% of our our orders and deliveries now.

Thomas Mitchell: Hey, Ken, it's Tom. Welcome. We're glad to have you. The bottom line, the West continues to perform very well for us. And so I appreciate you highlighting that. It's been misunderstood over the years, but California, as Doug said, the rest of the rest is really performing well, and we expect that to continue. Thank you.

Tom Mitchell: Hey, Ken, it's Tom. Welcome. We're glad to have you. The bottom line, the West continues to perform very well for us, and so I appreciate you highlighting that. It's been misunderstood over the years, but California, and as Doug said, the rest of the West is really performing well, and we expect that to continue. Thank you.

Speaker Change: Hey, Ken its Tom welcome we're glad to have you.

Speaker Change: Oh.

Ken Zenner: The bottom line the west continues to perform very well for us and so I. Appreciate you highlighting that it's been misunderstood over the years, but Californian as Doug said the rest of the rest is really performing well and we expect that to continue.

Speaker Change: Thank you and could you just housekeeping what was the wet.

Ken Zener: And could you just, housekeeping, what was the WIP piece of inventory? Thank you. Um, I don't have that right in front of me. I'll have to get back to you on that, Ken.

Ken Venter: And did you just housekeeping? What was the whip at piece of inventory? Thank you. I don't have that right in front of me. I'll have to get back to you on that. Ken. That's fine. Have a good day, everybody.

Speaker Change: That piece of inventory. Thank you.

Speaker Change: I don't have that right in front of me I'll have to get back to you on that Ken.

Ken Zener: That's fine.

Ken Zener: Have a good day, everybody.

Speaker Change: That time have a good day everybody.

Alex Barron: Thanks, Dan. Our next question is from Alex Barron from Housing Research Center.

Alex Barron: Thanks, Ken. Our next question is from Alex Barron from Housing Research Center. Please go ahead. Hey, everybody. Good morning. I wanted to ask about the hesitation comments. I was wondering how you guys are interpreting that. Are people waiting to see who won the election, or are they waiting for the Fed to lower interest rates further? What is the hesitation as far as you guys understand it?

Dan: Thanks, Dan.

Speaker Change: Our next question is from Alex Barron from housing Research Center. Please go ahead.

Alex Barron: Please go ahead. Hey, everybody, good morning. I wanted to ask about the hesitation comments. I was wondering how you guys are interpreting that. Are people waiting to see who wins the election? Or are they waiting for the Fed to lower interest rates further? What is the hesitation as far as you guys understand?

Alex Barron: Hey, everybody good morning.

Alex Barron: Oh, no I was asking about the hesitation comments I was wondering how you guys are interpreting that are people waiting to see who wins the election or are they waiting for.

Alex Barron: The sad to lower interest rates further or what what is the hesitation as far as you guys understand.

Douglas Bauer: Well, Alex is Doug. I mean, it's something we've seen in our careers for a long time, and this election is no different; probably creates a little more anxiety around the kitchen table. And it's nothing more than the consumer is wanting to see more clarity about what's happening here in this election. And you've got other events that we've talked about. I mean, the hurricanes, geopolitical uncertainties. I mean, remember this business is a very, I guess if we hired a psychiatrist, it would be helpful in the three regions that we build in because you're buying the most expensive, durable good you're ever going to buy in your life.

Doug Bauer: Well, you know, it's Doug, I mean, it's Something we've seen in our careers for a long time, and this election is no different, probably creates a little more anxiety around the kitchen table. And it's nothing more than the consumer is wanting to see more clarity about what's happening here in this election. And you've got other events that we've talked about. The hurricanes, the geopolitical uncertainties, I mean... Remember, this business is a very. I guess if we hired a psychiatrist, it would be helpful in the three regions that we build in because you're buying the most expensive durable good you're ever going to buy in your life and you need a lot of confidence about where the world is going, where the country is going, where your own job is going, and so on and so forth.

Alex Barron: Well.

Alex Barron: Hey, Alex This is Doug I mean, it's a.

Doug Bauer: Something we've seen in our careers for for a long time in this election is no different probably creates a little more anxiety around the kitchen table and it's nothing more than.

Doug Bauer: The consumer is wanting to see more clarity about what's happening here in this election and you've got other events that we've talked about I mean.

Doug Bauer: The hurricanes geopolitical uncertainties.

Doug Bauer: Remember this business is a very.

Doug Bauer: I guess, if we hired a psychiatry as it would be helpful. In the three regions that we build and because you're buying the most expensive durable goods you're ever going to buy in your life and you need a lot of confidence about where oh.

Douglas Bauer: And you need a lot of confidence about where the world is going, where the country is going, where your own job is going, and so on and so forth. Those are all just factors that provide the little hesitation, but as we mentioned. and the demand is very strong. They're very deep, I should say. And I think that demand is, is, is, is, is that it's heading to, is going to fall into a, I would project a very good spring selling season and hopefully a little earlier spring selling season. So, that, that's, that's what we're seeing in the field right now.

Doug Bauer: Where the world is going and where the country has gone where your own job is going and so on and so forth. So those are all just factors that provides a little hesitation, but as as we mentioned.

Doug Bauer: So those are all just factors that provides a little hesitation.

Doug Bauer: But as we mentioned... The demand is very strong out there, very deep, I should say. And I think that demand that is hesitating is going to fall into, I would project, a very good spring selling season, and hopefully a little earlier spring selling season.

Doug Bauer: The demand is very strong out there very deep I should say and I think that demand is that is hesitating is going to fall into I would project a very good spring selling season, and hopefully a little earlier spring selling season. So that's that's what we're seeing in the field right now and that's what we're hearing.

Doug Bauer: So that's what we're seeing in the field right now, and that's what we're hearing.

Alex Barron: And, and that's what we're hearing. Yeah, and I guess that was going to be my, my next question because, as I look at the order pattern in, say, fourth quarter of, of last year, 23, it looks like it did quite a bit sequentially. And then we had a huge jump in the first quarter of this year. So I was wondering if that's generally what you guys are anticipating. We could see, you know, as we move into 25.

Alex Barron: And I guess that was going to be my next question because as I look at the order pattern in say fourth quarter of last year, 23, it looks like it dipped quite a bit sequentially and then we had a huge jump in first quarter of this year. So I was wondering if that's generally what you guys are anticipating we could see, you know, as we move into 25. That follows kind of normal seasonality, Alex, so I think that's a reasonable expectation. We'd like to call it the January jump.

Speaker Change: Yeah, and I guess that was going to be my my next question because I.

As I look at the order pattern in say fourth quarter of last year and 23, it looks like it did quite a bit sequentially and then we had a huge jump.

Speaker Change: First quarter of this year. So I was wondering if that's generally what you guys.

Speaker Change: I'm anticipating we could see you know as we move into 'twenty five.

Alex Barron: That, that, that follows kind of normal seasonality, Alex. So, I think that's a reasonable expectation. We'd like to call it the January Jump. Sounds good.

Speaker Change: But that that follows kind of normal seasonality, Alex So I think that's a reasonable expectation we'd like to call. It the January Jim Yeah.

Alex Barron: Sounds good.

Speaker Change: It sounds good what about Bill times did you guys see an improvement in build times this quarter and if so how much was it sequentially and year over year.

Douglas Bauer: What about build times? Did you guys see an improvement in build times this quarter? And if so, how much was it sequentially in year to year? Yeah, we continue to be encouraged by our build times, and we're really on our baseline template schedules. You see a flight improvement may be picked up a day or two quarter over quarter. But on average, we're right on our 115-day working day schedule. So that's very much normalized. Do you guys expect any further improvement, or do you think you're pretty much at your normal baseline now? We're at our normal baseline, but we will continuously look for improvement.

Alex Barron: What about bill times? Did you guys see an improvement in bill times this quarter, and if so, how much was it sequentially in year over year? Yeah, we continue to be encouraged by our build times. And we're really on our baseline template schedules. We've seen a slight improvement, maybe picked up a day or two, quarter over quarter. But on average, we're right on our 115-day working day schedule. So that's very much normalized.

Speaker Change: Yeah, we continue to be encouraged by our build times and we're really on our baseline template schedules, we've seen a slight improvement maybe picked up a day or two quarter over quarter.

Speaker Change: But on average we're right on our 115 day.

Speaker Change: Looking day schedule so.

Speaker Change: That's very much normalized.

Doug Bauer: Do you guys expect any further improvement or do you think you're pretty much at your normal baseline? We're at our normal baseline, but we will continuously look for improvement, and if we see an ability to... and adjust our templates more favorably, we're going to look at that in all.

Speaker Change: Do you guys expect any further improvement or do you think you're pretty much set in your normal baseline now.

Speaker Change: We're at our normal baseline, but we will continuously look for improvement and if we see an ability to.

Douglas Bauer: And if we see an ability to, you know, adjust our templates more favorably, we're going to look at that in all of our markets.

Speaker Change: Yes adjust our templates more favorably we're going to look at that in all of our markets.

Alex Barron: Okay, best of luck, guys. I'll get back in the queue. Thank you. Thanks, Alex.

Doug Bauer: Okay.

Alex Barron: Best of luck, guys. I'll get back in the queue.

Speaker Change: Okay, well, that's the bucholz I'll get back in the queue. Thank you.

Alex Barron: Thank you. Thanks, Alex.

Speaker Change: Thanks, Alex.

Douglas Bauer: This concludes the question-and-answer session.

Doug Bauer: This concludes the question and answer session.

Speaker Change: This concludes the question and answer session I'd like to turn the floor over to Doug Bauer for any closing comments.

Doug Bauer: I'd like to turn the floor over to Doug Bauer for any closing. Well, thank you everyone for joining us in today's call and I hope you all have a A wonderful upcoming holiday season. Thank you again, and we'll talk to you soon.

Operator: I'd like to turn it over to Doug Bauer for any closing comments. So thank you, everyone, for joining us today's call. And I hope you all have a wonderful upcoming holiday season. Thank you again. And we'll talk to you soon.

Doug Bauer: Well. Thank you everyone for joining us on today's call and I Hope you all have a.

Doug Bauer: Wonderful upcoming holiday season, Thank you again, and we'll talk to you soon.

Operator: This concludes today's teleconference. You made this connector wise at this time. Thank you again for your participation. Thank you.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.

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