Good morning, ladies and gentlemen, and welcome to M/I Homes' fourth quarter and year-end earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. As a reminder, this call is being recorded on Wednesday, January 31st, 2024. I would now like to turn over the conference to Phil Creek. Please go ahead. Thank you for joining us. Joining me on the call today is Bob Schottenstein, our CEO and President, and Derek Klutch, the President of our mortgage company. First, to address Regulation Fair Disclosure, we encourage you to ask any questions regarding issues that you consider material during this call, because we are prohibited from discussing significant non-public items with you directly. And as to forward-looking statements, I want to remind everyone that the cautionary language about forward-looking statements contained in today's press release also applies to any comments made during this call. Also, be advised that the company undertakes no obligation to update any forward-looking statements made during this call. With that, I'll turn the call over to Bob. Thanks, Phil. Good morning, and thank you for joining our call as we highlight our fourth quarter and full year 2023 results. We had an outstanding year in 2023, one of the best in our 47-year history. We are particularly pleased with our results, given the significant headwinds the housing industry faced as we entered 2023, as well as a rising interest rate environment throughout most of the year, together with inflationary pressures and general uncertainty within the economy. For the year, we had very strong income and returns. Pre-tax income equaled $607 million, with a pre-tax return of 15%. Gross margins for the year came in at 25.3%, the same as last year. We were pleased to see our gross margins hold steady, notwithstanding the choppy market conditions and rising rates. Return on equity was a very solid 20.2%. The strength of our communities and product offerings, along with our selective and very targeted use of below-market financing incentives, contributed to our strong fourth quarter and full-year sales performance. In the fourth quarter, we sold 1,588 homes, a 61% increase over last year, with significantly better per community absorptions. Clearly, as rates began to fall in the fourth quarter, we saw a pickup in both traffic and demand. Notably, our December sales were the best month of the fourth quarter. For the full year, we sold 7,977 homes, an increase of 20% over 2022. Our monthly sales pace during the year averaged 3.3 homes per community, compared to a sales pace of 3.1 homes per community during 2022. The quality of buyers that we're seeing continues to be strong, with average credit scores of 747 and an average down payment above 18%. Our Smart Series, which is our most affordably priced product, continues to have a very positive impact, not just on our sales, but our overall performance. Smart Series sales comprised 53% of total company sales in the fourth quarter, compared to 52% in the fourth quarter a year ago. I'm pleased to report that the improvement in traffic and demand that we saw in the fourth quarter has continued as we begin this year, with our January sales exceeding last year. We are very optimistic about a good selling season. We continue to see improvement in our construction cycle time. During the fourth quarter, our cycle time improved by an additional 10 days sequentially. Year-over-year, our cycle time has improved by more than 60 days. Improvement in cycle time remains a major area of focus for us. In terms of deliveries, given that we began 2023 with roughly 15% fewer homes in the field, we were very pleased to close 8,112 homes for the year, 3% less than 2022. Now, I will provide some additional comments on our markets. Our division income contributions in 2023 were led by Dallas, Tampa, Columbus, Orlando, Raleigh, Sarasota, and Charlotte. All had very strong years. New contracts for the fourth quarter in our southern region increased 44% and 89% in our northern region. For the year, new contracts increased 18% in our southern region and 22% in our northern region. Our deliveries decreased 17% over last year's fourth quarter in the southern region, comprising 1,171 deliveries or 58% of our total. Northern region contributed 848 deliveries, a decrease of 13% over last year's fourth quarter. For the year, homes delivered, as I mentioned before-or rather, homes delivered increased 3% in the southern region, but decreased 12% in the northern region. Our owned and controlled lot position in the southern region increased by 12% compared to last year. Owned and controlled lots increased 3% in the northern region. We have an excellent land position. Company-wide, we own approximately 24,400 lots, which is roughly a three-year supply. Of that total, 28% of the lots are in our northern region, with a balance of 72% in the southern region. On top of our own lots, we control via option contracts, an additional 21,300 lots. So in total, we own and control approximately 45,700 single-family lots, which is up 9% from a year ago and equates to about a five year supply. Most importantly, about 47% of our lots are controlled pursuant to option contracts. This gives us significant flexibility to react to changes in demand or individual market conditions. With respect to our balance sheet, we ended the year with an all-time record, $2.5 billion of equity, which equates to a book value of $91 per share. We also ended the year with $733 million of cash and zero borrowings under our $650 million unsecured revolving credit facility. This resulted in a debt-to-capital ratio of 22%, down from 25% a year ago, and a net debt-to-capital ratio of -2%. As I conclude, let me just state: we are in the best financial condition in our history. We feel very good about our business and fully expect to deliver another year of strong results in 2024. With that, I'll turn it over to Phil. Thanks, Bob. Our new contracts were up 35% in October, up 92% in November, and up 64% in December, for a 61% improvement in the quarter overall. Our sales pace was 2.5 in the fourth quarter, compared to 1.8 in last year's fourth quarter, and our cancellation rate for the fourth quarter was 13%. As to our buyer profile, 53% of our fourth quarter sales were to first-time buyers, compared to 58% a year ago. In addition, 62% of our fourth quarter sales were inventory homes, compared to 64% in last year's fourth quarter. Our community count was 213 at the end of 2023, compared to 196 at the end of 2022. During the quarter, we opened 20 new communities while closing 11, and for the year, we opened 76 new communities. We currently estimate that our average 2024 community count will be about 10% higher than 2023. We delivered 2,019 homes in the fourth quarter, delivering 59% of our backlog, compared to 53% a year ago. And as we stated in our third quarter conference call, we entered the fourth quarter with 1,200 less homes in the field than a year ago. And at December 31st, we had 4,400 homes in the field versus 4,500 homes in the field a year ago. Revenue decreased 20% in the fourth quarter to $973 million. Our average closing price for the fourth quarter was $471,000, a 4% decrease when compared to last year's fourth quarter average closing price of $492,000. Our gross margins were 25.1% for the quarter, up 250 basis points year-over-year. For the full year, our gross margins were flat at 25.3%. Our SG&A expenses increased by 4% in the fourth quarter, due primarily to higher incentive compensation, increased real estate taxes on our inventory levels, and the cost of having more communities. Interest income increased to $8.3 million for the quarter due to our higher cash balances, and our pre-tax income was 15.1% versus 15.4% last year, and our return on equity remained strong at 20%. Here in the fourth quarter, we generated $153 million of EBITDA, and for the full year, we generated $648 million of EBITDA. We generated $552 million of cash flow from operations this year, compared to generating $184 million last year. Our effective tax rate was 24% in the fourth quarter, compared to 21% last year's fourth quarter, and our effective rate for the year was 23%. We expect 2024's effective tax rate to also be around 23%. Our earnings per diluted share for the quarter decreased to $3.66 per share from $4.65 per share in last year's fourth quarter, and decreased 6% for the year to $16.21 from $17.24 last year. Here in the fourth quarter, we spent $25 million repurchasing our shares, and for the year, we spent $65 million. We currently have $128 million available under our repurchase authorization. In the last three years, we have repurchased 9% of our outstanding shares. Now, Derek Klutch will address our mortgage company results. Thank you, Phil. In the fourth quarter, our mortgage and title operations achieved pre-tax income of $4.7 million, down $5 million from 2022 on revenue of $19.7 million, down 13% over last year, primarily as a result of lower pricing margins, lower average loan amounts, and fewer loans closed. For the year, pre-tax income was $38.4 million, and revenue was $93.8 million. Loan to value on our first mortgages for the quarter was 82% in 2023, the same as 2022's fourth quarter. 66% of loans closed in the fourth quarter were conventional, and 34% were FHA or VA. This compares to 79% and 21%, respectively, for 2022's same period. Our average mortgage amount decreased to $383,000 in 2023's fourth quarter, compared to $392,000 in 2022. Loans originated in the quarter decreased 7% from 1,497- 1,387, and the volume of loans sold increased by 9%. Mentioned earlier, the borrower profile remained solid, with an average down payment of over 18% for the quarter and an average credit score on mortgages originated by M/I Financial of 747. Our mortgage operation captured 88% of the business in the quarter, an increase from 77% in 2022's fourth quarter. We maintain a separate mortgage repurchase facility that provides us with funding for our mortgage originations prior to the sale to investors. At December 31st, we had a total of $166 million outstanding under this facility, which expires in October of this year. Facility is a typical 364-day mortgage repurchase line that we extend annually. Now I'll turn the call back over to Phil. Thanks, Derek. As far as the balance sheet, we ended the fourth quarter with a cash balance of $733 million, and no borrowings under our unsecured revolving credit facility. Our credit facility matures in late 2026, and our public debt with interest rates below 5% mature in 2028 and 2030. Our total home building inventory at year-end was $2.8 billion, which was flat with the prior year level. During 2023, we spent $344 million on land purchases and $512 million on land development, for a total land spend of $856 million. This was up from $837 million in 2022. At December 31, 2023, we had $715 million of raw land and land under development and $721 million of finished, unsold lots. We own 8,724 unsold, finished lots. We have a very strong land position at year-end, controlling 46,000 lots. We own 24,400 lots, which is about a three-year supply, and of the lots controlled, 53% are owned, which is about a 5.5-year supply. At the end of the year, we had 592 completed inventory homes, about three per community, and 2,023 total inventory homes. Now, the total inventory, 912, were in the northern region, and 1,111 is in the southern region. In December 31, 2022, we had 485 completed inventory homes and 1,827 total inventory homes. This completes our presentation. We'll now open the call for any questions or comments. Thank you, ladies and gentlemen. We will now conduct a question and answer session. If you have a question, please press star, followed by the number one on your touchpad. If you wish to cancel your request, please press star two. Please ensure to lift the handset if you're using a speakerphone before pressing any keys. Your first question comes from Alan Ratner, from Zelman & Associates. Your line is now open. Hey, guys. Good morning. Congrats on a great year. Thanks, Alan. Thanks for all the detail. You got to be celebrating your. You must be celebrating your football team's performance. I'm still riding high, Bob. I'm still riding high. I expect nothing less. Next year might look a little different, but we'll, we'll see. We'll worry about that then. So, you know, a lot of great detail there. You know, your margins have been pretty, pretty stable in this 25% range for the last several quarters. As you think about 2024, I know you're not going to give specific guidance, but how are you thinking about the moving pieces of margin? You know, the outlook on material and labor inflation, land inflation in terms of what's going to be flowing through. And then, you know, ultimately, directionally, what your views are on pricing now, given what seems like a pretty, pretty healthy start to the spring selling season so far, you know, any ability to push price. If you could kind of just talk about those three buckets, I think it'll help us directionally. Yeah. I think on the cost side, things have stabilized quite a bit, even on land development. A year ago, I was quite concerned, we were quite concerned about inflation on land development, and clearly there has been some, but that appears to be moderating somewhat as well. Maybe not every single aspect, still probably a little bit of pressure on concrete. But, on the cost side, I think we feel pretty good about where that stands in terms of moderating inflation and moderating increases. A year ago, as we looked at what we thought was going to happen in 2023, we thought margins would be under considerable pressure, given where rates were and the softening of demand. As it turned out, even though we did have to spend money, on, as I mentioned, on a selective basis, and some of it was very targeted for certain communities. To provide a more marketable rate, we were really pleased and surprised, frankly, that our margins held steady at just over 25%, as you mentioned. Yeah, it's very, very hard to forecast margins. Everybody has an opinion, but sitting where we are now, as I look at demand, and I look at traffic, website traffic, the way the year is starting out, what we're hearing in the field, even in markets that might have been a little weaker throughout the early parts of last year, now appear to be quite a bit stronger. We're, you know, we're hopeful that we can continue to maintain margins in this level. I don't know if they'll go up. We're super excited about all the new communities we're going to be opening. We have and it was reflected in the average selling price that Phil mentioned, coming down slightly. We have a lot more affordable product offerings that we hope will provide bigger pace and strong margins, coming out this year. But, you know, you don't know until you really know, if you're really honest about it. But, I guess sitting here today, generally, pretty optimistic about, you know, the state of housing, the state of demand, and our ability to continue to generate what I think are very solid returns. Start our. You know, we're not expecting much erosion, frankly, and, you know, maybe we'll be fortunate with a little bit of uptick because we don't see the pressure on the cost side, maybe quite as much as we did a couple of years ago. And frankly, the other thing is for the most part, the supply chain disruptions that we just couldn't stop talking about, you know, post-COVID, now seem to have pretty much cleared out and dissipated. That's all really, really helpful and encouraging to hear. So, hopefully, that momentum continues. And yes. Exactly. C ongrats on that, maintaining margins, when. Look, I don't think we're alone in this, which is also comforting. If you're the only one that's experiencing something, it always makes you wonder whether it's good or bad. But I think that there's a lot of momentum within the industry right now. You know, you sort of hear things and, you know, seeing what other builders have recently said as well. It resonates with us. And Alan, just a couple more things, just kind of follow- up on what Bob said. You know, the stores we opened last year, ended up performing better pace, better margin, you know, than we anticipated. Mm-hmm. We talked about our current estimate of this year having on average 10% more stores. Mm-hmm. Over half of those expected openings are in the first half this year, which again, will not only help us with sales, also with closings this year. So we're very excited about, you know, the new stores we're opening also. That's great. Thanks for, thanks for that addition there, Phil. Second question, you know, around kind of spec versus BTO. I mean, Smart Series has, has obviously been a huge focus of yours for the last several years. I think if I heard you correctly, the share of spec sales actually ticked a little bit lower this quarter, year-over-year. And I guess I'm, I'm curious, as you think about the landscape today with, with cycle times normalizing, resale inventory still incredibly low, but maybe starting to tick up a little bit, does that change your thinking at all as far as the mix of your business at spec versus BTO? Are you starting to see consumers. I'll let. Yeah, more interest there? I'll let Phil give you the, yeah, great question. I'll let Phil give a little more of the detail. We've increased on. It's a subdivision business, so it's not necessarily the case in every subdivision, but on average, our plan is to have, you know, more specs than maybe we would have had three or four years ago. We've ramped up our specs for all the reasons that you mentioned. And then the other thing is, in terms of mix, with Smart Series and also townhomes, attached townhomes, which represent an increasing percentage of our business, you know, company-wide, that will also result in more specs with these four-unit and six-unit, you know, buildings being the most common form of townhomes. You know, you start a building with one or two sales, and you automatically have three or four specs out there. Phil, you want to add anything else to that? Yeah. As far as spec levels, again, you know, in general, depending on the month or whatever, we're selling, you know, 50%-60% specs. One of the good news is that the gross margin on specs versus to be built, you know, is not very much. In some markets, matter of fact, it's like really, really close. So, we do feel good about our spec levels. We are doing more attached townhouses. We're doing more smaller, single-family, detached, and by its nature, we're doing a few more specs in those. You know, Mike specs get up to the 2,200, 2,300, 2,400. But again, as our store count moves up, that's about, you know, 10 per store. And then having two, three, four finished specs, again, seems like a good number to us. Per community? Per community. So, so we do feel good about our spec levels. We want to make sure that we have what we need. Makes sense. All right. Well, appreciate it all, and best of luck in the new year. Thanks. You too. Your next question comes from Jay McCanless from Wedbush. Your line is now open. Hey, Jay. Hey, good morning, everyone. Hope you all are doing well. Bob, or sorry, Phil, if you don't mind, what was the monthly order pace through 4Q, and maybe any color you can give us on January? I'll take the last part of that first, and then Phil will give you the pace. Well, just let me start over. Our January, what I mentioned was, is that the increase in demand and traffic that really, sort of intensified during the fourth quarter, and that resulted in December being our best month of the quarter, that has continued, and that increase in traffic and demand. And, while technically January is not over, our January sales will exceed last year's. We're very pleased with the way the year is starting out and, and optimistic about the selling season. Phil can give you the details on pace. Yeah, sales pace, Jay. In the fourth quarter, it was 2.5. In the fourth quarter last year, it was 1.8. And again, you know, in the third quarter, you know, we were 3-4. So, you know, again, we have been improving pace and have a big focus on that. Hope to continue improving that. Great. And then could you talk about the, community count? Because you all guided, I think, to like 225 maybe, and you came in at 213. Maybe what's going on there, and I, and I know you said you're going to open 50% of the new communities in, in the first half of 2024. I mean, is it, is it gonna be a pretty big step up in, in the total community count in the first quarter, sequentially? Yeah, Jay. Again, overall, we expect our community count this year to be on average, up about 10%. Last year, we were a little short of where we thought we would be at year end, primarily because about 10 stores were delayed. Most of them are just sliding into this year. We do expect over half the stores we're opening this year to be the first half. So if you kind of look at that the year in general, you know, we ended the year with 213. You know, we expect to get to that, you know, 225 type level by the middle of the year. And again, the second half of the year gets a little more difficult, you know, because it is taking a little longer to develop land and those type things. We do feel comfortable saying today, we think we'll be up 10% on average. Okay. All right. And then I guess, you know, Alan already asked you the gross margin question, but just maybe what type of pricing power are you seeing currently? Maybe what percentage of, your communities during fourth quarter were you able to raise prices, raise base pricing? I think pricing power is limited. If we can continue to stay at this 25% gross margin level, this year, we're going to have a phenomenal year, and that's our goal. I don't know that I can predict with any kind of certainty whether we'll be able to grow margins. I think that the balance between demand and price right now within the market generally is really good. And, like I said before, a year ago, I thought margins were going to fall off 100 or 200 basis points just because of the higher rates and so forth, and that didn't happen last year. We were really pleased that our margins held steady. I think that's a, I think that's strong performance. I think it's a testament to our people and our product and our communities. But, you know, I think that I think knowing what we know today, I'm not sure how much pricing power we'll see, but I think we'd be thrilled. And, you know, I think there's a good possibility that our margins will remain, as we talked about with Alan, in this 25% range. Right. And I guess from a competitive standpoint, saw a lot of your larger competitors pretty aggressive on both base price discounts and incentives during the calendar fourth quarter of 2023. I guess, what are you seeing now relative to what was going on a month ago? And do you feel like the pace of incentives may have to start picking up again if mortgage rates don't start coming down? Well, I actually have a slightly contrary view on that. I think. First of all, it's very market specific. It's, you know, it's cliché, but every market's different. I think that in a number of instances, we're starting to see incentives decline. Ours have, and the slight decline in mortgage rates that we've seen over the last 90 days has made it so that you don't have to spend as much where needed to provide, you know, a rate in either the low 6s or the high 5s. You'd rather not spend anything on that, but that's what we have been doing, and the net of that has resulted in our 25.3% gross margins. You know, if demand continues to stay like it does, like it is now, I'd like to think that builder behavior will respond accordingly and not see as much of a need for incentivizing. That's sort of how we're thinking about it. You know, Jay, also, as you know, as Bob mentioned, every subdivision is a little different because we're definitely in the subdivision business. If you look at the 213 communities we have going into this year, like we said, 76 of them opened in 2023, and over 100 of them opened in 2022. So you know, how you open, what model you have, what the specification level is of those houses, all those things, how many specs do you want? You know, again, I mean, we're not driven solely by volume. Obviously, we want to continue to grow and think we are positioned to grow. But again, when you have $3 billion, $4 billion, $5 billion of revenue, 15 basis points, 25 basis points mean a whole lot. So we really try to focus on every subdivision, not get too far ahead of ourselves, you know, make sure we're focused on who the buyer is. So every subdivision is really a little different. We don't do blanket things like, oh, let's do interest rate buy downs everywhere. I mean, some customers need an interest rate buy down for the payment help. Some customers need closing cost help. So again, we try to deal with it more, you know, on a rifle approach as opposed to just a shotgun across the board. Sure. Any notion of what you're going to spend on land acquisition and development this year? Well, we definitely expect to spend more. We did spend a little more in 2023 than 2022, and the majority is continuing to be land development. Land development costs, as Bob says, you know, is not going up the way it was. The good news is, it's kind of stabilizing. But we do want to continue to grow, have more stores, so we do expect to be spending more on land this year. Look, you know, I think we've said this before, our goal is to grow the business. We're very bullish about housing, and we're really bullish about our business. And, our growth goals, you know, 5%-10% per year, hopefully closer to 10, and that, that remains our, our, you know, our strategic outlook. Got you. And then just one other question, because we've heard some builders talking about it. And this is kind of relative to what you said, Bob, about gross margins being flat at this 25-ish level. You know, land prices, we've heard, have been going up for some of the builders. Labor prices seem to be going up. I guess, what are the levers you're going to have to pull? Is it going to be maybe reduction in the other input costs that are coming in that keep your gross margin flat around this 25 level, Bob? Especially with land prices seeming to move up, I guess, kind of what are the levers you're going to have to push and pull to hold at these levels? Especially if you don't think you're going to get much pricing power this year, what are the things you're going to have to do to maintain it at this 25% level? Continue to produce really high-quality, affordable product, whether it's attached or detached, and well-located communities. You probably would like a more magical answer, but I think that's what it goes back to. Well-located communities will sell, and they will sell at really good margins. If the majority of our communities, you know, check the box of being exceptionally well-located, and we think they do, we think we can maintain our margins that way. That's what happened in 2023. We expect it to happen in 2024. And that's. I mean, definitely, you know, we're all focused on that. A couple of little details with that, you know, Jay, specifications of the product, you know, to make sure we're putting things in the homes that people really want, that they need, and they'll pay for, not overbuilding. That's very important to us. As we increase the mix of attached product in our company, probably approaching somewhere around 20% company-wide, you know, we get higher density, and that brings—even though the land may cost more, all those things hunt back into the average selling price. I mean, if, if, I don't want to sound like a broken record, but if someone would have said a year ago, "Your average price is going to come down, or your margin stay the same," you might have go, "I don't think so." That's what happened. We may still see a slight relative reduction in average price because of the continued leaning into of slightly more attached product as well as, you know, we've just had home run success with our Smart Series, and it's over half of our business, and it will continue to be. And then a couple more things we are focused on as far as trying to improve returns and so forth. We talked about cycle time. We have made dramatic improvements. We still think there is some improvement there we can make. Also, sales pace. Again, make sure we have a very focused product. Who are the buyers that we provide, you know, the products they want? Best trained sales team, et cetera. But when you look at sales pace, cycle time, big impact on overall returns. Phil and I are playing off of each other here. Just on the cycle time, in many of our markets right now, our cycle time is approaching pre-COVID levels, which is where it needs to be. And we still have a little bit of room to run there in some other markets, but 60-day improvement on average, year-over-year in 2023, I think was heroic. That was our goal. I thought, we thought it was a stretch goal, but we hit it, and as I said in my primary comments, cycle time remains a very, very intense area of focus for us, and that contributes to margins as well, and returns. Yeah, and you also know, Jay, I mean, we're just getting started in Nashville. We closed our first house in Nashville in the fourth quarter. We just opened for sale our second community in Nashville, so we're excited about that. Our new Fort Myers, Naples division, also getting additional stores open for sales and closings. So we're excited about those two markets contributing to our results. Got you. And then one more, and I'll turn it over. When you think about an attached home versus a detached home, just rough average, is there a gross margin differential on a per foot basis. No. between those two? Okay. No. No. Well, the underwriting, you know, we have very. We haven't changed our approach in underwriting. Every community is underwritten to hit certain thresholds, and we're not doing attached product at lower margins. That's not the goal. If anything, hopefully, you know, with pace and so forth, it'll be at least equal to, if not better than what we get with single family. We've had a. I don't want to let this go unsaid either. We have a lot of move-up product that's very successful for us, and so it's, you know, it's -- we're not just -- we don't have all our eggs in one basket, but, you know, about half of our business is designed to be, you know, very affordable. Gotcha. Okay, I'll jump back to Keith. Thanks, guys. Thanks, Jay. Thanks, Jay. Ladies and gentlemen, as a reminder, should you have any questions, please press star followed by the number one. There are no further questions at this time, Mr. Creek. Please proceed with your closing remarks. Thank you for joining us. Look forward to talking to you next quarter. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.