KB Home (KBH) 首席执行官 Jeff Mezger 在 2019年 第二季度业绩 - 收益电话会议记录

[机器翻译] 电话会议 · 2019年06月28日 · 107 次阅读 · KB Home

KB Home (NYSE:KBH) Q2 2019 Earnings Conference Call June 26, 2019 5:00 PM ET
Company Participants
Jill Peters - Senior Vice President, Investor Relations
Jeff Mezger - Chairman, President & Chief Executive Officer
Jeff Kaminski - Executive Vice Pressident & Chief Financial Officer
Conference Call Participants
Alan Ratner - Zelman & Associates
Truman Patterson - Wells Fargo
Nishu Sood - Deutsche Bank
Christina Chiu - Barclays
Stephen Kim - Evercore ISI
Mike Dahl - RBC Capital Markets
John Lovallo - Bank of America Merrill Lynch
Mike Rehaut - JPMorgan
Scott Schrier - Citi

KB Home(纽约证券交易所代码:[KBH])2019年第二季度收益电话会议2019年6月26日美国东部时间下午5:00


Jill Peters - 投资者关系高级副总裁

Jeff Mezger - 董事长,总裁兼首席执行官

Jeff Kaminski - 执行副总裁兼首席财务官


Alan Ratner - Zelman&Associates

杜鲁门帕特森 - 富国银行

Nishu Sood - 德意志银行

Christina Chiu - 巴克莱

Stephen Kim - Evercore ISI

Mike Dahl - 加拿大皇家银行资本市场

John Lovallo - 美国银行美林证券

Mike Rehaut - 摩根大通

Scott Schrier - 花旗


Good afternoon. My name is Devon and I will be your conference operator today. I would like to welcome everyone to KB Home 2019 Second Quarter Earnings Conference Call. At this time, all participant lines are in a listen-only mode. Following the company’s opening remarks; we will open the line for questions. Today's conference call is being recorded and will be available for replay at the company's website, kbhome.com, through July 26.
Now, I will like to turn the call over to Jill Peters, Senior Vice President, Investor Relations. Jill, thank you. You may begin.

下午好。 我的名字是Devon,今天我将成为您的会议运营商。 我想欢迎大家参加KB Home 2019第二季度收益电话会议。 此时,所有参与者线路都处于只听模式。 继公司开幕致辞之后; 我们将打开问题的界限。 今天的电话会议正在录制,并将于7月26日在公司网站kbhome.com上重播。

现在,我想转达投资者关系高级副总裁Jill Peters的电话。 吉尔,谢谢。 你可以开始吧。


Thank you, Devon. Good afternoon, everyone and thank you for joining us today to review our results for the second quarter of fiscal 2019. With me are Jeff Mezger, Chairman, President and Chief Executive Officer; Jeff Kaminski, Executive Vice President and Chief Financial Officer; Matt Mandino, Executive Vice President and Chief Operating Officer; Bill Hollinger, Senior Vice President and Chief Accounting Officer; and Thad Johnson, Senior Vice President and Treasurer.
Before we begin, let me note that during this call, items will be discussed that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results and the company does not undertake any obligation to update them.
Due to factors outside of the company's control, including those detailed in today's press release and in filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward-looking statements.
In addition, a reconciliation of the non-GAAP measures referenced during today's discussion to their most directly comparable GAAP measures can be found in today's press release and/or on the Investors Relations page of our website at kbhome.com.
And with that, I will turn the call over the Jeff Mezger.

谢谢你,德文。大家下午好,感谢您今天加入我们,审查2019财年第二季度的业绩。我是Jeff Mezger,董事长,总裁兼首席执行官; Jeff Kaminski,执行副总裁兼首席财务官; Matt Mandino,执行副总裁兼首席运营官; Bill Hollinger,高级副总裁兼首席会计官;和Thad Johnson,高级副总裁兼财务主管。




有了这个,我将把这个电话转过Jeff Mezger。


Thank you, Jill, and good afternoon. We continued to deliver solid performance in the second quarter under our Returns-Focused Growth Plan, which prioritizes the profitable growth of our business and greater productivity and efficiency of our assets. Our execution on this plan has been consistent and strong since we launched it in 2016 and has produced measurable results.
We have realized significant growth in our community count this year, which fueled a 15% year-over-year increase in our second quarter net orders. In addition, by substantially reducing our debt while growing our active inventory, we expect to lower our annual interest incurred in 2019 by more than $40 million since the plan was introduced.
In the second quarter, we accelerated our community count growth by successfully opening 43 new communities, bringing our total openings over the last 12 months to 123, which had us well positioned for the spring selling season. Our second quarter average community count was up 17% from a year ago, reflecting increases in all four regions, with three of our regions producing greater than 20% growth.
We expect to continue growing our average community count year-over-year over the next two quarters and remain committed to realizing a 10% to 15% increase for the year, which sets us up well as we look ahead to 2020. We generated just over $1 billion in total revenues in the second quarter and diluted earnings per share of $0.51.
Our housing gross profit margin, excluding the inventory-related charges, held even with our 2019 first quarter at 17.6%. While this result was lower year-over-year, we are encouraged by the composition of our $2.2 billion backlog, which we expect to drive gross margin improvement over the balance of the year, as Jeff will share with you shortly.
From a macro perspective, the combination of a decline in mortgage interest rates, along with steady economic growth, high consumer confidence and favorable demographics in particular household formation, continues to provide a healthy backdrop for our industry. In addition, the buyer pause that the industry experienced in the latter part of 2018 has generally moderated home prices, which is positive for the market, given the significant levels of price appreciation over the past few years.
On the other side of the equation, supply remains insufficient to meet demand, stemming from the under production of new homes over multiple years and the shortage of existing home inventory, particularly at the price points where we operate. These factors contributed to the solid market conditions that we saw in the early weeks of March, which we spoke of on our last earnings conference call.
On a per-community basis, net orders were a healthy 5.4 per month, which closely tracked the prior year quarter's robust absorption pace. Our business gained momentum as the second quarter progressed, fueled in large part by the significant number of new community openings that I discussed earlier, resulting in a 15% year-over-year increase in net orders.









Each of our four regions produced a double-digit increase in the second quarter. Net order value expanded by 13% in the second quarter to $1.5 billion. This result help bolster our backlog value to $2.2 billion, as I mentioned earlier. In terms of units, our backlog in the second quarter was up about 2% year-over-year.
Moving on to the regional commentary, our net orders were up 18% in our West Coast region, driven by an increase in average community count and a healthy pace of 5.7 net orders per community per month, compared to 6.2 net orders in the year-earlier quarter.
In Northern and Central California, we experienced generally solid market conditions. In the Bay Area, we expanded our average community count, contributing to net order growth of more than 20%, while achieving an absorption pace slightly ahead of our company average. As we are now successfully rebuilding our Bay Area community count, the division's order result supports our expectation for a sequentially higher company ASP and gross margin in the second half of this year.
In Southern California, our net order trends improved. In both our Los Angeles and Inland Empire divisions net orders increased by roughly 25%, driven by community count growth in areas with healthy market conditions. We view these results positively, as we have been monitoring our Inland Empire business for any ripple effect from conditions along the coast.
Within our coastal business, the smallest of our California divisions in terms of units, while market conditions are softer than the Inland areas, the net order decline that we experienced was primarily due to the sellout of one community in San Diego that alone produced nearly 30% of this division's net orders in our 2018 second quarter.
Finally, in April, we were pleased to successfully open our first community in Seattle in Pierce County, a commuter market southeast of the city. When we started up our Seattle business, we identified an opportunity to offer affordable product in the high $300,000 to $400,000 price range, targeting first-time and first move-up buyers.
Our first community, Falling Water, is aligned with this market approach with an ASP starting at $385,000, as compared to a median new home price of $620,000 and a median existing home price of $465,000 across the three-county metro Seattle area. We expect deliveries from this community by the end of the year and look forward to our second community in Seattle opening later this year as well.
In our Central region, our largest in terms of units, net orders increased 11%, driven by our Houston and Colorado divisions. In Houston, the combination of a strong economy, population growth and our positioning at affordable price points in desirable areas, resulted in the highest quarterly net sales for this division in over a decade.
The most active sales volume price band in Houston is between $200,000 and $300,000 and with our ASP of roughly $245,000, we are operating in the sweet spot of this market.






最后,在4月份,我们很高兴能够成功在西雅图的皮尔斯县开设我们的第一个社区,这是该市东南部的通勤市场。当我们启动西雅图业务时,我们发现有机会以高达$ 300,000至$ 400,000的价格提供价格合理的产品,定位为首次和首次购买的买家。

我们的第一个社区,Falling Water,与这种市场方法保持一致,平均销售价格为385,000美元,相比之下,三县西雅图地区的新房价中位数为620,000美元,现有房屋价格中位数为465,000美元。我们希望在今年年底之前从这个社区交付,并期待我们在西雅图的第二个社区也将在今年晚些时候开放。



Elsewhere in the region, our Colorado division opened five new communities in the second quarter. The openings were well received in this supply constrained market contributing to a 45% increase in net orders.
Demand in the Denver housing market is strong driven by positive in-migration and job growth. We are well positioned to meet this demand with our ASP of approximately $485,000 in between, the median new home price of $525,000, a median resale price of $425,000 on point with our pricing strategy providing affordable product in attractive areas.
In addition to these specific market updates, I would also like to comment on KBHS, our mortgage joint venture with Stearns Lending. In the two years since becoming fully operational KBHS has provided high-quality level of service to our home buyers helping to drive our customer satisfaction scores higher. In addition, the JV's consistent performance has supported our divisions as well, enabling more predictability in deliveries and contributing to our ability to successfully deliver homes to our buyers on time.
With a capture rate of nearly 70% in the second quarter, growing significantly from 52% in the year-ago quarter and our expectation for continued enhanced execution from KBHS, we anticipate a meaningful increase in the income contribution from our JV in the second half of this year.
In closing, with a backlog value of $2.2 billion, and a considerable number of new communities still to open this year, we are well positioned to deliver year-over-year growth in revenue and profitability by the fourth quarter of this year, and for momentum entering 2020.
With strong execution on our core business strategy to increase our scale, we have achieved a top five market share ranking in just over 70% of our divisions as compared to roughly 50% when we launched our plan. We have a business model with our build-to-order approach that allows us the flexibility to move with demand and react quickly to market changes. This differentiates us and contributes to our growing share of first-time buyers, which increased to 55% of our business in the second quarter. We are poised for a strong finish to 2019 and look forward to updating you on our progress moving forward.
With that, I'll now turn the call over to Jeff for the financial review. Jeff?



除了这些特定的市场更新,我还想对我们与Stearns Lending的抵押合资企业KBHS发表评论。自投入全面运营以来的两年中,KBHS为我们的购房者提供了高质量的服务,帮助提高客户满意度。此外,合资公司的一贯表现也为我们的部门提供了支持,使交付更具可预测性,并有助于我们按时成功地为买家提供房屋。






Thank you, Jeff, and good afternoon everyone. I will now provide highlights of our financial results for the second quarter as well as our outlook for the third quarter and full year 2019. We are very pleased with our second quarter performance, particularly our strong backlog conversion, which helped drive housing revenues, and the solid absorption pace in community count growth that led to a 15% year-over-year increase in net orders. We believe we are well positioned for a strong second half of the year and expect to generate improvements in virtually all our key financial metrics.
In the second quarter, our housing revenues were just over $1 billion as compared to $1.1 billion in the prior year period reflecting an 8% decrease in our overall average selling price that was partially offset by a 2% increase in the number of homes delivered. The primary drivers of the overall housing revenue decrease were a lower proportion of total deliveries from our West Coast region and a decline in our West Coast region average selling price that stem from both a mix shift towards deliveries in lower price inland markets, and the absence of certain communities with high average selling prices that closed out in prior quarters.
The 2,768 homes we delivered in the quarter represented a backlog conversion rate of 60%. This strong performance reflected several factors including a sequential and year-over-year reduction in construction cycle time, an increase in closings financed by our mortgage joint venture, and a higher percentage of standing inventory that was both sold and closed within the quarter.
We ended the second quarter with over 5,900 homes in backlog, an increase of 2% versus the prior year. Our ending backlog value was $2.17 billion as compared to the year-earlier level of $2.24 billion, which represented our highest second quarter backlog value in 11 years.
Considering the quarter-end backlog and expected future net orders, we currently anticipate third quarter housing revenues in a range of $1.1 billion to $1.18 billion. For the full year, we believe our housing revenues will range from $4.45 billion to $4.6 billion.
In the second quarter, our overall average selling price of homes delivered decreased 8% year-over-year to approximately $368,000 due to the impact from our West Coast region that I previously mentioned and a mix shift in our Central region with the lower proportion of deliveries from our Colorado operations. We believe the expected increase mix of West Coast region deliveries driven by the successful rebuilding of our California community count will result in higher average selling prices in the second half of the year.
For the 2019 third quarter, we are projecting an overall average selling price in the range of $395,000 to $400,000 and believe our ASP for the full year will be in a range of $385,000 to $395,000. Homebuilding operating income decreased from the year-earlier quarter to $52 million or 5.1% of revenues. Excluding inventory-related charges of $4.3 million in the quarter and $6.5 million in the year-earlier quarter, this metric was 5.5% compared to 7.3%.








For the third quarter, we expect our homebuilding operating income margin excluding the impact of any inventory-related charges will be in the range of 6.4% to 7.0%. For the full year 2019, we expect this metric to be in the range of 6.7% to 7.3%. Our housing gross profit margin for the second quarter was 17.2% compared to 17.1% for the prior year period. Excluding inventory-related charges, our gross margin for the quarter was 17.6% compared to 17.7% for the 2018 second quarter.
The current year metric reflected favorable impacts from lower amortization of capitalized interest as well as the change in the classification of certain model complex cost, due to our adoption of the new revenue accounting standard ASC 606. These favorable impacts were offset by pricing pressure on fourth quarter and first quarter orders, due to weaker marketing conditions during those periods, the effect of certain high ASP and high margin West Coast communities, having closed out in previous quarters and reduced operating leverage due to lower housing revenues and higher fixed community level expenses supporting community count growth.
Our adjusted housing gross profit margin, which excludes inventory-related charges as well as the amortization of previously capitalized interest, was 21.3% for the second quarter compared to 22.2% for the same period in 2018. Assuming no inventory-related charges, we expect the sequential increase in our third quarter housing gross profit margin to a range of 17.9% to 18.5% and further improvement in the fourth quarter. Considering this expected favorable trend, we believe our full year housing gross profit margin excluding inventory-related charges will be within the same range of 17.9% to 18.5%.
Our selling, general and administrative expense ratio of 12.1% for the quarter was up as compared to the 2018 second quarter record low ratio of 10.4%. The increase mainly reflected the ASC 606 impact mentioned earlier, reduced operating leverage due to lower housing revenues, increased marketing expenses to support new community openings, and the impact of legal recoveries and favorable legal settlements in the prior year period.
As we continue to prioritize containment of overhead costs and expect to realize favorable leverage impacts from higher housing revenues in the second half of the year, we are forecasting our third quarter SG&A expense ratio to be in the range of 11.3% to 11.9% and our full year 2019 ratio to be in the range of 11.0% to 11.6%.
Income tax expense for the quarter was $9.3 million, which reflected $5.2 million of favorable impacts from federal energy tax credits and benefits from stock-based compensation. Without these impacts, the effective tax rate for the quarter would have approximated 26%. We expect our effective tax rate for the remaining quarters of 2019 to be approximately 26%, excluding potential impacts from stock-based compensation.
Overall, we reported net income for the second quarter of $47.5 million, or $0.51 per diluted share. For modeling purposes, diluted earnings per share for the remaining quarters of 2019 should be calculated using approximately 92.5 million shares, which reflects the 8.4 million reduction in our diluted share count due to first quarter repayment of our convertible senior notes. Approximately 93.5 million shares should be used for the full year calculation, representing a year-over-year decrease of 7%.


由于我们采用了新的收入会计准则ASC 606,当前年度指标反映了资本化利息摊销较低以及某些模型复杂成本分类变化的有利影响。这些有利影响被第四个定价压力所抵消。季度和第一季度订单,由于这些时期的营销条件较差,某些高平均售价和高利润的西海岸社区的影响,在前几个季度已经关闭,并且由于住房收入减少和固定社区层面支出的增加而降低了运营杠杆社区数量增长。


本季度我们的销售,一般和管理费用比率为12.1%,而2018年第二季度的创纪录低利率为10.4%。这一增长主要反映了前面提到的ASC 606影响,由于住房收入减少导致的经营杠杆减少,支持新社区开放的营销费用增加,以及上一年度法律追偿和有利的法律​​和解的影响。




Turning now to community count. Our second quarter average of 252 was up 17% from 215 in the same quarter of 2018. We ended the quarter with 255 communities, including 27 communities, or 11% that were previously classified as land held for future development. As we continue to successfully implement our strategy of monetizing these inactive assets, and with less than $200 million in this inventory category at quarter end, we expect to see further declines in the number of reactivated communities in the future.
We invested $399 million in land, land development and fees during the second quarter with $132 million of the total representing new land acquisitions. Over the past 12 months, in addition to the capital allocated to pay down debt, we deployed over $1.8 billion into land-related investments and opened 123 new communities as Jeff mentioned earlier.
On a year-over-year basis, we anticipate our third quarter average community count will increase in the range of 15% to 18% as compared to the 2018 third quarter. We still expect our average community count for the 2019 full year to be up approximately 10% to 15% year-over-year.
We ended the second quarter with total liquidity of approximately $600 million, including $179 million of cash and $419 million available under our unsecured revolving credit facility. Earlier in the year, we entered into a new $50 million unsecured letter of credit facility, separate from our existing $500 million unsecured revolving credit facility. Over time, we anticipate that most of our letters of credit will be transferred to or issued under this new line, which will free up capacity on the revolver and enhance liquidity.
At quarter end, our debt-to-capital ratio of 45.8% improved by 930 basis points as compared to the second quarter of last year, reflecting a $280 million increase in stockholders' equity combined with $500 million of debt reduction. As we continue to drive improvements in our credit metrics, we have tightened once again our leverage objective from a 35% to 45% net debt-to-capital target to a debt-to-capital ratio within that same range.
While our quarter-end ratio was just above the upper limit of our revised target range, we expect our debt-to-capital ratio to be within this range by year-end. Along with our return of capital to shareholders in the form of our quarterly dividend, our capital allocation priorities remain consistent with a focus on investment in land assets to grow the business and improve returns, and continue deleveraging the balance sheet to retain earnings growth enhanced by future debt reduction.
In summary, our second quarter highlights included a strong backlog conversion rate driving over $1 billion in housing revenues, a measurable increase in community count and a healthy sales pace per community contributing to a 15% year-over-year increase in net orders, a sequential expansion of our operating margin and a significant improvement in our debt-to-capital ratio to 45.8%. We believe that our expanded community count and solid quarter-end backlog value position us to achieve growth in housing revenues and improvement in both our gross and operating margins during the second half of this year.








We will now take your questions. Devon, please open the lines.

我们现在将回答您的问题。 德文,请打开线。


Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from the line of Alan Ratner with Zelman & Associates. Please proceed with your questions.

谢谢。 此时,我们将进行问答环节。 [操作员说明]我们的第一个问题来自Alan Ratner与Zelman&Associates的合作。 请继续你的问题。


Hey, guys, good afternoon. Congrats, really great results. So, first question, I was hoping you might be able to talk a little bit about what you're seeing on the incentive environment. I think there's a lot of confusion out there right now on exactly what's going on. I mean, you have a few builders talking about incentives coming down, but it sounds like they're still at fairly elevated levels across the industry. At the same time, I look at your absorption numbers and they're extremely strong, and it would seem like you should have some pricing power at that type of a sales pace.
So do you have an ability to push price now? Or are you kind of being a little bit conservative there just given how many communities you're opening up? And just any general commentary you could have on that front would be great.

嘿,伙计们,大家下午好。 恭喜,真的很棒。 所以,第一个问题,我希望你能谈谈你在激励环境中看到的内容。 我认为现在对于正在发生的事情存在很多困惑。 我的意思是,你有一些建筑商正在谈论激励措施,但听起来他们仍然处于整个行业的相当高的水平。 与此同时,我看看你的吸收数字,它们非常强大,看起来你应该在这种类型的销售速度上有一些定价能力。

那你现在有能力推高价格吗? 或者你是否有点保守,只是给了你开放的社区? 而且你在这方面可以得到的任何一般性评论都会很棒。


So Alan thanks for the recognition on the quarter. As you know, our business model doesn't really focus much on incentives. We believe in offering the consumer the best value and price and then personalization in our Studios. So we don't have a heavy incentive business model. We did -- there is some closing cost we pay in certain communities where the buyers may not have the cash to close without it. I think in the quarter, our sales incentives were up 30 bps, was it Jeff? Up 30 bps sequentially, so it's not a big mover for us.
I think the markets are pretty rational. I do think overall the industry is backing off of their incentives or pushing price. And as we look at our communities, we did raise price during the quarter in the majority of our communities, so we were able to take some price, while holding the fairly strong absorption rate.

所以艾伦感谢本季度的表彰。 如您所知,我们的商业模式并未真正关注激励措施。 我们相信为消费者提供最佳价值和价格,然后在我们的工作室提供个性化服务。 所以我们没有一个沉重的激励商业模式。 我们做了 - 我们在某些社区支付了一些成交费用,如果没有它,买家可能没有现金可以关闭。 我认为在本季度,我们的销售激励措施增加了30个基点,是杰夫吗? 顺序上升30个基点,所以它对我们来说不是一个大动力。

我认为市场非常理性。 我认为整个行业正在退出他们的激励措施或推动价格。 当我们看看我们的社区时,我们确实在大多数社区中提高了价格,因此我们能够承担一定的价格,同时保持相当强的吸收率。


Great. And I assume that -- would that kind of continue through the quarter through May and into June? Or did you see kind of progressively that the pricing power improving through that period?

非常好。 我认为 - 这种情况会持续到整个五月到六月吗? 或者您是否逐渐看到定价能力在此期间有所改善?


Well, I don't want to talk June, because we're just closing the second quarter. But within our second quarter, I would say it was pretty consistent through the quarter. We manage each asset every week based on how our sales are going. And if we have an opportunity to take price, we'll take price. If the community where sales are a little softer, we won't take price. I would say it was fairly consistent through the quarter. As we shared in our prepared remarks, we did see our sales strengthening sequentially from March to April to May.

好吧,我不想谈六月,因为我们刚刚关闭第二季度。 但在我们的第二季度内,我会说整个季度都非常稳定。 我们每周根据销售情况管理每项资产。 如果我们有机会接受价格,我们将采取价格。 如果销售有点软的社区,我们将不会采取价格。 我会说这个季度相当一致。 正如我们在准备好的评论中所说的那样,我们确实看到我们的销售从3月到4月到5月顺序增强。


Got it. That's very helpful. Second question if I could just for Jeff K. Thank you for the updated targets on the leverage and the goals there. You guys have been incredibly opportunistic through this cycle with buybacks especially when your stock is seemingly disconnected with reality. And it would seem like, we're kind of entering one of those periods right now, stocks back below book value and in the face of what I perceive to be extremely strong results. So can you talk about a little bit just the willingness or the opportunity there to maybe deviate a little bit from that target? If the stock remains at these low levels for an extended period of time, would you be willing to do a similar buyback like you've done in the past?

得到它了。 这非常有帮助。 第二个问题,如果我可以只为Jeff K.感谢您对杠杆和目标的更新目标。 你们在回购过程中一直非常机会主义,特别是当你的股票看似与现实脱节时。 而且看起来,我们现在正在进入其中一个时期,股价低于账面价值,面对我认为非常强劲的结果。 那么你能谈谈一点意愿或机会可能偏离目标吗? 如果股票在较长时间内保持在这些低水平,您是否愿意像过去那样做类似的回购?


Right. Well, let's first talk about the target level. I mean, it's a pretty wide range, right? It's 35% to 45%. We're just above the range right now at the end of the second quarter. And with just retained earnings growth alone by the end of the year, we could clearly see that to be well within it. It is a wide range for a reason. It's there to allow us flexibility on capital allocation decisions as we go forward due to market conditions. But as you know, I think, you're using the right words with our stock buybacks in the past. They have been opportunistic buybacks. They're not -- it's not a scheduled program at this point. We're still focused on our two main capital priorities, capital allocation priorities of growing the business and improving our returns as well as getting the leverage in place. But we've been opportunistic in the past and with fairly modest buybacks at certain points in time and I'd say we'd still be open to that, but no prediction of where we're going with it at this point.

对。好吧,让我们先谈谈目标水平。我的意思是,这是一个非常广泛的范围,对吗?这是35%至45%。我们现在正处于第二季度末的范围之上。仅仅在年底之前保留了收益增长,我们可以清楚地看到它在其中。这是一个广泛的原因。由于市场条件的原因,它可以让我们在资本分配决策方面具有灵活性。但是如你所知,我认为,你过去使用正确的单词和我们的股票回购。他们一直是机会主义的回购。他们不是 - 现在不是预定的计划。我们仍然专注于我们的两个主要资本优先事项,即增加业务的资本分配优先级,提高我们的回报以及实现杠杆作用。但是我们过去一直是机会主义者,并且在某些时间点进行了相当温和的回购,我会说我们仍然对此持开放态度,但是目前还没有预测到我们的目标。


Great. And if I could just go back real quickly, just to clarify something that Jeff M. said on the incentives, I just want to clarify it. I think you mentioned incentives were up. I assume that's on closings, not on orders, so a little bit of a backward-looking data point there.

非常好。 如果我能够快速回到现实状态,只是为了澄清Jeff M.对激励措施所说的话,我只想澄清一下。 我想你提到激励措施了。 我认为这是关闭,而不是订单,所以那里有一些向后看的数据点。





Okay, got it. Thanks guys, good luck.

好,知道了。 谢谢你们,祝你好运。


Our next question comes from the line of Stephen East with Wells Fargo. Please proceed with your question.

我们的下一个问题来自Stephen East和Wells Fargo。 请继续你的问题。


Hi, good afternoon guys. This is actually Truman Patterson on for Stephen. Nice quarter. Thanks for clearing up the incentive commentary. I realize, you guys don't use a lot of incentives, but you said the pricing was up in the majority of communities. Is there any way you guys might be able to quantify the magnitude of that improvement from first quarter to second or maybe the percentage of the communities that you actually saw some base pricing power?

嗨,大家下午好。 这实际上是杜鲁门帕特森为斯蒂芬。 不错的季度。 感谢您清理激励评论。 我知道,你们不会使用很多激励措施,但是你们说大多数社区的价格都在提高。 您是否有任何方式可以量化从第一季度到第二季度的改善幅度,或者您实际看到一些基本定价能力的社区百分比?


Truman, it's very hard to quantify that because every asset is unique and it could be $1000 on a $500000 house or $5000 on a $300000 house. It just depends on how the community is pacing. And I think a part we're sharing, we expect margin improvement going forward and part of that is the price that we've been able to take.

杜鲁门很难量化这一点,因为每件资产都是独一无二的,50万美元的房子可能是1000美元,30万美元的房子可能是5000美元。 这取决于社区的节奏。 我认为我们正在共享的一部分,我们预计未来利润率会有所改善,部分原因是我们能够采取的价格。


Okay. Okay. Thanks. That actuallysegues nice into my follow-up. Just a little bit more clarity on the gross margin ramp in the back half of 2019, it seems like a little bit of that is just a little bit better pricing if you will. But could you maybe walk us through the moving parts, because it seems like there's a pretty nice ramp in the back half of the year that hit your guidance, anyway you can just walk us through the moving parts to get investors comfortable?

好的。 好的。 谢谢。 这实际上很适合我的后续行动。 稍微清楚一点2019年后半期的毛利率上升,如果你愿意的话,似乎只是稍微好一些。 但是你可以带我们穿过活动部件,因为看起来在今年下半年有一个非常好的坡道可以达到你的指导,无论如何你可以带我们穿过活动部件让投资者感到舒服吗?


Sure. Yes. There are several things that are coming into play there. I mean the one -- and we should never lose sight of the mix impact that you see in all this. We have a fairly large change in our portfolio. As I mentioned during the prepared remarks, I think Jeff mentioned as well, we opened 123 new communities since the end of the second quarter of last year. That was on a base of 210. So we ended the second quarter last year 210 communities opened 123 new and closeout of 78. So there's been a pretty large churn in communities that we're selling out of right now that will provide third and fourth quarter deliveries.
On top of that, when you look at some of the tailwinds that we have, we should continue to enjoy some year-over-year positives from the improvements that we've implemented in our capital structure. So the lower interest incurred is now coming through in lower amortized interest and we expect to see more of that as we go through the rest of the year. And the new community openings themselves should be providing a higher uptick in gross margins in a lot of those communities. And a lot of those communities are actually replacing reactivated communities at lower-margin levels. So we'll see some impact from that as well. So when you roll it all up, we do expect to see two quarters of sequential improvement and a full fiscal year that will be in that 17.9% to 18.5% range.

当然。是。有几件事在那里发挥作用。我的意思是那个 - 我们永远不要忘记你在所有这些中看到的混合影响。我们的投资组合发生了相当大的变化。正如我在准备好的讲话中提到的那样,我想杰夫也提到过,自去年第二季度末以来,我们开设了123个新社区。那是在210的基础上。所以我们去年第二季度结束了210个社区开了123个新的并且关闭了78个。所以我们现在卖出的社区有一个非常大的流失,将提供第三和第四季度交货。



Our next question comes from the line of Nishu Sood with Deutsche Bank. Please proceed with your question.

我们的下一个问题来自Nishu Sood与德意志银行的关系。 请继续你的问题。

Nishu Sood

Thank you. The absorption pace was really strong in the second quarter. And at the end of March, you had anticipated that it would be similar to 2017, the second quarter in 2017 which would imply kind of continued down double-digit pace as you saw and the housing market was weaker. What changed so dramatically? I mean it implies a really serious ramp in April and May. Just wanted to understand the drivers of that where there successful grand openings? Jeff K, you were just mentioning how many communities you've opened. Did that boost the absorptions? What changed so dramatically from the end of March?

谢谢。 第二季度的吸收速度非常强劲。 而在3月底,你曾预计它将与2017年相似,2017年第二季度意味着你所看到的并且房地产市场疲软,这意味着继续下降两位数的速度。 变化如此剧烈? 我的意思是它意味着四月和五月的一个非常严重的匝道。 只是想了解成功隆重开幕的那些驱动因素? 杰夫K,你刚才提到你打开了多少社区。 这是否增加了吸收力? 从3月底开始变化如此剧烈?


Well Nishu, I can make a couple of comments and then turn it to Jeff. At the time we guided on the absorption pace, we were early in the spring, so it's still unclear to us how strong the spring would be. And we also had the variable of so many communities yet to open and you wonder if the communities are going to hit as expected and as planned. And for the most part the community openings hit and -- but I wouldn't just attribute it to that. Our overall sales rate around the system was pretty good. We target strategically to optimize our assets. We target about four a month on average. You have to do better than four in your strongest selling part of the year which is right now, so that 5.4 is right on track for us to optimize the asset. Anything else you want to add?

那么Nishu,我可以做几个评论,然后把它转给杰夫。 在我们引导吸收速度的时候,我们在春天的早期,所以我们仍然不清楚弹簧的强度。 我们还有许多社区的变量尚未开放,您想知道社区是否会按预期和计划进行。 在大多数情况下,社区开放受到打击 - 但我不仅仅将其归因于此。 我们整个系统的整体销售率非常好。 我们战略性地定位以优化我们的资产。 我们平均每月约四个目标。 在今年最强劲的销售部分中,您必须做得比四个好,因此5.4正在按计划优化资产。 还有其他想要添加的内容吗?


Yes. Just, as we move through the quarter, we saw a pretty nice ramp. I mean when we were doing the call and at the time of the call, we were actually only up single digit over the prior year, so that was tracking about the 2017 consumption pace. And it just started picking up and getting progressively better as we enter the quarter. As Jeff mentioned, the new communities performed very well. And importantly, a large proportion of them opened when they were supposed to open and we had a lot of openings in the quarter. I think, we said last call that we were expecting to open over 35 and we ended up opening 43 new communities, so that helped us well. But I think just general market conditions, the way we had our product positioned, I think some of the changes we made in positioning and modifying the product has helped and we're right price point at the right place at the right time and we did really well on sales as a result.

是。 只是,当我们穿过这个季度时,我们看到了一个相当不错的坡道。 我的意思是,当我们打电话时,在通话时,我们实际上只比前一年增加了一位数,所以这跟踪了2017年的消费速度。 随着我们进入该季度,它刚刚开始变得越来越好。 正如杰夫所说,新社区的表现非常好。 而且重要的是,当它们应该打开时,它们中的很大一部分都打开了,而且我们在这个季度开了很多。 我想,我们上次打电话说我们期待开放超过35个,最后我们开了43个新社区,这对我们有好处。 但我认为只是一般的市场条件,我们对产品定位的方式,我认为我们在定位和修改产品方面所做的一些改变有所帮助,我们在正确的时间在合适的地点找到合适的价格,我们做到了 结果非常好的销售。

Nishu Sood

Got it. No that's really encouraging. And I think -- I think I know you're not commenting on June in particular. But as we think about some of the factors that you described, how should we think about the sustainability of some of those factors? Is there going to be a continued rate of new community openings which might impact it? Or say sequential trends, would you be able to expect them to continue? The third quarter of last year had a pretty nice absorption pace as well. So I guess what it boils down to is would you expect to be able to sustain or meet that rate in the third quarter.

得到它了。 不,这真的很鼓舞人心。 而且我认为 - 我想我知道你并不是特别关注6月。 但是,当我们考虑您描述的一些因素时,我们应该如何考虑其中一些因素的可持续性? 会不会继续推出可能会影响它的新社区空缺? 或者说顺序趋势,你能期望它们继续下去吗? 去年第三季度的吸收速度相当不错。 所以我猜它归结为什么,你期望能够在第三季度维持或达到这个速度。


Nishu, you're correct. We don't want to talk about the third quarter. My expectation is that we'll see the normal seasonal trends that you typically see from Q2 to Q3. We don't see any storm clouds on the horizon in the housing markets because there's no inventory, rates are low and people out there looking and buying. So I think you'll see the normal seasonal trends. We do have a lot of openings still coming at us here in the third quarter and we're hopeful that we produce nice sales numbers as the quarter rolls through.

Nishu,你说的没错。 我们不想谈论第三季度。 我的期望是,我们会看到您通常在第二季度到第三季度看到的正常季节性趋势。 我们看不到房地产市场上出现任何风暴云,因为没有库存,房价低,人们在那里寻找和购买。 所以我认为你会看到正常的季节性趋势。 我们确实在第三季度有很多空缺,我们希望在季度结束时我们能够提供良好的销售数据。


Our next question comes from the line of Matthew Bouley with Barclays. Please proceed with your question.

我们的下一个问题来自Matthew Bouley与巴克莱的合作。 请继续你的问题。

Christina Chiu

我们的下一个问题来自Budd Bugatch和Raymond James。 我们将继续与Matt McCall一起与Seaport Global合作。...

Hi, this is actually Christina Chiu on for Matt. Thanks for taking the question. And just looking at California you had an 18% order growth. And I was wondering if you could elaborate and provide more color on what caused the strength there and what you're expecting regionally in the back half of the year.

嗨,这实际上是Christina Chiu为Matt。 谢谢你提出这个问题。 只是看着加州,你的订单增长了18%。 而且我想知道你是否能够详细说明并提供更多的颜色来确定那里的力量以及你在今年下半年所期望的区域性。


Okay. Christina I can make a few comments and then Jeff can offer some more. As we shared in the prepared comments, Northern Cal overall did very well. And if you look at the inland areas I touched on our L.A. business Inland Empire, Central Valley, Sacramento, they're all very good right now.
In the Bay Area, we're bridging through this. We had a slowdown in community count as we've successfully sold through a lot of high-priced margin communities last year and it's taken some time to reload and get the new communities open. And that's what we started to see in our order results here in Q2. The expected openings hit.
And while it's higher priced on average than anywhere else we operate in the state it's still at a low price relative to the Bay Area and I think that's why you saw some strong sales. As we shared in the Bay Area, we're on the affordable side and there's such a shortage of housing up there. The price points are compelling.
When you move down to Southern Cal coastal is a small business for us. We want to grow it but it's still a little soft and it's the higher priced goods. The -- our view on that market is it held steady that sales rates are similar. We're not seeing pricing pressure. So, price is holding. It's just not as robust as the inland areas are. And because prices are holding, it's continuing to fuel a lot of demand out in the more affordable inland areas of Southern Cal. So, overall we're pleased with what we're seeing in California right now.




当你下到南加州沿海对我们来说是一个小生意。我们想要发展它但它仍然有点软,这是价格较高的商品。 - 我们对该市场的看法是稳定的,销售率相似。我们没有看到价格压力。所以,价格持有。它不像内陆地区那么强大。而且由于价格持续上涨,它继续为南卡罗来纳州更便宜的内陆地区带来大量需求。所以,总的来说,我们对目前在加利福尼亚州看到的情况感到满意。

Christina Chiu

我们的下一个问题来自Budd Bugatch和Raymond James。 我们将继续与Matt McCall一起与Seaport Global合作。...

Got it. Thanks. And then given your lot position at this stage of the year nearly 55,000 lots, are you comfortable highlighting at least directionally what community count growth could look like beyond 2019?

得到它了。 谢谢。 然后考虑到你今年这个阶段的近55,000手的位数,你是否愿意至少明确地突出显示2019年以后的社区数量增长情况?


Not at this point. We really try not to get too far out ahead on things like that as far as guidance goes we're seeing obviously a really nice cadence this year. We've been very successful in opening communities.
And I'll say actually relatively on time at least within the same quarters is what we plan. And we're looking forward to the next couple of quarters of year-over-year growth. And we'll bubble up again later in the year and give you guys more guidance on what 2020 is going to look like.

不是在这一点上。 我们真的尽量不要在这样的事情上遥遥领先,就指导而言,我们今年看到的显然是一个非常好的节奏。 我们在开放社区方面非常成功。

而且我会说实际上至少在同一时间内相对准时就是我们的计划。 我们期待未来几个季度的同比增长。 我们将在今年晚些时候再次冒出来,并为你们提供更多有关2020年前景的指导。


Our next question comes from the line of Stephen Kim with Evercore ISI. Please proceed with your question.

我们的下一个问题来自Stephen Kim和Evercore ISI。 请继续你的问题。

Stephen Kim

Yes, thanks very much guys and thanks for all the color and good job in the quarter. Your guidance is really interesting obviously because it suggests a nice margin ramp and I want to talk about that for a sec.
One of the things we get a lot is people wondering whether there's a lag effect from rates. And as we think about that, your build-to-order business model which seemed to be well teed up to capture a drop in rates that happens maybe better than guys that do more spec building because the fellows who decide to sign on the dotted line and buy one of your homes little time goes by and all of a sudden they can afford more and they can cut back and maybe buy some more goodies to stick in the house.
And so I was curious as to just generally have you seen that? And is there any way that you can quantify the delta between the price that you initially sell the house at and what you ultimately are closing the house at? Is that a delta that you can monitor? Is that -- has it widened in the last few months? And do you project it to widen in the next several months?



所以我很好奇,一般来说你看到了吗?有没有什么方法可以量化您最初出售房屋的价格与最终关闭房屋的价格之间的差价?这是你可以监控的三角洲吗?那是 - 在过去的几个月里它扩大了吗?你是否计划在未来几个月内扩大规模?


Well, Stephen, I guess, a few things just on the business model itself. We try to lock in all the option and choices before starting the house. And in fact we don't try to that's what we do do. So, we actually require the customers to lock in on their options before start.
So, you don't really see a creep in the price of the house once we're under construction. That's the one way we're able to really still build efficiently and not -- and stay away from the customization and more towards the personalization part of our strategy. So, that's one point.
The second I think when you look at what happens with the lower rate environment you certainly would see less cancellations. If rates were moving up, you could potentially see some cans coming out of the inability to still qualify for a loan at the new rate. Our cancellations ticked down three points or so this quarter which I think was an indication partially of that anyway so that's a good thing.
But I think overall the strength of the market and the build-to-order approach I think definitely has a lot to do with our strong sales base. And you see it almost every quarter with our pace versus the rest of the industry; we're always one of the highest sales paces in the quarter. And I think a lot of that's a result of customers like the ability to personalize their homes and they like the business model. So, I think that -- I'm not sure it gets right to the answer to your question or right to your question, but that's kind of what we're seeing right now in the market.


所以,一旦我们正在建设中,你并没有真正看到房子的价格出现下降。这是我们能够真正有效地构建而不是 - 并远离定制,更多地转向我们战略的个性化部分的一种方式。所以,这是一点。


但我认为总的来说,市场的实力和按订单生产的方法,我认为这与我们强大的销售基础有很大关系。而且你几乎每个季度都会看到我们的步伐与其他行业相比;我们一直是本季度销售额最高的一个。我认为很多客户的结果就是能够个性化他们的家庭,他们喜欢商业模式。所以,我认为 - 我不确定你的问题或问题的答案是否正确,但这就是我们现在在市场上所看到的。

Stephen Kim

Yes. I guess the only difference would be if there's maybe a couple of weeks or maybe a three-week lag between when you take the order and when you actually start the house. I imagine it's not too great a period of time though, so that probably isn't a huge factor.
Could you talk a little bit then about what you're seeing in your margins as we look -- I'm drilling into this very nice ramp you seem to be forecasting for your gross margin into the fourth quarter implied through your year in the 3Q guide you've given?
Can you talk a little bit about what you're seeing in terms of input costs that are informing your view on that -- your margin for the year relative to the 3Q margin that you talked about, particularly I'm thinking lumber. Are you anticipating that you're going to see a benefit all the way through your fourth quarter before the spike in lumber futures that we've just seen maybe weighs on your 1Q of next year? Just trying to get a sense for input cost inflation movements.

是。 我想唯一的区别是,如果您在接受订单和实际启动房屋之间可能有几周或三周的延迟。 我想这段时间不是太长,所以这可能不是一个很重要的因素。

你可以稍微谈谈你在我们看来你所看到的利润 - 我正在钻探这个非常好的坡道,你似乎预测到你在第三季度暗示的第四季度的毛利率 指导你给出了什么?

你能否谈谈你所看到的输入成本方面的内容,这些成本告诉你对此的看法 - 你相对于你所谈到的第三季度的年度保证金,特别是我在想木材。 您是否预计,在我们刚刚看到的木材期货价格飙升之前,您可能会在第四季度看到一直受益于明年第一季度的重量? 只是想了解投入成本通胀走势。


Sure. Yes the input cost side is pretty good news for us. We just had our second consecutive quarter of decreases in the input cost. And we talked about it in a lot of conference calls in the past; we use an index approach to it. We think it's probably the cleanest way to show it where you're taking out factors like square footage differences and things like that. So, we'll index the house.
And we'll calculate what that indexed house will build for at a point in time and then we'll compare that index to the same house indexed at a later point in time. So, if you can compare end of the second quarter to end of the year, we're actually down 1.1% in our budget for that indexed house.
And I think where that's coming from is a couple factors. One certainly the lumber cost decreases have been there and have helped that and they've also helped to offset what we view as somewhat moderate increases in other input costs. And we think there's been some moderation due to the market pause in the fourth quarter and the first quarter. So, the one good part of the market pause is we felt that we've experienced some moderation in increases.
On a year-over-year basis, our largest decreases or advantages favorable to margin came in obviously to the lumber category. In the drywall category, net offset increases in a few of the other commodity categories like cement, roofing, and plumbing.
On a year-over-year basis we're actually also down, less than 1% down, but still down on a year-over-year basis. So, the input story -- the input cost story for us has been pretty favorable. Obviously, there's a few watch-outs. You have the whole tariff issue. That's a watch-out for us. And as you pointed out the increase in the lumber's futures is also a watch-out. But because we are in look-back pricing and we obviously crossed out the house at the point in time when we frame it, we do think there's still more favorability coming from lumber before any potential downside that we could experience by the end of the year depending what the market does.





与去年同期相比,我们实际上也下降了不到1%,但仍然同比下降。因此,输入故事 - 我们的输入成本故事非常有利。显然,有一些观察。你有整个关税问题。这是对我们的关注。正如你所指出的那样,木材期货的增加也是值得关注的。但是因为我们处于回顾定价状态,而且我们显然在我们构建它的时间点划掉了房子,我们确实认为在我们可以在年底之前遇到任何潜在的不利因素之前,木材仍然会有更多的好感度。取决于市场的作用。


Our next question comes of the line of Mike Dahl with RBC Capital Markets. Please proceed with your question.

我们的下一个问题来自于RBC Capital Markets的Mike Dahl。 请继续你的问题。

Mike Dahl

Hi, thanks for taking my questions and nice results. I wanted to start on the order side. And one of the things that you guys have been pretty vocal about and proactive about is kind of the shift to smaller floor plans and at least introducing smaller plan options into newer communities. So I wanted to ask if even anecdotally you can give us any update or color on, how those smaller floor plans are performing or performed through the quarter. Presumably to get this type of order number, it had to be fairly broad-based, but just wondering if you could give us anything specific on the newer plan options.

嗨,谢谢你提出我的问题和好结果。 我想从订单方面开始。 你们其中一个非常直言不讳的事情就是转向较小的平面图,至少将较小的计划选项引入新的社区。 所以我想问一下,即使是轶事,你是否可以给我们任何更新或颜色,这些较小的平面图如何在整个季度执行或执行。 据推测,要获得这种类型的订单号,它必须相当广泛,但只是想知道您是否可以就新的计划选项向我们提供任何具体信息。


Mike, as I shared in the comments, our sales were up double-digit in every region. So it definitely was broad-based in the strength of the sales. We've introduced smaller plans. We've modeled them in many locations. Coincident with that shift, we had a drop in interest rates. So I think it's tempered the need a little bit if you will. We are seeing with a lower advertised price that we're drawn in a bigger pool of buyers, where they're coming in and may not have thought they could afford it. And then they get in and once they understand what they qualified for they'll move to a little bit larger home, so it is helping to expand our marketing and create a bigger pool.
Our sales in the quarter on the unstarted homes, so our presale square footage ticked down just incrementally. It could be just a function of mix by market. So I wouldn't call it a trend yet and we're certainly monitoring it. So it's helped us from a marketing standpoint. But with the rate decline people will move up to the biggest home they can afford. And we are well positioned for when -- whenever rates do go back up we're already there.


我们在这个季度的未开发房屋的销售,所以我们的预售平方英尺只是逐步下降。它可能只是市场混合的一个功能。所以我不会把它称为趋势,我们肯定会监控它。从营销的角度来看,这对我们有所帮助。但随着利率的下降,人们将会搬到他们能负担得起的最大房屋。而且我们处于有利位置 - 只要价格回升,我们就已经存在。

Mike Dahl

Right. Okay. Yes. Helpful and that makes sense. And then second question just around margins. And Jeff K. I think you kind of alluded to a couple of different things helping you to kind of bridge to the year-end an implied 4Q margin which makes sense, but I wanted to follow up and try to get a little more quantification of two of the issues. One, you've continued to benefit from the lower interest amortization, so any update on how to think about that delta as we move through the year? And then the second part, you mentioned reactivated communities that mix starting to kind of be reduced and help your margins by year-end. I thought of that as more of a 2020 occurrence. Can you just help us -- how much is that starting to help by the end of this year and how to think about that potential support as that mix continues to decline of the reactivated communities?

对。 好的。 是。 有帮助,这是有道理的。 然后第二个问题就在边缘附近。 而Jeff K.我认为你提到了几个不同的东西,帮助你在年底之间建立一个隐含的第四季度利润,这是有道理的,但我想跟进并尝试进一步量化 其中两个问题。 其中一个,您继续受益于较低的利息摊销,因此我们在全年都会考虑如何考虑这个三角洲的任何更新? 然后是第二部分,你提到了重新启动的社区,这些社区的混合开始减少,并在年底前帮助你获得利润。 我认为这更像是2020年的事件。 你能帮助我们吗 - 到今年年底开始提供多少帮助以及如何考虑这种潜在的支持,因为重新激活的社区的这种组合继续下降?


Right. Okay, let's -- we'll take the interest amortization first, because that's probably the simpler and more straightforward. We talked about during last quarter's call that we expected year-over-year benefit in interest amortization of between 80 and 100 basis points per quarter for the full year. In the first quarter, we were up 100. This quarter we were 80. And we still expect to be within that same range the next two quarters, so 80 to 100 basis points per quarter year-over-year is still a good number.
On the reactivated communities, what you see there is, you definitely see a lag from the point in time when they enter community count or when the community count starts declining to when it's actually running through the revenues and impacting the overall gross margins. In the quarter -- in the second quarter, we really didn't see any benefit from the prior year, because we had a fairly high revenue number coming from reactivated communities, partially because of the strong sales that we saw relative to last year in those communities.
So it was pretty well even with the prior year. We do expect to see some incremental improvement by the fourth quarter as the count continues to decline. But I would say, you are correct in saying that most of that improvement we'll see yet in 2020, which will be nice, because there'll be another tailwind or a continued tailwind for us as we get into the next fiscal year.

对。好吧,让我们 - 我们首先考虑利息摊销,因为这可能更简单,更直接。我们在上一季度的电话会议上谈到,我们预计全年每季度利息摊销收益率为80至100个基点。在第一季度,我们上涨了100个。本季度我们是80个。我们仍然预计未来两个季度将在同一范围内,因此每季度80到100个基点仍然是一个很好的数字。

在重新启动的社区,你看到的是,你肯定会看到他们进入社区统计时或社区计数开始下降到实际运行收入并影响整体毛利率时的滞后时间。在本季度 - 第二季度,我们确实没有看到去年的任何好处,因为我们从重新启动的社区获得了相当高的收入,部分原因是我们看到相对于去年的强劲销售额那些社区。



Our next question comes from the line of John Lovallo with Bank of America Merrill Lynch. Please proceed with your question.

我们的下一个问题来自John Lovallo与美国银行美林公司的合作。 请继续你的问题。

John Lovallo

Hey, guys, thank you for fitting me in here. First question, Jeff K., you brought up tariffs. I'm just curious, it seems like to me that that would be a pretty small impact. I mean, I think one of your competitors just laid out something like $500 per home. I was wondering if you guys maybe had an estimate through List one, two, three and then maybe if -- on List four us as well?

嘿,伙计们,谢谢你让我适应我。 第一个问题,Jeff K.,你提出了关税。 我只是好奇,对我来说这似乎是一个非常小的影响。 我的意思是,我认为你的竞争对手之一只是为每个家庭提供500美元。 我想知道你们是否可能通过列表一,二,三,然后可能如果 - 在列表四我们也有估计?


We -- I would say at this point, we're really not seeing any impact, any material impact at all on our cost. It may be being absorbed through the supply chain or we may be seeing certain increases here and there that are getting offset by others, but it hasn't been significant for us to even be all that focused on at this point.

我们 - 我想说,在这一点上,我们真的没有看到任何影响,对我们的成本产生任何重大影响。 它可能正在通过供应链被吸收,或者我们可能会看到其中某些增长被其他人所抵消,但对于我们来说,即使是在这一点上所关注的重点也不是很重要。

John Lovallo

Okay. Yes, that's encouraging. And then, clearly, demand is getting a little bit better here. And it's been I think it's been largely focused at lower price points. Have you guys seen any improvement though at -- as we move up the price point spectrum, are you starting to see increasing demand like kind of the first maybe even second-time move-up?

好的。 是的,这令人鼓舞。 然后,显然,需求在这里变得更好一些。 而且我认为它主要集中在较低的价位。 你们有没有看到任何改善 - 随着我们提高价格点谱,你是否开始看到需求增加,就像第一次甚至第二次升级一样?


John, I think the comment that there's strong demand at the price points that we operate at; our first move-up communities are hitting their pro formas just like our entry level. We don't have as many first move-up and very little, if any second move-up even come to mind for me right now. So we'll be -- we're watchful of what happens to pricing in the markets. My general sense is the higher-priced goods are a softer demand than the price points that we operate at. But our first move-up programs are selling well too.

约翰,我认为有关我们经营的价格点需求强劲的评论; 我们的第一个升级社区就像我们的入门级别一样打击了他们的职业生涯。 我们没有尽可能多的第一次升级,如果有任何第二次提升,我现在还没有想到。 所以我们会 - 我们注意到市场定价会发生什么变化。 我的一般意义是,价格较高的商品需求比我们运营的价格点要软。 但我们的第一个升级计划也很畅销。


Our next question comes from the line of Mike Rehaut with JPMorgan. Please proceed with your question.

我们的下一个问题来自Mike Rehaut与摩根大通的合作。 请继续你的问题。

Mike Rehaut

Hi, good afternoon. Thanks for taking my question and congrats on the results. First question, I just wanted to circle back if I could to the sales pace. I think that was really one of the big upside surprises relative to your prior expectation. Again, that 2Q sales pace you had originally expected would match 2017 and instead it roughly matched 2018. So in your prior answer, you talked about a few different factors, but it just seemed the answer itself that you gave was just more kind of generic in terms of yes things just overall performed a little bit better.
I guess, I just wanted to make sure from my perspective or maybe from investors' perspective, I think the initial reaction would be wow those new communities really did perform a lot better or -- and perhaps there was a -- between that and the combination of some conservatism that that was really the ultimate driver there. And oftentimes, when you have new community openings, you really want these new communities to start off strong and they can be an outsized contribution to results.
So, I'm just trying to -- I just wanted to ask if I speaking about that correctly, or by contrast, was there some region or regions that really just kind of -- the switch flipped back on and you really just had some disproportionate strength from some regions recovering a lot better than you might have expected a few months ago?



所以,我只是想 - 我只是想问一下我是否正确地谈到了这一点,或者相反,是否有一些区域或区域真的只是那种 - 交换机重新开启而你真的只有一些一些地区的不成比例的力量比几个月前的预期恢复得更好?


Mike, I can say a couple things. You're not totally correct on the it's just coming from the new communities. It's a frustrating statistic for me to share our average community count, because it could be open for one month two months three months or one day in the quarter. And it's really a 90-day lag before the communities blend in and really start to gain strong momentum. So if it opened in March, it may have served a full quarter. But the communities we opened in mid-May didn't drive that absorption up.
And if you think of it from a math perspective, you got 255 communities and yet 43 openings and you still average the same as the year before that tells you that the existing communities that were already open performed well to hit that kind of an average. If you look at it regionally, the one I would highlight is California, where we typically have a higher sales pace per community on average, because you have to turn a bigger asset base with the community count growth there and the sales rate that we saw in California that they again lifted our company average.




Yeah, Mike the other thing; I think Jeff was saying, we did see across-the-board improvement. It doesn't mean every single community in every market but it was pretty broad-based for the quarter. I think a lot of it is just the business model and where we're competing. I mean, you read it all over the place with the industry news about the return of first-time buyer and the entry level picking up and being at the right price point is very important.
And the company stayed very disciplined over the last several years especially as we were rebuilding community count to make sure we were putting communities on the ground that met those parameters. And it's very natural for our company to operate in that space. It's been a strategy of the company for a long time.
So for me it was gratifying I guess to see the results at the end of the quarter, coming off some of the base communities that we've had in the ground for a long time as well as for the new communities.
But Jeff said it right, I mean we opened 43 communities and there were not many of them that were opened for 13 weeks. And they would average into the count at 21.5 because we're zero at the beginning and 43 at the end and two-point average, so that they certainly didn't drag us down. But I don't think that you could have point to that as saying that was a single point of focus. But that said, we are pleased with how they're performing and hope the rest of the communities we open this year perform equally as well.





Mike Rehaut

No that's great. I appreciate that. I guess, secondly shifting to the gross margins and obviously you reiterated your outlook for improvement there. As we think about 3Q and 4Q, I think the math would work more or less that you’d have perhaps even a little bit of a greater sequential improvement, it seems like. If I'm kind of getting to the midpoints of your guidance ranges, let's see yeah maybe perhaps equal to or a little bit better of a sequential improvement in 4Q versus 3Q at least let's say a similar amount of improvement. So I'm just trying to get a sense -- yeah. So I'm just trying to get a sense -- okay. Good, good. So I'm just trying to get a sense for as you look for the drivers of those improvements, would you say its equal parts revenue leverage and mix? Or I guess how would you rank order the drivers of that improvement as it relates to across let's say operating leverage if mix is a contributor and obviously input cost with lumbar and such?

不,那很好。 我很感激。 我猜,其次是转向毛利率,显然你重申了你的改善前景。 当我们考虑第3季度和第4季度时,我认为数学运算会或多或少地起作用,甚至可能会有一些更大的顺序改进。 如果我有点达到你的指导范围的中点,那么让我们看看也许等于或者好一点,在第四季度与第三季度的顺序改进至少让我们说相似的改进量。 所以我只想尝试一下 - 是的。 所以我只想尝试一下 - 好吧。 好好。 所以我只是想了解一下当你寻找这些改进的驱动因素时,你会说它的平等收入杠杆和混合吗? 或者我猜你会如何排序这个改进的驱动因素,因为它涉及跨越让我们说运营杠杆如果混合是一个贡献者,显然输入成本与腰部等?


Sure. Let's start right up top right and let you guys know how we come up with our guidance ranges and how we actually estimate and forecast the rest of the year. And you could start with our backlog value. I mean, we had about $2.2 billion in backlog at the end of the second quarter, which is a pretty high percentage of our expected third and fourth quarter revenues.
So we've already priced that product. We already have budgets on the cost. We know the land cost. We know about what the studio ad will be, some of those -- some of that backlog hasn't benched through the studio process yet. But we know on average about what that takes and we basically just forecast out our deliveries on a community-by-community, division-by-division, region-by-region on a total company basis and roll off the margins coming off of that.
We're getting, obviously, more confident in the ability to forecast. This is the first time we've gone out to the full year. Because of the backlog and because of the quarter we just had and because of what we saw during the spring selling season, we definitely have a higher level of confidence in the guidance ranges that we have out there and what we're seeing.
As far as the gross margin specifically, certainly we always see better leverage in the back half of the year in the third and fourth quarters and this year is no exception. We do expect to see some pickup from higher top line revenues, leveraging the fixed cost that we have in cost of sales. And the remainder of that, exactly as you outlined does come from mix.
And not the least of which is we expect to see a higher West Coast mix later in the year where we typically do carry higher margins and we have some pretty high margin communities coming to market that will be delivering out in the fourth quarter, so all of that's helpful. And we're pretty encouraged by the year and we like the progression. Certainly after some pretty tough market conditions in the fourth quarter in early first quarter, it was welcomed to see the market come back to us in the second quarter. And to be able to build that level of backlog and have the visibility out for the rest of the year is important for our business model.


所以我们已经定价了那个产品。我们已经预算了成本。我们知道土地成本。我们知道工作室广告将会是什么,其中一些 - 其中一些积压工作尚未通过工作室流程。但我们平均知道这需要什么,我们基本上只是预测我们在整个公司的基础上逐个社区,逐个区域地分发我们的交付,并从那个区域滚出利润。 。





Our next question comes from the line of Scott Schrier with Citi. Please proceed with your question.

我们的下一个问题来自Scott Schrier与Citi的合作。 请继续你的问题。

Scott Schrier

Hi, good afternoon. I wanted to ask a little bit more on the conversions to the smaller floor plans, understanding about the lower rates. Does the lower number and the other math of costs, does that make it maybe a little more efficient to try to push more of the larger plans? How flexible are you in your communities to shift around the number of smaller plans that you had to -- as you alluded to earlier as more of a marketing tool to bring people in? And how do you think about keeping the smaller plan in the community versus potentially going back to the larger plans versus the smaller plan but possibly get more out of the design studio from both lower rates and then from your perspective the trend that you've seen in input cost and the efficiencies associated with that?

嗨,下午好。 我想再问一些关于较小楼层计划的转换,了解较低的房价。 较低的数字和其他数学成本是否会使尝试推动更多大型计划的效率更高一些? 您在社区中有多灵活地转移您必须使用的较小计划的数量 - 正如您之前提到的那样,更多的营销工具可以引入人们? 您如何考虑将较小的计划保留在社区中,而不是可能回到较大的计划而不是较小的计划,但可能从较低的费率中获得更多的设计工作室,然后从您的角度看待您所见的趋势 投入成本和与之相关的效率?


Well, you bring up an interesting topic. And what we try to toggle, we use the term bracket to median income. We try to make our product attainable by the median income in that ZIP code. And we'll look at the median income and then how can we position the product to make the most money per lot that can be attainable for the median income. So over here in the higher income area the smallest model may be 1,800 square feet. And over here it may be 1,200 square feet.
And the beauty of this for us is that it's the buyer picking it, not us building it and then selling. So we constantly are tracking, which end of the footage spectrum the buyers are tilting to in a community. If they're tilting up big, we'll push the price. We may introduce an even bigger home. If they're moving to the smaller products you push the price the best you can and everything in between. So it's pretty fluid each week in every community that's out there but we go to -- optimize how much money can we make on every lot.


而对我们来说,这就是买家选择它的美丽,而不是我们建造它然后销售。因此,我们不断跟踪,这是买家在社区中倾向于哪个镜头频谱的结尾。如果他们向上倾斜,我们会推高价格。我们可能会介绍一个更大的家。如果他们转向较小的产品,你可以尽可能地推动价格和介于两者之间的一切。因此,每周在每个社区都有相当流动但我们去 - 优化我们可以在每一批产品上赚多少钱。

Scott Schrier

Got it. And then on a year-to-date basis, it looks like your Southwest; your Southeast ASPs are up quite a bit year-on-year. Can you talk about some of the drivers whether there's any granularity into the different mix or regional considerations or potentially on a like-for-like basis how much pricing you're able to get in some of those regions?

得到它了。 然后在年初至今,它看起来像你的西南; 你的东南部平均销售额同比增长很多。 你能否谈谈一些驱动因素是否有任何粒度进入不同的组合或区域考虑因素,或者可能是基于类似的基础,您可以在某些区域获得多少定价?


Right. So you're speaking -- you said Southeast and Southwest, right? Yeah, they're both up. The -- there's a little bit of division mix particularly in the Southwest where our ASPs in the Vegas market are higher than our ASPs in the Arizona market. And they've accelerated by a higher pace as well for the year, so most of that came out of the Vegas market in the Southwest.
In the Southeast, you see it pretty much across Florida and even in the Carolinas in our business there where a lot of that is just replacement communities probably at a higher price point. I don't think -- when you look at it, we couldn't say we got 6.4% price increase in the Southeast on a year-over-year basis but there's definitely some price in there along with community mix. Outside of that, I don't know if I could get any more granular detailed on -- than that high level for you.

对。 所以你说 - 你说东南和西南,对吧? 是的,他们都起来了。 - 在西南地区有一些分工组合,特别是在西南地区,我们在拉斯维加斯市场的平均售价高于我们在亚利桑那市场的平均售价。 而且他们今年也加快了步伐,所以大部分时间来自西南的拉斯维加斯市场。

在东南部,你可以在佛罗里达州看到它,甚至在我们的商业中的卡罗莱纳州,其中很多只是替代社区可能在更高的价格点。 我不认为 - 当你看到它时,我们不能说我们在东南部的价格同比上涨了6.4%,但肯定有一些价格与社区组合。 除此之外,我不知道我是否可以获得更细致的详细信息 - 而不是那个高级别的信息。


Ladies and gentlemen, we have reached the end of our question-and-answer session as well as today’s teleconference. I would like to thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.

女士们,先生们,我们的问答环节以及今天的电话会议已经结束。 我想感谢你的参与。 您现在可以断开线路并度过美好的一天。


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