SCOTTSDALE, Ariz., April 30, 2024 /PRNewswire/ -- Taylor Morrison Home Corporation (NYSE:TMHC), a leading national land developer and homebuilder, announced results for the first quarter ended March 31, 2024. Reported net income in the first quarter was $190 million, or $1.75 per diluted share, as compared to $191 million, or $1.74 per diluted share, in the first quarter of 2023. First quarter 2024 highlights included the following, as compared to the first quarter of 2023: Net sales orders increased 29% to 3,686, driven by a monthly absorption pace of 3.7 per community versus 2.9 a year ago Home closings revenue of $1.6 billion, driven by 2,731 home closings at an average price of $599,000 Home closings gross margin of 24.0% 74,182 homebuilding lots owned and controlled, representing 6.5 years of total supply, of which 3.1 years was owned Repurchased 1.5 million common shares for $92 million Homebuilding debt to capitalization of 26.1% on a gross basis and 20.1% net of $554 million of unrestricted cash Total liquidity of $1.6 billion Expansion into the attractive Indianapolis market with acquisition of approximately 1,500 lots from Pyatt Builders, which closed after quarter-end "In the first quarter, our team delivered a strong start to the year, including better-than-expected sales activity, upside to our gross margin expectations, and efficient construction progress that we believe has set the stage for continued success through the remainder of the year. Supported by our diversified consumer and geographic strategy, we delivered 2,731 homes at a better-than-expected home closings gross margin of 24.0%, driving earnings per diluted share of $1.75 and 14% growth in our book value per share to $50. With consistent activity throughout the quarter, our net sales orders increased 29% year over year, driven by a monthly sales pace of 3.7 per community—putting us firmly on track to meet our annual sales pace goal in the low-three range," said Sheryl Palmer, Taylor Morrison Chairman and CEO. "Following this positive first quarter momentum, we are raising our full-year guidance and now expect to deliver approximately 12,500 homes at a home closings gross margin between 23.5% to 24.0% and an average closing price between $600,000 to $610,000. This improved outlook is reinforced by our healthy backlog of over 6,200 homes and includes an expected contribution of around 175 closings over the remainder of the year from our entry into Indianapolis. We are excited to add this growing market and its experienced team to our organization." Palmer continued, "The diversification of our consumer mix—from entry-level through first and second move-up to resort lifestyle buyers—is the foundation of our strong performance. We further maximize our performance by optimizing our construction efficiencies and gross margin opportunity by offering both quick-move in specs and personalized to-be-built homes aligned to our targeted consumer's needs and preferences, while our geographic diversification adds another layer of risk mitigation and growth opportunity. This unique diversification, combined with our operational capabilities, provides important competitive advantages that we believe will deliver strong growth and profitability in the years ahead, as reflected in our long-term targets for 10%-plus annual home closings growth, low-to-mid 20% home closings gross margins, mid-to-high teens returns on equity and ongoing book value growth." Business Highlights (All comparisons are of the current quarter to the prior-year quarter, unless indicated.) Homebuilding Home closings revenue increased 2% to $1.6 billion, driven by an 8% increase in home closings to 2,731, which was partially offset by a 6% decrease in average closing price to $599,000. Home closings gross margin increased ten basis points year over year to 24.0%. Net sales orders increased 29% to 3,686, driven by a 28% increase in the monthly absorption pace to 3.7 per community and a 2% increase in ending community count to 331. Average net sales order price decreased 3% to $608,000. SG&A as a percentage of home closings revenue increased to 10.4% from 9.9% a year ago. Cancellations equaled just 7.0% of gross orders, down from 14.0% a year ago. Backlog at quarter end was 6,244 homes with a sales value of $4.2 billion. Backlog customer deposits averaged approximately $57,000 per home. Land Portfolio Homebuilding land acquisition and development spend totaled $588 million, up from $321 million a year ago. Development-related spend accounted for 38% of the total versus 68% a year ago. Homebuilding lot supply was 74,182 owned and controlled homesites, up from 72,362 at year-end 2023. Controlled homebuilding lots as a share of total lot supply was 53%, unchanged from year-end 2023. Based on trailing twelve-month home closings, total homebuilding lots represented 6.5 years of total supply, of which only 3.1 years was owned. Financial Services The mortgage capture rate increased to 87%, up from 82% a year ago. Borrowers had an average credit score of 751 and debt-to-income ratio of 40%.  Balance Sheet At quarter end, total liquidity was approximately $1.6 billion, including $554 million of unrestricted cash and $1.1 billion of total capacity on the Company's revolving credit facilities, which were undrawn outside of normal letters of credit. Subsequent to quarter end, the Company received an upgraded credit rating from Moody's to BA1 from BA2 with a Stable outlook. The gross homebuilding debt to capital ratio was 26.1%, down from 30.9% a year ago. Including $554 million of unrestricted cash on hand, the net homebuilding debt-to-capital ratio was 20.1%, down from 21.0% a year ago. The Company repurchased 1.5 million shares for $92 million. At quarter end, the remaining share repurchase authorization was $403 million. Expansion into Indianapolis with Acquisition of Approximately 1,500 Lots Following the end of the quarter, Taylor Morrison purchased approximately 1,500 homebuilding lots from privately-held Pyatt Builders in Indianapolis, Indiana. Nearly 55% of the acquired lots are controlled via options and the transaction was funded with cash on hand. The expansion into Indianapolis further diversifies Taylor Morrison's geographic footprint into a healthy market supported by above-average employment growth and affordability.  Business Outlook Second Quarter 2024 Home closings are expected to be approximately 3,000 Average closing price is expected to be around $605,000 Home closings gross margin is expected to be at least 23.5% Ending active community count is expected to be between 330 to 340 Effective tax rate is expected to be approximately 25% Diluted share count is expected to be approximately 108 million Full Year 2024 Home closings are now expected to be approximately 12,500 Average closing price is now expected to be between $600,000 to $610,000 Home closings gross margin is now expected to be between 23.5% to 24.0% Ending active community count is now expected to be between 330 to 340 SG&A as a percentage of home closings revenue is expected to be in the high-9% range Effective tax rate is expected to be approximately 25% Diluted share count is now expected to be approximately 108 million Land and development spend is expected to be between $2.3 billion to $2.5 billion Share repurchases are expected to total approximately $300 million Quarterly Financial Comparison (Dollars in thousands) Q1 2024 Q1 2023 Q1 2024 vs. Q1 2023 Total Revenue $         1,699,752 $         1,661,857 2.3 % Home Closings Revenue $         1,636,255 $         1,612,595 1.5 % Home Closings Gross Margin $            393,046 $            385,082 2.1 % 24.0 % 23.9 % 10 bps increase SG&A $            170,164 $            159,021 7.0 % % of Home Closings Revenue 10.4 % 9.9 % 50 bps increase Earnings Conference Call Webcast A public webcast to discuss the Company's earnings will be held later today at 8:30 a.m. ET. A live audio webcast of the conference call will be available on Taylor Morrison's website at www.taylormorrison.com on the Investor Relations portion of the site under the Events & Presentations tab. For call participants, the dial-in number is (833) 470-1428 and conference ID is 544307. The call will be recorded and available for replay on the Company's website. About Taylor Morrison Headquartered in Scottsdale, Arizona, Taylor Morrison is one of the nation's leading homebuilders and developers. We serve a wide array of consumers from coast to coast, including first-time, move-up and resort lifestyle homebuyers and renters under our family of brands—including Taylor Morrison, Esplanade, Darling Homes Collection by Taylor Morrison and Yardly. From 2016-2024, Taylor Morrison has been recognized as America's Most Trusted® Builder by Lifestory Research. Our strong commitment to sustainability, our communities, and our team is highlighted in our latest Environmental, Social, and Governance (ESG) Report on our website. Forward-Looking Statements This earnings summary includes "forward-looking statements." These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, the words ""anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "may," "will," "can," "could," "might," "should" and similar expressions identify forward-looking statements, including statements related to expected financial, operating and performance results, planned transactions, planned objectives of management, future developments or conditions in the industries in which we participate and other trends, developments and uncertainties that may affect our business in the future. Such risks, uncertainties and other factors include, among other things: inflation or deflation; changes in general and local economic conditions; slowdowns or severe downturns in the housing market; homebuyers' ability to obtain suitable financing; increases in interest rates, taxes or government fees; shortages in, disruptions of and cost of labor; higher cancellation rates of existing agreements of sale; competition in our industry; any increase in unemployment or underemployment; the seasonality of our business; the physical impacts of climate change and the increased focus by third-parties on sustainability issues; our ability to obtain additional performance, payment and completion surety bonds and letters of credit; significant home warranty and construction defect claims; our reliance on subcontractors; failure to manage land acquisitions, inventory and development and construction processes; availability of land and lots at competitive prices; decreases in the market value of our land inventory; new or changing government regulations and legal challenges; our compliance with environmental laws and regulations regarding climate change; our ability to sell mortgages we originate and claims on loans sold to third parties; governmental regulation applicable to our financial services and title services business; the loss of any of our important commercial lender relationships; our ability to use deferred tax assets; raw materials and building supply shortages and price fluctuations; our concentration of significant operations in certain geographic areas; risks associated with our unconsolidated joint venture arrangements; information technology failures and data security breaches; costs to engage in and the success of future growth or expansion of our operations or acquisitions or disposals of businesses; costs associated with our defined benefit and defined contribution pension schemes; damages associated with any major health and safety incident; our ownership, leasing or occupation of land and the use of hazardous materials; existing or future litigation, arbitration or other claims; negative publicity or poor relations with the residents of our communities; failure to recruit, retain and develop highly skilled, competent people; utility and resource shortages or rate fluctuations; constriction of the capital markets; risks related to instability in the banking system; risks associated with civil unrest, acts of terrorism, threats to national security, the conflicts in Eastern Europe and the Middle East and other geopolitical events; the scale and scope of current and future public health events, including pandemics and epidemics; any failure of lawmakers to agree on a budget or appropriation legislation to fund the federal government's operations (also known as a government shutdown), and financial markets' and businesses' reactions to any such failure; risks related to our substantial debt and the agreements governing such debt, including restrictive covenants contained in such agreements; our ability to access the capital markets; the risks associated with maintaining effective internal controls over financial reporting; provisions in our charter and bylaws that may delay or prevent an acquisition by a third party; and our ability to effectively manage our expanded operations. In addition, other such risks and uncertainties may be found in our most recent annual report on Form 10-K and our subsequent quarterly reports filed with the Securities and Exchange Commission (SEC) as such factors may be updated from time to time in our periodic filings with the SEC. We undertake no duty to update any forward-looking statement, whether as a result of new information, future events or changes in our expectations, except as required by applicable law.   Taylor Morrison Home Corporation Consolidated Statements of Operations (In thousands, except per share amounts, unaudited)   Three Months EndedMarch 31, 2024 2023 Home closings revenue, net $         1,636,255 $         1,612,595 Land closings revenue 7,225 4,520 Financial services revenue 46,959 35,149 Amenity and other revenue 9,313 9,593 Total revenue 1,699,752 1,661,857 Cost of home closings 1,243,209 1,227,513