Taylor Morrison Home Corporation (NYSE:TMHC) Q1 2022 Earnings Conference Call April 27, 2022 8:30 AM ET

Company Participants

Mackenzie Aron - Vice President, Investor Relations

Sheryl Palmer - Chairman and Chief Executive Officer

Louis Steffens - Chief Financial Officer

Erik Heuser - Chief Corporate Operations Officer

Conference Call Participants

Carl Reichardt - BTIG

Alan Ratner - Zelman Associates

Jay McCanless - Wedbush

Alex Rygiel - B. Riley Financial

Ashley Kim - Barclays

Paul Przybylski - Wolfe Research

Ken Zener - KeyBanc

Ryan Frank - RBC Capital Markets

Dan Oppenheim - Credit Suisse

Alex Barrón - Housing Research Center

Operator

Good morning and welcome to Taylor Morrison’s First Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce you to Mackenzie Aron, Vice President of Investor Relations. Please go ahead.

Mackenzie Aron

Thank you and good morning. Before we get started, let me remind you that today’s call, including the question-and-answer session, includes forward-looking statements that are subject to the Safe Harbor statement for forward-looking information that you will find in today’s earnings release, which is available on the Investor Relations portion of our website at www.taylormorrison.com. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those factors identified in the release and in our filings with the SEC and we do not undertake any obligation to update our forward-looking statements. In addition, we will refer to certain non-GAAP financial measures on the call, which are reconciled to GAAP figures in the release.

Now, let me turn the call over to our Chairman and Chief Executive Officer, Sheryl Palmer.

Sheryl Palmer

Thank you, Mackenzie and good morning everyone. I am pleased to also be joined today by Louis Steffens, our Chief Financial Officer and Erik Heuser, our Chief Corporate Operations Officer. I will share the highlights from this quarter as well as an update on the market environment and the favorable positioning of our portfolio in today’s rising rate environment. After my remarks, Erik will discuss our land supply and disciplined investment strategy and Louis will give a detailed review of our quarterly results and financial guidance.

To begin, we are pleased to share the results of our first quarter performance, which exceeded our expectations across each of our key operating metrics despite the challenges facing our industry from ongoing supply chain constraints, further inflationary pressure and the swift rise in mortgage rates. Among the highlights, our home closings gross margin improved 450 basis points year-over-year to the strongest level since 2013. Our SG&A percentage declined 120 basis points to the lowest first quarter level ever and our return on equity improved nearly 900 basis points to the highest return since 2013. Each of these record results reflect the combination of our acquisition journey, which began nearly 10 years ago and more than tripled our annual deliveries to add critical scale and diversification to our business.