United Homes Group, Inc. Q4 FY2023 earnings call

• Strategic initiatives in 2023: Completed business combination of Great Southern Homes and Diamond Head Holdings, acquired Herring Homes, Rosewood Communities, and Creekside.
• Land acquisition/development: Active in 2023, focused on land-light strategy, expanded relationships with land bankers.
• Market focus: Remained on affordable segments, average closing price $316,000 in 2023, starting to broaden product portfolio.
• Q4 operational performance: Net new orders 294 (+8% vs Q4 2022), net new orders Jan-Feb 2024: 260, lower cancellation rates (10.1% Q4, 6.2% Jan-Feb), started 308 homes in Q4 (+75% vs 2022), cycle times down to ~3 months.

For the fourth quarter of 2023, revenue was $117 million compared to $115 million in the fourth quarter of 2022. Full year 2023 revenue was $421 million versus $477 million in 2022. Home closings in the fourth quarter of 2023 were 387 homes, flat year-over-year with 389 homes in the fourth quarter of 2022. Full year 2023 closings were approximately 1400 homes compared to ~1600 homes in 2022. Average sales price in the fourth quarter of 2023 was $320,000 for 338 production-built homes, compared to $300,000 in the fourth quarter of 2022 for 371 production-built homes. Full year 2023 average sales price was $316,000 for ~1300 production-built homes, versus $296,000 in 2022 for ~1500 production-built homes.

• Margin outlook: Flat year-to-year, adjusted margin ended 2022 around 21.5%, financing incentives impact margins.
• Community count expansion: High single-digit to low double-digit organic store count increase in 2024.

• Forward-looking statements subject to numerous assumptions, risks, and uncertainties as per SEC filings.
• Market conditions and interest rates impacting margins.

Q: Shelton, expand on pricing power in communities and lower vs higher priced product performance.

A: Saw price increases in ~10-15% of communities, good margins in lower priced product, high conversion rates with low cancellations.

Q: Plans for community count expansion in 2024?

A: High single-digit to low double-digit organic store count increase.

Q: Gross margins, credit facility?

A: Margin outlook flat, no immediate plan to increase credit facility, comfortable with debt to book value around 2 times.