Greetings and welcome to the Century Communities Third Quarter 2015 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host John Kolstoe, Vice President of Finance. Thank you, you may now begin.

Good afternoon. We would like to thank you for joining us today for Century Communities third quarter 2015 earnings conference call. After the market closed today, we distributed a press release detailing our third quarter financial results, which can be found in the Investor Relations section of our website at www.centurycommunities.com. Before the call begins, I would like to remind everyone that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in the forward-looking statements. The company undertakes no duty to update any forward-looking statements that are made during the course of this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call. The company's presentation of this information is not intended to be considered in isolation or is a substitute for the financial information presented in accordance with GAAP. Management will be available after the call should you have any questions that did not get answered. Hosting the call today are Dale Francescon, Chairman and Co-Chief Executive Officer; Rob Francescon, Co-Chief Executive Officer and David Messenger, Chief Financial Officer. With that, I'll turn the call over to Dale.

Thank you, John. Today on the call, I will review our operating highlights. Rob will then discuss our homebuilding markets. Afterwards, Dave will follow up with further details on our financial results and balance sheet. After our prepared remarks, we will open the lines for questions. We are extremely pleased with our team's hard work and dedication to accomplishing our full year 2015 growth and profit objectives as we strive to continue building our position as a top U.S. homebuilder. While we experienced bearing dynamics from market-to-market during the third quarter, our overall results were positive, highlighting the benefits or diverse footprint across the nation. We are pleased with our ability to more than double our net income to $10.6 million and deliver record earnings of $0.50 per share. This EPS improvement was accomplished as a result of several factors, which underscore the strength of our strategy and approach to market. First, our deliveries increased 124% to 578 homes, accounting for 98% growth in our home sales revenues to $179.8 million. This improvement was largely driven by a healthy pace of activity in our most recently acquired Southeast operations, along with strong results in Colorado and Las Vegas. Second, we have been successful in open communities in new and existing markets to capture incremental demand and traffic to fuel our growth. Third, our ASP was down 12% year-over-year, mainly due to the mix impact from home deliveries from the Southeast. However, our organic ASP increased 9% excluding our Southeast acquisition. Fourth, we continue to carefully balance our focus on growth, while maintaining a sharp eye on margins and costs in order to maximize our profits. Our adjusted homebuilding gross margin percentage of 22.8% was up 150 basis points sequentially, reflecting a better mix. We are vigilant in controlling our fixed…

Thank you Dale and good afternoon everyone. We remain committed to entering good markets with attractive long-term fundamentals, strengthening our current market positions and supporting our growth initiatives with a prudently leverage balance sheet. We ended the quarter with a high quality backlog of 904 homes up 92% with a dollar value of $325 million, representing considerable growth compared to 472 homes and a $190 million in the same period a year ago. This growth was driven by an increase in net new contracts during the past year, including 477 net new contracts in the third quarter 2015 compared to 247 net new contracts in the prior year quarter. The third quarter orders represented an increase of 93% was stable demand in our existing Colorado and Las Vegas markets, along with contribution from our Atlanta operations more than offsetting softer trends in Texas. Specifically and looking at our markets, we expect overall demand trends to vary across our markets over the next several quarters as the housing recovery reestablishes it sustained upward trajectory. Atlanta which comprises our Southeast operations continues to represent an increasing mix of our land inventory and backlog. Demand is strong for our product offerings and labor is tight but manageable. Our mix of first-time homebuyers are most heavily represented in this market, which is been a contributing factor to the health of this housing market. In Colorado, we increased deliveries by 51% and had a highly favorable mix of deliveries compared to the year ago quarter. Overall market fundamentals remain stable. Since the beginning of the third quarter, we have opened five new communities in Colorado. In Las Vegas, we are growing our deliveries, improving our market position and expanding our margins. New communities opened in the first half of 2015 are performing well with stable…

Thank you, Rob. In the third quarter, we continue to increase our revenue at an exceptional pace and drive sequential improvement in our gross margin percentage to deliver record earnings of $0.50 per share compared to $0.19 per share in the prior year quarter. For the third quarter, our net income improved to $10.6 million, representing an increase of 156% compared to $4.1 million in the same quarter last year, largely reflecting higher home deliveries and favorable G&A leverage. Adjusted EBITDA for the third quarter was $19.9 million, up 136% compared to $8.4 million in the third quarter 2014. Home sales revenues for the third quarter were $179.8 million, an increase of 98% compared to $90.7 million in the prior year quarter. This improvement in revenues was driven by a 124% increase in home deliveries to 578, mainly attributable to the expansion of our platform over the past year. The growth in the number of closing year-over-year was partially offset by the average sales price of $311,031 on the homes we delivered in the quarter compared to $351,687 during the prior year quarter, mainly the result of a change in our regional and product mix from our expanding market presence primarily into the Southeast. Gross margin percentage on homes in the third quarter was 21.3% compared to 21.9% in the third quarter 214. Excluding capitalized interest and purchase accounting impacts, our cost of sales, our adjusted gross margin percentage in the quarter was essentially stable at 22.8% versus 23.1% in the prior year quarter, but up from 21.3% sequentially. SG&A as a percentage of revenue was 12.3%, an improvement from 13.9% in the prior year quarter, and our higher home sales revenues and the successful integration of our regional platforms more than offset the higher personnel costs and additional investments to support a higher number of communities. Turning now to our balance sheet and liquidity. We ended the third quarter with total inventories of $741.6 million and total assets of $860.1 million. Our total liabilities were $465.1 million, including total debt of $362.3 million. In July, we successfully expanded our unsecured credit facility to $200 million with a $100 million accordion feature. We believe our balance sheet and capital resources firmly position us to continue investing in attractive land parcels and pursuing targeted acquisitions. In closing, we are pleased with our third quarter results. As we look to the fourth quarter, we anticipate the momentum in our business to continue. As a result, we are tightening our full-year 2015 outlook and expect deliveries to be 2,350 to 2,500, and home sales revenues to be in a range of $700 million to $750 million. We expect our active selling community count to be between 90 and 95 communities at year end. We are firmly positioned to realize another solid year of continued profitability and improvement in our business. Operator, can you please open up the lines to Q&A.

[Operator Instructions] Our first question is from William Long from JPMorgan. Please proceed with your question.

Good afternoon guys. My first question is on the gross margin, you know a nice improvement on a sequential basis up 150 basis points. And I think you guys have mentioned that that was reflecting better mix. So I think on the last call in August you guys have talked about just a gross margins, so excluding interest and purchase accounting in the back half similar to what you guys saw in the first half. So I was just wondering if this is more of a shifting of some higher margin homes into third quarter, and so should we expect that to level out as we get into the fourth quarter?

Hi William, it’s Dave. I would say that you're looking at the fourth quarter modeling for the full year, for the full year we’re running 21.9% on a gross margin basis where our guidance have been roughly 21.5% or so. The mix shift that we experienced in the third quarter obviously being very beneficial from the third quarter, I think that for your guidance you can still be using a 21.5% in that area for the fourth quarter because a permanent mix shift going into the end of the year.

Okay. So in the fourth quarter you guys are still expecting to be around 21.5%?

Yeah. We haven't changed our expectations.

Great. And just with regards to the markets that you guys are operating in, I mean are you seeing incentive levels, pricing power similar to what you are seeing earlier this year? As there been any change in terms of your ability to push price, obviously there is a balance between price and pace just on like-for-like basis. Have you guys seen any change there as well as change in incentive levels?

Well, this is Dale. We haven't seen much change. It's been fairly stable in terms of pricing. When we look at Atlanta, we have pricing power pretty much across all of our subdivisions and our other markets that it's really more subdivision-by-subdivision in terms of the pricing power.

Okay, great. And then just lastly if I could, could you talk about any trends in October that you're seeing right now in terms of [indiscernible] giving us some color with orders in October?

In terms when we look at October, it's kind of a continuation of what we’ve seen in the third quarter, there is obviously some seasonality as we get later into the year, but we’ve seen nothing that has really changed in, either up or down. With the exception of in Central Texas, we've seen a pickup so far in October and we’re optimistic that maybe there is a trend, but it's too early to tell.

Okay, appreciated. I’ll get back in queue. Thanks, guys.

Our next question is from Nishu Sood from Deutsche Bank.

Thank you. I want to ask about obviously that’s a very popular topic of delivery delays and labor issues. You touch on it a little bit, obviously excited it’s in effect, [indiscernible] but if and when you’re very substantial proportion of closings in Colorado and in Texas, you know the closings guidance is great. So your community count, the additional I think five or six communities in Colorado this quarter. It doesn't seem to be affecting you as much as some of the other builders. Maybe, you know, obviously you’ve got a very strong growth trajectory, so maybe it hasn’t come in quite as strong as you were expected that the Southeast may be as providing some offset. I am just wondering if you can go through your thoughts on that, how bad is it out there for you folks? How much of an affect that having and how are you managing through it?

Nishu, thanks for the question. I mean we are immune to labor challenges in the market. In Colorado we have a season trade partner base that we built up over the years and that’s helping us to mitigate some of that, but with that said, cycle times have increased in certain subdivisions. At Atlanta based on our volume there, the labor site is tight, but we’re able to manage through it. And you know, we’re not immune, we’re making it work and getting through it.

Got it. I mean, if you look at your results and what – obviously [indiscernible] you provide the guidance and you haven’t change that much. Would you have expected stronger results? I mean I am just trying to understand quantify the impact that it's had on your business [indiscernible] closings delay or whether there is been any margin pressure slowdown in sales pace perhaps to equalize demand with the delivery capabilities?

Nishu, its Dave. I would say that we would have expected a little bit stronger closings, as we now experience several wanted [indiscernible] to keep in mind that as we’ve been talking our investors and analysts partners that we've been dealing with this Colorado market for the past couple of years. So some of that we've already considered in our guidance as we’ve been forecasting our numbers out. So it's not new information to ask if there is been labor and trade issues here in Colorado and we build that into our business plans and our forecast.

Got it, it makes sense. And then second question, 1,300 lots I think you said to put under control or purchased in the third quarter and mostly finished a very strong pace of acquisition. Most indicators out there anecdotal evidence say that it's very difficult to get finished lots and you know the deals are difficult to pencil, but again the data point which kind of run contrary to the trans which are generally seem to be you enter the [indiscernible] industry. So I was just wondering if you could kind of walk us through that. How are you finding success? Are these you know the shortage of develop lots seem to be mainly in A and B closer in – locations or at least further out locations? Are there a more entry level, whether it maybe some more abundance, so it is most in Atlanta, where are these acquisitions. So just some color on that [indiscernible].

Good question. We’re always what we're doing in Atlanta. We're always focused if we can on finish lots if we can meet our investment criteria. When we look specifically at the third quarter just under 1,000 of the 1,323 lots were in the Atlanta market, which still has the benefit where you can find located finished lots that meet the investment criteria. And so, that’s part of the reason why in that market that still exists. When you look at some of our other markets, it’s harder to find finished lots and we have full development teams in house that will finish the lots for us, but generally speaking, Atlanta still has that benefit right now.

Got it. Thanks. Appreciate the color.

Our next question is from Jay McCanless from Sterne Agee.

Good afternoon guys. I wanted to ask first on the gross margin for the fourth quarter the 21.5% number is that the exclusive of interest and purchase accounting marks?

Yes, it is.

Okay. The second question order rate was impressive this quarter, but the community count was about nine higher than we thought it was going to be. Honestly I would have expected a little bit more growth on the order side of that new communities opening up. Was there a timing issue in there or were communities in one area [indiscernible] making up for weakness in another?

Part of it was timing as you mentioned. The weather delays that we experienced in the second quarter pushed off the opening of some of the communities to a later date. So as we look at that what we're giving you is where we were at the end of the quarter, but we had anticipated that they would open sooner.

Okay. And then just on SG&A in terms of where the community count is now or you think they're going to go in '16. Should we be modeling a little bit higher dollar or SG&A margin that we might have in the past just as you guys get through this initial build out of new communities and expand it Atlanta et cetera, or do you feel like you have a pretty good run rate now?

This is Dave, Jay. I would say that we’re achieving a pretty good run rate now that if you look at what we’ve done with our SG&A is we’ve been ramping up the operations over the last two years. In '13 and '14 we were at 13.8% and 13.3% respectively, and then we've been coming down quarter-over-quarter for the last three quarters to where we’re today at 12.3%. So, I think that as we’ve been ramping our communities and adding markets to our platform, we are getting close to a good run rate number. Look for improvement, but I think we’re going to begin to a point where we set the flat now a little bit.

Okay, perfect. Thanks guys for sharing

[Operator Instructions] Our next question is from Patrick Keeley from FBR. Please proceed with your question.

Hi guys. Thanks for having me on. Most of my questions have been answered, so just one on the M&A environment, you talk about acquisition still being a large partier growth story. So given kind of the headlines we’ve seen in the space quarter over the past three months. Have you seen any changes and we’ll call it the bid ask spread [indiscernible] between buyers and sellers here?

Every deal is different, Patrick. And as we look at it over the last couple years, we've looked at a tremendous number of transactions and some of them meet the underwriting criteria, and the vast majority of them don't. And so, when I look at what's happened recently, I don't think there is any different than what we've seen in the past.

Thank you, guys.

Thanks, Patrick.

Ladies and gentlemen we have reached the end of the question-and-answer session. I’d like to turn the call back to Dale Francescon for closing remarks.

Thank you operator and thank you again to everyone for joining us today. We look forward to speaking with you again next quarter.

Thank you. This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.