Operator: Good morning, and thank you for joining us. Today for the Hovnanian Enterprises fiscal two thousand twenty six third quarter Earnings Conference Call. An archive of the webcast will be available after the completion of the call and run for 12 months. This conference is being recorded for rebroadcast and all are currently in a listen-only mode. Management will make some opening remarks about the third quarter results and then open the lines for questions. The company will be broadcast-- excuse me, webcasting a slide presentation along with the opening comments from management. The slides are available on the Investors page of the company's website at www.khov.com. Those listeners who would like to follow along, should now log in to the website. I would now like to turn the call over to Jeffrey O'Keefe, vice president Investor Relations. Jeffrey, please go ahead.
Jeffrey T. O'Keefe: Thank you, Lisa, and thank you all for participating in this morning's call to review the results for our third quarter. All statements on this conference call that are not historical facts should be considered as forward looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 2000. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements of the company to be materially different from any future results, performance, or achievements expressed or implied by the forward looking statements. Such forward looking statements include, but are not limited to statements related to the company's goals and expectations with respect to its financial results for future financial periods. Although we believe that our plans, intentions, and expectations reflected in suggested by such forward looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. By their nature, forward looking statements speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward looking statements as a result of a variety of factors. Such risks, uncertainties and other factors are described in detail in the sections entitled Risk Factors and Management's Discussion and Analysis, particularly the portion of MD&A entitled Safe Harbor Statement in our Annual Report on Form 10-K the fiscal year ended October 31, 2025, and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable security laws, we undertake no obligation to publicly update or revise any forward looking statements whether as a result of new information, future events, changed circumstances or any other reason. Joining me today are Ara K. Hovnanian, chairman and CEO, Brad O'Connor, CFO, David Mitrisin, Vice President, Corporate Controller, and Paul Eberly, vice president, finance and treasurer. I will now turn the call over to Ara.
Ara K. Hovnanian: Thanks, Jeffrey. I will begin with a review of our third quarter results and discuss how we continue to execute our strategy in a housing market that remains challenging. Brad will then review the quarter in more detail and discuss our guidance for next quarter before we open the call for questions. To begin, it is clear that the macro environment has been challenged World events as well as high mortgage rates, high gas prices, inflation, and other factors have caused potential homebuyers to hesitate. While website traffic has remained strong, indicating long term homebuying interest buyers remain slow to make the final decision to move forward. If you turn to slide 5, you can see that total revenues were $706 million slightly above the midpoint of our guidance range that we provided for the quarter. Honestly, we are hoping for a little more, but with almost a third of our deliveries for the quarter coming from new sales in the quarter, it is harder to predict. Gross margin was 14.6%, also above the midpoint of our guidance range. We believe gross margin troughed in the first quarter and we have now seen improvement in the second and third quarters and are guided to continued and more-- excuse me, guiding to continued and more significant improvement in the fourth quarter, and we will describe that more in a moment. Our SG and A ratio was 12.3% which was better than our guidance range. Income from unconsolidated joint ventures was $3 million, which was within the guidance range but below the midpoint and certainly below our expectations. Adjusted EBITDA was $32 million, also within our guidance range. And finally, adjusted pretax was a loss of $2 million slightly below the bottom of our guidance range of $0. The short the shortfall was primarily driven by income from unconsolidated joint ventures, which was the 1 area that came in below the midpoint of our guidance. This was substantially driven by delays at our newest joint venture deliveries. If JV income had been at the midpoint or if new QMI sales were just a little bit stronger, we certainly would have been within the guidance range. We are disappointed that our adjusted pretax income came in slightly below the guidance. Since the fourth quarter of 2020, we have consistently provided guidance 1 quarter in advance and this was the first time in 23 quarters that adjusted pretax income finished below the guidance range. As we discussed for the past several quarters, our strategy has been to maintain sales pace while carefully working through older land inventory that was acquired before today's higher incentive environment became the norm. At the same time, we are bringing on newer communities where the underwriting economics already reflect today's market conditions. Despite the weaker than anticipated level of profitability for the third quarter, the transition from old inventory to new continues to make progress. Now, turning to slide 6. Compared with last year's third quarter, our results continue to reflect the reality of a housing market operating under substantially higher mortgage rates elevated incentives, and concern about global instability which has affected our top line as well. Although the metrics on this slide are below last year's level, we are continuing to manage through the cycle to position ourselves for long term returns. Our inventory position is healthier today, Our land portfolio is significantly better aligned with the market conditions, and our balance sheet remains substantially stronger than it was a few years ago. Slide 7 shows our quarterly contracts declined slightly by 57 homes to 1.36 thousand. The decline reflected the impact of political and financial volatility during the quarter, which contributed to more cautious buyer behavior, as I mentioned just a moment ago. We continue to believe that there is meaningful underlying demand for housing Consumers are visiting communities and shopping for new homes. The challenge remains converting that interest into contracts in an environment where buyers continue to react to the latest news they read. Even with that modest decline, we believe our sales pace remained resilient relative to the broader market backdrop. Looking at our monthly contracts on Slide 8, the choppiness we experienced early in the year continued throughout the third quarter. Since hostilities began with Iran, in March, heightened periods of heightened geopolitical uncertainty. The presence of or absence of a ceasefire, and concerns about access to 2 different straits have generally appeared to move in the same direction as our sales pace. As of yesterday, interestingly, month-to-date contracts in August were up 3% from last year. Consumers are still researching communities as evidenced by the strong website traffic in July 2026, website visits were higher than in all but 1 year since 2019. And the last 2 weeks were higher than any year since 2019. However, the homebuyer decision making process remains uneven as we have been discussing with consumers highly sensitive to changes in affordability and overall news and confidence. When affordability improves or confidence strengthens, we believe this greater website traffic should lead to increased foot traffic. In turn, a larger portion of that foot traffic should convert to sales, but monthly recent monthly sales clearly show buyers are remaining cautious at the moment. Turning to slide 9. Our sales pace remained healthy by historical standards despite the difficult market backdrop. with 9.4 contracts per community, were just above the historical averages. When you look at contracts per community on a monthly basis, as we do on slide 10, you can see that same uneven pattern we have been discussing. We started the quarter with a stronger year over year comparison in May but the pace softened as the quarter progressed with June roughly in line with last year and July below last year's level, So far, as we mentioned, August is just a little stronger than last year. This pattern of ups and downs is consistent with what we said earlier. Our strategy remains relatively straightforward, maintain a healthy sales pace, keep moving inventory, burning through older vintage land, and make certain standing inventory does not build unnecessarily. We believe that approach supports stronger long term returns than attempting to maximize near term pricing at the expense of absorption. 1 area we continue to monitor is incentive activity. As you can see on slide 11, incentives remain elevated relative to historic levels. However, after increasing for several years, incentive levels have decreased from the first quarter to the second quarter to the third quarter. And this happened even though mortgage rates increased during the quarter. Importantly, today's incentive environment is already incorporated into our new underwriting assumptions for the more recent land acquisitions. That distinction definitely matters. When we are delivering homes, from land purchased several years ago, the higher incentives greatly compress margins. When we are delivering homes from communities that were acquired or underwritten with high incentives already assumed, those communities should generate better gross margins. That transition remains 1 of the most important drivers of our future margin recovery. As incentives have come down over the past couple of quarters, our gross margin has improved. On Slide 12, you can see that gross margins have increased sequentially since reaching a low point in the first quarter. This is now 2 quarters of sequential improvement And at the midpoint of our guidance, we expect a larger sequential increase in the fourth quarter to 15.8%. Another indicator that we continue to monitor closely is the percentage of communities where we are able to raise prices or reduce incentives. As you can see on slide 13, we were able to do so in 31% of our communities during the third quarter. We view this as a balanced signal It shows that affordability and confidence continue to limit broad based pricing power, but it also demonstrates that meaning that a meaningful portion of our communities can still support improved net pricing where inventory is well controlled and the local competitive environment is more balanced. If you turn to slide 14, 1 of our objectives over the last 18 months has been to bring QMI inventory to a more balanced level given sales, and we are making substantial progress. Although QMI inventory increased slightly to 6.7 QMIs per community, We are very comfortable with our position today. And we believe our inventory is well aligned with current demand. On slide 15, you can see total QMI inventory has fallen meaningfully by 29% from the levels we experienced in early 2025. This improvement gives us greater flexibility allows us to be more selective with incentives, better manage pricing, and increase the percentage of sales that are generated from to-be-built homes, which generally carry stronger margins. Our teams have done an outstanding job matching starts to demand and maintaining inventory across the portfolio. In the third quarter of 2020 6, 33% of our homes that were delivered, of the homes we delivered, were both sold and closed within the same quarter. It makes it difficult to predict next quarter's results, as we said, Overall, our backlog conversion ratio was 74% and it is still much higher than our historical average of 57% since the third quarter of 2000. So to summarize, while the housing market remains challenging, and affordability continues to weigh on customers, we delivered results that were generally within guidance and maintained sales momentum during the quarter. We are making meaningful progress as newer communities underwritten for today's market become a larger part of our business. With that, I will turn the call over to Brad to discuss our liquidity, land position, and outlook in more detail.
Brad G. O'Connor: Thank you, Ara. Turning to slide 16. We finished the third quarter with liquidity well above our target range. The strength of our liquidity continues to provide significant flexibility as we evaluate new land opportunities, support community count growth, and maintain a disciplined approach to capital allocation. While we certainly like to deploy additional capital into attractive opportunities, we remain committed to maintaining our underwriting discipline and will not pursue growth at returns that fail to meet our standards. Turning to slide 17, our debt maturity profile remains well laddered. With no significant near term maturities. This provides us with continued flexibility as we manage through the current market environment the refinancing transaction we completed last fall was an important step in extending our maturity runway and further strengthening the balance sheet. On Slide 18, we show that over the last several years, we have meaningfully reduced debt while simultaneously increasing book equity, As a result, our net debt to cap ratio has improved from where it stood just a few years ago. Today, we remain firmly focused on further strengthening the balance sheet while maintaining the flexibility necessary to capitalize on future growth opportunities. Turning to Slide 19. We ended the quarter with 147 communities, relatively unchanged from 146 communities at the same time last year. Although our total community count was essentially flat year over year, there was meaningful movement within the portfolio. We opened 62 new communities and closed 61 others underscoring the continued refresh of our community base. We continue to expect our community count to increase sequentially in the fourth quarter as newer communities come online. While we have talked about growing community count in the past, it is not grown as quickly as we had anticipated, due in part to our decision to walk away from certain land contracts during due diligence when they did not meet our underwriting standards. At the same time, we remain committed to our land light approach. As you can see on slide 20, our own lot position continues to decrease. While our option lot position grew sequentially for the first time in 6 quarters as we replaced delivered lots with higher margin new lot positions. Turning to Slide 21, option lots represent the vast majority of our control lot portfolio, allowing us to maintain flexibility while limiting invested capital. Here you can see that the percentage of option lots has grown from 46% the third quarter of 2015 to 87% in the third quarter of 2020 6, which is our highest percentage of option lots ever. Slide 22 shows the age of our lot position both owned and optioned. Broken down by the year each lot was controlled. The number in each bar represents the total lot controlled in that year, and the number below each bar indicates the percentage of incentives used on homes delivered during that year. Our controlled opposition remains substantial, but more importantly, the quality of that lot position continues to improve. At the end of the third quarter, 82% of our lots were controlled in fiscal year 23 or later. After incentives had moved substantially above historical levels. That is a significant shift in the portfolio. It means the vast majority of our current lot position was underwritten with today's incentive environment already reflected in the economics rather than based on assumptions from the time when incentives were much lower. An increasing percentage of our deliveries are expected to come from lots acquired under today's market assumptions. As those communities become a larger part of our mix, we believe they will provide stronger margins and stronger returns than many of the communities they are replacing. The land market continues to present select opportunities that meet our underwriting hurdles, and we remain patient and disciplined our land evaluation. Given the continued variability in the sales environment, and the timing effects associated with QMI deliveries, we are providing financial guidance for the next quarter only. Our outlook assumes market conditions remain broadly stable with no major increases in mortgage rates tariffs, inflation, cancellation rates, or construction cycle times. As a greater portion of our deliveries come from QMIs, quarterly results can be more sensitive to closing timing and mix. Our forecast includes ongoing use of mortgage rate buy downs and similar incentives and it does not include any changes to SG&A from phantom stock expense tied to stock price movement from the $123.90 closing price at the end of the third quarter of fiscal 2026. On Slide 23, we show our guidance for the fourth quarter. We expect continued progress as more homes are delivered from our newer communities. We expect total revenues between $800 million and $900 million Adjusted gross margin is expected to be in the range of 15% to 16.5%. We expect SG&A as a percentage of total revenues to be between 10.5% to 11.5%. Which remains above our long term objective. We expect income from joint ventures to be between $10 million and $20 million and our guidance for adjusted EBITDA is between $50 million and $65 million Our expectation for adjusted pretax income for the fourth quarter is between $15 million and $30 million We remain focused on execution and believe our positioning today supports continued improvement moving forward. I will now turn it back over to Ara for some closing remarks.
Ara K. Hovnanian: Thanks, Brad. When we look at this housing cycle, we are focused less on the results of a single quarter and more on how we are positioned for the years ahead. Turning to slide 24, these 5 priorities on the slide, which I will describe more in detail in a moment, reflect the strategic framework that we are using to guide our operating decisions. Slide 25. Sales pace leadership. Here, we show that we are maintaining 1 of the stronger sales pace in the industry. it is not happening by accident. We are keeping communities actively selling, aligning prices, incentives, and production with local demand, and staying focused on converting consistent sales velocity. In a market where affordability remains challenging, and buyer confidence can shift quickly sustaining this level of absorption is an important part of our strategy. We want to burn through the older land, as we have said many times, and perform for our land sellers as well. You can see on this slide how our contracts per community would stack up against our peers who report on a June quarterly basis. Our contracts per community of 10.2 ranks us third out of these peers. On slide 26, we show that our sales pace increased year over year while many builders were flat or down. Again, ranking us third if we had a June quarter end. In our view, that demonstrates we are getting more than our fair share of the market, even in a difficult selling environment. By staying disciplined on pricing incentives and production, we are keeping buyers engaged in converting demand into contracts at a rate that compares favorably with the industry even as it is going through a difficult time. On slide 27, we show another important element of our strategy, capital efficiency. At 87%, option lots. We control more of our lots through options than the majority of our peers. That allows us to secure future community growth while limiting the amount of capital tied up in land. By using options with sellers and strategic land partners, we can minimize the investment in long duration communities and maintain the flexibility to align our land pipeline with actual market demand. On slide 28, we show that we have the second highest inventory turn rate in the industry and this is a relative position that we have maintained over time. This reflects disciplined execution across the business, keeping our build cycles efficient, converting starts into deliveries quickly, and limiting standing inventory. Faster inventory turns help preserve our pricing power reduce carrying costs, and allows us to recycle capital more efficiently into new communities and other growth opportunities. On slide 29, you can see how our higher percentage of option lots combined with higher inventory turns translates into 1 of the highest EBIT ROIs among our small to midsized peers. This is the result of evaluating decisions through the lens of inventory efficiency and return on capital, allocating capital to communities and opportunities where we see the best returns, balancing growth, margins, and cash flows, to maximize long term value creation. On slide 30, we highlight the continued shift in our portfolio toward higher price points and higher value buyer segments. As we make this shift, we are reducing our exposure to the most competitive entry level price points and placing a greater emphasis on move up buyers and active adult housing. To support that strategy, we recently hired Deborah Blake a veteran active adult lifestyle expert to bring additional focus to our 4 Seasons brand and communities where we can differentiate through elevated design, quality, and included features. We believe this portfolio shift can help broaden our appeal to buyers who have greater financial flexibility while supporting stronger margins and returns over time. Taken together, these slides show how a strategy focused on generating sales pace capital efficiencies, and returns can be better for the long term than just simply growing for growth's sake or chasing margin. We are maintaining 1 of the strongest sales paces in the industry capturing more than our fair share of demand and using our land light model and faster inventory turns to drive 1 of the strongest EBIT ROI return profiles among our small and midsized peers. As we shift more of our portfolio to higher value buyer segments including move up and active adult communities, we believe we are positioning the company for stronger margins better capital returns, and long term shareholder value creation. The housing market undoubtedly remains challenging, and we do not pretend otherwise. But we like where we are positioned, We have great people, strong liquidity, a disciplined land strategy, and a clear focus on returns. We believe those advantages position us well to create value for our shareholders over the longer term. With that, operator, we will be glad to open it up for questions.
Operator: Thank you. If you would like to ask a question, please press 1-1 on your telephone. You will hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, press 1-1 again. We also ask that you wait for your name and company to be announced before proceeding with your question. 1 moment while we compile the Q and A roster. Our first question is coming from the line of Natalie Kulasekere of Zelman & Associates. Please go ahead.
Natalie Kulasekere: Hey, good morning. Thank you for taking my question. So I see here on your presentation that construction cost per square foot ticked higher this quarter. So I know it is a fractional increase, but could you talk a little bit about what drove that And if it is fuel or lumber related, what sort of success have you had in negotiating this cost lower for the coming quarters?
Brad G. O'Connor: The primary-- let me-- there, yeah. there is I mean, it is not a very large increase. there is been minor increases in a few areas, and we are seeing lumber start to increase as you point out. We do continue to look for ways and push back on both material and labor supply you know, in all of our communities. Looking for opportunities to drive those costs down. As you will see on that same slide, we brought cost down quite a bit since the beginning of 2025. It troughed in the last quarter, and now it is just gone back up slightly. So it is not a significant change, and we do continue to look for ways to bring down our costs.
Natalie Kulasekere: Okay. Thank you. And we have been hearing more chatter about ICE raids over the past month. So have you experienced any disruptions to your operations in any of the markets because of this?
Brad G. O'Connor: I have not heard of any ICE raids lately. it is been a while actually since I have heard about that in any of our communities. Of note, I think the last 1 I have heard about was probably 3 or 4 months ago.
Ara K. Hovnanian: Yes. it is been relatively quiet. I mean, the overwhelming majority of our trades obviously use all legal workers. So do not expect problems. And, frankly, with demand a little on the low side, labor has not been an issue right now. Got it. Thank you.
Operator: Thank you. 1 moment for the next question. Our next question is coming from the line of Alex Barron of Housing Research Center. Please go ahead.
Alex Barron: Yes. Good morning, I guess. Morning. I just wanted to see if you guys could discuss a bit about your outlook on what incentives you believe are likely to do at the moment or how your strategy has been shifting And, also, can you discuss a bit more, bringing the Saudi Arabia stuff on balance sheet?
Ara K. Hovnanian: So I will tackle it, and Brad, you can fill in a little bit more. You know, as we mentioned, even though mortgage rates increased during this quarter, more or less I mean, we were not anticipating any increase that it did increase quite a bit. But incentives managed to go down. Obviously, you know, today, mortgage rates crept up again So you know, it is difficult to try to project. what is going to happen with incentives or crystal ball on what is going to happen with long-term rates is just not super clear. But what is clear is that we are getting a greater percentage of our deliveries from newer properties where we have already anticipated higher incentives during underwriting that will help. Even if they creep up just a little bit. I forgot the second part of your question.
Brad G. O'Connor: The second question was KSA. That was HOV Global area. So the I do not know exactly, Alexander, what you are asking, but in the first quarter, we brought we consolidated what was a joint venture, and you can see if you look at the balance sheet, the change from year end to July, a lot of the changes in inventory, customer deposits, receivables deposits, notes are a result of that consolidation. We talk about that some in the queue, so you could certainly take a look there. Even the last Q would talk about it. That we really have not seen any that business is kind of in between communities at the moment. We are not really seeing we do not really have any deliveries coming, in this year so far. But we are expecting some deliveries to begin to happen in the fourth quarter and then in 2027. So we will start to talk about it a little bit more when that starts to happen. At the moment, it is really a non event in our income statement. Because there is really no delivery or active delivery activity yet.
Ara K. Hovnanian: And I think the same is true for the balance sheet. We have very little invested there. it is just not a so far, it has not been a capital intensive market. Especially as most of our buyers are doing stage payments, which really reduces the amount of capital we need to invest. there.
Alex Barron: So how should we think about you know, the backlog and when that is likely to start to get delivered or what the first year deliveries is likely to look like.
Brad G. O'Connor: Well, I think as I mentioned, you will start to see some deliveries in the fourth quarter. And then once that starts to happen as we are giving next year's projections, we will we will probably start to be able to give you more guidance about that.
Alex Barron: Okay. Thank you. Yep.
Ara K. Hovnanian: Yeah. Overall, I would not be overly focused on Saudi. it is a minor investment and minor activity. Relatively speaking. We are hoping over the long term to make it a greater and more meaningful part of our business. But at the moment, we are really keeping it on the lower side.
Operator: As a reminder, if you would like to ask a question, please press 1-1 on your telephone. 1 moment for the next question. Our next question is coming from the line of Jay McCanless of Citizens. Please go ahead.
Jay McCanless: Hey, good morning, everyone. When I look at the total revenue guide of 800 million to 900 million is there any land sales contemplated in that number? Or is that all increase in housing sales?
Brad G. O'Connor: No land sales are assumed in that in that number.
Jay McCanless: Okay. Could you talk about what you guys are expecting for an ASP this quarter?
Brad G. O'Connor: I would say if you if you looked at our most recent quarter actuals, It should not be that significantly different than that. You are going to just gradually see our ASP go up quarter over quarter as we are bringing in new communities. And moving away from the first time aspire products we have talked about. But it is going to take time for that to happen. So you will just see a very gradual increase in ASP Quarter to quarter.
Jay McCanless: That was actually going to be my next question, Brad, is what are you guys thinking for next year? So just mix of more move-up buyers is going to bring that ASP up, you think?
Brad G. O'Connor: Yes. Just it is gonna take time, but, yeah, that is right. You are going to see that over the coming years. I think our ASP will continue to move up as we move away from Aspire.
Jay McCanless: Yeah. Gotcha. And then the next question on community count, any idea as to when that is going to inflect and start to move higher? This is the third quarter in a row where community count's been down sequentially.
Brad G. O'Connor: Yeah. We did mention that the fourth quarter, we do expect it to be up. And then we do expect growth in 2027. As I mentioned, we have unfortunately, we have been saying that. It has not been coming to fruition. And it is because we have had a number of communities that we have walked away from at various stages primarily during due diligence or before the land is purchased. But that is hurt our ability to get growth we have talked about. We have a lot of new communities that we have done, 62 in the last 12 months, but not getting growth yet. But we do anticipate you know, barring any significant changes to the market that you know, force us to consider walking away from additional deals. We expect growth to happen in the fourth quarter and then into 2027.
Jay McCanless: Gotcha. And then really good news on the gross margin front. I guess, how sustainable is that from going from 4Q to 1Q? Think you are going to lose some volume sequentially. But do you think without giving guidance, you think there is a possibility you could be close to that gross margin number? Or if not, what has been the historical degradation from April to January just, you know, given the lack of volume? Or the or the lower volume between January versus April?
Brad G. O'Connor: I think you are basically stating it correctly. I mean, the we should continue to see a trend of improvement from where we are today. There was likely be maybe a little degradation from the fourth quarter to the first as we typically see from the volume as you point out. But you know, that is probably typically 30 to 50 basis points, something in that range. So Okay. I think you would still see improvement from the third quarter to the first quarter you know, if the market does not change, if that helps answer your question.
Jay McCanless: Yeah. that is great. Thank you. And then the last 1 I had, with all the M&A this year, and I know a lot of these deals are recently closed or soon to be closed. I guess, are you seeing any opportunities on the land side either from, like, full packages or 1 off communities, anything that is coming to market that might help you guys grow the community count a little faster?
Ara K. Hovnanian: We definitely are. Looking at oh, go ahead, Ara. Yeah. No, I was just gonna say we are obviously are seeing land opportunities from a variety of sources. This quarter, as we mentioned during the call, we had positive progress in our lots controlled. We optioned and controlled more lots during the quarter than we delivered homes. Some of it you know, can be coming from the, M&A activity. Some of it is coming from other of our peers that are walking that are walk from communities just like we are doing. That do not make economic sense for them. And then sometimes that same land seller can keep the previous deposit and reduce prices to make it enticing to resell it. So we are definitely seeing that, including some that are finished lots, which is particularly helpful. So, we are optimistic, and we are actually really gearing up in our land acquisition teams across the country. We know we need scale. We really need scale, we are trying to make a concerted effort If not through M&A opportunities and by being more aggressive in searching for land that meets our underwriting criteria. Okay. that is great. Thank you, guys. I appreciate Thank you.
Operator: Thank you. And that concludes the Q and A session. I would like to turn the call back over to Ara for closing remarks. Please go ahead.
Ara K. Hovnanian: Great. Thank you very much. You know, considering the environment, we are not overly surprised by the results, but we very much look forward to producing better results and reporting better results the next quarter and certainly next year as well. Thanks so much.
Operator: Thank you for participating in today's program. You may now disconnect.