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Pure Cycle (PCYO)

Participants
Mark Harding President, Chief Financial Officer and Director
Elliot Knight Knight Advisors
Bill Miller JM Hartwell
Call transcript
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Operator

Greetings, and welcome to the Pure Cycle Corporation 2020 Second Quarter and Six Months Financial Conference. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions]

It is now my pleasure to introduce you to your speaker, Mark Harding. Mr. you Thank Harding.

begin. You may

Mark Harding

and our I'd you you to like quarter call. to second all Thank welcome

Some We housekeeping for deck measures. do have slide a this.

should second quarter want our landing you log presentation. It be you page. say, if front on just So, will the to website, into

investor there don’t the as it well. over see will there you then you and If surf be can there, to section a link

presentation will So to and the the you with prepared allow that along remarks. follow

who beg the We forgiveness typical to for giving I are am our you jump of new the got company of sort kind going on resources quarter website. just probably company. to excellent overview of overview, the those without some of into the end

a do more how are, you If podcasts sort there of and little things there about of on you to will new to that bit is the are color where we to we company how give got and couple we presentation. a get that want

that, of ahead with – me the go really I I or Safe through guidance to the second be the direction I to or leading our to I is policy are get at do to through slide, presentation statements got the first the this to least quickly. was and room thing forward said the let call well, Harbor lawyers which that to these is out saying and and is get go our need But, here statement going not investors. intended start

update had. by the am an you segment X to activity giving I kind Development of of all roll, down an that and Slide our Land with you really going scroll we’ve to into give that, start guys update you and So,

of here a very phase As you community on which Corridor over located XXX metropolitan master large in includes the lots. know, our little Denver area. first I-XX embarked that a the we’ve We’ve in planned all got

of all all lots contract national are our three that homebuilders our We on homes that. under for have or

very We building have out And KB. are there. active in Morrison of them Taylor Richmond homes America, and all three

of the delivered think we’ve XXX XXX have, We I of XXX lots. the lots, about

just So, there two is more takedowns. really

think more going takedown of all will lots. or down down to lots. lots one plus one be lots I think, are requirement, a bit little taken than XX of And Taylor Morrison be take more about KB which has XX I has Richmond and has another lots. then maybe minus, they more XX their

maybe they’ve down two I take think schedules. more got,

thing of our market, We’ve and had. real mostly point. due great is, take accelerated The nice this that our original because entry into price schedules a contract had three about the downs project our from to, has builders have their our project mostly all here success of really the and

price Our an point. price is entry-level point

kind the, of sort in XXX XXX, start homes range. Our the of

may and we a home that there. status, mix of starter real Denver sound that’s a have out the in the That’s market. But homeowners

of had We a sort got to homeowner and meeting folks. meet community have first with number a of our those chance

was meeting than – and community little XX more out people houses the huge a We there have occupying first success. about

gave families homes homes model we of think the throw XX KB homes there. place represented. I for on to than meeting will one their gave had to represented and ashout-outthere more us some who XX from they things snack I us

project XXX, the occupied say, I’d and we probably the addition shout-out a them give homes, would thank homes is under to for in going I actual great them construction. So that. XXX But got,

under either homes a right built So, got I’d XXX let pull say, XXX close issued. building to or me We’ve – about we that back construction. are – permits

building you have permit. a actually got on started get can’t you until a So, home

fees. We have paid tap

track of addition we a we well. are to know, water keep metric lots, utility you and of in selling that So as many as that

and the water for water XXX first how the XXX We’ll our waste of rest lots this deliver roll to purchased this about out phase. and remaining taps from was got homebuilders through likely then, We’ve year-end. calendar

So those throughout staggered three year. there rest of the – four or are the is more of closings those

see they’ll likely we close, as how send each release know get let those progressing announcements press So, you to out those will are those through. everybody announcements for a of

Move to as a since you of X, slide, the a Slide progress kind representation next that visual the QX. both numerical as give of will well

just building we having see a are season. we getting can start really you the then tremendous and So are into

homes builder. homebuilders got six residents of a the we homes. new averaging month and would number we’ve XX are think per I say, So, describing I per about as were

over So, that very has been exciting absorption the winter.

that We environment little and progress presentation. this later a that I will bit about more will we to continues in talk the in that new how in see are

Move about will it’s – to of really kind give view total. a the acres Slide of XXX project. X. you X of rest the The thousand Slide in

as And than want So, see, phase is is component next entry XXX I residential the that. just there the this just highlight really you XXX first of The first a next more that. to much incorporates acres component. residential and can into acres really

is We be a interstate. going have large along the commercial to up component, which

about residential at property. product the mix residential we in are have that we going we So next we interstate mile the half a very exit of of to of existing have component. and and next on have the the our along interchange focus right component own a in our of that’s But frontage kind to broad

are kind the land two product that flip really a mix But and standalone of XX more And of mix, house. give be to kind variety the foot to detached be of you a of homogenous. next phase, to take sites. typical Those a the family kind wide was a is in It had we builders going first just able to If pretty on single foot you the plan we lot. did layout. page, homes than those have XX still the pretty allow it

smaller little single we foot duplexes and density will have town We’ll clusters. have family, will products where out a phase. more We’ll product on bit will then on home have lots, the have have XX acre per XXs the phase, we some first we XXs there means some In the paired which – next like and some some that.

really of so, the speak it product offering that to amongst we are customer builders number diversified A much at. a more base. larger does much And looking

can We’ll costs. set to likely is our able phase we’ve will But our second so allows each this phase. somewhere up have to phases it be we’ll micro of in where be us can and the kind as so phase deliveries XXX four this you construction see probably lot and you manage XXX see that to here

over we too for we absorbing and make all increment. to fees on sure the next don’t developing our cost that builders get far full want those we are to before move those So of lots out and paying

stay did we we’ve phase very to don’t first for want very job from and because not our far think I was that of good efficiently good a in that builders. model, I so our the away lots delivering XXX too only first think

they didn’t well the as have that much, inventory too to So as company.

of inventory So we to terms didn’t much the development costs. have too in

the carved four phases, land of but a work, we carve utilities roads, we into up like and we phases. gutters maybe So earth do and up two the curves that the those into lot can can

So delivering much real-time more in that those. were

make So, that, sure that’s our want to shareholders, wisely. we know important capital are I our they to using because

that having our into much on too putting with not without are a whip builders they progresses. kind work in are or us progress our payment We of

of utilities final we property finish get deliver going look payment I then where to contracts final the and lots. portion paid in to in or then we we a or lot lot as progress a are as phase plat a think we get second our phase going the are we what cost and payment where third, third final as third, progress maybe – deliver schedule will first very as the similar the to looked lot, cost delivery finished they a the

Pricing is able pricing stronger. be little bit disclose to that to to to would probably you. I be going like a

get am good keep becomes our our going until about contracts us. that and know finalized pit guidance you in or giving to that. had available as to with that idea defer we think pretty of to But I I we’ll builders, each we plat our that

XX. to move Page Let’s on

to water oil. have have also Page the the the water waste So, and gas oil biggest know, industry. the we of gas we just oil taken water this to as one water in mostly of activities a and the that they’ve When and services price supply seem and XX, due segment existed, to hiatus you year, is supplying industry have

We did the the of field. have some assets in repositioning

their called largest group Crestone field private sold our in – Resources. Peak operator position had to company a a So, called this ConocoPhillips

pension Canadian about more are find by a they can You fund. a owned bit them and almost out Google them. exclusively But little

a So than they company. maybe differently public operate E&P bit a little

take market a was X in is of look been a handled They it long-term current now, impressed significant or with transition. with in ago. oil mid-XXs management days their look very and then than to with going in at communication they have really their do on the point The the how How also, and them what’s this this a maybe have which transition. channels we have about they’ve I field the improvement focus. leadership X

right at the oil to in now. ability looking puts companies’ field really certainly of invest a it E&P But on lot a XXs, pressure low into

hold for activity XXXX And so, I exploration. in think terms their most new on of of is

as have from did hadn’t a wells have side, ConocoPhillips that the drilled they is, but carryover those they XX drilling and that things the of on completed wells. Conoco One they had fracked

timing based we’ll month-to-month make they price on some we completing So, look as at the if and to hanging the you look wells. the those is up of of – say, low pick a on to and want how fruit this assessment at based sort to oil of of a

modest those So bring wells at or those really can get complete very hold a leases in production. on and they least by to investment and production production that those

don’t a to activity for have yet. don’t on So, is that, lot guidance some of have lot little I just a on guidance they opportunity But a of bit us because that. of have there

financial some let the Slide to next metrics. slide, Moving XX, of give me you the

going so, are to year from assets cash and our as up last up Our do continue well our and year-end water of as go assets, investments.

always well position usually that they means if want cash own as money. as companies assets have that increasing making are So, increasing you to that

position liquidity unique in very areas where strong much company. asset not lot where very of this And and but highly very one there of a making very a is very strong ourselves a the base is and find money, within we and a appreciating those

sorry, I am that let that – could be misinterpreted. me take

money. We lot a of are making

Our now. a lot making not cash, money it’s of right

metrics number, month $XX kind six that’s roll million slide, that on me a what the next P&L. last of the you XX, Slide over to year. Let gives Operating revenues, was the

time this the month, a little growth so, year are continuing last of where we we this $X.XX operations So, ahead share from share. on income and bit basis, then, were in a

tax, tax And take used income have we if – all then, a you at credits. look net we profitability, are up after our the

now send that dollars now are So, up end very, having out. happy sent good some that be a to help after $X we those support tax Washington margin trillion to reporting has benefit very But package to profit. of

Page XX you breakdown kind that is on a will money of where give from. coming

the Development look lot over So Tap $XX.X a at Land sales. if million. million $X.X on fee little segment, revenue, you

of system. fracking we fallen What the is have are value our equity monetization we water obviously revenue. off good So, in that getting water has

fiscal very year. we really had a year revenue fracking fiscal for this revenue this frack and single So, haven’t the in nominal

is what be then, construction activity like revenue you of pad on our pad was there, of another And of would we or see and our substantial for water side a pad have of in kind land. side incidental compaction and site the oil well some That because and minerals Conoco things drilled that. you $XX,XXX that gas number four and in to in oil that tick that had water also is see royalties going up a and sort gas that completed some

if is of And net smaller in sections two This interest portion you remember, mineral on the forward that. where we carry that. we have

and pooling are in interest, pooling that. We where wells we then eighth have of have the these one three-eighths in other four

the even this well in smaller is So pooling.

but you for gives being that, very on XXs, fact it So oil be of price oil it pretty basis an a this aggressive is and of – developed being impact rich in kind would the the on a field the

water our the for oil queue And terms the that have fracking we in as This sell that. of and able will to pricing so, will cycles estate be we well end terms monetize share there in and that in of be the revenue. to to order water assets our in as currently mineral will opportunity sector continue

Next slide, balance sheet impacts.

think, period-over-period then, one So our of. sort you to the the the that kind I of sheet EBITDA, These XX, measures there. of good EBITDA and Slide gives balance there of non-GAAP sort are of P&L, that our a track impact on keep it’s non-GAAP

$X.X you six the months ending. got So for million

So, you trending provide investments your look those when assets, its to that. is really really assets of our value how your on over with benefit many years at sort to is and into doing company starting shareholders these really

about essential that, water talking a about bit and if to are of – that spend are to time our of impacts. you want with our the response virus some today So sort little of in world of waste and talk unique we the sort services. Water

our employees are are we exempt. those So industries one exempt of and

operations day-to-day much, our are pretty So, normal. pretty

standard. I’d �� I our would say, pretty crews are field say,

in and of a have folks be season. that out We typical flu to going are the

about sick, generous them as company, we very we want employee-centric give somebody stay them are policy. company to have very particular is the We an We home. PTO

sure So their then they care all to house our of sure that care they make want of as we but make take well. one that we take health co-workers’ also of

sure to have to do on We have the and waste water make keeps we water keeps flowing site. the be processed. that said, that being But do

healthy stick each have probably personnel maintain of have practices office that other to make try commuting here. the have We where the Our just to still our XX-XX to best we mix from office. distances and and sure offices our XX% to continued we professionals people

accounting and do job some some the folks a they responsibility able type being job very, from do do to some they and where commute our of of can of have the efficient and stuff have that very staff home that, are we do productive very remotely. can But engineers

Our sort sort like primarily the stay activities, throughs, have U.S. of period are builders have houses really are walk activity. that because, home at down continue think said that that Colorado, substantially They that’s under where essential a their onsite they contract. on most traffic is discouraging to complete and than I essential in the other states the they of

said, That construction essential. as itself industry is the classified

site. lot the they do a there not of a to there lot contracts be lot while a and construction, may of a lot is in activity have and that continues have of they pipeline – homes So, are on of

continue they new that have specific start contracts that they have for homes, So and on those to because construction had those complete started or delivery timelines they homes to to have that as continue starts, they we support that.

have crews lines are we sending sure on there So sewer our out that field meters, making all and that and water inspections activity.

to capitalize existing and things on our bring invest how What mentioned of sort those to That looks wells new partner oil XXXX. being activities see deferred sorry, we’ll new activity. those and market. for there those that XX frac am I think are on I gas fruit again, to and those or wells able in But I been else? and to – the So, low are did that hanging has

of our we a are seven Phase put with product of and want in each the it balance trying homebuilders specialties we individual and national out in to their builder If seven have builders. with different as at have two, conversation for as don’t are we room all seven we look in think front We are. seven all sort project what many to you builders. take But be

count products, product builder on is some on builders some specialized builders don’t. have paired alloy some products, have builders and load So some

that have and those the they looking types really well, be each within And figure some get of we doing them of site have the segment find so next players of builders proposition segmentation to agreements to we and able a on the market to out do XX really different finalize the want what out value to for days.

the would I maybe out December to looking current with timeframe. this But to be in keep are November, September, sometime would year, be construction am opportunity our be able we conditions, say, under for Our be of because late I where and market ground I saying, October.

XXXX that some model continues be in see for can and a sometime being by will on their homes opportunistic selling some this on. of lots then, we But what is. their of can we So in – deliver timeframe and then how product start where still constructing position they really

that of in have in as phase our have being second as builders So, first a some new the some phase interest we our strong well builders.

build So, looking well, going to through on at that. winter of how that is through can continue traffic seasons go to as the they so XXXX, the

about lot handling like a on know I and what activity probably I’d turn is it that, might current are sort with open to what do of all to conditions impact this it back of up moderator, questions of have So you to how the the maybe questions. some the all company. over we market

turn So, with I that, back over. it will

Operator

comes first question from Advisors. Elliot Sir, Our may your Knight you Instructions] Knight question. [Operator of ask now

Elliot Knight

Hi, Mark.

Mark Harding

Hey, Elliot. How are you?

Elliot Knight

much. Thank very I well. you am

You commercial. haven’t call about said anything on the the

You what that us a XXX do I anticipate? Could what the plans tell what got you are you you and timetable, you. your highlight there there. acres, know timetable Thank

Mark Harding

Great question.

So, excited usually kind with property. we those solidifying And that to have of builders, attention very component while and just very development. you am of that’s component this about been lags the commercial a commercial are large lot has residential a where right, of contracts occupied, residential the I my

have who develop. somebody people market on say, have it and the to would – A year is actually to calls But then contract on under I would excuse than been they say, want lot found point put our right interest, the of yet. and we’ve interest the year gotten the really XX% that to to I calls me, we want interest piece. significantly commercial to this serious not opportunity significantly going of more more last that where the

think independent direct a would be of we I somebody our that a five flexibility rather to we to go want to to going than able having to to we that it from the it, in we to building And buy or significant or value not that bring want not position to I have an intermediary user Kroger. a be are Walmart deal that acres and that say, then have

do where that retail the structure, look they where and type both for commercial are We if interested. are at opportunities of those commercial. we have opportunities Certainly, it and has to that’s that

of it So, lot a employment will have base.

– offerings fast get on the Depots, product use really have a restaurant you a big commercial retail have Targets, of side, mixed there. out you can casuals of stores, It the Walmarts, of Home sort box lot will where types and typical the all will different of uses

And kind of of kind we so some those to bring demographics what can time that of any at the and plan, of we are have land are right commercial that’s that configure on our there. demographics we the at player the or retail and looking model looking type we

if still, I’ve on that made one say installations where be, I would out us there it. scale being I’ve and on call on people got a people and this got a commercial building I But one somebody to ten building to would saying, ten

the say three, range at I’d four are we on that.

BUCK a under So I and in sensors get would months out the pick still getting as Ranch get fitness up kind homes getting Store that. XX there. lot are for counts they think to XXX that there on roof probably out the we early a we Sky of we there, closer occupied tops to are Lifetime or getting more are and out that monitor a I center that where pretty at – next traffic out expect can

– bit a we than most we So, we little like like the it look would. maybe as that longer hold developers to at

more necessarily are we of it by end value on the value but not this. just the with the participating end participating on more that value patient building being So in that

Elliot Knight

are a to there have now. they to theater? to Home far we do Depot, to a So drive How a supermarket,

Mark Harding

those ten it’s go ten to to eight So, types different miles almost to to It it in installations. and find the of west, the miles miles south, west, miles to will eleven be three it and will – miles the east it’s triangulated directions. ten be the almost about

and of transportation on would than the land accessibility are because to don’t other there really they that we kind the give very much opportunity and site not on the So, network itself. is well that interchange that you located ours, have that

Elliot Knight

a commercial our makes little attractive? more Which

Mark Harding

things. also do you value several does It water real a from mean, and commercial do and of it user the one, the we lot and value out that. benefit I commercial of has estate you benefit of a in

see So, see value there in I’ve Colorado not and in I only We we know value in about here past. then selling is for in see talked value reimbursables in tremendous land, we taps. the value But water. that the

estate But at when look that generates our you is incentivized, a commercial residential times equivalent the AV four AV Colorado take real how a has.

does our XX% the really reimbursables a four which last the I it about at reimbursables phase. bond our that first encompassed allow talked did we of for so, and on And do call, about us really offering. to accrued capitalize we that

valuing that residential. But of all that was

the at when So you look add when you component. commercial surplus – we’ll have in should it, have we revenue

So help component that monetize and us accrued a those very will some reimbursables. to for help become of realize important

Elliot Knight

you. Thank

Mark Harding

You bet. Stay safe.

Operator

Instructions] may [Operator Our Bill question JM proceed you. comes from you questions. Miller with your Hartwell. next with Sir, Thank

Bill Miller

Mark, hi.

Mark Harding

Bill. Hi,

Bill Miller

want of going recurring whatever. and three time to at know sales be or you what percentage I sounds land be what that if But sales be percentage or how I point? really years, tap will think let's your say. looked a it at not out that – well will really recurring revenue

Mark Harding

sewer really connections. we is, month-over-month, to kind that around water year-over-year say Today, pretty have connections XXX monthly, close down would system. - drills into think and I the stand what connection. water then the somewhere into maybe a of that The we I So, XXX connections

we’ve and connections. sewer reason connections a water have irrigation of between And is, got the lot disconnect we the the the

we’ll we’ll connections. that creating water in more create So as will get we than sewer. house doesn’t catch is sewer a residents up have sewer and we still family Those than have more of connections the have water water more that single

at phase I we on, are XXX. the first think the built years, of three out least within But

So, that connections. probably add another would XXX – adding

I Sky connections more size would the just than we’ll So there. we’ll – say have double in the first phase we Ranch than that more of and the

to do continue on We Wild our down Pointe. acquisition at well

that to out. build continues So

year-over-year, bought terms number we So almost up are of are that of that I we when XX% the think in connections from adding.

build There of We a on is little that the commercial that. out in component still side. residential bit title are to close of the left getting on

So build that We’ll more will to add connections. continue out.

continue on of if multiple add range likely sort we’ll other Bill, X,XXX So, we own, that know an and in phases the you on capacity about our going could grow X,XXX continuing of I see, but kind we to at really indication, have don’t we’ll and we’ve gives then that portfolio. then be the necessarily talked but our what to to we this, into Sky see, grow. that likely to And system, we’ll that the and that builds of Ranch extend utilities as properties water to and

at capacity time add system our projects to multiple want that same the we on going that. so, to have in And

are to you curve you see And you as if it'll serving a our grow have serving portfolio we we’ll connections where that will bell a to so, XXX today, that, well, of that’s – our capacity portfolio. number are our on where build-out going front-end XX,XXX the for and continue and look at trail-off of scenarios to get and get we up years high very the then some on on slower then numbers to some of

I out the look connections, in out. we short probably But, XX that’s good very years But, still get still think run. XX,XXX to

Bill Miller

acquisition Are there pickings any the other front? easy on

Mark Harding

our I going I somebody was cash. ask what all would hoping me with to do am

Bill Miller

Yes, well, point, the that’s it? isn’t

Mark Harding

cash we in $XX it It that’s if T sitting in investing cash long million, we’ve going view year a on money million of I problem quality sheet. in philosophical balance a and to past any at and on be builds. high terms am million am cash, Yes, a the and of little the how manage side to And overhead is. our talked bit know, not this is our about in $X.X I make I $XX got It’s honestly. of the my I’ve

to invest stuff. that builds give Right short on T now I’ve to got up money the in

be So, here. we are to opportunistic looking

us acquisition for been had are to Ranch. We little to can might be land land insurance a interest them a looking advantageous, where we when looking that available acquired much for more Sky that that up. otherwise or we not pick pricing don’t I bit have that like may am water

I are to am be systems improvements them. this going have help to for liquidity need and improvements in stressed condition make somebody make may them to that in market that come some in to some water looking and the

the opportunities we So for areas favorable bit more going and costs more infrastructure more little to be customers. a extend are acquisition us and where connections give us can to that

those We disciplined we’ll times. enthusiasms an whether still look Board to very at So, to and very, want a some good at got or I not, look of where I know and take there. acclimated I that’s is our metrics my opportunities it is this take about a system opportunity and get disciplined been nets those. think about be at get of very back my present throttling my when mantra out that we’ve that usually so our But you this kind stress the into excited

maybe they and opportunities on But for and of risk are condition, current also see. be that looking with some stuff we’ll opportunistic this to with

Bill Miller

at Well, about the a ever if approaching that moment? thing, the whole aren’t to time be we there was aggressive

Mark Harding

I I indicate with tend tend agree that. – on to you to

got nine are you the the going property today. to proof to how just this to that whole current liquidity the businesses, impacts see very have and know – premium yards condition think will a a happens entrepreneurs, effect be pudding a market owners, going I what and it’s get to in significant trickledown

sheet, solid we not can – balance because healthy what very pounce lose deals solve peoples’ a relationship, market other they a having conditions it’s are win problems us so liquid And balance that have very and some sheet on are. and we necessarily current a

really make create would great that, having way use where and were the and value utilities acquired had able it to time sort and value value and when get us. situation a well. the access by that to adding past, we the that utility in impact some we shareholder those say as that infrastructure to of we I of can similar on those opportunities to then increasing longer not sure assets we we sides, the adding having horizon and Sky that the then very more All Ranch, in for water a shareholder are and acquired be

Bill Miller

Well, the on you only with down but Arkansas not your acreage the Sky is superb, with Ranch, River. record bought

Board activity isn’t the trial or So, I hope now. on on constraint your

when things. somebody time to go have If assignment opportunities? to looking whose at not else scout you is devoted you, is - out and the somebody who you should these the is for have Now these

Mark Harding

believe you another just gave law I of there. Well, me softball

gives McNeill, – company. about back the is So decade to was controller an Kevin me we ago. He that a to welcome our introduce who opportunity

be we to opportunities see is and the what he to be it our CFO there and that’s see metrics can new to put to get But charge is if generate going his action are landscape and start out some to and us combing and the exactly available there. going

of and we come back it’s can – that. for to of great us Kevin through. lot deals activity to on So, exactly time is going a that be plenty there to A come that

we be to I give phone So, yes, have give up appreciate staffing that. a and a are me number, are taking think game we seriously mean that bit my on you of to can But, able I it kind be words might I really, so wife's very I I well, aggressive sword. little your and still there. you

Bill Miller

am that, to I ultimately get Great. revenues. paid for because recurring you’ll glad hear

Mark Harding

Yes.

on point astute out that failed me. and to You that to are very never

Bill Miller

pointing am is obviously I the have. I the skill Well, out

Mark Harding

stay kicking healthy. for thanks and in Well,

Bill Miller

too. Great You job.

Operator

you. Thank

next Our comes from Cunningham. you may Bill proceed. Sir, question

Unidentified Analyst

assuming sold, maybe the goes it actual signings I’ve what’s Hi, actually to happening My as a what cancellations, you’ll expected because out Mark. question recent doesn’t Alpha carefully a on website I’ve seen real-time and signed contracts talked of see I with else the something because all on with signed. going that been I potentially their with article something on see purchaser and or is, they reporting. is have Richmond contract that’s monitoring then recently on,. qualify goes most reported Seeking along been because American contract in great It’s report has being what because what’s about

So there in of lot a there. is change

the going past And in at everything week. there a cancellations actually couple the number zero and there is the has expecting see looking weeks last been been market. I’ve of signed So with cancellations site on the to in instead, and new contracts of been

some am kind the in may seeing what in just but not Ranch, want look I is and couple estate how of real cycle Sky market months are in this So spin overall general with general the what your years? or with as curious market at to your next of you of few housing to the

Mark Harding

least voting I one this anecdotal here, they anything on, of kind but pattern. if give welcome from moved can experience, and it’s we Texans at back, you had probably, Texas to be in don’t only right will and question. Great a relocated first-hand like the back comments The that coming he reference I but Austin, back, typically Kevin he

But he buy anyway, wanted house Ranch. a back and come Sky in really he to

with out. three was and He great, out And And He said, all a listen, a hey, are met said, but March. months and said, well, in so, nine and I want builders buy we moving luck. house said, I good need house he went to they they back.

You can get one.

experience area. surrounding the he find here, that of did in only but kind not And

of that the There And strong we so, things know at is Sky strong I-XX is one that is demand Ranch. there in the demand Corridor.

the we are at, where in are look think price at in in that. right points so right are we I And we and the you location

I sitting at because is going is be down, that will a of everybody I home. you everybody are about, I that same to to what, around kitchen traffic people is But are home of continue just so, the know around. believe kids we and bunch contracts. this their table firmly talking house know see staying pace that is sitting The small. too And know

want They're else. climbing the walls, something going, I

But, people demand pent-up and think to our are They have of that, extended going find so think I so, on it are showings. we are still site. And to even to out – some couple another you there going still outside weeks. Governor I

contract get didn’t believe me of have then, see you to a why everybody under have and people are and going still beating saying need up to online second going stuff putting a really showings. I that that you this still out sooner. They is people have rush project coming be They

high So, us. a be I for to going think it’s quality problem

We invest to as and lots. be our opportunities, to of some as We reacting into it. I very want position be able phase time some into well some invest have next able of want to to contracts. those to try be that we acquisition liquidity

take strong some structure and think to the But some So money well in on out out there give we and house’s the deals. that these of us we play us our I serve equity will last go and back-end. then rope

Unidentified Analyst

contracts in still no what’s at unprofitable new basically also and the revenue being this industry, truly few in from you last I every on cancellations you've in weeks. revenue oil separate got just gas the question, signed fracking get Totally whole it’s your activities is coming Yes, a income. industry dollar of and although to see noticed surprising some point,

You are it. against cost with not dealing

although So, from generating you. you it certain income important loss down, I for think going a it’s rather And is to … that’s never of amount are generate a and revenue

Mark Harding

of right. and is – variable it’s to important all Very us, cost there distinction

that So, outside I have that. of don’t lot fixed costs a are

to cost are not segment So, attractive am attributable can I And I the revenue us. not I for the can up, getting am that dial incurring a that dial so very down. you if is I that right, that, and

Unidentified Analyst

Okay. Thank you, Mark.

Mark Harding

healthy. Stay questions. your for Thanks

Operator

Harding, make any we Mr. Would like like have you this questions remarks? further closing looks it to you. no Thank at time.

Mark Harding

thanks. would, I

continued and all you support. your to I for again, So, your want loyalty of thank continued

it’s a in and proud sticking the and discipline patience, able sticking having really Board We to patience, then position a of metrics of guys acquire really – the valuable size are you to company being it’s right very metrics, management the assets. being having company grow and the company this and its their to

We that. to continue will do

what and on our thankful decisions will assuming be in And good highly foreshadow assets continue anything of having our your very liquidity appreciating are try We behalf. times normal, on, more see have the all much return out again on to bit come Day the you when we coming I’d and ton the like for will that make up, over another to to summer site. and these to more a you like can Investor a going of things activity we

getting closer you can maybe So, the has around been you and out the the had all company, send you those the seeing of of save and tires, a for chance we I’ll get to view tangible that, date have out nothing a the it following as new we because is chance come to a do. over what bit who and a like into real to it are your that timeframe, welcome haven’t if arms there July a company in little kick we quite little

I’ll and So, couldn’t had forward give that off thank challenge, anybody get if a me with a and had don’t question look technical Thanks. you holler. a that sign through that to I hesitate

Operator

you. this today’s teleconference. this time, At concludes Thank

your may now You disconnect participation. you for lines. Thank your