Good afternoon. My name is Bridget and I will be your conference operator today. At this time, I would like to welcome everyone to the M/I Homes First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator instructions] Thank you. Mr. Creek, you may begin your conference.

Thank you for joining us. Joining me on the call today is Bob Schottenstein, our CEO and President; Paul Rosen, President of our Mortgage Company; Ann Marie Hunker, VP Corporate Controller; and Kevin Hake, Senior VP. First, to address regulation fair disclosure, we encourage you to ask any questions regarding issues that you consider material during this call, because we are prohibited from discussing significant non-public items with you directly. And as to forward-looking statements, I want to remind everyone that the cautionary language about forward-looking statements contained in today’s press release also applies to any comments made during this call. Also, be advised that the Company undertakes no obligation to update any forward-looking statements made during this call. With that, I’ll turn the call over to Bob.

Thank you, Phil. Good afternoon and thank you all for joining us to review our first quarter results. We are very pleased with our first quarter results highlighted by a 26% increase in pre-tax income, a 13% increase in new contracts and a 16% increase in backlog sales value. Revenue for the quarter increased 12% to $263 million despite a slight 3% decline in homes delivered. Our quarterly pre-tax income improved to $15.7 million compared to $12.5 million last year. A number of factors contributed to our improved profitability. One, our average sale price of homes delivered increased 9% to $325,000 a home resulting in a 12% increase in revenue. Second, gross margins for the quarter were 21.7% in line with last year’s first quarter and 170 basis points sequentially better than our gross margins that we incurred in the fourth quarter of 2014. Third, we improved our operating leverage by reducing our SG&A expense ratio by 50 basis points. This resulted is further improving our operating margin. And fourth, as Paul Rosen will highlight, in a few moments, our financial services segment also produced strong results during the quarter with income up 6% from year ago. In terms of our sales we will particularly please to increase our new contracts as I indicated it earlier by 13%, by region our new contracts increase by 12% in the Mid West, 23% in the South and 1% in Mid Atlantic. Our increase in sales was achieved despite a slight 3% to 4% decline in community count. Looking ahead we remain on track to open approximately 70 new communities this year and to thereby increase our community count by 15%. We are excited about the location and quality of these new communities that we plan to open this year, many of which…

Thanks, Bob. New contracts for the first quarter increased 13% to 1108. Our traffic for the quarter was up 8% and our community count was down 3%. In March we sold 461 homes, our biggest sales month, since March of 2005. Our new contracts were up 7% in January, up 20% in February and up 12% in March. As to our buyer profile, about 40% of our sales were the first-time buyers and about 40% of our first quarter sales were inventory homes. Our active communities were 153 at the end of the first quarter. The break down by region is 64 in the Mid West, 54 in the South and 35 in the Mid Atlantic. During the quarter we open 14 new communities while closing 11, our current estimate as to end of the year with about 15% higher community count than we began the year, with the majority of our new communities opening in the second half of 2015. We delivered 717 homes in 2015’s first quarter, delivering 59% of our backlog compared to 58% a year ago. Revenue increased 12% in the first quarter compared to the same period last year as a result of above and increase in the average closing price and third part lot sales. Our average closing price for the first quarter was 325,000 a 9% increase over the last year's 299 and our backlog average sales price is 358,000 up 10% from a year ago. Our building cycle times for homes were about the same in the first quarter as 2014’s fourth quarter. However certain markets continue to have challenges. Our construction and land development cost increased slightly when compared to the first quarter of last year. Our gross margin was 21.7% for the quarter, flat compared to the same period in…

Thank you, Phil. Our mortgages entitle operations pre-tax income increased from 4.7 million in 2014 first quarter to 5 million in the same period for 2015. Our first quarter results increased due to loans originated increasing from 493 to 568 and an increase in the average loan amount. The long term value on our first quarter mortgages was 85% in 2015 the same as 2014 first quarter. We continued to see a shift towards conventional financing, 71% of the loans closed were conventional and 29% were FHA, VA. This compares to 67% and 33% respectively for 2014 same period. Our average mortgage amount increased 6% to $266,000 in 2015’s first quarter compared to 252,000 in 2014’s first quarter. The average borrower credit score on mortgages originated by M/I Financial was 739 in the first quarter of 2015 compared to 736 in 2014’s fourth quarter. The mortgage operation captured 82% of our business in the first quarter compared to 2014's 76%. On March 31, 2015, we had 65 million outstanding under M/I credit agreements which expires due March 26, 2015 and 7 million outstanding under a separate repo facility which expires November 3rd, 2015. Both facilities are typical 364-day mortgage warehouse facilities that we extend annually. Now I’ll turn the call back over to Phil.

Thanks, Paul. As far as the balance sheet, we continue to manage our balance sheet carefully focusing on investing carefully in new communities, while also managing our capital structure. Total homebuilding inventory at March 31, ’15 was 959 million, an increase of 235 million above March 31, ’14 levels. Primarily due to higher investment in our backlog and increased land spend. Our land investment at March 31, ’15 is 470 million, a 32% increase compared to 357 million a year ago. At March 31st, we had 251 million of raw land and land under development and 219 million of finished unsold lots. We owned 3,300 unsold finished lots with an average cost of 66,000 per lot and this average lot cost is 18% of our 358,000 backlog average sale price. And the market breakdown of our 470 million of unsold land is 127 million in the Midwest, 204 million in the South and 139 million in the Mid-Atlantic. Lots owned and controlled as of March 31, ’15 totaled 19,450 lots, 56% of which were owned and 44% under contract. We owned 10, 936 lots of which 31% are in the Midwest, 45% here in the South and 24% in the Mid Atlantic. We believe, we have a very good solid land position. During 2015 first quarter, we spent 51 million on land purchases and 38 million on land development for a total of a 89 million and about 45% of purchased amount was raw land. Our estimate today for 2015 land purchase and development spending is 400 million to 450 million which includes the 89 million we spent in our first quarter. At the end of the quarter, we had 413 completed inventory homes, about three per community and 872 total inventory homes. And other total inventories 261 are in the Mid West, 409 are in the Southern and 202 are in the Mid-Atlantic. And in March 31, ’14, we had 305 completed inventory homes and 782 total inventory homes. We believe we are well positioned with our spec levels. Our financial condition continues to be strong with 554 million in equity and net debt to cap ratio of 48%. At March 31, ’15 there was 90 million outstanding under our 300 million unsecured revolving credit facility. This completes our presentation. We will now open the call for any questions or comments.

[Operator Instructions] And your first question comes from the line of Michael Rehaut with JPMorgan.

It’s actually Jason Markinson for Mike. So you saw a very strong sales pace increase in the quarter. I wonder if you could talk a little bit more about that improvement in the context to your pricing and incentive trends during the quarter? And also from a regional perspective, which markets are you seeing the most pricing power and how are you thinking about your incentive levels at the current sales pace?

It’s a great question. I think that the improvement in sales absorption per community was -- for the most part a result of improving conditions, the spring selling season getting off to a pretty solid start. We feel really good about our communities, the location of our communities. My highlight is that we saw the most improvement in our sales performance in the South, although with a 1% improvement in the Mid-Atlantic I think it was particularly noteworthy given that our community count in the Mid-Atlantic region was down around 10%, so we felt good even about that 1%. But I really think our margins are held up well, sequentially up quite a bit from fourth quarter in line with last year’s first quarter. I think that it’s mostly a function of what was not in every market, certainly we’ve seen a little bit of softening in Houston as I mentioned and I think for us San Antonio has been a little bit soft too but I think that as you look across the other 11 markets we had pretty good demand and good traffic in our models.

And next question just going back to Texas, I know you said most of the markets in Texas were pretty solid, but you saw a little bit of softening in Houston. I know in general I think Texas saw a pretty significant decline in job growth a significant decline actually in overall jobs in March. So I just wanted to see how you’re handling the Houston market in terms of new land purchases and just what you’re seeing overall in the land market there?

Well we’re still little bit newcomers in the Houston market. If it was our largest market the issue might be more acute for us, but with our price point being where it is which caters more to a move up buyer there which I think is the buyer that’s maybe a little skittish right now perhaps more or so maybe a lower price buyer. We’re sort of watching the situation as is. We’ve a lot of confidence in the Houston market. We expect to continue to grow there. We do have some new community up or actually our new communities were down slightly from year ago in Houston. We did incur some delays in getting some communities open that we started work on getting opening last year but we’re expecting to open new communities later this year and I think that the long-term prognosis for the market is good and we have a lot more optimism about it but now we’re going to watch it, we think we have our investment level there is very comfortable and very manageable.

Then the last question just on the outstanding preferred stock, I wanted to hear how you guys are thinking about that and if you have any intention of repurchasing that remaining amount in the near future?

I think we’ll have Kevin Hake our Treasurer to answer that.

Sure. And Jason we really haven’t had a change in our thinking on the preferred. We took the 50 million of that out some time ago and continue to look at it as a helpful piece of our capital structure at this point in terms of equity and the remaining 50 million, so we don’t have any immediate plans of doing any of it.

Your next question comes from the line of Alan Ratner with Zelman & Associates.

Question on the price. If I look at your backlog price 358 it’s trending well above your delivery price I think the spread to that 10% which is one of the widest spread we’ve seen in quite a while. So I was hoping you could just talk a little bit about what you are seeing on the pricing side. If that’s the function of mix or whether you’re seeing some pricing power returning to the market and how should we think about that [indiscernible] deliveries over the next few quarters.

Allan, it’s the price that’s a little bit that the first quarter was as slow as it was. It was really more of mix issue. Also we continue to work on inventory home level. Our spec is level is lower than it was that year end, we feel good about working that down but still with 40% to 50% of our sales continuing to be the spec level, kind of makes it more of a difficult number to predict. But we have had eight straight quarters of increase in advert sales price and backlog and 10% in the last four quarters. We would expect that to inform you the next couple of quarters as suppose to going down the way we did the first quarter which should be just a little more mix in the first quarter.

So you are trying to just to the delivery price being that what was lower than you were expecting because of more spec sale?

Yes, it’s just more of a mix issue we’d expect, we don’t make specific projections on those types of things. But 350 it target up a little bit from what it was the first quarter.

Got it and in terms of the pricing power, if you look at your current community count, roughly what percentage are you raising prices so far and any estimate on kind of the magnitude of those price increases?

That’s always the real hard number. If you kind of look and again we don’t have any gross profit projections out there. But what we kind of saw in the first quarter on new orders, margins have not moved around a lot. As Bob said we feel real good about the new communities that we are opening. The Mid West has continued to be really solid for us. Florida and the Carolina have also been solid, little weak in DC and we just really get going in Texas. But we feel really pretty good about what we are, what the margin stand point always work and try to improve those margins.

I appreciate, that’s very helpful and then I’d like to squeeze in one more. Bob I thought I heard comment that you said margins in Huston were actually trending up, I want to confirm that and if that’s true what’s driving that because I would imagine it’s getting a little bit more competitive from an incentive stand point.

I think it is going to give more competitive. But I think the answer to the question about margins is really more mix than anything else and I think that’s the case in Huston too when you look at in year-over-year, in terms of where we are selling and what’s closing and so forth. We’re optimistic about housing. But like you and so many others, this is not a linear. This recovery is by no means linear and there is a lot up and down and where we really think we can push pricing we have. But most of the margins that we are seeing is what we sort of expected to see when we under wrote the deals and we’re pleased if that’s the case.

And your next question comes from the line of Lee Brading with Wells Fargo.

I want to follow up on a couple of things on the cost side. Are you seeing much pressure and the material at all on the material side and on the labor side? You guys did a good job obviously upholding your gross margins share and I wonder if you have seen any pressures on the cost down?

We have a significant plumber actually have been pretty good concretes moved around a little bit. It’s kind of specific market-by-market cycle time it’s been a little challenging in some of the Texas markets but when we look at the cost increases, the first quarter of this year and what we kind of see for the next couple of quarter. Maybe a percent comparing to a year ago but nothing real significant.

This is a more intuition than data driven. But I think that if you had the project where there might be some increases it would be more in the labor side than material side.

Okay, great and then on the no payable the [indiscernible] essentially down the 90, how much of availability do you have at that point in time?

We have the full amount available which are outstanding – yes, $300 million. So, we have 220 million. [Multiple speakers] but we also give projection in queue. We don’t think we are going to be borrowing.

Yes. With given guidance, we gave it at beginning of the year and we’ve kept at this time which is that we expect to have PQs about a 159.

And we feel very comfortable that Lee.

And you mentioned 40% of your buyers – first time buyers and I was wondering if you could comment a little bit about that category you’ve seen couple of builders in those couple of days talk about their category doing pretty well and I was wondering if you guys have seen anything different or similar to others?

I want to say this about at [indiscernible] the fact that the first buyers just means that that is the first time they are buying a house is suppose to a 24 year old they just got a job out of college. The term is it can be a broad term. I think that the [indiscernible] so it get tied to that term. But the [indiscernible] are clearly sitting on the side lines and being very slow to enter the new home market. They are supporting all the apartment developers now. But I don’t know if you want to add anything to that.

If you look at that step last few quarters we said that it was 40% the first quarter, this year it was 39%, the fourth quarter of ’14 it was 38%, the third quarter 2014 and 40% the second quarter of 2014. So, it really has not moved around much to us, again if you look our average sales price and if we don’t compete at blow our most affordable in at the entry level one of our goal is to bring people through our product line so we’re kind of in that top parts of the first time buyers but had to change the whole lot for us.

I would just pick that up. Our first time home buyers come to us pretty well qualified and they generally have pretty good credit scores. So, we’re pretty happy with those customers.

Yes. And you credit score is 739 definitely speaks to that. And other – last question here is on the truth on the lending that we have talked others have talked about [indiscernible] some paperwork additions to the process and I was curious how you guys are setup for that that is going to be a big hurdle or is that how big of an issue is it I guess.

It’s a very significant issue to the industry. We actually have three plans in place so we feel pretty comfortable if first line it depends on our systems and procedures aren’t 100% in place, we have both a second level plan and a third level plan so we feel it will be from our customers point of view which is home builder and a home buyers. We don’t think that they will see any interruption at all.

And there are no further questions at this time.

We appreciate you joining us and look forward to speaking to you next quarter. Thanks.

Thank you. That concludes today’s conference call. You may now disconnect your line.