Thank you, Twanda, and thank you all for participating in this morning’s call to review the results for our first quarter, which ended January 31, 2024. All statements in 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 1995.

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 and are 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 with a portion of MD&A entitled Safe Harbor Statement in our annual report on Form 10-k for the fiscal year ended October 31, 2023, and subsequent filings with the Securities and Exchange Commission.

Except as otherwise required by applicable securities 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 on the call today are Ara Hovnanian, Chairman, President and CEO; Brad O’Connor, CFO and Treasurer and David Mikerson, Vice President, Corporate Controller.

I’ll now turn the call over to Ara.

Thanks, Jeff. I’m going to review our first quarter results, and I’ll also comment on the current housing environment.

Brad O’Connor, our Chief Financial Officer, will follow me with more details, and of course, we’ll follow-up with Q&A afterwards. Starting on Slide 5, we show how our results compared to last year’s first quarter.

Starting in the upper left-hand quadrant of the slide, you can see that, our total revenues increased 15% to $594 million. In the upper right-hand corner of the slide, our gross margin held steady year-over-year at 21.8%.

In the bottom left-hand portion of the slide, you can see that, our EBITDA increased 30% to $65 million in this year’s first quarter. If you adjust the impact from the incremental phantom stock expense, EBITDA would have increased 45% to $72 million.

Finally, in the bottom right-hand portion of the slide, pretax profit increased 80% to $33 million and if you ignore the impact of the incremental phantom stock expense, pretax profit would have increased 122% to $40 million. By all of these measures, we’re off to a strong start for fiscal ‘24.

On Slide 6, we show our first quarter guidance in the first column. Our actual results in the second column and because our guidance specifically excluded positive or negative impacts from the incremental phantom stock expense, we added a third column that shows our results adjusted for the $7.5 million of incremental phantom stock expense for the quarter.

The impacts have fluctuated positive or negative on a quarter-over-quarter basis for the past several years, but with all the ups and downs in a quarter, it hasn’t had much of a significant impact on an annual basis, but it can have a little more impact, as you see on an individual quarter. It’s obviously a little difficult to predict.

Beginning at the top, our total revenues were $594 million, which was toward the upper end of the guidance range. Our adjusted gross margin was 21.8% for the quarter, which was slightly lower than the range we gave.

This was partly due to fluctuating mortgage rate buy down costs. The final buy down costs are hard to estimate until rates are locked just before closing.

Additionally, we have more QMIs that are sold and closed during the same quarter than we did historically. Having said that, we do not expect any margin compression for the second quarter.

Generally, our newer sales are taking less buy down costs. For example, for February contracts, concessions including buy downs were more than 100 basis points lower than they were for the full first quarter of 2024.

We’ll show you more about buydown trends in a moment. Our SG&A ratio was 14.5%.

This was above the range we gave. However, before the $7.5 million of incremental phantom stock expense, it would have been 13.2%, which is right in the middle of the range we gave.

Adjusted EBITDA was $63 million and was within the range we gave. But again, before the $7.5 million from incremental phantom stock expense, we were above the high end the range at $71 million.

Finally, our adjusted pretax income was $31 million, which was also within our guidance range. However, without the $7.5 million from the incremental phantom stock expense, we are at the very high end of the range at $39 million.

Needless to say, we are pleased that our total revenues and profitability was within or above the guidance that we gave. Turning to Slide 7.

On this slide, you can see that contracts per community for the first quarter increased 48% year-over-year. While that was an easy comparison, the 9.6 contracts per community in the first quarter is 12% higher than the average of 8.6 contracts per community for the first quarter between ‘97 and ‘02.

We use that time often because it was a period of neither bust nor boom. The 9.6 was also about the equivalent of the first quarter of 2020, which was the most recent period before the effects of COVID.

Turning to Slide 8. We show interest rate trends.

The gray line on this slide shows what happened to interest rates last year between July of ‘22 and February of ‘23. During this period, when rates declined, we saw a pickup in sales pace.

A year later, the blue line shows what happened with these rates this year during the same time. The monthly rate pattern is very similar to the prior year.

Even though rates are incrementally higher this year, we have once again seen an increase in sales as people adjusted their expectations regarding rates. Needless to say, the slow decline of rates has been helpful.

Even though interest rates are higher than last year during the same period, our sales are far greater than last year during this period. On Slide 9.

We give more granularity and show the trend of monthly contracts per community, compared to the same month a year ago for each month of the quarter as well as the last month of the fourth quarter. This slide shows contracts per community, including and excluding build-for-rent contracts.

No matter how you look at it, our contract pace has improved significantly for each of the four months shown on this slide. As far as February goes, we’re three weekends deep into the month and while last February sales pace was excellent at 4.1 contracts per community, this year’s February sales pace so far has been even better.

Turning to Slide 10. We show annual contracts per community.

On the far-left hand side, you can see our average sales base of 44 for that normal period I mentioned between ‘97 and ‘02. On the far-right hand side, you can see that for the past 12 months, the annual contracts per community was 43.9 it is not as good as the post-COVID sales boom paste in ‘20 and ‘21, but it could puts our current sales pace at our normal annualized sales pace.

Turning to slide 11, we show our contracts per community as if our quarter ended on December 31, ‘23 compared to our peers that report contracts per community on a December quarter end. At 8.4 contracts per community, our sales page per community is the fourth highest among the public home builders that reported for this time period.

On slide 12, you can see our year-over-year growth in contracts per community for that same period, and it was the third highest among the peers. The last two slides illustrate that we’re not only competitive, but we continue to get more than our fair share of contracts.

Turning to slide 13. On the left-hand portion of the slide, we show total website visits during the month of January for ‘23 and ‘24.

As you can see, total website visits are up more than a 100,000 year-over-year. For January, total website visits were also up 43% month over month from December.

On the right-hand portion of the slide, you can see internet leads. Those are customers that gave us their email address or phone number.

The internet leads per community were up 13% year-over-year and they were up 31% month over month. Now seasonality is to be expected, but it certainly is great to see the best improvement over last year.

Of note, both total website visits and internet leads per community for January. We’re also above the levels back in January of ‘19 and January of ‘20, which was before the COVID surge in demand.

Anecdotally, we’re seeing similar strong levels of activity in February as well. Through this last weekend, weekly traffic in our communities has also been continuing at healthy levels.

These trends indicate that future demand for new homes should remain strong. One of the reasons, we’ve been able to maintain a strong sales pace is related to our pivot to start more quick move-in homes or QMI, as we call them.

Having more QMIs, allows us to offer customers mortgage rate buy downs that would be cost prohibitive on to be built homes which have longer delivery dates. If you turn to slide 14.

On this slide, you can see that customers that used a buydown declined from 87% in the month of November to 82% in December and down further to 72% in the month of January. We average 79% for the quarter, based on sales so far in February, the expectation is that it’ll continue to decline in February.

For the foreseeable future, elevated QMI remain part of our operating philosophy. One of the benefits of a larger QMI supply is that it greatly reduces complexities for our customers and increases efficiencies for our trade partners.

It also makes it easier for our internal construction and purchasing teams. We’re certainly becoming much more proficient at producing, monitoring and selling a greater number of QMIs.

If we turn to slide 15, which shows QMIs by community, you can see that after a significant shortage of QMI during the COVID surge in demand, we’ve gone from a trough of 1.4 QMIs per community at the end of the second quarter of ‘21 to 6.3 QMIs at the end of the first quarter of ‘24. In the Q1 of ‘24, our QMI sales were about 63% of our sales versus 40% historically, a significant increase.

We’ll continue to manage our start schedule per community with our current sales pace per community at each community. Not only do we monitor our QMIs, but we continue to keep an eye on the supply of QMIs in the market.

With the exception of a few communities from time-to-time, we do not get the sense that our peers are being overly aggressive or out of the ordinary under the QMI strategy. While there is no perfect data set on pool of QMIs in the market.

Slide 16 shows existing homes for sale and QMI for all homebuilders as measured by the consensus bureau. The blue line shows the number of existing homes for sale around the country remaining depressed at about 900,000 homes, that’s less than half of the historical average of 2 million homes available for sale.

The gray line on this slide represents existing homes plus started and completed new homes, the measure that the U.S. Census Bureau uses for spec homes or QMI.

The combined total today is 1.2 million homes, that’s about half of the historical average of 2.3 million homes. While that’s not perfect, this data confirms our observations that inventory available for homebuyers regardless of whether it is new or existing homes remains at extremely low levels.

Consumers have fewer existing homes to choose from and as a result, homebuyers are turning more to new construction than they have in the past. Additionally, the ability to buy down mortgage rates gives builders an advantage over existing rates.

Even if rates move down to 6% later in the year, we believe it’s unlikely that it would create a surge of existing homes being listed and increasing supply. Moving to Slide 17.

Due to the strength of demand for our homes, we are still able to raise net home prices in 37% of our communities during the first quarter of ‘24. As you can see on this slide, this percentage is lower than it had been for the previous three quarters, but it’s unusual to raise prices over the slower winter holiday season.

We’ve already seen increases in 44% of our community’s month-to-date for February. We probably will see even more increases, as we get further into the spring selling season based on the early demand that we’re seeing.

Slightly higher prices and lower mortgage rate buy down costs will certainly be helpful to margins if this continues. We monitor contracts on a community-by-community basis.

If we are ahead of our expected sales pace, we’ll generally make small incremental week-by-week increases. Keep in mind that these net home prices I’m referring to are often reductions in incentives or concessions.

As a reminder, we do not assume any future home price increases in our guidance and we do not assume future home price increases when we underwrite new land transactions. The fundamentals remain strong for the new home industry and our operating results and our recent sales pace reflect those results.

Now, I will turn it over to Brad O’Connor, our Chief Financial Officer and Treasurer.

Thank you, Ara. Now beginning with slide 18, you can see that we ended the quarter with a total of 135 open-for-sale communities, 118 of those communities were wholly owned.

We opened 19 new wholly owned communities and closed 14 wholly owned communities during the first quarter. We also opened one unconsolidated joint venture community during the first quarter, this was the second quarter in a row, we saw a sequential growth in our total community count.

We expect our total community count to continue to grow further in fiscal ‘24. However, it is difficult to give a projection because existing communities can sell out ahead of schedule and new community openings can be delayed for a variety of reasons.

But make no mistake about it, we are extremely focused on attaining substantial community count growth this year and feel like we are making solid progress. Turning to slide 19, we ended the first quarter with 33,576 controlled lots, which equates to a 6.7-year supply of controlled lots.

Our lot count increased both sequentially and year-over-year. We continue to be disciplined with respect to our underwriting process.

Our land teams are actively engaging with land sellers and negotiating for new land parcels that meet these underwriting standards. As a matter of fact, our land and land development spend was $230 million in the first quarter of fiscal ‘24, which was the highest quarterly land spend since 2010 when we first reported the data.

Our corporate land committee calendar continues to be busy, which is an indication that our lot count should continue to increase over time, but not always in a straight line. By using current home prices, including the cost of appropriate mortgage rate buy downs, current construction costs, and current sales space to underwrite to a 20% plus internal rate of return, our underwriting standards automatically self-adjust to any changes in market conditions.

We are finding many opportunities and are very focused on growing our top and bottom lines for the long term. On slide 20, we show the percentage of our lots controlled via option increase from 44% in the first quarter of fiscal ‘15 to 77% in the first quarter fiscal ‘24.

This increase is intentional and has been a focus of our land light high inventory term land strategy. We are pleased with the progress we have made.

Turning now to slide 21, compared to our peers, you see that we continue to have one of the higher percentages of land controlled via option and we are significantly above median. On slide 22, we show year supply of own lots for us and our peers, with 1.5-year supply, we have one of the lowest year supply of owned lots.

As the previous three slides show, we are very focused on increasing the percentage of lots we control through options which provides the benefit of higher inventory turn, increase returns on capital and land risk mitigation. Turning now to slide 23.

Compared to our peers, we continue to have the third highest inventory turnover rate. High inventory terms are a key component of our overall strategy.

We believe we have opportunities to continue to increase our use of land options and to further improve our inventory terms and our returns on inventory and future periods. Another way to improve our inventory terms is by shortening our construction cycle times.

We made good progress reducing our cycle times in the second half of fiscal ‘23 from 190 days to 160 days. Our cycle times in the first quarter of ‘24 were similar to the fourth quarter of ‘23 at around 160 days.

However, it is a significant improvement from the 190 days in the first quarter of 2023. We still have some work ahead of us to get back to pre-pandemic cycle times of about four months or 120 days.

Our ROI results will be boosted as our cycle times return to normal, which is 25% better than what we are currently experiencing and positive momentum continues. Turning to Slide 24.

Even after $230 million of new land and land development spend, which was the highest quarterly land spend since 2010 when we first reported the data and after using $114 million toward the early retirement of debt in our first quarter, we still ended the quarter with $313 million of liquidity, above the high end of our targeted liquidity range. Turning now to Slide 25.

This slide shows our maturity ladder as of January 31, 2024. We have taken significant steps to improve our maturity ladder over the past several years.

The latest debt reduction in the first quarter of ‘24 and most recent refinancing done in the Q4 of ‘23 shows that we remain committed to strengthening our balance sheet. Turning to Slide 26.

Here we show the progress we’ve made to date to grow our equity and reduce our debt. Starting on the left-hand portion of the slide, we show the growth in equity over the past few years.

On the right-hand portion, you can see the progress we’ve made in reducing our debt, including the redemptions we made in fiscal 2023 and 2024, we reduced our debt by $650 million, since the beginning of fiscal 2020. Our net debt to net cap at the end of the first quarter of fiscal ‘24 was 58%, which is a significant improvement from 146% at the beginning of fiscal ‘20, but we still have more work to do to achieve our goal of a mid-30% level.

We have made significant progress and are well on our way to getting there. Our balance sheet has improved significantly over the last five years and we expect to continue to make significant progress moving forward.

Given our remaining $295 million of deferred tax assets, we will not have to pay federal income taxes on approximately $1.1 billion of future pre-tax earnings. This benefit will continue to significantly enhance our cash flow in years to come and will accelerate our growth plans as well as our ability to pay down debt.

Our financial guidance for the second quarter of fiscal 2024 assumes no adverse changes in current market conditions, including no further deterioration in our supply chain or material increases in mortgage rates, inflation or cancellation rates. Our guidance assumes continued extended construction cycle times averaging five to six months compared to our pre-COVID cycle time for construction of approximately four months.

Further, it excludes any impact to SG&A expenses from our phantom stock expense related solely to the stock price movement from our $168.97 stock price at the end of the first quarter of fiscal ‘24. Slide 27 shows our guidance for the Q2 of fiscal ‘24.

We expect total revenues for the second quarter of ‘24 to be between $675 million and $775 million. We also expect adjusted gross margin to be in a range of 21.5% to 23% and SG&A as a percent of total revenue to be between 11% and 12%.

Our guidance for adjusted EBITDA is a range between $80 million and $90 million and our adjusted pretax income for the second quarter of fiscal ‘24 is expected to be between $45 million and $55 million. Of note, the second quarter included a land sale of approximately $5 million.

Turning to Slide 28. Here you can see the positive trends from the first quarter ‘24 results to our guidance for the second quarter of ‘24.

All of the metrics show a sequential improvement. At the midpoint, total revenues would be up 22%.

Adjusted gross margin would be up 45 basis points. SG&A ratio would decline 300 basis points and pre-tax income would be up 61%.

Turning to slide 29. On this slide, we show that compared to our peers, we had the highest return on equity at 40.1% over the last 12 months.

Turning to slide 30, we show compared to our peers that we have one of the highest consolidated EBIT returns on investment at 33%, while our ROE was helped by our leverage, our EBIT return on investment, a true measure of pure home building operating performance without regard to leverage was the highest among our mid-size peers. Over the last several years, we have consistently had one of the highest EBIT ROIs among our peers.

Slide 31 shows that for 2022, we had the fourth highest EBIT, ROI and second highest among mid-size peers, and for 2021, we had the sixth highest EBIT, ROI overall and third highest among mid-size peers. We have an operating model that we don’t speak about specifically, but is clearly delivering superior results and our relative position has been improving over this three-year period.

Eventually, investors will recognize our consistent superior returns on capital, reduce the leverage and significantly improve balance sheet. As a result, our stock price multiples should increase.

On slide 32, we show our price to book multiple compared to our peers, given our rapidly growing book value, we think it would be appropriate to consider a variety of metrics, including EBIT return on investment, enterprise value to EBITDA, and our price to earnings multiple, when establishing a fair value for our stock. We believe when all our fundamental financial metrics are considered, our stock is a compelling value.

Turning to slide 33 here, you can see that when we compare our enterprise value to adjusted EBITDA, we had the lowest ratio despite our outperformance on a return basis. On slide 34, we show the trailing 12-month price to earnings ratio for us and our peer group.

Based on our price earnings multiple of 5.96 times at yesterday’s closing stock price of $164, we are trading at a 40% discount to the home billing industry average PE ratio. We recognize that our stock may trade at a discount to the group because of our higher leverage.

However, given our 40% return on equity, our industry leading growth in book value, our top quartile EBIT return on investment, combined with our rapidly improving balance sheet, we believe our stock continues to be the most undervalued in the entire universe of public home builders. We remain focused on further strengthening our balance sheet, including further reduction in our debt levels.

I will now turn it back to Ara for some brief closing remarks.

Thanks, Brad. We’re encouraged by our sales pace in January and the first few weeks of February.

There are two main factors that cause us to be optimistic about the spring selling season. First, there’s a downward trend in mortgage rates.

Second, the tightness of existing homes for sale. Third, there are very favorable signs from the employment market.

Fourth, there are strong demographic trends, including the millennials, and finally, the overall growth in the broader economy. These same factors should continue to drive demand for new homes over the longer term.

After reducing debt for several years and refinancing much of our remaining debt last fall. We’re in a position where we are now more focused on growing our revenues and achieving higher levels of profitability.

Rest assured that while we’re more focused on growth than the past, we’re still extremely committed to reducing our leverage and are targeting about mid-30% net debt-to-cap ratio. That concludes our formal comments, and we’ll open it up now for Q&A.

Thanks for taking my questions. My first one is just related to the QMI share of the business.

Could you maybe just remind us what percent of the business now whether on orders or deliveries is QMIs or in your first quarter versus maybe a year ago or pre-COVID and what the margin differential is on those QMIs versus the business average? Thanks.

The QMI business for the first quarter of ‘24 was 63% of the deliveries, I’m sorry, of sales. It’s typically in the past if you went back to pre-COVID would have been typically 40% -ish up or down but around 40%.

We aren’t really commenting on the margin differential. Overall, the QMI as we mentioned do get impacted with rate buy downs that happen up until closing, which is why we mentioned we slightly missed our margin percentage.

But we’re not providing the breakdown of our margin to be built versus QMI.

Understood. Do you see that 63% of sales, how high could you see that going?

Is that kind of a comfortable range? Or would you foresee that rising a little bit more?

It’s probably a comfortable range right now. On the West Coast, it’s higher than that average.

On the East Coast, it’s lower than that average. We tend to sell more to be built.

But I think at the moment, the 60% to 70% range is probably a fair guesstimate.

That’s helpful. And then just on the pivoting to cycle times, what exactly are the bottlenecks preventing you from getting those 40 days back to get you back to the four months from the 160 where you are now?

I think it’s early on during the COVID craziness, it was more of a challenge of material and labor. Today, the material shortages have really dwindled and it’s really more about labor.

I mean, the housing market has been strong, apartment construction was strong. There was a lot of demand on labor.

Luckily, while new home construction for sale has been strong, apartment construction seems to be waning a bit. I think there’ll be a little less pressure on the labor side.

Hopefully, that will allow us to get back to more normal cycle times.

That’s helpful. If I could squeak in one more, somewhat similar, just on the land development side.

I know you’re trying to ramp community count and could you talk a little bit about the horizontal development timelines and maybe some constraints there? Cost inflation has that kind of leveled off, or is that still accelerating?

Whereas on the material side, on the vertical construction, it’s leveled off. Anything on the horizontal development would be helpful.

Yes. But first of all, land development has continued to be a little behind schedule for the whole industry.

The same sort of thing regarding the general demand. But on top of that, the one particular problem has been transformers for the entire industry.

And that has been delaying community openings for outside developers and for ourselves for internal developers. Costs have not really been a material problem.

It’s just been timing delays, and it’s very often related to transformers. I will add, I guess on the west-coast in California, they’ve had a particularly large amount of rain too.

So that’s been a bit of an effect.

Okay. And do you think your reliance on third party developers, given you’re optioning a relatively high share of your lofts, has had an impact on maybe your visibility into the community count ramp here, and any impact on from those developers from the regional banking crisis about a year ago?

Or has that kind of settled itself out?

Well, I’d love to blame it on our outside developers, but I mean, we can be late as well. There’s just been a challenge on for everyone on, land development, again, the transformer issue that I mentioned.

So that’s part of what makes it difficult to project community count. The other thing is we have been selling out a little faster, depending on how fast a particular community sells out that would be deleted from community counts.

So that’s what makes it hard to measure. Suffice it to say though, that we’re quite optimistic that we’ll continue increasing the set -- the community opening pace, hopefully even more than we’ve seen over the last couple of quarters.

But for all the reasons I just mentioned, it’s always hard to project accurately.

Good job on the quarter and the year. I was wondering, I saw that you guys paid down some debt.

Can you help us which trache of debt you guys paid down?

The final payment that occurred in November was really part of the transaction that we had announced in the fourth quarter. And so, we’ll get to the specific tranche.

It was the 10% senior secured, 1.75 notes that were due November of 2025. That October was $114 million of book value.

Great, great. And so, going forward, is there a plan to continue reducing debt?

Or are you switching gears and not doing that going forward?

What we try to make clear is, while our primary focus in the past was bringing down debt, we brought it down enough that we feel we can focus on both significant growth and still reducing debt. Our fanatical focus on inventory turn, which is driven by our option loss and really focusing on the timing between taking down a lot and construction certainly helps that going forward.

The other thing that obviously helps us quite a bit is our NOL, because we’re not having to pay taxes even though we booked the taxes. We feel confident that we can grow significantly and still continue to reduce debt to reach our target of around the mid-30% range.

Just to add to that, when we did the refinancing in the fourth quarter, we intentionally left if you look at the maturity ladder slide that we provided, we intentionally left tranches of relatively small amounts of debt that’s coming due in ‘26, ‘27 and ‘28 that’s there for us to continue to pay down.

Okay. Yes, that was going to be my next question.

If you did continue to pay down, is there a specific order that you’d have to go down?

We would likely look at it in order of where we don’t have to make significant prepayment penalties, but you have to balance that with whatever the rates are in the individual notes. We don’t have an order that we need to take out the near-term maturity.

We can do it in whatever order we want, but it has to do with what it would cost us to take out each piece and when.

Okay. The good news is your leverage is coming down pretty quickly.

I think by the end of the year, you should be pretty similar to most other builders. That’s very, very good progress.

My guess is we’re making there for sure.

Yes, most definitely. Now in terms of your margin outlook, as it pertains to incentives, I think you guys noted, you’ve seen improvements in sales so far in January and February.

Are you guys more likely to pursue higher sales pace and maintain the incentives the same? Or are you guys more likely to accept the lower sales pace but try to reduce the incentives?

I would say pace is very important to us, but we look at every community, community-by-community and while trying to maintain the pace in that community, we will tweak pricing or reduce concessions, small amounts to continue to improve our margin without shutting off the sales pace. So, it’s a balancing act, but pace is definitely important to us.

Okay. And if I could ask one last one, as far as the phantom stock expense going forward, that’s basically, impacted by the movement in your stock price relative to each previous quarter?

That’s exactly right. So, when we -- each quarter end we adjust the phantom stock expense based on the stock price on the last day of the quarter.

And so, the guidance, as we’ve said, the guidance are given for the second quarter assumes that the stock price stays the same as it was on January 31st at the 168, I think it was. So, if it moves up or down from there, we either can get a benefit or additional expense associated with that stock price movement.

That’s right.

And is that somewhat indefinite or when would those pluses and minuses sort of change go away?

The most recent grant that has phantom stock expense was in December of ‘23. So that particular grant will have the exposure to this stock price over the next few years.

We did have, one of the early ones was 2019, that one is now completed. So, the exposure to that one ended actually in this first quarter, the final payout was made.

So, it just depends on the grant. And when that grant gets paid out.

I’ll add that given the stock price has been much healthier recently, it’s very likely impossible that we’ll reduce our use of phantom stock in the future, and our older ones are expiring.

Yes. I was going to say, is there any benefit to using this method versus giving people -- to some other compensation?

The benefit is that we foresaw our earnings increasing and didn’t think it would be a good idea to dilute our current shareholders. We thought they benefit more from the lack of dilution than the small expense on a given quarter.

Again, if you go back quarter-by-quarter, I believe the data’s in the appendix. You can see on an annual basis, it really hasn’t amounted to much.

It is been up and down. One quarter is up 5 million, one quarter is down 5 million.

But on any individual quarter, yes, it makes a difference on the quarter.

Great, thank you very much. As we said, we’ve been pleased with the results and the market overall just feels like it’s continuing to strengthen.

So, we’re looking forward to a very good ‘24 and look forward to reporting more good news next quarter. Thank you.