Alex Barron: Yes, no, I’m not saying at any price, but when it’s trading at a 30% discount to book, it seems almost like a no brainer. But anyway, good to hear that. What about similar thoughts on dividends? Maybe you’re not quite there yet, but other builders have started to launch more consistent dividends. Just your thoughts around that.
David Goldberg: I would tell you, Alex, it feels a little premature to have that conversation. I think, Alex, I think we try to make it pretty clear kind of what the considerations in the market and frankly, repurchase program, as Allan said, seems to make a lot of sense given where we are. So…
Allan Merrill: Yes, and we want to execute our multiyear goals, like we’ve got, we are going to grow the community count. We are going to have net debt to net cap below 30% when we said we would. And we think we can do that and accommodate in these, this range of share price and buybacks. But I think to go beyond that in terms of returning capital to shareholders, we need to get a little further along.
Alex Barron: Okay, great. If I could ask one more on the orders, the southeast region orders were down 30%. And is that just mainly because you’re experiencing strong demand and communities are selling out faster than you’re replacing them or what’s going on there?
Allan Merrill: Yes. Excuse me. A lot of our southeast divisions do not have very large community counts. And one of the things that happens to us occasionally in the southeast is that we’ll gap out because we don’t run a big, big spec program. So we can get caught between phases a little bit. I don’t think anyone should infer from a quarter a particular narrative around the southeast. Our southeast markets pretty good. We are happy to be in them, and frankly, we’re growing community count in every one of them.
Alex Barron: Okay, great. Well, best of luck. Thank you.
David Goldberg: Thank you, Alex.
Operator: Thank you. [Operator Instructions] Currently our last question in queue is from Jay McCanless from Wedbush. Please go ahead.
Jay McCanless: Hey, good afternoon, everyone. So, I wanted to ask also on the orders with both the southeast and the east down pretty significantly relative to where the west was, the cynic in me says some of this move to the READY PLUS Homes is move some inventory, generate some cash flow in a very competitive environment. Is that the right way to think about this? Or is there really a push to get some of these newer homes out there?
David Goldberg: We really want to get the newer homes out there. You are familiar with our balance sheet. There isn’t really a generate cash focal point. We’re really trying to maximize the value of every community. We’ve got some communities that have been in the STAR and PLUS Series where we’ve been able to introduce READY. We want to accelerate that. We’ve got some communities that are not going to be converted or transitioned to READY. I’d like to build out of them. And in the communities where we are, and all new communities are only READY, we definitely want to get some sticks in the air. So we are seeding, as we always do, those communities with some specs. But that the focal point is really around. The sooner we have clarity, certainty, and the simplicity of we sell READY homes, they’re better built and they perform better. I think the happier will be, our buyers will be and our shareholders will be.
Allan Merrill: Jay, I would tell you in the east, the sales pace was very much in line with the overall company average. It was a little bit tough comp from last year, but there’s really nothing feed into there.
Jay McCanless: Okay. And then I wanted to ask, I’m looking for the slide in the deck where you said that the, okay, I get Slide 14 where you say that the gross margins when you transition to already homes or mostly Ready Homes is going to be improved versus the second half of fiscal 2024. But when I’m looking at the numbers you gave right now, it looks like 20% adjusted gross margin for the third quarter, probably something in line and maybe a little bit better for the fourth quarter. And that’s a pretty easy bar to say. You’re going to be higher than. Where are these margins going to compare to where they were in the first half, where you guys had a pretty good set of gross margins the first half of this year?
Allan Merrill: Well, Jay, just for a quick correction on the question, the words in the script were pretty clear. If you look at the full year gross margin guide, it suggests a pretty significant pickup in the fourth quarter. So it’s not going to be around 20%. We said it’s a number better than that.
David Goldberg: And I think we got it to above 21% for the full year. The only way you’re going to get there with Q3 at 20% is a good lift in Q4.
Allan Merrill: Exactly.
Jay McCanless: Okay. But then still, the question is, how does the margins under these new homes compare to what you were doing in the front half? Is it going to be equal, slightly less as you get the build issues worked out? What should we expect from that?
David Goldberg: Well, I guess, I would say is, we think that margins in 2025 will be higher than margins in 2024. And that’s because these are homes that command, I think that kind of value, and because I think we can keep working on getting our build costs down. So, I, it’s hard to make a comparison of one period to another period as which periods and which homes. But at a higher level, what we’ve said is 2025 will be above 2024.
Jay McCanless: Okay. And then the last one I had just on the specs. It looks like your specs and process were up sequentially from first quarter to second quarter. Could you talk about what’s driving that?
David Goldberg: Community count growth? Yep.
Allan Merrill: Jay, if you look at our slide, we actually show on a per community basis, and it’s really not dissimilar on a per community basis. It’s just that we have the community count growth coming online, and that’s driving some incremental specs.
