We had a record setting second quarter highlighted by a 97% increase in net income, a 23% increase in homes delivered a 35% increase in revenue, and a return on equity of 27%.
All of this is a result of a high level of performance across all 15 of our housing operations, as well as from our mortgage and title business.
Our gross margins improved by 320 basis points over last year, and improved sequentially by 70 basis points from the first quarter to a second quarter level of 25.1%.
Our overhead expense ratio improved by 110 basis points from a year ago to 10.4% of revenues, reflecting greater operating leverage.
And most importantly, our pre tax income percentage improved significantly to 14.7% versus 10% a year ago.
Since 2013, our revenues have grown at a compounded annual rate of 19%.
And our pre tax income has grown at an even more impressive annual rate of 43%.
And as reflected in our year to date new contracts increasing by 24%.
And our record set second quarter new contracts just slightly better than a year ago, with 2267 homes sold during the quarter.
We achieved record second quarter sales notwithstanding that we are operating in nearly 20% fewer communities than a year ago.
For EMI homes, we sold 31% more homes and last year second quarter, aided by the strength of last May in June.
As you all recall, as we moved into last year's third quarter, where our sales grew by 71% over 2019.
Smart Siri sales in the second quarter accounted for just under 40% of total company sales compared to about 35% a year ago.
We are selling our smart series homes and 35% of our communities compared to 30% of the communities a year ago.
The average price of our smart series Homes is now just under $350,000 compared to roughly $330,000 at the end of the first quarter.
Our backlog sales value at the end of the quarter was $2.5 billion and all time quarterly record and 70% better than last year.
units in backlog increased by 49%.
To an all time record 5488 homes with an average price of homes in backlog equal to $454,000.
This is 15% higher than a year ago.
As I mentioned at the beginning of the call, we experienced strong performance from each of our 15 homebuilding divisions, with substantial income contributions for most of our markets led by Orlando, Tampa, Minneapolis, Dallas, Columbus, and Cincinnati.
Our deliveries increased by 18% over last year in our southern region, reminding you that our southern region consists of our four Texas markets, three Florida markets and two North Carolina markets.
Deliveries in the southern region increased to 1297 homes, or 57% of the total.
The northern region, which is the balance of our markets, six to be exact in Ohio, Indiana, Illinois minutes Soda in Michigan contributed 961 deliveries, which is roughly 31% better than a year ago.
new contracts in our southern region increased by 3% for the quarter and decreased by 4%.
In our northern region, our owned and controlled lot position in the nine markets representing our southern region increased by 35%, compared to last year, and increased by 15%.
And the six markets that comprise our northern region 34% of our owned and controlled lots are in the north, with the balance roughly 66%.
company wide, we own approximately 18,300 lots, which is roughly a two year supply.
On top of that, we control the option contracts, and additional nearly 26,000 lots.
So in total, are owned and controlled lots are slightly slightly more than 44,000 lots, which is just below a five year supply.
Perhaps most important 59% of those near 44,000 lots are controlled under an option contract, which gives me my home's significant flexibility to react to changes in demand or individual market conditions.
First, our financial condition is very strong with one and a half billion dollars of equity at June 30, and a book value slightly over $50 a share.
We ended the second quarter with a cash balance of $372,000,000.00 borrowings under our $550 million unsecured revolving credit facility.
This resulted in a very healthy net debt to cap ratio of 16%.
This replaces our existing $50 million share repurchase authorization which had roughly $17 million of remaining availability.
The $100 million share repurchase authorization reflects our expectation of the ongoing strength in our business and our commitment to creating long term shareholder value, while always maintaining low debt leverage.
new contracts and second quarter increased to 2267.
A second quarter record 2261 for last year second quarter.
And last year second quarter was up 31% versus 2019.
Year today, we have so 5376 homes 24% better than last year.
Our new contracts were up 103% in April, down 11% in May and down 33% in June.
Our sales pace was 4.2 in the second quarter compared to last year is 3.4.
And our cancellation rate for the second quarter was 7%.
We continue to manage sales to closely align ourselves with our ability to start and deliver our homes along with focus on our margins, especially given our record backlog of 5500 houses.
About 51% of our second quarter sales were to first time buyers, compared to 56% in the first quarter.
In addition 43% of our second quarter sales for inventory homes, the same percentage as the first quarter.
Our community count was 175 at the end of the second quarter compared to 220 at the end of last year second quarter, and the breakdown by region is 79 in the northern region and 96 in the southern region.
During the quarter we opened 16 new communities while closing 20 During last year of second quarter we opened 22 new stores and close 25.
We delivered an all time quarterly record of 2250 and homes in the second quarter.
And year today we have delivered 4277 homes, which is 28% more than last year.
And we have started over 5000 homes in the first half of this year, which is 1500 more homes than the first half of last year.
revenue increased 35% in the second order, reaching an all time quarterly record of 961 million.
And our average closing price for the quarter was 411,008% increase compared to last year second quarter average of 379,000.
Our second quarter gross margin was 25.1%.
Up 320 basis points year over year.
And our second quarter SG and a expenses were 10.4 revenue, improving 110 basis points compared to 11.5 a year ago.
Interest expense decreased 2.1 million for the quarter compared to last year.
Interest incurred for the quarter was 10 point 1 million compared to 10 point 3 million a year ago.
Our pre tax income was 14.7 versus 10 last year, and our return on equity was 27% versus 17%.
And during the quarter we generated 156 million of EBITDA compared to 86 million in last year second quarter.
we generated 174 million of positive cash flow from operations in the second quarter compared to generating 83 million a year ago.
And we have 22 billion in capitalized interest on our balance sheet about 1% of our assets.
And our effective tax rate was 24% in the second quarter, same as last year, second quarter, and we estimate our annual rate for the year to be around 24%.
And our earnings per diluted share for the quarter increased to $3.58 per share from $1.89 per share last year.
Our mortgage and title operations achieved record second quarter results in pre tax income, revenue and number of loans originated revenue was up 50% to $28.6 million due to a higher volume of loans closed and sold, along with higher pricing margins.
Pre tax income was $18 million, which was up 66% over 2000 and 22nd quarter.
The loan to value on our first mortgages for the second quarter was 84% compared to 83%.
78% of loans closed in the quarter were conventional, and 22%, FHA or VA.
This compares to 77% and 23%, respectively, for 2000 and 22nd quarter.
Our average mortgage amount increased to $336,000 in 2021 second quarter compared to $311,000.
Loans originated increased to a second quarter record of 1704 loans 24% more than last year, and the volume of loans sold increased by 48%.
Our borrower profile remains solid, with an average down payment of over 16% and an average credit score of 747 up from 746 last quarter.
Our mortgage operation captured over 84% of our business in the second quarter, compared to 83% last year.
at June 30, we had $134 million outstanding under the MIF warehousing agreement, which is a $175 million commitment that was recently extended and expires in May 2022.
And we also had $34 million outstanding Under a separate $90 million repo facility, which expires in October of this year.
Both facilities are typical 364 day mortgage warehouse lines that we extend annually.
As far as the balance sheet we ended the second quarter with a cash balance of 372 million and no borrowings under our unsecured revolving credit facility.
And during the second quarter, we extended the maturity of our credit facility to July 2025, and increased the total commitment to 550 million.
Total homebuilding inventory at June 30, was 2.1 billion, an increase of 250 million from last year, and our unsold land investment at June 37 or 82 million compared to 810 million a year ago.
We had 497 million of raw land and land under development, and 285 million of finished unsold lots.
We owned 3872, unsold finished lots, with an average cost of 74,000 per lot.
And this average lock cost is 16% of our Foreign Earned 54,000 backlog every sale price.
And during the second quarter, we spent 150 million on land purchases, and 87 million on land development for a total of 237 million, which was up from 156 million in last year, second quarter.
And in the second quarter, we purchased about 4000 lots of which 78% were all in 2,022nd quarter, we purchased about 2100 lots of which 67% were all in general, most of our smart series communities are rolling deals, and have above average company pace and margin.
And at the end of the quarter, we had 59 completed inventory homes, and 169 total inventory homes.
Another total inventory 498 are in the northern region in 371 are in the southern region.
And at the end of the first quarter, we had 98 completed inventory homes, and 708 total inventory homes.

Summary:
We had a record setting second quarter highlighted by a 97% increase in net income, a 23% increase in homes delivered a 35% increase in revenue, and a return on equity of 27%.
Our backlog sales value at the end of the quarter was $2.5 billion and all time quarterly record and 70% better than last year.
units in backlog increased by 49%.
The northern region, which is the balance of our markets, six to be exact in Ohio, Indiana, Illinois minutes Soda in Michigan contributed 961 deliveries, which is roughly 31% better than a year ago.
The $100 million share repurchase authorization reflects our expectation of the ongoing strength in our business and our commitment to creating long term shareholder value, while always maintaining low debt leverage.
revenue increased 35% in the second order, reaching an all time quarterly record of 961 million.
And our earnings per diluted share for the quarter increased to $3.58 per share from $1.89 per share last year.