You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: New factors emerge from time to time and it's simply not possible to predict all such factors.
On our call today, Allan will review highlights from the third quarter, discuss our view of the current macroeconomic environment and outline how we have strategically positioned for continued growth in fiscal '22 and beyond.
I will cover our third quarter results in greater depth, our expectations for the fourth quarter and full fiscal year and update our expectation for continued growth in our land position followed by a wrap up by Allan.
We had a very successful third quarter, generating financial results that met or exceeded our expectations, positioning us for a strong end of the fiscal year.
Our sales pace in the third quarter was one of the highest levels that we've generated in the last five years.
And in fact, this pace would have been even higher if not for our deliberate efforts to proactively slow sales to align with our production capacity and limit our exposure to raw material price inflation.
We delivered substantial gains in operating margin, EBITDA and net income as we benefited from increased pricing and improved overhead leverage.
On the balance sheet, we expanded both our total lot position, share of lots controlled by option, while retiring $14 million in debt.
Together, these results perfectly demonstrate our long-standing balanced growth strategy, which is a multiyear plan to grow profitability faster than revenue from a less leveraged and more efficient balance sheet.
With these results and confidence in our expectations for the fourth quarter, we are once again raising full year guidance, highlighted by earnings per share of at least $3.25.
Collectively, these factors have led to significant home price appreciation, which has clearly outpaced wage and income growth.
In the coming quarters, we do not expect this level of price appreciation to continue.
Our view is that disciplined mortgage underwriting will effectively limit the extent of home price appreciation.
That's entirely healthy and gives us confidence that we won't experience the kind of pricing accesses about a painful correction in the future.
The demand and supply characteristics of our industry remain highly compelling.
Aspiration for homeownership among millennials and changing homeownership expectations among baby boomers provide a durable source of demand for new homes, particularly with enduring work from home expectations.
And the significant deficit of new homes simply can't be addressed quickly with the supply chain, land use and entitlement barriers that exist.
Ultimately, our industry's challenge will be to ensure that labor and material cost expectations in the supply chain remain tethered to affordable home prices.
That's where we believe our market positioning will prove advantageous.
With three strong customer-facing differentiators, we have a lot of tools to work with to enable us to deliver extraordinary value at an affordable price in a highly competitive environment.
Last quarter, we provided initial visibility into our expectations for profitability growth in fiscal '22, and our confidence has only increased since then.
First, at the end of our third quarter, we had more than 1,500 homes in backlog scheduled to close next year, nearly double the level at this time last year.
And importantly, these homes have higher prices and higher margins.
Second, even as our ASP has increased, we have remained focused on carefully managing our overhead costs.
This will drive SG&A leverage, pushing SG&A below 11% next year.
And finally, our deleveraging efforts continue to reduce our cash interest expense, setting us up for reductions in GAAP interest over time.
Next year, we expect at least $5 million in GAAP interest savings with further reductions in subsequent years.
Taken together, we're confident that these factors will allow us to achieve our goal of generating double-digit earnings-per-share growth in fiscal '22.
First, over the past six months, we've experienced exceptional demand in gatherings, our 55-plus active adult business.
While traffic and engagement among this buyer segment was particularly impacted during the early part of the pandemic, the strength in the resale market and the availability of vaccines have contributed to much higher sales activity.
This is a growing part of our business with communities underway in Atlanta, Dallas, Houston, Nashville and Orlando.
Second, the roll out of charity title, our title business committed to contributing 100% of its profits to charity continues to gain momentum.
In fiscal '21, we expect to provide title insurance for more than a third of our closings.
Next year, we expect to provide title for two-thirds of our customers, which should generate philanthropic resources of over $1 million a year on a run rate basis.
This will allow us to expand our efforts with Fisher House and support local charities in each of our markets.
I'm incredibly proud of our team's innovative strategy to develop a dedicated funding mechanism that aligns our customers, employees and partners in supporting our communities.
Looking at our third quarter results compared to the prior year, new home orders decreased approximately 13% to 1,199 as a higher sales pace helped to offset a reduction in average community count.
Homebuilding revenue increased nearly 7% to $567 million on 1% higher closings and a 6% higher average sales price.
Our gross margin, excluding amortized interest, impairments and abandonments was 24.2%, up approximately 300 basis points to the highest level in more than a decade.
SG&A was down 60 basis points as a percentage of total revenue to 11.1% as we benefited from improved overhead leverage.
Adjusted EBITDA was $78.8 million, up over 45%.
Our EBITDA margin was 13.8%.
Interest amortized as a percentage of homebuilding revenue was 4%, down 10 basis points.
And net income from continuing operations was $37.1 million, yielding earnings per share of $1.22, more than double earnings per share for the same period last year.
Given our continued performance and substantial backlog, we are able to increase our financial expectations for fiscal '21.
We now expect EBITDA to be over $250 million.
Our full year EBITDA guidance equates to earnings per share of at least $3.25, up from last quarter's guidance of above $3.
We now expect our return on average equity for the full year to be approximately 15%.
If you exclude our deferred tax asset, which doesn't generate profits, our ROE would be about 22%.
Turning now to our expectations for the fourth quarter.
We expect the sales pace of over three sales per community per month as we actively manage pace to ensure cost certainty and a positive customer experience.
This pace is higher than our historical average, but below the extraordinarily high base we experienced last year.
We expect backlog conversion to be in the mid-40s as we continue to manage through the challenging production environment.
Our ASP should be above $410,000.
Gross margin should be up more than 100 basis points year-over-year.
SG&A on an absolute dollar basis should be down about 10%.
Our interest amortized as a percentage of homebuilding revenue should be under 4%, and our tax rate will be about 25%.
Combined, this should drive earnings per share up over 20%.
In addition, we expect to repurchase over $55 million of debt, bringing our full year total to at least $80 million.
Our increased land spending in the quarter helped us grow our active lot count to over 19,000.
We also increased our option percentage in the third quarter and now control nearly half of our active lots through options, up from less than 30% in the same period last year.
Given our current pipeline of deals, we expect to continue to grow our land position to over 20,000 lots by the end of fiscal '21.
It's worth noting that most of these deals have been in our pipeline for many months and are under contract at favorable prices.
In addition, we remain focused on growing our position, while minimizing risk by maintaining our strict underwriting standards, focusing on products that we built before in some markets that we already know and relying on options to control around half of our lots.
So, while land prices have appreciated, we're still finding deals at pencil, allowing us to refill the pipeline and grow our business.
In the third quarter, we spent over $140 million on land and development and we expect to spend around $600 million for the full year, with higher land spending and a big increase in our option lot position, we're creating a framework to sustain profitable growth in the years ahead.
On Slide 12, we depict our expectations for near-term community count.
As you might expect, the supply chain issues so common in the home construction market have also impacted land development activities.
As such, predicting the timing of new communities has never been more difficult.
While we'll be actively opening communities every month, we don't expect sequential growth in community counts until next spring.
Fortunately,, we've concentrated our acquisition activities in established new home corridors, so many of our coming soon communities are already generating interest lists.
We ended the third quarter with over $600 million of liquidity, up about 50% versus the prior year, with unrestricted cash in excess of $360 million and nothing outstanding on our revolver.
During the quarter, we retired approximately $14 million of our senior notes.
And with two remaining term loan repayments, we're on a clear path to achieve our goal of bringing our total debt below $1 billion before the end of fiscal '22.
Our net debt to trailing 12-month adjusted EBITDA fell below 3 times, down from 8 times five years ago.
During the quarter, our corporate rating was upgraded by one of the rating agencies and we remain on positive outlook at both S&P and Moody's.
We had a terrific third quarter.
But instead of repeating the highlights, I'd like to close by putting this quarter in context.
We have been diligently and successfully executing against our balanced growth strategy.
Over the last five years, we've grown EBITDA by more than 60%, improved our return on assets by more than five percentage points and reduced debt by more than $300 million.
At the same time, we quietly demonstrated leadership in each of the ESG categories.
As satisfying as these results have been so far, we're even more excited about what's in front of us.
Industry fundamentals are solid and we're deliberately investing for future growth.
In the meantime, we'll have higher prices and gross margins and lower overheads and interest expense to sustain earnings growth.
And we aren't just succeeding for investors.
We have charted the most ambitious energy saving course in the industry with our path to net zero energy ready homes, and we've created a growing philanthropic platform to fuse the efforts of our employees with the resources provided by our customers.
I'm confident that we have the people, the strategy and the resources to create durable value in the coming years.

user
q3 earnings per share $1.22 from continuing operations.

assistant