Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — Q2 2023 Earnings Presentation
25 slides from Tri Pointe Homes's earnings presentation, Jul 27, 2023
Slide 1: 2023 Second Quarter Results
2023 Second Quarter Results July 27, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Various statements contained in this presentation, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limite
Slide 3: Management Team
Management Team Thomas Mitchell Douglas Bauer Glenn Keeler President & COO Chief Executive Officer Chief Financial Officer • Over 30 years of real estate • Over 30 years of real estate and • Over 10 years of real estate and homebuilding experience homebuilding experience and homebuilding experience
Slide 4: A diversified portfolio of markets
A diversified portfolio of markets West Segment Markets: San Francisco Bay Area, Inland Empire, Orange County-Los Angeles, Sacramento, San Diego, Phoenix, Las Vegas, Seattle Metro Area LTM Orders: 2,788 LTM Deliveries: 3,508 LTM HS Revenue: $2,783,960 LTM ASP: $794 Lots Owned or Controlled: 16,384 E
Slide 5: Second Quarter Highlights
2023 Second Quarter Highlights 5
Slide 6: 2023 Second Quarter Highlights
2023 Second Quarter Highlights • Net new home orders up 41% and absorption rate of 4.5 net new home orders per community per month Metric 2Q23 2Q22 % Change • New home deliveries down 21% to 1,173 with an average Orders 1,912 1,356 41% sales price of $698,000 Deliveries 1,173 1,485 -21% • Backlog un
Slide 7: Second Quarter Results
OMES pointe tri Second *» Quarter | Results ~ % ae A
Slide 8: Active Selling Communities and Absorption Rate
Active Selling Communities and Absorption Rate Q2 2023 Results Active Selling Communities and Absorption Rate Active Selling Communities by Geography As of and for the quarters ended June 30, 2022 and 2023 As of June 30, 2023 175 5.0 Washington 4.5 D.C. Area(2) 4.5 150 145 2% Washington 3.7 4.0 4% C
Slide 9: Net New Home Orders – Q2 2023 Results
Net New Home Orders – Q2 2023 Results Net New Home Orders Net New Home Orders by Geography For the quarters ended June 30, 2022 and 2023 For the quarter ended June 30, 2023 2,500 Washington D.C. Area(2) Washington 2% Carolinas(1) 2,000 4% 1,912 10% Colorado 2% 1,500 1,356 Increase 41% YOY California
Slide 10: Backlog – Units and Dollar Value – Q2 2023 Results
Backlog – Units and Dollar Value – Q2 2023 Results Backlog – Units and Dollar Value Backlog Dollar Value by Geography As of June 30, 2022 and 2023 (dollars in thousands) As of June 30, 2023 Washington 4,500 Washington D.C. Area(2) $3,500,000 7% 4,000 3,826 2022 5% $2,981,255 Carolinas(1) $3,000,000
Slide 11: New Home Deliveries – Q2 2023 Results
New Home Deliveries – Q2 2023 Results New Home Deliveries New Home Deliveries by Geography For the quarters ended June 30, 2022 and 2023 For the quarter ended June 30, 2023 Washington 1,600 Washington D.C. Area(2) 1,485 3% 2% Carolinas(1) 1,400 12% 1,200 1,173 Colorado California 4% 1,000 30% Decrea
Slide 12: Home Sales Revenue – Q2 2023 Results
Home Sales Revenue – Q2 2023 Results Home Sales Revenue Home Sales Revenue by Geography For the quarters ended June 30, 2022 and 2023 (dollars in thousands) For the quarter ended June 30, 2023 $1,200,000 Washington D.C. $1,004,644 Area(2) $1,000,000 Washington 4% Carolinas(1) 4% 8% $819,077 $800,000
Slide 13: SG&A Expenses, Income Before Taxes, Net Income and EPS – Q2 2023
SG&A Expenses, Income Before Taxes, Net Income and EPS (Diluted) – Q2 2023 Results Selling, General and Administrative Expenses Income Before Taxes, Net Income Available to For the quarters ended June 30, 2022 and 2023 (dollars in thousands) Common Stockholders and EPS (Diluted) For the quarters end
Slide 14: Land Supply, Orders by Month, Improved Return on Equity and Risk Profile
Land Supply Orders by Month Improved Return on Equity and Risk Profile Book Value Per Share Debt 14
Slide 15: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of June 30, 2023 Note: Dollars in thousands Implied Years Geography Owned Controlled(3) Total Lots % Owned Inventory Dollars LTM Deliveries of Supply(4) Arizona 1,104 1,416 2,520 44% $310,218 762 3.3 California 9,143 1,980 11,123 82% $1
Slide 16: Net New Home Orders – Historical by Quarter
Net New Home Orders – Historical by Quarter Full-Year Absorption Rate: 2023 – 4.3 per month (YTD) 2022 – 2.9 per month 2021 – 4.8 per month 2020 – 4.0 per month 2019 – 3.1 per month 2,500 1,987 1,912 1,933 2019 2,000 1,896 2020 1,661 1,619 1,622 1,491 2021 1,500 1,356 1,409 1,424 1,321 1,332 1,349 1
Slide 17: Improved Return on Equity and Risk Profile
Improved Return on Equity and Risk Profile Increased focus on generating strong return on equity (ROE) growth through a combination of improved asset efficiency and greater operating margins with a continued focus on maintaining an efficient capital structure. Measured approach to share repurchase a
Slide 18: Book Value Per Share
Book Value Per Share Dual impact of the reduction in shares of common stock outstanding through opportunistic share repurchases and strong earnings have contributed to accelerated growth in book value per share and tangible book value per share at a compounded annual growth rate of 15%, respectively
Slide 19: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics $ in thousands 6/30/2023 12/31/2022 Cash and cash equivalents $ 981,567 $ 889,664 Real estate inventories $ 3,193,328 $ 3,173,849 Total debt $ 1,379,835 $ 1,378,051 Total stockholders’ equity $ 2,896,111 $ 2,832,389 Ratio of debt-to-capital 32.3% 32.7% Ratio of net deb
Slide 20: 2023 Third Quarter and Full Year Outlook
2023 Third Quarter and Full Year Outlook
Slide 21: 2023 Third Quarter Outlook
2023 Third Quarter Outlook • Anticipate delivering between 1,000 and 1,100 homes at an average sales price between $690,000 and $700,000 for the third quarter • Anticipate homebuilding gross margin percentage for the third quarter will be in the range of 21.0% to 22.0% • Anticipate SG&A expense rati
Slide 22: 2023 Full Year Outlook
2023 Full Year Outlook • Anticipate delivering between 5,000 and 5,300 homes at an average sales price between $690,000 and $700,000 for the full year • Anticipate homebuilding gross margin percentage for the full year will be in the range of 21.5% to 22.5% • Anticipate SG&A expense ratio for the fu
Slide 23: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation 23
Slide 24: Reconciliation of Non-GAAP Financial Measures (unaudited)
Reconciliation of Non-GAAP Financial Measures (unaudited) In this presentation, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to manage
Slide 25: Reconciliation of Non-GAAP Financial Measures (cont'd) (unaudited)
Reconciliation of Non-GAAP Financial Measures (cont’d) (unaudited) The following table reconciles the Company’s ratio of debt-to-capital to the non-GAAP ratio of net debt-to-net capital. We believe that the ratio of net debt-to-net capital is a relevant financial measure for management and investors