Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — TRI Pointe Group — Q4 2016 Earnings Presentation
38 slides from Tri Pointe Homes's earnings presentation, Feb 22, 2017
Slide 1: 2016 Fourth Quarter and Full Year Results
2016 Fourth Quarter and Full Year Results Maracay Homes – Pardee Homes – Quadrant Homes – Trendmaker Homes – TRI Pointe Homes – Winchester Homes
Slide 2: Forward Looking Statement
Forward Looking Statement 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 projections and esti
Slide 3: Management Team
Management Team Thomas Mitchell Douglas Bauer Michael Grubbs President & COO Chief Executive Officer Chief Financial Officer • Over 25 years of real estate • Over 25 years of real estate • Over 25 years of real estate and homebuilding and homebuilding experience and homebuilding experience • Former
Slide 4: A Family of Regional Homebuilders
A Family of Regional Homebuilders A Family of Regional Homebuilders Market: Greater Puget Sound Area 2016 Orders: 341 2016 Deliveries: 383 2016 HS Revenue: $207,057 2016 ASP: $541 Lots Owned or Controlled: 1,582 Markets: Los Angeles/Ventura, Inland Empire, San Diego, Las Vegas 2016 Orders: 1,206 201
Slide 5: 2016 Fourth Quarter and Full Year Highlights
2016 Fourth Quarter and Full Year Highlights
Slide 6: 2016 Fourth Quarter Highlights
2016 Fourth Quarter Highlights • Absorption rate of 2.5 new home orders per Metric 4Q 2016 4Q 2015 % Change community per month Orders 909 753 21% • New home deliveries down 2% to 1,427 with an Deliveries 1,427 1,453 -2% average sales price of $540K • Home sales revenue down 9% to $771MM ASP of Deli
Slide 7: 2016 Full Year Highlights
2016 Full Year Highlights • Absorption rate of 3.0 new home orders per Metric 2016 2015 % Change community per month Orders 4,248 4,181 2% • New home deliveries up 4% to 4,211 with an average sales price of $553K Deliveries 4,211 4,057 4% • Home sales revenue up 2% to $2,329MM ASP of Deliveries ($00
Slide 8: Active Selling Communities and Absorption Rate
Active Selling Communities and Absorption Rate Active Selling Communities and Absorption Rate Active Selling Communities by State As of and for the years ended December 31, 2015 and 2016 As of December 31, 2016 150 4.0 Washington Virginia 6% Arizona 124 3.5 14% 125 3% 3.0 3.0 3.0 104 100 2.5 Texas 7
Slide 9: Average Selling Communities and Absorption Rate
Average Selling Communities and Absorption Rate Average Selling Communities and Absorption Rate Average Selling Communities by State As of and for the years ended December 31, 2014 through 2016 and 2017 projections For the year ended December 31, 2016 150 4.0 Washington 134 7% Arizona 3.5 Virginia 1
Slide 10: New Home Orders – Q4 2016 Results
New Home Orders – Q4 2016 Results Fourth Quarter - New Home Orders New Home Orders by State For the quarters ended December 31, 2015 and 2016 For the quarter ended December31, 2016 1,000 Washington Arizona 900 909 Virginia 7% 16% 3% 800 753 Texas 700 13% 600 Colorado 500 3% Increase 21% YOY 400 Neva
Slide 11: New Home Orders – FY 2014 through FY 2016
New Home Orders – FY 2014 through FY 2016 New Home Orders New Home Orders by State For the years ended December 31, 2014 through 2016 For the year ended December 31, 2016 5,000 4,500 4,248 Washington 4,181 8% Arizona 4,000 Virginia 16% 3,500 3% 3,000 2,947 Texas 12% 2,500 2,000 Colorado Increase 42%
Slide 12: Backlog – Units and Dollar Value
Backlog – Units and Dollar Value Backlog – Units and Dollar Value Backlog Dollar Value by State As of December 31, 2015 and 2016 (dollars in thousands) As of December 31, 2016 1,193 1,200 1,156 Washington $697,334 10% Arizona $661,146 $700,000 Virginia 17% 1,000 2015 3% $600,000 2016 800 $500,000 Te
Slide 13: Backlog Units – FY 2014 through FY 2016
Backlog Units – FY 2014 through FY 2016 Backlog Units Backlog Units by State For the years ended December 31, 2014 through 2016 For the year ended December 31, 2016 1,500 Washington 1,193 8% Arizona 1,156 Virginia 21% 1,032 2% 1,000 Texas 14% Increase 12% YOY Increase 3% YOY Colorado 500 5% Nevada 8
Slide 14: New Home Deliveries – Q4 2016 Results
New Home Deliveries – Q4 2016 Results New Home Deliveries New Home Deliveries by State As of and for the quarters ended December 31, 2015 and 2016 For the quarter ended December 31, 2016 1,600 Washington 1,453 1,427 7% Arizona Virginia 1,400 16% 5% 1,200 Texas 10% 1,000 Colorado 800 3% Decrease 2% Y
Slide 15: New Home Deliveries – FY 2014 through FY 2016
New Home Deliveries – FY 2014 through FY 2016 New Home Deliveries New Home Deliveries by State For the years ended December 31, 2014 through 2016 and 2017 projections For the year ended December 31, 2016 Guidance Range of 5,000 4,800 Deliveries Washington Arizona 9% 15% 4,500 Virginia 4,000 4,211 4%
Slide 16: Home Sales Revenue – Q4 2016 Results
Home Sales Revenue – Q4 2016 Results Home Sales Revenue Home Sales Revenue by State For the quarters ended December 31, 2015 and 2016 (dollars in thousands) For the quarter ended December 31, 2016 $1,000,000 $900,000 Washington $847,409 8% Arizona $800,000 Virginia 12% $770,703 5% $700,000 Texas $60
Slide 17: Home Sales Revenue – FY 2014 through FY 2016
Home Sales Revenue – FY 2014 through FY 2016 Home Sales Revenue Home Sales Revenue by State For the years ended December 31, 2014 through 2016 and 2017 projections For the year ended December 31, 2016 (dollars in thousands) Guidance Range of $3,000 Home Sales $2,736 Revenue Washington Arizona $2,500
Slide 18: SG&A Expenses, Income before Taxes and Net Income – Q4 2016
SG&A Expenses, Income before Taxes and Net Income – Q4 2016 Results Selling General and Administrative Expenses Income before Taxes, Net Income available to For the quarters ended December 31, 2015 and 2016 (dollars in thousands) Common Stockholders and EPS (Diluted) For the quarters ended December
Slide 19: SG&A Expenses, Income before Taxes and Net Income – FY 2014-2016
SG&A Expenses, Income before Taxes and Net Income – FY 2014 through FY 2016 Selling, General and Administrative Expenses Income before Taxes, Net Income available to For the years ended December 31, 2014 through 2016 (dollars in thousands) Common Stockholders and EPS (Diluted) For the full years end
Slide 20: Orders, Deliveries and Absorption Rate by Segment
Orders, Deliveries and Absorption Rate year over year comparisons for the Fourth Quarter and Full Year 2016 by Segment (Includes breakout by state for Pardee Homes and TRI Pointe Homes brands)
Slide 21: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 250 3.5 700 670 3.5 225 625 3.0 600 578 3.0 200 2.7 3.1 173 2.9 480 2.5 500 2.5 144 150 2.0 400 2.0 1.8 1.5 300 1.5 Increase
Slide 22: Nevada – Orders, Deliveries and Absorption Rate
Nevada Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 180 3.5 600 4.0 165 160 3.6 3.0 3.5 2.9 2.9 500 478 140 136 3.2 460 2.5 3.0 120 400 394 374 99 2.5 100 94 2.0 300 2.0
Slide 23: California – Orders, Deliveries and Absorption Rate
California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 300 3.9 4.0 900 6.0 270 800 792 756 760 3.5 250 3.5 728 5.0 227 5.2 700 4.8 3.0 200 600 4.0 171 2.5 500 150 138 2.
Slide 24: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 120 114 4.0 500 4.0 441 3.6 3.4 450 3.5 3.5 411 100 96 88 400 3.4 383 3.0 341 3.0 350 80 2.8 67 2.5 300 2.5 60 2.0 250 2.0 De
Slide 25: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 160 2.0 600 2.5 145 539 139 501 140 500 457 474 116 2.0 120 1.5 400 100 1.3 1.5 1.5 1.5 1.1 80 76 1.0 300 Increase 53% YOY De
Slide 26: Colorado – Orders, Deliveries and Absorption Rate
Colorado Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 70 65 3.0 193 193 200 3.0 60 180 2.5 160 2.6 2.5 160 50 2.1 2.4 135 2.0 140 42 2.0 40 120 1.5 1.5 100 1.5 30 28 25 D
Slide 27: California – Orders, Deliveries and Absorption Rate
California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 450 4.0 1,200 4.0 3.7 3.5 400 384 369 3.5 3.5 1,000 962 914 929 350 3.0 867 3.0 300 2.6 800 2.5 2.5 250 2.3 2.0 60
Slide 28: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2015 and 2016 For the years ended December 31, 2015 and 2016 180 3.0 500 3.0 166 2.7 164 437 433 160 450 412 420 2.5 2.5 2.5 2.5 400 2.5 140 350 120 2.0 2.0 102 98 300 100 1.5 250 1.5 80
Slide 29: 2017 Outlook
2017 Outlook
Slide 30: Full Year 2017 Update and Outlook
Full Year 2017 Update and Outlook • Expect to grow average selling communities by 10% for the full year • Anticipate delivering between 4,500 and 4,800 homes at an average sales price of $570,000 • Anticipate generating $45 million of gross profit from land and lot sales, most of which is expected t
Slide 31: Land Supply, Orders by Month, Debt
Land Supply Orders by Month Debt
Slide 32: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of December 31, 2016 . Note: Dollars in thousands Implied Years Market Owned Controlled Total Lots % Owned Inventory Dollars LTM Deliveries of Supply (1) California 16,835 410 17,245 98% $1,617,972 1,689 10.2 Colorado 621 297 918 68% $9
Slide 33: New Home Orders – Historical by Month
New Home Orders – Historical by Month January 2017 4Q16 Orders up Orders up 500 477 2015 17% YOY 21% YOY 455 457 2016 450 425 415 409 418 410 2017 400 377 371 367 356 355 346 345 350 324 322 318 306 297 300 280 274 267 250 227 208 200 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017
Slide 34: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics Selected Balance Sheet Metrics $ in thousands 12/31/2016 12/31/2015 Cash and cash equivalents $ 208,657 $ 214,485 • During the fourth quarter, the Real estate inventories $ 2,910,627 $ 2,519,273 Company had zero net borrowings Total Debt $ 1,382,033 $ 1,170,505 under i
Slide 35: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation
Slide 36: 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 37: Reconciliation of Non-GAAP Financial Measures (unaudited)
Reconciliation of Non-GAAP Financial Measures (unaudited) Year Ended December 31, 2016 % 2015 % (dollars in thousands) Home sales revenue $ 2,329,336 100.0 % $ 2,291,264 100.0 % Cost of home sales 1,836,327 78.8 % 1,808,776 78.9 % Homebuilding gross margin 493,009 21.2 % 482,488 21.1 % Add: interest
Slide 38: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited) The following table reconciles the Company’s ratio of debt-to-capital to the ratio of net debt-to-capital. We believe that the ratio of net debt- to-capital is a relevant financial measure for management and investors to understand th