Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — TRI Pointe Group — Q2 2015 Earnings Presentation
34 slides from Tri Pointe Homes's earnings presentation, Aug 10, 2015
Slide 1: 2015 Second Quarter Results
2015 Second Quarter 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 • 28 years of real estate and • 28 years of real estate and • 28 years of real estate and homebuilding experience homebuilding experience homebuilding experience • Former EVP
Slide 4: Leading Brand Names Targeted to Specific Markets
Leading Brand Names Targeted to Specific Markets Markets: Orange County, Los Market: Greater Puget Sound Area Angeles, San Diego, San LTM Orders: 399 LTM Deliveries: 355 Francisco Bay Area, Denver LTM HB Revenue: $157,060 LTM ASP: $442 Markets: Washington DC, LTM Orders: 1,068 Lots Owned or Controll
Slide 5: Second Quarter Highlights
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Slide 6: 2015 Second Quarter Highlights
2015 Second Quarter Highlights SECOND QUARTER HIGHLIGHTS AND COMPARISONS TO SECOND QUARTER 2014 New home orders increased 62% to 1,238 New home deliveries up 27% to 798 with increased average sales price of 9% to $535k Home sale revenue up 38% to $427.2M Homebuilding gross margin of 20.0% Adjusted h
Slide 7: Active Selling Communities and Absorption Rate
Active Selling Communities and Absorption Rate Active Communities and Absorption Rate Communities by State As of and for the quarters ended June 30, 2014 and 2015 As of June 30, 2015 140 4.0 122 Washington Arizona 120 10% 22% 3.45 3.5 15% Virginia 100 100 6% 3.0 80 2.61 2.5 60 Texas 2.0 20% Californ
Slide 8: New Home Orders – Second Quarter Results
New Home Orders – Second Quarter Results Second Quarter - New Home Orders Orders by State For the quarters ended June 30, 2014 and 2015 – GAAP and on an adjusted For the quarter ended June 30, 2015 basis(1) 1,400 1,238 1,238 1,200 Washington Arizona 9% 15% Virginia 953 4% 1,000 Increase 62% YOY Incr
Slide 9: New Home Deliveries – Second Quarter Results
New Home Deliveries – Second Quarter Results Second Quarter – New Home Deliveries Deliveries by State For the quarters ended June 30, 2014 and 2015- GAAP and on an adjusted For the quarter ended June 30, 2015 basis(1) 900 798 798 Washington Arizona 800 11% 11% 731 700 Virginia 628 6% 600 Increase 27
Slide 10: Backlog – Units and Dollar Value (GAAP)
Backlog – Units and Dollar Value (“GAAP”) Backlog – Units and Dollar Value Dollar Value by State As of June 30, 2014 and 2015 (dollars in thousands) As of June 30, 2015 2500 Washington $1,199,847 $1,200,000 Arizona 7% 9% $1,100,000 Virginia 1,998 6% 2000 2014 $1,000,000 2015 $900,000 Texas Increase
Slide 11: Backlog – Units and Dollar Value (Adjusted)
Backlog – Units and Dollar Value (“Adjusted”)(1) Backlog – Units and Dollar Value (“Adjusted”) Dollar Value by State As of and for the quarters ended June 30, 2014 and 2015 (dollars in thousands) As of June 30, 2015 2500 $1,199,847 Washington $1,200,000 Arizona 7% 9% $1,100,000 Virginia 1,998 6% 200
Slide 12: Home Sales Revenue – Second Quarter Results
Home Sales Revenue – Second Quarter Results Second Quarter – Home Sales Revenue Home Sales Revenue by State For the quarter ended June 30, 2014 and 2015 (dollars in thousands) For the quarter ended June 30, 2015 $500,000 Washington Arizona 8% 8% $427,328 $427,238 $396,945 Virginia $400,000 8% $309,6
Slide 13: Orders, Deliveries and Absorption Rate by Segment
Orders, Deliveries and Absorption Rate year over year comparisons for the Second Quarter and YTD through June by Segment (includes breakout by state for Pardee Homes and TRI Pointe Homes brands)
Slide 14: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 For the six months ended June 30, 2014 and 2015 200 5.0 400 5.0 184 180 345 4.5 350 4.5 160 53% 53% 4.0 300 4.0 140 120 3.4 3.5 250 3.5 120 225 3.3 93 192 100 91 3.0 200
Slide 15: Nevada
Nevada Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 For the six months ended June 30, 2014 and 2015 120 5.0 250 5.0 101 4.5 201 4.5 100 25% 200 49% 81 85 4.0 4.0 3.6 80 3.5 3.4 3.5 3.4 3.5 150 135 139 60 3.0 3.0 51
Slide 16: California
California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 For the six months ended June 30, 2014 and 2015 300 7.0 500 462 7.0 17% 254 6.3 6.5 450 6.2 6.5 250 25% 394 6.0 400 6.0 203 195 350 5.5 5.5 200 5.3 5.0 300 283
Slide 17: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 For the six months ended June 30, 2014 and 2015 140 6.0 300 6.0 266 5.5 5.5 120 9% 116 30% 250 106 5.0 5.0 100 204 4.5 4.3 4.5 87 200 180 4.0 4.0 80 3.6 67 145 3.5 150 3.
Slide 18: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 For the six months ended June 30, 2014 and 2015 180 4.0 350 4.0 166 309 (17%) 160 (25%) 3.5 300 3.5 139 269 140 256 124 123 250 231 120 3.0 3.0 100 200 2.5 2.5 80 2.3 2.3
Slide 19: Colorado
Colorado Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 on an For the six months ended June 30, 2014 and 2015 on an adjusted adjusted basis(1) basis(1) 70 6.0 160 6.0 60 5.5 134 5.5 60 140 5.0 4.8 5.0 120 50 4.4 4.5 4
Slide 20: California
California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 on an For the six months ended June 30, 2014 and 2015 on an adjusted adjusted basis(1) basis(1) 350 6.0 600 567 6.0 5.3 305 5.5 5.5 300 5.0 500 4.9 5.0 4.8 5.0
Slide 21: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the second quarter ended June 30, 2014 and 2015 For the six months ended June 30, 2014 and 2015 95 94 4.0 250 4.0 8% 201 3.5 23% 3.5 90 200 87 163 3.0 149 156 3.0 85 150 83 2.5 2.5 81 2.5 80 100 2.2 2.0 2.0 75 50 1.5 1
Slide 22: 2015 Outlook
2015 Outlook
Slide 23: Re-iterate 2015 Outlook
Re-iterate 2015 Outlook Increase home deliveries by 25% over the 2014 deliveries of the combined company(1) Average sales price of homes delivered of $550,000 Expand homebuilding gross margins for the year as compared to GAAP 2014 results; delivering full year homebuilding gross margin of approximat
Slide 24: Third Quarter 2015 Update and Outlook
Third Quarter 2015 Update and Outlook New home orders up 39% for the month of July over the combined company(1) results for the comparable month a year ago Anticipate delivering approximately 50% of the 1,998 homes in backlog as of June 30, 2015 Open 8 new communities and close out of 14 communities
Slide 25: Significant Land Supply, TRI Pointe Solutions, Orders by Month, Debt
Significant Land Supply TRI Pointe Solutions Orders by Month Debt
Slide 26: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of June 30, 2015 Years of Market Owned Controlled Total Lots % Owned Inventory Dollars LTM Deliveries(2) Supply California 17,834 533 18,367 97% $1,466,267 1,343 13.7 Colorado 456 202 658 69% $74,048 114 5.8 Washington, D.C. (1) 2,284 4
Slide 27: TRI Pointe Solutions
TRI Pointe Solutions TRI Pointe Solutions – a wholly-owned subsidiary formed to provide buyer services including mortgage and title insurance related services 100% owned by TRI Pointe Solutions Title Agent for First American Title Insurance Company Licensed in Texas, Maryland, and Virginia Cash flow
Slide 28: New Home Orders – July 2014 – July 2015
New Home Orders – July 2014 – July 2015 New Home Orders (July 2014 through July 2015) 500 455 457 450 415 410 400 371 355 350 324 296 300 255 252 249 252 250 213 200 150 100 50 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2014 2015 2.52 2.85 2.38 2.38 2.42 2.00 2.96 3.67 3.91 3.47 3.82 3.05
Slide 29: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics Selected Balance Sheet Metrics • In May 2015, the Company $ in thousands 6/30/2015 12/31/2014 increased its unsecured revolving Cash and cash equivalents $ 121,907 $ 170,629 credit facility from $425 million Real estate inventories $ 2,535,753 $ 2,280,183 to $550 milli
Slide 30: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation
Slide 31: 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 32: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited) The merger with Weyerhaeuser Real Estate Company (“WRECO”) was accounted for as a "reverse acquisition" of TRI Pointe by WRECO in accordance with ASC Topic 805, "Business Combinations." As a result, legacy TRI Pointe's financial resul
Slide 33: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited) The following schedule provides certain supplemental financial and operations information of the combined company that is “Adjusted" to include legacy TRI Pointe stand-alone operations for the six month ending June 30, 2104 as though
Slide 34: 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