Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — Q4 2014 Earnings Presentation
31 slides from Tri Pointe Homes's earnings presentation, Mar 3, 2015
Slide 1: 2014 Full Year and Fourth Quarter Results
2014 Full Year and Fourth 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: Q4 Financial Results | Participants
Q4 Financial Results | Participants Thomas Mitchell Douglas Bauer Michael Grubbs President & COO Chief Executive Officer Chief Financial Officer • 25 years of real estate and • 25 years of real estate and • 25 years of real estate and homebuilding experience homebuilding experience homebuilding expe
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 2014 Orders: 337 2014 Deliveries: 320 Francisco Bay Area, Denver 2014 HB Revenue: $134,304 ASP: $420 Markets: Washington DC, 2014 Orders: 695 Lots Owned or Controlled
Slide 5: Fourth Quarter Highlights
Fourth Quarter Highlights
Slide 6: 2014 Fourth Quarter Highlights
2014 Fourth Quarter Highlights FOURTH QUARTER HIGHLIGHTS – “GAAP” Income from Continuing Operations $41.4M; $0.26 per diluted share Home sale revenue up 31% to $623.0M New home deliveries of 1,122 with increased average sales price of 26% to $555k Homebuilding gross margin of 19.9% Adjusted homebuil
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 years ended December 31, 2013 and 2014 As of December 31, 2014 120 3.5 108 2.98 21% Washington Arizona 3.0 9% 100 15% 89 Virginia 2.5 6% 2.48 80 2.0 60 1.5 Texas California 40
Slide 8: New Home Orders – Fourth Quarter Results
New Home Orders – Fourth Quarter Results Fourth Quarter - New Home Orders Orders by State For the fourth quarter ended December 31, 2013 and 2014 – on a combined As of December 31, 2014 – on a combined adjusted basis(1) adjusted basis(1) 800 714 714 700 Washington Arizona Virginia 7% 10% 609 600 5%
Slide 9: New Home Deliveries – Fourth Quarter Results
New Home Deliveries – Fourth Quarter Results Fourth Quarter – New Home Deliveries Deliveries by State For the fourth quarter ended December 31, 2013 and 2014- GAAP and on a For the quarter ended December 31, 2014 – on a combined adjusted basis(1) combined adjusted basis(1) 1,400 1,238 Washington Ari
Slide 10: Backlog – Units and Dollar Value (GAAP)
Backlog – Units and Dollar Value (“GAAP”) GAAP Backlog – Units and Dollar Value Dollar Value by State As of December 31, 2013 and 2014 (dollars in thousands) As of December 31, 2014 1200 Washington 2013 $900,000 Arizona 8% 6% 1032 2014 $800,000 1000 Virginia 897 10% $653,096 $700,000 800 $600,000 $5
Slide 11: Backlog – Units and Dollar Value (Combined Adjusted)
Backlog – Units and Dollar Value (“Combined Adjusted”)(1) Combined Adjusted Backlog – Units and Dollar Value Dollar Value by State As of December 31, 2013 and 2014 (dollars in thousands) As of December 31, 2014 1200 Washington 2013 $900,000 Arizona 1,046 8% 6% 1032 2014 $800,000 1000 Virginia $700,0
Slide 12: Home Sales Revenue – Fourth Quarter Results
Home Sales Revenue – Fourth Quarter Results Fourth Quarter – Home Sales Revenue Home Sales Revenue by State For the fourth quarter ended December 31, 2013 and 2014 (dollars in thousands) For the quarter ended December 31, 2014 (“GAAP”) $700,000 Washington Arizona 7% 7% $600,000 Virginia 8% $500,000
Slide 13: Full Year Highlights
Full Year Highlights
Slide 14: 2014 Full Year Highlights
2014 Full Year Highlights FULL YEAR HIGHLIGHTS – “GAAP” Income from Continuing Operations $84.2M; $0.58 per diluted share Home sale revenue up 35% to $1.6 billion New home deliveries of 3,100 with increased average sales price of 28% to $531k Homebuilding gross margin of 19.9% Adjusted homebuilding
Slide 15: New Home Orders – Full Year Results
New Home Orders – Full Year Results Full Year - New Home Orders Orders by State For the years ended December 31, 2013 and 2014 – on a combined adjusted As of December 31, 2014 – on a combined adjusted basis(1) basis(1) 4,000 3,532 3,500 3,283 Washington Arizona 3,055 10% 12% 2,947 Virginia 3,000 5%
Slide 16: New Home Deliveries – Full Year Results
New Home Deliveries – Full Year Results Full Year – New Home Deliveries Deliveries by State For the years ended December 31, 2013 and 2014- GAAP and on a combined For the year ended December 31, 2014 – on a combined adjusted basis(1) adjusted basis(1) 4,000 Washington Arizona 3,500 3,335 10% 12% 3,2
Slide 17: Home Sales Revenue – Full Year Results
Home Sales Revenue – Full Year Results Full Year – Home Sales Revenue Home Sales Revenue by State For the years ended December 31, 2013 and 2014 (dollars in thousands) For the year ended December 31, 2014 – on a combined adjusted basis(1) $2,000,000 Washington Arizona 8% $1,800,000 8% Virginia $1,60
Slide 18: 2015 Outlook
2015 Outlook
Slide 19: 2015 Outlook
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 Improve the SG&A as a % of home sales revenue to a range of 10.5% to 11.
Slide 20: First Quarter 2015 Update and Outlook
First Quarter 2015 Update and Outlook New home orders up 59% through February over the combined company(1) results for the comparable period a year ago Convert 55% to 60% of 1,032 units in beginning backlog Anticipate slightly lower homebuilding gross margins on deliveries in 1Q15 as compared to 4Q1
Slide 21: Additional Information
/ hy fy TRIPOINTE Additional Information
Slide 22: New Home Orders – July 2014 – February 2015
New Home Orders – July 2014 – February 2015 New Home Orders (July 2014 through February 2015) 450 415 400 350 324 296 300 255 252 249 252 250 213 200 150 100 50 0 Jul Aug Sep Oct Nov Dec Jan Feb 2014 2015 2.52 2.85 2.38 2.38 2.42 2.00 2.96 3.67 Absorption Rate = Orders per Month per Community
Slide 23: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of December 31, 2014 2014 Combined Years of Market Owned Controlled Total Lots % Owned Inventory Dollars Deliveries(2) Supply California 18,140 702 18,842 96% $1,338,169 1,296 14.5 Colorado 483 156 639 76% $69,151 57 11.2 Washington, D.
Slide 24: TRI Pointe Solutions
TRI Pointe Solutions TRI Pointe Solutions – a wholly-owned subsidiary formed to provide buyer services including mortgage and title insurance 100% owned by TRI Pointe Solutions Title Agency arrangement in conjunction with First American Title Licensed in Texas Anticipate licensing in Maryland & Virg
Slide 25: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation
Slide 26: 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 27: Reconciliation of Non-GAAP Financial Measures (cont’d)
Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited) Year Ended December 31, 2014 % 2013 % (dollars in thousands) Home sales $ 1,646,274 100.0% $ 1,218,430 100.0% Cost of home sales 1,316,470 80.0% 948,561 77.9% Homebuilding impairments and lot option abandonments 2,147 0.1% 1,719 0.1%
Slide 28: 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
Slide 29: Reconciliation of Non-GAAP Financial Measures (cont’d)
Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited) The following table reconciles net income and diluted earnings per share, as reported and prepared in accordance with GAAP, to the non- GAAP measure of net income and diluted earnings per share excluding noncash purchase accounting ad
Slide 30: 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 31: 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 "Combined Adjusted" to include legacy TRI Pointe stand-alone operations for the three months ended December 31,