Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — TRI Pointe Group — Q3 2017 Earnings Presentation
31 slides from Tri Pointe Homes's earnings presentation, Oct 25, 2017
Slide 1: 2017 Third Quarter Results
2017 Third 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 • Over 28 years of real estate • Over 28 years of real estate • Over 28 years of real estate and homebuilding experience and homebuilding experience and homebuilding experienc
Slide 4: A Family of Regional Homebuilders
A Family of Regional Homebuilders A Family of Regional Homebuilders Market: Seattle Metro Area LTM Orders: 378 LTM Deliveries: 302 LTM HS Revenue: $192,869 LTM ASP: $639 Lots Owned or Controlled: 1,685 Markets: Los Angeles, Inland Empire, San Diego, Las Vegas LTM Orders: 1,552 LTM Deliveries: 1,288
Slide 5: 2017 Third Quarter Highlights
2017 Third Quarter Highlights
Slide 6: 2017 Third Quarter Highlights
2017 Third Quarter Highlights • Absorption rate of 3.3 new home orders per Metric 3Q17 3Q16 % Change community per month Orders 1,268 932 36% • New home deliveries up 9% to 1,111 with an Deliveries 1,111 1,019 9% average sales price of $584K • Backlog units (1) up 32% to 2,265 homes and ASP of Home
Slide 7: Active Selling Communities and Absorption Rate
Active Selling Communities and Absorption Rate Q3 2017 Results Active Selling Communities and Absorption Rate Active Selling Communities by State As of and for the quarters ended September 30, 2016 and 2017 As of September 30, 2017 140 4.0 123 127 Washington Arizona 3.5 Virginia 7% 10% 120 3.3 3% 3.
Slide 8: New Home Orders – Q3 2017 Results
New Home Orders – Q3 2017 Results New Home Orders New Home Orders by State For the quarters ended September 30, 2016 and 2017 For the quarter ended September 30, 2017 1,600 Washington Arizona Virginia 7% 12% 1,400 3% 1,268 Texas 1,200 9% Colorado 1,000 932 3% 800 Nevada 10% Increase 36% YOY 600 400
Slide 9: Backlog – Units and Dollar Value – Q3 2017 Results
Backlog – Units and Dollar Value – Q3 2017 Results Backlog – Units and Dollar Value Backlog Dollar Value by State As of September 30, 2016 and 2017 (dollars in thousands) As of September 30, 2017 2,400 2,265 Washington $1,482,265 $1,600,000 Arizona 2,200 11% 10% 2,000 $1,400,000 Virginia 2016 3% 1,8
Slide 10: New Home Deliveries – Q3 2017 Results
New Home Deliveries – Q3 2017 Results New Home Deliveries New Home Deliveries by State As of and for the quarters ended September 30, 2016 and 2017 For the quarter ended September 30, 2017 1,200 Washington 1,111 Arizona Virginia 7% 1,019 15% 1,000 2% Texas 9% 800 Colorado 3% 600 Nevada Increase 9% Y
Slide 11: Home Sales Revenue – Q3 2017 Results
Home Sales Revenue – Q3 2017 Results Home Sales Revenue Home Sales Revenue by State For the quarters ended September 30, 2016 and 2017 (dollars in thousands) For the quarter ended September 30, 2017 $700,000 $648,638 Washington $578,653 8% Arizona $600,000 Virginia 12% 2% $500,000 Texas 8% $400,000
Slide 12: SG&A Expenses, Income before Taxes and Net Income – Q3 2017
SG&A Expenses, Income before Taxes and Net Income – Q3 2017 Results Selling General and Administrative Expenses Income before Taxes, Net Income available to For the quarters ended September 30, 2016 and 2017 (dollars in thousands) Common Stockholders and EPS (Diluted) For the quarters ended Septembe
Slide 13: Orders, Deliveries and Absorption Rate by Segment
Orders, Deliveries and Absorption Rate year over year comparisons for the Third Quarter 2017 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 quarters ended September 30, 2016 and 2017 For the quarters ended September 30, 2016 and 2017 180 5.0 100 4.0 165 164 90 158 160 4.5 90 84 3.4 3.5 79 140 134 3.9 4.0 80 3.0 3.5 70 120 60 2.5 3.0 100 49 2.5 50 2.0 8
Slide 15: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended September 30, 2016 and 2017 For the quarters ended September 30, 2016 and 2017 140 4.0 160 2.0 120 114 3.5 140 130 104 121 97 3.1 3.0 120 1.5 113 1.5 100 104 81 2.5 100 80 2.4 1.3 2.0 80 1.0 60 Incre
Slide 16: California and Nevada Orders, Deliveries and Absorption Rate
California Nevada Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended September 30, 2016 and 2017 For the quarters ended September 30, 2016 and 2017 300 294 6.0 140 4.0 127 5.3 120 3.5 3.5 250 5.0 120 111 5.1 233 3.3 3.0 100 95 200 182 4.0 172 2.5 80
Slide 17: California and Colorado Orders, Deliveries and Absorption Rate
California Colorado Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended September 30, 2016 and 2017 For the quarters ended September 30, 2016 and 2017 350 5.0 45 2.5 338 40 302 4.5 40 300 2.1 4.2 2.0 4.0 35 31 30 250 230 3.5 30 30 1.7 208 1.5 3.0 200
Slide 18: 2014 – 2016 Historical Results with 2017 Guidance Ranges
2014 – 2016 Historical Results with 2017 Guidance Ranges
Slide 19: 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 128 7% Arizona 3.5 Virginia 1
Slide 20: 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 Updated Guidance Range of 5,000 Deliveries 4,750 Washington Arizona 4,640 9% 15% Virginia 4,000
Slide 21: 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 millions) Updated Guidance Range of $3,000 Home Sales $2,768 Revenue $2,680 Washington
Slide 22: SG&A Expenses, Income before Taxes and Net Income – FY 2014 through FY 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 23: 2017 Outlook
2017 Outlook
Slide 24: Fourth Quarter 2017 Outlook
Fourth Quarter 2017 Outlook Fourth Quarter • Expect to open 14 new communities and close out of 10, resulting in 131 active selling communities as of December 31, 2017 • Anticipate delivering approximately 75% to 80% of the 2,265 homes in backlog as of September 30, 2017 at an average sales price ra
Slide 25: Land Supply, Orders by Month, Debt
Land Supply Orders by Month Debt
Slide 26: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of September 30, 2017 . Note: Dollars in thousands Implied Years Market Owned Controlled Total Lots % Owned Inventory Dollars LTM Deliveries of Supply (1) California 15,883 520 16,403 97% $1,808,048 1,868 8.8 Colorado 588 229 817 72% $1
Slide 27: New Home Orders – Historical by Month
New Home Orders – Historical by Month 2Q17 Orders up 1Q17 15% YOY 3Q17 Orders up Orders up 13% YOY 36% YOY 550 524 500 477 477 477 455 457 445 444 437 450 418 425 431 415409 410 400 2015 400 377 371 367 356 355 2016 350 346 345 324 318 2017 322 306 297 300 280 274 267 250 227 208 200 150 100 50 0 Ja
Slide 28: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics Selected Balance Sheet Metrics $ in thousands 9/30/2017 12/31/2016 • During the quarter, the Company Cash and cash equivalents $ 162,396 $ 208,657 borrowed $50 million from its Real estate inventories $ 3,303,421 $ 2,910,627 unsecured revolving credit facility. Total D
Slide 29: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation
Slide 30: 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 31: 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-net capital. We believe that the ratio of net debt-to-net capital is a relevant financial measure for management and investors to unders